As filed with the Securities and Exchange Commission on April 28, 2000
Securities Act File No.--------
Investment Company Act File No.811-09917
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. |_|
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. |X|
(Check Appropriate Box or Boxes)
SENTINEL VARIABLE PRODUCTS TRUST
(Exact Name of Registrant as Specified in Charter)
National Life Drive
Montpelier, Vermont 05604
(Address of Principal Executive Offices) (Zip Code)
(802) 229-3113
(Registrant's Telephone Number, including Area Code)
Copy to:
D. Russell Morgan, Esq. John A. MacKinnon, Esq.
c/o Sentinel Variable Products Trust Brown & Wood LLP
National Life Drive One World Trade Center
Montpelier, Vermont 05604 New York, New York 10048-0557
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
Title of securities being registered: common shares of beneficial
interest, par value $.01 per share.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
The information in this prospectus is not complete and may be changed. We may
not use this prospectus to sell securities until the registration statement
containing this prospectus, which has been 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.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 28, 2000
Sentinel Variable Products Trust
P R O S P E C T U S
Dated , 2000
Sentinel Variable Products Common Stock Fund
Sentinel Variable Products Mid Cap Growth Fund
Sentinel Variable Products Small Company Fund
Sentinel Variable Products Growth Index Fund
Sentinel Variable Products Money Market Fund
This prospectus contains information you should know before investing,
including information about risks. Please read it before you invest and keep
it for future reference.
The Securities and Exchange Commission has not approved or disapproved
these securities or determined if this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
Sentinel Variable Products Trust o National Life Drive o Montpelier, VT 05604
Table of Contents
Key Facts About the Sentinel Variable Products Trust..........................3
Risk/Return Bar Chart and Table...............................................5
Details About the Funds' Investment
Objectives, Principal Investment Strategies
and Related Risks...........................................................7
Offer, Purchase and Redemption of Shares.....................................11
How the Funds are Priced.....................................................12
Dividends, Capital Gains and Taxes...........................................12
Management of the Funds......................................................13
Description of Sentinel Variable Products
Fund's Shares..............................................................15
<PAGE>
Key Facts About the Sentinel Variable Products Trust Risk/Return Bar
Chart and Table Details About the Funds' Investment Objectives, Principal
Investment Strategies and Related Risks Offer, Purchase and Redemption of
Shares How the Funds are Priced Dividends, Capital Gains and Taxes Management
of the Funds Description of Sentinel Variable Products Trust's Shares
Key Facts about the Sentinel Variable Products Trust
What are the main goals and investment strategies of each of the Sentinel
Variable Products Trust?
This prospectus contains information about the four mutual funds that are
series of Sentinel Variable Products Trust.
In this prospectus, each Sentinel Variable Products Fund is referred to
individually as a "Fund". National Life Investment Management Company, Inc. is
the investment advisor for each Fund. We cannot guarantee that any Fund will
achieve its goals.
A brief description of each Fund follows:
Sentinel Variable Products Common Stock Fund
seeks a combination of growth of capital, current income, growth of income and
relatively low risk as compared with the stock market as a whole, by investing
in a diverse group of common stocks of well-established companies. [Pie Chart]
Sentinel Variable Products Mid Cap Growth Fund seeks growth of capital, by
focusing its investments on common stocks of mid-sized growing companies.
Income is not a factor in selecting stocks. [Pie Chart]
Sentinel Variable Products Small Company Fund seeks growth of capital, by
investing mainly in common stocks of small and medium-sized companies that
National Life Investment Management believes have attractive growth potential
and are attractively valued. Income is not a factor in selecting stocks. [Pie
Chart]
Sentinel Variable Products Growth Index Fund seeks to match, as closely as
possible before expenses, the performance of the S&P 500/BARRA Growth Index,
by investing in common stocks of the companies comprising the Index in
approximately the same weightings as the Index. [Pie Chart]
Sentinel Variable Products Money Market Fund seeks as high a level of current
income as is consistent with stable principal values and liquidity by
investing exclusively in dollar-denominated money market instruments,
including U.S. government securities, bank obligations, repurchase agreements,
commercial paper, and other corporate debt obligations. [Pie Chart]
What are the main risks of investing in the Funds?
Investment in each Fund is subject to certain risks. Some of the risk
factors described below affect more than one Fund; others are specific to
certain Funds.
More information on each Fund's risk factors is described under "Details
About the Funds' Investment Objectives, Principal Investment Strategies, and
Related Risks". We cannot guarantee that any of the Funds will achieve its
goals.
Equity Fund Risks
The value of all equity funds, including the Common Stock Fund, the Mid
Cap Growth Fund, the Small Company Fund and the Growth Index Fund, may go up
or down as the prices of the stocks held by these Funds go up or down. Changes
in value may occur because the U.S. stock markets are rising or falling or due
to business developments or other factors that affect the value of particular
companies. Stock markets tend to move in cycles, with periods of rising prices
and periods of falling prices. Stocks could decline generally or underperform
other types of investment assets. If the value of the stocks held in these
Funds goes down, you may lose money. The stocks of smaller companies may be
subject to greater changes in value than stocks of larger, more established
companies, because they generally have more limited financial resources,
narrower product lines, and may have less seasoned managers. In addition,
small company stocks may trade less frequently and in lower share volumes,
which could contribute to wider price fluctuations.
The equity Funds are also subject to investment style risk, which is the
chance that returns from the portion of the stock market on which they focus,
for example large capitalization value stocks for the Common Stock Fund, or
large capitalization growth stocks for the Growth Index Fund, will trail
returns from other asset classes or the overall stock market. Growth stocks
and value stocks, and large company stocks and smaller company stocks, tend to
go through cycles of doing better, or worse, than the stock market in general.
These periods have, in the past, lasted for as long as several years. Growth
stocks, and funds that focus on them, also have a tendency to be more volatile
than other investments.
In the case of the Growth Index Fund, there is the risk that the Fund
will not track closely the performance of the S&P 500/BARRA Growth Index for a
number of reasons, including the Fund's costs of buying and selling securities
and the flow of money into and out of the Fund.
Money Market Fund
Short term instruments issued by banks and other corporate issuers are subject
to the risk that the issuer will default on its obligation, in which case the
Fund may suffer a loss. Repurchase agreements may also subject the Fund to
risk of loss if the other party to the repurchase agreement defaults on its
obligation, and the proceeds from the sale of the securities held as
collateral turn out to be less than the repurchase price stated in the
agreement. An investment in the Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Money Market Fund.
<PAGE>
Risk/Return Bar Chart and Table
This Prospectus does not include a Risk/Return Bar Chart or Table because
as of the date of this Prospectus, the Funds have not yet commenced operations.
Fees and Expenses
These tables describe the fees and expenses that you pay if you buy and hold
shares of the Funds:
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases........................ None
Maximum Deferred Sales Charge (Load).................................... None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends............. None
Redemption Fees......................................................... None
Exchange Fees........................................................... None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Common Mid-Cap Small Growth Money
Stock Growth Company Index Market
Management Fees 0.55% 0.60% 0.60% 0.30% 0.40%
Other Expenses:
Accounting and
Administrative Costs 0.12 0.12 0.12 0.12 0.12
Other 0.40 0.40 0.40 0.44 0.40
Total Other Expenses 0.52 0.52 0.52 0.56 0.52
----- ----- ----- ----- -----
Total Fund Operating
Expense 1.07%(a) 1.12%(a) 1.12%(a) 0.86%(a) 1.12%(a)
===== ===== ===== ===== =====
(a) Current Expense Ratios
The above expense ratios do not reflect waivers or reimbursements of
expenses by National Life Investment Management.
Currently National Life Investment Management voluntarily waives or reimburses
expenses of the Funds shown below to the extent necessary to cap expense ratios
at the amounts shown. These waivers or reimbursements will continue at least
until December 31, 2001.
Common Stock.......................0.80%
Mid Cap Growth.....................0.95%
Small Company......................1.00%
Growth Index.......................0.60%
Money Market.......................0.50%
National Life Investment Management currently intends to continue these
reimbursement arrangements indefinitely. However, these arrangements may be
changed or terminated at any time after December 31, 2001.
Examples:
These examples are intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds.
These examples assume that you invest $10,000 in each Fund for the time
periods indicated, that you pay the maximum sales charge that applies to a
particular class, that the Fund's operating expenses remain the same, and that
your investment has a 5% return each year. This assumption is not meant to
indicate that you will receive a 5% annual rate of return.
Your annual return may be more or less than the 5% used in these
examples. Although your actual costs may be higher or lower, based on these
assumptions your costs would be as shown below.
Note that the amounts shown do not reflect any of the waivers or
reimbursements that limit expense ratios to the levels shown in footnote (a)
on page __.
1 year 3 years
------ -------
Common Stock $109 $340
Mid Cap Growth 114 356
Small Company 114 356
Growth Index 88 274
Money Market 94 293
<PAGE>
Details About the Funds' Investment Objectives, Principal Investment
Strategies, and Related Risks
Each Fund has distinct investment objectives and policies. Investment
objectives are fundamental policies of each Fund that may only be changed by a
majority vote of the outstanding shares of that Fund. We cannot guarantee that
these objectives will be achieved.
Each Fund's investment objectives and policies are described in this section.
A general discussion of the Funds' investment policies and associated risks
follows.
The Common Stock Fund
invests in common stocks
of well-established
companies
The Common Stock Fund seeks a combination of growth of capital, current
income, growth of income, and relatively low risk as compared with the stock
market as a whole. It seeks this goal by investing mainly in a diverse group
of common stocks of well-established companies, most of which pay regular
dividends. National Life Investment Management tries to select stocks of
leading companies that are financially strong and are selling at attractive
prices in relation to their values. When appropriate, the Fund also may invest
in preferred stocks or debentures convertible into common stocks.
The Mid Cap Growth Fund
invests in stocks of mid-sized
companies
The Mid Cap Growth Fund seeks growth of capital by focusing its investments on
common stocks of mid-sized growing companies. National Life Investment
Management tries to invest in companies with favorable growth potential with
attractive pricing in relation to this growth potential, and experienced and
capable managements. The Fund will invest at least 65% of its assets in stocks
whose market capitalizations are within the range of the stocks comprising the
Standard & Poor's 400 Midcap index. Income is not a factor in selecting
investments.
National Life Investment Management emphasizes stocks it believes to have
superior potential for growth, rather than wide diversification. The Fund may
invest up to 25% of its assets in stocks of companies within a single
industry. The Fund is actively managed. It is possible that the Fund's
turnover rate may exceed 100% annually. High turnover would cause the Fund to
incur higher trading costs, including more brokerage commissions. It may also
cause the Fund to recognize capital gains and capital losses for tax purposes
earlier than it would if its turnover rate was lower.
The Small Company Fund
invests in stocks of small
and medium-sized
companies.
The Small Company Fund seeks growth of capital, by investing mainly in common
stocks of small and medium-sized companies that National Life Investment
Management believes have attractive growth potential and are attractively
valued. Income is not a factor in selecting stocks. The Fund invests at least
75% of its assets in stocks of companies with market capitalizations of less
than 2.5 times the median market capitalization of the Standard & Poor's
Smallcap 600 Index. Market capitalization is the total value of all the
outstanding shares of common stock of a company. Up to 25% of the Fund's
assets may be invested in securities within a single industry.
The Small Company Fund's policy is to avoid short-term trading. However,
the Fund may sell a security without regard to its holding period if National
Life Investment Management believes it is in the Fund's best interest to do
so. The Fund's turnover rate is not expected to exceed 100% annually. The Fund
is intended for long-term investors willing to accept more risk in order to
seek above-average gains.
The Growth Index Fund
invests in stocks comprising
the S&P500/BARRA Growth Index
The Growth Index Fund seeks to match, as closely as possible before expenses,
the performance of the S&P 500/BARRA Growth Index. The S&P 500/BARRA Growth
Index includes those stocks of the S&P 500 Index with higher than average
price to book value ratios. The S&P 500 is an unmanaged index and typically
includes companies that are the largest and most dominant in their industries.
There can be no assurance that the Fund will achieve its objective.
The Fund will invest at all times at least 80% of its total assets in the
common stocks of the companies that comprise the S&P 500/BARRA Growth Index.
It intends normally to invest substantially all its total assets in these
common stocks, in approximately the same weightings as the S&P 500/BARRA
Growth Index. The Fund also may hold up to 20% of its assets in money market
instruments and stock index options and futures. Futures and options are
considered "derivatives" because they "derive" their value from a traditional
security (like a stock or bond) or index. The Fund intends to buy index
options or futures, if at all, only in anticipation of buying stocks.
The Growth Index Fund is not "actively managed," which would involve the
investment advisor buying and selling securities based on research and
analysis. Rather, the Growth Index Fund tries to match, as closely as
possible, before expenses, the performance of its target index, the S&P
500/BARRA Growth Index. It does this by holding, under normal circumstances,
all of the common stocks included in the target index, in approximately the
same weightings as in the index.
The Growth Index Fund by itself is not a balanced investment program. The
Growth Index Fund will generally hold exclusively the stocks of companies
among the 500 largest U.S. publicly owned corporations. Of these stocks, the
stocks included in the S&P 500/BARRA Growth Index have been valued in the
stock market at levels which indicate that the market expects their issuers to
have better than average prospects for growth of revenue and earnings. These
stocks are sometimes referred to as "large capitalization growth stocks". The
Growth Index Fund will not invest in other types of stocks, including the
stocks of small companies, or so-called "value stocks", from which the market
does not expect as much growth in revenue and earnings, but which can be
purchased at lower valuations. Diversifying your investments beyond "large
capitalization growth stocks" may lower the volatility of your overall
investment portfolio, and could improve your long-term investment return.
It is anticipated that the Growth Index Fund will have relatively low
portfolio turnover. However, it may have to sell securities from time to time
to meet redemption requests, and adjustments will be made in the portfolio
from time to time because of changes in the composition of the S&P/BARRA
Growth Index.
The Money Market Fund
invests primarily in
high quality money market instruments
The Money Market Fund seeks as high a level of current income as is consistent
with stable principal values and liquidity by investing exclusively in
dollar-denominated money market instruments, including U.S. government
securities, bank obligations, repurchase agreements, commercial paper, and
other corporate debt obligations. All such investments will have remaining
maturities of 397 days or less. The Fund may also invest up to 10% of its
total assets in shares of institutional money market funds which invest
primarily in securities in which the Fund could invest directly. The Fund may
earn less income than funds owning longer term securities or lower quality
securities that have less liquidity, greater market risk and greater market
value fluctuations.
The Fund seeks to maintain a net asset value of $1.00 per share, by using
the amortized cost method of valuing its securities. The Fund is required to
maintain a dollar-weighted average portfolio maturity of 90 days or less.
<PAGE>
General Information Relevant to the Investment Practices of the Funds, and
Associated Risks
We cannot guarantee that any Fund's investment objective will be achieved.
You can find additional information about the securities and investment
techniques used by the Funds in the Funds' Statement of Additional
Information, which is incorporated by reference into (is legally made a part
of) this Prospectus. You can get a free copy of the Statement of Additional
Information by calling 1-800- - , or by writing to Sentinel Variable
Products Fund, Inc. at National Life Drive, Montpelier, VT 0560.
Information Relevant to the Equity Funds
Stock Market and Selection Risk. The Common Stock, Mid Cap Growth and Small
Company Funds are subject to stock market and selection risk. Stock market
risk is the risk that the stock market will go down in value, including the
possibility that the market will go down sharply and unpredictably. Selection
risk is the risk that that the investments that National Life Investment
Management selects will underperform that stock market or other funds with
similar investment objectives and investment strategies.
Risks of Stocks of Smaller Companies. The stocks of small and medium-sized
companies typically involve more risk than the stocks of larger companies.
These smaller companies may have more limited financial resources, narrower
product lines, and may have less seasoned managers. In addition, these stocks
may trade less frequently and in lower share volumes, making them subject to
wider price fluctuations.
Risks of Growth Stocks. Prices of growth stocks tend to be higher in relation
to their companies' earnings, and may be more sensitive to market, political
and economic developments than other stocks, making their prices more
volatile. Investment Style Risk. The Common Stock Fund has a focus on "large
capitalization value stocks", although it may also invest in growth stocks.
The Mid Cap Growth Fund focuses on "mid capitalization growth stocks", while
the Small Company Fund focuses on the stocks of smaller companies. The Growth
Index Fund focuses on "large capitalization growth stocks". Changes in
investment style may cause any of these groups to underperform the stock
market in general, or other asset classes.
Tracking Error Risk. There are several reasons why the Growth Index Fund's
performance may not match the S&P 500/BARRA Growth Index. First, the Fund
incurs administrative expenses and transaction costs in trading stocks.
Second, the composition of the S&P 500/BARRA Growth Index and the stocks held
in the Fund may diverge, due to cash flows into or out of the Fund and changes
in the composition of the index. Third, the timing and magnitude of cash flows
into and out of the Fund may result in temporarily uninvested cash, or may
lead to weightings of stocks held by the Fund which are not precisely the same
as in the S&P 500/BARRA Growth Index.
Futures and Options. If the Growth Index Fund invests in stock index futures
or options contracts, the Fund will be subject to the risks that:
o the future or option will not fully offset the underlying positions,
o the Fund cannot sell the future or option because of an illiquid secondary
market, and
o the intended risk management purpose of the future or option may not be
achieved, and may produce losses or missed opportunities.
Temporary Defensive Positions. Each of the equity Funds may be less than fully
invested in securities called for by its principal investment strategies at
any time. If National Life Investment Management feels that it is necessary
under adverse market conditions to take a temporary defensive position, these
Funds may depart significantly or completely from their principal investment
strategies. The use of temporary defensive positions could prevent the Funds
from achieving their investment objectives.
Information Regarding the S&P 500/BARRA Growth Index
The Growth Index Fund is not sponsored, endorsed, sold or promoted by Standard
& Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P makes no
representation or warranty, express or implied, to the owners of the Growth
Index Fund or any member of the public regarding the advisability of investing
in securities generally or in the Growth Index Fund particularly or the
ability of the S&P 500/BARRA Growth Index to track general stock market
performance. S&P's only relationship to the Sentinel Funds is the licensing of
certain trademarks and trade names of S&P and the S&P 500/BARRA Growth Index,
which is determined, composed, and calculated without regard to the Growth
Index Fund. S&P has no obligation to take the needs of the Sentinel Funds or
the owners of the Growth Index Fund into consideration in determining,
composing or calculating the S&P 500/BARRA Growth Index. S&P is not
responsible for and has not participated in the determination of the prices at
which the Growth Index Fund shares are sold, the timing of the offering of
Growth Index Fund shares, or the determination of the prices at which Growth
Index Fund shares may be redeemed. S&P has no obligation or liability in
connection with the administration or marketing of the Growth Index Fund.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500/BARRA GROWTH INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO THE RESULTS TO BE OBTAINED BY THE GROWTH
INDEX FUND, OWNERS OF THE GROWTH INDEX FUND, OR ANY OTHER PERSON OR ENTITY
FROM THE USE OF THE S&P 500/BARRA GROWTH INDEX OR ANY DATA INCLUDED THEREIN.
S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES AND HEREBY EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500/BARRA GROWTH INDEX OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY
LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Information Relevant to the Money Market Fund
The Money Market Fund faces very little interest rate risk, or the risk that
the value of the Fund's investments will decline due to increases in interest
rates, because the time until these investments mature is relatively short.
The Money Market Fund does face the risk that an issuer of a money market
instrument in which it invests will default in the repayment of the
instrument, and if this occurs the Fund will incur a loss. The Fund seeks to
control this risk by investing only in high quality instruments issued by
banks or corporations believed to be highly creditworthy by National Life
Investment Management.
Information Relevant to All Funds
Repurchase Agreements. All of the Funds may invest in repurchase agreements,
provided the counterparty maintains the value of the underlying securities at
a value not less than the repurchase price stated in the agreement. Under a
repurchase agreement, a Fund purchases bonds and simultaneously agrees to
resell these bonds to a counterparty at a prearranged time and specific price.
If the counterparty defaults on its repurchase obligation, the Fund would have
the bonds and be able to sell them to another party, but it could suffer a
loss if the proceeds from a sale of the bonds turns out to be less than the
repurchase price stated in the agreement. If the counterparty becomes
insolvent or goes bankrupt, a Fund may be delayed in being able to sell bonds
that were subject to the repurchase agreement. For more information about
repurchase agreements, please refer to the Statement of Additional
Information.
Offer, Purchase and Redemption of Shares
Shares of the Funds are not available directly to the public. Currently,
shares of the Funds are sold, without sales charge, at each Fund's net asset
value per share, only to variable life insurance and variable annuity separate
accounts of National Life Insurance Company. In the future, the Funds may
offer shares of one or more of the Funds (including new Funds that might be
added to Sentinel Variable Insurance Products, Inc.) to other separate
accounts of National Life, to support variable life insurance policies or
variable annuity contracts, or shares may be sold to other insurance company
separate accounts to fund variable life insurance policies and variable
annuity contracts. The price per share is based on the next daily calculation
of net asset value after an order is placed.
Shares of the Funds are sold in a continuous offering and are authorized
to be offered to National Life Insurance Company separate accounts to support
variable life insurance contracts and variable annuity contracts. Net premiums
or net purchase payments under such contracts are placed in one or more
subaccounts of a separate account and the assets of each such separate account
are invested in the shares of the Fund corresponding to that subaccount. A
separate account purchases and redeems shares of the Funds for its subaccounts
at net asset value without sales or redemption charges.
On each day that a Fund's net asset value is calculated, a separate
account transmits to the Fund any orders to purchase or redeem shares based on
the premiums, purchase payments, redemption (surrender) requests, and transfer
requests from contract owners or payees that have been processed on that day.
A separate account purchases and redeems shares of each Fund at that Fund's
net asset value per share calculated as of the same day, although such
purchases and redemptions may be executed the next morning.
Please refer to the separate prospectus for each separate account and its
related contract for a more detailed description of the procedures under which
a contract owner or payee may allocate his or her interest in a separate
account to a subaccount using the shares of one of the Funds as an underlying
investment medium.
How the Funds Are Priced
Net asset value for each Fund is calculated at 4:00 p.m., Eastern Time, on
each business day on which the New York Stock Exchange is open, and becomes
effective immediately upon its determination. The net asset value per share is
computed by dividing the total value of the assets of each Fund, less its
liabilities, by the total number of each Fund's outstanding shares. The Funds'
investments are valued as shown below:
o ________ Equity securities are valued at the latest transaction prices on
the principal stock exchanges on which they are traded.
o ________ Unlisted and listed securities for which there were no sales
during the day are valued at the mean between the latest available bid
and asked prices.
The Money Market Fund's assets are valued on the basis of amortized
cost, which involves valuing a portfolio instrument at its cost initially and
thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument.
Dividends, Capital Gains and Taxes
Each Fund intends to qualify as a regulated investment company ("RIC") under
the Internal Revenue Code of 1986, as a mended (the "Code"), and to meet
certain diversification requirements applicable to mutual funds underlying
variable insurance products. As long as it so qualifies, a Fund will not be
subject to federal income tax on the part of its ordinary net income and net
realized capital gains which it distributes to shareholders. Each Fund
intends to distribute substantially all of such income.
Shares of the Funds are offered only to separate accounts of National Life
Insurance Company. Under the Code, no tax is imposed on an insurance company
with respect to income of a qualifying separate account properly allocable to
the value of eligible variable life insurance or variable annuity contracts.
Accordingly, no gain or loss should be recognized on ordinary income or
capital gain distributions to the Funds' insurance company shareholders or
upon the sale or redemption of shares of the Funds. Please refer to the
appropriate tax disclosure in the prospectus for a separate account and its
related contract for more information on the taxation of life insurance
companies, separate accounts, and the tax treatment of variable life insurance
and variable annuity contracts and the holders thereof.
Management of the Funds
National Life Investment Management Company, Inc. manages the Funds'
investments and their business operations under the overall supervision of the
Board of Trustees of Sentinel Variable Products Trust. National Life
Investment Management has the responsibility for making all investment
decisions for the Funds. National Life Investment Management is a wholly owned
subsidiary of National Life Insurance Company. Its principal business address
is National Life Drive, Montpelier, Vermont 05604.
The Funds' investment advisory contracts call for the Funds to pay
National Life Investment Management fees, which are anticipated for the year
ending December 31, 2000, to be equal to the following percentages of the
Funds' average daily net assets:
Common Stock Fund 0.55%
Mid Cap Growth Fund 0.60%
Small Company Fund 0.60%
Growth Index Fund 0.30%
Money Market Fund 0.40%
National Life Investment Management currently waives all or a portion of
its advisory fees for some of the Funds. The effective advisory fee rates (as
a percentage of each Fund's average daily net assets) that these Funds are
anticipated to pay in the year ending December 31, 2000, after taking these
waivers into account, are as follows:
Common Stock Fund 0.28%
Mid Cap Growth Fund 0.43%
Small Company Fund 0.48%
Growth Index Fund 0.04%
Money Market Fund 0.00%
Portfolio Managers
National Life Investment Management employs a team approach in managing
the Funds. The management teams are comprised of a lead portfolio manager,
other portfolio managers and research analysts. Each team includes members
with one or more areas of expertise and shares the responsibility for
providing ideas, information and knowledge in managing the Funds. Rodney A.
Buck, the Chief Executive Officer of National Life Investment Management
Company, Inc., is also Executive Vice President and Chief Investment Officer
of National Life Insurance Company. Mr. Buck has been employed by National
Life Investment Management or its affiliates since 1972. There are three
investment management teams: an Equity Value Team, headed by Van Harissis,
Vice President of National Life Investment Management; an Equity Growth Team,
headed by Robert L. Lee, Vice President of National Life Investment
Management; and a Fixed Income Team, headed by David M. Brownlee, Vice
President of National Life Investment Management.
Each of Messrs. Buck, Lee, Brownlee and Harissis is a Chartered Financial
Analyst. Mr. Lee and Mr. Brownlee have each been associated with National Life
Investment Management since 1993. Mr. Harissis joined National Life Investment
Management in June 1999.
The Common Stock Fund is managed by the Equity Value Team, led by Mr.
Harissis. Mr. Harissis was a managing director and portfolio manager at
Phoenix Investment Partners from 1995 to 1999, and previously was a portfolio
manager at Howe & Rusling. Mr. Lee is the portfolio manager for the Mid Cap
Growth Fund and the Growth Index Fund. The Small Company Fund is managed by
Scott T. Brayman, Vice President of National Life Investment Management, and
Mr. Lee. Mr. Brayman is a Chartered Financial Analyst, and has been with
National Life Investment Management since 1995. Prior to joining National Life
Investment Management, he was associated with Argyle Capital Management, Inc.
The portfolio manager of the Money Market Fund is Darlene Coppola, Money
Market Trader of National Life Investment Management. Ms. Coppola has been
employed by National Life Investment Management or its affiliates since 1974.
She is supervised by Mr. Brownlee as head of the Fixed Income Team.
Monitoring For Possible Conflicts
The Trust sells its shares to fund variable life insurance contracts and
variable annuity contracts. Because of differences in tax treatment and other
considerations, it is possible that the interest of variable life insurance
contract owners and variable annuity contract owners could conflict. The Trust
will monitor the situation and in the event that a material conflict did
develop, the Trust would determine what action, if any, to take in response.
Performance Data
The Funds may from time to time include average annual total return
figures in advertisements or other material the Funds send to existing or
prospective shareholders. The Funds calculate these figures by determining the
average annual compounded rates of return that would produce the redeemable
value of the Fund being shown at the end of each period for a given initial
investment. All recurring and nonrecurring expenses are included in the
calculation. It is assumed that all dividends and distributions are
reinvested. In addition, to better illustrate the performance of money already
invested in the Funds, the Funds may also periodically advertise total return
without subtracting sales charges.
The Funds also may refer to rankings and ratings published by independent
tracking services and publications of general interest including Lipper
Analytical Services, Inc., CDA/Wiesenberger, Morningstar, Donoghue's;
magazines such as Money, Forbes, Kiplinger's Personal Finance Magazine,
Financial World, Consumer Reports, Business Week, Time, Newsweek, U.S. News
and World Report; and other publications such as the Wall Street Journal,
Barron's, Investor's Daily, and Standard & Poor's Outlook. These ranking
services and publications may rank the performance of the Funds against all
other mutual funds or against funds in specified categories. The rankings may
or may not include the effects of sales or other charges.
Description of Sentinel Variable Products Fund's Shares
Sentinel Variable Products Trust issues a separate class of shares of
common stock for each Fund. It may establish additional funds in the future
and additional classes of shares for such new funds.
Based on current federal securities law requirements, the Funds expect
that National Life Insurance Company will offer owners of its variable life
insurance contracts and its variable annuity contracts the opportunity to
instruct such shareholders as to how to vote shares allocable to their
contracts regarding certain matters, such as the approval of investment
advisory agreements. Fund shares not attributable to variable life insurance
and annuity contracts, or for which no timely instructions are received by
National Life, are voted by National Life in the same proportion as the voting
instructions that are received for all contracts participating in each Fund.
The voting instructions received from contract holders may be disregarded in
certain circumstances that are described in the prospectuses for the variable
contracts.
<PAGE>
Sentinel Variable Products Trust
Shareholder Reports
Additional information about the Funds' investments is available in the Funds'
annual and semi-annual reports to shareholders. In the Funds' annual report
you will find a discussion of the market conditions and investment strategies
that significantly affected investment performance of each of the Funds during
its last fiscal year. You may obtain copies of these reports at no cost from
the Funds by calling 1-800- - ____ .
The Funds will send you one copy of each shareholder report and certain
other mailings, regardless of the number of Funds to which you have allocated
value under your variable life insurance or annuity contract. To receive
additional shareholder reports at no cost, call the Funds at 1-800- - _____ .
Statement of Additional Information
The Funds' Statement of Additional Information contains further information
about the Funds and is incorporated by reference (legally considered to be
part of this Prospectus). You may request a free copy by writing the Funds at
the address shown below or by calling 1-800- - _____ (3863). Please contact
your registered representative or the Funds if you have any questions.
Information about the Funds (including the Statement of Additional
Information) can also be reviewed and copied at the SEC's Public Reference
Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation
of the public reference room. This information is also available on the SEC's
Internet site at http://www.sec.gov and copies may be obtained upon payment of
a duplicating fee by writing the Public Reference Section of the SEC,
Washington, D.C. 20549-6009.
You should rely only on the information contained in this prospectus. No one
is authorized to provide you with information that is different.
Sentinel Variable Products Trust
National Life Drive
Montpelier, VT 05604
Investment Advisor Counsel
National Life Investment
Management Company, Inc. Brown & Wood LLP
National Life Drive One World Trade Center
Montpelier, VT 05604 New York, NY 10048
Principal Independent
Underwriter Accountants
Equity Services, Inc.
National Life Drive
Montpelier, VT 05604
Custodian
and Dividend
Paying Agent
State Street Bank and Trust
Company - Kansas City
801 Pennsylvania Avenue
Kansas City, MO 64105
Investment Company Act file # 811-09917.
<PAGE>
Subject to Completion
Preliminary Statement of Additional Information dated January 14, 2000
The information in this statement of additional information is not complete
and may be changed. 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.
STATEMENT OF ADDITIONAL INFORMATION
, 2000
SENTINEL VARIABLE PRODUCTS TRUST
National Life Drive
Montpelier, Vermont 05604
(800) -
Sentinel Variable Products Common Stock Fund (the "Common Stock Fund")
Sentinel Variable Products Mid Cap Growth Fund (the "Growth Fund") Sentinel
Variable Products Small Company Fund (the "Small Company Fund") Sentinel
Variable Products Growth Index Fund (the "Growth Index Fund") Sentinel
Variable Products Money Market Fund (the "Money Market Fund")
SENTINEL VARIABLE PRODUCTS TRUST (the "Trust") is a managed, open-end
investment company, which continuously offers its shares, to separate accounts
of life insurance companies to serve as the investment vehicle for variable
life insurance and annuity contracts. The Trust consists of five separate and
distinct funds, four of which are diversified (the Growth Index Fund being
non-diversified). The five funds of the Trust are referred to hereinafter
collectively as the "Funds", and individually as a "Fund". The Funds are
described in a Prospectus of the Trust dated , 2000 (the "Prospectus"). Each
of the Funds has different investment objectives and risk characteristics.
National Life Investment Management Company, Inc. (the "Advisor") acts as
the investment advisor to the Funds. Shares of the Funds are distributed by
Equity Services, Inc. ("ESI"). Both the Advisor and ESI are wholly owned
subsidiaries of National Life Insurance Company ("National Life").
This Statement of Additional Information is not a Prospectus and should
be read in conjunction with the Prospectus. The Prospectus, which has been
filed with the Securities and Exchange Commission (the "SEC"), can be obtained
upon request and without charge by writing to the Funds at the above address,
or by calling 1-800- - . This Statement of Additional Information has been
incorporated by reference into the Prospectus.
<PAGE>
TABLE OF CONTENTS
Page
The Trust....................................................................3
Investment Objectives and Policies...........................................3
Investment Restrictions......................................................4
Management of the Trust......................................................4
Principal Shareholder and Voting Rights......................................7
The Investment Advisor.......................................................7
Principal Underwriter........................................................9
The Fund Services Agreement..................................................9
Portfolio Transactions and Brokerage Commissions.............................9
Portfolio Turnover..........................................................11
Capitalization..............................................................11
Determination of Net Asset Value............................................12
Total Return and Yield......................................................13
General Information.........................................................14
<PAGE>
THE TRUST
The Trust was formed as a Delaware business trust on March 14, 2000.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and certain fundamental policies of each of the
Funds are set forth in the Prospectus.
General Considerations
Each Fund is an open-end, management investment company. All Funds are
diversified investment companies except the Growth Index Fund, which is a
non-diversified investment company.
Each Fund's fundamental policies and investment objectives as they affect
each such Fund cannot be changed without the approval of the lesser of (i) 67
percent or more of the voting securities of each such Fund present at a
meeting if the holders of more than 50 percent of the outstanding voting
securities of each such Fund are present or represented by proxy, or (ii) more
than 50 percent of the outstanding voting securities of each such Fund. With
respect to the submission of a change in fundamental policy or investment
objective of each such Fund, such matter shall be deemed to have been
effectively acted upon with respect to any such Fund if a majority of the
outstanding voting securities of such Fund vote for the approval of such
matters, notwithstanding (1) that such matter has not been approved by a
majority of the outstanding voting securities of any other Fund affected by
such matter and (2) that such matter has not been approved by a majority of
the outstanding voting securities of the Company. Fundamental policies adopted
with respect to each Fund, except the Growth Index Fund, provide that no Fund
shall concentrate its investments in a particular industry, nor will it
purchase a security if, as a result of such purchase, more than 25% of its
assets will be invested in a particular industry.
Repurchase Agreements. Each of the Funds to a limited extent may enter
into repurchase agreements with selected banks and broker-dealers under which
the Fund purchases securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities ("U.S. Government Securities") and agrees to
resell the securities at an agreed upon time and at an agreed upon price. The
difference between the amount a Fund pays for securities and the amount it
receives upon resale is interest income to a Fund. Failure of the seller to
repurchase the securities as agreed may result in a loss to a Fund if the
market value of the securities has fallen to less than the repurchase price.
In the event of such a default, a Fund may also experience certain costs and
be delayed or prevented from recovering or liquidating the collateral
securities, which could result in further loss to a Fund. The Funds will use
repurchase agreements as a means of making short-term investments of seven
days or less and in aggregate amounts of not more than 25% of the net assets
of the Fund. All repurchase agreements used by the Funds will provide that the
value of the collateral underlying the repurchase agreement always will be at
least equal to 102% of the repurchase price. The Advisor will monitor on a
continuing basis the creditworthiness of all parties with which it might enter
into repurchase agreements and will enter into repurchase agreements only if
it determines that the credit risk of such a transaction is minimal.
INVESTMENT RESTRICTIONS
The Trust's Board of Trustees has adopted a number of investment policies
for the Trust. One such policy, which is a fundamental policy, is that each of
the Common Stock Fund, Mid Cap Growth Fund and Small Company Fund cannot
purchase securities of any one issuer if the market value of such securities
exceeds 5% of the total market value of each such Fund's securities and cash.
These three Funds also may not invest more than 25% of their total assets in a
particular industry, although these Funds may from time to time invest more
than 25% of their assets in broad industrial sectors. The Growth Index Fund
may concentrate in a particular industry to the extent necessary to match its
target index.
It is also a fundamental policy of the Trust that it may not borrow
money, except from banks in an amount up to 5% of a Fund's total assets for
temporary or emergency purposes or to meet redemption requests which might
otherwise require the untimely disposition of securities. None of the Funds
may purchase securities on margin. The Trust may not issue senior securities.
The Trust may not loan money, but may lend its securities. Loans of securities
are not a principal investment strategy of any of the Funds, however. Also,
the Trust may not deal in real estate, may not act as underwriter of
securities issued by others, and may not purchase from or sell to any officer,
director or employee of the Trust, the Advisor or underwriter, or any of their
officers or directors, any securities other than shares of the Trust's capital
stock. None of the Funds may deal in commodities or commodities contracts.
None of the Funds may invest in oil, gas or other mineral exploration or
development programs or leases. None of the Funds are able to invest more than
5% of its net assets in warrants valued at the lower of cost or market, or
more than 2% of its net assets in warrants which are not listed on either the
New York Stock Exchange or the American Stock Exchange.
The Trust may not purchase more than 10% of the voting securities of any
issuer. The Trust may not invest in companies for purposes of exercising
control or management.
The Trust's investment policies will be affected by the insurance laws of
certain states, which may impose certain limitations on the permissible
investments of the Funds.
Each Fund may at any time assume a temporary defensive position, if
prudent in the opinion of the Advisor. In the event that any Fund assumes a
temporary defensive position, it may invest without limitation in securities
of the U.S. Treasury or U.S. government agencies or instrumentalities, or high
quality money market instruments which are eligible investments for money
market funds.
Restrictions and policies established by resolution of the Board of
Trustees, unless specifically identified as fundamental policies, may be
changed by the Board, with any material changes to be reported to
shareholders. Among those presently in effect is a policy which provides that
assets of all Funds may be invested entirely or in part in U.S. Government
Securities or an agency thereof, or held as cash deposits in a bank or trust
company having assets of not less than $2,000,000,000. The securities of
foreign issuers may be selected as being suitable for one or more of the
Funds.
MANAGEMENT OF THE TRUST
Management is made up of (i) the Trust's Board of Trustees, which is
responsible for the Trust's operations; (ii) the officers of the Trust, who
are responsible to the Board; and (iii) the Advisor, which under agreements
with the Trust, supervises and assists in the management of the Funds and the
purchase and sale of securities. See the "The Investment Advisor", below. Set
forth below is information regarding the trustees and officers of the Trust,
their ages and their principal occupations during the past five years. In the
case of those persons who also hold positions with affiliated persons of the
Trust, such positions are also indicated.
THOMAS H. MACLEAY* - CHAIRMAN AND TRUSTEE
National Life Drive
Montpelier, VT 05604
Age 50
National Life - President and Chief Operating Officer, 1996 to present;
Executive Vice President and Chief Financial Officer, 1993 to 1996; National
Life Investment Management Company, Inc., - Director - 1996 to present; Equity
Services, Inc. - Director - 1996 to present; and National Retirement Plan
Advisors, Inc.- Director - 1996 to present.
WILLIAM D. MCMEEKIN - TRUSTEE
36 North Main Street
Barre, Vermont 05641
Age 55
Granite Savings Bank and Trust Co. - President and Chief Executive Officer,
1993 to present; Vermont Granite Museum of Barre - Director; Central Vermont
Economic Development Corporation - Director; Green Mountain United Way
Allocation Committee Member.
WILLIAM G. RICKER - TRUSTEE
17 State Street
Montpelier, Vermont 05602
Age 60
Denis, Ricker & Brown (insurance and financial services) - President, for more
than five years; Jeffersonville Insurance Agency, President, for more than
five years; Central Vermont Economic Development Corporation - President;
Winooski East Riverfront Council - Vice Chairman; Kemper Insurance Agents
Advisory Board - Chairman.
JOSEPH M. ROB* - PRESIDENT
National Life Drive
Montpelier, Vermont 05604
Age 57
Sentinel Management Company - Chief Executive Officer, 1993 to present;
Sentinel Financial Services Company - Chief Executive Officer, 1993 to
present; Sentinel Administrative Services Company - Chief Executive Officer,
1993 to present; ESI - Chairman, Chief Executive Officer, and Director, 1985
to present, President, 1997 to present; American Guaranty & Trust Company -
Director, 1993 to present; LSW National Holdings, Inc. - Director, 1996 to
present; Life Insurance Company of the Southwest - Director, 1996 to present.
THOMAS P. MALONE* - VICE PRESIDENT & TREASURER
National Life Drive
Montpelier, Vermont 05604
Age 44
Sentinel Administrative Service Company - Vice President, 1997 to present;
Assistant Vice President, 1990 to 1997; Sentinel Group Funds, Inc. - Vice
President & Treasurer, 1997 to present; Assistant Vice President, 1990 to
1997.
D. RUSSELL MORGAN* - SECRETARY
National Life Drive
Montpelier, Vermont 05604
Age 44
National Life - Senior Counsel, 2000 to present; Counsel, 1994 to present; ESI
- - Counsel, 1986 to present; National Life Investment Management Company, Inc.
- - Counsel, 1986 to present; Sentinel Advisors Company - Sentinel Financial
Services Company - Sentinel Administrative Service Company - Counsel, 1993 to
present; LSW National Holdings, Inc. Secretary, 1996 to present.
*"Interested Persons" (as defined in the 1940 Act).
The officers and trustees of the Trust who are employees of National Life
or its subsidiaries do not receive any compensation from the Trust. The Trust
pays to each trustee who is not an affiliate of the Advisor a fee of $1,500
for each meeting of the Board of Trustees attended by the trustee. It is
expected that the Board of Trustees will meet four times per year. The Trust
also reimburses trustees for travel and other out-of-pocket expenses incurred
by them in connection with attending such meetings.
The following table sets forth estimated compensation for the first year
of operations of the Trust to Messrs. McMeekin and Ricker:
Aggregate Pension or Retirement
Name of Compensation Benefits Accrued as Part Total
Trustee from the Trust of Fund Expense Compensation
- ------- -------------- --------------- ------------
William D. McMeekin $6,000 None $6,000
William G. Ricker $6,000 None $6,000
Code of Ethics
The Board of the Trust has adopted a Code of Ethics pursuant to Rule
17j-1 under the 1940 Act and the Advisor has adopted a similar Code of Ethics
(together, the "Codes of Ethics"). The Codes of Ethics significantly restrict
the personal investing activities of all employees of the Advisor.
The Codes of Ethics require that all employees preclear any personal
securities transaction (with limited exceptions, such as mutual funds and
government securities). The preclearance requirement and associated procedures
are designed to identify any substantive prohibition or limitation applicable
to the proposed transaction. The substantive restrictions include a ban on
acquiring any securities in an initial public offering, and a prohibition on
profiting from short-term trading in securities (with certain exceptions). In
addition, no employee may purchase or sell any security which at the time is
being purchased or sold by any mutual fund advised by the Advisor or its
affiliates, except for stock s with a market capitalization in excess of $25
billion. Furthermore, the Codes of Ethics provide for seven day trading
"blackout periods" which prohibit trading by employees of the Advisor in
proximity to periods of trading by mutual funds managed by the Advisor in the
same (or equivalent) security, unless certain conditions exist.
PRINCIPAL SHAREHOLDER AND VOTING RIGHTS
It is expected that all of the shares of the trust will be legally owned
by various separate accounts of National Life which serve as investment
vehicles for National Life's variable life insurance and variable annuity
contracts, or by National Life in its general account.
As the legal owner of the Trust shares, National Life has the right to
vote upon any matter that may be voted upon at a shareholders' meeting.
However, in accordance with the SEC's view of present applicable law, National
Life will vote Trust shares at meetings of the shareholders of the Trust or
Fund in accordance with instructions of policyowners. We will vote Fund shares
held in each account for which policyowners do not send timely instructions in
the same proportion as those shares in that account for which instructions are
received.
If there is a shareholder vote, National Life will send policyowners
proxy material and a form for giving voting instructions. Policyowners may
vote, by proxy or in person, only as to the Funds that correspond to the
accounts in which his or her policy values are allocated. We will determine
the number of shares held in each account attributable to a policy for which
the policyowner may provide voting instructions by dividing the policy's value
in that account by the net asset value per share of the corresponding Fund as
of the record date for the shareholder meeting. For each share of a Fund for
which policyowners have no interest, including any shares held in National
Life's general account, National Life will cast votes, for or against any
matter, in the same proportion as policyowners provide voting instructions.
If required by state insurance officials, National Life may disregard
voting instructions if they would require shares to be voted so as to cause a
change in the investment objectives or policies of one or more of the Funds,
or to approve or disapprove an investment policy or investment adviser of one
or more of the Funds. In addition, National Life may disregard voting
instructions in favor of certain changes initiated by a policyowner or the
Fund's Board of Trustees if its disapproval of the change is reasonable and is
based on a good faith determination that the change would be contrary to state
law or otherwise inappropriate, considering the Fund's objectives and
purposes, and the effect the change would have on National Life. If National
Life disregards voting instructions, it will advise policyowners of that
action and National Life's reasons for it in the next report to policyowners.
Shares of the Funds are currently being offered to variable life
insurance and variable annuity separate accounts of life insurance companies
other than National Life that are not affiliated with National Life. National
Life understands that shares of these Funds also will be voted by such other
life insurance companies in accordance with instructions from their
policyholders invested in such separate accounts. This will dilute the effect
of your voting instructions.
None of the Trustees or officers of the Trust own any shares of the
Trust, as they are available only to the separate accounts of National Life to
serve as investment vehicles for its variable life insurance and variable
annuity contracts.
THE INVESTMENT ADVISOR
The Advisor provides general supervision of the Funds' investments as
well as certain administrative and related services. The Advisor is a Vermont
corporation which is a wholly owned subsidiary of National Life. Thomas H.
MacLeay, the Chairman of the Trust, is also President and Chief Operating
Officer of National Life. As such, he may be deemed to control the Advisor.
Joseph M. Rob, the President of the Trust, is also Chairman and Chief
Executive Officer of ESI, the Funds' distributor, and a wholly owned
subsidiary of National Life, and the Chief Executive Officer of Sentinel
Financial Services Company, Sentinel Administrative Service Company, and
Sentinel Management Company. Sentinel Financial Services Company, Sentinel
Administrative Service Company and Sentinel Management Company are all Vermont
general partnerships of which the general partners are affiliates of National
Life. Thomas P. Malone and D. Russell Morgan, the Vice President and
Treasurer, and Secretary of the Trust, respectively, also hold the positions
with the affiliates of the Advisor shown on pages ____ ______ .
As compensation in full for services rendered under its advisory
agreement applicable to the Funds, the Trust will pay to the Advisor a monthly
fee determined as follows:
(1) With respect to the Mid Cap Growth and Small Company Funds: 0.60% per
annum on the first $100 million of average daily net assets of each such Fund;
and 0.55% per annum on such assets in excess of $100 million.
(2) With respect to the Common Stock Fund: 0.55% per annum on the average
daily net assets of the Fund.
(3) With respect to the Growth Index Fund: 0.30% per annum on the average
daily net assets of the Fund.
(4) With respect to the Money Market Fund: 0.40% per annum on the average
daily net assets of the Fund.
The Advisor has voluntarily agreed for a period at least until December
31, 2000, to waive the following Funds' advisory fees or other expenses
necessary to limit these Funds' overall expense ratios to the amounts shown
below:
Common Stock Fund..............................0.80%
Mid Cap Growth Fund............................0.95%
Small Company Fund.............................1.00%
Growth Index Fund..............................0.65%
Money Market Fund..............................0.50%
The Advisor currently intends to continue to waive fees to the extent
provided above indefinitely. However, these arrangements may be changed or
terminated at any time after December 31, 2000.
The Trust's advisory agreement, which was approved by the Trust's sole
shareholder on _____________________ , 2000, and by the Trust's Board of
Trustees on _____________________ , 2000, must each be approved annually by
vote of the Board of Trustees of the Trust or by the vote of a majority of the
outstanding voting securities of the applicable Fund, but in either event it
must also be approved by a vote of a majority of the Trustees who are not
parties to the contract, or "interested persons", as defined in the 1940 Act,
of any such party cast in person at a meeting called for the purpose of voting
on such approval. With respect to the submission of the Trust's advisory
agreement for approval by the shareholders, such matters shall be deemed to be
acted upon effectively with respect to any Fund if a majority of the
outstanding voting securities of such Fund vote for approval of such matter,
notwithstanding (A) that such matter has not been approved by a majority of
the outstanding voting securities of any other class affected by such matter,
and (B) that such matter has not been approved by a vote of a majority of the
outstanding voting securities of the Fund.
The advisory agreement will terminate automatically in the event of its
assignment and is terminable at any time without penalty by the Board, or,
with respect to a particular Fund, by a majority of the Fund's outstanding
voting securities, on not more than 60 days' written notice to the Advisor and
by the Advisor on 60 days' written notice to the Fund.
PRINCIPAL UNDERWRITER
ESI acts as the principal underwriter of shares of the Funds. Its
principal business address is National Life Drive, Montpelier, Vermont 05604.
ESI receives no compensation from the Trust for acting as principal
underwriter. The distribution contract of the Trust provides that ESI shall
use its best efforts to continuously offer the Funds' shares. This contract
may be terminated by either party thereto on 60 days' written notice, without
penalty, and it terminates automatically in the event of its assignment. The
distribution contract must be approved annually in one of the same ways as
described above for the advisory agreement.
THE FUND SERVICES AGREEMENT
Sentinel Administrative Service Corporation ("Sentinel Service"), in
accordance with its Fund Services Agreement with the Trust, provides the Funds
with certain transfer agency, fund accounting and financial administration
services.
For these services, the Fund Services Agreement provides for the Trust to
pay to Sentinel Service a fixed fee totalling $20,000 per year for fund
transfer agency services, accounting and financial administration services and
a fee of 0.10% of the average daily net assets of the Funds. The fixed fee is
subject to increase under inflation clauses for fiscal years beginning on or
after January 1, 2003, to the extent approved by the Board of Trustees. Fees
are payable monthly in arrears.
Sentinel Service is a Vermont corporation which is a wholly owned
subsidiary of national Life.
The Trust's Fund Services Agreement was approved by the Trust's sole
shareholder on , 2000. The Agreement was approved by the Trust's
Board of Trustees on , 2000. Each agreement must be approved annually
by vote of the Board or by the vote of a majority of the outstanding voting
securities of each Fund, but in either event it must also be approved by a vote
of a majority of the trustees who are not parties to the contract, or
interested persons, as defined in the 1940 Act, of any such party, cast in
person at a meeting called for the purpose of voting on such approval. The Fund
Services Agreement will terminate automatically in the event of its assignment
and is terminable at any time without penalty by the Board or, as to a
particular Fund, by a majority of the applicable Fund's outstanding voting
securities on not more than 60 days' written notice to Sentinel Service and by
Sentinel Service on 60 days' notice to the Fund.
PORTFOLIO TRANSACTIONS
AND BROKERAGE COMMISSIONS
The Funds' policy, in the case of listed securities, is to place its
orders with firms that are members of a stock exchange on which such
securities are listed or traded and in the case of securities traded in the
over-the-counter market to deal directly with dealers who are primary market
makers in such securities, without the use of a broker unless the Funds can
obtain better price or execution through the use of a broker. Purchases are
generally made for investment and not for trading purposes. Subject to the
direction and control of the Board of Trustees and in accordance with its
advisory agreement, the Advisor supervises the investments of the Funds and,
as an essential feature thereof, places orders for the purchase and sale of
portfolio securities and supervises their execution, including negotiating the
amount of the commission rate paid, in each case at prices it believes to be
the best then available, taking into consideration such factors as price,
commission, size of order, difficulty of execution and skill required of the
executing broker-dealer as well as the extent to which a broker capable of
satisfactory execution may provide research information and statistical and
other services to the Advisor.
In making such purchases and sales, the brokerage commissions are paid by
the Funds. The Funds may also buy or sell securities from, or to, dealers
acting as principals.
Section 28(e) of the 1934 Act, which was enacted by Congress in
connection with the elimination of fixed commission rates on May 1, 1975,
provides that, except as agreements such as investment advisory contracts
otherwise provide, money managers such as the Advisor will not be deemed to
have acted unlawfully or to have breached a fiduciary duty if, subject to
certain conditions, a broker-dealer is paid in return for brokerage and
research services an amount of commission for effecting transactions for
accounts, such as the Funds, in excess of the amount of commission another
broker-dealer would charge for effecting the transaction. In order to cause
the Funds to pay such greater commissions, the Advisor has to determine in
good faith that the greater commission is reasonable in relation to the value
of the brokerage and research services provided by the broker-dealer viewed in
terms of either a particular transaction or the Advisor's overall
responsibilities to the Funds and to its other clients.
Brokerage and research services, as provided in Section 28(e) of the 1934
Act, include advice as to the value of securities, the advisability of
investing in, purchasing or selling securities, the availability of securities
or purchasers or sellers of securities; furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts and effecting securities
transactions and performing functions incidental thereto (such as clearance,
settlement and custody).
Although research and market and statistical information from brokers and
dealers can be useful to the Funds, and to the Advisor, it is the opinion of
the management of the Funds that such information is only supplementary to the
Advisor's own research effort since the information must still be analyzed,
weighed and reviewed by the Advisor's staff.
The Advisor obtains several research services specifically in exchange
for commissions paid by the Funds and its other clients. These services
primarily consist of electronic research services from Bloomberg, ILX,
Factset, and First Call. The Trust also obtains Lipper Directors' Analytical
Data from Lipper Analytical Distributors, Inc., in exchange for Fund brokerage
commissions. This service is available only for brokerage commissions.
The research services provided by brokers through which the Funds effect
securities transactions may be used by the Advisor or its affiliates in
managing their other client accounts, as well as the Funds. However, the
Advisor and its affiliates use the commissions paid by most of their other
client accounts to obtain research services as well, and this research is also
useful in managing the Funds' accounts, as well those of other clients.
Except for implementing the policies stated above, there is no commitment
to place portfolio transactions with brokers or dealers who provide investment
research. The Advisor has advised the Funds that it is not feasible to assign
any precise value to services provided by such brokers and dealers to it, nor
does the use of such services reduce its expense by any measurable or
significant amount. _____ Such commissions were allocated on the basis of
research and statistical or other services provided by the dealer.
PORTFOLIO TURNOVER
Purchases for the Small Company, Common Stock and Growth Index Funds are
made for long-term investment, and not for short-term trading profits.
However, during rapidly changing conditions, there necessarily may be more
portfolio changes than in a more stable period and these may result in
short-term gains or short-term losses.
The Mid Cap Growth Fund anticipates that it may have a higher level of
portfolio turnover. This Fund may engage in relatively short term trading in
some stocks. This activity may create higher transaction costs due to
commissions and other expenses.
CAPITALIZATION
The Trust's shares of beneficial interest are fully paid and
non-assessable. Each share of the Trust is entitled to one vote per dollar of
net asset value per share, on matters on which all Funds of the Trust vote as
a single class.
The proceeds from the sale of shares of each Fund of the Trust and all
income, earnings and profits therefrom irrevocably appertain to that Fund.
Each such Fund records all liabilities (including accrued expenses) in respect
of such Fund, as well as a share of such liabilities (including general
liabilities of the Trust) in respect to two or more Funds, in proportion to
their average net assets. If any reasonable doubt exists as to the Fund to
which any asset or liability appertains, the Board may resolve such doubt by
resolution.
In the case of dissolution or liquidation of the Trust, the shareholders
of each Fund of the Trust are entitled to receive ratably per share the net
assets of such Fund, with any general assets of the Trust distributed ratably
per share, regardless of the Fund.
Voting rights are non-cumulative, meaning that the holders of more than
50% of the net asset value of the shares voting for the election of trustees
can elect 100% of the trustees being voted upon if they choose to do so, and,
in such event the holders of the remaining minority of the shares voting for
the election of trustees will not be able to elect any person or persons to
the Board.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Funds are not available directly to the public. Currently,
shares of the Funds are sold, without sales charge, at each Fund's net asset
value per share, only to variable life insurance and variable annuity separate
accounts of National Life Insurance Company. In the future, the Funds may
offer shares of one or more of the Funds (including new Funds that might be
added to the Trust) to other separate accounts of National Life, to support
variable life insurance policies or variable annuity contracts, or shares may
be sold to other insurance company separate accounts to fund variable life
insurance policies and variable annuity contracts. The price per share is
based on the next daily calculation of net asset value after an order is
placed.
Shares of the Funds are sold in a continuous offering and are authorized
to be offered to National Life Insurance Company separate accounts to support
variable life insurance contracts and variable annuity contracts. Net premiums
or net purchase payments under such contracts are placed in one or more
subaccounts of a separate account and the assets of each such separate account
are invested in the shares of the Fund corresponding to that subaccount. A
separate account purchases and redeems shares of the Funds for its subaccounts
at net asset value without sales or redemption charges.
On each day that a Fund's net asset value is calculated, a separate
account transmits to the Fund any orders to purchase or redeem shares based on
the premiums, purchase payments, redemption (surrender) requests, and transfer
requests from contract owners or payees that have been processed on that day.
A separate account purchases and redeems shares of each Fund at that Fund's
net asset value per share calculated as of the same day, although such
purchases and redemptions may be executed the next morning.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund is computed by dividing the
total value of the assets of that Fund, less its liabilities, by the total
number of such Fund's outstanding shares. Equity securities which are traded
on a national securities exchange are valued at the last reported sale price
each business day at the regular close of trading, currently 4:00 p.m. Eastern
time. Equity securities for which there were no sales during the day are
valued at the mean between the latest available bid and asked prices. Net
asset value is calculated once each business day, at 4:00 p.m. Eastern time,
and becomes effective immediately upon its determination. Orders to purchase
shares of the Funds received by the Trust prior to 10:00 a.m. Eastern time
will be confirmed on the basis of the closing price on the preceding day,
provided they represent instructions provided by policyholders of variable
life insurance or annuity policies for which the Trust serves as an investment
vehicle before 4:00 p.m. Eastern time on the preceding day, or effect
transactions with respect to such policies as of such preceding day. "Business
day" means a day on which the New York Stock Exchange is open. The New York
Stock Exchange is not open on New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Money Market Fund values its portfolio securities based on their
amortized cost in accordance with SEC regulations. The amortized cost method
of valuation involves valuing a security at its cost at the time of purchase
and thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. During such periods the yield to investors in the
Money Market Fund may differ somewhat from that obtained in a similar
investment company which uses mark-to-market value for all of its portfolio
securities. For example, if the use of amortized cost resulted in a lower
(higher) aggregate portfolio value on a particular day, a prospective investor
in the Money Market Fund would be able to obtain a somewhat higher (lower)
yield than would result from investment in such a similar company which
utilizes mark-to-market values and existing investors would receive less
(more) investment income. The purpose of this method of calculation is to
attempt to maintain a constant net asset value per share of $1.00.
In accordance with the SEC rule permitting the use of the amortized cost
method of valuation, the Money Market Fund will maintain a dollar-weighted
average portfolio maturity of 90 days or less, and must purchase instruments
having remaining maturities of 397 days (13 months) or less. In addition, the
Board of Trustees has established procedures designed to stabilize, to the
extent reasonably possible, the Money Market Fund's price per share as
computed for the purpose of sales and redemptions at $1.00. The Board will
review periodically the Money Market Fund's portfolio holdings to determine
whether a deviation exists between the net asset value calculated using market
quotations and that calculated on an amortized cost basis. In the event the
directors determine that a deviation exists which may result in material
dilution or other unfair results to existing shareholders, the Money Market
Fund will take such corrective action as it regards as necessary and
appropriate, including (i) the reduction of the number of outstanding shares
of the Money Market Fund by having each shareholder proportionately contribute
shares to the Money Market Fund's capital, (ii) the sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
average portfolio maturity, (iii) the withholding of dividends or (iv) the
establishment of a net asset value per share by using available market
quotations. If the number of outstanding shares is reduced in order to
maintain a constant net asset value of $1.00 per share, the shareholders will
contribute proportionately to the Money Market Fund's capital the number of
shares which represent the difference between the amortized cost valuation and
the market valuation of the portfolio. Each shareholder will be deemed to have
agreed to such contribution by such shareholder's investment in the Money
Market Fund.
Since the net income of the Money Market Fund is determined and declared
as a dividend immediately prior to each time the asset value of the Money
Market Fund is determined, the net asset value per share of the Money Market
Fund normally remains at $1.00 per share immediately after each such dividend
declaration. Any increase in the value of a shareholder's investment in the
Money Market Fund, representing the reinvestment of dividend income, is
reflected by an increase in the number of shares of the Money Market Fund in
that shareholder's account and any decrease in the value of a shareholder's
investment may be reflected by a reduction in the number of shares in the
account.
TOTAL RETURN AND YIELD INFORMATION
Each of the Funds (except the Money Market Fund) from time to time may
include its average annual total return in advertisements or information
furnished to present or prospective shareholders.
The Trust will compute these total returns by assuming a hypothetical
initial payment of $1,000. It will then be assumed that all of the dividends
and distributions by each of the Funds over the relevant time period are
reinvested. It will then assume that at the end of the one-, five- or ten-year
period, after taking into account all applicable recurring and nonrecurring
expenses, the entire amount is redeemed. The average annual total return then
will be calculated by calculating the annual rate required for the initial
payment to grow to the amount which would have been received upon redemption
(i.e., the average annual compound rate of return). Since the Trust had not
begun operations as of the date of this Statement of Additional Information,
no average annual total return calculations are shown here.
Each Fund's average annual total return will vary depending upon market
conditions, the securities comprising such Fund's portfolio, such Fund's
operating expenses and the amount of net capital gains or losses realized by
such Fund during the period. An investment in any of the Funds will fluctuate
and an investor's shares, when redeemed, may be worth more or less than their
original cost.
On occasion, the Funds may compare their average annual total return
figures to mutual fund averages such as those compiled by Lipper Analytical
Services, Inc., and to market indices such as the Dow Jones Industrial
Average, the Standard & Poor's 500, the Standard & Poor's 500/ BARRA Growth
Index, the Standard & Poor's 500/BARRA Value Index, the Standard and Poor's
400 Midcap Index and the Russell 2000 Index.
The Money Market Fund normally computes its annualized yield by
determining the net income for a seven-day base period for a hypothetical
pre-existing account having a balance of one share at the beginning of the
base period, dividing the net income by the net asset value of the account at
the beginning of the base period to obtain the base period return, multiplying
the result by 365 and then dividing by seven. In accordance with regulations
adopted by the SEC, the Money Market Fund is required to disclose its
annualized yield for certain seven-day base periods in a standardized manner
which does not take into consideration any realized or unrealized gains or
losses on portfolio securities. The SEC also permits the calculation of a
standardized effective or compounded yield. This is computed by compounding
the unannualized base period return which is done by adding one to the base
period return, raising the sum to a power equal to 365 divided by seven and
subtracting one from the result.
The yield quoted should not be considered a representation of the yield
of the Money Market Fund in the future since the yield is not fixed. Actual
yields will depend not only on the type, quality and maturities of the
investments held by the Money Market Fund and changes in interest rates on
such investments, but also on changes in the Money Market Fund's expenses
during the period.
Yield information may be useful in reviewing the performance of the Money
Market Fund and for providing a basis for comparison with other investment
alternatives. However, the Money Market Fund's yield fluctuates, unlike bank
deposits or other investments which typically pay a fixed yield for a stated
period of time.
GENERAL INFORMATION
Copies of the Trust's Declaration of Trust, and various agreements
referred to in the Prospectus and this Statement of Additional Information are
filed with the registration statement at the SEC, to which reference is made
for their full terms. Such documents and other information filed with the SEC
may be obtained from the SEC upon payment of the fees prescribed by the Rules
of the SEC and are also now available at the SEC's Internet Web site at
http://www.sec.gov. All cash and securities of the Funds, except for U.S.
Government Securities which are represented only in book entry form at the
Federal Reserve Bank, are held by State Street Bank and Trust Company or in a
central depository system in the name of State Street Bank & Trust - Kansas
City, 801 Pennsylvania Avenue, Kansas City, Missouri 64105 as the Funds'
Custodian. State Street is also Dividend Disbursing Agent for the Funds'
shares. Sentinel Service is Transfer Agent and Registrar for the Funds'
shares. All correspondence regarding the Trust should be mailed to National
Life Insurance Company, National Life Drive, Montpelier, Vermont 05604, Attn:
Registered Insurance Contracts.
The independent accountants for the Trust are ,
located at . The independent accountants are
responsible for auditing the annual financial statements of the Trust.
Counsel for the Funds is Brown & Wood LLP, One World Trade Center, New
York, New York 10048-0557.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholder,
Sentinel Variable Products Trust:
We have audited the accompanying statement of assets and liabilities of
Sentinel Variable Products Common Stock Fund, Sentinel Variable Products
Mid Cap Growth Fund, Sentinel Variable Products Small Company Fund,
Sentinel Variable Products Growth Index Fund and Sentinel Variable
Products Money Market Fund of Sentinel Variable Products Trust as of
_______ __, 2000. These financial statements are the responsibility of
the Funds' management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the statements of assets and liabilities present fairly,
in all material respects, the financial position of Sentinel Variable
Products Common Stock Fund, Sentinel Variable Products Mid Cap Growth
Fund, Sentinel Variable Products Small Company Fund, Sentinel Variable
Products Growth Index Fund and Sentinel Variable Products Money Market
Fund of Sentinel Variable Products Trust as of _______ __, 2000, in
conformity with generally accepted accounting principles.
_________, 2000
<PAGE>
Statement of Assets and Liabilities
Sentinel Variable Products Common Stock Fund
of Sentinel Variable Products Trust
, 2000
Assets:
Cash in Bank........................................................ $20,000
Prepaid registration fees and offering costs (Note 3)............... __________
Total Assets........................................................
Liabilities - accrued expenses...................................... __________
Net Assets.......................................................... $20,000
==========
- ---------------
(1) Sentinel Variable Products Trust (the "Trust") was organized as a
Delaware business trust on March 14, 2000. The Trust is registered under
the Investment Company Act of 1940 as an open-end management investment
company. Sentinel Variable Products Common Stock Fund (the "Fund") is a
series of the Trust. To date, the Fund has not had any transactions other
than those relating to organizational matters and the sale of 20,000
shares of beneficial interest to National Life Investment Management
Company, Inc. (the "Advisor").
(2) The Trust has entered into an investment advisory agreement (the
"Advisory Agreement") with the Advisor, and distribution agreements (the
"Distribution Agreements") with Equity Services, Inc. (the "Distributor").
Certain officers and/or trustees of the Fund are officers and/or director/
trustees of the Advisor and the Distributor.
(3) The Advisor, on behalf of the Fund, will incur organization costs
estimated at $____________. Prepaid offering costs consist of legal and
printing fees related to preparing the initial registration statement,
and will be amortized over a 12 month period beginning with the
commencement of operations of the Fund. Prepaid registration fees are
charged to income as the related shares are issued.
<PAGE>
Statement of Assets and Liabilities
Sentinel Variable Products Mid Cap Growth Fund
of Sentinel Variable Products Trust
, 2000
Assets:
Cash in Bank......................................................... $20,000
Prepaid registration fees and offering costs (Note 3)................ _________
Total Assets.........................................................
Liabilities - accrued expenses....................................... _________
Net Assets........................................................... $20,000
=========
- ---------------
(1) Sentinel Variable Products Trust (the "Trust") was organized as a
Delaware business trust on March 14, 2000. The Trust is registered under
the Investment Company Act of 1940 as an open-end management investment
company. Sentinel Variable Products Mid Cap Growth Fund (the "Fund") is a
series of the Trust. To date, the Fund has not had any transactions other
than those relating to organizational matters and the sale of 20,000
shares of beneficial interest to National Life Investment Management
Company, Inc. (the "Advisor").
(2) The Trust has entered into an investment advisory agreement (the
"Advisory Agreement") with the Advisor, and distribution agreements (the
"Distribution Agreements") with Equity Services, Inc. (the "Distributor").
Certain officers and/or trustees of the Fund are officers and/or director/
trustees of the Advisor and the Distributor.
(4) The Advisor, on behalf of the Fund, will incur organization costs
estimated at $____________. Prepaid offering costs consist of legal and
printing fees related to preparing the initial registration statement,
and will be amortized over a 12 month period beginning with the
commencement of operations of the Fund. Prepaid registration fees are
charged to income as the related shares are issued.
<PAGE>
Statement of Assets and Liabilities
Sentinel Variable Products Small Company Fund
of Sentinel Variable Products Trust
, 2000
Assets:
Cash in Bank....................................................... $20,000
Prepaid registration fees and offering costs (Note 3).............. __________
Total Assets.......................................................
Liabilities - accrued expenses..................................... __________
Net Assets......................................................... $20,000
==========
- ---------------
(1) Sentinel Variable Products Trust (the "Trust") was organized as a
Delaware business trust on March 14, 2000. The Trust is registered under
the Investment Company Act of 1940 as an open-end management investment
company. Sentinel Variable Products Small Company Fund (the "Fund") is a
series of the Trust. To date, the Fund has not had any transactions other
than those relating to organizational matters and the sale of 20,000
shares of beneficial interest to National Life Investment Management
Company, Inc. (the "Advisor").
(2) The Trust has entered into an investment advisory agreement (the
"Advisory Agreement") with the Advisor, and distribution agreements (the
"Distribution Agreements") with Equity Services, Inc. (the "Distributor").
Certain officers and/or trustees of the Fund are officers and/or director/
trustees of the Advisor and the Distributor.
(5) The Advisor, on behalf of the Fund, will incur organization costs
estimated at $____________. Prepaid offering costs consist of legal and
printing fees related to preparing the initial registration statement,
and will be amortized over a 12 month period beginning with the
commencement of operations of the Fund. Prepaid registration fees are
charged to income as the related shares are issued.
<PAGE>
Statement of Assets and Liabilities
Sentinel Variable Products Growth Index Fund
of Sentinel Variable Products Trust
, 2000
Assets:
Cash in Bank........................................................ $20,000
Prepaid registration fees and offering costs (Note 3)............... _________
Total Assets........................................................
Liabilities - accrued expenses...................................... _________
Net Assets.......................................................... $20,000
=========
- ---------------
(1) Sentinel Variable Products Trust (the "Trust") was organized as a
Delaware business trust on March 14, 2000. The Trust is registered under
the Investment Company Act of 1940 as an open-end management investment
company. Sentinel Variable Products Growth Index Fund (the "Fund") is a
series of the Trust. To date, the Fund has not had any transactions other
than those relating to organizational matters and the sale of 20,000
shares of beneficial interest to National Life Investment Management
Company, Inc. (the "Advisor").
(2) The Trust has entered into an investment advisory agreement (the
"Advisory Agreement") with the Advisor, and distribution agreements (the
"Distribution Agreements") with Equity Services, Inc. (the "Distributor").
Certain officers and/or trustees of the Fund are officers and/or director/
trustees of the Advisor and the Distributor.
(6) The Advisor, on behalf of the Fund, will incur organization costs
estimated at $____________. Prepaid offering costs consist of legal and
printing fees related to preparing the initial registration statement,
and will be amortized over a 12 month period beginning with the
commencement of operations of the Fund. Prepaid registration fees are
charged to income as the related shares are issued.
<PAGE>
Statement of Assets and Liabilities
Sentinel Variable Products Money Market Fund
of Sentinel Variable Products Trust
, 2000
Assets:
Cash in Bank.......................................................... $20,000
Prepaid registration fees and offering costs (Note 3)................. ________
Total Assets..........................................................
Liabilities - accrued expenses........................................ ________
Net Assets............................................................ $20,000
========
- ---------------
(1) Sentinel Variable Products Trust (the "Trust") was organized as a
Delaware business trust on March 14, 2000. The Trust is registered under
the Investment Company Act of 1940 as an open-end management investment
company. Sentinel Variable Products Money Market Fund (the "Fund") is a
series of the Trust. To date, the Fund has not had any transactions other
than those relating to organizational matters and the sale of 20,000
shares of beneficial interest to National Life Investment Management
Company, Inc. (the "Advisor").
(2) The Trust has entered into an investment advisory agreement (the
"Advisory Agreement") with the Advisor, and distribution agreements (the
"Distribution Agreements") with Equity Services, Inc. (the "Distributor").
Certain officers and/or trustees of the Fund are officers and/or director/
trustees of the Advisor and the Distributor.
(7) The Advisor, on behalf of the Fund, will incur organization costs
estimated at $____________. Prepaid offering costs consist of legal and
printing fees related to preparing the initial registration statement,
and will be amortized over a 12 month period beginning with the
commencement of operations of the Fund. Prepaid registration fees are
charged to income as the related shares are issued.
<PAGE>
Part C
Other Information
Item 23. Exhibits
(a) Declaration of Trust of the Registrant.
(b) None.
(c) Portions of the Declaration of Trust of the Registrant defining
the rights of holders of shares of the Registrant.(2)
(d) Investment Advisory Agreement between the Registrant and
National Life Investment Management Company, Inc. (the
"Advisor").(1)
(e) Distribution Contract between the Registrant and Equity
Services, Inc. ("ESI").(1)
(f) None.
(g) Custody Contract between the Registrant and State Street Bank
and Trust Company.(1)
(h) Fund Services Agreement between the Registrant and Sentinel
Administrative Service
Corporation.(1)
(i) Opinion and consent of Brown and Wood LLP.(1)
(j) Consent of , independent accountants for the
Registrant.(1)
(k) ______ No financial statements are included because the
Registrant has not yet commenced operations (l) None.
(m) None.
(n) None.
(o) Reserved.
(p) (1) Code of Ethics of the Trust.(1)
(2) Code of Ethics of National Life Investment Management
Company, Inc.
- ---------------
(1) To be filed by amendment.
(2) Reference is made to Article 1, Article 4 (Sections 4.2, 4.3, 4.8, 4.9.3,
4.9.5, 4.9.5.5, 4.9.5.6), Article 5 (Sections 5.4, 5.6, 5.8, 5.10, 5.10.1,
5.11, 5.11.1, 5.11.7), Article 8 (Sections 8.1, 8.5, 8.6), Article 9
(Section 9.1, 9.2.2), Article 10 (Sections 10.1, 10.1.1, 10.2, 10.5,
10.5.1, 10.5.2), Article II (Section 11.3), Article 12.
Item 24. Persons Controlled by or under Common Control with the Registrant
None.
Item 25. Indemnification
Article 10.5 of the Registrant's Declaration of Trust, incorporated
by reference to Exhibit (a) hereto, provides for the indemnification
of the Registrant's trustees and officers.
In no event will the Registrant indemnify any of its trustees,
officers, employees or agents against any liability to which such
person would otherwise be subject by reason of his or her bad faith,
willful misfeasance, or reckless disregard of the duties involved in
the conduct of his or her office. The Registrant will comply with
Rule 484 under the Securities Act of 1933, as amended (the "1933
Act"), and Release No. 11330 under the 1940 Act in connection with
any indemnification.
Insofar as indemnification for liability arising under the 1933 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 Commission
such indemnification is against public policy as expressed in the
1933 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
1933 Act and will be governed by the final adjudication of such issue.
Trustees and officers of the Registrant are also covered by a
directors and officers liability insurance policy that became
effective as to it on March 14, 2000, with a total coverage of
$30,000,000.
Item 26. Business and Other Connections of the Investment Adviser
Information on the Advisor is incorporated by reference to the
Prospectus included in this Registration Statement. The Advisor also
provides investment management services with respect to the general
accounts of National Life Insurance Company and its wholly owned
subsidiary, Life Insurance Company of the Southwest, and other
National Life affiliates.
Officers of the Advisor
Rodney A. Buck, Chairman, President & Chief Executive Officer (1)(2)
(3)
Erick R. Grinde, Senior Vice President
Bruce R. Bottamini, Vice President & Director of Fixed Income
Research (1)
Allan R. Bradley, Vice President-Mortgages
Scott T. Brayman, Vice President (1)
Thomas H. Brownell, Vice President & Portfolio Manager (1)
David M. Brownlee, Vice President & Portfolio Manager (1)(2)
Kay L. Edson, Vice President & Head Equity Trader (1)
Stephen P. Flynn, Vice President & Fixed Income Credit Analyst (1)
Daniel E. Gass, Vice President & Portfolio Manager (1)
Van Harissis, Vice President & Portfolio Manager (1)(2)
Kenneth J. Hart, Vice President & Portfolio Manager (1)
R. Scott Higgins, Vice President & Director of Private Placements
Dean R. Howe, Vice President & Treasurer (1)(2)
William C. Kane, Vice President & Portfolio Manager (1)
Robert L. Lee, Vice President & Portfolio Manager (1)
Daniel J. Manion, Vice President (1)
Stephen S. Rauh, Vice President (1)(2)
Henry J. Restaino, Vice President & Trader (1)
John A. Skypeck, Vice President - Mortgages
D. Russell Morgan, Counsel (1)(3)
Lisa A. Pettrey, Secretary (3)
The principal business address of each such person is National Life
Drive, Montpelier, Vermont 05604.
------------------------
(1) Also an officer or employee of Sentinel Advisors Company, an
affiliated investment advisor which provides investment management
services to the Sentinel Funds, a family of mutual funds offered to
the public.
(2) Also an officer or employee of NL Capital Management, Inc., which
provides investment management services to individuals and
institutions, primarily in northern New England.
(3) Also an officer or employee of National Life Insurance Company.
Item 27. Principal Underwriters
(a) The Registrant's principal underwriter, ESI, also serves as principal
underwriter for National Life's various variable life insurance and
variable annuity contracts.
(b) As to each officer of ESI:
Positions and
Name and Principal Positions and Offices Offices with
Business Address with ESI the Registrant
Joseph M. Rob Chairman & Chief
Executive Officer President
Kenneth R. Ehinger President & Chief
Operating Officer None
John M. Grab, Jr. Senior Vice President &
Chief Financial Officer None
Sharon E. Bernard Treasurer & Controller None
The principal business address of all such persons is National Life Drive,
Montpelier, Vermont 05604.
(c) Not applicable.
Item 28. Location of Accounts and Records
The following maintain physical possession of each account book or
other documents required by Section 31(a) of the 1940 Act and the
Rules promulgated thereunder:
a) Sentinel Administrative Service Corporation
National Life Drive
Montpelier, Vermont 05604
Rule 31a-1(a)
Rule 31a-1(b)(1)(2)(3)(4)(5)(6)(7)(8)
Rule 31a-2(a)(b)(c)(f)
(b) National Life Investment Management Company, Inc.
National Life Drive
Montpelier, Vermont 05604
Rule 31a-1(a)(9)(10)(11)
Rule 31a-1(d)(f)
Rule 31a-2(a)(c)(f)
(c) Equity Services, Inc.
National Life Drive
Montpelier, Vermont 05604
Rule 31a-1(d)
Rule 31a-2(c)
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Montpelier and State of Vermont, on the 28th day of April, 2000.
SENTINEL VARIABLE PRODUCTS TRUST
(Registrant)
By: /s/ Thomas H. MacLeay
--------------------------------------
Thomas H. MacLeay, Chairman
As required by the Securities Act of 1933, this post-effective amendment
to the Registration Statement has been signed by the following persons in the
capacities on the dates indicated.
Signature Title Date
/s/ Thomas H. MacLeay Chairman
- ------------------------- (Chief Executive April 28, 2000
Thomas H. MacLeay Officer)
/s/ William D. McMeekin
- ------------------------- Trustee April 28, 2000
William D. McMeekin
/s/ William G. Ricker
- ------------------------- Trustee April 28, 2000
William G. Ricker
/s/ Thomas P. Malone Vice President and Treasurer
- ------------------------- (Chief Accounting and April 28, 2000
Thomas P. Malone Financial Officer)
<PAGE>
Exhibit Index
Exhibit
Number
(a) Declaration of Trust of the Registrant.
(p)(2) Code of Ethics of National Life Investment Management Company, Inc.
<PAGE>
Exhibit (a)
DECLARATION OF TRUST
OF
SENTINEL VARIABLE PRODUCTS TRUST
March 14, 2000
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 NAME AND DEFINITIONS...........................................1
Section 1.1. Name............................................1
Section 1.2. Definitions.....................................1
ARTICLE 2 NATURE AND PURPOSE OF TRUST....................................2
Section 2.1. Nature of Trust.................................2
Section 2.2. Purpose of Trust................................3
Section 2.3. Interpretation of Declaration of Trust..........3
Section 2.3.1. Governing Instrument......................3
Section 2.3.2. No Waiver of Compliance with
Applicable Law............................3
Section 2.3.3. Power of the Trustees Generally...........3
ARTICLE 3 REGISTERED AGENT; OFFICES......................................3
Section 3.1. Registered Agent................................3
Section 3.2. Offices.........................................3
ARTICLE 4 SHARES OF BENEFICIAL INTEREST..................................4
Section 4.1. Shares of Beneficial Interest...................4
Section 4.2. Number of Authorized Shares.....................4
Section 4.3. Ownership and Certification of Shares...........4
Section 4.4. Status of Shares................................4
Section 4.4.1. Fully Paid and Non-assessable.............4
Section 4.4.2. Personal Property.........................4
Section 4.4.3. Party to Declaration of Trust.............4
Section 4.4.4. Death of Shareholder......................4
Section 4.4.5. Title to Trust; Right to Accounting.......5
Section 4.5. Determination of Shareholders...................5
Section 4.6. Shares Held by Trust............................5
Section 4.7. Shares Held by Persons Related to Trust.........5
Section 4.8. Preemptive and Appraisal Rights.................5
Section 4.9. Series and Classes of Shares....................5
Section 4.9.1. Generally.................................5
Section 4.9.2. Establishment and Designation.............6
Section 4.9.3. Conversion Rights.........................6
Section 4.9.4. Separate and Distinct Nature..............6
Section 4.9.5. Rights and Preferences of Series..........6
Section 4.9.5.1. Assets and Liabilities Belonging
to a Series.........................6
Section 4.9.5.2. Treatment of Particular Items.......7
Section 4.9.5.3. Limitation on Interseries
Liabilities.........................7
Section 4.9.5.4. Dividends...........................7
Section 4.9.5.5. Redemption by Shareholder...........8
Section 4.9.5.6. Redemption by Trust.................8
Section 4.9.5.7. Prevention of Personal Holding
Company Status......................8
Section 4.9.5.8. Net Asset Value.....................8
Section 4.9.5.9. Maintenance of Stable Net
Asset Value.........................9
Section 4.9.5.10. Transfer of Shares..................9
Section 4.9.5.11. Equality of Shares..................9
Section 4.9.5.12. Fractional Shares...................9
Section 4.9.6. Rights and Preferences of Classes........10
ARTICLE 5 TRUSTEES......................................................11
Section 5.1. Management of the Trust........................11
Section 5.2. Qualification..................................11
Section 5.3. Number.........................................11
Section 5.4. Term and Election; Mandatory Retirement........11
Section 5.5. Composition of the Board of Trustees...........11
Section 5.6. Resignation and Retirement.....................11
Section 5.7. Removal........................................11
Section 5.8. Vacancies......................................12
Section 5.9. Ownership of Assets of the Trust...............12
Section 5.10. Powers.........................................12
Section 5.10.1. Bylaws..................................12
Section 5.10.2. Officers, Agents, and Employees.........13
Section 5.10.3. Committees..............................13
Section 5.10.3.1. Generally.........................13
Section 5.10.3.2. Executive Committee...............13
Section 5.10.4. Advisers, Administrators,
Depositories, and Custodians............13
Section 5.10.5. Compensation............................13
Section 5.10.6. Delegation of Authority.................14
Section 5.10.7. Suspension of Sales.....................14
Section 5.11. Certain Additional Powers......................14
Section 5.11.1. Investments.............................14
Section 5.11.2. Disposition of Assets...................14
Section 5.11.3. Ownership...............................14
Section 5.11.4. Subscription............................14
Section 5.11.5. Payment of Expenses.....................14
Section 5.11.6. Form of Holding.........................15
Section 5.11.7. Reorganization, Consolidation,
or Merger...............................15
Section 5.11.8. Compromise..............................15
Section 5.11.9. Partnerships............................15
Section 5.11.10. Borrowing...............................15
Section 5.11.11. Guarantees..............................15
Section 5.11.12. Insurance...............................15
Section 5.11.13. Indemnification.........................16
Section 5.11.14. Pensions................................16
Section 5.12. Meetings and Vote of Trustees..................16
Section 5.12.1. Regular Meetings........................16
Section 5.12.2. Special Meetings........................16
Section 5.12.3. Telephonic Meetings.....................16
Section 5.12.4. Quorum..................................16
Section 5.12.5. Required Vote...........................16
Section 5.12.6. Consent in Lieu of a Meeting............17
ARTICLE 6 OFFICERS......................................................17
Section 6.1. Enumeration....................................17
Section 6.2. Qualification..................................17
Section 6.3. Election.......................................17
Section 6.4. Term of Office.................................17
Section 6.5. Powers.........................................18
Section 6.6. Titles and Duties..............................18
Section 6.6.1. Chairman of the Board; President.........18
Section 6.6.2. Vice President...........................18
Section 6.6.3. Treasurer................................18
Section 6.6.4. Assistant Treasurer......................18
Section 6.6.5. Secretary................................19
Section 6.6.6. Assistant Secretary......................19
Section 6.6.7. Temporary Secretary......................19
Section 6.7. Resignation, Retirement, and Removal...........19
Section 6.8. Vacancies......................................19
ARTICLE 7 TRANSACTIONS WITH OFFICERS AND TRUSTEES.......................20
Section 7.1. Purchase and Redemption of Shares of
the Trust......................................20
Section 7.2. Purchase and Sale of Other Securities..........20
ARTICLE 8 SERVICE PROVIDERS.............................................20
Section 8.1. Investment Adviser.............................20
Section 8.2. Underwriter and Transfer Agent.................20
Section 8.3. Custodians.....................................20
Section 8.4. Administrator..................................21
Section 8.5. Other Contracts................................21
Section 8.6. Parties to Contracts...........................21
ARTICLE 9 SHAREHOLDERS VOTING POWERS AND MEETINGS.......................21
Section 9.1. Voting Powers..................................21
Section 9.1.1. Matters Requiring Shareholders
Action...................................21
Section 9.1.2. Separate Voting by Series and
Class....................................22
Section 9.1.3. Number of Votes..........................22
Section 9.1.4. Cumulative Voting........................22
Section 9.1.5. Voting of Shares; Proxies................22
Section 9.1.6. Actions Prior to the Issuance of
Shares...................................23
Section 9.2. Meetings of Shareholders.......................23
Section 9.2.1. Annual or Regular Meetings...............23
Section 9.2.2. Special Meetings.........................23
Section 9.2.3. Notice of Meetings.......................23
Section 9.2.4. Call of Meetings.........................23
Section 9.3. Record Dates...................................23
Section 9.4. Quorum.........................................24
Section 9.5. Required Vote..................................24
Section 9.6. Adjournments...................................24
Section 9.7. Actions by Written Consent.....................24
Section 9.8. Inspection of Records..........................24
Section 9.9. Additional Provisions..........................24
ARTICLE 10 LIMITATION OF LIABILITY AND INDEMNIFICATION...................25
Section 10.1. General Provisions.............................25
Section 10.1.1. General Limitation of Liability..........25
Section 10.1.2. Notice of Limited Liability..............25
Section 10.1.3. Liability Limited to Assets of the
Trust....................................25
Section 10.2. Liability of Trustees..........................25
Section 10.2.1. Liability for Own Actions................25
Section 10.2.2. Liability for Actions of Others..........26
Section 10.2.3. Advice of Experts and Reports of
Others...................................26
Section 10.2.4. Bond.....................................26
Section 10.2.5. Declaration of Trust Governs Issues
of Liability.............................26
Section 10.3. Liability of Third Persons Dealing
with Trustees..................................26
Section 10.4. Liability of Shareholders......................26
Section 10.4.1. Limitation of Liability..................26
Section 10.4.2. Indemnification of Shareholders..........27
Section 10.5. Indemnification................................27
Section 10.5.1. Indemnification of Covered Persons.......27
Section 10.5.2. Exceptions...............................27
Section 10.5.3. Rights of Indemnification................28
Section 10.5.4. Expenses of Indemnification..............28
Section 10.5.5. Certain Defined Terms Relating
to Indemnification.......................28
ARTICLE 11 TERMINATION OR REORGANIZATION.................................29
Section 11.1. Termination of Trust or Series or Class........29
Section 11.1.1. Termination..............................29
Section 11.1.2. Distribution of Assets...................29
Section 11.1.3. Certificate of Cancellation..............29
Section 11.2. Sale of Assets.................................30
Section 11.3. Merger or Consolidation........................30
Section 11.3.1. Authority to Merge or Consolidate........30
Section 11.3.2. No Shareholder Approval Required.........30
Section 11.3.3. Subsequent Amendments....................30
Section 11.3.4. Certificate of Merger or
Consolidation............................31
ARTICLE 12 AMENDMENTS....................................................31
Section 12.1. Generally......................................31
Section 12.2. Certificate of Amendment.......................31
Section 12.3. Prohibited Retrospective Amendments............31
ARTICLE 13 MISCELLANEOUS PROVISIONS......................................31
Section 13.1. Certain Internal References....................31
Section 13.2. Certified Copies...............................31
Section 13.3. Execution of Papers............................31
Section 13.4. Fiscal Year....................................32
Section 13.5. Governing Law..................................32
Section 13.6. Headings.......................................32
Section 13.7. Resolution of Ambiguities......................32
Section 13.8. Seal...........................................32
Section 13.9. Severability...................................32
Section 13.10. Signatures.....................................33
<PAGE>
DECLARATION OF TRUST
OF
SENTINEL VARIABLE PRODUCTS TRUST
This DECLARATION OF TRUST of the Sentinel Variable Products Trust is
adopted effective as of this 14th day of March, 2000 by the Trustees
hereunder.
W I T N E S S E T H
WHEREAS, the Trustees desire to form a Delaware business trust for the
purpose of carrying on the business of an open-end management investment
company; and
WHEREAS, in furtherance of such purpose, the initial Trustees and any
successor Trustees elected in accordance with Article 5 hereof are acquiring
and may hereafter acquire assets which they will hold and manage as trustees
of a Delaware business trust in accordance with the provisions hereinafter set
forth; and
WHEREAS, this Trust is authorized to issue its shares of beneficial
interest in one or more separate series and classes of series, all in
accordance with the provisions set forth in this Declaration of Trust;
NOW, THEREFORE, the initial Trustees hereby declare that they and any
successor Trustees elected in accordance with Article 5 hereof will hold in
trust all cash, securities, and other assets which they may from time to time
acquire in any manner as Trustees hereunder, and that they and any successor
Trustees will manage and dispose of the same upon the following terms and
conditions for the benefit of the holders of shares of beneficial interest in
this Trust as hereinafter set forth.
ARTICLE 1
Name and Definitions
Section 1.1. Name. This Trust shall be known as Sentinel Variable
Products Trust and the Trustees shall conduct the business of the Trust under
that name or any other name or names as they may from time to time determine.
Section 1.2. Definitions. Whenever used herein, unless otherwise required
by the context or specifically provided below:
(a) The "Code" refers to the Internal Revenue Code of 1986 (and
any successor statute) and the rules and regulations thereunder, all as
amended from time to time.
(b) "Commission" shall mean the United States Securities and
Exchange Commission (or any successor agency thereto);
(c) The "DBTA" refers to the Delaware Business Trust Act, Chapter
38 of Title 12 of the Delaware Code (and any successor statute), as amended
from time to time; and
(d) "Declaration of Trust" or "Declaration" shall mean this
Declaration of Trust as amended or restated from time to time;
(e) The "1940 Act" refers to the Investment Company Act of 1940
(and any successor statute) and the rules and regulations thereunder, all as
amended from time to time;
(f) "Person," "Interested Person," and "Principal Underwriter" shall have
the meanings given them in the 1940 Act;
(g) "Series" shall mean any of the separate series of Shares established
and designated under or in accordance with the provisions of Article 4 and to
which the Trustees have allocated assets and liabilities of the Trust in
accordance with Article 4;
(h) "Shares" shall mean the shares of beneficial interest in the Trust
described in Article 4 hereof and shall include fractional and whole Shares;
(i) "Shareholder" shall mean a beneficial owner of Shares;
(j) The "Trust" shall mean the Delaware business trust established by
this Declaration of Trust, as amended from time to time;
(k) "Trustee" and "Trustees" shall mean the signatories to this
Declaration of Trust so long as such signatories shall continue in office in
accordance with the terms hereof, and all other individuals who at the time in
question have been duly elected or appointed and qualified in accordance with
Article 5 hereof and are then in office;
ARTICLE 2
Nature and Purpose of Trust
Section 2.1. Nature of Trust. The Trust is a business trust of the type
referred to in the DBTA. The Trustees shall file a certificate of trust in
accordance with Section 3810 of the DBTA. The Trust is not intended to be,
shall not be deemed to be, and shall not be treated as, a general or a limited
partnership, joint venture, corporation or joint stock company, nor shall the
Trustees or Shareholders or any of them for any purpose be deemed to be, or be
treated in any way whatsoever as though they were, liable or responsible
hereunder as partners or joint venturers.
Section 2.2. Purpose of Trust. The purpose of the Trust is to engage in,
operate and carry on the business of an open-end management investment company
and to do any and all acts or things as are necessary, convenient,
appropriate, incidental or customary in connection therewith.
Section 2.3. Interpretation of Declaration of Trust.
Section 2.3.1. Governing Instrument. This Declaration of Trust shall
be the governing instrument of the Trust and shall be governed by and
construed according to the laws of the State of Delaware.
Section 2.3.2. No Waiver of Compliance with Applicable Law. No
provision of this Declaration shall be effective to require a waiver of
compliance with any provision of the Securities Act of 1933, as amended, or
the 1940 Act, or of any valid rule, regulation or order of the Commission
thereunder.
Section 2.3.3. Power of the Trustees Generally. Except as otherwise
set forth herein, the Trustees may exercise all powers of trustees under the
DBTA on behalf of the Trust.
ARTICLE 3
Registered Agent; Offices
Section 3.1. Registered Agent. The name of the registered agent of the
Trust is Corporation Service Company and the registered agent's business
address in Delaware is 1013 Centre Road, Wilmington, Delaware 19805.
Section 3.2. Offices. The Trust shall maintain an office within the State
of Delaware which shall be identical to the business office of the Registered
Agent of the Trust as set forth in Section 3.1. The Trustees may, at any time,
establish branch or subordinate offices at any place or places where the Trust
intends to do business.
ARTICLE 4
Shares of Beneficial Interest
Section 4.1. Shares of Beneficial Interest. The beneficial interests in
the Trust shall be divided into Shares, par value $.001 per share. The
Trustees shall have the authority from time to time to divide the Shares into
two (2) or more separate and distinct series of Shares ("Series") and to
divide each such Series of Shares into two (2) or more classes of Shares
("Classes"), all as provided in Section 4.9 of this Article 4.
Section 4.2. Number of Authorized Shares. The Trustees are authorized to
issue an unlimited number of Shares. The Trustees may issue Shares for such
consideration and on such terms as they may determine (or for no consideration
if pursuant to a Share dividend or split), all without action or approval of
the Shareholders.
Section 4.3. Ownership and Certification of Shares. The Secretary of the
Trust, or the Trust's transfer or similar agent, shall record the ownership
and transfer of Shares of each Series and Class separately on the record books
of the Trust. The record books of the Trust, as kept by the Secretary of the
Trust or any transfer or similar agent, shall contain the name and address of
and the number of Shares held by each Shareholder, and such record books shall
be conclusive as to who are the holders of Shares and as to the number of
Shares held from time to time by such Shareholders. No certificates certifying
the ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of share certificates, transfer of Shares, and
similar matters for the Trust or any Series or Class.
Section 4.4. Status of Shares.
Section 4.4.1. Fully Paid and Non-assessable. All Shares when issued
on the terms determined by the Trustees shall be fully paid and
non-assessable.
Section 4.4.2. Personal Property. Shares shall be deemed to be
personal property giving only the rights provided in this Declaration of
Trust.
Section 4.4.3. Party to Declaration of Trust. Every Person by virtue
of having become registered as a Shareholder shall be held to have expressly
assented and agreed to the terms of this Declaration of Trust and to have
become a party thereto.
Section 4.4.4. Death of Shareholder. The death of a Shareholder
during the continuance of the Trust shall not operate to terminate the Trust
nor entitle the representative of any deceased Shareholder to an accounting or
to take any action in court or elsewhere against the Trust or the Trustees.
The representative shall be entitled to the same rights as the decedent under
this Trust.
Section 4.4.5. Title to Trust; Right to Accounting. Ownership of
Shares shall not entitle the Shareholder to any title in or to the whole or
any part of the Trust property or right to call for a partition or division of
the same or for an accounting.
Section 4.5. Determination of Shareholders. The Trustees may from time to
time close the transfer books or establish record dates and times for the
purposes of determining the Shareholders entitled to be treated as such, to
the extent provided or referred to in Section 9.3.
Section 4.6. Shares Held by Trust. The Trustees may hold as treasury
shares, reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares of any
Series or Class reacquired by the Trust.
Section 4.7. Shares Held by Persons Related to Trust. Any Trustee,
officer or other agent of the Trust, and any organization in which any such
person is interested may acquire, own, hold and dispose of Shares to the same
extent as if such person were not a Trustee, officer or other agent of the
Trust; and the Trust may issue and sell or cause to be issued and sold and may
purchase Shares from any such person or any such organization subject only to
the general limitations, restrictions or other provisions applicable to the
sale or purchase of such Shares generally.
Section 4.8. Preemptive and Appraisal Rights. Shareholders shall not, as
Shareholders, have any right to acquire, purchase or subscribe for any Shares
or other securities of the Trust which it may hereafter issue or sell, other
than such right, if any, as the Trustees in their discretion may determine.
Shareholders shall have no appraisal rights with respect to their Shares and,
except as otherwise determined by resolution of the Trustees in their sole
discretion, shall have no exchange or conversion rights with respect to their
Shares. No action may be brought by a Shareholder on behalf of the Trust
unless Shareholders owning no less than a majority of the then outstanding
Shares, or Series or Class thereof, join in the bringing of such action. A
Shareholder shall not be entitled to participate in a derivative or class
action lawsuit on behalf of any other Series or any other Class or on behalf
of the Shareholders in any other Series or any other Class of the Trust than
the Series or Class of Shares owned by such Shareholder.
Section 4.9. Series and Classes of Shares.
Section 4.9.1. Generally. In addition to the Series and Classes
established and designated in Section 4.9.2, the Shares of the Trust shall be
divided into one or more separate and distinct Series or Classes of a Series
as the Trustees shall from time to time establish and designate.
Section 4.9.2. Establishment and Designation. The Trustees shall
have exclusive power without the requirement of Shareholder approval to
establish and designate separate and distinct Series of Shares and with
respect to any Series of Shares, to establish and designate separate and
distinct Classes of Shares. The establishment and designation of any Series
(in addition to those established and designated in this Section below) or
Class shall be effective upon the execution by an officer of the Trust,
pursuant to a vote of a majority of the Trustees, of an instrument setting
forth such establishment and designation and the relative rights and
preferences of the Shares of such Series or Class, or as otherwise provided in
such instrument. Each such instrument shall have the status of an amendment to
this Declaration of Trust. Without limiting the authority of the Trustees to
establish and designate any further Series or Classes, the Trustees hereby
establish and designate the following five Series: Common Stock Fund, Mid Cap
Growth Fund, Growth Index Fund, Small Company Fund, and Money Market Fund. The
initial Shares of such Series shall be issued in a single Class designated as
"Initial Class" Shares.
Section 4.9.3. Conversion Rights. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to provide
that holders of Shares of any Series or Class within a Series shall have the
right to convert such Shares into Shares of one or more other Series or
Classes in accordance with such requirements and procedures as may be
established by the Trustees.
Section 4.9.4. Separate and Distinct Nature. Each Series and Class,
including without limitation Series and Classes specifically established in
Section 4.9.2, shall be separate and distinct from any other Series and Class
and shall maintain separate and distinct records on the books of the Trust,
and the assets belonging to any such Series and Class shall be held and
accounted for separately from the assets of the Trust or any other Series and
Class.
Section 4.9.5. Rights and Preferences of Series. The Trustees shall
have exclusive power without the requirement of Shareholder approval to fix
and determine the relative rights and preferences as between the Shares of the
separate Series. The initial Series and any further Series that may from time
to time be established and designated by the Trustees shall (unless the
Trustees otherwise determine with respect to some further Series at the time
of establishing and designating the same) have relative rights and preferences
as set forth in this Section 4.9.5, subject to the relative rights and
preferences of Classes within each such Series as set forth in Section 4.9.6.
Section 4.9.5.1. Assets and Liabilities "Belonging" to a Series.
All consideration received by the Trust for the issue or sale of Shares of a
particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall be held and accounted for
separately from the other assets of the Trust and of every other Series and
may be referred to herein as "assets belonging to" that Series. The assets
belonging to a particular Series shall belong to that Series for all purposes,
and to no other Series, subject only to the rights of creditors of that
Series. Such consideration, assets, income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments which are not readily identifiable
as belonging to any particular Series (collectively "General Items"), the
Trustees shall allocate to and among any one or more of the Series in such
manner and on such basis as they, in their sole discretion, deem fair and
equitable. Any General Items so allocated to a particular Series shall belong
to that Series. Each such allocation by the Trustees shall be conclusive and
binding upon all Shareholders for all purposes. The assets belonging to each
particular Series shall be charged with the liabilities in respect of that
Series and all expenses, costs, charges and reserves attributable to that
Series, and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees to and among any one or
more of the Series established and designated from time to time in such manner
and on such basis as the Trustees in their sole discretion deem fair and
equitable. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon all Shareholders
for all purposes.
Section 4.9.5.2. Treatment of Particular Items. The Trustees
shall have full discretion, to the extent consistent with the 1940 Act and
consistent with generally accepted accounting principles, to determine which
items shall be treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.
Section 4.9.5.3. Limitation on Interseries Liabilities. Subject
to the right of the Trustees in their discretion to allocate general
liabilities, expenses, costs, charges or reserves as provided in Section
4.9.5.1, the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Series shall be
enforceable against the assets of such Series only, and not against the assets
of any other Series. Notice of this limitation on liabilities between and among
Series shall be set forth in the certificate of trust of the Trust (whether
originally or by amendment) as filed or to be filed in the Office of the
Secretary of State of the State of Delaware pursuant to the DBTA, and upon the
giving of such notice in the certificate of trust, the statutory provisions of
Section 3804 of the DBTA relating to limitations on liabilities between and
among series (and the statutory effect under Section 3804 of setting forth
such notice in the certificate of trust) shall become applicable to the Trust
and each Series.
Section 4.9.5.4. Dividends. Dividends and capital gain
distributions on Shares of a particular Series may be paid with such frequency,
in such form, and in such amount as the Trustees may determine by resolution
adopted from time to time, or pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Trustees may determine. All
dividends and distributions on Shares of a particular Series shall be
distributed pro rata to the holders of Shares of that Series in proportion to
the number of Shares of that Series held by such holders at the date and time
of record established for the payment of such dividends or distributions. Such
dividends and distributions may be paid in cash, property or additional Shares
of that Series, or a combination thereof, as determined by the Trustees or
pursuant to any program that the Trustees may have in effect at the time for
the election by each Shareholder of the form in which dividends or
distributions are to be paid to that Shareholder. Any such dividend or
distribution paid in Shares shall be paid at the net asset value thereof as
determined in accordance with Section 4.9.5.8.
Section 4.9.5.5. Redemption by Shareholder. Each Shareholder
shall have the right at such times as may be permitted by the Trust and as
otherwise required by the 1940 Act to require the Trust to redeem all or any
part of such Shareholder's Shares of a Series at a redemption price per Share
equal to the net asset value per Share of such Series next determined in
accordance with Section 4.9.5.8 after the Shares are properly tendered for
redemption, less such redemption fee, if any, as may be established by the
Trustees in their sole discretion. Payment of the redemption price shall be
in cash; provided, however, that the Trust may, subject to the requirements of
the 1940 Act, make payment wholly or partly in securities or other assets
belonging to the Series of which the Shares being redeemed are part at the
value of such securities or assets used in such determination of net asset
value. Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of any
Series to require the Trust to redeem Shares of that Series during any period
or at any time when and to the extent permissible under any applicable
provision of the 1940 Act.
Section 4.9.5.6. Redemption by Trust. The Trustees may cause the
Trust to redeem at net asset value the Shares of any Series held by a
Shareholder upon such conditions as may from time to time be determined by the
Trustees. Upon redemption of Shares pursuant to this Section 4.9.5.6, the
Trust shall promptly cause payment of the full redemption price to be made to
such Shareholder for Shares so redeemed, less any applicable redemption fee.
Section 4.9.5.7. Prevention of Personal Holding Company Status.
The Trust may reject any purchase order, refuse to transfer any Shares, and
compel the redemption of Shares if, in its opinion, any such rejection,
refusal, or redemption would prevent the Trust from becoming a personal holding
company as defined by the Code.
Section 4.9.5.8. Net Asset Value. The net asset value per Share
of any Series shall be determined in accordance with the methods and procedures
established by the Trustees from time to time and, to the extent required by
applicable law, as disclosed in the then current prospectus or statement of
additional information for the Series.
Section 4.9.5.9. Maintenance of Stable Net Asset Value. The
Trustees may determine to maintain the net asset value per Share of any Series
at a designated constant dollar amount and in connection therewith may adopt
procedures not inconsistent with the 1940 Act for the continuing declarations
of income attributable to that Series as dividends payable in additional
Shares of that Series at the designated constant dollar amount and for the
handling of any losses attributable to that Series. Such procedures may
provide that in the event of any loss each Shareholder shall be deemed to have
contributed to the capital of the Trust attributable to that Series his or her
pro rata portion of the total number of Shares required to be canceled in
order to permit the net asset value per Share of that Series to be maintained,
after reflecting such loss, at the designated constant dollar amount. Each
Shareholder of the Trust shall be deemed to have agreed, by his or her
investment in any Series with respect to which the Trustees shall have adopted
any such procedure, to make the contribution referred to in the preceding
sentence in the event of any such loss. The Trustees may delegate any of their
powers and duties under this Section 4.9.5.9 with respect to appraisal of
assets and liabilities in the determination of net asset value or with respect
to a suspension of the determination of net asset value to an officer or
officers or agent or agents of the Trust designated from time to time by the
Trustees.
Section 4.9.5.10. Transfer of Shares. Except to the extent that
transferability is limited by applicable law or such procedures as may be
developed from time to time by the Trustees or the appropriate officers of the
Trust, Shares shall be transferable on the records of the Trust only by the
record holder thereof or by his or her agent thereunto duly authorized in
writing, upon delivery to the Trustees or the Trust=s transfer agent of a duly
executed instrument of transfer, together with a Share certificate, if one is
outstanding, and such evidence of the genuineness of each such execution and
authorization and of such other matters as may be required by the Trustees.
Upon such delivery the transfer shall be recorded on the register of the
Trust.
Section 4.9.5.11. Equality of Shares. All Shares of each
particular Series shall represent an equal proportionate interest in the assets
belonging to that Series (subject to the liabilities belonging to that Series),
and each Share of any particular Series shall be equal in this respect to each
other Share of that Series. This Section 4.9.5.11 shall not restrict any
distinctions otherwise permissible under this Declaration of Trust with
respect to any Classes within a Series.
Section 4.9.5.12. Fractional Shares. Any fractional Share of any
Series, if any such fractional Share is outstanding, shall carry
proportionately all the rights and obligations of a whole Share of that
Series, including rights and obligations with respect to voting, receipt of
dividends and distributions, redemption of Shares, and liquidation of the
Trust or any Series.
Section 4.9.6. Rights and Preferences of Classes. The Trustees shall
have exclusive power without the requirement of Shareholder approval to fix
and determine the relative rights and preferences as between the separate
Classes within any Series. The Initial Class and any further Classes that may
from time to time be established and designated by the Trustees shall (unless
the Trustees otherwise determine with respect to some further Class at the
time of establishing and designating the same) have relative rights and
preferences as set forth in this Section 4.9.6. If a Series is divided into
multiple Classes, the Classes may be invested with one or more other Classes
in the common investment portfolio comprising the Series. Notwithstanding the
provisions of Section 4.9.5, if two or more Classes are invested in a common
investment portfolio, the Shares of each such Class shall be subject to the
following preferences, conversion and other rights, voting powers,
restrictions, conditions of redemption, and, if there are other Classes
invested in a different investment portfolio comprising a different Series,
shall also be subject to the provisions of Section 4.9.5 at the Series level
as if the Classes invested in the common investment portfolio were one Class:
(a) The income and expenses of the Series shall be allocated among the
Classes comprising the Series in such manner as may be determined by the
Trustees in accordance with applicable law;
(b) As more fully set forth in this Section 4.9.6, the liabilities and
expenses of the Classes comprising the Series shall be determined separately
from those of each other and, accordingly, the net asset values, the dividends
and distributions payable to Shareholders, and the amounts distributable in
the event of liquidation of the Trust or termination of a Series to
Shareholders may vary within the Classes comprising the Series. Except for
these differences and certain other differences set forth in this Section
4.9.6 or elsewhere in this Declaration of Trust, the Classes comprising a
Series shall have the same preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and terms
and conditions of redemption.
(c) The dividends and distributions of investment income and capital
gains with respect to the Classes comprising a Series shall be in such amounts
as may be declared from time to time by the Trustees, and such dividends and
distributions may vary among the Classes comprising the Series to reflect
differing allocations of the expenses and liabilities of the Trust among the
Classes and any resultant differences between the net asset values per Share
of the Classes, to such extent and for such purposes as the Trustees may deem
appropriate. The allocation of investment income, capital gains, expenses, and
liabilities of the Trust among the Classes comprising a Series shall be
determined by the Trustees in a manner that is consistent with applicable law.
ARTICLE 5
Trustees
Section 5.1. Management of the Trust. The business and affairs of the
Trust shall be managed by the Trustees, and they shall have all powers
necessary and desirable to carry out that responsibility, including those
specifically set forth in Sections 5.10 and 5.11 herein.
Section 5.2. Qualification. Each Trustee shall be a natural person. A
Trustee need not be a Shareholder, a citizen of the United States, or a
resident of the State of Delaware.
Section 5.3. Number. The number of Trustees which shall constitute the
entire Board of Trustees is currently three (3) and thereafter shall be fixed
from time to time by resolution by a majority of the Trustees, provided,
however, that the number of Trustees shall in no event be less than one (1)
nor more than ten (10), but shall never be less than the minimum number
permitted by the DBTA. No decrease in the number of Trustees shall have the
effect of removing any Trustee from office prior to the expiration of his or
her term, but the number of Trustees may be decreased in conjunction with the
removal of a Trustee pursuant to Section 5.7.
Section 5.4. Term and Election; Mandatory Retirement. Each Trustee shall
hold office until the next meeting of Shareholders called for the purpose of
considering the election or re-election of such Trustee or of a successor to
such Trustee, and until his or her successor is elected and qualified, and any
Trustee who is appointed by the Trustees in the interim to fill a vacancy as
provided hereunder shall have the same remaining term as that of his or her
predecessor, if any, or such term as the Trustees may determine. The term of
each Trustee shall be deemed to expire on the day he or she attains age 65,
and such Trustee shall not be eligible for another term. The remaining
Trustees may, to the extent not inconsistent with the 1940 Act, elect a new
Trustee to replace any Trustee who becomes subject to the mandatory retirement
provision of the previous sentence, for a term until the next meeting of
Shareholders called for the purpose of considering the election or re-election
of Trustees.
Section 5.5. Composition of the Board of Trustees. No election or
appointment of any Trustee shall take effect if such election or appointment
would cause the number of Trustees who are Interested Persons to exceed the
number permitted by Section 10 of the 1940 Act.
Section 5.6. Resignation and Retirement. Any Trustee may resign or retire
as a Trustee (without need for prior or subsequent accounting) by an
instrument in writing signed by such Trustee and delivered or mailed to the
Chairman, if any, the President, or the Secretary of the Trust. Such
resignation or retirement shall be effective upon such delivery, or at a later
date according to the terms of the instrument.
Section 5.7. Removal. Any Trustee may be removed with or without cause at
any time: (1) by written instrument signed by two-thirds (2/3) of the number
of Trustees in office prior to such removal, specifying the date upon which
such removal shall become effective, or (2) by the affirmative vote of
Shareholders holding not less than two-thirds (2/3) of Shares outstanding,
cast in person or by proxy at any meeting called for that purpose.
Section 5.8. Vacancies. Any vacancy or anticipated vacancy resulting for
any reason, including without limitation the death, resignation, retirement,
removal, or incapacity of any of the Trustees, or resulting from an increase
in the number of Trustees may (but need not unless required by the 1940 Act)
be filled by a majority of the Trustees then in office, subject to the
provisions of Section 16 of the 1940 Act, through the appointment in writing
of such other person as such remaining Trustees in their discretion shall
determine. The appointment shall be effective upon the written acceptance of
the person named therein to serve as a Trustee and agreement by such person to
be bound by the provisions of this Declaration of Trust, except that any such
appointment in anticipation of a vacancy occurring by reason of the
resignation, retirement, or increase in number of Trustees to be effective at
a later date shall become effective only at or after the effective date of
such resignation, retirement, or increase in number of Trustees.
Section 5.9. Ownership of Assets of the Trust. The assets of the
Trust shall be held separate and apart from any assets now or hereafter held
in any capacity other than as Trustee hereunder by the Trustees or any
successor Trustees. Legal title to all the Trust property shall be vested in
the Trust as a separate legal entity under the DBTA, except that the Trustees
shall have the power to cause legal title to any Trust property to be held by
or in the name of one or more of the Trustees or in the name of any other
Person on behalf of the Trust on such terms as the Trustees may determine. In
the event that title to any part of the Trust property is vested in one or
more Trustees, the right, title and interest of the Trustees in the Trust
property shall vest automatically in each person who may hereafter become a
Trustee upon his or her due election and qualification. Upon the resignation,
removal or death of a Trustee he or she shall automatically cease to have any
right, title or interest in any of the Trust property, and the right, title
and interest of such Trustee in the Trust property shall vest automatically in
the remaining Trustees. To the extent permitted by law, such vesting and
cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or any right of
partition or possession thereof.
Section 5.10. Powers. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Trustees, and they
shall have all powers necessary or convenient to carry out that responsibility
and the purpose of the Trust including, but not limited to, those enumerated
in this Section 5.10.
Section 5.10.1. Bylaws. The Trustees may adopt Bylaws not
inconsistent with this Declaration of Trust providing for the conduct of the
business and affairs of the Trust and may amend and repeal them to the extent
that such Bylaws do not reserve that right to the Shareholders. Nothing in
this Declaration shall be construed to require the adoption of Bylaws by the
Trustees.
Section 5.10.2. Officers, Agents, and Employees. The Trustees may,
as they consider appropriate, elect and remove officers and appoint and
terminate agents and consultants and hire and terminate employees, any one or
more of the foregoing of whom may be a Trustee, and may provide for the
compensation of all of the foregoing.
Section 5.10.3. Committees.
Section 5.10.3.1. Generally. The Trustees, by vote of a majority
of the Trustees then in office, may elect from their number an Audit Committee,
Executive Committee, Nominating Committee, or any other committee, and may
delegate thereto some or all of their powers except those which by law, by
this Declaration of Trust, or by the Bylaws (if any) may not be delegated.
Except as the Trustees may otherwise determine, any such committee may make
rules for the conduct of its business, but unless otherwise provided by the
Trustees or in such rules, its business shall be conducted so far as possible
in the same manner as is provided by this Declaration of Trust or the Bylaws
(if any) of the Trust for the Trustees themselves. All members of such
committees shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any committee at any time. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees. The Trustees shall have
power to rescind any action of any committee, but no such rescission shall
have retroactive effect.
Section 5.10.3.2. Executive Committee. The Executive Committee,
if there shall be one, shall have all of the powers and authority of the
Trustees that may lawfully be exercised by an executive committee, except the
power to: (i) declare dividends or distributions on Shares; (ii) issue Shares;
(iii) recommend to the Shareholders any action which requires the Shareholders'
approval; or (iv) approve any merger, reorganization, or share exchange which
does not require Shareholder approval. Notwithstanding the foregoing, the
Trustees may limit the powers and authority of the Executive Committee at any
time.
Section 5.10.4. Advisers, Administrators, Depositories, and
Custodians. The Trustees may, in accordance with Article 8, employ one or more
advisers, administrators, depositories, custodians, and other persons and may
authorize any depository or custodian to employ subcustodians or agents and to
deposit all or any part of such assets in a system or systems for the central
handling of securities and debt instruments, retain transfer, dividend,
accounting or shareholder servicing agents or any of the foregoing, provide
for the distribution of Shares by the Trust through one or more distributors,
principal underwriters or otherwise, and set record dates or times for the
determination of Shareholders.
Section 5.10.5. Compensation. The Trustees may compensate or provide
for the compensation of the Trustees, officers, advisers, administrators,
custodians, other agents, consultants and employees of the Trust or the
Trustees on such terms as they deem appropriate.
Section 5.10.6. Delegation of Authority. In general, the Trustees
may delegate to any officer of the Trust, to any committee of the Trustees and
to any employee, adviser, administrator, distributor, depository, custodian,
transfer and dividend disbursing agent, or any other agent or consultant of
the Trust such authority, powers, functions and duties as they consider
desirable or appropriate for the conduct of the business and affairs of the
Trust, including without implied limitation, the power and authority to act in
the name of the Trust and of the Trustees, to sign documents and to act as
attorney-in-fact for the Trustees.
Section 5.10.7. Suspension of Sales. The Trustees shall have the
authority to suspend or terminate the sales of Shares of any Series or Class
at any time or for such periods as the Trustees may from time to time decide.
Section 5.11. Certain Additional Powers. Without limiting the foregoing
and to the extent not inconsistent with the 1940 Act, other applicable law,
and the fundamental policies and limitations of the applicable Series or
Class, the Trustees shall have power and authority for and on behalf of the
Trust and each separate Series or Class as enumerated in this Section 5.11.
Section 5.11.1. Investments. The Trustees shall have the power to
invest and reinvest cash and other property, and to hold cash or other
property uninvested without in any event being bound or limited by any present
or future law or custom in regard to investments by trustees.
Section 5.11.2. Disposition of Assets. The Trustees shall have the
power to sell, exchange, lend, pledge, mortgage, hypothecate, write options on
and lease any or all of the assets of the Trust.
Section 5.11.3. Ownership. The Trustees shall have the power to
vote, give assent, or exercise any rights of ownership with respect to
securities or other property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall deem proper, granting
to such person or persons such power and discretion with relation to
securities or other property as the Trustees shall deem proper.
Section 5.11.4. Subscription. The Trustees shall have the power to
exercise powers and rights of subscription or otherwise which in any manner
arise out of ownership of securities.
Section 5.11.5. Payment of Expenses. The Trustees shall have the
power to pay or cause to be paid all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust or any Series or
Class thereof, or in connection with the management thereof, including, but
not limited to, the Trustees' compensation and such expenses and charges for
the Trust's officers, employees, investment advisers, administrator,
distributor, principal underwriter, auditor, counsel, depository, custodian,
transfer agent, dividend disbursing agent, accounting agent, shareholder
servicing agent, and such other agents, consultants, and independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur.
Section 5.11.6. Form of Holding. The Trustees shall have the power
to hold any securities or other property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in the name of
the Trustees or of the Trust or of any Series or in the name of a custodian,
subcustodian or other depositary or a nominee or nominees or otherwise.
Section 5.11.7. Reorganization, Consolidation, or Merger. The
Trustees shall have the power to consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer, any
security of which is or was held in the Trust, and to consent to any contract,
lease, mortgage, purchase or sale of property by such corporation or issuer,
and to pay calls or subscriptions with respect to any security held in the
Trust.
Section 5.11.8. Compromise. The Trustees shall have the power to
arbitrate or otherwise adjust claims in favor of or against the Trust, any
Series, or Class on any matter in controversy, including but not limited to
claims for taxes.
Section 5.11.9. Partnerships. The Trustees shall have the power to
enter into joint ventures, general or limited partnerships and any other
combinations or associations.
Section 5.11.10. Borrowing. The Trustees shall have the power to
borrow funds and to mortgage and pledge the assets of the Trust or any Series
or any part thereof to secure obligations arising in connection with such
borrowing, consistent with the provisions of the 1940 Act.
Section 5.11.11. Guarantees. The Trustees shall have the power to
endorse or guarantee the payment of any notes or other obligations of any
person; to make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof; and to mortgage and pledge the Trust property
(or Series property) or any part thereof to secure any of or all such
obligations.
Section 5.11.12. Insurance. The Trustees shall have the power to
purchase and pay for entirely out of Trust property such insurance as they may
deem necessary or appropriate for the conduct of the business, including,
without limitation, insurance policies insuring the assets of the Trust and
payment of distributions and principal on its portfolio investments, and
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, consultants, investment advisers, managers, administrators,
distributors, principal underwriters, or independent contractors, or any
thereof (or any person connected therewith), of the Trust individually against
all claims and liabilities of every nature arising by reason of holding, being
or having held any such office or position, or by reason of any action alleged
to have been taken or omitted by any such person in any such capacity,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify such
person against such liability.
Section 5.11.13. Indemnification. The Trustees shall have the power
to indemnify any person with whom the Trust or any Series has dealings,
including the Investment Adviser, Administrator, Distributor, Transfer Agent
and selected dealers, to such extent as the Trustees shall determine.
Section 5.11.14. Pensions. The Trustees shall have the power to pay
pensions for faithful service, as deemed appropriate by the Trustees, and to
adopt, establish and carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive and benefit plans,
including the purchasing of life insurance and annuity contracts as a means of
providing such retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust.
Section 5.12. Meetings and Vote of Trustees.
Section 5.12.1. Regular Meetings. The Trustees from time to time may
provide for the holding of regular meetings of the Trustees and fix their time
and place.
Section 5.12.2. Special Meetings. Special meetings of the Trustees
may be called by the President or Secretary of the Trust on twenty-four (24)
hours notice to each Trustee, either personally, by mail, by telegram, or by
facsimile transmission. Special meetings shall be called by the President or
Secretary in like manner and on like notice on the written request of a
majority of the Trustees then in office or a majority of the members of any
executive (or comparable) committee of the Trustees.
Section 5.12.3. Telephonic Meetings. Trustees may participate in a
meeting of the Trustees by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time. Except to the extent that the
1940 Act has been interpreted otherwise, participation by such means shall
constitute presence in person at the meeting.
Section 5.12.4. Quorum. A majority of the Trustees then in office
being present in person or by proxy shall constitute a quorum.
Section 5.12.5. Required Vote. Except as otherwise provided by the
1940 Act or other applicable law, this Declaration of Trust, or the Bylaws (if
any), any action to be taken by the Trustees on behalf of the Trust or any
Series or Class may be taken by a majority of the Trustees present at a
meeting of Trustees at which a quorum is present.
Section 5.12.6. Consent in Lieu of a Meeting. Except as otherwise
provided by the 1940 Act or other applicable law, the Trustees may, by
unanimous written consent of the Trustees then in office, take any action
which may have been taken at a meeting of the Trustees or any committee
thereof.
ARTICLE 6
Officers
Section 6.1. Enumeration. The officers of the Trust shall be a President,
one or more Vice Presidents, a Treasurer, and a Secretary. The Trustees may
also appoint such other officers, including a Chairman of the Board, Assistant
Treasurers, and/or Assistant Secretaries. The Trust may also have such agents
as the Trustees from time to time may in their discretion appoint. Any two or
more offices may be held by the same person except that the same person may
not be both President and Vice President, and that a person who holds more
than one office may not act in more than one capacity to execute, acknowledge,
or verify an instrument required by law to be executed, acknowledged, or
verified by more than one officer.
Section 6.2. Qualification. The Chairman of the Board, if there shall be
one, shall be a Trustee and may, but need not be, a Shareholder. Any other
officer may, but need not be, a Trustee or Shareholder.
Section 6.3. Election. The President, Treasurer, and Secretary shall be
elected by the Trustees at the first meeting of the Trustees. Other officers,
if any, may be elected or appointed by the Trustees at any meeting of the
Trustees or at any other time. The President, all Vice Presidents, the
Treasurer, and the Secretary shall be elected at each annual meeting of the
Trustees.
Section 6.4. Term of Office. The Chairman of the Board, the President,
the Treasurer, and the Secretary shall hold office until their respective
successors are chosen and qualified, or in each case until he or she sooner
dies, resigns, is removed, or becomes disqualified. Each other officer shall
hold office and each agent shall retain authority at the pleasure of the
Trustees.
Section 6.5. Powers. Subject to the other provisions herein, each officer
shall have, in addition to the duties and powers set forth herein, such duties
and powers as are commonly incident to the office occupied by such officer as
if the Trust were organized as a Delaware business corporation and such other
duties and powers as the Trustees may from time to time designate.
Section 6.6. Titles and Duties.
Section 6.6.1. Chairman of the Board; President. Unless the Trustees
otherwise provide, the Chairman of the Board, or, if there is no Chairman or
in the absence of the Chairman, the President, shall preside at all meetings
of the Shareholders and of the Trustees. Unless the Trustees otherwise
provide, the Chairman of the Board shall be the Chief Executive Officer of the
Trust. The Chairman of the Board and the President shall each also perform
such other duties and have such other powers as the Board of Trustees may from
time to time prescribe.
Section 6.6.2. Vice President. In the absence of the President or in
the event of his or her inability or refusal to act, the Vice President, or if
there is more than one Vice President, the Vice Presidents in their order of
election or in such other order as determined by the Trustees, shall perform
the duties of the President, and when so acting shall have all the powers of
and be subject to all the restrictions upon the President. The Vice Presidents
shall also perform such other duties and have such other powers as the Board
of Trustees or the President may from time to time prescribe.
Section 6.6.3. Treasurer. The Treasurer shall be the chief financial
and accounting officer of the Trust, and shall, subject to the provisions of
the Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing
or similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust. The Treasurer shall also perform such other
duties and have such other powers as the Board of Trustees or the President
may from time to time prescribe.
Section 6.6.4. Assistant Treasurer. In the absence of the Treasurer
or in the event of his or her inability or refusal to act, the Assistant
Treasurer, or if there is more than one, the Assistant Treasurers in their
order of election or in such other order as determined by the Trustees, shall
perform the duties of the Treasurer, and when so acting shall have all the
powers of and be subject to all the restrictions upon the Treasurer. The
Assistant Treasurers shall also perform such other duties and have such other
powers as the Board of Trustees or the President may from time to time
prescribe.
Section 6.6.5. Secretary. The Secretary shall record all proceedings
of the Shareholders and the Trustees in books to be kept for such purposes,
which books or a copy thereof shall be kept at the principal office of the
Trust or at such other place as designated by the Trustees. The Secretary
shall also perform such other duties and have such other powers as the Board
of Trustees or the President may from time to time prescribe.
Section 6.6.6. Assistant Secretary. In the absence of the Secretary
or in the event of his or her inability or refusal to act, the Assistant
Secretary, or if there is more than one, the Assistant Secretaries in their
order of election or in such other order as determined by the Trustees, shall
perform the duties of the Secretary, and when so acting shall have all the
powers of and be subject to all the restrictions upon the Secretary. The
Assistant Secretaries shall also perform such other duties and have such other
powers as the Board of Trustees or the President may from time to time
prescribe.
Section 6.6.7. Temporary Secretary. In the absence of the Secretary
and all Assistant Secretaries from any meeting of the Shareholders or
Trustees, the Trustees may appoint a temporary secretary at such meeting, who
shall perform the duties of the Secretary for the purposes of such meeting.
Section 6.7. Resignation, Retirement, and Removal. Any officer may resign
at any time by written instrument signed by him or her delivered to the
Chairman of the Board, President, or Secretary or delivered to a meeting of
the Trustees. Such resignation shall be effective upon receipt unless
specified to be effective at some other time. The Trustees may remove any
officer elected by them with or without cause by the vote or written consent
of a majority of the Trustees then in office. To the extent that any officer
or Trustee of the Trust receives compensation from the Trust and except as may
otherwise be expressly provided in a written agreement with the Trust, no
Trustee or officer resigning and no officer removed shall have any right to
any compensation for any period following his or her resignation or removal,
or any right to damages on account of such removal.
Section 6.8. Vacancies. Any vacancy or anticipated vacancy resulting for
any reason, including without limitation the death, resignation, retirement,
removal, or incapacity of the Chairman of the Board, the President, the
Treasurer, or the Secretary may be filled by a majority of the Trustees then
in office through the appointment in writing of such other person as such
remaining Trustees in their discretion shall determine. The appointment shall
be effective upon the written acceptance of the person named therein to serve
as in the capacity named therein. Other vacancies may be filled, if at all, by
the Trustees at a meeting of the Trustees or at any other time.
ARTICLE 7
Transactions with Officers and Trustees
Section 7.1. Purchase and Redemption of Shares of the Trust. Any Trustee,
officer or other agent of the Trust may acquire, own and dispose of Shares to
the same extent as if he or she were not a Trustee, officer or agent, and the
Trustees may accept subscriptions to purchase Shares or orders to redeem
Shares from any firm or company in which any Trustee, officer or other agent
of the Trust may have an interest.
Section 7.2. Purchase and Sale of Other Securities. The Trust shall not
purchase any securities (other than Shares) from, or sell any securities
(other than Shares) to, any Trustee or officer of the Trust, or any director,
trustee, officer, or partner of any firm which acts as investment adviser or
principal underwriter for the Trust acting as principal, except to the extent
permitted by the 1940 Act or the rules or regulations thereunder or by
appropriate order or written advice of the Commission.
ARTICLE 8
Service Providers
Section 8.1. Investment Adviser. The Trust may enter into written
contracts with one or more persons to act as investment adviser or investment
sub-adviser to each of the Series, and as such, to perform such functions as
the Trustees may deem reasonable and proper, including, without limitation,
investment advisory, management, research, valuation of assets, clerical and
administrative functions, under such terms and conditions, and for such
compensation, as the Trustees may in their discretion deem advisable.
Section 8.2. Underwriter and Transfer Agent. The Trust may enter into
written contracts with one or more persons to act as principal underwriter or
underwriter or distributor whereby the Trust may either agree to sell Shares
to the other party or parties to the contract or appoint such other party or
parties its sales agent or agents for such Shares and with such other
provisions as the Trustees may deem reasonable and proper, and the Trustees
may in their discretion from time to time enter into transfer agency, dividend
disbursement, and/or shareholder service contract(s), in each case with such
terms and conditions, and providing for such compensation, as the Trustees may
in their discretion deem advisable.
Section 8.3. Custodians. The Trust may enter into written contracts with
one or more persons to act as custodian to perform such functions as the
Trustees may deem reasonable and proper, under such terms and conditions, and
for such compensation, as the Trustees may in their discretion deem advisable.
Each such custodian shall be a bank or trust company having an aggregate
capital, surplus, and undivided profits of at least five hundred thousand
dollars ($500,000).
Section 8.4. Administrator. The Trust may enter into written contracts
with one or more persons to act as an administrator to perform such functions,
including accounting functions, as the Trustees may deem reasonable and
proper, under such terms and conditions, and for such compensation, as the
Trustees may in their discretion deem advisable.
Section 8.5. Other Contracts. The Trust may enter into such other written
contracts as the Trustees deem necessary and desirable, including contracts
with one or more persons for the coordination or supervision of persons
providing services to the Trust under one or more of the contracts described
in Sections 8.1, 8.2, 8.3, and 8.4.
Section 8.6. Parties to Contracts. Any contract of the character
described in Sections 8.1, 8.2, 8.3, and 8.4 or in Article 10 hereof may be
entered into with any corporation, firm, partnership, trust or association,
including, without limitation, the investment adviser, any investment
sub-adviser, or any affiliated person of the investment adviser or investment
sub-adviser, although one or more of the Trustees or officers of the Trust may
be an officer, director, trustee, shareholder, or member of such other party
to the contract, or may otherwise be interested in such contract, and no such
contract shall be invalidated or rendered voidable by reason of the existence
of any such relationship, nor shall any person holding such relationship be
liable merely by reason of such relationship for any loss or expense to the
Trust under or by reason of said contract or be accountable for any profit
realized directly or indirectly therefrom; provided, however, that the
contract when entered into was not inconsistent with the provisions of this
Article 8, Article 10, or the Bylaws (if any). The same person (including a
firm, corporation, partnership, trust or association) may provide more than
one of the services identified in this Article 8.
ARTICLE 9
Shareholders' Voting Powers and Meetings
Section 9.1 Voting Powers. The Shareholders shall have power to vote only
with respect to matters expressly enumerated in Section 9.1.1 or with respect
to such additional matters relating to the Trust as may be required by the
1940 Act, this Declaration of Trust, the Bylaws (if any), any registration
statement of the Trust with the Commission or any state, or as the Trustees
may otherwise deem necessary or desirable.
Section 9.1.1. Matters Requiring Shareholders Action. Action by the
Shareholders shall be required as to the following matters:
(a) The election or removal of Trustees as provided in Sections 5.4 and
5.7;
(b) The approval of a contract with a third party provider of services as
to which Shareholder approval is required by the 1940 Act;
(c) The termination or reorganization of the Trust to the extent and as
provided in Sections 11.1 and 11.2;
(d) The amendment of this Declaration of Trust to the extent and as may
be provided by this Declaration of Trust or applicable law; and
(e) Any court action, proceeding or claim brought or maintained
derivatively or as a class action on behalf of the Trust, any Series or Class
thereof or the Shareholders of the Trust; provided, however, that a
Shareholder of a particular Series or Class shall not be entitled to vote upon
a derivative or class action on behalf of any other Series or Class or
Shareholder of any other Series or Class.
Section 9.1.2. Separate Voting by Series and Class. On any matter
submitted to a vote of the Shareholders, all Shares shall be voted separately
by individual Series, except: (i) when required by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (ii) when the
Trustees have determined that the matter affects the interests of more than
one Series, then the Shareholders of all such Series shall be entitled to vote
thereon, in the aggregate and not by individual series. The Trustees may also
determine that a matter affects only the interests of one or more Classes
within a Series, in which case any such matter shall only be voted on by such
Class or Classes.
Section 9.1.3. Number of Votes. On any matter submitted to a vote of
the Shareholders, each whole Share shall be entitled to one vote per dollar of
net asset value as of the close of business on the record date, as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote.
Section 9.1.4. Cumulative Voting. There shall be no cumulative
voting in the election of Trustees.
Section 9.1.5. Voting of Shares; Proxies. Votes may be cast in
person or by proxy. A proxy with respect to Shares held in the name of two or
more persons shall be valid if executed by any one of them unless at or prior
to exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise, and the burden of proving the invalidity of a proxy shall rest
on the challenger. No proxy shall be valid more than eleven months after its
date, unless it provides for a longer period.
Section 9.1.6. Actions Prior to the Issuance of Shares. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and may take
any action required by law, this Declaration of Trust or the Bylaws (if any)
to be taken by Shareholders.
Section 9.2. Meetings of Shareholders.
Section 9.2.1. Annual or Regular Meetings. No annual or regular
meetings of Shareholders are required to be held.
Section 9.2.2. Special Meetings. Special meetings of Shareholders
may be called by the President of the Trust or the Trustees from time to time
for the purpose of taking action upon any matter requiring the vote or
authority of the Shareholders as herein provided or upon any other matter upon
which Shareholder approval is deemed by the Trustees to be necessary or
desirable. A special meeting shall be called by the Secretary of the Trust
upon (i) the request of a majority of the Trustees then in office, or (ii) the
written request of Shareholders entitled to cast at least ten percent (10%) of
all the votes entitled to be cast at such meeting, provided that (a) such
request shall state the purpose or purposes of the meeting and the matters
proposed to be acted upon at such meeting, and (b) the Shareholders requesting
such meeting shall have paid to the Trust the reasonably estimated cost of
preparing and mailing the notice thereof, which the Secretary shall determine
and specify to such Shareholders. Upon payment of these costs to the Trust,
the Secretary shall notify each Shareholder entitled to notice of the meeting.
Unless requested by Shareholders entitled to cast at least a majority of all
the votes entitled to be cast at such meeting, a special meeting need not be
called to consider any matter which is substantially the same as a matter
voted on at any special meeting of Shareholders held during the preceding
twelve (12) months.
Section 9.2.3. Notice of Meetings. Written notice of any meeting of
Shareholders shall be given or caused to be given by the Trustees by mailing
or transmitting such notice not less than ten (10) nor more than ninety (90)
days before such meeting, postage prepaid, stating the time, place and purpose
of the meeting, to each Shareholder at the Shareholder=s address as it appears
on the records of the Trust.
Section 9.2.4. Call of Meetings. The Trustees shall promptly call
and give notice of a meeting of Shareholders for the purpose of voting upon
removal of any Trustee of the Trust when requested to do so in accordance with
Section 9.2.2. For all other matters, the Trustees shall call or give notice
of a meeting within thirty (30) days after written application by Shareholders
entitled to cast at least ten percent (10%) of all the votes entitled to be
cast on the matter requesting a meeting be called.
Section 9.3. Record Dates. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution,
or for the purpose of any other action, the Trustees may from time to time fix
a date and time not more than ninety (90) days nor less than ten (10) days
prior to any meeting of Shareholders or other action as the date and time of
record for the determination of Shareholders entitled to vote at such meeting
or any adjournment thereof or to be treated as Shareholders of record for
purposes of such other action. Any Shareholder who was a Shareholder at the
date and time so fixed shall be entitled to vote at such meeting or any
adjournment thereof or to be treated as a Shareholder of record for purposes
of such other action, even though such Shareholder has since that date and
time disposed of its Shares, and no Shareholder becoming such after that date
and time shall be so entitled to vote at such meeting or any adjournment
thereof or to be treated as a Shareholder of record for purposes of such other
action.
Section 9.4. Quorum. Except as otherwise required by the 1940 Act or
other applicable law, this Declaration of Trust, or the Bylaws (if any) , the
presence in person or by proxy of Shareholders entitled to cast at least
thirty percent (30%) of the votes entitled to be cast on any particular matter
shall be a quorum as to such matter; provided, however, that any lesser number
shall be sufficient for matters upon which the Shareholders vote at
adjournments.
Section 9.5. Required Vote. Notwithstanding any provision of law
requiring the authorization of any matter by a greater proportion, any matter
upon which the Shareholders vote shall be approved by the affirmative vote of
a majority of the votes cast on such matter at a meeting of the Shareholders
at which a quorum is present, except that Trustees shall be elected by the
affirmative vote of a plurality of the votes cast at such a meeting.
Section 9.6. Adjournments. Adjourned meetings may be held within a
reasonable time after the date set for the original meeting without the
necessity of further notice.
Section 9.7. Actions by Written Consent. Except as otherwise required by
the 1940 Act or other applicable law, this Declaration of Trust, or the Bylaws
(if any), any action taken by Shareholders may be taken without a meeting if
Shareholders entitled to cast at least a majority of all the votes entitled to
be cast on the matter (or such larger proportion thereof as shall be required
by the 1940 Act or by any express provision of this Declaration of Trust or
the Bylaws (if any)) consent to the action in writing and such written
consents are filed with the records of the meetings of Shareholders. Such
consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
Section 9.8. Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is required for
stockholders of a Delaware business corporation under the Delaware General
Corporation Law.
Section 9.9. Additional Provisions. The Bylaws (if any) may include
further provisions for Shareholders= votes and meetings and related matters
not inconsistent with the provisions hereof.
ARTICLE 10
Limitation of Liability and Indemnification
Section 10.1. General Provisions.
Section 10.1.1. General Limitation of Liability. No personal
liability for any debt or obligation of the Trust shall attach to any Trustee
of the Trust. Without limiting the foregoing, a Trustee shall not be
responsible for or liable in any event for any neglect or wrongdoing of any
officer, agent, employee, investment adviser, sub-adviser, administrator,
principal underwriter or custodian of the Trust, nor shall any Trustee be
responsible or liable for the act or omission of any other Trustee. Every
note, bond, contract, instrument, certificate, Share or undertaking and every
other act or thing whatsoever executed or done by or on behalf of the Trust or
the Trustees or any Trustee in connection with the Trust shall be conclusively
deemed to have been executed or done only in or with respect to their, his or
her capacity as Trustees or Trustee and neither such Trustees or Trustee nor
the Shareholders shall be personally liable thereon.
Section 10.1.2. Notice of Limited Liability. Every note, bond,
contract, instrument, certificate or undertaking made or issued by the
Trustees or by any officers or officer may recite that the same was executed
or made by or on behalf of the Trust by them as Trustees or Trustee or as
officers or officer and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually
but are binding only upon the assets and property of the Trust or belonging to
a Series thereof, and may contain such further recitals as they, he or she may
deem appropriate, but the omission thereof shall not operate to bind any
Trustees or Trustee or officers or officer or Shareholders or Shareholder
individually.
Section 10.1.3. Liability Limited to Assets of the Trust. All
persons extending credit to, contracting with or having any claim against the
Trust shall look only to the assets of the Trust or belonging to a Series
thereof, as appropriate, for payment under such credit, contract or claim, and
neither the Shareholders nor the Trustees nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally
liable therefor.
Section 10.2. Liability of Trustees. The exercise by the Trustees of
their powers and discretion hereunder shall be binding upon the Trust, the
Shareholders, and any other person dealing with the Trust. The liability of
the Trustees, however, shall be limited by this Section 10.2.
Section 10.2.1. Liability for Own Actions. A Trustee shall be liable
to the Trust or the Shareholders only for his or her own willful misfeasance,
bad faith, or reckless disregard of the duties involved in the conduct of the
office of Trustee, and for nothing else, and shall not be liable for errors of
judgment or mistakes of fact or law.
Section 10.2.2. Liability for Actions of Others. The Trustees shall
not be responsible or liable in any event for any neglect or wrongdoing of any
officer, agent, employee, consultant, adviser, administrative agent,
distributor, principal underwriter, custodian, transfer agent, dividend
disbursing agent, shareholder servicing agent, or accounting agent of the
Trust, nor shall any Trustee be responsible for any act or omission of any
other Trustee.
Section 10.2.3. Advice of Experts and Reports of Others. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration of Trust and their duties as
Trustees hereunder, and shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice. In
discharging their duties, the Trustees, when acting in good faith, shall be
entitled to rely upon the books of account of the Trust and upon written
reports made to the Trustees by any officer appointed by them, any independent
public accountant and (with respect to the subject matter of the contract
involved) any officer, partner or responsible employee of any other party to
any contract entered into hereunder.
Section 10.2.4. Bond. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.
Section 10.2.5. Declaration of Trust Governs Issues of Liability.
The provisions of this Declaration of Trust, to the extent that they restrict
the duties and liabilities of the Trustees otherwise existing at law or in
equity, are agreed by the Shareholders and all other Persons bound by this
Declaration of Trust to replace such other duties and liabilities of the
Trustees.
Section 10.3. Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to
the application of any payments made or property transferred to the Trust or
upon its order.
Section 10.4. Liability of Shareholders. Without limiting the provisions
of this Section 10.4 or the DBTA, the Shareholders shall be entitled to the
same limitation of personal liability extended to stockholders of private
corporations organized for profit under the General Corporation Law of the
State of Delaware.
Section 10.4.1. Limitation of Liability. No personal liability for
any debt or obligation of the Trust shall attach to any Shareholder or former
Shareholder of the Trust, and neither the Trustees, nor any officer, employee
or agent of the Trust shall have any power to bind any Shareholder personally
or to call upon any Shareholder for the payment of any sum of money or
assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay by way of subscription for any Shares or otherwise.
Section 10.4.2. Indemnification of Shareholders. In case any
Shareholder or former Shareholder of the Trust shall be held to be personally
liable solely by reason of being or having been a Shareholder and not because
of such Shareholder's acts or omissions or for some other reason, the
Shareholder or former Shareholder (or, in the case of a natural person, his or
her heirs, executors, administrators or other legal representatives or, in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets of the Trust to be held
harmless from and indemnified against all loss and expense arising from such
liability; provided, however, there shall be no liability or obligation of the
Trust arising hereunder to reimburse any Shareholder for taxes paid by reason
of such Shareholder's ownership of any Shares or for losses suffered by reason
of any changes in value of any Trust assets. The Trust shall, upon request by
the Shareholder or former Shareholder, assume the defense of any claim made
against the Shareholder for any act or obligation of the Trust and satisfy any
judgment thereon.
Section 10.5. Indemnification.
Section 10.5.1. Indemnification of Covered Persons. Subject to the
exceptions and limitations contained in Section 10.5.2, every person who is,
or has been, a Trustee, officer, employee or agent of the Trust, including
persons who serve at the request of the Trust as directors, trustees,
officers, employees or agents of another organization in which the Trust has
an interest as a shareholder, creditor or otherwise (hereinafter referred to
as a Covered PersonA), shall be indemnified by the Trust to the fullest extent
permitted by law against liability and against all expenses reasonably
incurred or paid by him or her in connection with any claim, action, suit or
proceeding in which he or she becomes involved as a party or otherwise by
virtue of his or her being or having been such a Trustee, director, officer,
employee or agent and against amounts paid or incurred by him or her in
settlement thereof.
Section 10.5.2. Exceptions. No indemnification shall be provided
hereunder to a Covered Person:
(a) For any liability to the Trust or its Shareholders arising out of a
final adjudication by the court or other body before which the proceeding was
brought that the Covered Person engaged in willful misfeasance, bad faith, or
reckless disregard of the duties involved in the conduct of his or her office;
(b) With respect to any matter as to which the Covered Person shall have
been finally adjudicated not to have acted in good faith in the reasonable
belief that his or her action was in the best interests of the Trust; or
(c) In the event of a settlement or other disposition not involving a
final adjudication (as provided in paragraph (a) or (b) of this Section
10.5.2) and resulting in a payment by a Covered Person, unless there has been
either a determination that such Covered Person did not engage in willful
misfeasance, bad faith, or reckless disregard of the duties involved in the
conduct of his or her office by the court or other body approving the
settlement or other disposition, or a reasonable determination, based on a
review of readily available facts (as opposed to a full trial-type inquiry),
that he or she did not engage in such conduct, such determination being made
by: (i) a vote of a majority of the Disinterested Trustees (as such term is
defined in Section 10.5.5) acting on the matter (provided that a majority of
Disinterested Trustees then in office act on the matter); or (ii) a written
opinion of independent legal counsel.
Section 10.5.3. Rights of Indemnification. The rights of
indemnification herein provided may be insured against by policies maintained
by the Trust, and shall be severable, shall not affect any other rights to
which any Covered Person may now or hereafter be entitled, shall continue as
to a person who has ceased to be a Covered Person, and shall inure to the
benefit of the heirs, executors and administrators of such a person. Nothing
contained herein shall affect any rights to indemnification to which Trust
personnel other than Covered Persons may be entitled by contract or otherwise
under law.
Section 10.5.4. Expenses of Indemnification. Expenses of preparation
and presentation of a defense to any claim, action, suit or proceeding subject
to a claim for indemnification under this Section 10.5 shall be advanced by
the Trust prior to final disposition thereof upon receipt of an undertaking by
or on behalf of the recipient to repay such amount if it is ultimately
determined that he or she is not entitled to indemnification under this
Section 10.5, provided that either:
(a) Such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses arising out
of any such advances; or
(b) A majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office act on
the matter) or independent legal counsel in a written opinion shall determine,
based upon a review of the readily available facts (as opposed to the facts
available upon a full trial), that there is reason to believe that the
recipient ultimately will be found entitled to indemnification.
Section 10.5.5. Certain Defined Terms Relating to Indemnification.
As used in this Section 10.5, the following words shall have the meanings set
forth below:
(a) A "Disinterested Trustee" is one (i) who is not an Interested Person
of the Trust (including anyone, as such Disinterested Trustee, who has been
exempted from being an Interested Person by any rule, regulation or order of
the Commission), and (ii) against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or has been pending;
(b) "Claim," "action," "suit" or "proceeding" shall apply to all claims,
actions, suits, proceedings (civil, criminal, administrative or other,
including appeals), actual or threatened; and
(c) "Liability" and "expenses" shall include without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
ARTICLE 11
Termination or Reorganization
Section 11.1. Termination of Trust or Series or Class. Unless terminated
as provided herein, the Trust and each Series and Class designated and
established pursuant to this Declaration of Trust shall continue without
limitation of time.
Section 11.1.1. Termination. Subject to approval by the affected
Shareholders, the Trust, any Series, or any Class (and the establishment and
designation thereof) may be terminated by an instrument executed by a majority
of the Trustees then in office; provided, however, that no approval of
affected Shareholders is necessary if a majority of the Trustees then in
office determines that the continuation of the Trust, Series, or Class is not
in the best interests of the Trust, such Series, such Class, or the affected
Shareholders as a result of factors or events adversely affecting the ability
of the Trust, Series, or Class to conduct its business and operations in an
economically viable manner.
Section 11.1.2. Distribution of Assets. Upon termination of the
Trust or any Series or Class, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or
anticipated, as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees consider appropriate, reduce
the remaining assets of the Trust to distributable form in cash or other
securities, or any combination thereof, and distribute the proceeds to the
affected Shareholders in the manner set forth by resolution of the Trustees.
To the extent permitted by the 1940 Act or other applicable law, the Trustees
may require affected Shareholders to receive Shares of any remaining Series or
Class in lieu of such proceeds.
Section 11.1.3. Certificate of Cancellation. Upon termination of the
Trust, the Trustees shall file a certificate of cancellation in accordance
with Section 3810 of the DBTA.
Section 11.2. Sale of Assets. The Trustees may sell, convey, or transfer
the assets of the Trust, or the assets belonging to any one or more Series, to
another trust, partnership, association or corporation organized under the
laws of any state of the United States, or to the Trust to be held as assets
belonging to another Series of the Trust, in exchange for cash, shares or
other securities (including, in the case of a transfer to another Series of
the Trust, Shares corresponding to such other Series) with such transfer
either (i) being made subject to, or with the assumption by the transferee of,
the liabilities belonging to each Series the assets of which are so
transferred, or (ii) not being made subject to, or not with the assumption of,
such liabilities. Following such transfer, the Trustees shall distribute such
cash, Shares or other securities (giving due effect to the assets and
liabilities belonging to and any other differences among the various Series
the assets belonging to which have so been transferred) among the Shareholders
of the Series corresponding to the Series the assets belonging to which have
been so transferred. If all of the assets of the Trust have been so
transferred, the Trust shall be terminated pursuant to Section 11.1.
Section 11.3. Merger or Consolidation.
Section 11.3.1. Authority to Merge or Consolidate. The Trust, or any
one or more Series, may, either as the successor, survivor, or non-survivor,
(i) consolidate with one or more other trusts, partnerships, associations or
corporations organized under the laws of the State ofDelaware or any other
state of the United States, to form a new consolidated trust, partnership,
association or corporation under the laws under which any one of the
constituent entities is organized, or (ii) merge into one or more other
trusts, partnerships, associations or corporations organized under the laws of
the State of Delaware or any other state of the United States, or have one or
more such trusts, partnerships, associations or corporations merged into it,
any such consolidation or merger to be upon such terms and conditions as are
specified in an agreement and plan of reorganization entered into by the
Trust, or one or more Series as the case may be, in connection therewith. The
terms Amerge@ or Amerger@ as used herein shall also include the purchase or
acquisition of any assets of any other trust, partnership, association or
corporation which is an investment company organized under the laws of the
State of Delaware or any other state of the United States.
Section 11.3.2. No Shareholder Approval Required. Any such
consolidation or merger shall not require the vote of the Shareholders
affected thereby, unless such vote is required by the 1940 Act or other
applicable laws, or unless such merger or consolidation would result in an
amendment of this Declaration of Trust which would otherwise require the
approval of such Shareholders.
Section 11.3.3. Subsequent Amendments. In accordance with Section
3815(f) of DBTA, an agreement of merger or consolidation may effect any
amendment to this Declaration of Trust or the Bylaws (if any) or effect the
adoption of a new declaration of trust or Bylaws (if any) of the Trust if the
Trust is the surviving or resulting business trust.
Section 11.3.4. Certificate of Merger or Consolidation. Upon
completion of the merger or consolidation, the Trustees shall file a
certificate of merger or consolidation in accordance with Section 3810 of the
DBTA.
ARTICLE 12
Amendments
Section 12.1. Generally. Except as otherwise specifically provided herein
or as required by the 1940 Act or other applicable law, this Declaration of
Trust may be amended at any time by an instrument in writing signed by a
majority of the Trustees then in office.
Section 12.2. Certificate of Amendment. In the event of any amendment to
this Declaration of Trust which affects the certificate of trust filed by the
Trust in accordance with Section 2.1, the Trustees shall file a certificate of
amendment in accordance with Section 3810 of the DBTA.
Section 12.3. Prohibited Retrospective Amendments. No amendment of this
Declaration of Trust or repeal of any of its provisions shall limit or
eliminate the limitation of liability provided to Trustees and officers
hereunder with respect to any act or omission occurring prior to such
amendment or repeal.
ARTICLE 13
Miscellaneous Provisions
Section 13.1. Certain Internal References. In this Declaration of Trust
or in any such amendment, references to this Declaration of Trust, and all
expressions like Aherein,@ Ahereof@ and Ahereunder,@ shall be deemed to refer
to this Declaration of Trust as a whole and as amended or affected by any such
amendment.
Section 13.2. Certified Copies. The original or a copy of this
Declaration of Trust and of each amendment hereto shall be kept in the office
of the Trust where it may be inspected by any Shareholder. Anyone dealing with
the Trust may rely on a certificate by an officer or Trustee of the Trust as
to whether or not any such amendments have been made and as to any matters in
connection with the Trust hereunder, and with the same effect as if it were
the original, may rely on a copy certified by an officer or Trustee of the
Trust to be a copy of this Declaration of Trust or of any such amendments.
Section 13.3. Execution of Papers. Except as the Trustees may generally
or in particular cases authorize the execution thereof in some other manner,
all deeds, leases, contracts, notes and other obligations made by the Trustees
shall be signed by the President, any Vice President, Treasurer, any Assistant
Treasurer, Secretary, or any Assistant Secretary, or any officer authorized to
do so by the Trustees or any of the foregoing.
Section 13.4. Fiscal Year. The fiscal year of the Trust shall end on
December 31, or such other date as fixed by resolution of the Trustees.
Section 13.5. Governing Law. This Declaration of Trust is executed and
delivered with reference to DBTA and the laws of the State of Delaware by all
of the Trustees whose signatures appear below, and the rights of all parties
and the validity and construction of every provision hereof shall be subject
to and construed according to DBTA and the laws of the State of Delaware
(unless and to the extent otherwise provided for and/or preempted by the 1940
Act or other applicable federal securities laws); provided, however, that
there shall not be applicable to the Trust, the Trustees, or this Declaration
of Trust (a) the provisions of Section 3540 of Title 12 of the Delaware Code
or (b) any provisions of the laws (statutory or common) of the State of
Delaware (other than the DBTA) pertaining to trusts which are inconsistent
with the rights, duties, powers, limitations or liabilities of the Trustees
set forth or referenced in this Declaration of Trust. All references to
sections of the DBTA or the 1940 Act, or any rules or regulations thereunder,
refer to such sections, rules, or regulations in effect as of the date of this
Declaration of Trust, or any successor sections, rules, or regulations
thereto.
Section 13.6. Headings. Headings are placed herein for convenience of
reference only, and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument may be executed in
any number of counterparts, each of which shall be deemed an original.
Section 13.7. Resolution of Ambiguities. The Trustees may construe any of
the provisions of this Declaration insofar as the same may appear to be
ambiguous or inconsistent with any other provisions hereof, and any such
construction hereof by the Trustees in good faith shall be conclusive as to
the meaning to be given to such provisions. In construing this Declaration,
the presumption shall be in favor of a grant of power to the Trustees.
Section 13.8. Seal. No official seal of the Trust shall be required to
execute any instruments on behalf of the Trust in accordance with Section
13.3.
Section 13.9. Severability. The provisions of this Declaration of Trust
are severable, and if the Trustees shall determine, with the advice of
counsel, that any of such provision is in conflict with the 1940 Act, the
DBTA, or with other applicable laws and regulations, the conflicting provision
shall be deemed never to have constituted a part of this Declaration of Trust;
provided, however, that such determination shall not affect any of the
remaining provisions of this Declaration of Trust or render invalid or
improper any action taken or omitted prior to such determination. If any
provision of this Declaration of Trust shall be held invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall attach only to
such provision in such jurisdiction and shall not in any manner affect such
provision in any other jurisdiction or any other provision of this Declaration
of Trust in any jurisdiction.
Section 13.10. Signatures. To the extent permitted by applicable law, any
instrument signed pursuant to a validly executed power of attorney shall be
deemed to have been signed by the Trustee or officer executing the power of
attorney.
IN WITNESS WHEREOF, the undersigned, being the Trustees of the Trust,
have executed this Declaration of Trust as of the date first written above.
/s/ Thomas H. MacLeay
------------------------------------------
Thomas H. MacLeay, Trustee
/s/ William D. McMeekin
------------------------------------------
William D. McMeekin, Trustee
/s/ William G. Ricker
------------------------------------------
William G. Ricker, Trustee
Exhibit p(2)
NATIONAL LIFE INVESTMENT MANAGEMENT COMPANY, INC.
NL CAPITAL MANAGEMENT, INC.
CODE OF ETHICS AND PERSONAL SECURITIES TRANSACTION POLICY
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Policy Statement
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No officer or employee of National Life Investment Management Company,
Inc. or NL Capital Management, Inc. (together, the "Company") shall have any
position with, or a "substantial interest" in, any other business enterprise
operated for a profit, the existence of which would conflict, or might
conflict, with the proper performance of his/her duties, or responsibilities
to the Company or which might tend to affect his/her independence of judgment
with respect to transactions between the Company or its investment clients,
and such other business enterprise, without prior full and complete disclosure
thereof. Each officer or employee who has such a conflicting, or possibly
conflicting, interest with respect to any transaction which he/she knows is
under consideration by the Company, any affiliate thereof, or its investment
clients, is required to make timely disclosure thereof so that it may be part
of the Company's consideration of the transaction.
Rules of Conduct
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In order to implement the foregoing Policy Statement but without limiting
its intent, the following Rules are adopted:
1. No officer or employee should accept gifts, gratuities or favors of
any kind from any person, firm or corporation doing business, or
having the potential to do business with the Company or its
investment clients, under any circumstances from which it could be
reasonably inferred that the purpose of the gift, gratuity or favor
could be to influence the officer or employee in the conduct of
Company or affiliated transactions with the donor; provided,
however, that this section shall not be interpreted to prohibit (i)
allowing business contacts to pay for meals which a officer or
employee attends, or (ii) gifts of items with a value not exceeding
$100.
2. Bribes, kickbacks, and other illegal payments to or from any
individual with whom the Company does business or hopes to do
business, in any form, for any purpose, are absolutely prohibited.
3. The accuracy and completeness of account entries and classifications
are to be strictly maintained at all times. Entries must be made in
such a manner that their nature is clearly discernible to management
and to the Company's independent auditors.
4. No officer or employee of the Company shall be a director, officer,
associate, partner, agent or employee of any other business
enterprise, or shall have any financial interest in any other
financial institution, or in any firm with whom the Company or any
affiliate does business, without first having secured written
permission from the Chief Executive Officer.
5. No officer or employee of the Company who receives information on
investment matters shall, either directly or indirectly (a) purchase
or sell securities where any such purchase or sale is based on
information obtained by reason of his/her official position in the
Company, unless he/she shall have first secured written permission
to make such purchase or sale from the Chief Executive Officer, nor
(b) invest in any real property in which he/she knows that the
Company or any affiliate has, or is considering any investment or a
tenancy, or in any real property the value of which may be affected
by any action of the Company of which he/she has special knowledge.
Notwithstanding the foregoing provisions of 5(a) above, purchases or
sales of 1,000 or less share orders of companies whose securities
are listed on a registered exchange or quoted daily on NASDAQ shall
not be deemed prohibited hereunder.
6. Any officer or employee of the Company concerned with investment
activities, who has any investment, either directly or indirectly,
in any corporation or business enterprise which has a direct
placement with the Company or any affiliate, or is under
consideration for a direct placement by the Company or any
affiliate, or which is under consideration for acquisition by the
Company, any affiliate, or any investment client, must make full
disclosure of the circumstances of any investment held in such
corporation or enterprise to the Chief Executive Officer.
7. Officers and employees of the Company shall treat information which
they receive about the financial condition and business activities
of enterprises being considered for investment as confidential.
8. No officer or employee of the Company shall knowingly or
intentionally trade, directly or indirectly, against the Company's
investment clients in any of their respective securities or in any
securities which they each may respectively purchase, hold or sell,
or, knowingly or intentionally, enter into, advise or permit any
security transaction inconsistent with the best interests of the
Company's investment clients.
9. Each officer or employee of the Company shall file within ten days
after the close of each calendar quarter, with counsel to the
Company, a complete and accurate report of all transactions in
securities of which he/she has knowledge, made by or for his/her
account or any immediate member of his/her family or any trust,
partnership, corporation, syndicate or account as to which he/she,
directly or indirectly has control or has participation in
investment policies; provided however, any such report may contain a
statement that it shall not be construed as an admission that the
person making such report has any direct or indirect beneficial
ownership in the securities to which the report relates. Every such
report shall contain the following information:
(a) The date of the transaction and the title and amount of the
security involved;
(b) The nature of the transaction (i.e., purchase, sale or other
acquisition or disposition);
(c) The price at which the transaction was effected; and
(d) The name of the broker, dealer or bank with or through whom the
transaction was effected.
Each officer or employee of the Company who is required to make such
reports in connection with his or her affiliation with Sentinel
Advisors Company or Sentinel Group Funds, Inc., shall be excused
from making these reports.
In order to help ensure that all such reports are timely filed, the
designated individual will distribute the report forms at least five
business days prior to the end of a quarter, with a reminder that
the forms are required by law to be submitted to him/her within 10
days after the end of the quarter. In addition, the designated
individual shall, on a date not later than seven days after the end
of the quarter, determine whether any reports have not yet been
submitted, and shall follow up orally with any such person to ensure
that his or her report is timely filed. All such reports shall be
reviewed by counsel to the Company who shall indicate in writing on
each form that it has been reviewed by him or her.
10. Officers and employees of the Company shall not under any
circumstances acquire securities in an initial public offering.
11. Officers and employees of the Company shall not invest in private
placements except after having obtained the prior approval of the
CEO, which approval will be granted only in exceptional
circumstances in which it is clear that the investment opportunity
is not appropriate for the Company's clients or will not interfere
with a client's participation in the investment, and is not being
offered to the individual as a result of his or her position with
the Company.
12. Officers and employees of the Company shall not trade in any
security on any day that the Company's clients have a pending buy or
sell order in the same security, or for seven days thereafter,
unless the applicable portfolio manager has affirmatively advised
the keeper of the restricted list that the client has completed its
trading and that the security should be removed from the restricted
list.. Furthermore, the period during which trading in a security is
prohibited hereunder will extend to a period seven days before a
trade in such security by a client, if at the time of the personal
trade the subsequent trade by a client has been identified as
reasonably expected by that client's portfolio manager.
13. Officers and employees of the Company shall not be permitted to take
a profit from a purchase and sale, or sale and purchase, of the same
securities within 60 calendar days. Any profits realized in
violation of this restriction shall be disgorged to the Company.
14. Transactions by officers and employees of the Company in securities
which have total market capitalizations of at least $25 billion, in
options on such securities, or in options or futures on equity
indexes, and which are, in the case of individual stocks and
options, in amounts of either 1000 shares or less or $50,000 or
less, shall be exempt from the requirements of paragraphs 12 and 13
above. However, such transactions must be pre-cleared as provided in
paragraph 16, so as to ensure that the Company or its affiliates are
not in possession of material non-public information about the
issuer of the security, before the transaction may be effected.
15. Officers and employees of the Company shall not serve on boards of
directors of publicly held companies, in the absence of prior
approval from the CEO based on a finding that the board service is
in the best interests of the Company.
16. The Company shall have in place at all times procedures under which
(a) all securities transactions by its personnel are pre-cleared,
(b) its personnel are required to direct their broker to send
duplicate copies of confirmations of securities trades to a
designated compliance official of the Company, (c) trades executed
after pre-clearance is given are monitored, (d) personal holdings of
personnel, not including mutual funds and government securities, are
reported annually by all its personnel (such reports may be kept
sealed and opened only where there is good reason to investigate an
individual's trading activity), and (e) its personnel annually
certify compliance with the Company's procedures listed above and
its Code of Ethics and Personal Securities Transaction Policy.
Definitions
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As used herein, the following definitions shall apply:
1. "Substantial interest" shall mean (a) beneficial ownership of 1% or
more of the voting stock of any public corporation; (b) an interest
valued at more than $5,000 or an ownership of more than 10% in a closely
held corporation; or (c) any interest for gain or profit in any other
business or profession with which to his knowledge the Company's
investment clients invest in, purchase from or sell to, other than in
marketable securities.
2. "Purchase or sale of a security" includes the writing of an option to
purchase or sell a security.
3. "Security," means any security, of a class of securities of an issuer
(other than the Company's investment clients, the Government of the
United States or an instrumentality of the Government) or any security
convertible into a security of that class or any option to purchase or
sell such security.
4. "Security held or to be acquired" by the Company means any security as
defined above which is being, or within the past thirty days has been;
(a) held by the Company; or (b) considered by the Company or its
investment clients for purchase by the Company or by its investment
clients.
If you should at any time have any question as to the application of the
above, please consult with Counsel to the Company. This Code of Ethics and
Personal Securities Transaction Policy was adopted as of August 6, 1999, and
replaces all other policy statements that previously applied to officers and
employees of the Company.
R:NLIMCMETH
