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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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SIGNATURE JEROME L. DUFFY
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES.
</LEGEND>
<CIK> 0000350562
<NAME> KEMPER INTERMATIONAL FUND
<SERIES>
<NUMBER> 0
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<PERIOD-END> OCT-31-1994
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PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
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<CIK> 0000350562
<NAME> KEMPER INTERNATIONAL FUND
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<NUMBER> 01
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PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
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<CIK> 0000350562
<NAME> KEMPER INTERNATIONAL FUND
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<TABLE> <S> <C>
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PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
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</LEGEND>
<CIK> 0000350562
<NAME> KEMPER INTERNATIONAL FUND
<SERIES>
<NUMBER> 03
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<REALIZED-GAINS-CURRENT> 0
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</TABLE>
SUPPLEMENTARY REPORT OF INDEPENDENT AUDITORS
Board of Trustees
Kemper Funds
In planning and performing our audit of the financial statements of
each of the Kemper Funds listed in Exhibit A attached hereto (the
"Funds") for the year ended October 31, 1994, we considered their
internal control structure, including procedures for safeguarding
securities, in order to determine our auditing procedures for the
purpose of expressing our opinion on their financial statements and
to comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Funds is responsible for establishing and
maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgements by management are required
to assess the expected benefits and related costs of internal control
structure policies and procedures. Two of the objectives of an
internal control structure are to provide management with reasonable,
but not absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition and that transactions are
executed in accordance with management's authorization and recorded
properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and not be detected. Also,
projection of any evaluation of the structure to future periods is
subject to the risk that it may become inadequate because of changes
in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of the
specific internal control structure elements does not reduce to a
relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving the
internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined
above as of October 31, 1994.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
December 2, 1994
Kemper Funds Exhibit A
October 31, 1994
Kemper Technology Fund
Kemper Total Return Fund
Kemper Income and Capital Preservation Fund
Kemper Diversifed Income Fund
Kemper U.S. Government Securities Fund
Kemper Blue Chip Fund
Kemper International Fund
Report of Independent Auditors
The Board of Trustees
Kemper Funds
We have examined the accompanying description of Kemper Financial
Services, Inc. ("KFS") policies and procedures applicable to the
multiple distribution system for calculating the net asset value,
dividends and distributions of, and for allocating income and
expenses to, various classes of shares of each of the Kemper
Funds listed in Exhibit A attached hereto (the "Funds"). Our
examination included procedures to obtain reasonable assurance
about whether (1) the accompanying description presents fairly,
in all material respects, the aspects of KFS policies and
procedures that may be relevant to the Funds' internal control
structure, (2) the control structure policies and procedures
included in the description were suitably designed to achieve the
control objectives specified in the description, if those
policies and procedures were complied with satisfactorily, and
(3) such policies and procedures had been placed in operation as
of October 31, 1994. The control objectives were specified by
KFS. Our examination was performed in accordance with standards
established by the American Institute of Certified Public
Accountants and included those procedures we considered necessary
in the circumstances to obtain a reasonable basis for rendering
our opinion.
In our opinion, the accompanying description of the
aforementioned portions of the internal control structure
presents fairly, in all material respects, the relevant aspects
of KFS's policies and procedures that had been placed in
operation as of October 31, 1994. Also, in our opinion, the
policies and procedures, as described, are suitably designed to
provide reasonable assurance that the specified control
objectives would be achieved if the described policies and
procedures were complied with satisfactorily.
In addition to the procedures we considered necessary to render
our opinion as expressed in the previous paragraph, we applied
tests to specific policies and procedures, listed in Section III.
The nature, timing, extent, and results of the tests are listed
in Section IV. This information has been provided to the Funds
and to their auditors to be taken into consideration, along with
information about the internal control structure at the Funds,
when making assessments of control risks for the Funds. In our
opinion, the policies and procedures that were tested, were
operating with sufficient effectiveness to provide reasonable,
but not absolute, assurance that the control objectives specified
in Section II were achieved as of October 31, 1994.
The relative effectiveness and significance of specific policies
and procedures at KFS and their effect on assessments of control
risk at the Funds are dependent on their interaction with the
policies, procedures, and other factors present at the Funds.
The description and tests of operating effectiveness of the
policies and procedures at KFS is as of October 31, 1994. Any
projection of such information to the future is subject to the
risk that, because of change, the description may no longer
portray the system in existence. The potential effectiveness of
specified policies and procedures at KFS is subject to inherent
limitations and, accordingly, errors or irregularities may occur
and not be detected. Furthermore, the projection of any
conclusions, based on our findings, to future periods is subject
to the risk that changes may alter the validity of such
conclusions.
This report is intended for use by the management of KFS, the
Funds and its auditors, and the Securities and Exchange
Commission.
ERNST & YOUNG
LLP
Chicago, Illinois
December 2, 1994
SECTION I
Description of the System
Kemper Financial Services, Inc. ("KFS") implemented plans which
allow each of the Kemper Funds listed in Exhibit A attached
hereto (the "Funds") to issue multiple classes of shares.
Under the multiple distribution system, the Funds provide
investors with the option of purchasing shares in any or all of
the following four ways: (i) with a front-end sales load and a
service fee (the "Front-End Load Option" or "Class A shares");
(ii) without a front-end sales load, but subject to a contingent
deferred sales charge as well as to a distribution fee pursuant
to a Rule 12b-1 Plan and to a service fee (the "Deferred Option"
or "Class B shares"); (iii) without a front-end sales load or
contingent deferred sales charge but subject to a Rule 12b-1 Plan
providing for a distribution fee and to a service fee (the Level
Load Option" or "Class C shares"); and (iv) without a front-end
sales load, contingent deferred sales charge, distribution fee or
service fee ("Institutional Option" or "Class I shares"). In
addition, the Funds may from time to time create one or more
additional classes of shares, the terms of which may differ from
the Class A, B, C and I shares. Class B shares are converted to
Class A shares six years after issuance. Class C and I shares
have no conversion feature. No Class I shares have been issued.
The net asset value of all outstanding shares of each class is
computed based on the net assets and shares outstanding
attributable to each class. All expenses incurred by each Fund
are allocated to each class based on the relative percentage of
adjusted net assets except for the expenses of the distribution
plan which are allocated to Class B and C shares, administrative
service fees which are allocated to Class A, B and C shares, and
class specific expenses which will be borne exclusively by that
class. Due to the specific allocation of expenses that are borne
solely by certain classes, the net income attributable to, and
the dividends paid by, each class may vary.
SECTION II
Specific Control Objectives
Following are the specific control objectives of each Fund's
system of internal accounting control relating to the allocation
of income, expenses, gains and losses and the calculation of NAV
and dividends/distributions for the four classes of shares:
1. Direct expenses charged to each class of shares are
correctly recorded in the Fund accounting records and
allocated to the correct class of shares.
2. Income, other operating expenses and realized and unrealized
gains and losses are allocated properly to each class of
shares based upon the relative net assets of each class of
shares at the beginning of the day after adjusting for the
prior day's Fund share activity.
3. Dividend rates and daily per share NAV's for each class of
shares reflect the proper allocation of income, expenses and
realized and unrealized gains and losses, including the
proper amount of any direct expenses charged to each class
of shares.
SECTION III
Procedures to Achieve Specific Control Objectives
The following additional procedures will be performed for each
Fund to meet the specific control objectives:
1. Preparation of the Multi-Class Pricing-NAV Worksheet
("Worksheet") daily.
2. A determination of the dividends by class is made by
dividing daily net investment income allocated to each class
by the number of shares of that class eligible to receive
dividends (record shares).
The periodic distribution rate for realized gains will be
determined by taking total net realized gains for each class
and dividing by total record date shares.
3. Upon completion of the Worksheet and the calculation of the
dividend rate, and prior to furnishing the computed NAV and
dividend rate to the Shareholder Service Agent, the
Worksheet and calculation will be reviewed for accuracy by
an accounting supervisor ("Final Reviewer"). The Final
Reviewer will initial the Worksheet as evidence of the
review.
4. If the Final Reviewer notes any unusual fluctuations in the
NAV or daily dividend rates between the classes of shares of
a Fund, he or she will research the matter and document the
reasons for, and the reasonableness of, the fluctuation.
5. On a monthly basis, a reconciliation of all account balances
for each class of shares to the general ledger will be
performed. The reconciliation will be reviewed and
initialed by the reviewer.
SECTION IV
Tests of Effectiveness of Control Structure Policies and
Procedures
Our tests of the effectiveness of control structure policies and
procedures were designed to determine whether:
1. the description of the KFS' policies and procedures included
in Section I of this report presents fairly, in all material
respects, those aspects of the KFS' control structure that
may be relevant to a user organization's internal control
structure,
2. the control structure policies and procedures described in
Section III of this report were suitably designed to achieve
the control objectives defined in Section II of this report,
if those policies and procedures were complied with
satisfactorily,
3. the control structure policies and procedures described in
Section III of this report had been placed in operation as
of the date specified, and
4. the control structure policies and procedures were operating
with sufficient effectiveness to provide reasonable, but not
absolute, assurance that the control objectives in Section
II were achieved as of October 31, 1994.
Our tests of the effectiveness of control structure policies and
procedures included the following procedures, to the extent we
considered necessary: (a) a review of the KFS' organizational
structure, including the segregation of functional
responsibilities, policy statements, and personnel policies, (b)
discussions with management, accounting, administrative and other
personnel who are assigned responsibilities for developing,
ensuring adherence to and applying control structure policies and
procedures, and (c) observations of personnel in the performance
of their assigned duties.
Our tests of the effectiveness of control structure policies and
procedures included such other tests as we considered necessary
in the circumstances to evaluate whether those policies and
procedures, and the extent of compliance with them, are
sufficient to provide reasonable, but not absolute, assurance
that the specified control objectives were achieved as of October
31, 1994. Our tests of the operational effectiveness of control
structure policies and procedures were designed to cover the
calculation as of October 31, 1994 for each of the procedures
listed in Section III which satisfy the control objectives listed
in Section II of this report. In selecting particular tests of
the operational effectiveness of control structure policies and
procedures, we considered the (a) nature of the items being
tested, (b) the kinds and competence of available evidential
matter, (c) the nature of the audit objectives to be achieved,
(d) the assessed level of control risk, and (e) the expected
efficiency and effectiveness of the tests.
Tests of effectiveness of control structure policies and
procedures included:
Tests of source documentation to ensure validity of
information.
Tests of input and supervisory control procedures in place
to ensure accuracy, completeness, validity and integrity of
processing.
Tests of recalculation of output to verify accuracy.
Tests of output control procedures and resultant documents
and reports relative to specific calculations to ensure
accurate and timely updates of accounting records were
achieved.
Testing procedures were designed and performed to enable us to
conclude that the control objectives listed in Section II of this
report were achieved as of
October 31, 1994.
Kemper Funds Exhibit A
October 31, 1994
Kemper Technology Fund
Kemper Total Return Fund
Kemper Income and Capital Preservation Fund
Kemper Diversified Income Fund
Kemper U.S. Government Securities Fund
Kemper Blue Chip Fund
Kemper International Fund
Exhibit 77C
Kemper International Fund
Form N-SAR for the period ended 10/31/94
File No. 811-3136
A special meeting of Registrant's shareholders was held on May 25,
1994. Votes regarding the items submitted for shareholder vote are
set forth below.
Amendment of Agreement and Declaration of Trust.
For: 21,379,492
Against: 1,419,166
Amendment of Investment Management Agreement.
For: 21,973,403
Against: 961,716
Amendment of the Fund's Investment Policies and Restrictions
Regarding Restricted and Illiquid Securities.
For: 16,495,877
Against: 1,420,057
Amendment of the Fund's Investment Restrictions Regarding Senior
Securities.
For: 16,042,780
Against: 1,315,320
Change of Investment Restrictions from Fundamental to Non-
Fundamental.
For: 16,834,241
Against: 1,714,063
Exhibit 77I
Kemper International Fund
Form N-SAR for the period ended 10/31/94
File No. 811-3136
Prior to May 27, 1994, Registrant offered one class of shares.
Registrant's Agreement and Declaration of Trust was Amended and
Restated as of May 27, 1994 and a Written Instrument Establishing
and Designating Separate Classes of Shares was executed as of May
27, 1994 to create separate classes of shares; Class A, Class B,
Class C and Class I shares. The one class outstanding prior to the
reorganization was redesignated as the new Class A. Shares of each
class have equal noncumulative voting rights, except that Class B
and Class C shares have separate and exclusive voting rights with
respect to Registrant's Rule 12b-1 Plan. Shares of each class also
have equal rights with respect to dividends, assets and liquidation
of the Registrant subject to any preferences (such as resulting
from different Rule 12b-1 distribution fees), rights or privileges
of any classes of shares of Registrant. Shares are fully paid and
nonassessable when issued, are transferable without restriction and
have no preempetive or conversion rights.
Exhibit 77Q(a)
Kemper International Fund
Form N-SAR for the period ended 10/31/94
File No. 811-3136
KEMPER INTERNATIONAL FUND
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
-----------------------------------
WHEREAS, Article IX, Section 4 of the Agreement and
Declaration of Trust of Kemper International Fund dated October
24, 1985, provides that the Agreement and Declaration of Trust
may be amended at any time by an instrument in writing signed
by a majority of the then Trustees when authorized so to do by
vote of Shareholders holding a majority of the Shares entitled
to vote; and
WHEREAS, the holders of a majority of the Shares entitled
to vote have authorized this Amendment and Restatement of said
Agreement and Declaration of Trust;
NOW, THEREFORE, said Agreement and Declaration of Trust is
amended and restated to read in its entirety as follows:
WITNESSETH
WHEREAS, this Trust has been formed for the purposes of
carrying on the business of a management investment company; and
WHEREAS, in furtherance of such purposes, the Trustees have
acquired and may hereafter acquire assets and properties, to
hold and manage as trustees of a Massachusetts voluntary
association with transferable shares in accordance with the
provisions hereinafter set forth;
NOW, THEREFORE, the Trustees hereby declare that they will
hold all cash, securities and other assets and properties which
they may from time to time acquire in any manner as Trustees
hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the
holders from time to time of shares in this Trust as hereinafter
set forth.
ARTICLE I
NAME AND DEFINITIONS
--------------------
NAME AND REGISTERED AGENT
- - --------------------------
SECTION 1. This Trust shall be known as Kemper
International Fund and the Trustees shall conduct the business
of the Trust under that name or any other name as they may from
time to time determine. The registered agent for the Trust in
Massachusetts shall be CT Corporation System whose address is
2 Oliver Street, Boston, Massachusetts or such other person as
the Trustees may from time to time designate.
DEFINITIONS
- - -----------
SECTION 2. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts voluntary
association established by this Agreement and Declaration of
Trust, as amended from time to time, pursuant to Massachusetts
General Laws, Chapter 182;
(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV and then in
office;
(c) "Shares" mean the equal proportionate transferable
units of interest into which the beneficial interest in the
Trust shall be divided from time to time or, if more than one
series or class of shares is authorized under or pursuant to
Article III, the equal proportionate transferable units of
interest into which each such series or class shall be divided
from time to time;
(d) "Shareholder" means a record owner of Shares;
(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) The terms "Affiliated Person", "Assignment",
"Commission", "Interested Person", "Principal Underwriter" and
"vote of a majority of the outstanding voting securities" shall
have the meanings given them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time;
(h) "By-Laws" shall mean the By-Laws of the Trust as
amended from time to time;
(i) "Net asset value" shall have the meaning set forth in
Section 6 of Article VI hereof;
(j) The terms "series" or "series of Shares" refers to the
one or more separate investment portfolios of the Trust
authorized under or pursuant to Article III into which the
assets and liabilities of the Trust may be divided and the
Shares of the Trust representing the beneficial interest of
Shareholders in such respective portfolios; and
(k) The terms "class" or "class of Shares" refers to the
division of Shares representing any series into two or more
classes authorized under or pursuant to Article III.
ARTICLE II
----------
NATURE AND PURPOSE
------------------
The Trust is a voluntary association (commonly known as a
business trust) of the type referred to in Chapter 182 of the
General Laws of the Commonwealth of Massachusetts. 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. 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.
ARTICLE III
-----------
SHARES
------
DIVISION OF BENEFICIAL INTEREST
- - -------------------------------
SECTION 1. The Shares of the Trust shall be issued in one
or more series as the Trustees may, without Shareholder
approval, authorize from time to time. Each series shall be
preferred over all other series in respect of the assets
allocated to that series as hereinafter provided. The
beneficial interest in each series shall at all times be divided
into Shares (without par value) of such series, each of which
shall, except as provided in the following sentence, represent
an equal proportionate interest in such series with each other
Share of the same series, none having priority or preference
over another Share of the same series. The Trustees may,
without Shareholder approval, divide the Shares of any series
into two or more classes, Shares of each such class having such
preferences and special or relative rights or privileges
(including conversion rights, if any) as the Trustees may
determine. The number of Shares authorized shall be unlimited,
and the Shares so authorized may be represented in part by
fractional Shares. The Trustees may from time to time divide
or combine the shares of any series or class into a greater or
lesser number without thereby changing the proportionate
beneficial interests in the series or class. Without limiting
the authority of the Trustees set forth in this Section 1 to
establish and designate any further series or class, the
Trustees hereby establish and designate one series of Shares to
be known as the "Initial Portfolio." The establishment and
designation of any series or class of Shares in addition to the
foregoing shall be effective upon the execution by a majority
of the then Trustees of an instrument setting forth such
establishment and designation and the relative rights and
preferences of such series or class. As provided in Article IX,
Section 1 hereof, any series or class of Shares (whether or not
there shall then be Shares outstanding of said series or class)
may be terminated by the Trustees by written notice to the
Shareholders of such series or class or by the vote of the
Shareholders of such series or class entitled to vote more than
fifty percent (50%) of the votes entitled to be cast on the
matter. In the event of any such termination, a majority of the
then Trustees shall execute an instrument setting forth the
termination of such series or class.
OWNERSHIP OF SHARES
- - -------------------
SECTION 2. The ownership and transfer of Shares shall be
recorded on the books of the Trust or its transfer or similar
agent. 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, the transfer
of Shares and similar matters. The record books of the Trust
as kept by the Trust or any transfer or similar agent of the
Trust, as the case may be, shall be conclusive as to who are the
Shareholders of each series or class and as to the number of
Shares of each series or class held from time to time by each
Shareholder.
INVESTMENT IN THE TRUST; ASSETS OF A SERIES
- - -------------------------------------------
SECTION 3. The Trustees may issue Shares of the Trust to
such persons and on such terms and, subject to any requirements
of law, for such consideration, which may consist of cash or
tangible or intangible property or a combination thereof, as
they may from time to time authorize.
All consideration received by the Trust for the issue or
sale of Shares of a particular series, together with all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation thereof, and any
funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall, irrevocably belong to
such series of Shares for all purposes, subject only to the
rights of creditors, and shall be so handled upon the books of
account of the Trust and are herein referred to as "assets of"
such series. Any allocation of the assets of a series among any
classes of Shares of such series shall be made in a manner
consistent with the preferences and special or relative rights
or privileges of such classes.
RIGHT TO REFUSE ORDERS
- - ----------------------
SECTION 4. The Trust by action of its Trustees shall have
the right to refuse to accept any subscription for its Shares
at any time without any cause or reason therefore whatsoever.
Without limiting the foregoing, the Trust shall have the right
not to accept subscriptions under circumstances or in amounts
as the Trustees in their sole discretion consider to be
disadvantageous to existing Shareholders and the Trust may from
time to time set minimum and/or maximum amounts which may be
invested in Shares by a subscriber.
ORDER IN PROPER FORM
- - --------------------
SECTION 5. The criteria for determining what constitutes
an order in proper form and the time of receipt of such an order
by the Trust shall be prescribed by resolution of the Trustees.
WHEN SHARES BECOME OUTSTANDING
- - -------------------------------
SECTION 6. Shares subscribed for and for which an order
in proper form has been received shall be deemed to be
outstanding as of the time of acceptance of the order therefor
and the determination of the net price thereof, which price
shall be then deemed to be an asset of the Trust.
MERGER OR CONSOLIDATION
- - -----------------------
SECTION 7. In connection with the acquisition of all or
substantially all the assets or stock of another investment
company, investment trust, or of a company classified as a
personal holding company under Federal Income Tax laws, the
Trustees may issue or cause to be issued Shares of a series or
class and accept in payment therefor, in lieu of cash, such
assets at their market value, or such stock at the market value
of the assets held by such investment company or investment
trust, either with or without adjustment for contingent costs
or liabilities.
NO PREEMPTIVE RIGHTS, ETC.
- - --------------------------
SECTION 8. Shareholders shall have no preemptive or other
right to receive, purchase or subscribe for any additional
Shares or other securities issued by the Trust. The
Shareholders shall have no appraisal rights with respect to
their Shares and, except as otherwise determined by the Trustees
in their sole discretion, shall have no exchange or conversion
rights with respect to their Shares.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
- - -----------------------------------------------------
SECTION 9. Shares shall be deemed to be personal property
giving only the rights provided in this instrument. Every
Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms of the
Declaration of Trust and to have become a party thereto. The
death of a Shareholder during the continuance of the Trust shall
not operate to terminate the same 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,
but only to the rights of said decedent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any
title in or to the whole or any part of the Trust property or
right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the
Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power
to bind personally any Shareholder, nor except as specifically
provided herein to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
SHAREHOLDER INSPECTION RIGHTS
- - -----------------------------
SECTION 10. Any Shareholder or his agent may inspect and
copy during normal business hours any of the following documents
of the Trust: By-Laws, minutes of the proceedings of the
Shareholders and annual financial statements of the Trust,
including a balance sheet and financial statements of
operations. The foregoing rights of inspection of Shareholders
of the Trust are the exclusive and sole rights of the
Shareholders with respect thereto and no Shareholder of the
Trust shall have, as a Shareholder, the right to inspect or copy
any of the books, records or other documents of the Trust except
as specifically provided in this Section 10 of this Article III
or except as otherwise determined by the Trustees.
ARTICLE IV
----------
THE TRUSTEES
------------
NUMBER, DESIGNATION, ELECTION, TERM, ETC.
- - -----------------------------------------
SECTION 1.
- - ----------
(a) INITIAL TRUSTEE. Robert J. Engling, the initial
Trustee, appointed other Trustees pursuant to subsection (c) of
this Section 1 and then resigned.
(b) NUMBER. The Trustees serving as such, whether named
above or hereafter becoming Trustees, may increase or decrease
the number of Trustees to a number other than the number
theretofore determined which number shall not be less than three
nor more than fifteen except during the period that the initial
Trustee named above is sole Trustee. No decrease in the number
of Trustees shall have the effect of removing any Trustee from
office prior to the expiration of his term, but the number of
Trustees may be decreased in conjunction with the removal of a
Trustee pursuant to subsection (e) of this Section 1.
(c) TERM AND ELECTION. Each Trustee, whether named above
or hereafter becoming a Trustee, shall serve as a Trustee until
the next meeting of Shareholders, if any, called for the purpose
of considering the election or re-election of such Trustee or
of a successor to such Trustee, and until the election and
qualification of his successor, if any, elected at such meeting,
or until such Trustee sooner dies, resigns, retires or is
removed. Upon the election and qualification of a new Trustee,
the Trust estate shall vest in the new Trustee (together with
the continuing or other new Trustees) without any further act
or conveyance. Prior to any sale of Shares pursuant to any
public offering, the initial Trustee named above shall have the
right to appoint other persons as Trustees each to serve as
Trustees as aforesaid until the first meeting of Shareholders
called for the purpose of the election or re-election of such
Trustee or of a successor to such Trustee.
(d) RESIGNATION AND RETIREMENT. Any Trustee may resign
his trust or retire as a Trustee, by written instrument signed
by him and delivered to the other Trustees or to the Chairman
of the Board, if any, the President or the Secretary of the
Trust, and such resignation or retirement shall take effect upon
such delivery or upon such later date as is specified in such
instrument.
(e) REMOVAL. Any Trustee may be removed for cause at any
time by written instrument, signed by at least a majority of
the number of Trustees prior to such removal, specifying the
date upon which such removal shall become effective. Any
Trustee may be removed with or without cause (i) by the vote of
the Shareholders entitled to vote more than fifty percent (50%)
of the votes entitled to be cast on the matter voting together
without regard to series or class at any meeting called for such
purpose, or (ii) by a written consent filed with the custodian
of the Trust's portfolio securities and executed by the
Shareholders entitled to vote more than fifty percent (50%) of
the votes entitled to be cast on the matter voting together
without regard to series or class.
Whenever ten or more Shareholders of record who have been
such for at least six months preceding the date of application,
and who hold in the aggregate Shares constituting at least one
percent of the outstanding Shares of the Trust, shall apply to
the Trustees in writing, stating that they wish to communicate
with other Shareholders with a view to obtaining signatures to
a request for a meeting to consider removal of a Trustee and
accompanied by a form of communication and request that they
wish to transmit, the Trustees shall within five business days
after receipt of such application inform such applicants as to
the approximate cost of mailing to the Shareholders of record
the proposed communication and form of request. Upon the
written request of such applicants, accompanied by a tender of
the material to be mailed and of the reasonable expenses of
mailing, the Trustees shall, within reasonable promptness, mail
such material to all Shareholders of record at their addresses
as recorded on the books of the Trust. Notwithstanding the
foregoing, the Trustees may refuse to mail such material on the
basis and in accordance with the procedures set forth in the
last two paragraphs of Section 16(c) of the 1940 Act.
(f) VACANCIES. Any vacancy or anticipated vacancy
resulting from 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 by the other Trustees may (but so long as there are at
least three remaining Trustees, need not unless required by the
1940 Act) be filled either by a majority of the remaining
Trustees, even if less than a quorum, through the appointment
in writing of such other person as such remaining Trustees in
their discretion shall determine or, whenever deemed appropriate
by the remaining Trustees, by the election by the Shareholders,
at a meeting called for such purpose, of a person to fill such
vacancy. Upon the appointment or election and qualification of
a new Trustee as aforesaid, the Trust estate shall vest in the
new Trustee, together with the continuing Trustees, without any
further act or conveyance, except that any such appointment or
election in anticipation of a vacancy to occur by reason of
retirement, resignation, or increase in number of Trustees to
be effective at a later date shall become effective only at or
after the effective date of said retirement, resignation, or
increase in number of Trustees.
(g) MANDATORY ELECTION BY SHAREHOLDERS. Notwithstanding
the foregoing provisions of this Section 1, the Trustees shall
call a meeting of the Shareholders for the election of one or
more Trustees at such time or times as may be required in order
that the provisions of the 1940 Act may be complied with, and
the authority hereinabove provided for the Trustees to appoint
any successor Trustee or Trustees shall be restricted if such
appointment would result in failure of the Trust to comply with
any provision of the 1940 Act.
(h) EFFECT OF DEATH, RESIGNATION, ETC. The death,
resignation, retirement, removal or incapacity of the Trustees,
or any one of them, shall not operate to annul or terminate the
Trust or to revoke or terminate any existing agency or contract
created or entered into pursuant to the terms of this
Declaration of Trust.
(i) NO ACCOUNTING. Except under circumstances which would
justify his removal for cause, no person ceasing to be a Trustee
as a result of his death, resignation, retirement, removal or
incapacity (nor the estate of any such person) shall be required
to make an accounting to the Shareholders or remaining Trustees
upon such cessation.
POWERS
- - ------
SECTION 2. The Trustees, subject only to the specific
limitations contained in this Declaration of Trust or otherwise
imposed by the 1940 Act or other applicable law, shall have,
without further or other authorization and free from any power
or control of the Shareholders, full, absolute and exclusive
power, control and authority over the Trust assets and the
business and affairs of the Trust to the same extent as if the
Trustees were the sole and absolute owners thereof in their own
right and to do all such acts and things as in their sole
judgment and discretion are necessary and incidental to, or
desirable for the carrying out of any of the purposes of the
Trust or conducting the business of the Trust. Any
determination made in good faith by the Trustees of the purposes
of the Trust or the existence of any power or authority
hereunder shall be conclusive. In construing the provisions of
this Declaration of Trust, there shall be a presumption in favor
of the grant of power and authority to the Trustees. Without
limiting the foregoing, the Trustees may adopt By-Laws not
inconsistent with this Declaration of Trust containing
provisions relating to the business of the Trust, the conduct
of its affairs, its rights or powers and the rights or powers
of its Shareholders, Trustees, officers, employees and other
agents and may amend and repeal them to the extent that such By-
Laws do not reserve that right to the Shareholders; fill
vacancies in their number, including vacancies resulting from
increases in their number, unless a vote of the Trust's
Shareholders is required to fill such vacancies pursuant to the
1940 Act; elect and remove such officers and appoint and
terminate such agents as they consider appropriate; appoint from
their own number, and terminate, any one or more committees
consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session,
exercise some or all of the powers and authority of the Trustees
as the Trustees may determine; appoint an advisory board, the
members of which shall not be Trustees and need not be
Shareholders; employ one or more investment advisers or managers
as provided in Section 6 of this Article IV; employ one or more
custodians of the assets of the Trust and authorize such
custodians to employ subcustodians and to deposit all or any
part of such assets in a system or systems for the central
handling of securities; retain a transfer agent or a Shareholder
services agent, or both; provide for the distribution of Shares
by the Trust, through one or more principal underwriters or
otherwise; set record dates for the determination of
Shareholders with respect to various matters; and in general
delegate such authority as they consider desirable to any
officer of the Trust, to any committee of the Trustees and to
any agent or employee of the Trust or to any such custodian or
underwriter.
In furtherance of and not in limitation of the foregoing,
the Trustees shall have power and authority:
(a) To invest and reinvest in, to buy or otherwise
acquire, to hold, for investment or otherwise, to sell or
otherwise dispose of, to lend or to pledge, to trade in or deal
in securities or interests of all kinds, however evidenced, or
obligations of all kinds, however evidenced, or rights,
warrants, or contracts to acquire such securities, interests,
or obligations, of any private or public company, corporation,
association, general or limited partnership, trust or other
enterprise or organization, foreign or domestic, or issued or
guaranteed by any national or state government, foreign or
domestic, or their agencies, instrumentalities or subdivisions
(including but not limited to, bonds, debentures, bills, time
notes and all other evidences of indebtedness); negotiable or
non-negotiable instruments; any and all futures contracts;
government securities and money market instruments (including
but not limited to, bank certificates of deposit, finance paper,
commercial paper, bankers acceptances, and all kinds of
repurchase agreements);
(b) To invest and reinvest in, to buy or otherwise
acquire, to hold, for investment or otherwise, to sell or
otherwise dispose of foreign currencies, and funds and
exchanges, and make deposits in banks, savings banks, trust
companies, and savings and loan associations, foreign or
domestic;
(c) To acquire (by purchase, lease or otherwise) and to
hold, use, maintain, develop, and dispose of (by sale or
otherwise) any property, real or personal, and any interest
therein;
(d) To sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all of the assets
of the Trust;
(e) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or
property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall deem
proper, granting to such person or persons such power and
discretion with relation to securities or property as the
Trustees shall deem proper;
(f) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities;
(g) To hold any security or 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 in the name of a custodian, subcustodian or other depositary
or a nominee or nominees or otherwise;
(h) Subject to the provisions of Article III, to allocate
assets, liabilities, income and expenses of the Trust to a
particular series of Shares or to apportion the same among two
or more series, provided that any liabilities or expenses
incurred by a particular series shall be payable solely out of
the assets of that series; and to the extent necessary or
appropriate to give effect to the preferences and special or
relative rights or privileges of any classes of Shares, to
allocate assets, liabilities, income and expenses of a series
to a particular class of Shares of that series or to apportion
the same among two or more classes of Shares of that series;
(i) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
issuer, any security or property of which is or was held in the
Trust; to consent to any contract, lease, mortgage, purchase or
sale of property by such corporation or issuer, and to pay calls
or subscriptions with respect to any security held in the Trust;
(j) To join with other security holders in acting through
a committee, depositary, voting trustee or otherwise, and in
that connection to deposit any security with, or transfer any
security to, any such committee, depositary or trustee, and to
delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(k) To compromise, arbitrate or otherwise adjust claims
in favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes;
(l) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(m) To borrow funds;
(n) 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 any
part thereof to secure any of or all such obligations;
(o) 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 distribution and principal on its portfolio investments, and
insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers,
principal underwriters, or independent contractors 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 as Shareholder,
Trustee, officer, employee, agent, investment adviser or
manager, principal underwriter, or independent contractor,
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; and
(p) 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, trusts and provisions, including the purchasing of life
insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust.
The Trustees shall not in any way be bound or limited by
any present or future law or custom in regard to investments by
trustees of common law trusts. Except as otherwise provided
herein or from time to time in the By-Laws, any action to be
taken by the Trustees may be taken by a majority of the Trustees
present at a meeting of Trustees (if a quorum by present),
within or without Massachusetts, including any meeting held by
means of a conference telephone or other communications
equipment by means of which all persons participating in the
meeting can communicate with each other simultaneously and
participation by such means shall constitute presence in person
at a meeting, or by written consents of a majority of the
Trustees then in office.
PAYMENT OF EXPENSES, ALLOCATION OF LIABILITIES
- - ----------------------------------------------
SECTION 3. The Trustees are authorized to pay or to cause
to be paid out of the principal or income of the Trust, or
partly out of principal and partly out of income, as they deem
fair, all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust, or in
connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and
charges for the services of the Trust's officers, employees,
investment adviser or manager, principal underwriter, auditor,
counsel, custodian, transfer agent, shareholder servicing agent,
and such other agents or independent contractors and such other
expenses and charges as the Trustees may deem necessary or
proper to incur.
The assets of a particular series of Shares shall be
charged with the liabilities (including, in the discretion of
the Trustees or their delegate, accrued expenses and reserves)
incurred in respect of such series (but not with liabilities
incurred in respect of any other series) and such series shall
also be charged with its share of any other liabilities. Any
allocation of the liabilities of a series among classes of
Shares of that series shall be done in a manner consistent with
the preferences and special or relative rights or privileges of
such classes. The determination of the Trustees shall be final
and conclusive as to the amount of liabilities to be charged to
one or more particular series or class. The Trustees may
delegate from time to time the power to make such allocation to
one or more Trustees or to an agent of the Trust appointed for
such purpose. The liabilities with which a series is so charged
are herein referred to as the "liabilities of" such series.
SECTION 4. The Trustees shall have the power, as
frequently as they may determine, to cause each Shareholder to
pay directly, in advance or arrears, for charges for the Trust's
custodian or transfer or shareholder service or similar agent,
an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but
unpaid dividends owed such Shareholder and/or by reducing the
number of Shares in the account of such Shareholder by that
number of full and/or fractional shares which represents the
outstanding amount of such charges due from such Shareholder.
OWNERSHIP OF ASSETS OF THE TRUST
- - --------------------------------
SECTION 5. Title to all of the assets of each series of
the Trust and of the Trust shall at all times be considered as
vested in the Trustees.
ADVISORY, MANAGEMENT AND DISTRIBUTION
- - -------------------------------------
SECTION 6. Subject to a favorable vote of a majority of
the outstanding voting securities of a series of the Trust, the
Trustees may on behalf of such series, at any time and from time
to time, contract for exclusive or nonexclusive advisory and/or
management services for such series with a corporation, trust,
association or other organization, every such contract to comply
with such requirements and restrictions as may be set forth in
the By-Laws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and
restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what
portion, if any, of the assets of such series shall be held
uninvested and to make changes in such series' investments. The
Trustees may also, at any time and from time to time, contract
with a corporation, trust, association or other organization,
appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares, every such contract to comply with
such requirements and restrictions as may be set forth in the
By-Laws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and
restrictions as the Trustees may determine.
The fact that:
(a) any of the Shareholders, Trustees or officers of
the Trust is a shareholder, director, officer, partner, trustee,
employee, manager, advisor, principal underwriter, or
distributor or agent of or for any corporation, trust,
association, or other organization, or of or for any parent or
affiliate of any organization, with which an advisory or
management or principal underwriter's or distributor's contract,
or transfer, shareholder services or other agency contract may
have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a
Shareholder or has an interest in the Trust, or that
(b) any corporation, trust, association or other
organization with which an advisory or management or principal
underwriter's or distributor's contract, or transfer,
shareholder services or other agency contract may have been or
may hereafter be made also has an advisory or management
contract, or principal underwriter's or distributor's contract,
or transfer, shareholder services or other agency contract with
one or more other corporations, trusts, associations, or other
organizations, or has other businesses or interests shall not
affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon
or executing the same or create any liability or accountability
to the Trust or its Shareholders.
ARTICLE V
---------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
VOTING POWERS
- - --------------
SECTION 1. Subject to the voting provisions of one or more
classes of Shares, the Shareholders shall have power to vote
only: (a) for the election or removal of Trustees as provided
in Article IV, Section 1; (b) with respect to any investment
advisor or manager as provided in Article IV, Section 6; (c)
with respect to any termination or reorganization of the Trust
or any series or class thereof to the extent and as provided in
Article IX, Section 1; (d) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article
IX, Section 4; and (e) with respect to such additional matters
relating to the Trust as may be required by law, the 1940 Act,
this Declaration of Trust, the By-Laws or any registration of
the Trust with the Securities and Exchange Commission (or any
successor agency) or any state, or as the Trustees may consider
necessary or desirable.
Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share
shall be entitled to a proportionate fractional vote. Notwith-
standing any other provision of the Declaration of Trust, on any
matter submitted to a vote of Shareholders all Shares of the
Trust then entitled to vote shall, except to the extent
otherwise required or permitted by the preferences and special
or relative rights or privileges of any class of Shares, be
voted by individual series and not in the aggregate or by class,
except (a) when required by the 1940 Act, Shares shall be voted
in the aggregate and not by individual series; and (b) when the
Trustees have determined that the matter affects only the
interests of one or more series or classes, then only Sharehold-
ers of such series or class shall be entitled to vote thereon.
There shall be no cumulative voting in the election of Trustees.
Shares may be voted 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 the 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 invalidity shall
rest on the challenger.
Until Shares of any series or class are issued, the
Trustees may exercise all rights of Shareholders and may take
any action required by law, this Declaration of Trust or the By-
Laws to be taken by Shareholders of such series or class.
SHAREHOLDER MEETINGS
- - --------------------
SECTION 2. Meetings of Shareholders (including meetings
involving only one or more but less than all series or classes)
may be called and held 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
deemed by the Trustees to be necessary or desirable. Such
meetings shall be held at the principal office of the Trust as
set forth in the By-Laws of the Trust or at any such other place
within the United States as may be designated in the call
thereof, which call shall be made by the Trustees or the
President of the Trust. Meetings of Shareholders may be called
by the Trustees or such other person or persons as may be
specified in the By-Laws upon written application by Sharehold-
ers holding at least twenty-five percent (25%) (or ten percent
(10%)) if the purpose of the meeting is to determine if a
Trustee is to be removed from office) of the Shares then
outstanding of all series and classes entitled to vote at such
meeting requesting a meeting be called for a purpose requiring
action by the Shareholders as provided herein or in the By-Laws
which purpose shall be specified in any such written applica-
tion.
Shareholders shall be entitled to at least seven days'
written notice of any meeting of the Shareholders.
QUORUM AND REQUIRED VOTE
- - ------------------------
SECTION 3. The presence at a meeting of Shareholders in
person or by proxy of Shareholders entitled to vote at least
thirty percent (30%) of all votes entitled to be cast at the
meeting of each series or class entitled to vote as a series or
class shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law
or of this Declaration of Trust permits or requires that the
holders of Shares shall vote in the aggregate and not as a
series or class, then the presence in person or by proxy of
Shareholders entitled to vote at least thirty percent (30%) of
all votes entitled to be cast at the meeting (without regard to
series or class) shall constitute a quorum. Any lesser number,
however, shall be sufficient for adjournments. Any adjourned
session or sessions may be held within a reasonable time after
the date set for the original meeting without the necessity of
further notice.
Except when a larger vote is required by any provisions of
the 1940 Act, this Declaration of Trust or the By-Laws, a
majority of the Shares of each series or class voted on the
matter shall decide that matter insofar as that series or class
is concerned, provided that where any provision of law, this
Declaration of Trust or the By-Laws permits or requires that the
holders of Shares vote in the aggregate and not as a series or
class, then a majority of the Shares voted on any matter
(without regard to series or class) shall decide such matter and
a plurality shall elect a Trustee.
ACTION BY WRITTEN CONSENT
- - --------------------------
SECTION 4. Any action taken by Shareholders may be taken
without a meeting if Shareholders entitled to vote more than
fifty percent (50%) of the votes entitled to be cast on the
matter of each series or class or, where any provision of law,
this Declaration of Trust or the By-Laws permits or requires
that the holders of Shares vote in the aggregate and not as a
series or class, if Shareholders entitled to vote more than
fifty percent (50%) of the votes entitled to be cast thereon
(without regard to series or class) (or in either case such
larger vote as shall be required by any provision of this
Declaration of Trust or the By-Laws) 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.
ADDITIONAL PROVISIONS
- - ---------------------
SECTION 5. The By-Laws may include further provisions for
Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
ARTICLE VI
----------
DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES,
------------------------------------------
AND DETERMINATION OF NET ASSET VALUE
------------------------------------
DISTRIBUTIONS
- - -------------
SECTION 1. The Trustees may in their sole discretion from
time to time distribute to the Shareholders of any series such
income and gains, accrued or realized, as the Trustees may
determine, after providing for actual and accrued expenses and
liabilities of such series (including such reserves as the
Trustees may establish) determined in accordance with this
Declaration of Trust and good accounting practices. The
Trustees shall have full discretion to determine which items
shall be treated as income and which items as capital and their
determination shall be binding upon the Shareholders. Distribu-
tions to any series, if any be made, shall be in Shares of such
series, in cash or otherwise and on a date or dates determined
by the Trustees. At any time and from time to time in their
discretion, the Trustees may distribute to the Shareholders of
any series as of a record date or dates determined by the
Trustees, in Shares of such series, in cash or otherwise, all
or part of any gains realized on the sale or disposition of
property of the series or otherwise, or all or part of any other
principal of the Trust attributable to the series. Except to
the extent otherwise required or permitted by the preferences
and special or relative rights or privileges of any classes of
Shares of that series, each distribution pursuant to this
Section 1 shall be made ratably according to the number of
Shares of the series held by the several Shareholders on the
applicable record date thereof, provided that distributions from
assets of a series may only be made to the holders of the Shares
of such series and provided that no distributions need be made
on Shares purchased pursuant to orders received, or for which
payment is made, after such time or times as the Trustees may
determine. Any distribution to the Shareholders of a particular
class of Shares shall be made to such Shareholders prorata in
proportion to the number of Shares of such class held by each
of them. Any distribution paid in Shares will be paid at the
net asset value thereof as determined in accordance with this
Declaration of Trust. The Trustees have the power, in their
discretion, to distribute for any year amounts sufficient to
enable the Trust to qualify as a "regulated investment company"
under the Internal Revenue Code as amended (or any successor
thereto) to avoid any liability for federal income tax in
respect of that year.
REDEMPTIONS AND REPURCHASES
- - ---------------------------
SECTION 2. Any holder of Shares of the Trust may, by
presentation of a request in proper form, together with his
certificates, if any, for such Shares, in proper form for
transfer to the Trust or duly authorized agent of the Trust,
request redemption of his shares for the net asset value thereof
determined and computed in accordance with the provisions of
this Section 2 and the provisions of Section 6 of this Article
VI.
Upon receipt by the Trust or its duly authorized agent, as
the case may be, of such a request for redemption of Shares in
proper form, such Shares shall be redeemed at the net asset
value per share of the particular series or class next
determined after such request is received or determined as of
such other time fixed by the Trustees as may be permitted or
required by the 1940 Act. The criteria for determining what
constitutes a request for redemption in proper form and the time
of receipt of such request shall be fixed by the Trustees.
The obligation of the Trust to redeem its Shares as set
forth above in this Section 2 shall be subject to the condition
that such obligation may be suspended by the Trust by or under
authority of the Trustees during any period or periods when and
to the extent permissible under the 1940 Act. If there is such
a suspension, any Shareholder may withdraw any request for
redemption which has been received by the Trust during any such
period and the applicable net asset value with respect to which
would but for such suspension be calculated as of a time during
such period. Upon such withdrawal, the Trust shall return to
the Shareholder the certificates therefor, if any.
The Trust may also purchase, repurchase or redeem Shares
in accordance with such other methods, upon such other terms and
subject to such other conditions as the Trustee may from time
to time authorize at a price not exceeding the net asset value
of such Shares in effect when the purchase or repurchase or any
contract to purchase or repurchase is made. Shares redeemed or
repurchased by the Trust hereunder shall be canceled upon such
redemption or repurchase without further action by the Trust or
the Trustees and the number of issued and outstanding Shares of
the relevant series and class shall thereupon by reduced by such
amount.
PAYMENT FOR SHARES REDEEMED
- - ---------------------------
SECTION 3. Payment of the redemption price for Shares
redeemed pursuant to this Article VI shall be made by the Trust
or its duly authorized agent after receipt by the Trust or its
duly authorized agent of a request for redemption in proper form
(together with any certificates for such Shares as provided in
Section 2 above) in accordance with procedures and subject to
conditions prescribed by the Trustees; provided, however, that
payment may be postponed during the period in which the
redemption of Shares is suspended under Section 2 above.
Subject to any generally applicable limitation imposed by the
Trustees, any payment on redemption, purchase or repurchase by
the Trust of Shares may, if authorized by the Trustees, be made
wholly or partly in kind, instead of in cash. Such payment in
kind shall be made by distributing securities or other property,
constituting, in the opinion of the Trustees, a fair
representation of the various types of securities and other
property then held by the series of Shares being redeemed,
purchased or repurchased (but not necessarily involving a
portion of each of the series' holdings) and taken at their
value used in determining the net asset value of the Shares in
respect of which payment is made.
REDEMPTIONS AT THE OPTION OF THE TRUST
- - --------------------------------------
SECTION 4. The Trust shall have the right at its option
and at any time and from time to time to redeem Shares of any
Shareholder at the net asset value thereof as determined in
accordance with Section 6 of this Article VI, if at such time
such Shareholder owns fewer shares of a series or class than,
or Shares of a series or class having an aggregate net asset
value of less than, an amount determined from time to time by
the Trustees. Any such redemption at the option of the Trust
shall be made in accordance with such other criteria and
procedures for determining the Shares to be redeemed, the
redemption date and the means of effecting such redemption as
the Trustees may from time to time authorize.
ADDITIONAL PROVISIONS RELATING TO DIVIDENDS, REDEMPTIONS AND
- - ------------------------------------------------------------
REPURCHASES
- - -----------
SECTION 5. The completion of redemption, purchase or
repurchase of Shares shall constitute a full discharge of the
Trust and the Trustees with respect to such Shares. No dividend
or distribution (including, without limitation, any distribution
paid upon termination of the Trust or of any series or class)
with respect to, nor any redemption or repurchase of, the Shares
of any series or class shall be effected by the Trust other than
from the assets of such series.
DETERMINATION OF NET ASSET VALUE
- - --------------------------------
SECTION 6. The term "net asset value" of each Share of a
series or class as of any particular time shall be the quotient
obtained by dividing the value, as at such time, of the net
assets of such series or class (i.e., the value of the assets
of such series or class less the liabilities of such series or
class, exclusive of liabilities represented by the Shares of
such series or class) by the total number of Shares of such
series or class outstanding at such time, all determined and
computed in accordance with the Trust's current prospectus.
The Trustees, or any officer, or officers or agent of the
Trust designated for the purpose by the Trustees shall determine
the net asset value of the Shares of each series or class, and
the Trustees shall fix the time or times as of which the net
asset value of the Shares of each series or class shall be
determined and shall fix the periods during which any such net
asset value shall be effective as to sales, redemptions and
repurchases of, and other transactions in, the Shares of such
series or class, except as such times and periods for any such
transaction may be fixed by other provisions of this Declaration
of Trust or by the By-Laws.
Determinations in accordance with this Section 6 made in
good faith shall be binding on all parties concerned.
HOW LONG SHARES ARE OUTSTANDING
- - -------------------------------
SECTION 7. Shares of the Trust surrendered to the Trust
for redemption by it pursuant to the provisions of Section 2 of
this Article VI shall be deemed to be outstanding until the
redemption price thereof is determined pursuant to this Article
VI and, thereupon and until paid, the redemption price thereof
shall be deemed to be a liability of the Trust. Shares of the
Trust purchased by the Trust in the open market shall be deemed
to be outstanding until confirmation of purchase thereof by the
Trust and, thereupon and until paid, the purchase price thereof
shall be deemed to be a liability of the Trust. Shares of the
Trust redeemed by the Trust pursuant to Section 4 of this
Article VI shall be deemed to be outstanding until said Shares
are deemed to be redeemed in accordance with procedures adopted
by the Trustees pursuant to said Section 4.
ARTICLE VII
-----------
COMPENSATION AND LIMITATION OF LIABILITY OF
-------------------------------------------
TRUSTEES AND SHAREHOLDERS
-------------------------
SECTION 1. The Trustees as such shall be entitled to
reasonable compensation from the Trust if the rate thereof is
prescribed by such Trustees. Nothing herein shall in any way
prevent the employment of any Trustee for advisory, management,
legal, accounting, investment banking or other services and
payment for the same by the Trust, it being recognized that such
employment may result in such Trustee being considered an
Affiliated Person or an Interested Person.
LIMITATION OF LIABILITY
- - -----------------------
SECTION 2. The Trustees shall not be responsible or liable
in any event for any neglect or wrongdoing of any officer,
agent, employee, investment advisor or manager, principal
underwriter or custodian, nor shall any Trustee be responsible
for the act or omission of any other Trustee. Nothing in this
Declaration of Trust shall protect any Trustee against any
liability to which such Trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the
office of 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 Trustee or any of
them in connection with the Trust shall be conclusively deemed
to have been executed or done only in or with respect to their
or his capacity as Trustees or Trustee and neither such Trustees
or Trustee nor the Shareholders shall be personally liable
thereon.
Every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officers
or officer shall give notice that this Declaration of Trust is
on file with the Secretary of State of The Commonwealth of
Massachusetts and shall 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 a particular series of
Shares, and may contain such further recital as he or they 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.
All persons extending credit to, contracting with or having
any claim against the Trust or a particular series of Shares
shall look only to the assets of the Trust or the assets of that
particular series of Shares, as the case may be, 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.
TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
- - -------------------------------------------------------------
SECTION 3. The exercise by the Trustees of their powers
and discretions hereunder shall be binding upon everyone
interested. A Trustee shall be liable only for his own willful
misfeasance, bad faith, gross negligence 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. 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 pursuant to
Section 2 of Article IV. The Trustees shall not be required to
give any bond as such, nor any surety if a bond is required.
LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES
- - ------------------------------------------------
SECTION 4. 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.
ARTICLE VIII
------------
INDEMNIFICATION
---------------
Subject to the exceptions and limitations contained in this
Article, every person who is, or has been, a Trustee or officer
of the Trust (including persons who serve at the request of the
Trust as directors, officers or trustees of another organization
in which the Trust has an interest as a shareholder, creditor
or otherwise) hereinafter referred to as a "Covered Person",
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 in connection with any claim,
action, suit or proceeding in which he becomes involved as a
party or otherwise by virtue of his being or having been such
a Trustee, director or officer and against amounts paid or
incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Covered
Person:
(a) against any liability to the Trust or its
Shareholders by reason of a final adjudication by the court or
other body before which the proceeding was brought that he
engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office;
(b) with respect to any matter as to which he shall
have been finally adjudicated not to have acted in good faith
in the reasonable belief that his action was in the best
interest 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)) 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, gross
negligence or reckless disregard of the duties involved in the
conduct of his 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 did not engage in such conduct:
(i) by a vote of 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
(ii) by written opinion of independent legal
counsel.
The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, 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 such 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.
Expenses of preparation and presentation of a defense to
any claim, action, suit or proceeding subject to a claim for
indemnification under this Article 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 is not entitled
to indemnification under this Article, 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 a full
trial-type inquiry), that there is reason to believe that the
recipient ultimately will be found entitled to indemnification.
As used in this Article, a "Disinterested Trustee" is one
(a) who is not an "interested person" of the Trust, as defined
in the 1940 Act (including anyone who has been exempted from
being an "interested person" by any rule, regulation or order
of the Commission), and (b) 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.
As used in this Article, the words "claim", "action",
"suit" or "proceeding" shall apply to all claims, actions, suits
or proceedings (civil, criminal or other, including appeals),
actual or threatened; and the words "liability" and "expenses"
shall include without limitation, attorneys' fees, cost,
judgments, amounts paid in settlement, fines, penalties and
other liabilities.
In case any Shareholder or former Shareholder shall be held
to be personally liable solely by reason of his or her being or
having been a Shareholder and not because of his or her acts or
omissions or for some other reason, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators or
other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall
be entitled to be held harmless from and indemnified against all
loss and expense arising from such liability but only out of the
assets of the particular series of Shares of which he or she is
or was a Shareholder; 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 Shares or for losses suffered by
reason of any changes in value of any Trust assets.
ARTICLE IX
----------
MISCELLANEOUS
-------------
DURATION, TERMINATION AND REORGANIZATION OF TRUST
- - -------------------------------------------------
SECTION 1. Unless terminated as provided herein, the Trust
shall continue without limitation of time. The Trust may be
terminated at any time by the Trustees by written notice to the
Shareholders without a vote of the Shareholders of the Trust or
by the vote of the Shareholders entitled to vote more than fifty
percent (50%) of the votes of each series or class entitled to
be cast on the matter. Any series or class of Shares may be
terminated at any time by the Trustees by written notice to the
Shareholders of such series or class without a vote of the
Shareholders of such series or class or by the vote of the
Shareholders of such series or class entitled to vote more than
fifty percent (50%) of the votes entitled to be cast on the
matter.
Upon termination of the Trust or of any one or more series
or classes of Shares, after paying or otherwise providing for
all charges, taxes, expenses and liabilities, whether due or
accrued or anticipated, of the particular series or class as may
be determined by the Trustees, the Trust shall in accordance
with such procedures as the Trustees consider appropriate reduce
to the extent necessary the remaining assets of the particular
series to distributable form in cash or other securities, or any
combination thereof, and distribute the proceeds to the
Shareholders of the series or class involved, ratably according
the number of Shares of such series or class held by the several
Shareholders of such series or class on the date of termination.
Any such distributions with respect to any series which has one
or more classes of Shares outstanding shall be made ratably to
such classes in the same proportion as the number of Shares of
each class bears to the total number of Shares of the series,
except to the extent otherwise required or permitted by the
preferences and special or relative rights or privileges of any
classes of Shares of any such series.
At any time by the affirmative vote of the Shareholders of
the affected series entitled to vote more than fifty percent
(50%) of the votes entitled to be cast on the matter, the
Trustees may sell, convey and 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 of
such other series) with such transfer being made subject to or
with the assumption by the transferee of, the liabilities
belonging to each series the assets of which are so distributed.
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 the
assets belonging to which have been so transferred; and if all
the assets of the Trust have been so distributed, the Trust
shall be terminated.
FILING OF COPIES, REFERENCES, HEADINGS
- - --------------------------------------
SECTION 2. The original or a copy of this instrument and
of each amendment hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of
this instrument and of each amendment hereto shall be filed by
the Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to
time be required. Anyone dealing with the Trust may rely on a
certificate by any officer 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 of the Trust to be a copy of this instrument or of any
such amendments. In this instrument and in any such amendment,
references to this instrument, and all expressions like
"herein", "hereof", and "hereunder", shall be deemed to refer
to this instrument as amended from time to time. Headings are
placed herein for convenience of reference only and shall not
be taken as a part hereof or control or affect the meaning,
construction or effect of this instrument. This instrument may
be executed in any number of counterparts each of which shall
be deemed an original.
APPLICABLE LAW
- - --------------
SECTION 3. This Declaration of Trust is made in The
Commonwealth of Massachusetts, and it is created under and is
to be governed by and construed and administered according to
the laws of said Commonwealth. The Trust shall be of the type
commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust.
AMENDMENTS
- - ----------
SECTION 4. This Declaration of Trust may be amended at any
time by an instrument in writing signed by a majority of the
then Trustees when authorized so to do by vote of Shareholders
holding more than fifty percent (50%) of the Shares of each
series entitled to vote, except that an amendment which in the
determination of the Trustees shall affect the holders of one
or more series or classes of Shares but not the holders of all
outstanding series and classes shall be authorized by vote of
the Shareholders holding more than fifty percent (50%) of the
Shares entitled to vote of each series or class affected and no
vote of Shareholders of a series or class not affected shall be
required. Amendments having the purpose of changing the name
of the Trust or of supplying any omission, curing any ambiguity
or curing, correcting or supplementing any provision which is
defective or inconsistent with the 1940 Act or with the
requirements of the Internal Revenue Code and the regulations
thereunder for the Trust's obtaining the most favorable
treatment thereunder available to regulated investment companies
shall not require authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands and seals for themselves and their assigns, as of this
27th day of May, 1994.
/s/ Charles M. Kierscht
__________________________________
(SEAL) Charles M. Kierscht, Trustee
321 Princeton Road
Hinsdale, Illinois 60521
(signatures continue)
/s/ David W. Belin
__________________________________
David W. Belin, Trustee
1705 Plaza Circle
Des Moines, Iowa 50322
/s/ Lewis A. Burnham
__________________________________
Lewis A. Burnham, Trustee
16410 Avila Boulevard
Tampa, Florida 33613
/s/ Donald L. Dunaway
__________________________________
Donald L. Dunaway, Trustee
235A North Elm Grove Road
Brookfield, Wisconsin 53005
/s/ Robert B. Hoffman
__________________________________
Robert B. Hoffman, Trustee
1448 North Lake Shore Drive,
Apt. 7-8A
Chicago, IL 60610
/s/ Donald R. Jones
__________________________________
Donald R. Jones, Trustee
1776 Beaver Pond Road
Inverness, Illinois 60067
__________________________________
Charles M. Kierscht, Trustee
321 Princeton Road
Hinsdale, Illinois 60521
/s/ William P. Sommers
__________________________________
William P. Sommers, Trustee
2181 Parkside Ave.
Hillsborough, California 94010
/s/ Stephen B. Timbers
__________________________________
Stephen B. Timbers, Trustee
1448 North Lake Shore Drive,
Apt. 12 1/2 C
Chicago, Illinois 60610
STATE OF ILLINOIS )
) SS
COUNTY OF COOK )
Then personally appeared the afore-named David W. Belin,
Lewis A. Burnham, Donald L. Dunaway, Robert B. Hoffman, Donald
R. Jones, Charles M. Kierscht, William P. Sommers and Stephen
B. Timbers who acknowledged the foregoing instrument to be their
free act and deed, before me this 27th day of May, 1994.
/s/ Mary A. McCallister
_________________________________
NOTARY PUBLIC
LKW|T:\EDGAR\OPEN.END\KIF\KIFTRST.AG|122394
Exhibit 77Q(d)
Kemper International Fund
Form N-SAR for the period ended 10/31/94
File No. 811-3136
KEMPER INTERNATIONAL FUND
WRITTEN INSTRUMENT ESTABLISHING
AND DESIGNATING SEPARATE CLASSES OF SHARES
------------------------------------------
The undersigned constitute all the Trustees of Kemper
International Fund (the "Fund"), a Massachusetts business trust
governed by an Amended and Restated Agreement and Declaration of
Trust dated May 27, 1994 (the "Amended Declaration of Trust").
This instrument is executed pursuant to Section 1 of Article III of
the Amended Declaration of Trust in order to establish and
designate separate classes of shares of any series of the Fund, and
it is based in part upon resolutions of the Board of Trustees of
the Fund adopted at a meeting on January 14, 1994.
WHEREAS, Under the Amended Declaration of Trust the Board of
Trustees has the authority, in its discretion and without
shareholder approval, to divide the shares of any series of the
Fund into separate classes of shares;
WHEREAS, This Board of Trustees has previously approved,
subject to various conditions, the division of the shares of each
series of the Fund into four classes of shares, to be named "Class
A Shares," "Class B Shares," "Class C Shares" and "Class I Shares;"
WHEREAS, This Board of Trustees deems it desirable and in the
best interests of the Fund to divide the shares of each series of
the Fund, whether now existing or hereafter created (the "series"),
into four separate classes of shares to be named, as previously
indicated, "Class A Shares," "Class B Shares," "Class C Shares" and
"Class I Shares" and to provide investors with a conversion feature
from Class B Shares to the Class A Shares, which conversion feature
would thereby eliminate any distribution services fee then in
effect under any plan adopted pursuant to Rule 12b-1 of the
Investment Company Act of 1940 ("1940 Act") for such Class B
Shares; and
WHEREAS, This Board of Trustees believes that the creation of
four separate classes of shares as provided herein will be in the
best interests of and will have no negative effects upon the
current shareholders of the Fund;
NOW, THEREFORE, the establishment and designation of separate
classes of shares of any series of the Fund is approved in
accordance with the following provisions:
1. Subject to the conditions hereinafter set forth, the
shares of any series shall be divided into four classes to be known
respectively as the "Class A Shares," the "Class B Shares," the
"Class C Shares" and the "Class I Shares," which classes shall have
such preferences and special or relative rights and privileges as
may be determined from time to time by this Board of Trustees
subject always to the Amended Declaration of Trust and the 1940 Act
and the rules and regulations thereunder.
2. Subject to the terms of the Amended Declaration of Trust,
the Class A Shares, Class B Shares, Class C Shares and Class I
Shares will have the same rights and privileges except that:
(A) the Class A Shares
(1) shall be sold subject to an initial sales charge as
described in the prospectus for the Fund as from time to time in
effect or shall be issued to shareholders in connection with the
conversion feature as hereinafter described;
(2) shall have an administrative service fee;
(3) shall not have a plan of distribution adopted under
Rule 12b-1 of the 1940 Act ("Rule 12b-1 plan") and no fees payable
under the Rule 12b-1 plans for the Class B Shares or Class C Shares
shall be allocated or charged to the Class A Shares; and
(4) shall have such dividend reinvestment, exchange and
redemption rights and privileges as may be described in the
prospectus for the Fund as from time to time in effect; and
(B) the Class B Shares
(1) shall be sold without an initial sales charge but
subject to a contingent deferred sales charge imposed upon the
redemption of the Class B shares as described in the prospectus of
the Fund as from time to time in effect;
(2) shall have an administrative service fee;
(3) shall have a Rule 12b-1 plan and any fees payable
from time to time under such plan shall be allocated and charged
to, and any voting rights with respect to such plan shall be
exercisable by, the Class B Shares only;
(4) shall convert to Class A Shares within a specified
number of years as hereinafter described; and
(5) shall have such purchase, dividend reinvestment,
exchange and redemption rights and privileges associated therewith
as may be described in the prospectus for the Fund as from time to
time in effect; and
(C) the Class C Shares
(1) shall be sold without any initial sales charge or
any contingent deferred sales charge;
(2) shall have an administrative service fee;
(3) shall have a Rule 12b-1 plan and any fees payable
from time to time under such plan shall be allocated and charged
to, and any voting rights with respect to such plan shall be
exercisable by, the Class C Shares only; and
(4) shall have such purchase, dividend reinvestment,
exchange and redemption rights and privileges associated therewith
as may be described in the prospectus for the Fund as from time to
time in effect; and
(D) the Class I Shares
(1) shall be sold without any initial sales charge or
any contingent deferred sales charge;
(2) shall not have an administrative service fee;
(3) shall not have a Rule 12b-1 plan and no fees payable
under the plans for the Class B Shares or Class C Shares shall be
allocated or charged to the Class I Shares; and
(4) shall have such dividend reinvestment, exchange and
redemption rights and privileges as may be described in the
prospectus for the Fund as from time to time in effect.
3. Any shares of the Fund that are issued and outstanding at
the time when shares of the Fund are effectively divided into
separate classes of shares as set forth above shall be classified
as Class A Shares.
4. Class A Shares of a series shall be issued to holders of
Class B Shares of the same series pursuant to the following
described conversion feature:
(A) Class B Shares will convert to Class A Shares six
years after issuance of such Class B Shares; provided, however,
that any Class B Shares issued in exchange for shares originally
classified as Initial Shares of Kemper Portfolios, formerly known
as Kemper Investment Portfolios (KP), whether in connection with a
reorganization with a series of KP or otherwise, shall convert to
Class A Shares seven years after issuance of such Initial Shares if
such Initial Shares were issued prior to February 1, 1991;
(B) Class B Shares issued upon reinvestment of income
and capital gain dividends and other distributions will convert to
Class A Shares on a pro rata basis with other Class B Shares; and
(C) Conversion to Class A Shares shall be based upon the
relative net asset values of the Class A Shares and the Class B
Shares at the time of conversion.
IN WITNESS WHEREOF, the undersigned have this 27th day of May,
1994 signed these presents.
/s/ Charles M. Kierscht
------------------------------------
Charles M. Kierscht
321 Princeton Road
Hinsdale, Illinois 60521
(signatures continue)
/s/ David W. Belin
------------------------------------
David W. Belin, Trustee
1705 Plaza Circle
Des Moines, Iowa 50322
/s/ Lewis A. Burnham
------------------------------------
Lewis A. Burnham, Trustee
16410 Avila Boulevard
Tampa, Florida 33613
/s/ Donald L. Dunaway
------------------------------------
Donald L. Dunaway, Trustee
235A North Elm Grove Road
Brookfield, Wisconsin 53005
/s/ Robert B. Hoffman
------------------------------------
Robert B. Hoffman, Trustee
1448 North Lake Shore Drive, Apt 7-8A
Chicago, IL 60610
/s/ Donald R. Jones
------------------------------------
Donald R. Jones, Trustee
1776 Beaver Pond Road
Inverness, Illinois 60067
------------------------------------
Charles M. Kierscht, Trustee
321 Princeton Road
Hinsdale, Illinois 60521
/s/ William P. Sommers
------------------------------------
William P. Sommers, Trustee
2181 Parkside Ave.
Hillsborough, California 94010
/s/ Stephen B. Timbers
------------------------------------
Stephen B. Timbers, Trustee
1448 North Lake Shore Drive,
Apt. 12 1/2 C
Chicago, Illinois 60610
LKW|T:\EDGAR\OPEN.END\KIF\WRITINST.MM|122394
Exhibit 77Q(e)
Kemper International Fund
Form N-SAR for the period ended 10/31/94
File No. 811-3136
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 28th day of May, 1994, by and between
KEMPER INTERNATIONAL FUND, a Massachusetts business trust (the
"Fund"), and KEMPER FINANCIAL SERVICES, INC., a Delaware
corporation (the "Adviser").
WHEREAS, the Fund is an open-end management investment
company registered under the Investment Company Act of 1940, the
shares of beneficial interest ("Shares") of which are registered
under the Securities Act of 1933;
WHEREAS, the Fund is authorized to issue Shares in separate
series or portfolios with each representing the interests in a
separate portfolio of securities and other assets;
WHEREAS, the Fund currently offers or intends to offer
Shares in one portfolio, the Initial Portfolio, together with
any other Fund portfolios which may be established later and
served by the Adviser hereunder, being herein referred to
collectively as the "Portfolios" and individually referred to
as a "Portfolio"; and
WHEREAS, the Fund desires at this time to retain the
Adviser to render investment advisory and management services
to the Initial Portfolio, and the Adviser is willing to render
such services;
NOW THEREFORE, in consideration of the mutual covenants
hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. The Fund hereby employs the Adviser to act as the
investment adviser for the Initial Portfolio and other
Portfolios hereunder and to manage the investment and
reinvestment of the assets of each such Portfolio in accordance
with the applicable investment objectives and policies and
limitations, and to administer the affairs of each such
Portfolio to the extent requested by and subject to the
supervision of the Board of Trustees of the Fund for the period
and upon the terms herein set forth, and to place orders for the
purchase or sale of portfolio securities for the Fund's account
with brokers or dealers selected by it; and, in connection
therewith, the Adviser is authorized as the agent of the Fund
to give instructions to the Custodian of the Fund as to the
deliveries of securities and payments of cash for the account
of the Fund. In connection with the selection of such brokers
or dealers and the placing of such orders, the Adviser is
directed to seek for the Fund best execution of orders. Subject
to such policies as the Board of Trustees of the Fund
determines, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty, created by this
Agreement or otherwise, solely by reason of its having caused
the Fund to pay a broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of
commission another broker or dealer would have charged for
effecting that transaction, if the Adviser determined in good
faith that such amount of commission was reasonable in relation
to the value of the brokerage and research services provided by
such broker or dealer viewed in terms of either that particular
transaction or the Adviser's overall responsibilities with
respect to the clients of the Adviser as to which the Adviser
exercises investment discretion. The Fund recognizes that all
research services and research that the Adviser receives or
generates are available for all clients, and that the Fund and
other clients may benefit thereby. The investment of funds
shall be subject to all applicable restrictions of the Agreement
and Declaration of Trust and By-Laws of the Fund as may from
time to time be in force.
The Adviser accepts such employment and agrees during such
period to render such services, to furnish office facilities and
equipment and clerical, bookkeeping and administrative services
for the Fund, to permit any of its officers or employees to
serve without compensation as trustees or officers of the Fund
if elected to such positions and to assume the obligations
herein set forth for the compensation herein provided. The
Adviser shall for all purposes herein provided be deemed to be
an independent contractor and, unless otherwise expressly
provided or authorized, shall have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent
of the Fund. It is understood and agreed that the Adviser, by
separate agreements with the Fund, may also serve the Fund in
other capacities.
2. In the event that the Fund establishes one or more
portfolios other than the Initial Portfolio with respect to
which it desires to retain the Adviser to render investment
advisory and management services hereunder, it shall notify the
Adviser in writing. If the Adviser is willing to render such
services, it shall notify the Fund in writing whereupon such
portfolio or portfolios shall become a Portfolio or Portfolios
hereunder.
3. For the services and facilities described in Section 1, the
Fund will pay to the Adviser at the end of each calendar month,
an investment management fee for each Portfolio computed by
applying the following annual rates to the applicable average
daily net assets of the Portfolio:
<PAGE>
<TABLE>
Applicable Average
Daily Net Assets
<CAPTION>
(Thousands) Annual Rate
----------------- -----------
<S> <C>
$0 - $ 250,000 .75 of 1%
$ 250,000 - $ 1,000,000 .72 of 1%
$ 1,000,000 - $ 2,500,000 .70 of 1%
$ 2,500,000 - $ 5,000,000 .68 of 1%
$ 5,000,000 - $ 7,500,000 .65 of 1%
$ 7,500,000 - $10,000,000 .64 of 1%
$10,000,000 - $12,500,000 .63 of 1%
Over $12,500,000 .62 of 1%
</TABLE>
The fee as computed above shall be computed separately for,
and charged as an expense of, each Portfolio based upon the
average daily net assets of such Portfolio. For the month and
year in which this Agreement becomes effective or terminates,
there shall be an appropriate proration on the basis of the
number of days that the Agreement is in effect during the month
and year, respectively.
4. The services of the Adviser to the Fund under this
Agreement are not to be deemed exclusive, and the Adviser shall
be free to render similar services or other services to others
so long as its services hereunder are not impaired thereby.
5. In addition to the fee of the Adviser, the Fund shall
assume and pay any expenses for services rendered by a custodian
for the safekeeping of the Fund's securities or other property,
for keeping its books of account, for any other charges of the
custodian, and for calculating the net asset value of the Fund
as provided in the prospectus of the Fund. The Adviser shall
not be required to pay and the Fund shall assume and pay the
charges and expenses of its operations, including compensation
of the trustees (other than those affiliated with the Adviser),
charges and expenses of independent auditors, of legal counsel,
of any transfer or dividend disbursing agent, and of any
registrar of the Fund, costs of acquiring and disposing of
portfolio securities, interest, if any, on obligations incurred
by the Fund, costs of share certificates and of reports,
membership dues in the Investment Company Institute or any
similar organization, costs of reports and notices to
shareholders, other like miscellaneous expenses and all taxes
and fees payable to federal, state or other governmental
agencies on account of the registration of securities issued by
the Fund, filing of trust documents or otherwise. The Fund
shall not pay or incur any obligation for any expenses for which
the Fund intends to seek reimbursement from the Adviser as
herein provided without first obtaining the written approval of
the Adviser. The Adviser shall arrange, if desired by the Fund,
for officers or employees of the Adviser to serve, without
compensation from the Fund, as trustees, officers or agents of
the Fund if duly elected or appointed to such positions and
subject to their individual consent and to any limitations
imposed by law.
If expenses borne by the Fund for those Portfolios which
the Adviser manages in any fiscal year (including the Adviser's
fee, but excluding interest, taxes, fees incurred in acquiring
and disposing of portfolio securities, distribution services
fees, extraordinary expenses and any other expenses excludable
under state securities law limitations) exceed any applicable
limitation arising under state securities laws, the Adviser will
reduce its fee or reimburse the Fund for any excess to the
extent required by such state securities laws. If for any month
the expenses of the Fund properly chargeable to the income
account shall exceed 1/12 of the percentage of average net
assets allowable as expenses, the payment to the Adviser for
that month shall be reduced and if necessary the Adviser shall
make a refund payment to the Fund so that the total net expense
will not exceed such percentage. As of the end of the Fund's
fiscal year, however, the foregoing computations and payments
shall be readjusted so that the aggregate compensation payable
to the Adviser for the year is equal to the percentage
calculated in accordance with Section 3 hereof of the average
net asset value as determined as described herein throughout the
fiscal year, diminished to the extent necessary so that the
total of the aforementioned expense items of the Fund shall not
exceed the expense limitation. The aggregate of repayments, if
any, by the Adviser to the Fund for the year shall be the amount
necessary to limit the said net expense to said percentage in
accordance with the foregoing.
The net asset value for each Portfolio shall be calculated
in accordance with the provisions of the Fund's prospectus or
as the trustees may determine in accordance with the provisions
of the Investment Company Act of 1940. On each day when net
asset value is not calculated, the net asset value of a
Portfolio shall be deemed to be the net asset value of such
Portfolio as of the close of business on the last day on which
such calculation was made for the purpose of the foregoing
computations.
6. Subject to applicable statutes and regulations, it is
understood that trustees, officers or agents of the Fund are or
may be interested in the Adviser as officers, directors, agents,
shareholders or otherwise, and that the officers, directors,
shareholders and agents of the Adviser may be interested in the
Fund otherwise than as a trustee, officer or agent.
7. The Adviser shall not be liable for any error of judgment
or of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except loss
resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its
obligations and duties or by reason of its reckless disregard
of its obligations and duties under this Agreement.
8. This Agreement shall become effective with respect to the
Initial Portfolio on the date hereof and shall remain in full
force until March 1, 1995, unless sooner terminated as
hereinafter provided. This Agreement shall continue in force
from year to year thereafter with respect to each Portfolio, but
only as long as such continuance is specifically approved for
each Portfolio at least annually in the manner required by the
Investment Company Act of 1940 and the rules and regulations
thereunder; provided, however, that if the continuation of this
Agreement is not approved for a Portfolio, the Adviser may
continue to serve in such capacity for such Portfolio in the
manner and to the extent permitted by the Investment Company Act
of 1940 and the rules and regulations thereunder.
This Agreement shall automatically terminate in the event
of its assignment and may be terminated at any time without the
payment of any penalty by the Fund or by the Adviser on sixty
(60) days written notice to the other party. The Fund may
effect termination with respect to any Portfolio by action of
the Board of Trustees or by vote of a majority of the
outstanding voting securities of such Portfolio.
This Agreement may be terminated with respect to any
Portfolio at any time without the payment of any penalty by the
Board of Trustees or by vote of a majority of the outstanding
voting securities of such Portfolio in the event that it shall
have been established by a court of competent jurisdiction that
the Adviser or any officer or director of the Adviser has taken
any action which results in a breach of the covenants of the
Adviser set forth herein.
The terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth
in the Investment Company Act of 1940 and the rules and
regulations thereunder.
Termination of this Agreement shall not affect the right
of the Adviser to receive payments on any unpaid balance of the
compensation described in Section 3 earned prior to such
termination.
9. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
10. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
11. All parties hereto are expressly put on notice of the
Fund's Agreement and Declaration of Trust and all amendments
thereto, all of which are on file with the Secretary of The
Commonwealth of Massachusetts, and the limitation of shareholder
and trustee liability contained therein. This Agreement has
been executed by and on behalf of the Fund by its representa-
tives as such representatives and not individually, and the
obligations of the Fund hereunder are not binding upon any of
the trustees, officers, or shareholders of the Fund individually
but are binding upon only the assets and property of the Fund.
With respect to any claim by the Adviser for recovery of that
portion of the investment management fee (or any other liability
of the Fund arising hereunder) allocated to a particular
Portfolio, whether in accordance with the express terms hereof
or otherwise, the Adviser shall have recourse solely against the
assets of that Portfolio to satisfy such claim and shall have
no recourse against the assets of any other Portfolio for such
purpose.
12. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 11 hereof which
shall be construed in accordance with the laws of The
Commonwealth of Massachusetts) the laws of the State of
Illinois.
13. This Agreement is the entire contract between the parties
relating to the subject matter hereof and supersedes all prior
agreements between the parties relating to the subject matter
hereof.
IN WITNESS WHEREOF, the Fund and the Adviser have caused
this Agreement to be executed as of the day and year first above
written.
KEMPER INTERNATIONAL FUND
By: /s/ John E. Peters
----------------------------
Title: Vice President
-------------------------
ATTEST:
/s/ Philip J. Collora
- - --------------------------------
Title: Asst. Secretary
-------------------------
KEMPER FINANCIAL SERVICES, INC.
By: /s/ Patrick H. Dudasik
-----------------------------
Title: Sr. Vice President
---------------------------
ATTEST:
/s/ David F. Dierenfeldt
- - --------------------------------
Title: Asst. Secretary
------------------------
LKW|T:\EDGAR\OPEN.END\KIF\INVESTAG|122394
KEMPER FINANCIAL SERVICES, INC.
120 S. LaSalle Street, Chicago, IL 60603 312/781-1121
December 28, 1994
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Filing Desk, Stop 1-4
Re: KEMPER INTERNATIONAL FUND
(FILE NOS. 2-70639 AND 811-3136)
Dear Sir or Madam:
Enclosed pursuant to Rule 30b-1 under the Investment Company Act of
1940 is the Form N-SAR for the above-referenced Registrant for the
twelve-month period ended October 31, 1994. A wire in the amount
of $125 for the filing fee has been sent to the Mellon Bank.
Very truly yours,
Maureen A. Miller
Associate Counsel
MAM/lkw
Enclosures
cc: Mr. Philip J. Collora/KFS
