<PAGE>
- --------------------------------------------------------------------------------
As filed with the Securities 1933 Act File No. 2-75443
and Exchange Commission 1940 Act File No. 811-3359
on July 27, 1995
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 [_]
Pre-Effective Amendment No. [_]
Post-Effective Amendment No. 16 [X]
and/or
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 16 [X]
WAYNE HUMMER MONEY FUND TRUST
(Exact Name of Registrant as Specified in Charter)
300 South Wacker Drive (312) 431-1700
Chicago, Illinois 60604 (Registrant's Telephone Number
(Address of Principal Executive including Area Code)
Offices, Zip Code)
Robert J. Moran, Esq.
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street, Suite 2600
Chicago, Illinois 60601
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[_] immediately upon filing pursuant to paragraph (b)
[X] on August 1, 1995 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
An indefinite amount of securities have been registered pursuant to Rule 24f-2
under the Investment Company Act of 1940. The Rule 24f-2 Notice for the year
ended March 31, 1995 was filed with the Securities and Exchange Commission on or
about May 23, 1995.
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<PAGE>
WAYNE HUMMER MONEY FUND TRUST
CROSS-REFERENCE SHEET
-------------------------------
<TABLE>
<CAPTION>
Form N-1A Item Number
- ---------------------
PART A Location in Prospectus
------ ----------------------
<C> <S> <C>
1 Cover Page Cover Page
2 Synopsis Summary of Expense
Information
3 Condensed Financial Financial Highlights;
Information Performance Information;
Supplement
4 General Description of Introduction; Investment
Registrant Objective, Policies
and Restrictions; Risks;
Supplement
5 Management of the Fund Management of the Trust;
Cover Page
5A Management's Discussion Not Applicable
of Fund Performance
6 Capital Stock and Other Description of Shares;
Securities Dividends; Taxes
7 Purchase of Securities Purchase of Shares;
Being Offered Management of the
Trust; Pricing of
Shares
8 Redemption or Repurchase Redemption of Shares
9 Pending Legal Proceedings Not Applicable
<CAPTION>
PART B Location in Statement of
------ ------------------------
Additional Information
----------------------
<C> <S> <C>
10 Cover Page Cover Page
11 Table of Contents Table of Contents
12 General Information and Background
History
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
13 Investment Objectives and Investment Objec-
Policies tive, Policies
and Restrictions;
Trust Investments
14 Management of the Management of the
Fund Trust
15 Control Persons and Management of the Trust
Principal Holders
of Securities
16 Investment Advisory and Management of the Trust;
Other Services Independent Auditors;
Custodian and Transfer and
Dividend Crediting Agent
17 Brokerage Allocation Management of the
and Other Practices Trust
18 Capital Stock and Other Shareholder Voting Rights
Securities
19 Purchase, Redemption and Purchase and Redemption
Pricing of Securities of Shares; Pricing of
Being Offered Shares
20 Tax Status Dividends; Taxes
21 Underwriters Management of the Trust
22 Calculation of Performance Information
Performance Data
23 Financial Statements Financial Statements and
Report of Independent
Auditors
</TABLE>
ii
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS, NOT CONTAINED IN THIS PROSPECTUS OR IN
THE STATEMENT OF ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFER CONTAINED
IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESEN-
TATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST, THE IN-
VESTMENT ADVISER, OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING IN ANY STATE IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
---------------
DISTRIBUTOR AND SHAREHOLDER SERVICE AGENT:
Wayne Hummer & Co.
300 South Wacker Drive
Chicago, Illinois 60606
INVESTMENT ADVISER AND PORTFOLIO ACCOUNTING AGENT:
Wayne Hummer Management Company
300 South Wacker Drive
Chicago, Illinois 60606
AUDITORS:
Ernst & Young LLP
233 South Wacker Drive
Chicago, Illinois 60606
COUNSEL:
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, Illinois 60601
CUSTODIAN, TRANSFER AND DIVIDEND PAYINGAGENT:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of Expense Information............................................. 2
Financial Highlights....................................................... 2
Introduction............................................................... 3
Investment Objective, Policies and Restrictions............................ 3
Risks...................................................................... 4
Purchase of Shares......................................................... 4
Redemption of Shares....................................................... 5
Management of the Trust.................................................... 6
Description of Shares...................................................... 7
Pricing of Shares.......................................................... 8
Performance Information.................................................... 8
Dividends.................................................................. 8
Taxes...................................................................... 9
</TABLE>
LOGO
Wayne
Hummer A NO-LOAD
Money MONEY MARKET FUND
Fund
Trust
300 South Wacker Drive, Chicago, Illinois 60606
The Wayne Hummer Money Fund Trust (the "Trust") is a no-load money market mu-
tual fund organized as a Massachusetts business trust. The objective of the
Trust is to maximize current income to the extent consistent with preservation
of capital and maintenance of liquidity. An investment in the Trust is not a
deposit or obligation of or guaranteed or insured by the U.S. Government, any
bank, the Federal Deposit Insurance Corporation, the Federal Reserve Board or
any other agency. There can be no assurance that the Trust will be able to
maintain a stable net asset value of $1.00 per share. Assistance with opening
an account and information about the Trust may be obtained from Wayne Hummer &
Co. at the above address or by telephone at one of the following numbers:
CHICAGO RESIDENTS (312) 431-1700
TOLL FREE (800) 621-4477
This prospectus sets forth concisely information about the Trust that a pro-
spective investor ought to know before investing. Please read this prospectus
and retain it for future reference. A Statement of Additional information dated
August 1, 1995 (which is incorporated herein by reference) has been filed with
the Securities and Exchange Commission. It may be obtained from the Trust at no
charge by calling one of the numbers listed above or by writing to Wayne Hummer
& Co. at the above address.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
LOGO
---------------
The date of this prospectus is August 1, 1995.
<PAGE>
LOGO
SUMMARY OF EXPENSE INFORMATION
<TABLE>
<S> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases or Reinvested Dividends......... None
Deferred Sales Load..................................................... None
Redemption Fee.......................................................... None
Exchange Fee............................................................ None
Annual Trust Operating Expenses (as a percentage of average net assets)
Management Fees......................................................... .50%
12b-1 Fees.............................................................. None
Other Expenses (primarily transfer agent, shareholder service and cus-
todian)................................................................ .30%
----
Total Trust Operating Expenses........................................ .80%
====
</TABLE>
EXAMPLE
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on
a $1,000 investment, assuming (1) a 5% annual
return, and (2) redemption at the end of each
time period. As noted in the table above, the
Trust does not charge any redemption fee...... $8 $26 $44 $99
</TABLE>
The purpose of the preceding table and example is to assist investors in
understanding the various costs and expenses that an investor (referred to
herein as a "Shareholder") in the Trust will bear directly or indirectly. The
example should not be considered a representation of past or future expenses.
Actual expenses may be greater or lesser than those shown. The example assumes
a 5% annual rate of return pursuant to requirements of the Securities and
Exchange Commission and is not intended to be representative of past or future
performance of the Trust. See "Management of the Trust" and "Financial
Highlights" for further information.
FINANCIAL HIGHLIGHTS
(for a Share outstanding throughout each year)
The table below reflects the results of the Trust's operations for the ten
fiscal periods ended March 31, 1995. The Trust's audited financial statements
and information in the table, except for total return, for the most recent
five years, including the report thereon of Ernst & Young LLP, independent
auditors, are included in the Trust's annual report for the year ended March
31, 1995, which is incorporated by reference into the Statement of Additional
Information. The Statement of Additional Information may be obtained from
Wayne Hummer & Co. upon request and without charge.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of year........... $1.00 $ 1.00 $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income.. 0.04 0.02 0.03 0.05 0.07 0.07 0.07 0.06 0.05 0.07
Less dividends from in-
vestment income....... (0.04) (0.02) (0.03) (0.05) (0.07) (0.07) (0.07) (0.06) (0.05) (0.07)
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Net asset value, end of $1.00 $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
year................... ===== ====== ===== ===== ===== ===== ===== ===== ===== =====
Total return............ 4.24%(a) 2.47% 2.83% 4.74% 7.34% 8.47% 7.58% 6.29% 5.58% 7.20%
RATIOS AND SUPPLEMENTARY
DATA
Net assets, end of pe-
riod ($000's).......... 155,248 153,529 158,170 180,823 220,297 175,287 140,366 116,473 101,944 78,796
Ratio of total expenses
to average net assets.. .80% .80% .79% .76% .80% .82% .85% .86% .92% .98%
Ratio of net investment
income to average net
assets................. 4.16% 2.44% 2.80% 4.66% 7.06% 8.11% 7.39% 6.11% 5.42% 6.97%
</TABLE>
- -------
NOTE TO FINANCIAL HIGHLIGHTS:
(a) The total return includes the effect of the capital contribution of
$0.0011 per share. The return without the capital contribution would have been
4.12%.
2
<PAGE>
INTRODUCTION
The Trust is a no-load, diversified, open-end management investment company
organized as a Massachusetts business trust pursuant to an Agreement and
Declaration of Trust dated December 4, 1981 ("Trust Agreement"). The Trust is
designed to provide a convenient means of investing funds where the direct
purchase of money market instruments may be undesirable or impractical. An
investment in the Trust permits participation in money market instruments
(with maturities not exceeding one year from date of acquisition) while
relieving the investor of most details associated with the direct purchase of
money market instruments, such as the need to maintain bookkeeping records, to
make frequent investment decisions, to schedule maturities and to provide for
safekeeping. "No-load" means that the Trust imposes no commissions or charges
when its Shares are purchased or redeemed.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
The Trust seeks to maximize current income to the extent consistent with
preservation of capital and maintenance of liquidity. Of course, there can be
no assurance that the Trust will achieve its investment objective.
The Trust seeks to achieve its investment objective by investing exclusively
in the following types of money market instruments maturing in one year or
less from time of purchase: (1) debt securities issued or guaranteed by the
U.S. Government or by its agencies or instrumentalities (including securities
supported by the limited right of the issuer to borrow from the U.S. Treasury,
such as Federal Home Loan Bank securities, or solely by the creditworthiness
of the issuer, such as Federal National Mortgage Association debentures and
notes), and repurchase agreements/1/ with respect to any of such securities;
(2) zero coupon securities that are U.S. Treasury notes and bonds stripped of
their unmatured interest coupons, the unmatured interest coupons or interests
in such U.S. Treasury securities or coupons; (3) certificates of deposit,
variable rate certificates of deposit, time deposits, and banker's acceptances
of United States banks (excluding foreign branches) having total assets of at
least $1 billion and which are members of the Federal Deposit Insurance
Corporation; (4) commercial paper at the time of purchase rated Prime-1 by
Moody's Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's
Corporation ("S&P") or, if unrated, issued or guaranteed by a corporation with
outstanding debt rated Aa or better by Moody's or AA or better by S&P; and (5)
any other corporate notes, bonds and debentures rated Aa or better by Moody's
or AA or better by S&P at the time of purchase. In addition, the Trust limits
its investments to securities that meet the quality and diversification
requirements of Rule 2a-7 under the Investment Company Act of 1940. See the
Statement of Additional Information and its "Appendix," for a description of
commercial paper, note and bond ratings and for a more detailed description of
the money market instruments in which the Trust may invest.
Generally, the Trust will invest only in securities that are considered
liquid and that are not subject to restriction as to disposition under the
federal securities laws, except that the Trust may invest in money market
instruments issued in a private placement under Section 4(2) of the Securities
Act of 1933 ("Securities Act") and may invest up to 10% of its assets in
illiquid securities. Securities issued pursuant to Section 4(2) include
instruments similar in nature to commercial paper, but which are not entitled
to the exemption afforded commercial paper by Section 3(a)(3) of the
Securities Act because they were issued to finance other than current
transactions or were issued with a maturity greater than nine months. The
Trust's investment adviser considers Section 4(2) paper generally to be
liquid. If a particular investment in Section 4(2) paper is determined not to
be liquid, however, based on specified standards, the investment will be
included within the 10% limitation on illiquid securities. The Board of
Trustees has approved guidelines and procedures adopted by the investment
adviser and has delegated the day-to-day function of determining and
monitoring the liquidity of securities to the Trust's adviser. The Board,
however, will retain oversight and be ultimately responsible for the
determination. See "Investment Objective, Policies and Restrictions" and
"Trust Investments" in the Statement of Additional Information.
In addition to the Section 4(2) paper, other types of "restricted" money
market instruments that meet the Trust's credit, maturity and other investment
criteria (such as high quality bonds with less than one year remaining to
maturity) could be purchased or sold by the Trust in a private placement. The
Trust does not have a current intention to purchase such securities, but is
permitted to do so provided that investments in all securities considered
illiquid were not greater than 10%.
The 10% limitation on illiquid securities also would include securities for
which a readily available market may not exist and repurchase agreements
maturing in more than seven days. For a more detailed discussion of the
Trust's investment restrictions, see the Statement of Additional Information,
"Investment Objective, Policies and Restrictions."
- -------
/1/Repurchase agreements are instruments under which the Trust acquires
ownership of a security and the seller (a broker-dealer or bank) agrees to
repurchase the security at a mutually agreed upon time and price, thereby
determining the yield during the Trust's holding period. In the event of
bankruptcy or other default of a seller of a repurchase agreement the Trust
might have expenses in enforcing its rights, and could experience losses,
including a decline in the value of the underlying securities and loss of
income.
3
<PAGE>
It is the policy of the Trust to seek to maintain a net asset value of $1
per share, and, as a general policy, to hold securities until maturity. See
"RISKS." Pursuant to an exemptive order obtained from the Securities and
Exchange Commission and procedures adopted pursuant to Rule 2a-7, the Trust
values its assets on the basis of amortized cost which permits it, if the
investment adviser deems it advisable, to maintain a dollar weighted average
portfolio maturity of up to 90 days. The Trust may attempt, from time to time,
to increase its yield by trading to take advantage of variations in the
markets for short-term money market instruments. For additional information,
see the Statement of Additional Information, "Pricing of Shares."
The foregoing investment objective, policies and restrictions (as well as
certain others specified in the Statement of Additional Information) may not
be changed without the approval of the holders of a majority of the
outstanding shares of the Trust as defined under "DESCRIPTION OF SHARES."
RISKS
While the Trust intends to invest in high quality money market instruments,
these investments are not entirely without risk. An increase in interest rates
generally will reduce the value of the Trust's investments and a decline in
interest rates generally will increase their value. Redemptions of the Trust's
Shares could necessitate the sale of securities at times when such sales would
not otherwise be desirable. Because the Trust invests exclusively in short-
term high quality money market instruments, such instruments generally may not
yield as high a level of current income as longer term or lower grade
securities which generally have less liquidity and greater fluctuation in
value. Although the Trust seeks to maintain a net asset value of $1 per share,
there is no assurance that it will be able to do so. For additional risks see
the Statement of Additional Information, "Trust Investments" and "Investment
Objective, Policies and Restrictions."
PURCHASE OF SHARES
The Trust's Shares may be purchased through Wayne Hummer & Co., 300 South
Wacker Drive, Chicago, Illinois 60606 (the "Distributor"), without a sales
charge at their net asset value next determined after an order in proper form
and payment are received. The net asset value of the Trust's Shares is
determined as of the close of trading on the New York Stock Exchange
(generally 3:00 p.m. Chicago time) on each business day and at 3:00 p.m.
Chicago time on each other day in which there is a sufficient degree of
trading in the securities held by the Trust so as to affect materially the
Trust's net asset value. See "PRICING OF SHARES."
The purchase price normally is $1 per Share. The minimum initial investment
generally is $500 and subsequent investments generally must also be at least
$500. The foregoing minimum investments may be lower for accounts that are
part of an employer sponsored and administered 401(K) pension plan. The
minimum initial purchase of Shares with respect to an Individual Retirement
Account, a Simplified Employee Pension Plan, a Defined Contribution Plan or
any other type of retirement plan provided by Wayne Hummer & Co. is $500 and
subsequent investments must be at least $100. The Trust reserves the right, in
its sole discretion, at any time to vary the initial and subsequent investment
minimums, to withdraw the offering or to refuse any purchase order.
To purchase Shares, an investor who does not currently maintain a brokerage
account with Wayne Hummer & Co. must establish one. Purchases will be effected
through the investor's brokerage account and all Shares purchased are entered
and credited to the account. Payment must be made to Wayne Hummer & Co. in
cash or by check, draft or wire transfer, unless the necessary funds are
already available as a free credit balance in the account. Shares may be
purchased by mail, in person, or in the case where an investor has an adequate
free credit balance in his or her brokerage account, automatically as
described below. Shares purchased begin to earn dividends on the business day
following the day on which an investor's order is effected.
Orders received by Wayne Hummer & Co. with payment prior to the close of
trading on the New York Stock Exchange (generally 3:00 p.m. Chicago time) will
be effected that business day. Orders received after that time will be
effected the next business day. In the case of an order for the purchase of
Shares paid for by check, Wayne Hummer & Co. advances federal funds, usually
not later than the next business day following receipt of an order in proper
form, though the order is effected when the check is received by Wayne Hummer
& Co. as described above. If Shares are purchased by a check which is
subsequently dishonored, Wayne Hummer & Co. has the right to redeem such
Shares and to retain any dividends or distributions made with respect thereto.
"Business day" as used in this prospectus means any day that the New York
Stock Exchange and federal banks in both Illinois and Massachusetts are open
for business.
Additional information on retirement plans provided by Wayne Hummer & Co.,
including a description of applicable service fees and limitations on
contributions and withdrawals, may be obtained by calling Wayne Hummer & Co.
at the telephone numbers shown on the cover of this prospectus or by writing
to Wayne Hummer & Co., Attention: Retirement Plans Department, 300 South
Wacker Drive, Chicago, Illinois 60606. A retirement plan account may combine
investments in Trust Shares with investments in shares of Wayne Hummer
Investment Trust or in other securities purchased through Wayne Hummer & Co.
4
<PAGE>
AUTOMATIC PURCHASES
The Trust, in conjunction with Wayne Hummer & Co., maintains a "sweep
program" for the automatic purchase and redemption of Shares. Expenses of
maintaining the "sweep program" are borne by Wayne Hummer & Co. pursuant to a
Shareholder Service Agreement. See "MANAGEMENT OF THE TRUST." Under the
program, free credit cash balances of $100 or more arising in a Shareholder's
Wayne Hummer & Co. brokerage account are automatically invested in Shares on a
specified day of each week (currently, Friday), or if the specified day is not
a business day, then on the prior business day. Free credit balances of $500
or more arising from cash deposits into an account from dividend and interest
payments that are not to be paid to the Shareholder in cash, or from any other
source, are invested in Shares on the day of receipt in the account if
deposited in the account prior to 3:00 p.m. Chicago time. Free credit balances
of $500 or more arising from the sale of securities that do not settle on the
day of the transaction (such as most common and preferred stock transactions)
and from principal repayments on debt securities are invested in Shares on the
business day on which the proceeds are received in the brokerage account. The
automatic Share purchase procedure, and the automatic Share redemption
procedure described below, may be suspended at any time by the Trust or Wayne
Hummer & Co. A Shareholder wishing to terminate his or her participation in
the "sweep program" may do so at any time by notifying his or her Wayne Hummer
& Co. investment executive.
SYSTEMATIC INVESTMENT PLAN
Shareholders of the Trust (except retirement plan accounts) can arrange to
have a pre-authorized amount ($100 minimum) drawn on their bank checking
account and automatically invested in the Trust on a specified day of each
month. An authorization agreement which contains details of the plan can be
obtained from the Shareholder's Wayne Hummer & Co. investment executive. The
Systematic Investment Plan may be terminated by the Trust at any time and by
the Shareholder at any time by notifying his or her investment executive.
EXCHANGE PRIVILEGE
Shareholders of the Trust have the unlimited privilege (without charge) of
exchanging their Shares for shares of either the Wayne Hummer Growth Fund (
"Growth Fund") or the Wayne Hummer Income Fund ("Income Fund"), both of which
are portfolios of the Wayne Hummer Investment Trust ("Investment Trust") and
each of which operates as a separate no-load mutual fund. Similarly, shares of
either the Growth Fund or the Income Fund may be exchanged for Shares of the
Trust without charge. Exchanges may only be made, however, for shares of a
Trust which are available for sale in the Shareholder's state of residence. A
Shareholder desiring to utilize the exchange privilege should contact his or
her Wayne Hummer & Co. investment executive at the phone number or address
shown on the cover of this prospectus to obtain information about the
Investment Trust's mutual funds and exchange procedures. No guarantee can be
made as to the availability of the telephone exchange privilege (or the
telephone redemption privilege discussed below) during emergency situations or
unusual market conditions. Before exchanging Shares, Shareholders should read
the Investment Trust prospectus carefully. Exchanges will be effected through
the redemption of Shares tendered for exchange and the purchase of shares of
the either Growth Fund or the Income Fund at their respective net asset values
next determined after receipt by Wayne Hummer & Co. of the exchange request.
For federal income tax purposes, an exchange constitutes a sale with respect
to which a gain or loss may be realized depending upon whether the value of
the Shares being exchanged is more or less than the Shareholder's adjusted
cost basis.
REDEMPTION OF SHARES
The Trust will redeem all or any number of a Shareholder's Shares without
charge at their net asset value next determined after receipt by Wayne Hummer
& Co. of a redemption request in proper form. Except for redemptions by check,
redemption requests must be made to Wayne Hummer & Co. by telephone, mail or
in person. Shares covered by a redemption request received in proper form
prior to 3:00 p.m. Chicago time will continue to accrue dividends through the
close of business on the date of receipt; Shares covered by a redemption
request received in proper form after 3:00 p.m. Chicago time will continue to
accrue dividends through the close of business on the next business day
following the date of receipt. Redemption proceeds are normally credited to a
Shareholder's Wayne Hummer & Co. brokerage account at the start of business on
the next business day following the date through which dividends are accrued,
but in no event later than three business days after the redemption request is
received. In certain instances, redemptions may be automatically effected by
Wayne Hummer & Co. as described below.
REDEMPTIONS BY CHECK
A Shareholder (except retirement plan accounts) may establish a special
checking account with State Street Bank and Trust Company for the purpose of
redeeming Shares by check. Checks may be requested from Wayne Hummer & Co.
Checks may be written in amounts of $500 or more up to a maximum of $250,000
and may be made payable to any party.
The checkwriting procedure for redeeming Shares enables a Shareholder to
earn the dividends declared on Shares until such time as the check is
presented to State Street Bank and Trust Company which effects the redemption
on behalf of the Trust and makes payment on the check. If (1) the amount of
the check is greater than the value in a
5
<PAGE>
Shareholder's account, or (2) the check is for an amount less than $500 or (3)
the check is in excess of $250,000, the check will not be honored and will be
returned unpaid to the person to whom the check was written. The Trust
reserves the right to impose a charge for the checkwriting privilege at a
future date, to charge for excessive use of the checkwriting privilege, to
charge Shareholders its costs for stop payment requests and checks returned
for any reason, and to make additional charges to recover the costs of
providing the checkwriting service. The check redemption procedure may be
suspended or terminated at any time by the Trust, Wayne Hummer & Co. or State
Street Bank and Trust Company.
At various times the Trust may be requested to redeem shares for which good
payment has not been received. For example, if Shares are purchased by check,
the Shareholder's check may not have been cleared through the banking system
even though Wayne Hummer & Co. has advanced federal funds to effect the
purchase. In such event, Wayne Hummer & Co. or, in the case of redemption by
check, State Street Bank and Trust Company, may delay payment for redeemed
Shares for up to 15 days while the Trust awaits assurance that good payment
has been collected.
AUTOMATIC REDEMPTIONS
Redemptions of Shares will be automatically effected on a daily basis by
Wayne Hummer & Co. to satisfy debit balances of $10 or more existing in a
Shareholder's brokerage account just prior to 3:00 p.m. Chicago time. After
application of any free credit cash balances in the account to such debit
balances, the number of Shares needed to satisfy the remaining debit balance
will be redeemed at net asset value determined at 3:00 p.m. Chicago time that
day. If more than one redemption transaction is processed on a specific day
and the number of Shares available for redemption is insufficient to satisfy
all redemption transactions, redemptions by check, if presented, will take
precedence over redemption to satisfy debit balances resulting from activity
in the Shareholder's brokerage account. The automatic redemption of Shares to
settle debit balances in the brokerage account for purchases of other
securities may occur prior to the settlement date of such purchases and, thus,
the redemption proceeds may remain uninvested in the brokerage account until
such settlement date.
Due to the relatively high cost of maintaining accounts of less than $500,
the Trust reserves the right to redeem involuntarily Shares in any account
(other than a retirement plan account) for their then current value if at any
time a Shareholder's total investment does not have a value of at least $500.
A Shareholder will first be notified that the value of his or her account is
less than $500 and will be allowed 60 days to make an additional investment
before the involuntary redemption is made. The proceeds of an involuntary
redemption will be credited promptly to the Shareholder's Wayne Hummer & Co.
brokerage account and, on the following business day, will be mailed to the
Shareholder by check.
The Trust may suspend the right of redemption and the determination of net
asset value and may postpone the date of payment for redeemed Shares beyond
seven days under the following unusual circumstances: when the New York Stock
Exchange is closed (other than weekends and holidays) or trading is
restricted; when an emergency exists as determined by the Securities and
Exchange Commission, making disposal of portfolio securities or the valuation
of net assets not reasonably practicable; or during any period when the
Securities and Exchange Commission has by order permitted a suspension of
redemption for the protection of Shareholders. For a more detailed description
of these circumstances see the Statement of Additional Information, "Purchase
and Redemption of Shares."
MANAGEMENT OF THE TRUST
Wayne Hummer Management Company (the "Investment Adviser"), 300 South Wacker
Drive, Chicago, Illinois 60606, acts as investment adviser to the Trust and
provides the Trust with operating facilities and management and portfolio
accounting services and serves as investment adviser to the Growth Fund as
well as to various individual, institutional and fiduciary accounts. The
Investment Adviser, organized in 1981, is owned by the general partners of
Wayne Hummer & Co., a securities brokerage firm, which acts as Shareholder
Service Agent and Distributor.
Subject to the general supervision of the Board of Trustees, the Investment
Adviser determines the securities to be purchased, sold and held by the Trust,
is responsible for management of the Trust's portfolio and places all orders
subject to periodic review by the Board of Trustees.
As compensation for its advisory and management services to the Trust, the
Investment Adviser receives a fee from the Trust, payable monthly, at an
annual rate based on a percentage of the Trust's average daily net assets. The
annual rate of the advisory fee is .50% of the first $500 million of average
daily net assets and is reduced at several breakpoints for average daily net
assets in excess of $500 million. See the Statement of Additional Information,
"Management of the Trust--Investment Adviser." The Investment Adviser has
agreed to waive its fees to the extent that the Trust's operating expenses
during any fiscal year exceed either (1) 1% of the Trust's average daily net
assets or (2) the expense limitations imposed by the securities laws or
regulations thereunder of any state in which the Trust's shares are qualified
for sale,
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<PAGE>
as such limitations may be increased or decreased from time to time, and if
required by such laws or regulations, to reimburse the Trust for certain
expenses in excess of any applicable expense limitation. Expenses which are
not subject to these limitations are interest, taxes, brokerage commissions
and extraordinary items.
The Investment Adviser also provides the Trust with certain portfolio
accounting services under the terms of a Portfolio Accounting Services
Agreement. The Investment Adviser maintains the accounting books and records
that constitute the record forming the basis for financial statements of the
Trust; maintains the capital stock account for the Trust; prepares a daily
trial balance for the Trust and calculates its net asset value; maintains all
records of a financial nature to the Trust's transactions; and processes
special ledgers and other reports when requested. As compensation for its
accounting services to the Trust, the Investment Adviser receives an annual
fee which is computed and accrued daily and payable monthly. The Investment
Adviser receives for the period January 1, 1995 through December 31, 1995 an
annual fee of .0025 of 1% of average daily net assets of the Trust and for the
period January 1, 1996 and thereafter an annual fee of .01 of 1% of average
daily net assets of the Trust; but such fee shall not exceed $15,000 per
annum. In additon, the Investment Adviser receives an equipment fee of $50 per
month and is reimbursed for its out-of-pocket costs for obtaining securities
pricing services the license for use of portfolio accounting software, and for
other out-of-pocket costs which are incurred in providing the pricing and
software services.
Wayne Hummer & Co. provides services to the Trust pursuant to a Shareholder
Service Agreement. Such services, which are provided at their approximate cost
(excluding labor and overhead), if any, include such matters as: converting
funds into or advancing Federal Funds for the purchase of Shares; transmitting
purchase orders or redemption requests to the Transfer Agent; maintaining
records of Shareholders' transactions; preparing and transmitting federal and
state informational tax returns; recording Share dividends and forwarding cash
dividends to Shareholders; maintaining the automatic Share redemption and
purchase "sweep program"; generating and transmitting monthly statements; and
providing telephonic and written communications with respect to Shareholder
account inquiries.
DESCRIPTION OF SHARES
The Trust's Agreement and Declaration of Trust ("Trust Agreement") permits
the Trust to issue an unlimited number of full and fractional Shares. Each
Share is without par value, represents a proportionate interest in the Trust
which is equal to the proportionate interest represented by each other Share
and is entitled to such distributions from the net investment income generated
by the Trust's investments as are declared by the Trustees. Upon the
liquidation of the Trust, Shareholders are entitled to share pro rata in the
net assets that are available for distribution. Shares do not have cumulative
voting rights nor any preemptive or conversion rights. Shares are fully paid
and nonassessable when issued as described herein, except as expressly set
forth below. Share Certificates are not issued. Shares owned and dividends
paid thereon will be reflected in each Shareholder's Wayne Hummer & Co.
monthly statement.
SHAREHOLDER VOTING RIGHTS
As a general rule the Trust will not hold annual or other meetings of
Shareholders. Under the Trust Agreement, Shareholders are entitled to vote in
connection with the following matters: (1) for the election or removal of one
or more Trustees if a meeting is called for that purpose; (2) with respect to
the adoption of any contract for which Shareholder approval is required under
the Investment Company Act of 1940 (such as the Trust's Investment Advisory
and Management Agreement); (3) with respect to any termination of the Trust to
the extent and as provided in the Trust Agreement; (4) with respect to any
amendment of the Trust Agreement (other than amendments changing the name of
the Trust, supplying any omission, curing any ambiguity or curing, correcting
or supplementing any defective or inconsistent provision thereof); (5) as to
whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, to the same extent as the stockholders of a Massachusetts
business corporation; and (6) with respect to such additional matters relating
to the Trust as may be required by law, the Trust Agreement, the By-laws of
the Trust, any registration of the Trust with the Securities and Exchange
Commission or any state, or as the Trustees may consider necessary or
desirable. Each Trustee serves until the next meeting of Shareholders and
until the election and qualification of his or her successor or until such
Trustee sooner dies, resigns, retires or is removed by vote of at least two-
thirds of the Shares entitled to vote or a majority of the Trustees.
ADDITIONAL PORTFOLIOS
The Trust Agreement permits the Board of Trustees to issue Shares in one or
more series ("Portfolios"). Only one Portfolio is currently authorized, which
is designated as the "Money Market Portfolio." If additional Portfolios are
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<PAGE>
established, each Share of a particular Portfolio will represent an equal
proportionate interest in the assets and liabilities belonging to such
Portfolio with each other Share of that Portfolio. Should the Trust issue
Shares in two or more Portfolios, voting with respect to certain matters will
be by Portfolio (such as approval of the Investment Advisory and Management
Agreement) and with respect to other matters will be by all Shareholders
without regard to Portfolio (such as election of Trustees and the ratification
of the selection of independent auditors).
SHAREHOLDER LIABILITY
The Trust is organized as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable for the obligations of the Trust. The
Trust Agreement provides that Shareholders shall not be subject to any
personal liability to any person extending credit to, contracting with or
having any claims against the Trust and that every written agreement,
obligation, instrument or undertaking made by the Trust shall contain a
provision that the same is not binding upon the Shareholders personally. With
respect to other claims, a Shareholder may be held personally liable to the
extent that claims are not satisfied by the Trust. Upon payment of any such
liability, however, Shareholders will be entitled to reimbursement from the
general assets of the Trust. The Trust is covered by insurance which the
Trustees consider adequate to cover foreseeable tort claims. See the Statement
of Additional Information, "Shareholder Liability."
PRICING OF SHARES
Shares may be purchased or redeemed at their net asset value, which normally
is $1. The net asset value per Share is computed by dividing the value of the
securities held by the Trust plus any other assets minus all liabilities by
the total number of Shares outstanding. The securities held by the Trust will
be valued using the amortized cost method of valuation. The net asset value
per Share is determined on each day the New York Stock Exchange is open for
trading as of the close of regular session trading on the Exchange (generally
3:00 p.m. Chicago time) and at 3:00 p.m. Chicago time on each other day during
which there is a sufficient degree of trading in securities of the Trust's
portfolio so as to affect materially the net asset value of the Shares. See
the Statement of Additional Information, "Pricing of Shares." Expenses,
including the fee payable to the Investment Adviser, are accrued daily.
PERFORMANCE INFORMATION
From time to time, in advertisements or reports to shareholders, the Trust
may quote recognized independent publishers and other sources, such as
IBC/Donoghue, Inc. or similar industry services, for purposes of comparing the
Trust's rank or performance with that of other money market funds having
similar investment objectives or asset size. Performance comparisons should
not be considered representative of the future performance of the Trust.
Additionally, from time to time, the Trust may quote "yield" and "effective
yield" figures for the Trust's performance in advertisements and other
materials furnished to present or prospective shareholders. Each of these
figures is based upon historical earnings and is not necessarily
representative of the future performance of the Trust. The yield of the Trust
refers to the income generated by a hypothetical investment in the Trust over
a specific seven day period. This income is then annualized, which means that
the income generated during the seven day period is assumed to be generated
each week over an annual period and is shown as a percentage of the
investment. The effective yield is calculated similarly but, when annualized,
the income earned by the investment is assumed to be reinvested. The effective
yield will be slightly higher than the yield due to this compounding effect.
The Trust's yield and effective yield will fluctuate. See the Statement of
Additional Information, "Performance Information," for more information
concerning the Trust's performance.
DIVIDENDS
The Trust declares as daily dividends all of the Trust's undistributed net
investment income. Net investment income of the Trust is determined
immediately prior to the determination of net asset value and consists of (1)
accrued interest income plus or minus amortized purchase discount or premium,
(2) plus or minus all short-term realized and unrealized gains and losses and
(3) minus accrued expenses. The Trust does not expect to realize any long-term
gains or losses. Dividends are reinvested monthly in the form of additional
full and fractional Shares at net asset value, or at the option of
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the Shareholder, are paid as cash dividends monthly by credit to the
Shareholder's brokerage account with Wayne Hummer & Co. and, on the following
business day, are mailed to the Shareholder by check. Dividends are taxable to
Shareholders whether received in cash or reinvested in additional Shares, as
described below.
TAXES
The Trust intends to continue to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"), as it has
since its inception. If so qualified, the Trust will not be subject to federal
income tax on its net investment income and realized capital gains distributed
to Shareholders.
Distributions of net income including any short-term capital gains are
taxable to Shareholders as ordinary income, whether such distributions are
taken in cash or reinvested in additional Shares. It is expected that none of
the Trust's distributions to Shareholders will be eligible for the dividends-
received deduction currently available to corporate Shareholders. Promptly
after the end of each calendar year, each Shareholder will receive a statement
of the federal income tax status of all distributions made during the year.
Distributions declared in October, November or December to Shareholders of
record as of a date in one of those months and paid before the following
February 1 are treated for federal income tax purposes as paid on December 31
of the calendar year declared. Shareholders are advised to consult with their
tax advisors concerning their individual tax situations.
The Trust is required by law to withhold federal income tax at a rate of 31%
from taxable distributions to Shareholders who do not furnish their correct
taxpayer identification numbers (in the case of individuals, their social
security numbers) and in certain other circumstances.
REPORTS TO SHAREHOLDERS
The Trust sends to its Shareholders various financial reports ("Reports")
such as unaudited semi-annual financial statements and fiscal year-end
financial statements audited by the Trust's independent auditors. To reduce
expenses, only one copy of most Reports may be mailed to all accounts with the
same social security or taxpayer identification number or to all Shareholders
in the same household. Shareholders may call or write Wayne Hummer & Co. to
request that copies of Reports be mailed to each account with a common
taxpayer number or to two or more Shareholders in the same household.
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<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
WAYNE HUMMER MONEY FUND TRUST
A No-Load Mutual Fund
300 South Wacker Drive
Chicago, Illinois 60606
Chicago Residents Call.........(312) 431-1700
Toll Free......................(800) 621-4477
_____________________________________________
This Statement of Additional Information is not the Trust's Prospectus.
This Statement provides additional information which should be read in
conjunction with the Trust's Prospectus dated August 1, 1995. The Prospectus
may be obtained at no charge by telephoning Wayne Hummer & Co., the Trust's
Distributor and Shareholder Service Agent, at one of the numbers above or by
writing to the above address.
The date of this Statement of Additional Information is
August 1, 1995
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
- --------------------------------------------------------------------------------
<S> <C>
BACKGROUND.............................................................. 1
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS......................... 1
TRUST INVESTMENTS....................................................... 4
MANAGEMENT OF THE TRUST................................................. 8
Trustees........................................................... 9
Officers........................................................... 10
Investment Adviser................................................. 11
Relationship of the Trust, Wayne Hummer & Co.
and Wayne Hummer Management Company................................ 15
PURCHASE AND REDEMPTION OF SHARES....................................... 17
PRICING OF SHARES....................................................... 19
SHAREHOLDER VOTING RIGHTS............................................... 21
SHAREHOLDER LIABILITY................................................... 23
LIMITATION OF LIABILITY................................................. 23
OTHER MATTERS........................................................... 23
TRUST NAME.............................................................. 24
PERFORMANCE INFORMATION................................................. 24
DIVIDENDS............................................................... 26
TAXES................................................................... 26
Federal Income Tax................................................. 26
Other Taxes........................................................ 27
INDEPENDENT AUDITORS.................................................... 27
CUSTODIAN AND TRANSFER AND DIVIDEND CREDITING AGENT..................... 27
REPORTS TO SHAREHOLDERS................................................. 28
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT AUDITORS.......................... 28
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER AND BOND RATINGS 29
</TABLE>
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BACKGROUND
Wayne Hummer Money Fund Trust (the "Trust") is a no-load, diversified,
open-end management investment company organized as a Massachusetts business
trust pursuant to an Agreement and Declaration of Trust dated December 4, 1981
(the "Trust Agreement"). The Trust Agreement authorizes the Trustees to issue
one or more series of units of beneficial interest ("Shares"). The Trust
currently offers Shares of only one series, the Money Market Portfolio.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
In addition to the investment objective, policies and restrictions
discussed in the prospectus, the Trust may not:
(1) Purchase any securities other than money market instruments and
securities described in the Trust's current prospectus or Statement of
Additional Information;
(2) Purchase the securities of issuers whose principal business is in
the same industry (other than United States Government securities, United
States Government agency or instrumentality securities or bank money
instruments) if immediately after such purchase the value of the Trust's
investments in such industry would exceed 25% of the value of its total
assets (taken at market value at the time of each investment). For purposes
of this subparagraph, the personal credit and business credit businesses of
finance companies will be considered separate industries and, as to
utilities, the water, gas, electric and telephone businesses will be
considered separate industries;
(3) Purchase the securities (other than of the United States
Government, its agencies and instrumentalities) of any one issuer if
immediately after such purchase more than 5% of the value of the Trust's
total assets (taken at market value at the time of each investment) would
be invested in such issuer, except that up to 25% of the value of the
Trust's total assets may be invested without regard to such 5% limitation
but shall instead be subject to a 10% limitation;/1/
(4) Purchase more than 10% of any one class of an issuer's
outstanding securities, except that such restriction shall not apply to
securities of the United States Government,
- ------------------------
/1/ Procedures adopted pursuant to Rule 2a-7 under the Investment Company
Act of 1940 restrict the Trust generally to the 5% limitation; the 10%
limitation will not be available so long as such procedures are in effect. See
"PRICING OF SHARES".
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its agencies or instrumentalities, certificates of deposit, bankers'
acceptances or repurchase agreements;
(5) Make investments for the purpose of exercising control or
management;
(6) Make loans, except that securities owned or held by the Trust may
be loaned pursuant to paragraph (7) below; provided, however, that the
Trust may purchase money market securities and enter into repurchase
agreements with banks, brokers and dealers;
(7) Lend securities in excess of 20% of the Trust's total assets,
taken at market value; provided, however, that loans not exceeding 20% of
the Trust's total assets may be made if collateral is maintained from the
borrower equal at all times to the current market value of the securities
loaned;/2/
(8) Purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;
(9) Purchase any securities on margin, except for use of short-term
credits necessary for clearance of purchases and sales of Portfolio
securities; make short sales of securities or maintain a short position or
write, purchase or sell puts, calls, straddles, spreads or combinations
thereof;
(10) Purchase or sell real estate (other than money market securities
secured by real estate or interests therein or money market securities
issued by companies which invest in real estate, or interests therein),
commodities or commodity contracts, oil or gas interests or other mineral
exploration or development programs;
(11) Purchase securities of issuers (other than securities of the
United States Government, its agencies or instrumentalities) having a
record, together with its predecessors, of less than three years of
continuous operation if, regarding all such securities, more than 5% of
the Trust's total assets, taken at market value, would be invested in such
securities;
(12) Invest in securities restricted as to disposition under the
federal securities laws (except money market instruments issued under
Section 4(2) of the Securities Act);
- ------------------------
/2/ The Trust did not lend its securities during the past fiscal year.
There is no present intention to engage in the lending of Trust securities.
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<PAGE>
(13) Invest more than 10% of its assets in securities (including
repurchase agreements maturing in more than seven days) which are
considered illiquid;
(14) Borrow money except from banks and only as a temporary measure
for extraordinary or emergency purposes, but not for investment purposes
nor in any amount exceeding 5% of the Trust's total assets, taken at market
value;
(15) Mortgage, pledge or hypothecate or in any manner transfer (except
as provided in paragraph (7) above) as security for indebtedness any
securities owned or held by the Trust except as may be necessary in
connection with borrowings mentioned in paragraph (14) above, and then such
mortgaging, pledging or hypothecating may not exceed 25% of the Trust's
total assets, taken at market value;
(16) Act as an underwriter of securities;
(17) Purchase or retain securities of any issuer employing, as an
officer or director, any person serving as an officer or Trustee of the
Trust, or purchase or retain the securities of any issuer, if, to the
Trustees' knowledge, those officers, directors or Trustees of the Trust or
its Investment Adviser who individually either directly or indirectly own,
control or hold with power to vote more than 0.5% of the outstanding
securities of such issuer, together own directly or indirectly, control or
hold with power to vote more than 5% of such outstanding securities;
(18) Issue a class of securities which is senior to the Shares, except
as provided pursuant to paragraph 14 and in accordance with the Investment
Company Act of 1940.
The restrictions set forth above may not be changed without the approval of
the holders of a majority of the Trust's Shares, as defined in the Investment
Company Act of 1940. See "SHAREHOLDER VOTING RIGHTS." In addition to the
foregoing restrictions, the Trust limits its investments to securities that meet
the quality and diversification requirements of Rule 2a-7 under the Investment
Company Act of 1940. See "PRICING OF SHARES".
In order to permit the sale of Shares of the Trust in certain states, the
Trust may make commitments more restrictive than the restrictions described
above and in the prospectus. Should the Trustees determine that any such
commitment is no longer in the best interests of the Trust and its Shareholders,
the Trust will revoke the commitment by terminating sales of its Shares in the
state(s) involved.
If any applicable percentage restriction contained in the foregoing
investment restrictions is satisfied at the time the
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<PAGE>
securities subject thereto are purchased, the fact that the percentage
restriction subsequently is exceeded due to a fluctuation in the value of such
securities or of other securities of the Trust will not require the Trust to
dispose of such securities. Notwithstanding the foregoing, if the percentage
restriction contained in paragraph (7) or paragraph (14) above is violated due
to a subsequent fluctuation in value of the Trust's portfolio of securities, the
Trust shall be entitled, as a condition which shall be a part of all loans
subject to paragraph (7) and all borrowings subject to paragraph (14), to reduce
within three business days the outstanding amount of such loans or borrowings in
order once again to satisfy such percentage restriction.
Moreover, subject to the investment restriction contained in paragraph (7)
above, the Trust may from time to time loan its securities to brokers, dealers
and financial institutions and receive collateral in cash or cash equivalents
which will be maintained at all times in an amount equal to at least 100% of the
current value of the loaned securities. In this regard: (1) such collateral
will be invested in short-term securities, the income from which will increase
the return to the Trust; (2) the Trust will retain all rights of beneficial
ownership as to the loaned Portfolio securities, including voting rights and
rights to interest or other distributions, and will have the right to regain
record ownership of loaned securities to exercise such beneficial rights; (3)
such loans will be terminable within three business days; and (4) upon
termination of the loan, the Trust will receive securities which are of the same
class and issue as those loaned. In the event that the borrower of such loaned
securities fails financially, the Trust might experience a delay in recovery,
incur expenses in enforcing its rights and experience losses, including a
substitution of securities and loss of income. The Trust may pay reasonable
fees to persons not affiliated with the Trust, as defined in the Investment
Company Act of 1940, in connection with the arranging of such loans.
TRUST INVESTMENTS
The following is a description of the types of money market instruments in
which the Trust may invest. All securities purchased by the Trust will mature
within one year from the date of purchase.
United States Government Securities are marketable debt securities which
-----------------------------------
are issued by and are a direct obligation of the United States Treasury.
Treasury securities differ in their interest rates, maturities and times of
issuance: Treasury bills have maturities of one year or less; Treasury notes
have maturities of one to 10 years; Treasury bonds generally have maturities of
greater than ten years. All Treasury securities are direct
B-4
<PAGE>
obligations of the United States Government and generally are considered the
safest forms of investment as no borrower has a higher credit rating than the
United States Government.
United States Government Agency and Instrumentality Securities are
--------------------------------------------------------------
marketable debt securities issued or guaranteed by agencies and
instrumentalities of the United States Government. Although these securities are
not direct obligations of the United States Government, some are supported by
the full faith and credit of the Treasury, such as Government National Mortgage
Association pass-through certificates; others are supported to the extent of the
right of the issuer to borrow from the Treasury, such as Federal Home Loan Bank
bonds and notes; while others solely depend on the credit of the agency or
instrumentality and not the Treasury, such as Federal National Mortgage
Association debentures and notes. There can be no assurance that the United
States Government would support an agency or instrumentality that defaults on
securities not guaranteed by the Treasury.
United States Government Agencies and Instrumentalities may also issue
securities having rates of interest that are adjusted periodically or that
"float" continuously or periodically according to formulae intended to minimize
fluctuation in values of the instruments ("Variable Rate Securities"). The
interest rate on a Variable Rate Security is ordinarily determined by reference
to, or is a percentage of, an objective standard such as a bank's prime rate,
the 90-day U.S. Treasury Bill rate, or the rate of return on commercial paper or
bank certificates of deposit. Generally, the changes in the interest rates on
Variable Rate Securities reduce the fluctuation in the market value of such
securities. Accordingly, as interest rates decrease or increase, the potential
for capital appreciation or depreciation is less than for fixed-rate
obligations.
The maturity of Variable Rate Securities are determined in accordance with
the Securities and Exchange Commission rules, that allow the trust to consider
certain of such instruments as having maturities shorter than the maturity date
on the face of the instrument if they are guaranteed by the U.S. Government or
its agencies or instrumentalities.
Zero Coupon Bonds are purchased at a discount from the face amount. The
-----------------
buyer receives only the right to receive a fixed payment on a certain date in
the future and does not receive periodic interest payments. The zero coupon
securities in which the Fund may invest are U.S. Treasury notes and bonds that
have been stripped of their unmatured interest coupons, the unmatured interest
coupons or interests in such U.S. Treasury securities or coupons.
Bank Money Instruments include certificates of deposit, variable rate
----------------------
certificates of deposit, and bankers' acceptances.
B-5
<PAGE>
Certificates of deposit generally are short-term, interest-bearing
negotiable certificates issued by commercial banks against funds deposited in
the issuing institution.
Variable rate certificates of deposit are certificates of deposit on which
the interest rate is periodically adjusted prior to their stated maturity,
usually at 30, 90 or 180 day intervals, based upon a specified market rate which
is considered by the issuers to be representative of the then-prevailing
certificate of deposit rate. As a result of these adjustments the interest rate
on these obligations may be increased or decreased periodically. Variable rate
certificates of deposit also may contain provisions whereby the issuing banks
agree to repurchase such instruments at par on any coupon date, on any rate
adjustment date, or on any date after a specified holding period. Variable rate
certificates of deposit normally carry a higher initial interest rate than fixed
rate certificates of deposit with shorter maturities because the issuing bank
pays a premium for the use of the money for a longer period of time. With
respect to variable rate certificates of deposit maturing in one year or less
from the time of purchase, the Trust uses the period remaining until the next
rate adjustment date for purposes of determining the average weighted maturity.
Bankers' acceptances are time drafts drawn on a commercial bank by a
borrower, usually in connection with an international commercial transaction (to
finance the import, export, transfer or storage of goods). The borrower, as
well as the bank which unconditionally guarantees to pay the draft at its face
amount on the maturity date, is liable for payment. Most acceptances have
maturities of six months or less and are traded in secondary markets prior to
maturity.
The Trust may not invest in any security issued by a commercial bank unless
the bank is organized and operating in the United States, has total assets of at
least $1 billion and is a member of the Federal Deposit Insurance Corporation
("FDIC"), although the securities in which the Trust invests may not be insured
by the FDIC. The Trust may not invest in money market instruments issued by
foreign banks or foreign branches of domestic banks.
Short-Term Corporate Debt Instruments include both commercial paper and
-------------------------------------
non-convertible corporate debt securities with no more than one year remaining
to maturity from the date of their acquisition by the Trust.
The Trust may invest in commercial paper issued in reliance on the
exemption from Section 3(a)(3) ("Section 3(a)(3) paper") of the Securities Act.
Such commercial paper is generally issued by major corporations and may be
issued only to finance current transactions and must mature in nine months or
less. Although Section 3(a)(3) paper is not restricted as to the types of
investors to whom it may
B-6
<PAGE>
be sold, it is purchased primarily by institutional investors through investment
dealers and individual investor participation in the commercial paper market is
very limited. The Trust also may invest in money market instruments issued in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act ("Section 4(2) paper") which is restricted as to disposition
under the federal securities laws, and generally is sold to institutional
investors such as the Trust who agree that they are purchasing the paper for
investment and not with a view to a public distribution. Any resale by the
purchaser must be in an exempt transaction. Section 4(2) paper is often resold
to other institutional investors through or with the assistance of investment
dealers or on an automated trading system operated by the National Association
of Securities Dealers, Inc., thus assisting in providing liquidity.
The Trust's adviser believes that generally, there is no significant
difference between Section 3(a)(3) and Section 4(2) commercial paper in terms of
market or trading characteristics or of the quality of the issuers and that,
despite the legal restrictions thereon, Section 4(2) paper has typically been no
less liquid or saleable than Section 3(a)(3) paper. If a particular investment
in Section 4(2) paper is not determined by the Trust's adviser to be liquid
based on specified standards, the investment will be included within the 10%
limitation on illiquid securities. In accordance with rules of the Securities
and Exchange Commission, the Board of Trustees has approved guidelines and
procedures adopted by the Trust's adviser and has delegated the day-to-day
function of determining and monitoring the liquidity of securities to the
Trust's adviser. The Board, however, will retain oversight and be ultimately
responsible for the determination.
The Trust may also make investments in non-convertible corporate debt
securities (e.g., bonds and debentures) with no more than one year remaining to
maturity from the date of their acquisition by the Trust. Corporate debt
securities with a remaining maturity of less than one year tend to become
extremely liquid and are traded as money market securities. Such issues tend to
have greater liquidity and considerably less market value fluctuations than
longer term issues.
The Section 3(a)(3) paper and Section 4(2) paper investments of the Trust,
at the time of purchase, will be rated "A-1" by Standard & Poor's Corporation
and/or "Prime-1" by Moody's Investors Service, Inc. or, if not rated, issued by
companies having an outstanding debt issue rated at least "AA" by Standard &
Poor's Corporation and/or "Aa" by Moody's Investors Service, Inc. The Trust's
investments in corporate debt securities (which must have maturities from the
date of their acquisition by the Trust of one year or less) must be rated at the
time of purchase at least "AA" by Standard & Poor's Corporation and/or "Aa" by
Moody's Investors Service, Inc. See "APPENDIX" for an explanation of the
commercial
B-7
<PAGE>
paper ratings of Standard & Poor's Corporation and Moody's Investors Service,
Inc.
Repurchase Agreements are instruments under which the purchaser (e.g., the
---------------------
Trust) acquires ownership of the obligation (underlying security) and the seller
(a broker-dealer or bank) agrees, at the time of the sale, to repurchase the
obligation at a mutually agreed upon time and price, thereby determining the
yield during the purchaser's holding period. This results in a fixed rate of
return for the period. Repurchase agreements usually are for short periods,
frequently less than one week. The value of the underlying securities is marked
to market daily. Should the value of the underlying securities decline, the
issuer of the repurchase agreement is required to provide the Trust with
additional securities so that the aggregate value of the underlying securities
is equal to the repurchase price. The Trust may invest in securities subject to
repurchase agreements with any member bank of the Federal Reserve System or
primary dealer in United States Government securities. In the event of
bankruptcy or other default of a seller of a repurchase agreement, the Trust
might have expenses in enforcing its rights, and could experience losses,
including a decline in the value of the underlying securities and a loss of
income. Repurchase agreements may be entered into only with respect to
underlying United States Government or United States Government agency or
instrumentality securities, certificates of deposit, commercial paper or
bankers' acceptances in which the Trust may otherwise invest, as described
above.
The Trust is managed so that the average maturity of all instruments in its
Portfolio (on a dollar-weighted basis) is generally between 15 and 75 days and
not more than 90 days depending upon the Investment Adviser's evaluation of
market trends and other conditions. The securities of the Trust normally
mature within six months and in no event will the Trust contain any securities
maturing more than one year from the date of acquisition.
Although the Trust generally does not seek profits through short-term
trading, it may dispose of any security prior to its maturity if, on the basis
of a revised credit evaluation of the issuer or other circumstances or
considerations, the Investment Adviser believes such disposition advisable. In
addition, the Trust may attempt, from time to time, to increase its yield by
trading to take advantage of variations in the markets for short-term money
market instruments.
MANAGEMENT OF THE TRUST
The Trustees and executive officers of the Trust and their principal
occupations are set forth below. Unless otherwise noted, the address of each of
the following Trustees and executive officers is 300 South Wacker Drive,
Chicago, Illinois 60606.
B-8
<PAGE>
Trustees
--------
Steven R. Becker, Partner, Wayne Hummer & Co.; Director and
----------------
Former Vice President, Wayne Hummer Management Company./*3/
Philip M. Burno, Chairman, Board of Trustees of the Trust;
---------------
Partner, Wayne Hummer & Co.; Director, Wayne Hummer Management Company./*3/
Charles V. Doherty, 3 First National Plaza, Suite 1400, Chicago,
------------------
Illinois 60602; Director, Lakeside Bank, Chicago, Illinois (Illinois State
Chartered Bank); Managing Director, Madison Asset Group, Chicago, Illinois
(Registered Investment Adviser); President and Director, Doherty Zable &
Co. (Certified Public Accountants); September 1, 1989 to December 31, 1992,
President and Chief Operating Officer, Midwest Stock Exchange (now, Chicago
Stock Exchange).
Joel D. Gingiss, 207 Hazel, Highland Park, Illinois 60035;
---------------
Assistant States Attorney, Lake County, Illinois; Former Chairman of the
Board of Directors and President, Gingiss International, Inc. (franchisor
of Gingiss Formalwear Stores); Past President, International Franchise
Association./3/
Patrick B. Long, 101 N. Main Street, Ann Arbor, Michigan 48104;
---------------
Chairman and Chief Executive Officer, KMS Industries, Inc. (fusion energy
research).
Eustace K. Shaw, 200 First Avenue E., Newton, Iowa 50208;
---------------
President, B. F. Shaw Printing Co.; Chairman of the Board of Directors, B.
F. Shaw Printing Co.; Former Publisher, Newton Daily News.
The Trustees serve in similar capacities with Wayne Hummer Investment
Trust.
- ------------------------
/*/ Interested person, as defined in the Investment Company Act of 1940,
of the Trust, the Investment Adviser and/or the Distributor.
/3/ Member of the Executive Committee of the Trust. The Executive
Committee is elected by the Board of Trustees and is composed of three Trustees,
two of whom are interested persons as defined in the Investment Company Act of
1940. The Executive Committee is authorized by the Agreement and Declaration of
Trust to exercise such powers and authority of the Trustees as the Trustees may
determine, when the Board of Trustees is not in session and as are consistent
with law.
B-9
<PAGE>
Effective October 24, 1994, Mr. Doherty was elected by the Board of
Trustees to fill the vacancy created by the resignation of Mr. Samuel B. Lyons
as a Trustee of the Trust on May 4, 1994. Mr. Lyons resigned to retire; his
resignation was not due to disagreement with the Trust on any matter relating to
the Trust's operations, policies, or practices.
Officers
- --------
David P. Poitras, President of the Trust since August 1, 1993;
----------------
Vice President, Wayne Hummer Investment Trust since 1993; Vice President,
Wayne Hummer Management Company since May, 1992; Partner, Wayne Hummer &
Co. since January, 1992 and Bond Department Manager, Wayne Hummer & Co.
since 1987.
Alan W. Bird, Vice President of the Trust; President, Wayne
------------
Hummer Investment Trust; Partner, Wayne Hummer & Co. since 1986; President,
Wayne Hummer Management Company.
Jean M. Watts, Treasurer of the Trust and Secretary and Treasurer
-------------
of Wayne Hummer Investment Trust since March, 1988; Administrative
Assistant for the Trust and Wayne Hummer Investment Trust, prior thereto.
Robert J. Moran, 222 North LaSalle Street, Chicago, Illinois
---------------
60601; Secretary of the Trust; Partner of the law firm Vedder, Price,
Kaufman & Kammholz./4/
Wayne Hummer Management Company, the investment adviser, pays all
compensation of the officers of the Trust and the compensation of all Trustees
of the Trust who are interested persons, as defined in the Investment Company
Act of 1940, of the Trust. The Trust pays each Trustee who is not an interested
person of the Trust, as defined in the Investment Company Act of 1940, $2,000
per year, plus $500 and expenses for each Board and committee meeting attended.
The following table sets forth the compensation received by all Trustees of
the Trust for the fiscal year ended March 31, 1995. The information in the last
column of the table sets forth the total compensation received by all Trustees
for calendar year 1994 for service as a Trustee of this Trust and the Wayne
Hummer Investment Trust.
- ------------------------
/4/ Mr. Moran receives no compensation for services rendered in his
capacity as Secretary of the Trust. The law firm of Vedder, Price, Kaufman &
Kammholz, of which he is a partner, receives compensation for legal services
rendered to the Trust.
B-10
<PAGE>
<TABLE>
<CAPTION>
Pension and
Retirement Total
Benefits Compensation
Aggregate Accrued as Hummer Funds
Compensation Part of Trust Paid to
Trustee From the Trust Expenses Trustees
- ------- -------------- ------------- ------------
<S> <C> <C> <C>
Steven R. Becker $ 0 $ 0 $ 0
Philip M. Burno 0 0 0
Charles V. Doherty 2,000 0 2,000
Joel D. Gingiss 5,000 0 11,500
Patrick B. Long 4,500 0 10,000
Samuel B. Lyons (1) 1,500 0 5,000
Eustace K. Shaw 5,000 0 10,000
</TABLE>
- -------------------------------------
(1) Served on the Board of Trustees through May 4, 1994
As of June 30, 1995, the Trustees and officers as a group owned less than
1% of the outstanding Shares of the Trust.
Investment Adviser
- ------------------
Wayne Hummer Management Company (the "Investment Adviser"), 300 South
Wacker Drive, Chicago, Illinois 60606, acts as investment adviser to the Trust
and provides the Trust with operating facilities and management services under
the terms of an Investment Advisory and Management Agreement. The Investment
Adviser was incorporated on November 30, 1981.
Subject to the review of the Trustees, the Investment Adviser is
responsible for the management of the Trust and reviews the Trust's holdings in
light of its own research analysis and information from other relevant sources.
The Investment Adviser determines the securities to be purchased, sold and held
by the Trust and places all orders subject to the general supervision of the
Board of Trustees. Securities normally are purchased directly from the issuer or
from an underwriter or a market maker for money
B-11
<PAGE>
market instruments. Usually, no brokerage commissions are paid by the Trust for
such purchases. Purchases from underwriters of securities may include a
concession paid by the issuer to the underwriter. The purchase price paid to
dealers serving as primary market makers for money market instruments may
include a spread between the bid and asked prices. During the three fiscal years
ended March 31, 1995, all transactions for the Trust were at net prices and
there were no commissions paid by the Trust.
Transactions are allocated among various brokers and dealers by the
Investment Adviser in its best judgment. In placing such orders, the Investment
Adviser primarily is concerned with obtaining the best combination of price and
execution. This does not mean that the Trust must base its execution decisions
solely on whether the lowest possible price or commission costs may be obtained.
In seeking to achieve the best combination of price and execution, an effort
will be made to evaluate the overall quality and reliability of broker-dealers
and the services they provide, including their general execution capability,
reliability and integrity, willingness to take positions in securities, general
operational capabilities and financial condition. When the execution and prices
offered by two or more brokers or dealers are comparable, the Investment Adviser
may, in its discretion, purchase and sell Portfolio securities from and to
brokers or dealers that provide the Investment Adviser with research,
statistical or other services. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing or selling
securities; the availability of securities or the purchasers or sellers of
securities; and furnishing analysis and reports concerning issuers and
industries, securities, economic factors, trends and portfolio strategy. It is
not possible to place a monetary value on such research services. Since such
research and statistical services only supplement the Investment Adviser's own
research efforts and any information received must be analyzed, weighed and
reviewed by the Investment Adviser's staff, the receipt of such information is
not expected materially to reduce the Investment Adviser's cost of performing
its advisory contract with the Trust. The information received may be used by
the Adviser for its other clients and/or made available to Wayne Hummer & Co.
for use in serving its customers. Additionally, information available to Wayne
Hummer & Co. may be made available to the Investment Adviser in serving the
Trust and its other clients. Portfolio securities will not be purchased from or
sold to Wayne Hummer & Co. or the Investment Adviser or an affiliate, as defined
in the Investment Company Act of 1940, of either, except pursuant to special
procedures adopted under Rule 17a-7 promulgated under the Investment Company Act
of 1940.
Investment decisions for the Trust are reached independently from those for
Wayne Hummer Investment Trust ("WHIT"), the other investment company managed by
the Investment Adviser, or other of the Investment Adviser's clients
("Clients"). WHIT and/or Clients
B-12
<PAGE>
may also make investments in money market instruments at the same time as the
Trust. When the Trust, WHIT and/or Clients have funds available for investment
in money market instruments, the Investment Adviser, to the extent permitted by
applicable laws and regulations, may aggregate the securities to be sold or
purchased in order to obtain the best combination of price and execution. In
such event, allocation of the securities so purchased or sold, as well as the
costs incurred in a transaction, will be made by the Investment Adviser in a
manner it considers to be equitable and consistent with its fiduciary
obligations to the Trust, WHIT and/or its Clients. In some cases this procedure
may affect the size or price of the position available to the Trust. It is the
opinion of management of the Trust that the benefits available outweigh any
disadvantages that may arise from concurrent transactions.
The principal executive officers and directors of the Investment Adviser
are as follows:
Harry Flagg Baum, Director; Steven R. Becker, Director; G. Ted Becker,
Treasurer; Alan W. Bird, President; Philip M. Burno, Director;
Philip Wayne Hummer, Director and Executive Vice President;
David P. Poitras, Vice President; William A. Rogers, Director and
Secretary; and Thomas J. Rowland, Vice President.
As compensation for its advisory and management services to the Trust, the
Investment Adviser receives a fee from the Trust monthly at the following annual
rates:
<TABLE>
<CAPTION>
Advisory
Fee
--------
<S> <C>
Average daily net assets of the Trust:
Up to $500 million 0.500%
In excess of $500 million but not exceeding $750 million 0.425%
In excess of $750 million but not exceeding $1 billion 0.375%
In excess of $1 billion but not exceeding $1.5 billion 0.350%
In excess of $1.5 billion but not exceeding $2 billion 0.325%
In excess of $2 billion but not exceeding $2.5 billion 0.300%
In excess of $2.5 billion 0.275%
</TABLE>
For the fiscal years ended March 31, 1995, 1994 and 1993, the Trust
incurred total advisory fees amounting to $736,790, $788,244 and $816,122,
respectively.
The Investment Adviser has agreed to waive its advisory fee to the extent
that the Trust's ordinary operating expenses, including the fee of the
Investment Adviser, exceed either (1) 1% of the average daily net assets of the
Trust, computed on an annual basis or (2) the expense limitations imposed by the
securities laws or regulations thereunder of any state in which the Fund's
Shares are qualified for sale, as such limitations may be increased or
B-13
<PAGE>
decreased from time to time, and, if required by such laws or regulations, to
reimburse the Fund for certain expenses in excess of any expense limitation.
Expenses which are not subject to these limitations are interest, taxes,
brokerage commissions and extraordinary items such as litigation costs. No
reimbursement by the Investment Adviser was required for the last three fiscal
years.
The Investment Adviser is obligated, among other things: to provide
investment advisory services; to furnish administrative services, office space
and basic facilities for management of the Trust's affairs; to pay the
compensation of all officers and other personnel of the Trust for their
services to the Trust as well as of the Trustees of the Trust who are interested
persons, as defined in the Investment Company Act of 1940. The Trust pays all
other expenses incurred in the operation of the Trust including, among other
things: brokerage commissions and transaction costs in connection with the
purchase and sale of the Trust's portfolio of securities; taxes; expenses for
legal, auditing and accounting services; costs of preparing, typesetting,
printing and mailing prospectuses, Shareholder reports, proxy materials and
notices to Shareholders of the Trust; charges of the Custodian, Transfer Agent
and Shareholder Service Agent; premiums for insurance carried by the Trust
pursuant to the requirements of Section 17(g) or permissible under any other
provision of the Investment Company Act of 1940 and the regulations promulgated
thereunder; expenses related to the issuance or redemption of Shares; expenses
of registering, qualifying and maintaining registration and qualification of
Shares for sale under federal, state and other laws; costs of conducting
Shareholder relations; fees and out-of-pocket expenses of Trustees who are not
interested persons, as defined in the Investment Company Act of 1940; expenses
incidental to holding meetings of the Trust's Shareholders, including proxy
solicitations therefor, as well as expenses incidental to holding meetings of
the Board of Trustees and committees of the Board of Trustees; interest
expenses; costs of transactions in portfolio securities; costs incidental to
generating and mailing confirmations and monthly statements; the allocated
portion of fees and expenses incurred in connection with any investment company
organization or trade association of which the Trust may be a member; and other
expenses properly payable by the Trust. Certain of these expenses will be
incurred on behalf of the Trust by the Investment Adviser or by Wayne Hummer &
Co. as Distributor or Shareholder Service Agent and will be reimbursed to such
party by the Trust at approximately such party's cost.
The Investment Advisory and Management Agreement (the "Advisory Agreement")
was approved (i) at the May 2, 1995 meeting of the Board of Trustees by a
majority of the Trustees who are neither interested persons, as defined in the
Investment Company Act of 1940, nor parties to the Advisory Agreement, and (ii)
by the Shareholders of the Trust at the meeting of
B-14
<PAGE>
Shareholders held December 13, 1990. The Advisory Agreement has been approved by
the Trustees as specified above for continuance until July 31, 1996. Unless
earlier terminated as described below, the Advisory Agreement thereafter will
continue in effect from year to year if approved annually (1) by the Trustees of
the Trust or by a majority of the outstanding voting Shares of the Trust and (2)
by a majority of Trustees who are not parties to such Agreement or interested
persons, as defined in the Investment Company Act of 1940, of any such party.
The Advisory Agreement is not assignable and may be terminated without penalty
on 60 days' written notice at the option of either party thereto or by the vote
of the Shareholders.
The Investment Adviser also provides the Trust with certain portfolio
accounting services under the terms of a Portfolio Accounting Services Agreement
(the "Accounting Agreement"). The Investment Adviser maintains the accounting
books and records that constitute the record forming the basis for financial
statements of the Trust; maintains the capital stock account for the Trust;
prepares a daily trial balance for the Trust and calculates its net asset value;
maintains all records of a financial nature to the Trust's transactions; and
processes special ledgers and other reports when requested.
Under the Accounting Agreement in effect since November 1, 1994, the
Investment Adviser receives as compensation for its accounting services to the
Trust, an annual fee which is computed and accrued daily and payable monthly.
The Investment Adviser receives for the period January 1, 1995 through December
31, 1995 an annual fee of .0025 of 1% of average daily net assets and for the
period January 1, 1996 and thereafter an annual fee of .01 of 1% of average
daily net assets; but such fee shall not exceed $15,000 per annum. In addition,
the Investment Adviser receives an equipment fee of $50 per month and is
reimbursed for its out-of-pocket costs for obtaining securities pricing
services, the license for use of portfolio accounting software, and other
out-of-pocket costs which are incurred in providing the pricing and software
services. For the fiscal year ended March 31, 1995, the total portfolio
accounting services fees incurred by the Trust were $6,028.
The Accounting Agreement was approved at the October 25, 1994 meeting of
the Board of Trustees by a majority of the Trustees who are neither parties to
the Accounting Agreement nor interested persons, as defined in the Investment
Company Act of 1940, of any such party. The Accounting Agreement shall continue
in effect until terminated. The Accounting Agreement may be terminated by
either party upon sixty days' prior written notice; provided, however, that the
Trust may terminate the Accounting Agreement without prior notice in order to
preserve the integrity of its records from material and continuing errors and
omissions on the part of the Investment Adviser.
B-15
<PAGE>
Relationship of the Trust, Wayne Hummer & Co.
and Wayne Hummer Management Company
- ---------------------------------------------
The shareholders of the Investment Adviser are the general partners of
Wayne Hummer & Co., an Illinois limited partnership, who own shares in
proportion to their percentages of general partnership interest. Wayne Hummer &
Co. with offices at 300 South Wacker Drive, Chicago, Illinois 60606, has been
engaged in the securities brokerage business since 1931.
Wayne Hummer & Co. provides services to the Trust pursuant to a Shareholder
Service Agreement. Such services are provided at their approximate cost
(excluding labor and overhead), if any, and include the following: (1)
converting funds into or advancing Federal Funds for the purchase of Shares as
well as transmitting purchase orders to the Transfer Agent; (2) maintaining
records of Shareholders' transactions for federal and state tax and securities
law purposes as well as for other purposes; (3) preparing and transmitting
federal and state tax informational returns relating to Share transactions to
Shareholders and governmental agencies; (4) recording dividends on Shareholders'
brokerage accounts with Wayne Hummer & Co. and forwarding cash dividends to
Shareholders; (5) generating and transmitting transaction confirmations (if
required) and monthly statements to Shareholders; (6) transmitting redemption
requests to the Transfer Agent and transmitting the proceeds of redemption of
Shares pursuant to Shareholder instructions when such redemption is effected
other than in connection with the checkwriting privilege; (7) transmitting proxy
materials and reports to the Trust's Shareholders; (8) maintaining the automatic
Share purchase and redemption "sweep program" as described in the Trust's
prospectus; and (9) providing telephonic and written communications with respect
to Shareholder account inquiries. For the three fiscal years ended March 31,
1995, 1994 and 1993, the Trust reimbursed the Shareholder Service Agent
$114,800, $118,500, and $124,737, respectively.
Wayne Hummer & Co. also acts as the sole Distributor of the Trust's Shares
pursuant to a Distribution Agreement. The terms of the Distribution Agreement
as to continuation, termination and assignment are identical to those of the
Investment Advisory and Management Agreement described above, except that the
Distributor may only terminate the Distribution Agreement upon 90 days' written
notice to the Trust. The Distribution Agreement provides that the Distributor
will hold itself available to receive or will arrange to receive orders for
Shares which continuously will be issued by the Trust and that the Distributor
pays all costs and expenses in connection with the distribution of the Trust's
Shares. The Distributor is not obligated thereunder to sell any certain number
of Shares.
As of January 1, 1991 the Investment Adviser entered into an Agreement with
Wayne Hummer & Co. whereby the Investment Adviser
B-16
<PAGE>
agreed to pay to Wayne Hummer & Co. the following: (a) for distribution
services rendered to the Trust under the Distribution Agreement, an amount equal
to 35% of the gross revenues generated from the rendering of investment advisory
services to the Trust, not to exceed in the aggregate for a particular fiscal
year, however, the net profit (before taxes and before payment of the fees so
payable) earned by the Investment Adviser for such year for the rendering of
such advisory services, and (b) for services rendered by Wayne Hummer & Co. to
Trust Shareholders under the Shareholder Service Agreement, an amount equal to
130% of the unreimbursed overhead and labor expenses incurred by Wayne Hummer &
Co. in rendering such services. The Agreement also provides for similar payments
to be made by the Investment Adviser to Wayne Hummer & Co. for distribution and
shareholder services rendered to WHIT and its shareholders.
The following persons, all of whom, except as specified, are located at
300 South Wacker Drive, Chicago, Illinois 60606, have been partners or employees
of Wayne Hummer & Co. for at least the past five years and presently are general
partners of Wayne Hummer & Co.: William B. Hummer; Philip Wayne Hummer;
Harry Flagg Baum; William A. Rogers; Robert F. Kahlfeldt; Philip M. Burno;
Joseph A. Piekarczyk; G. Ted Becker; Steven R. Becker; W. Douglas Carroll;
Richard J. Kosarek; Raymond L. Kratzer; Jean E. Williams; Alan W. Bird;
Linda C. Becker; Thomas J. Rowland; Laura A. Kogut; David P. Poitras;
Richard Wholey, Jr.; Peder H. Culver; Donald G. Hack; and Ronald A. Tyrpin.
The George E. Barnes Family Trust/5/ has been a limited partner of Wayne Hummer
& Co. since April, 1986, John D. Carroll/6/ has been a limited partner since
January, 1990 and Robert H. Chase/7/ has been a limited partner since January,
1992.
As noted in the preceding discussion of Trustees and Officers, certain of
the partners of Wayne Hummer & Co. are also officers, directors or employees of
the Investment Adviser, as well as officers and interested persons, as defined
in the Investment Company Act of 1940, of the Trust.
- ------------------------
/5/ George E. Barnes, grantor of the Family Trust, was a founding partner
of Wayne Hummer & Co. and was a general partner through March, 1986. Mr. Barnes'
address is 5864 Glen Eagle Way, Stuart, Florida 34997.
/6/ John D. Carroll was a general partner of Wayne Hummer & Co. through
December, 1989. His address is 904 El Rancho, Sun City Center, Florida 33570.
/7/ Robert H. Chase was a general partner of Wayne Hummer & Co. through
December, 1991. His address is 1246 Nicolet Circle, Appleton, Wisconsin 54915.
B-17
<PAGE>
PURCHASE AND REDEMPTION OF SHARES
Please refer to the description of procedures for the purchase and
redemption of Shares contained in the prospectus under "Purchase of Shares" and
"Redemption of Shares," which are incorporated herein by reference.
With regard to the checkwriting redemption privilege described in the
prospectus, it should be noted that checks which have been honored will be
returned periodically to Shareholders by Wayne Hummer & Co. A check representing
a redemption request will be processed ahead of any other redemption
instructions issued by a Shareholder and before any automatic redemptions are
effected in a Shareholder's account pursuant to the "sweep program" as described
in the prospectus under "Redemption of Shares." The check redemption procedure
may be suspended or terminated at any time by the Trust, Wayne Hummer & Co. or
State Street Bank and Trust Company.
There is no charge to the Shareholder for normal use of the check
redemption privilege other than as set forth below. The Trust may charge
Shareholders its costs (currently $5) for (1) each stop payment; (2) each check
written for an amount under $500; (3) each check written in excess of $250,000;
and (4) each check returned because there are insufficient Shares in the account
against which the check is drawn. In addition, the Trust reserves the right to
impose a charge for the checkwriting privilege at a future date, to charge for
excessive use of the checkwriting privilege and to make additional charges to
recover the costs of providing this service. All charges will be deducted from
any existing or future credit balance in the Shareholder's Wayne Hummer & Co.
brokerage account.
By opening an account with Wayne Hummer & Co., a Shareholder is agreeing
with the Trust and Wayne Hummer & Co. that neither the Trust nor Wayne Hummer &
Co. is responsible for the authenticity of redemption instructions or the
delivery of the redemption proceeds by check from Wayne Hummer & Co.
Redemption requests made other than by check normally will be credited to a
Shareholder's Wayne Hummer & Co. brokerage account on the business day after the
redemption request is effective. If, at the time the redemption request is
made, a Shareholder has requested that Wayne Hummer & Co. transmit the proceeds
of redemption by mail, the proceeds normally will be mailed on the day they are
credited to the Shareholder's Wayne Hummer & Co. brokerage account, or, if the
request to transmit the proceeds by mail is made subsequent to the request to
redeem, on the next business day after receipt of the Shareholder's request to
transmit the proceeds by mail; but in either event, payment will be made within
three business days after the redemption is effective or the request to transmit
proceeds is made, respectively.
B-18
<PAGE>
The right to receive payment or the right to redeem Shares may be suspended
for more than seven days (1) for any period (a) during which the New York Stock
Exchange is closed other than customary weekend and holiday closings or (b)
during which trading on the New York Stock Exchange is restricted; (2) for any
period during which an emergency exists as a result of which (a) disposal by
the Trust of securities owned by it is not reasonably practicable or (b) it is
not reasonably practicable for the Trust fairly to determine the value of its
net assets; or (3) for such other periods as the Securities and Exchange
Commission may by order permit for the protection of Shareholders of the Trust.
The rules and regulations promulgated by the Securities and Exchange Commission
shall be used to determine the conditions under which trading shall be deemed to
be restricted within the meaning of (1) above and an emergency shall be deemed
to exist within the meaning of (2) above.
The value of a Shareholder's investment at the time of redemption may be
more or less than his initial cost, but normally will be $1 per Share, depending
principally on the value of the securities held in the Trust at such time.
The Trust has made an election pursuant to Rule 18f-1 under the Investment
Company Act of 1940 to enable the Trust to elect to limit payments in cash for
large redemptions. Under the provisions of Rule 18f-1, the Trust may limit cash
redemptions with respect to each Shareholder during any 90-day period to the
lesser of (1) $250,000 or (2) 1% of the net asset value of the applicable
Portfolio at the beginning of such period. If deemed advisable by the Board of
Trustees, the Trust may pay the redemption price in excess of the amounts
described above in whole or in part in securities owned by the applicable
Portfolio. The market value of such securities shall be determined as of the
close of trading on the New York Stock Exchange on the business day on which the
redemption is effective. In such case a Shareholder might incur transaction
costs if he or she sold the securities received.
PRICING OF SHARES
The net asset value per Share of the Trust is determined on each day the
New York Stock Exchange is open for trading as of the close of trading on the
Exchange (generally 3:00 p.m. Chicago time) immediately after dividends have
been declared on each business day and at 3:00 p.m. Chicago time on each other
day during which there is a sufficient degree of trading in securities held by
the Trust so as materially to affect the net asset value of the Shares. The net
asset value per Share normally is $1.00. The net asset value per Share is
computed by dividing the value of the securities held by the Trust plus any
other assets minus all liabilities by the total number of Shares outstanding.
The Securities and Exchange Commission has issued an order of
B-19
<PAGE>
exemption from certain provisions of the Investment Company Act of 1940 to the
extent necessary to permit the Trust to use the amortized cost method of valuing
its Portfolios' securities. As a condition of the order of exemption and
pursuant to Rule 2a-7 promulgated by the Securities Exchange Commission and
Procedures adopted by the Trust's Board of Directors pursuant thereto, the Trust
will (1) maintain a dollar-weighted average Portfolio maturity of 90 days or
less, (2) purchase only instruments having remaining maturities of one year or
less, and (3) limit Portfolio investments, including repurchase agreements, to
those United States dollar-denominated instruments which the Board of Trustees
determines present minimal credit risks, and which are of high quality, as
determined by any major rating service or, in the case of any instrument that is
not rated, of comparable quality as determined by the Board of Trustees. The
Trust, however, further will limit its investments as described under "TRUST
INVESTMENTS" above and under "INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS"
in this Statement of Additional Information and in the Prospectus.
The valuation of the securities held by the Trust is based upon their
amortized cost, which does not take into account unrealized securities gains or
losses. This involves valuing an instrument at its cost and thereafter assuming
a constant amortization to maturity of any discount or premium, regardless of
the impact of fluctuating interest rates on the market value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which the value of an instrument, as determined by amortized cost, is
higher or lower than the price the Trust would receive if it sold the
instrument. During such periods the yield to investors in the Trust may differ
somewhat from that obtained in a similar entity which uses available indications
as to market value to value its portfolio securities. For example, if the use
of amortized cost resulted in a lower (higher) aggregate Trust value on a
particular day, a prospective investor in such Trust could obtain a somewhat
higher (lower) yield and ownership interest than would result from investment in
such similar entity and existing investors would receive less (more) investment
income and ownership interest. The Trust expects, however, that the procedures
referred to in the following paragraphs of this section will tend to minimize
the differences referred to above.
The Trustees have established procedures designed to stabilize, to the
extent reasonably possible, the Trust's price per Share, as computed for the
purpose of sales and redemptions, at $1.00. Such procedures include review of
the securities holdings by the Trustees, at such intervals as they may deem
appropriate, to determine whether the net asset value per Share of the Trust
calculated by using available market quotations or market equivalents deviates
more than .50% from $1.00 per Share based on amortized cost and, if so, whether
such deviation may result in material dilution or is otherwise unfair to
investors or existing Shareholders. In such review, investments for which market
B-20
<PAGE>
quotations are readily available will be valued at the most recent bid-asked
mean or yield equivalent for such securities or for securities of comparable
maturity, quality and type, as obtained from one or more of the major market
makers for the securities to be valued. If market quotations are not readily
available for an investment, the investment will be valued pursuant to a
security valuation matrix system that classifies investments by type, days to
maturity and quality and which system is considered dependable in producing a
fair value of such investments.
To the extent that any deviation between the Trust's net asset value based
upon available market quotations or market equivalents and $1 per Share based on
amortized cost exceeds .50%, the Trustees promptly will consider what action, if
any, will be initiated. In the event the Trustees determine that a deviation
exists which may result in material dilution or other unfair results to
investors or existing Shareholders, the Trustees have agreed to take such
corrective action as they consider necessary and appropriate, including the sale
of Trust instruments prior to maturity to realize gains or losses or to shorten
average portfolio maturity, withholding dividends or payment of distributions,
redeeming Shares in kind, or establishing a net asset value per Share by using
available market quotations or by using estimates of value reflecting current
market conditions selected by the Board of Trustees as appropriate indicators of
value. In addition, in the event that the Trust incurs a loss or liability
which the Trustees determine to be significant with respect to the maintenance
of a net asset value of $1.00 per Share, the Trustees shall have the power (1)
to reduce the number of Shares of the Trust by that number of Shares which
represents the amount of such loss or liability by reducing the number of Shares
of each Shareholder on a pro rata basis, (2) to offset the pro rata amount of
such loss or liability from the accrued dividend account of each Shareholder,
and/or (3) to establish an account in the amount of such loss or liability and
to offset such account and to defer the declaration of dividends until
sufficient income is obtained to reduce such account to zero. There can be no
assurance that the Trust will be able to maintain a stable net asset value of
$1.00 per share.
SHAREHOLDER VOTING RIGHTS
Please refer to the section of the Prospectus entitled "Description of
Shares - Shareholder Voting Rights," which information is incorporated herein by
reference. That section sets forth a general rule that the Trust will not hold
annual or other meetings of Shareholders but specifies several matters in
connection with which the Shareholders are entitled to vote, including "the
election or removal of one or more Trustees if a meeting is called for that
purpose." In this regard and in accordance with the Investment Company Act of
1940 (i) the Trust will hold a Shareholder's meeting for the election of
Trustees at
B-21
<PAGE>
such time as less than a majority of the Trustees holding office have been
elected by Shareholders, and (ii) if, as a result of a vacancy in the Board of
Trustees, less than 2/3 of the Trustees holding office have been elected by the
Shareholders, that vacancy will only be filled by a vote of the Shareholders. In
addition, Trustees may be removed from office by a vote of the holders of at
least 2/3 of the outstanding Shares at a meeting duly called for that purpose,
which meeting shall be held upon the written request of the holders of not less
than 10% of the outstanding Shares. Upon the written request of the holders of
Shares having a net asset value of $25,000 or constituting 1% of the outstanding
Shares stating that such Shareholders wish to communicate with the other
Shareholders for the purpose of obtaining the signatures necessary to demand a
meeting to consider removal of a Trustee, the Trust has undertaken to provide a
list of Shareholders or to disseminate appropriate materials (at the expense of
the requesting Shareholders).
The Trust Agreement permits the Trustees to issue Shares in one or more
Portfolios. Only one Portfolio currently is authorized. Should more than one
Portfolio be issued, however, the Trust Agreement provides that on any matter
submitted to a vote of the Shareholders, all Shares entitled to vote,
irrespective of Portfolio, shall be voted in the aggregate and not by Portfolio
except as otherwise required by the Investment Company Act of 1940. The Trust
Agreement also expressly permits the Trustees to terminate the Trust without
Shareholder approval by notice to the Shareholders. The Investment Company Act
of 1940, however, prohibits an investment company from changing the nature of
its business so as to cease to be an investment company unless such action is
authorized by the vote of a majority of its outstanding shares.
As used in the Prospectus and this Statement of Additional Information, the
term "majority of the outstanding Shares" of either the Trust or a particular
Portfolio of the Trust means the vote of the lesser of (1) the holders of 67% or
more of the Shares of the Trust or such Portfolio present at a meeting, if the
holders of more than 50% of the outstanding Shares of the Trust or such
Portfolio are present or represented by proxy, or (2) the holders of more than
50% of the outstanding Shares of the Trust or such Portfolio.
B-22
<PAGE>
SHAREHOLDER LIABILITY
Please refer to the section of the Prospectus entitled "Description of
Shares - Shareholder Liability" which is incorporated herein by reference.
The Trust Agreement provides that Shareholders shall not be subject to any
personal liability to any person extending credit to, contracting with or having
any claims against the Trust and that every written agreement, obligation,
instrument or undertaking made by the Trust shall contain a provision that the
same is not binding upon the Shareholders personally. The law firm of Ropes &
Gray, Boston, Massachusetts, which supervised the organization of the Trust
under Massachusetts law, is of the opinion that, pursuant to Massachusetts law,
Shareholders will not be liable personally for contract claims under any such
agreement, obligation, instrument or undertaking governed by Massachusetts law
and containing such provision when adequate notice of such provision is given.
The Trustees intend to conduct the operations of the Trust, with the advice
of counsel, in such a way so as to avoid, as far as possible, ultimate liability
of the Shareholders for liabilities of the Trust. The Trust is covered by
insurance which the Trustees consider adequate to cover foreseeable tort claims.
LIMITATION OF LIABILITY
The Trust Agreement provides that the Trust shall indemnify the Trustees
and Officers of the Trust against liability arising in connection with the
affairs of the Trust to the fullest extent permitted by law. The Trust Agreement
also provides that all third persons shall look solely to the Trust property for
satisfaction of claims arising in connection with the affairs of the Trust.
OTHER MATTERS
The Trust is not required to issue share certificates. Unless terminated by
vote of Shareholders holding at least a majority of the Shares entitled to vote
or by the Trustees by written notice to the Shareholders, the Trust will
continue without limitation as to duration. A Portfolio may be terminated at any
time by vote of Shareholders holding at least a majority of the Shares of such
Portfolio entitled to vote or by the Trustees by written notice to the
Shareholders of such Portfolio.
B-23
<PAGE>
TRUST NAME
Pursuant to an agreement with the Investment Adviser, the Trust has been
granted a non-exclusive license ("License") to use the trade name and service
mark "Wayne Hummer" (the "Name"), without charge for as long as the Trust is
solvent, Wayne Hummer Management Company is the Investment Adviser to the Trust
and Wayne Hummer & Co. is the Distributor. If Wayne Hummer Management Company
ceases to act as Investment Adviser or if Wayne Hummer & Co. ceases to act as
Distributor, then the Trust will be required to change its name within 90 days
of written notice from Wayne Hummer Management Company and the Trust will be
required to adopt a new Trust name, amend its Trust Agreement to accomplish a
change of Trust name, and deliver to Wayne Hummer Management Company for
destruction all materials in which the Name is used. Wayne Hummer Management
Company may exercise control over use of the Name and the Trust has agreed to
indemnify Wayne Hummer Management Company against expenses or losses which may
arise from the Trust's misuse of the Name or out of any breach of the License
regarding the use of the Name.
PERFORMANCE INFORMATION
As described in the Prospectus, the Trust's historical performance may be
shown in the form of "yield" or "effective yield." The Trust's yield is computed
in accordance with a standard method prescribed by rules of the Securities and
Exchange Commission. Under that method, the yield quotation is based on a
seven-day period and is computed as follows: The Trust's net investment income
per share (accrued interest on portfolio securities, plus or minus amortized
purchase discount or premium, less accrued expenses) is divided by the price per
share (expected to remain constant at $1.00) at the beginning of the period
("base period return") and the result is divided by seven and multiplied by 365
and the resulting yield figure is carried to the nearest one hundredth of one
percent. The Trust's yield for the seven-day period ended March 31, 1995 was
5.33%.
The Trust's effective yield is determined by taking the base period return
(computed as described above) and calculating the effect of assumed compounding.
The formula for the effective yield is: [(base period return + 1) 365/7] - 1.
The Trust's effective yield for the seven-day period ended March 31, 1995 was
5.46%.
Realized capital gains or losses and unrealized appreciation or
depreciation of the Trust's investments are not included in the calculation of
yield or effective yield. The Trust's yield fluctuates, and the publication of
an annualized yield quotation is not a representation as to what an investment
in the Trust will actually yield for any given future period. Actual yields will
B-24
<PAGE>
depend not only on changes in interest rates on money market instruments during
the period in which the investment in the Trust is held, but also on such
matters as Trust expenses.
Yield fluctuations may reflect changes in the Trust's net income, and
portfolio changes resulting from net purchases or net redemptions of the Trust's
shares may affect the yield. Accordingly, the Trust's yield may vary from day to
day, and the yield stated for a particular past period is not necessarily
representative of its future yield. Since the Trust uses the amortized cost
method of net asset value computation, it does not anticipate any change in
yield resulting from any unrealized gains or losses or unrealized appreciation
or depreciation not reflected in the yield computation, or change in net asset
value during the period used for computing yield. If any of these conditions
should occur, yield quotations would be suspended. The Trust's yield is not
guaranteed, and its principal is not insured. Although the Trust uses its best
efforts to maintain its net asset value at $1.00 per share, there can be no
assurance that it will be able to do so.
In addition, the Trust's performance may be compared to that of other money
market mutual funds tracked by Lipper Analytical Services, Inc., a widely used
independent research firm which ranks mutual funds by overall performance,
investment objectives and assets and by IBC/Donoghue's, Inc., which reports on
money market funds.
The Trust's performance also may be compared to various bank products,
including the average rate of bank and thrift institution money market deposit
accounts, Super N.0.W. accounts, passbook savings accounts and 6-month maturity
certificates of deposit. Account minimums for money market deposit accounts and
Super N.0.W. accounts range upward from $2,000 and compounding methods may vary.
Super N.0.W. accounts generally offer unlimited check writing while money market
deposit accounts generally restrict the number of checks that may be written.
Bank and thrift institution deposit accounts may be insured by the Bank
Insurance Fund or Savings Association Insurance Fund. Shareholder accounts in
the Trust are not insured. Additionally, bank passbook savings accounts compete
with money market mutual fund products with respect to certain liquidity
features but may not offer all of the features available from a money market
mutual fund, such as check writing. Bank checking accounts normally do not pay
interest but compete with money market mutual fund products with respect to
certain liquidity features (e.g., the ability to write checks against the
account). Bank certificates of deposit may offer fixed or variable rates for a
set term. Withdrawal of these deposits prior to maturity will normally be
subject to a penalty. In contrast, shares of the Trust are redeemable at net
asset value (normally $1.00 per share) next determined after a request is
received, without charge.
B-25
<PAGE>
Investors may also want to compare the Trust's performance to that of
United States Treasury Bills or Notes because such instruments represent
alternative income producing products. Treasury obligations are issued in
selected denominations. Rates of Treasury obligations are fixed at the time of
issuance and payment of principal and interest is backed by the full faith and
credit of the United States Treasury. The market value of such instruments will
generally fluctuate inversely with interest rates prior to maturity and will
equal par value at maturity. Generally the values of obligations with shorter
maturities will fluctuate less than those with longer maturities. The Trust's
yield will fluctuate. Also, while the Trust seeks to maintain a net asset value
per share of $1.00, there is no assurance that it will be able to do so.
DIVIDENDS
The Trust declares as daily dividends all of the Trust's undistributed net
investment income. The Trust's net investment income for dividend purposes is
determined by the Investment Adviser immediately prior to the determination of
net asset value per Share. See "PRICING OF SHARES" above and in the prospectus.
Net investment income of the Trust (from the time of the immediately preceding
determination thereof) consists of (1) accrued interest income plus or minus
amortized purchase discount or premium, (2) plus or minus all short-term
realized and unrealized gains and losses and (3) minus accrued expenses
(including the fees payable to the Investment Adviser). The Trust does not
expect to realize any long-term gains or losses. Dividends are declared daily
and reinvested monthly in the form of additional full and fractional Shares at
net asset value, or at the option of the Shareholder, are paid as cash dividends
monthly by credit to a Shareholder's brokerage account with Wayne Hummer & Co.
Dividends are taxable to Shareholders whether received in cash or reinvested in
additional Shares, as described below. See "TAXES."
TAXES
Please refer to information concerning taxes which is found in the
Prospectus under the headings "Dividends" and "Taxes," which is incorporated by
reference herein.
Federal Income Tax
- ------------------
The Trust intends to continue to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended, as it has since its
inception. If so qualified, the Trust will not be subject to federal income tax
to the extent that it distributes its net investment income and realized capital
gains. Distributions of net income including any short-term capital gains
B-26
<PAGE>
are taxable to Shareholders as ordinary income, whether such distributions are
received in cash or reinvested in additional Shares. Ordinary income
distributions are not expected to qualify for the dividends-received deduction
available to corporate Shareholders.
Other Taxes
- -----------
The Trust may be subject to tax in certain states where it does business.
Further, in those states which have income tax laws, the tax treatment of the
Trust and of Shareholders with respect to distributions by the Trust may differ
from federal income tax treatment. In particular, distributions may be subject
to state and local income taxes as dividend or interest income even though a
substantial portion of such distributions may be derived from interest on United
States Government instruments which might be exempt from such taxes if received
directly by the Shareholder. Shareholders are advised to consult their own tax
advisers regarding specific questions as to federal, state or local taxes.
INDEPENDENT AUDITORS
The Trust's independent auditors are Ernst & Young LLP, 233 South Wacker
Drive, Chicago, Illinois 60606, who audit and report on the Trust's annual
financial statements, review certain regulatory reports and the Trust's federal
income tax return, and perform other professional accounting, auditing, tax and
advisory services when engaged to do so by the Trust. The selection of
independent auditors is subject to ratification by the Trust's Shareholders
should a meeting of Shareholders be held.
CUSTODIAN AND TRANSFER AND DIVIDEND CREDITING AGENT
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, acts as Custodian for the Trust's assets and as the Trust's
Transfer and Dividend Crediting Agent.
The Custodian is responsible for holding all securities and cash of the
Trust, receiving and paying for securities purchased, delivering securities sold
upon payment therefor, receiving and collecting income from investments, making
all payments covering expenses of the Trust, and performing other administrative
duties, all as directed by authorized persons. The Custodian does not exercise
any supervisory function in such matters as purchase and sale of portfolio
securities, payment of dividends, or payment of expenses of the Trust. The Trust
has authorized the Custodian to deposit certain portfolio securities in central
depository systems as permitted under Federal law. The Trust may invest in
obligations of the Custodian and may purchase securities from or sell securities
to the Custodian.
B-27
<PAGE>
REPORTS TO SHAREHOLDERS
The Trust sends to its Shareholders various financial reports ("Reports")
such as unaudited semi-annual financial statements and fiscal year-end financial
statements audited by the Trust's independent auditors. To reduce expenses,
only one copy of most Reports may be mailed to all accounts with the same social
security or taxpayer identification number or to all Shareholders in the same
household. Shareholders may call or write Wayne Hummer & Co. to request that
copies of Reports be mailed to each account with a common taxpayer number or to
two or more Shareholders in the same household.
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT AUDITORS
The financial statements and the report of independent auditors contained
in the Trust's annual report to Shareholders entitled "Annual Financial
Statements (Audited)" for the fiscal year ended March 31, 1995 are incorporated
herein by reference. The Trust's Annual Financial Statements (Audited), unless
previously received, must accompany this Statement of Additional Information.
B-28
<PAGE>
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER AND BOND RATINGS
Description of Moody's Investors Service, Inc.'s two highest bond ratings:
- --------------------------------------------------------------------------
Aaa---Bonds which are rated Aaa are judged to be of the best quality. They
---
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa---Bonds which are rated Aa are judged to be of high quality by all
--
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there may be other elements present
which make the long-term risks appear somewhat greater than in Aaa securities.
Description of Standard & Poor's Corporation's two highest bond ratings:
- ------------------------------------------------------------------------
AAA---Bonds rated AAA are highest grade obligations. They possess the
---
ultimate degree of protection as to principal and interest. Marketwise they move
with interest rates, and hence provide the maximum safety on all counts.
AA---Bonds rated AA also qualify as high-grade obligations and, in the
--
majority of instances, differ from AAA issues only in a small degree. Here, too,
prices move with the long-term money market.
Description of Moody's Investors Service, Inc.'s three highest commercial paper
- -------------------------------------------------------------------------------
ratings:
- --------
Among the factors considered by Moody's Investors Service, Inc. in
assigning commercial paper ratings are the following: (1) evaluation of the
management of the issuer; (2) economic evaluation of the issuer's industry or
industries and an appraisal of the risks which may be inherent in certain areas;
(3) evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8) recognition
by the management
B-29
<PAGE>
of obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations. Relative differences in
strength and weakness in respect to these criteria would establish a rating in
one of three classifications: Prime-1; Prime-2; or Prime-3.
Description of Standard & Poor's Corporation's three highest commercial paper
- -----------------------------------------------------------------------------
ratings:
- -------
Commercial paper rated "A" by Standard & Poor's Corporation has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is generally rated "A" or better. The issuer
has access to at least two additional channels of borrowing. Basic earnings and
cash flow have an upward trend with allowance made for unusual circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position within the industry. The reliability and quality of management are
unquestioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is rated A-1, A-2 or A-3.
B-30
<PAGE>
ANNUAL FINANCIAL STATEMENTS
(Audited)
MARCH 31, 1995
Wayne
Hummer
Money
Fund
Trust
Dear Fellow Shareholder:
We are pleased to present the annual financial statements of Wayne Hummer Money
Fund Trust (the "Trust") for the year ended March 31, 1995. Net assets under
management at the end of the fiscal year totaled $155,247,877. Since its
inception thirteen years ago, the Trust has continued to meet its objectives of
liquidity and stability, which are the most important considerations of short-
term investing.
During the past twelve months we have seen short-term interest rates increase
due to the Federal Reserve Bank's attempts to control inflation. As a result,
the Trust was able to take advantage of the higher yields to increase its
return. The seven day average yield on the Trust's portfolio at March 31, 1995,
was 5.33%; if dividends were reinvested the effective yield was 5.46%. For the
year ended March 31, 1995, the Trust provided a total return of 4.24%, assuming
reinvestment of dividends. Since these figures represent historical data, future
yields may be higher or lower.
The policies and procedures of the Trust adhere to the strict criteria used by
rating agencies to assign the highest rating to money market funds. The Trust
invests in high quality commercial instruments, does not purchase foreign
instruments, and limits itself to dealing with banks that have $1 billion or
more in assets.
As you are aware, the Trust offers its shareholders the ability to purchase and
redeem shares without penalties or cost, while providing a vehicle for earning a
yield on investments which reflects changes in current rates. The Trust also
offers the Systematic Investment Plan, check writing services and provides,
through Wayne Hummer & Co., a personal representative to whom shareholders may
speak to regarding their accounts and through whom investments may be made.
We appreciate your continued support of the Trust and ask that you call or write
us if you have any questions about the Trust or your account.
Sincerely,
[Signature]
David P. Poitras
President
Wayne Hummer Money Fund Trust
April 28, 1995
An investment in the Trust is not a deposit or obligation of nor guaranteed or
insured by the U.S. Government, any bank, the Federal Deposit Insurance
Corporation, or any other agency. There can be no assurance that the Trust will
be able to maintain a stable net asset value of $1.00 per share.
<PAGE>
WAYNE HUMMER MONEY FUND TRUST
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
MARCH 31, 1995
--------------
<S> <C>
ASSETS
Investments, at amortized cost................................. $154,828,799
Other assets:
Cash........................................................ 116,266
Interest receivable........................................ 456,645
Prepaid expenses............................................ 49,585
Insurance deposit........................................... 18,775
------------
Total assets............................................ 155,470,070
LIABILITIES AND NET ASSETS
Dividends payable.............................................. 111,977
Due to Wayne Hummer Management Company......................... 65,604
Accounts payable............................................... 44,612
------------
Total liabilities....................................... 222,193
------------
Net assets applicable to Shares
outstanding, equivalent to $1.00 per Share................... $155,247,877
============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
MARCH 31, 1995
--------------
<S> <C>
Interest income................................................ $7,308,352
Expenses:
Management fee............................................... 736,790
Transfer agent fees.......................................... 123,200
Shareholder service agent fees............................... 114,800
Custodian fees............................................... 59,600
Professional fees............................................ 59,213
Registration costs........................................... 21,153
Insurance costs.............................................. 17,743
Trustee fees................................................. 16,608
Portfolio accounting......................................... 6,028
Other........................................................ 24,057
----------
Total expenses........................................... 1,179,192
----------
Net investment income........................................ 6,129,160
Net realized loss on investments............................. (164,303)
----------
Net increase in net assets resulting from operations......... $5,964,857
==========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1995 1994
------------- --------------
<S> <C> <C>
Operations:
Net investment income......................................................... $ 6,129,160 $ 3,852,673
Net realized loss on investments.............................................. (164,303) --0--
------------- -------------
Net increase in net assets resulting from operations............................ 5,964,857 3,852,673
Dividends to Shareholders from net investment income............................ (6,129,160) (3,852,673)
Capital contribution............................................................ 164,303 --0--
Capital Share transactions (dollar amounts and number of Shares are the same):
Proceeds from Shares sold..................................................... 380,661,450 399,954,375
Shares issued upon reinvestment of dividends.................................. 5,862,996 3,645,326
------------- -------------
386,524,446 403,599,701
Less payments for Shares redeemed............................................. (384,805,251) (408,240,525)
------------- -------------
Increase (decrease) due to Capital Share transactions......................... 1,719,195 (4,640,824)
Net assets at beginning of the year............................................. 153,528,682 158,169,506
------------- -------------
Net assets at end of the year................................................... $ 155,247,877 $ 153,528,682
============= =============
</TABLE>
FINANCIAL HIGHLIGHTS
(For a Share outstanding throughout each year)
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income................................. 0.04 0.02 0.03 0.05 0.07
Less dividends from investment income................. (0.04) (0.02) (0.03) (0.05) (0.07)
-------- -------- -------- -------- --------
Net asset value, end of year............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return............................................ 4.24%(a) 2.47% 2.83% 4.74% 7.34%
RATIOS AND SUPPLEMENTARY DATA
Net assets, end of year ($000's)...................... 155,248 153,529 158,170 180,823 220,297
Ratio of total expenses to average net assets......... .80% .80% .79% .76% .80%
Ratio of net investment income to average net assets.. 4.16% 2.44% 2.80% 4.66% 7.06%
</TABLE>
(a) The total return includes the effect of the capital contribution of $0.0011
per Share. The return without the capital contribution would have been 4.12%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
PORTFOLIO OF INVESTMENTS
March 31, 1995
<TABLE>
<CAPTION>
MATURITY
PRINCIPAL RATE DATE
AMOUNT COMMERCIAL PAPER (71.6%) % 1995 VALUE
- ---------- ---------------- ----- -------- ------------
<C> <S> <C> <C> <C>
$ 1,000,000 American Telephone & Telegraph Co................................. 6.036 04/03 $ 999,669
5,000,000 Equitable Resources Inc........................................... 6.066 04/03 4,998,339
4,500,000 Northern Trust Corp............................................... 6.067 04/04 4,497,758
1,611,000 Raytheon Co....................................................... 6.017 04/05 1,609,938
4,800,000 Bellsouth Telecommunications Inc.................................. 6.029 04/06 4,796,040
3,800,000 Coca-Cola Co...................................................... 6.019 04/07 3,796,244
2,000,000 Madison Gas & Electric Co......................................... 6.104 04/10 1,996,995
4,250,000 NationsBank Corp.................................................. 6.043 04/10 4,243,678
2,260,000 Norwest Financial Inc............................................. 6.054 04/11 2,256,258
6,600,000 Duke Power Co..................................................... 6.045 04/12 6,588,001
2,116,000 Teco Finance Inc.................................................. 6.055 04/12 2,112,147
1,872,000 Associates Corp. of North America................................. 6.056 04/13 1,868,281
2,000,000 Hartford Steam Boiler Inspection and Insurance Co................. 6.066 04/13 1,996,020
3,188,000 Pitney Bowes Inc.................................................. 6.056 04/13 3,181,667
1,500,000 Snap-On Tools Corp................................................ 6.086 04/13 1,497,005
4,000,000 Hewlett-Packard Co................................................ 6.051 04/18 3,988,761
2,054,000 Penney (J.C.) Funding Corp........................................ 6.051 04/18 2,048,229
2,875,000 Consolidated Rail Corp............................................ 6.062 04/19 2,866,433
3,500,000 Snap-On Tools Corp................................................ 6.083 04/20 3,488,954
2,000,000 Banc One Corp..................................................... 6.087 04/24 1,992,359
2,000,000 Hartford Steam Boiler Inspection and Insurance Co................. 6.140 04/25 1,991,960
3,500,000 Florida Power Corp................................................ 6.069 04/26 3,485,514
4,800,000 Penney (J.C.) Funding Corp........................................ 6.060 04/27 4,779,373
4,300,000 Pitney Bowes Inc.................................................. 6.060 04/27 4,281,522
1,400,000 Raytheon Co....................................................... 6.061 04/28 1,393,753
7,000,000 Wal-Mart Stores Inc............................................... 6.061 04/28 6,968,762
1,600,000 Norwest Financial Inc............................................. 6.065 05/02 1,591,802
2,000,000 Equitable Resources Inc........................................... 6.107 05/03 1,989,351
2,100,000 Florida Power Corp................................................ 6.098 05/04 2,088,488
5,000,000 Teco Finance Inc.................................................. 6.099 05/05 4,971,761
5,750,000 National Rural Utilities Cooperative Finance Corp................. 6.143 05/08 5,714,423
3,000,000 Hartford Steam Boiler Inspection and Insurance Co................. 6.189 05/18 2,976,250
3,200,000 Banc One Corp..................................................... 6.211 05/24 3,171,403
5,000,000 American Telephone & Telegraph Co................................. 6.190 06/22 4,931,439
------------
111,158,577
BANKERS ACCEPTANCES (2.4%)
-------------------
2,000,000 Republic National Bank of New York................................ 6.108 04/24 1,992,333
1,800,000 Northern Trust Co., Chicago, IL................................... 6.115 05/01 1,791,000
------------
3,783,333
CORPORATE AND BANK NOTES (13.5%)
------------------------
2,000,000 General Electric Capital Corp. (a)................................ 6.320 04/01 2,000,000
3,000,000 Society National Bank, Cleveland, OH (a).......................... 6.285 04/01 2,999,271
2,000,000 PNC Bank, N.A. (a)................................................ 5.920 04/04 1,999,947
2,000,000 Associates Corp. of North America................................. 6.850 05/11 1,993,989
7,000,000 Fifth Third Bank, Cincinnati, OH.................................. 6.100 05/17 6,999,954
3,000,000 Wachovia Bank of North Carolina, N.A., Winston-Salem, NC (a)...... 6.250 06/21 3,000,000
1,000,000 LaSalle National Bank............................................. 7.200 07/25 994,463
1,000,000 WMX Technologies, Inc............................................. 7.151 12/15 993,842
------------
20,981,466
US GOVERNMENT AGENCIES (8.9%)
----------------------
2,750,000 Federal Home Loan Bank (a)........................................ 6.250 04/01 2,749,052
1,000,000 Federal Home Loan Bank (a)........................................ 6.180 04/01 1,000,000
500,000 Student Loan Marketing Association (a)............................ 6.420 04/04 500,073
2,000,000 Federal Farm Credit Bank.......................................... 5.890 04/03 2,000,039
1,500,000 Federal National Mortgage Association (a)........................ 6.340 04/16 1,500,017
250,000 Federal Home Loan Mortgage Corp................................... 6.215 05/01 251,039
2,000,000 Federal Farm Credit Bank.......................................... 6.200 05/01 2,000,000
1,000,000 Federal Farm Credit Bank (a)...................................... 5.980 05/23 997,025
1,000,000 Federal Farm Credit Bank.......................................... 6.524 05/25 1,003,468
1,335,000 Federal Home Loan Bank............................................ 6.170 06/26 1,342,885
500,000 Federal Home Loan Bank............................................ 6.900 10/25 494,751
------------
13,838,349
CERTIFICATE OF DEPOSIT (3.3%)
5,000,000 First Alabama Bank, Montgomery.................................... 6.230 04/24 5,000,091
66,983 State Street Bank & Trust Co., Boston, MA......................... 3.250 02/28/96 66,983
------------
5,067,074
------------
TOTAL INVESTMENTS (99.7%)......................................... 154,828,799
CASH AND OTHER ASSETS, LESS LIABILITIES (0.3%).................... 419,078
------------
NET ASSETS (100.0%)............................................... $155,247,877
============
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS:
(a) Short term floating rate security. Rate shown is the effective interest rate
at March 31, 1995. The date shown represents the next interest rate change
date.
(b) Interest rates represent annualized yield to date of maturity.
(c) For each security, cost (for financial reporting and federal income tax
purposes) and carrying value are the same.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
BOARD
OF TRUSTEES
Philip M. Burno
Chairman
Steven R. Becker
Charles V. Doherty
Joel D. Gingiss
Patrick B. Long
Eustace K. Shaw
This brochure must
be preceded or
accompanied by
a current
prospectus of
the Wayne Hummer
Money Fund Trust.
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION:
Wayne Hummer Money Fund Trust (the "Trust") is organized as an unincorporated
business trust under the laws of Massachusetts. It commenced investment
operations on April 2, 1982. The Trust may issue an unlimited number of full
and fractional units of beneficial interest ("Shares") without par value in
one or more series ("Portfolios"). At March 31, 1995, Shares of only one
series were outstanding.
1. SIGNIFICANT ACCOUNTING POLICIES
SECURITY VALUATION
Investments are stated at value. The Trust utilizes the amortized cost method
to determine value. In the event that a deviation of 1/2 of 1% or more exists
between a Portfolios' $1.00 per Share net asset value and the net asset value
as calculated by valuing the Portfolio securities based upon market
quotations, if available, or otherwise based upon a matrix system approved by
the Board of Trustees, or if there is any other deviation which the Trust
believes would result in a material dilution to Shareholders or purchasers,
the Board of Trustees of the Trust promptly will consider what action should
be taken.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the trade date. Investment income
is recorded on the accrual basis and includes amortization of premium and
discount on investments.
2. TRUST SHARE VALUATION AND DIVIDENDS TO SHAREHOLDERS
Trust Shares are sold and redeemed on a continuous basis at net asset value.
Net asset value per Share is determined on each day the New York Stock
Exchange is open for trading as of the close of trading on the Exchange and
at 3:00 p.m. Chicago time on each other day during which there is a
sufficient degree of trading in securities of the Trust's Portfolio so as to
affect materially the net asset value of the Shares by dividing the value of
net assets (total assets less liabilities) by the total number of Shares
outstanding. Dividends are declared daily and distributed monthly in the form
of additional Shares at net asset value unless the Shareholder elects to have
dividends paid in cash, in which case they are credited monthly to the
Shareholder's brokerage account with Wayne Hummer & Co.
3. FEDERAL INCOME TAXES
It is the Trust's policy to comply with the special provisions of the
Internal Revenue Code available to investment companies and, in the manner
provided therein, to distribute all of its taxable income, as well as any net
realized gain on sales of investments. Such provisions were complied with and
therefore no federal income tax provision is required.
4. TRANSACTIONS WITH AFFILIATES
The Trust has an Investment Advisory and Management Agreement and a Portfolio
Accounting Services Agreement with Wayne Hummer Management Company
("Investment Adviser"), and a Distribution Agreement and a Shareholder
Service Agreement with Wayne Hummer & Co ("Distributor and Shareholder
Service Agent"). The shareholders of the Investment Adviser are the general
partners of the Distributor and Shareholder Service Agent. For advisory and
management services and facilities furnished, the Trust pays fees on a
declining annual basis ranging from .50 of 1% on the first $500 million of
average daily net assets to .275 of 1% of average daily net assets in excess
of $2.5 billion. The Investment Adviser is obligated to reimburse the Trust
to the extent that the Trust's ordinary operating expenses, including the fee
of the Investment Adviser, exceed 1% of average daily net assets on an annual
basis. During the year ended March 31, 1995, the Trust incurred management
fees of $736,790.
For portfolio accounting services, the Trust pays the Investment Adviser a
fee based on the level of average daily net assets plus out-of-pocket
expenses. The Trust reimburses the Shareholder Service Agent for the
approximate cost of processing Trust Share transactions and maintaining
Shareholder accounts.
Certain trustees of the Trust are also officers or directors of the
Investment Adviser or partners of the Distributor and Shareholder Service
Agent. During the year ended March 31, 1995, the Trust made no direct
payments to its officers and incurred trustee fees for its unaffiliated
trustees of $16,608.
During the year ended March 31, 1995, the Trust sold two securities at
amortized cost to Wayne Hummer & Co. in an affiliated party transaction
sanctioned by the Securities and Exchange Commission. The excess of the
amortized cost over the market value on the date of the transaction is shown
as a capital contribution to the Trust.
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Wayne Hummer Money Fund Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Wayne Hummer Money Fund Trust as of March 31,
1995, and the related statements of operations for the year then ended and
changes in net assets for each of the two years in the period then ended, and
financial highlights for each of the fiscal years since 1991. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
March 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Wayne
Hummer Money Fund Trust as of March 31, 1995, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the periods then ended, and financial highlights for each of the fiscal years
since 1991, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Chicago, Illinois
April 28, 1995
WAYNE HUMMER LOGO
300 South Wacker 200 E. Washington Street
Chicago, Illinois Appleton, Wisconsin
60606 54911
1 800 621 4477 (toll-free) 1 800 678 0633 (toll-free)
(312) 431 1700 (local) (414) 734 1474 (local)
<PAGE>
PART C
WAYNE HUMMER MONEY FUND TRUST
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Index to Financial Statements and Supporting Schedules:
1. Included in Part A of this Registration Statement:
(i) Condensed Financial Information - Per Share Income and
Capital Changes.
2. Included in Part B of this Registration Statement through
incorporation by reference to the financial statements in the
Fund's annual report to Shareholders for the fiscal year ended
March 31, 1995:
(i) Report of Independent Auditors
(ii) Statement of Assets and Liabilities at March 31, 1995
(iii) Statement of Operations for the year ended March 31, 1995
(iv) Statement of Changes in Net Assets for the years ended
March 31, 1995 and 1994
(v) Portfolio of Investments at March 31, 1995
(vi) Notes to Financial Statements
3. Included in Part C of this Registration Statement:
(i) Schedule I has been omitted as the required information is
presented in the Portfolio of Investments at March 31,
1995, which is included in Part B.
(ii) Schedules II, III, IV, V, VI and VII are omitted as the
required information is not present.
C-1
<PAGE>
(b) Exhibits:
*1. Declaration of Trust 1/
-
*1(a). Amendment to Agreement and Declaration of Trust, dated
July 12, 1984 2/
-
*2. By-laws 1/
-
*2(a). Amendment to By-laws, dated April 13, 1984 2/
-
*2(b). By-laws, Amended and Restated as of October 10, 1990
3. Not applicable
4. Not applicable
*5. Investment Advisory and Management Agreement 1/
-
*6. Distribution Agreement 1/
-
- -----------------------
* Filed herewith
1/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Pre-Effective Amendment
No. 1, File No. 2-75443, filed on or about March 26, 1982.
2/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 4 filed on or about May 25, 1984.
3/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Registration Statement on
Form N-1 filed on or about December 22, 1981.
4/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 6 filed on or about May 22, 1986.
5/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 8 filed on or about July 29, 1988.
C-2
<PAGE>
7. Not applicable
*8(a). Custodian Agreement 1/
-
*8(b). Amendments to Custodian Agreement 5/
-
*9(a). Shareholder Service Agreement 1/
-
*9(a)(i). Revised Schedule A to Shareholder Service Agreement,
effective November 1, 1985 4/
-
*9(b). Transfer and Dividend Crediting Agency Agreement 1/
-
*9(c). Trade Name and Service Mark License Agreement 3/
-
*9(d). Portfolio Accounting Services Agreement
10. Not applicable
- -----------------------
* Filed herewith
1/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Pre-Effective Amendment
No. 1, File No. 2-75443, filed on or about March 26, 1982.
2/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 4 filed on or about May 25, 1984.
3/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Registration Statement on
Form N-1 filed on or about December 22, 1981.
4/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 6 filed on or about May 22, 1986.
5/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 8 filed on or about July 29, 1988.
6/ Electronically
- -
C-3
<PAGE>
filed with EDGAR Filing of Post-Effective Amendment No. 16 on or about
July 27, 1995. Initially filed with Post-Effective Amendment No. 10 filed
on or about July 31, 1990.
C-4
<PAGE>
*11(a) Consent of Ernst & Young LLP
*11(b) Representation of Vedder, Price, Kaufman & Kammholz
12. Not applicable
*13. Investment Letter from Wayne Hummer Management Company
to the Trust 1/
-
*14(a). IRA Prototype Plan and Documents 6/
-
*14(b). SEP Prototype Plan and Documents 6/
-
*14(c). Defined Contribution Prototype Plans and Documents 6/
-
15. Not applicable
*16. Computation of Performance Quotations 5/
-
*27. Financial Data Schedule
- -----------------------
* Filed herewith
1/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Pre-Effective Amendment
No. 1, File No. 2-75443, filed on or about March 26, 1982.
2/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 4 filed on or about May 25, 1984.
3/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Registration Statement on
Form N-1 filed on or about December 22, 1981.
4/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 6 filed on or about May 22, 1986.
5/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 8 filed on or about July 29, 1988.
6/ Electronically filed with
- -
C-5
<PAGE>
EDGAR Filing of Post-Effective Amendment No. 16 on or about July 27, 1995.
Initially filed with Post-Effective Amendment No. 10 filed on or about July
31, 1990.
C-6
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------
Not applicable.
Item 26. Number of Holders of Securities
-------------------------------
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Money Market Portfolio Shares............. 13,001
</TABLE>
(Information supplied as of May 31, 1995)
Item 27. Indemnification
---------------
The information required by this item is incorporated herein by reference
to (a) Item 4 of Part II of Pre-Effective Amendment No. 1 and (b) Item 10 of
Part II of Post-Effective Amendment No. 1, and (c) Item 4 of Part II of
Post-Effective Amendment No. 3 to the Form N-1 Registration Statement for Wayne
Hummer Money Fund Trust, File No. 2-75443, filed on or about March 26, 1982,
April 20, 1982 and May 24, 1983 respectively.
Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
Wayne Hummer Management Company, Registrant's investment adviser and
portfolio accounting agent, is a corporation organized under the laws of
Illinois on November 30, 1981. Wayne Hummer Management Company also acts as
investment adviser and portfolio accounting agent to Wayne Hummer Investment
Trust, a registered investment company, and as investment adviser to individual,
fiduciary and corporate clients. Set forth below is information as to any other
business, vocation or employment of a substantial nature in which each director
or officer of the Registrant's investment adviser is, or at any time during the
past two fiscal years has been, engaged for his own account or in the capacity
of director, officer, employee, partner or trustee:
C-7
<PAGE>
<TABLE>
<S> <C> <C>
Harry Flagg Baum, Wayne Hummer & Co., General Partner
Director securities bro-
kerage firm
Steven R. Becker, Wayne Hummer & Co., General Partner
Director securities bro-
kerage firm
Wayne Hummer Investment Trustee
Trust, registered
investment company
Registrant Trustee
G. Ted Becker, Wayne Hummer & Co., General Partner
Treasurer securities brokerage
firm
Alan W. Bird Wayne Hummer & Co., General Partner
President securities brokerage
firm
Wayne Hummer Investment President
Trust, registered
investment company
Registrant Vice President
Philip M. Burno, Wayne Hummer & Co., General Partner
Director securities bro-
kerage firm
Wayne Hummer Investment Chairman of the
Trust, registered Board of Trustees
investment company
Registrant Chairman of the
Board of Trustees
Philip Wayne Wayne Hummer & Co., General Partner
Hummer, securities bro-
Executive Vice- kerage firm
President and
Director
David P. Poitras Wayne Hummer & Co., General Partner
Vice President securities brokerage
firm
Registrant President
Wayne Hummer Investment Vice President
Trust, registered
</TABLE>
C-8
<PAGE>
<TABLE>
<CAPTION>
Name and Posi-
tion with In- Name of Company and/or
vestment Adviser Principal Business Capacity
- ---------------- ---------------------- --------
<S> <C> <C>
investment company
William A. Rogers, Wayne Hummer & Co., General Partner
Secretary securities bro-
and Director kerage firm
Thomas J. Rowland, Wayne Hummer & Co., General Partner
Vice President securities brokerage
firm
Wayne Hummer Investment Vice President
Trust, registered
investment company
</TABLE>
The principal business address of each company or other entity named above
is 300 South Wacker Drive, Chicago, Illinois 60606.
Item 29. Principal Underwriter
---------------------
(a) Wayne Hummer & Co., the Registrant's distributor, also acts as
distributor of Wayne Hummer Investment Trust.
(b) The partners of Wayne Hummer & Co. are:
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Wayne Hummer & Co. with Registrant
- ---- ----------------------- ---------------------
<S> <C> <C>
William B. General Partner None
Hummer
Philip Wayne General Partner None
Hummer
Harry Flagg General Partner None
Baum
John D. Limited Partner None
Carroll
Robert H. Limited Partner None
Chase
</TABLE>
C-9
<PAGE>
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Wayne Hummer & Co. with Registrant
- ---- ----------------------- ---------------------
<S> <C> <C>
William A. General Partner None
Rogers
Robert F. General Partner None
Kahlfeldt
Philip M. General Partner Chairman of
Burno the Board of
Trustees
Joseph A. General Partner None
Piekarczyk
G. Ted General Partner None
Becker
Steven R. General Partner Trustee
Becker
W. Douglas General Partner None
Carroll
Richard J. General Partner None
Kosarek
Raymond L. General Partner None
Kratzer
Jean E. General Partner None
Williams
Alan W. Bird General Partner Vice President
George E. Barnes Limited Partner None
Family Trust
Thomas J. Rowland General Partner None
Linda C. Becker General Partner None
Laura A. Kogut General Partner None
David P. Poitras General Partner President
Richard Wholey, Jr. General Partner None
Peder H. Culver General Partner None
Daniel G. Hack General Partner None
Ronald A. Tyrpin General Partner None
</TABLE>
C-10
<PAGE>
The principal business address of each person listed above is 300 South
Wacker Drive, Chicago, Illinois 60606. George E. Barnes, grantor of the Family
Trust, was a founding partner of Wayne Hummer & Co. and was a General Partner
until April, 1986. Mr. Barnes's address is 5864 Glen Eagle Way, Stuart, Florida
34997. John D. Carroll, whose address is 904 El Rancho, Sun City Center,
Florida 33570, was a General Partner until December, 1989 and Robert H. Chase,
whose address is 1246 Nicolet Circle, Appleton, Wisconsin 54915, was a General
Partner until December, 1991.
(c) Not applicable.
Item 30. Location of Accounts and Records
--------------------------------
All accounts, books and other documents required to be maintained pursuant
to Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder are in the physical possession of Registrant's investment adviser,
Wayne Hummer Management Company; Registrant's shareholder service agent, Wayne
Hummer & Co.; and Registrant's transfer agent and custodian, State Street Bank
and Trust Company. The address of Wayne Hummer Management Company and of Wayne
Hummer & Co. is 300 South Wacker Drive, Chicago, Illinois 60606. The address of
State Street Bank and Trust Company is 225 Franklin Street, Boston,
Massachusetts 02110.
Item 31. Management Services
-------------------
Not Applicable.
Item 32. Undertakings
------------
(a) The Registrant undertakes to comply with the last three paragraphs of
Section 16(c) of the Investment Company Act of 1940 as though such
provisions of the Act were applicable to Registrant.
C-11
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant represents (1) that it meets all
of the requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement on Form N-1A pursuant to Rule 485(b) under the Securities
Act of 1933, and (2) that it has duly caused this Post-Effective Amendment to
the Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago and State of
Illinois on the 26th day of July, 1995.
WAYNE HUMMER MONEY FUND TRUST
By: /s/ David P. Poitras
-------------------------------
David P. Poitras, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on July 26, 1995 on behalf
of the following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ David P. Poitras President
- ----------------------------
David P. Poitras
/s/ Jean M. Watts Treasurer
- ----------------------------
Jean M. Watts
/s/ Steven R. Becker Trustee
- ----------------------------
Steven R. Becker
/s/ Philip M. Burno Trustee
- ----------------------------
Philip M. Burno
/s/ Joel D. Gingiss Trustee
- ----------------------------
Joel D. Gingiss
/s/ Patrick B. Long Trustee
- ----------------------------
Patrick B. Long
/s/ Eustace K. Shaw Trustee
- ----------------------------
Eustace K. Shaw
/s/ Charles V. Doherty Trustee
- ----------------------------
Charles V. Doherty
</TABLE>
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Sequentially
Exhibits Numbered Page
- -------- -------------
<C> <S> <C>
*1. Declaration of Trust 1/
-
*1(a). Amendment to Agreement and Declaration of Trust, dated July 12,
1984 2/
-
*2. By-laws 1/
-
*2(a). Amendment to By-laws, dated April 13, 1984 2/
-
*2(b). By-laws, Amended and Restated as of October 10, 1990
3. Not applicable
</TABLE>
- -----------------------
* Filed herewith
1/ Electronically filed with EDGAR Filing of Post-Effective Amendment No.
- - 16 on or about July 27, 1995. Initially filed with Pre-Effective
Amendment No. 1, File No. 2-75443, filed on or about March 26, 1982.
2/ Electronically filed with EDGAR Filing of Post-Effective Amendment No.
- - 16 on or about July 27, 1995. Initially filed with Post-Effective
Amendment No. 4 filed on or about May 25, 1984.
3/ Electronically filed with EDGAR Filing of Post-Effective Amendment No.
- - 16 on or about July 27, 1995. Initially filed with Registration
Statement on Form N-1 filed on or about December 22, 1981.
4/ Electronically filed with EDGAR Filing of Post-Effective Amendment No.
- - 16 on or about July 27, 1995. Initially filed with Post-Effective
Amendment No. 6 filed on or about May 22, 1986.
5/ Electronically filed with EDGAR Filing of Post-Effective Amendment No.
- - 16 on or about July 27, 1995. Initially filed with Post-Effective
Amendment No. 8 filed on or about July 29, 1988.
6/ Electronically filed with EDGAR Filing of Post-Effective Amendment No.
- - 16 on or about July 27, 1995. Initially filed with Post-Effective
Amendment No. 10 filed on or about July 31, 1990.
C-13
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibits Numbered Page
- -------- -------------
<C> <S> <C>
4. Not applicable
*5. Investment Advisory and
Management Agreement 1/
-
*6. Distribution Agreement 1/
-
7. Not applicable
*8(a). Custodian Agreement 1/
-
*8(b). Amendments to Custodian Agreement 5/
-
*9(a). Shareholder Service Agreement 1/
-
</TABLE>
- -----------------------
* Filed herewith
1/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Pre-Effective Amendment
No. 1, File No. 2-75443, filed on or about March 26, 1982.
2/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 4 filed on or about May 25, 1984.
3/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Registration Statement on
Form N-1 filed on or about December 22, 1981.
4/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 6 filed on or about May 22, 1986.
5/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 8 filed on or about July 29, 1988.
6/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 10 filed on or about July 31, 1990.
C-14
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibits Numbered Page
- -------- -------------
<C> <S> <C>
*9(a)(i). Revised Schedule A to
Shareholder Service Agreement,
effective November 1, 1985 4/
-
*9(b). Transfer and Dividend
Crediting Agency Agreement 1/
-
*9(c). Trade Name and Service Mark
License Agreement 3/
-
*9(d). Portfolio Accounting Services
Agreement
10. Not applicable
</TABLE>
- -----------------------
* Filed herewith
1/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Pre-Effective Amendment
No. 1, File No. 2-75443, filed on or about March 26, 1982.
2/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 4 filed on or about May 25, 1984.
3/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Registration Statement on
Form N-1 filed on or about December 22, 1981.
4/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 6 filed on or about May 22, 1986.
5/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 8 filed on or about July 29, 1988.
6/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 10 filed on or about July 31, 1990.
C-15
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibits Numbered Page
- -------- -------------
<C> <S> <C>
*11.(a) Consent of Ernst & Young LLP
*11.(b) Representation of Vedder, Price,
Kaufman & Kammholz
12. Not applicable
*13. Investment Letter from Wayne Hummer
Management Company to the Trust 1/
-
*14(a). IRA Prototype Plan and Documents 6/
-
*14(b). SEP Prototype Plan and Documents 6/
-
*14(c). Defined Contribution Prototype Plans
and Documents 6/
-
15. Not applicable
*16. Computation of Performance Quotations 5/
-
*27. Financial Data Schedule
</TABLE>
- -----------------------
* Filed herewith
1/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Pre-Effective Amendment
No. 1, File No. 2-75443, filed on or about March 26, 1982.
2/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 4 filed on or about May 25, 1984.
3/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Registration Statement on
Form N-1 filed on or about December 22, 1981.
4/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 6 filed on or about May 22, 1986.
5/ Electronically filed with EDGAR Filing of Post-Effective Amendment No. 16
- - on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 8 filed on or about July 29, 1988.
6/ Electronically filed
- -
C-16
<PAGE>
with EDGAR Filing of Post-Effective Amendment No. 16
on or about July 27, 1995. Initially filed with Post-Effective Amendment
No. 10 filed on or about July 31, 1990.
C-17
<PAGE>
EXHIBIT 1
WAYNE HUMMER MONEY FUND TRUST
---------------------
AGREEMENT AND DECLARATION OF TRUST
---------------------
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this
4th day of December, 1981, by the Trustees hereunder, and by the holders of
shares of beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands 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, 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
- ----
Section 1. This Trust shall be known as the "Wayne Hummer Money Fund
Trust" 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.
<PAGE>
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;
(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 of Shares is authorized by the
Trustees, the equal proportionate transferable units into which each series of
Shares 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
the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment", "Commission",
"Interested Person", "Principal Underwriter" and "Majority Shareholder Vote"
(the 67% or 50% requirement of the third sentence of Section 2(a)(42) of the
1940 Act, whichever may be applicable) 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; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time.
ARTICLE II
Purpose
-------
The purpose of the Trust is to provide investors a managed investment
portfolio consisting primarily of securities, including debt instruments or
obligations.
-2-
<PAGE>
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. Each series
shall be preferred over all other series in respect of the assets allocated to
that series. The beneficial interest in each series shall at all times be
divided into Shares, without par value, each of which shall represent an equal
proportionate interest in the series with each other Share of the same series,
none having priority or preference over another. 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 into a greater or lesser number without thereby changing
the proportionate beneficial interests in the series.
Ownership of Shares
- -------------------
Section 2. The ownership 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 and as to the number of Shares of
each series held from time to time by each Shareholder.
Investments in the Trust; Assets of the Series
- ----------------------------------------------
Section 3. The Trustees may accept investments in the Trust from 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 each 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
-3-
<PAGE>
be, shall irrevocably belong to the series of Shares with respect to which the
same were received by the Trust 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.
No Preemptive Rights
- --------------------
Section 4. Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.
Status of Shares and Limitation of Personal Liability
- -----------------------------------------------------
Section 5. 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.
ARTICLE IV
The Trustees
------------
Election
- --------
Section 1. In each year beginning 1983, at the annual meeting of
Shareholders or at any special meeting held in lieu thereof, or at any special
meeting held before 1983, the Shareholders shall elect a Board of not less than
three nor more than fifteen Trustees, each of whom shall serve until the next
annual meeting or special meeting in lieu thereof and until the election and
qualification of his or her successor, or until he or she sooner dies, resigns
or is
-4-
<PAGE>
removed. The number of Trustees to be so elected each year shall be fixed by the
Trustees in advance of the giving of notice of the meeting at which Trustees are
to be elected for such year, or if not so fixed, by vote of the Shareholders at
such meeting. The number of Trustees so fixed may be increased either by the
Shareholders or by the Trustees by a vote of a majority of the Trustees then in
office. The number of Trustees so fixed may be decreased either by the
Shareholders or by the Trustees by vote of a majority of the Trustees then in
office, but only to eliminate vacancies existing by reason of the death,
resignation or removal of one or more Trustees. The initial Trustees, each of
whom shall serve until the first meeting of Shareholders at which Trustees are
elected and until his or her successor is elected and qualified, or until he or
she sooner dies, resigns or is removed shall be Philip M. Burno and such other
persons as the Trustee or Trustees then in office shall, prior to any sale of
Shares pursuant to public offering, appoint. By vote of the Shareholders holding
a majority of the Shares entitled to vote, the Shareholders may remove a Trustee
with or without cause. By vote of a majority of the Trustees then in office, the
Trustees may remove a Trustee for cause. Any Trustee may but need not be a
Shareholder.
Effect of Death, Resignation, etc. of a Trustee
- -----------------------------------------------
Section 2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
Powers
- ------
Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may fill vacancies in their number,
including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may 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
-5-
<PAGE>
the Trustees may determine; they may appoint an advisory board, the members of
which shall not be Trustees and need not be Shareholders; they may employ one or
more investment advisers or managers as provided in Section 7 of this Article
IV; they may employ one or more custodians of the assets of the Trust and may
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.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) 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;
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) 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;
(f) To allocate assets, liabilities and expenses of the Trust to a
particular series of Shares or to apportion the same among two or more series;
-6-
<PAGE>
(g) 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;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection
to deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but not
limited to claims for taxes;
(j) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(k) To borrow funds;
(1) 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;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, 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,
-7-
<PAGE>
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
(n) 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 be 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 by Trust
- ----------------------------
Section 4. 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.
Section 5. 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 of the Trust's custodian or transfer or shareholder service or
-8-
<PAGE>
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 6. Title to all of the assets of the Trust shall at all times be
considered as vested in the Trustees.
Advisory, Management and Distribution
- -------------------------------------
Section 7. Subject to a favorable Majority Shareholder Vote, the Trustees
may, at any time and from time-to time, contract for exclusive or nonexclusive
advisory and/or management services with Wayne Hummer Management Company (the
"Advisor"), an Illinois corporation, and/or any other 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
the Trust shall be held uninvested and to make changes in the Trust's
investments. The Trustees may also, at any time and from time to time, contract
with the Advisor and/or any other 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:
(i) 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
-9-
<PAGE>
organization, or any parent or affiliate thereof, is a Shareholder or has
an interest in the Trust, or that
(ii) any corporation, trust, association or other organization with
which an 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. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (ii) with
respect to any investment advisor or manager as provided in Article IV, Section
7, (iii) with respect to any termination of the Trust to the extent and as
provided in Article IX, Section 4, (iv) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX, Section 7, (v)
to the same extent as the stockholders of a Massachusetts business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by law, this Declaration of Trust, the By-Laws
or any registration of the Trust with the 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. On any matter submitted to a vote of Shareholders
all Shares of the Trust then entitled to vote, irrespective of series,
-10-
<PAGE>
shall be voted in the aggregate and not by series, except (1) when required by
the 1940 Act, Shares shall be voted by individual series, in which event, unless
otherwise required by the 1940 Act, a vote of Shareholders of all shares of the
Trust, irrespective of series, shall not be required; and (2) when the Trustees
have determined that the matter affects only the interests of one or more
series, then only Shareholders of the such series 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 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.
Voting Power and Meetings
- -------------------------
Section 2. There shall be an annual meeting of the Shareholders on the date
fixed in the By-Laws at the principal office 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. In the event
that such meeting is not held in any year on the date fixed in the By-Laws,
whether the omission be by oversight or otherwise, a subsequent special meeting
may be called and held in lieu of the annual meeting with the same force and
effect as though held on such date.
Special meetings may also 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. Special meetings may be called by the Trustees or
such other person or persons as may be specified in the By-Laws and shall be
called by the Trustees or such other person or persons as may be specified in
the By-Laws upon written application by Shareholders holding at least 25% of the
Shares then outstanding requesting a meeting be called for a purpose requiring
-11-
<PAGE>
action by the Shareholders as provided herein or in the By-Laws.
Shareholders shall be entitled to at least seven days' written notice of
any meeting of the Shareholders.
Quorum and Required Vote
- ------------------------
Section 3. A majority of the Shares entitled to vote 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
holders of any series shall vote as a series, then a majority of the aggregate
number of Shares of that series entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that series. 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 this Declaration
of Trust or the By-Laws, a majority of the Shares voted on any matter shall
decide such matter and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any series shall vote as a series, then a majority of the Shares
of that series voted on the matter shall decide that matter insofar as that
series is concerned.
Action by Written Consent
- -------------------------
Section 4. Any action taken by Shareholders may be taken without a meeting
if a majority of Shareholders entitled to vote on the matter (or 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.
-12-
<PAGE>
ARTICLE VI
Distributions, Redemptions and Repurchases,
and Determination of Net Asset Value
-------------------------------------------
Distributions
- -------------
Section 1. The Trustees may, but need not, each year distribute to the
Shareholders of each series such income and gains, accrued or realized, as the
Trustees may determine, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with 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.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which shall be in Shares, 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 one or
more series as of a record date or dates determined by the Trustees, in Shares,
in cash or otherwise, all or part of any gains realized on the sale or
disposition of property of the Trust or otherwise, or all or part of any other
principal of the Trust. 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 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 such distribution paid in Shares will be paid at the net asset
value thereof as determined in accordance with this Declaration of Trust.
Redemptions and Repurchases
- ---------------------------
Section 2. Any holder of Shares of the Trust may by presentation of a
written request, together with his certificates, if any, for such Shares, in
proper form for transfer, at the office of the Trust, the Advisor, the
underwriter or the distributors, or at a principal office of a transfer or
shareholder service agent appointed by the Trust (as the Trustees may
determine), redeem 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 5 of Article VI of this Declaration of Trust.
Upon receipt by the Trust, the Advisor, the underwriter or the distributor,
or the Trust's transfer or shareholder
-13-
<PAGE>
service agent of such written request for redemption of Shares, such Shares
shall be redeemed at the net asset value per share of the particular series next
determined after such Shares are tendered in proper form for transfer to the
Trust or determined as of such other time fixed by the Trustees as may be
permitted or required by the 1940 Act, provided that no such tender shall be
required in the case of Shares for which a certificate or certificates have not
been issued, and in such case such Shares shall be redeemed at the net asset
value per share of the particular series next determined after such demand has
been received or determined at such other time fixed by the Trustees as may be
permitted or required by the 1940 Act.
The obligation of the Trust to redeem its Shares of each series as set
forth above in this Section 2 shall be subject to the conditions that during any
time of emergency, as hereinafter defined, such obligation may be suspended by
the Trust by or under authority of the Trustees for such period or periods
during such time of emergency as shall be determined by or under authority of
the Trustees. If there is such a suspension, any Shareholder may withdraw any
demand for redemption and any tender of Shares which has been received by the
Trust during any such period and any tender of Shares the applicable net asset
value of 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. For the purposes of any such suspension "time of
emergency" shall mean, either with respect to all Shares or any series of
Shares, any period during which:
a. the New York Stock Exchange is closed other than for customary
weekend and holiday closings; or
b. the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations of the
Commission, either that trading on the New York Stock Exchange is
restricted, or that an emergency exists as a result of which (i) disposal
by the Trust of securities owned by it is not reasonably practicable or
(ii) it is not reasonably practicable for the Trust fairly to determine the
current value of its net assets; or
c. The suspension or postponement of such obligations is permitted by
order of the Commission.
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 Trustees may from time to time authorize at a price not exceeding the net
-14-
<PAGE>
asset value of such Shares in effect when the purchase or repurchase or any
contract to purchase or repurchase is made.
Payment in Kind
- ---------------
Section 3. 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.
Additional Provisions Relating to Redemptions and Repurchases
- -------------------------------------------------------------
Section 4. 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 and the Trustees may require that any certificate or certificates
issued by the Trust to evidence the ownership of such Shares shall be
surrendered to the Trustees for cancellation or notation.
Determination of Net Asset Value
- --------------------------------
Section 5. The term "net asset value" of the Shares of each series shall
mean: (i) the value of all the assets of such series; (ii) less total
liabilities of such series; (iii) divided by the number of Shares of such series
outstanding, in each case at the time of each determination. The "number of
Shares of such series outstanding" for the purposes of such computation shall be
exclusive of any Shares of such series to be redeemed, purchased or repurchased
by the Trust and not then redeemed, purchased or repurchased as to which the
price has been determined, but shall include Shares of such series presented for
redemption, purchase or repurchase by the Trust and not then redeemed, purchased
or repurchased as to which the price has not been determined and Shares of such
series the sale of which has been confirmed. Any fractions involved in the
computation of net asset value per share shall be adjusted to the nearer cent
unless the Trustees shall determine to adjust such fractions to a fraction of a
cent.
-15-
<PAGE>
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, and the Trustees shall fix the times as of which the net
asset value of the Shares of each series 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, 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.
In valuing the portfolio investments of any series for determination-of net
asset value per share of such series, securities for which market quotations are
readily available shall be valued at prices which, in the opinion of the
Trustees or any officer, or officers or agent of the Trust designated for the
purpose by the Trustees, most nearly represent the market value of such
securities which may, but need not, be the most recent bid price obtained from
one or more of the market makers for such securities; other securities and
assets shall be valued at fair value as determined by or pursuant to the
direction of the Trustees. Notwithstanding the foregoing, short-term debt
obligations, commercial paper, and repurchase agreements may be, but need not
be, valued on the basis of quoted yields for securities I of comparable
maturity, quality and type, or on the basis of amortized cost. In the
determination of net asset value of any series, dividends receivable and
accounts receivable for investments sold and for Shares sold shall be stated at
the amounts to be received therefor; and income receivable accrued daily on
bonds and notes owned shall be stated at the amount to be received. Any other
assets shall be stated at fair value as determined by the Trustees or such
officer, officers or agent pursuant to the Trustees' authority, except that no
value shall be assigned to good will, furniture, lists, reports, statistics or
other noncurrent assets other than real estate. Liabilities of any series for
accounts payable, for investments purchased and for Shares tendered for
redemption, purchase or repurchase by the Trust and not then redeemed, purchased
or repurchased as to which the price has been determined shall be stated at the
amounts payable therefor. In determining net asset value of any series, the
person or persons making such determination on behalf of the Trust may include
in liabilities such reserves, estimated accrued expenses and contingencies as
such person or persons may in its, his or their best judgment deem fair and
reasonable under the circumstances. Any income dividends and gains distributions
payable by the Trust shall be deducted as of such time or times on the record
date therefor as the Trustees shall determine.
-16-
<PAGE>
The manner of determining the net assets of any series or of determining
the net asset value of the Shares of any series may from time to time be altered
as necessary or desirable in the judgment of the Trustees to conform to any
other method prescribed or permitted by any applicable law or regulation or
generally accepted accounting practice.
Determinations in accordance with Section 5 made in good faith shall be
binding on all parties concerned.
Maintenance of Constant Net Asset Value
- ---------------------------------------
Section 6. The Trust will use its best efforts to maintain the net asset
value per share of each series at $1.00. In the event that the Trust, or any
series, incurs a loss or liability, which the Trustees, in their sole
discretion, determine to be significant with respect to the maintenance by the
Trust of a constant net asset value of $1.00 per share for each series, the
Trustees shall have the power (i) to reduce the number of shares of the Trust,
or the series, as the case may be, by that number of full and fractional shares
which represent the amount of such loss or liability, by reducing the number of
shares in the account of each Shareholder of the Trust or the series, as the
case may be, on a pro rata basis; (ii) to offset the pro rata share of such loss
or liability from the accrued dividend account of each Shareholder of the Trust
or the series, as the case may be, and/or (iii) to cause to be recorded on the
books of the Trust or the series, as the case may be, an asset account in the
amount of any such loss or liability, which account may be reduced by the amount
of dividends declared thereafter upon the shares of the Trust or the series, as
the case may be, outstanding on the day any such loss or liability is incurred,
until such asset account is reduced to zero.
ARTICLE VII
Compensation and Limitation
of Liability of Trustees
---------------------------
Compensation
- ------------
Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
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
-17-
<PAGE>
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, but nothing herein
contained shall protect any Trustee against any liability to which he or she
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any 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 or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
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 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 a Trustee
or officer and against amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Trustee or officer:
(a) against any liability to the Trust or its stockholders 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;
-18-
<PAGE>
(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 interests of the Trust;
(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 Trustee or officer, unless there has been either a
determination that such director or officer 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 hereinafter provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer 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 Trustees and officers may be entitled by
contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in the last paragraph of 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
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<PAGE>
(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 (i) who is not an
"interested person" of the Trust (as defined by the Investment Company Act of
1940) (including anyone who has been exempted from being an "interested person"
by any rule, regulation or order of the Securities and Exchange Commission), and
(ii) against whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is then or has
been pending.
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,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
ARTICLE IX
Miscellaneous
-------------
Trustees, Shareholders, etc. Not Personally Liable; Notice
- ----------------------------------------------------------
Section 1. All persons extending credit to, contracting with or having any
claim against the Trust shall look only to the assets of the Trust 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. 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 Trustees.
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 The Commonwealth of
Massachusetts and shall recite that the same was executed
-20-
<PAGE>
or made by or on behalf of the Trust or 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, and may contain such
further recital as he or she 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.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
- -------------------------------------------------------------
Section 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her 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 shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. 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 3. 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.
Duration and Termination of Trust
- ---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares entitled to vote or by
the Trustees by written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least a majority of
the Shares of such series entitled to vote or by the Trustees by written notice
to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares, after
paying or otherwise providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated, of the particular series as may be
determined by the Trustees, the Trust shall in accordance
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<PAGE>
with such procedures as the Trustees consider appropriate reduce the remaining
assets to distributable form in cash or shares or other securities, or any
combination thereof, and distribute the proceeds to the Shareholders of the
series involved, ratably according to the number of Shares of such series held
by the several Shareholders of such series on the date of termination.
Filing of Copies, References, Headings
- --------------------------------------
Section 5. 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 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 an 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 6. 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 7. 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 a majority of the Shares entitled to
vote, except that an amendment which shall affect the
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<PAGE>
holders of one or more series of Shares but not the holders of all outstanding
series shall be authorized by vote of the Shareholders holding a majority of the
Shares entitled to vote of each series affected and no vote of Shareholders of a
series 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 defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
in the City of Boston, Massachusetts for himself and his assigns, as of the day
and year first above written.
/s/ PHILIP M. BURNO
----------------------------------------
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<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston December 4, 1981
Then personally appeared the above-named Philip M. Burno and acknowledged
the foregoing instrument to his free act and deed, before me,
/s/ DEBRA DI TOCCO
---------------------------------------
Notary Public
My commission expires:
(Notary's Seal)
<PAGE>
WAYNE HUMMER MONEY FUND TRUST
--------------------------
AGREEMENT AND DECLARATION OF TRUST
(As amended through February 23, 1982)
--------------------------
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this 4th
day of December, 1981, by the Trustees hereunder, and by the holders of shares
of beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands 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, 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
- ----
Section 1. This Trust shall be known as the "Wayne Hummer Money Fund
Trust" 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.
<PAGE>
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;
(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 of Shares is authorized by
the Trustees, the equal proportionate transferable units into which each
series of Shares 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
the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment", "Commission",
"Interested Person", "Principal Underwriter" and "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section 2(a)(42)
of the 1940 Act, whichever may be applicable) 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; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
Purpose
-------
The purpose of the Trust is to provide investors a managed investment
portfolio consisting primarily of securities, including debt instruments or
obligations.
-2-
<PAGE>
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. Each series shall be
preferred over all other series in respect of the assets allocated to that
series. The beneficial interest in each series shall at all times be divided
into Shares, without par value, each of which shall represent an equal
proportionate interest in the series with each other Share of the same series,
none having priority or preference over another. 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 into a greater or lesser number without thereby changing
the proportionate beneficial interests in the series.
Ownership of Shares
- -------------------
Section 2. The ownership 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 and as to the number of Shares of each series held
from time to time by each Shareholder.
Investments in the Trust; Assets of the Series
- ----------------------------------------------
Section 3. The Trustees may accept investments in the Trust from 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
each 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
-3-
<PAGE>
be, shall irrevocably belong to the series of Shares with respect to which the
same were received by the Trust 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.
No Preemptive Rights
- --------------------
Section 4. Shareholders shall have no preemptive or other right to receive,
purchase or subscribe for any additional Shares or other securities issued by
the Trust.
Status of Shares and Limitation of Personal Liability
- -----------------------------------------------------
Section 5. 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.
ARTICLE IV
The Trustees
------------
Election
- --------
Section 1. In each year beginning 1983, at the annual meeting of
Shareholders or at any special meeting held in lieu thereof, or at any special
meeting held before 1983, the Shareholders shall elect a Board of not less than
three nor more than fifteen Trustees, each of whom shall serve until the next
annual meeting or special meeting in lieu thereof and until the election and
qualification of his or her successor, or until he or she sooner dies, resigns
or is
-4-
<PAGE>
removed. The number of Trustees to be so elected each year shall be fixed by the
Trustees in advance of the giving of notice of the meeting at which Trustees are
to be elected for such year, or if not so fixed, by vote of the Shareholders at
such meeting. The number of Trustees so fixed may be increased either by the
Shareholders or by the Trustees by a vote of a majority of the Trustees then in
office. The number of Trustees so fixed may be decreased either by the
Shareholders or by the Trustees by vote of a majority of the Trustees then in
office, but only to eliminate vacancies existing by reason of the death,
resignation or removal of one or more Trustees. The initial Trustees, each of
whom shall serve until the first meeting of Shareholders at which Trustees are
elected and until his or her successor is elected and qualified, or until he or
she sooner dies, resigns or is removed shall be Philip M. Burno and such other
persons as the Trustee or Trustees then in office shall, prior to any sale of
Shares pursuant to public offering, appoint. By vote of the Shareholders holding
a majority of the Shares entitled to vote, the Shareholders may remove a Trustee
with or without cause. By vote of a majority of the Trustees then in office, the
Trustees may remove a Trustee for cause. Any Trustee may but need not be a
Shareholder.
Effect of Death, Resignation, etc. of a Trustee
- -----------------------------------------------
Section 2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
Powers
- ------
Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may 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
Investment Company Act of 1940, and may elect and remove such officers and
appoint and terminate such agents as they consider appropriate; they may appoint
from their own number, and terminate, any one or more committees consisting of
two or more Trustees, including an executive committee
-5-
<PAGE>
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; they may
appoint an advisory board, the members of which shall not be Trustees and need
not be Shareholders; they may employ one or more investment advisers or managers
as provided in Section 7 of this Article IV; they may employ one or more
custodians of the assets of the Trust and may 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.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) 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;
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) 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;
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<PAGE>
(f) To allocate assets, liabilities and expenses of the Trust to a
particular series of Shares or to apportion the same among two or more
series;
(g) 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;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of
the expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but not limited
to claims for taxes;
(j) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(k) To borrow funds;
(1) 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;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or managers,
principal underwriters, or independent contractors of the Trust individually
against all claims and
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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
(n) 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 be 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 by Trust
- ----------------------------
Section 4. 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.
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Section 5. 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 of 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 6. Title to all of the assets of the Trust shall at all times be
considered as vested in the Trustees.
Advisors, Management and Distribution
- -------------------------------------
Section 7. Subject to a favorable Majority Shareholder Vote, the Trustees
may, at any time and from time to time, contract for exclusive or nonexclusive
advisory and/or management services with Wayne Hummer Management Company (the
"Advisor"), an Illinois corporation, and/or any other 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
the Trust shall be held uninvested and to make changes in the Trust's
investments. The Trustees may also, at any time and from time to time, contract
with the Advisor and/or any other 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:
(i) 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
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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
(ii) 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. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (ii) with
respect to any investment advisor or manager as provided in Article IV, Section
7, (iii) with respect to any termination of the Trust to the extent and as
provided in Article IX, Section 4, (iv) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX, Section 7, (v)
to the same extent as the stockholders of a Massachusetts business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by law, this Declaration of Trust, the By-Laws
or any registration of the Trust with the Commission (or any successor agency)
or any state, or as the Trustees may consider necessary or desirable.
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<PAGE>
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. On any matter submitted to a vote of Shareholders
all Shares of the Trust then entitled to vote, irrespective of series, shall be
voted in the aggregate and not by series, except (1) when required by the 1940
Act, Shares shall be voted by individual series, in which event, unless
otherwise required by the 1940 Act, a vote of Shareholders of all shares of the
Trust, irrespective of series, shall not be required; and (2) when the Trustees
have determined that the matter affects only the interests of one or more
series, then only Shareholders of the such series 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 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.
Voting Power and Meetings
-------------------------
Section 2. There shall be an annual meeting of the Shareholders on the
date fixed in the By-Laws at the principal office 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. In the
event that such meeting is not held in any year on the date fixed in the By-
Laws, whether the omission be by oversight or otherwise, a subsequent special
meeting may be called and held in lieu of the annual meeting with the same force
and effect as though held on such date.
Special meetings may also 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. Special meetings may be called by the Trustees or
such other person or persons as may be specified in the By-Laws and shall be
called by the
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Trustees or such other person or persons as may be specified in the By-Laws upon
written application by Shareholders holding at least 25% of the Shares then
outstanding requesting a meeting be called for a purpose requiring action by the
Shareholders as provided herein or in the By-Laws.
Shareholders shall be entitled to at least seven days' written notice of
any meeting of the Shareholders.
Quorum and Required Vote
- ------------------------
Section 3. A majority of the Shares entitled to vote 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
holders of any series shall vote as a series, then a majority of the aggregate
number of Shares of that series entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that series. 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 this Declaration
of Trust or the By-Laws, a majority of the Shares voted on any matter shall
decide such matter and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any series shall vote as a series, then a majority of the Shares
of that series voted on the matter shall decide that matter insofar as that
series is concerned.
Action by Written Consent
- -------------------------
Section 4. Any action taken by Shareholders may be taken without a meeting
if a majority of Shareholders entitled to vote on the matter (or 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.
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ARTICLE VI
Distributions, Redemptions and Repurchases,
and Determination of Net Asset Value
-------------------------------------------
Distributions
- -------------
Section 1. The Trustees may, but need not, each year distribute to the
Shareholders of each series such income and gains, accrued or realized, as the
Trustees may determine, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with 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.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which shall be in Shares, 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 one or
more series as of a record date or dates determined by the Trustees, in Shares,
in cash or otherwise, all or part of any gains realized on the sale or
disposition of property of the Trust or otherwise, or all or part of any other
principal of the Trust. 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 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 such distribution paid in Shares will be paid at the net asset
value thereof as determined in accordance with this Declaration of Trust.
Redemptions and Repurchases
- ---------------------------
Section 2. Any holder of Shares of the Trust may by presentation of a
written request, together with his certificates, if any, for such Shares, in
proper form for transfer, at the office of the Trust, the Advisor, the
underwriter or the distributors, or at a principal office of a transfer or
shareholder service agent appointed by the Trust (as the Trustees may
determine), redeem 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 5 of Article VI of this Declaration of Trust.
Upon receipt by the Trust, the Advisor, the underwriter or the distributor,
or the Trust's transfer or shareholder
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<PAGE>
service agent of such written request for redemption of Shares, such Shares
shall be redeemed at the net asset value per share of the particular series next
determined after such Shares are tendered in proper form for transfer to the
Trust or determined as of such other time fixed by the Trustees as may be
permitted or required by the 1940 Act, provided that no such tender shall be
required in the case of Shares for which a certificate or certificates have not
been issued, and in such case such Shares shall be redeemed at the net asset
value per share of the particular series next determined after such demand has
been received or determined at such other time fixed by the Trustees as may be
permitted or required by the 1940 Act.
The obligation of the Trust to redeem its Shares of each series as set
forth above in this Section 2 shall be subject to the conditions that during any
time of emergency, as hereinafter defined, such obligation may be suspended by
the Trust by or under authority of the Trustees for such period or periods
during such time of emergency as shall be determined by or under authority of
the Trustees. If there is such a suspension, any Shareholder may withdraw any
demand for redemption and any tender of Shares which has been received by the
Trust during any such period and any tender of Shares the applicable net asset
value of 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. For the purposes of any such suspension "time of
emergency" shall mean, either with respect to all Shares or any series of
Shares, any period during which:
a. the New York Stock Exchange is closed other than for customary
weekend and holiday closings; or
b. the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations of the
Commission, either that trading on the New York Stock Exchange is
restricted, or that an emergency exists as a result of which (i) disposal by
the Trust of securities owned by it is not reasonably practicable or (ii) it
is not reasonably practicable for the Trust fairly to determine the current
value of its net assets; or
c. The suspension or postponement of such obligations is permitted by
order of the Commission.
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 Trustees may from time to time authorize at a price not exceeding the net
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asset value of such Shares in effect when the purchase or repurchase or any
contract to purchase or repurchase is made.
Payment in Kind
- ---------------
Section 3. 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 of
this Declaration of Trust, if at such time such shareholder owns fewer Shares of
a series than, or Shares of a series 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 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 and the Trustees may require that any certificate or
certificates issued by the Trust to evidence the ownership of such Shares shall
be surrendered to the Trustees for cancellation or notation.
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<PAGE>
Determination of Net Asset Value
- --------------------------------
Section 6. The term "net asset value" of the Shares of each series shall
mean: (i) the value of all the assets of such series; (ii) less total
liabilities of such series; (iii) divided by the number of Shares of such series
outstanding, in each case at the time of each determination. The "number of
Shares of such series outstanding" for the purposes of such computation shall be
exclusive of any Shares of such series to be redeemed, purchased or repurchased
by the Trust and not then redeemed, purchased or repurchased as to which the
price has been determined, but shall include Shares of such series presented for
redemption, purchase or repurchase by the Trust and not then redeemed, purchased
or repurchased as to which the price has not been determined and Shares of such
series the sale of which has been confirmed. Any fractions involved in the
computation of net asset value per share shall be adjusted to the nearer cent
unless the Trustees shall determine to adjust such fractions to a fraction of a
cent.
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, and the Trustees shall fix the times as of which the net
asset value of the Shares of each series 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, 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.
In valuing the portfolio investments of any series for determination of net
asset value per share of such series, securities for which market quotations are
readily available shall be valued at prices which, in the opinion of the
Trustees or any officer, or officers or agent of the Trust designated for the
purpose by the Trustees, most nearly represent the market value of such
securities which may, but need not, be the most recent bid price obtained from
one or more of the market makers for such securities; other securities and
assets shall be valued at fair value as determined by or pursuant to the
direction of the Trustees. Notwithstanding the foregoing, short-term debt
obligations, commercial paper, and repurchase agreements may be, but need not
be, valued on the basis of quoted yields for securities of comparable maturity,
quality and type, or on the basis of amortized cost. In the determination of net
asset value of any series, dividends receivable and accounts receivable for
investments sold and for Shares sold shall be stated at the amounts to be
received therefor; and income receivable
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accrued daily on bonds and notes owned shall be stated at the amount to be
received. Any other assets shall be stated at fair value as determined by the
Trustees or such officer, officers or agent pursuant to the Trustees' authority,
except that no value shall be assigned to good will, furniture, lists, reports,
statistics or other noncurrent assets other than real estate. Liabilities of any
series for accounts payable, for investments purchased and for Shares tendered
for redemption, purchase or repurchase by the Trust and not then redeemed,
purchased or repurchased as to which the price has been determined shall be
stated at the amounts payable therefor. In determining net asset value of any
series, the person or persons making such determination on behalf of the Trust
may include in liabilities such reserves, estimated accrued expenses and
contingencies as such person or persons may in its, his or their best judgment
deem fair and reasonable under the circumstances. Any income dividends and gains
distributions payable by the Trust shall be deducted as of such time or times on
the record date therefor as the Trustees shall determine.
The manner of determining the net assets of any series or of
determining the net asset value of the Shares of any series may from time to
time be altered as necessary or desirable in the judgment of the Trustees to
conform to any other method prescribed or permitted by any applicable law or
regulation or generally accepted accounting practice.
Determinations in accordance with Section 6 made in good faith shall
be binding on all parties concerned.
Maintenance of Constant Net Asset Value
- ---------------------------------------
Section 7. The Trust will use its best efforts to maintain the net
asset value per share of each series at $1.00. In the event that the Trust, or
any series, incurs a loss or liability, which the Trustees, in their sole
discretion, determine to be significant with respect to the maintenance by the
Trust of a constant net asset value of S1.00 per share for each series, the
Trustees shall have the power (i) to reduce the number of shares of the Trust,
or the series, as the case may be, by that number of full and fractional shares
which represent the amount of such loss or liability, by reducing the number of
shares in the account of each Shareholder of the Trust or the series, as the
case may be, on a pro rata basis; (ii) to offset the pro rata share of such loss
or liability from the accrued dividend account of each Shareholder of the Trust
or the series, as the case may be, and/or (iii) to cause to be recorded on the
books of the Trust or the series, as the case may be, an asset account in the
amount of any such loss or liability,
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which account may be reduced by the amount of dividends declared thereafter upon
the shares of the Trust or the series, as the case may be, outstanding on the
day any such loss or liability is incurred, until such asset account is reduced
to zero.
ARTICLE VII
Compensation and Limitation
of Liability of Trustees
---------------------------
Compensation
- ------------
Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
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, but nothing herein
contained shall protect any Trustee against any liability to which he or she
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any 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 or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
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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 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 a Trustee
or officer and against amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Trustee or officer:
(a) against any liability to the Trust or its stockholders 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 interests of the Trust;
(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 Trustee or officer, unless there has been either a
determination that such director or officer 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.
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The rights of indemnification hereinafter provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer 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 Trustees and officers may be entitled by
contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in the last paragraph of
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 (i) who is not an
"interested person" of the Trust (as defined by the Investment Company Act of
1940) (including anyone who has been exempted from being an "interested person"
by any rule, regulation or order of the Securities and Exchange Commission), and
(ii) against whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is then or has
been pending.
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,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
-20-
<PAGE>
ARTICLE IX
Miscellaneous
-------------
Trustees, Shareholders, etc. Not Personally Liable; Notice
- ----------------------------------------------------------
Section 1. All persons extending credit to, contracting with or having any
claim against the Trust shall look only to the assets of the Trust 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. 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 Trustees.
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 The Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or 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, and may contain such further recital as he or
she 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.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
- -------------------------------------------------------------
Section 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her 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 shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.
-21-
<PAGE>
Liability of Third Persons Dealing with Trustees
- ------------------------------------------------
Section 3. 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.
Duration and Termination of Trust
- ---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares entitled to vote or by
the Trustees by written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least a majority of
the Shares of such series entitled to vote or by the Trustees by written notice
to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the particular series as
may be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash or shares or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders of the series involved,
ratably according to the number of Shares of such series held by the several
Shareholders of such series on the date of termination.
Filing of Copies, References, Headings
- --------------------------------------
Section 5. 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 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 an 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
-22-
<PAGE>
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 6. 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 7. 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 a majority of the Shares entitled to
vote, except that an amendment which shall affect the holders of one or more
series of Shares but not the holders of all outstanding series shall be
authorized by vote of the Shareholders holding a majority of the Shares
entitled to vote of each series affected and no vote of Shareholders of a series
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 defective or inconsistent provision contained
herein shall not require authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal in
the City of Boston, Massachusetts for himself and his assigns, as of the day and
year first above written.
/s/ Robert J. Moran, Sec.
-------------------------------
-23-
<PAGE>
STATE OF ILLINOIS )
) SS .
COUNTY OF COOK ) February 23, 1981
Then personally appeared the above-named Robert J. Moran and acknowledged
the foregoing instrument to his free act and deed, before me,
/s/ Patricia S. Irmiter
------------------------------
Notary Public
My commission expires: 4/21/84
(Notary's Seal)
<PAGE>
WAYNE HUMMER MONEY FUND TRUST
WRITTEN INSTRUMENT AMENDING THE AGREEMENT AND DECLARATION OF TRUST
The undersigned, being at least a majority of the Trustees of Wayne Hummer
Money Fund Trust, a business trust organized under the laws of The Commonwealth
of Massachusetts pursuant to an Agreement and Declaration of Trust dated
December 4, 1981 (the "Declaration of Trust"), do hereby amend, effective upon
the filing of this instrument in the office of the Secretary of The Commonwealth
of Massachusetts, the Declaration of Trust as follows, said amendment having
been approved by the Trust's shareholders.
Article VIII of the Declaration of Trust is hereby amended by inserting at
the end thereof a new paragraph which reads in its entirety as follows:
"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 out of
the assets of the Trust to be held harmless from and indemnified
against all loss and expense arising from such liability."
<PAGE>
This instrument may be executed in several counterparts, each of which
shall be deemed an original, but all taken together shall constitute one
instrument.
IN WITNESS WHEREOF, the undersigned have this 11th day of March, 1982 signed
these presents.
/s/ George E. Barnes
-------------------------
George E. Barnes
/s/ Philip M. Burno
-------------------------
Philip M. Burno
/s/ Joel D. Gingiss
-------------------------
Joel D. Gingiss
/s/ Chalkley J. Hambleton
-------------------------
Chalkley J. Hambleton
/s/ Philip Wayne Hummer
-------------------------
Philip Wayne Hummer
/s/ Ralph J. Lemley
-------------------------
Ralph J. Lemley
/s/ Patrick B. Long
-------------------------
Patrick B. Long
/s/ Samuel B. Lyons
-------------------------
Samuel B. Lyons
/s/ Eustace K. Shaw
-------------------------
Eustace K. Shaw
-2-
<PAGE>
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
Then personally appeared before me the above-named George E. Barnes, Philip
M. Burno, Joel D. Gingiss, Chalkley J. Hambleton, Philip Wayne Hummer, Ralph J.
Lemley, Patrick B. Long, Samuel B. Lyons and Eustace K. Shaw known to me and
known to be trustees of Wayne Hummer Money Eund Trust, and acknowledged the
foregoing instrument to be their free act and deed.
Patricia S. Irmiter
----------------------------
Notary Public
My Commission Expires: 4-21-84
---------
-3-
<PAGE>
WAYNE HUMMER MONEY FUND TRUST
-----------------------------
AGREEMENT AND DECLARATION OF TRUST
(As amended through March 11, 1982)
-----------------------------
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this 4th day
of December, 1981, by the Trustees hereunder, and by the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an investment
company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands 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, 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
- ----
Section 1. This Trust shall be known as the "Wayne Hummer Money Fund Trust"
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.
<PAGE>
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;
(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 of Shares is authorized by the Trustees,
the equal proportionate transferable units into which each series of Shares
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 the
Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment", "Commission", "Interested
Person", "Principal Underwriter" and "Majority Shareholder Vote" (the 67% or
50% requirement of the third sentence of Section 2(a)(42) of the 1940 Act,
whichever may be applicable) 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; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time.
ARTICLE II
Purpose
-------
The purpose of the Trust is to provide investors a managed investment
portfolio consisting primarily of securities, including debt instruments or
obligations.
-2-
<PAGE>
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. Each series shall
be preferred over all other series in respect of the assets allocated to that
series. The beneficial interest in each series shall at all times be divided
into Shares, without par value, each of which shall represent an equal
proportionate interest in the series with each other Share of the same series,
none havinq priority or preference over another. 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 into a greater or lesser number without thereby changing
the proportionate beneficial interests in the series.
Ownership of Shares
- -------------------
Section 2. The ownership 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 and as to the number of Shares of
each series held from time to time by each Shareholder.
Investments in the Trust; Assets of the Series
- ----------------------------------------------
Section 3. The Trustees may accept investments in the Trust from 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
each 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
-3-
<PAGE>
be, shall irrevocably belong to the series of Shares with respect to which the
same were received by the Trust 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.
No Preemptive Rights
- --------------------
Section 4. Shareholders shall have no preemptive or other right to receive,
purchase or subscribe for any additional Shares or other securities issued by
the Trust.
Status of Shares and Limitation of Personal Liability
- -----------------------------------------------------
Section 5. 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.
ARTICLE IV
The Trustees
------------
Election
- --------
Section 1. In each year beginning 1983, at the annual meeting of Shareholders
or at any special meeting held in lieu thereof, or at any special meeting held
before 1983, the Shareholders shall elect a Board of not less than three nor
more than fifteen Trustees, each of whom shall serve until the next annual
meeting or special meeting in lieu thereof and until the election and
qualification of his or her successor, or until he or she sooner dies, resigns
or is
-4-
<PAGE>
removed. The number of Trustees to be so elected each year shall be fixed by
the Trustees in advance of the giving of notice of the meeting at which Trustees
are to be elected for such year, or if not so fixed, by vote of the Shareholders
at such meeting. The number of Trustees so fixed may be increased either by the
Shareholders or by the Trustees by a vote of a majority of the Trustees then in
office. The number of Trustees so fixed may be decreased either by the
Shareholders or by the Trustees by vote of a majority of the Trustees then in
office, but only to eliminate vacancies existing by reason of the death,
resignation or removal of one or more Trustees. The initial Trustees, each of
whom shall serve until the first meeting of Shareholders at which Trustees are
elected and until his or her successor is elected and qualified, or until he or
she sooner dies, resigns or is removed, shall be Philip M. Burno and such other
persons as the Trustee or Trustees then in office shall, prior to any sale of
Shares pursuant to public offering, appoint. By vote of the Shareholders holding
a majority of the Shares entitled to vote, the Shareholders may remove a Trustee
with or without cause. By vote of a majority of the Trustees then in office, the
Trustees may remove a Trustee for cause. Any Trustee may, but need not, be a
Shareholder.
Effect of Death, Resignation, etc., of a Trustee
- ------------------------------------------------
Section 2. The death, declination, resignation, or incapacity of the Trustees,
or any one of them, shall not operate to annul the Trust or to revoke any
existing agency created pursuant to the terms of this Declaration of Trust.
Powers
- ------
Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may 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
Investment Company Act of 1940, and may elect and remove such officers and
appoint and terminate such agents as they consider appropriate; they may appoint
from their own number, and terminate, any one or more committees consisting of
two or more Trustees, including an executive committee
-5-
<PAGE>
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; they may
appoint an advisory board, the members of which shall not be Trustees and need
not be shareholders; they may employ one or more investment advisers or managers
as provided in Section 7 of this Article IV; they may employ one or more
custodians of the assets of the Trust and may 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.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) 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;
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) 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;
-6-
<PAGE>
(f) To allocate assets, liabilities and expenses of the Trust to a
particular series of Shares or to apportion the same among two or more
series;
(g) 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;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but not
limited to claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(k) To borrow funds;
(1) 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;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or managers,
principal underwriters, or independent contractors of the Trust
individually against all claims and
-7-
<PAGE>
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
(n) 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 be 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 by Trust
- ----------------------------
Section 4. 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.
-8-
<PAGE>
Section 5. 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 of 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 6. Title to all of the assets of the Trust shall at all times be
considered as vested in the Trustees.
Advisory, Management and Distribution
- -------------------------------------
Section 7. Subject to a favorable Majority Shareholder Vote, the Trustees
may, at any time and from time to time, contract for exclusive or nonexclusive
advisory and/or management services with Wayne Hummer Management Company (the
"Advisor"), an Illinois corporation, and/or any other 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
the Trust shall be held uninvested and to make changes in the Trust's
investments. The Trustees may also, at any time and from time to time, contract
with the Advisor and/or any other 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:
(i) 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
-9-
<PAGE>
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
(ii) 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. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (ii) with
respect to any investment advisor or manager as provided in Article IV, Section
7, (iii) with respect to any termination of the Trust to the extent and as
provided in Article IX, Section 4, (iv) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX, Section 7, (v)
to the same extent as the stockholders of a Massachusetts business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by law, this Declaration of Trust, the By-Laws
or any registration of the Trust with the Commission (or any successor agency)
or any state, or as the Trustees may consider necessary or desirable.
-10-
<PAGE>
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. On any matter submitted to a vote of Shareholders
all Shares of the Trust then entitled to vote, irrespective of series, shall be
voted in the aggregate and not by series, except (1) when required by the 1940
Act, Shares shall be voted by individual series, in which event, unless
otherwise required by the 1940 Act, a vote of Shareholders of all shares of the
Trust, irrespective of series, shall not be required; and (2) when the Trustees
have determined that the matter affects only the interests of one or more
series, then only Shareholders of such series 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 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.
Voting Power and Meetings
- -------------------------
Section 2. There shall be an annual meeting of the Shareholders on the date
fixed in the By-Laws at the principal office 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. In the event
that such meeting is not held in any year on the date fixed in the By-Laws,
whether the omission be by oversight or otherwise, a subsequent special meeting
may be called and held in lieu of the annual meeting with the same force and
effect as though held on such date.
Special meetings may also 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. Special meetings may be called by the Trustees or
such other person or persons as may be specified in the By-Laws and shall be
called by the
-11-
<PAGE>
Trustees or such other person or persons as may be specified in the By-Laws upon
written application by Shareholders holding at least 25% of the Shares then
outstanding requesting a meeting be called for a purpose requiring action by the
Shareholders as provided herein or in the By-Laws.
Shareholders shall be entitled to at least seven days' written notice of
any meeting of the Shareholders.
Quorum and Required Vote
- ------------------------
Section 3. A majority of the Shares entitled to vote 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
holders of any series shall vote as a series, then a majority of the aggregate
number of Shares of that series entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that series. 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 this Declaration
of Trust or the By-Laws, a majority of the Shares voted on any matter shall
decide such matter and a plurality shall elect a Trustee, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any series shall vote as a series, then a majority of the Shares
of that series voted on the matter shall decide that matter insofar as that
series is concerned.
Action by Written Consent
- -------------------------
Section 4. Any action taken by Shareholders may be taken without a meeting
if a majority of Shareholders entitled to vote on the matter (or 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.
-12-
<PAGE>
ARTICLE VI
Distributions, Redemptions and Repurchases,
and Determination of Net Asset Value
-------------------------------------------
Distributions
- -------------
Section 1. The Trustees may, but need not, each year distribute to the
Shareholders of each series such income and gains, accrued or realized, as the
Trustees may determine, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with 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.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which shall be in Shares, 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 one or
more series as of a record date or dates determined by the Trustees, in Shares,
in cash or otherwise, all or part of any gains realized on the sale or
disposition of property of the Trust or otherwise, or all or part of any other
principal of the Trust. 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 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 such distribution paid in Shares will be paid at the net asset
value thereof as determined in accordance with this Declaration of Trust.
Redemptions and Repurchases
- ---------------------------
Section 2. Any holder of Shares of the Trust may by presentation of a
written request, together with his certificates, if any, for such Shares, in
proper form for transfer, at the office of the Trust, the Advisor, the
underwriter or the distributors, or at a principal office of a transfer or
shareholder service agent appointed by the Trust (as the Trustees may
determine), redeem 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 Article VI of this Declaration of Trust.
Upon receipt by the Trust, the Advisor, the underwriter or the distributor,
or the Trust's transfer or shareholder
-13-
<PAGE>
service agent of such written request for redemption of Shares, such Shares
shall be redeemed at the net asset value per share of the particular series next
determined after such Shares are tendered in proper form for transfer to the
Trust or determined as of such other time fixed by the Trustees as may be
permitted or required by the 1940 Act, provided that no such tender shall be
required in the case of Shares for which a certificate or certificates have not
been issued, and in such case such Shares shall be redeemed at the net asset
value per share of the particular series next determined after such demand has
been received or determined at such other time fixed by the Trustees as may be
permitted or required by the 1940 Act.
The obligation of the Trust to redeem its Shares of each series as set
forth above in this Section 2 shall be subject to the conditions that during any
time of emergency, as hereinafter defined, such obligation may be suspended by
the Trust by or under authority of the Trustees for such period or periods
during such time of emergency as shall be determined by or under authority of
the Trustees. If there is such a suspension, any Shareholder may withdraw any
demand for redemption and any tender of Shares which has been received by the
Trust during any such period and any tender of Shares the applicable net asset
value of 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. For the purposes of any such suspension "time of
emergency" shall mean, either with respect to all Shares or any series of
Shares, any period during which:
a. the New York Stock Exchange is closed other than for customary
weekend and holiday closings; or
b. the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations of the
Commission, either that trading on the New York Stock Exchange is
restricted, or that an emergency exists as a result of which (i) disposal
by the Trust of securities owned by it is not reasonably practicable or
(ii) it is not reasonably practicable for the Trust fairly to determine the
current value of its net assets; or
c. the suspension or postponement of such obligations is permitted by
order of the Commission.
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 Trustees may from time to time authorize at a price not exceeding the net
-14-
<PAGE>
asset value of such Shares in effect when the purchase or repurchase or any
contract to purchase or repurchase is made.
Payment in Kind
- ---------------
Section 3. 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 of this
Declaration of Trust, if at such time such shareholder owns fewer Shares of a
series than, or Shares of a series 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 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 and the Trustees may require that any certificate or certificates
issued by the Trust to evidence the ownership of such Shares shall be
surrendered to the Trustees for cancellation or notation.
Determination of Net Asset Value
- --------------------------------
Section 6. The term "net asset value" of the Shares of each series shall
mean: (i) the value of all the assets of such series; (ii) less total
liabilities of such series; (iii) divided by the number of Shares of such series
-15-
<PAGE>
outstanding, in each case at the time of each determination. The "number of
Shares of such series outstanding" for the purposes of such computation shall be
exclusive of any Shares of such series to be redeemed, purchased or repurchased
by the Trust and not then redeemed, purchased or repurchased as to which the
price has been determined, but shall include Shares of such series presented for
redemption, purchase or repurchase by the Trust and not then redeemed, purchased
or repurchased as to which the price has not been determined and Shares of such
series the sale of which has been confirmed. Any fractions involved in the
computation of net asset value per share shall be adjusted to the nearer cent
unless the Trustees shall determine to adjust such fractions to a fraction of a
cent.
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, and the Trustees shall fix the times as of which the net
asset value of the Shares of each series 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, 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.
In valuing the portfolio investments of any series for determination of net
asset value per share of such series, securities for which market quotations are
readily available shall be valued at prices which, in the opinion of the
Trustees or any officer, or officers or agent of the Trust designated for the
purpose by the Trustees, most nearly represent the market value of such
securities which may, but need not, be the most recent bid price obtained from
one or more of the market makers for such securities; other securities and
assets shall be valued at fair value as determined by or pursuant to the
direction of the Trustees. Notwithstanding the foregoing, short-term debt
obligations, commercial paper, and repurchase agreements may be, but need not
be, valued on the basis of quoted yields for securities of comparable maturity,
quality and type, or on the basis of amortized cost. In the determination of net
asset value of any series, dividends receivable and accounts receivable for
investments sold and for Shares sold shall be stated at the amounts to be
received therefor; and income receivable accrued daily on bonds and notes owned
shall be stated at the amount to be received. Any other assets shall be stated
at fair value as determined by the Trustees or such officer, officers or agent
pursuant to the Trustees' authority, except that no value shall be assigned to
good will, furniture, lists, reports, statistics or other noncurrent
-16-
<PAGE>
assets other than real estate. Liabilities of any series for accounts payable,
for investments purchased and for Shares tendered for redemption, purchase or
repurchase by the Trust and not then redeemed, purchased or repurchased as to
which the price has been determined shall be stated at the amounts payable
therefor. In determining net asset value of any series, the person or persons
making such determination on behalf of the Trust may include in liabilities such
reserves, estimated accrued expenses and contingencies as such person or persons
may in its, his or their best judgment deem fair and reasonable under the
circumstances. Any income dividends and gains distributions payable by the Trust
shall be deducted as of such time or times on the record date therefor as the
Trustees shall determine.
The manner of determining the net assets of any series or of determining
the net asset value of the Shares of any series may from time to time be altered
as necessary or desirable in the judgment of the Trustees to conform to any
other method prescribed or permitted by any applicable law or regulation or
generally accepted accounting practice.
Determinations in accordance with Section 6 made in good faith shall be
binding on all parties concerned.
Maintenance of Constant Net Asset Value
- ---------------------------------------
Section 7. The Trust will use its best efforts to maintain the net
asset value per share of each series at $1.O0. In the event that the Trust, or
any series, incurs a loss or liability, which the Trustees, in their sole
discretion, determine to be significant with respect to the maintenance by the
Trust of a constant net asset value of $1.00 per share for each series, the
Trustees shall have the power (i) to reduce the number of shares of the Trust,
or the series, as the case may be, by that number of full and fractional shares
which represent the amount of such loss or liability, by reducing the number of
shares in the account of each Shareholder of the Trust or the series, as the
case may be, on a pro rata basis; (ii) to offset the pro rata share of such loss
or liability from the accrued dividend account of each Shareholder of the Trust
or the series, as the case may be, and/or (iii) to cause to be recorded on the
books of the Trust or the series, as the case may be, an asset account in the
amount of any such loss or liability, which account may be reduced by the amount
of dividends declared thereafter upon the shares of the Trust or the series, as
the case may be, outstanding on the day any such loss or liability is incurred,
until such asset account is reduced to zero.
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<PAGE>
ARTICLE VII
Compensation and Limitation
of Liability of Trustees
---------------------------
Compensation
- ------------
Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
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, but nothing herein
contained shall protect any Trustee against any liability to which he or she
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any 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 or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
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 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
-18-
<PAGE>
of his being or having been a Trustee or officer and against amounts paid or
incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Trustee or officer:
(a) against any liability to the Trust or its stockholders 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 interests of the Trust;
(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 Trustee or officer, unless there has been either a
determination that such director or officer 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 hereinafter provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer 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 Trustees and officers may be entitled by
contract or otherwise under law.
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<PAGE>
Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in the next to the last
paragraph of 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 (i) who is not an
"interested person" of the Trust (as defined by the Investment Company Act of
1940) (including anyone who has been exempted from being an "interested person"
by any rule, regulation or order of the Securities and Exchange Commission), and
(ii) against whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is then or has
been pending.
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, costs, 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 out of
the assets of the Trust to be held harmless from and indemnified against all
loss and expense arising from such liability.
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<PAGE>
ARTICLE IX
Miscellaneous
-------------
Trustees, Shareholders, etc., Not Personally Liable; Notice
-----------------------------------------------------------
Section 1. All persons extending credit to, contracting with or having any
claim against the Trust shall look only to the assets of the Trust 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. 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 Trustees.
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 The Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or 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, and may contain such further recital as he or
she 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.
Trustees' Good Faith Action, Expert Advice, No Bond or Surety
- -------------------------------------------------------------
Section 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her 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 shall be
under no liability for any act or omission in accordance with such advice or for
failing to flow such advice. The Trustees shall not be required to give any bond
as such, nor any surety if a bond is required.
-21-
<PAGE>
Liability of Third Persons Dealing with Trustees
- ------------------------------------------------
Section 3. 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.
Duration and Termination of Trust
- ---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares entitled to vote or by
the Trustees by written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least a majority of
the Shares of such series entitled to vote or by the Trustees by written notice
to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares, after
paying or otherwise providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated, of the particular series as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash or Shares or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders of the series involved,
ratably according to the number of Shares of such series held by the several
Shareholders of such series on the date of termination.
Filing of Copies, References, Headings
- --------------------------------------
Section 5. 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 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 an 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
-22-
<PAGE>
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 6. 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 7. 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 a majority of the Shares entitled to
vote, except that an amendment which shall affect the holders of one or more
series of Shares but not the holders of all outstanding series shall be
authorized by vote of the Shareholders holding a majority of the Shares
entitled to vote of each series affected and no vote of Shareholders of a series
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 defective or inconsistent provision contained
herein shall not require authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal in
the City of Chicago, Illinois for himself and his assigns, as of the day and
year first above written.
/s/ Robert J. Moran
----------------------------------
Robert J. Moran, Secretary
(SEAL)
-23-
<PAGE>
STATE OF ILLINOIS
County of Cook, ss. March 11, 1981
Then personally appeared the above-named Robert J. Moran who stated that he
was the duly elected and acting Secretary of the Wayne Hummer Money Fund Trust
and who acknowledged that the foregoing instrument is a true and accurate copy
of the Agreement and Declaration of Trust dated December 4, 1981 including all
amendments thereto adopted as of the date of his acknowledgement.
/s/ Gina Marie Sabbia
-----------------------
Notary Public
My Commission expires: Sept. 17, 1983
(Notary's Seal)
<PAGE>
EXHIBIT 1(a)
WAYNE HUMMER MONEY FUND TRUST
-----------------------------
WRITTEN INSTRUMENT AMENDING
AGREEMENT AND DECLARATION OF TRUST
----------------------------------
The undersigned, being at least a majority of the trustees of Wayne Hummer
Money Fund Trust, a business trust organized under the laws of The Commonwealth
of Massachusetts pursuant to an Agreement and Declaration of Trust dated
December 4, 1981 as amended and restated through March 11, 1982 (the
"Declaration of Trust"), do hereby amend, effective upon the filing of this
instrument in the office of the Secretary of The Commonwealth of Massachusetts,
the Declaration of Trust as follows, said amendment having been approved by the
Trust's shareholders.
Section 1 of Article IV of the Declaration of Trust is hereby amended and
restated in its entirety as follows:
"Number, Term, Election, etc. of Trustees
-----------------------------------------
Section 1.
----------
(a) Number. The Trustees, now or hereafter serving as such, shall fix
the number of trustees of the Trust and may from time to time increase or
decrease the number of Trustees to a number other than the number
theretofore fixed which number shall not, however, be less than three nor
more than fifteen. 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 pur suant to subsection (e) of this Section 1. Any
Trustee may be but need not be a Shareholder.
(b) Term and Election. Each Trustee of the Trust shall serve as a
Trustee until the next meeting of Shareholders, if any, called for the
purpose of considering the election or reelection 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
<PAGE>
or is removed. Upon the election and qualification of a new Trustee the Trust
estate shall rest in the new Trustee (together with the continuing or other new
Trustees) without any further act or conveyance.
(c) Resignation and Retirement. Any Trustee of the Trust 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.
(d) Removal. Any Trustee of the Trust 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 holding at least a majority of the shares entitled
to vote on the matter voting together without regard to series 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 holding at
least a majority of the shares entitled to vote on the matter voting together
without regard to series.
(e) 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
-2-
<PAGE>
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.
(f) 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."
Section 2 of Article V of the Declaration of Trust is hereby amended and
restated in its entirety as follows:
"Meetings.
--------
Section 2. Meeting of Shareholders. (Including meetings involving only one
or more but less than all series) 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 and shall be called by the Trustees
or such other person or persons as may be specified in the By-Laws upon written
application by Shareholders 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 requesting a meeting be
called for a purpose requiring action by the Shareholders as provided herein or
in the By-Laws which purpose
-3-
<PAGE>
shall be specified in any such written application.
Shareholders shall be entitled to at least seven days' written notice
of any meeting of the Shareholders."
This instrument may be executed in several counterparts, each of which
shall be deemed an original, but all taken together shall constitute one
instrument.
IN WITNESS WHEREOF, the undersigned have this 12th day of July, 1984
signed these presents.
/s/ Samuel B. Lyons /s/ Joel D. Gingiss
- ----------------------------------- -----------------------------------
/s/ E. K. Shaw /s/ Steven R. Becker
- ----------------------------------- -----------------------------------
/s/ Patrick B. Long /s/ Chalkley J. Hambleton
- ----------------------------------- -----------------------------------
/s/ Philip Hummer
- -----------------------------------
/s/ Philip M. Burno
- -----------------------------------
-4-
<PAGE>
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
Then personally appeared before me on this 12th day of July, 1984 the
above-named George E. Barnes, Steven R. Becker, Philip M. Burno, Joel D.
Gingiss, Chalkley J. Hambleton, Philip Wayne Hummer, Patrick B. Long, Samuel B.
Lyons and Eustace K. Shaw known to me and known to be trustees of Wayne Hummer
Money Fund Trust, and acknowledged the foregoing instrument to be their free act
and deed.
/s/ Patricia S. Irmiter
-----------------------------------
Notary Public
My Commission Expires: 4-21-88
-5-
<PAGE>
WAYNE HUMMER MONEY FUND TRUST
WRITTEN INSTRUMENT AMENDING
AGREEMENT AND DECLARATION OF TRUST
The undersigned, being at least a majority of the trustees of Wayne Hummer
Money Fund Trust, a business trust organized under the laws of The Commonwealth
of Massachusetts pursuant to an Agreement and Declaration of Trust dated
December 4, 1981 as amended and restated through March 11, 1982 (the
"Declaration of Trust"), do hereby amend, effective upon the filing of this
instrument in the office of the Secretary of The Commonwealth of Massachusetts,
the Declaration of Trust as follows, said amendment having been approved by the
Trust's shareholders.
Section 1 of Article IV of the Declaration of Trust is hereby amended and
restated in its entirety as follows:
"Number, Term, Election, etc. of Trustees Section 1.
(a) Number. The Trustees, now or hereafter serving as such,
shall fix the number of trustees of the Trust and may from time to
time increase or decrease the number of Trustees to a number other
than the number theretofore fixed which number shall not, however,
be less than three nor more than fifteen. 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. Any Trustee may be but need not be
a Shareholder.
(b) Term and Election. Each Trustee of the Trust shall serve
as a Trustee until the next meeting of Shareholders, if any, called
for the purpose of considering the election or reelection 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
<PAGE>
or is removed. Upon the election and qualification of a new
Trustee the Trust estate shall rest in the new Trustee
(together with the continuing or other new Trustees) without
any further act or conveyance.
(c) Resignation and Retirement. Any Trustee of the Trust
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.
(d) Removal. Any Trustee of the Trust 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 holding at least a majority of
the shares entitled to vote on the matter voting together
without regard to series 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 holding at least a majority of the shares entitled
to vote on the matter voting together without regard to series.
(e) 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
-2-
<PAGE>
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 ln 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.
(f) 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."
Section 2 of Article V of the Declaration of Trust is hereby amended and
restated in its entirety as follows:
"Meetings.
Section 2. Meeting of Shareholders. (Including meetings
involving only one or more but less than all series) 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 wlthin 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 and shall be called by the
Trustees or such other person or persons as may be specified
in the By-Laws upon written application by Shareholders
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 requesting a meeting be called for a purpose
requiring action by the Shareholders as provided herein or in
the By-Laws which purpose
-3-
<PAGE>
shall be specified in any such written application.
Shareholders shall be entitled to at least seven days'
written notice of any meeting of the shareholders."
This instrument may be executed in several counterparts, each of which shall
be deemed an original, but all taken together shall constitute one instrument.
IN WITNESS WHEREOF, the undersigned have this 12th day of July, 1984 signed
these presents.
Samuel B. Lyons Joel D. Gingiss
- ---------------- -----------------------
E. K. Shaw Steven R. Becker
- ---------------- -----------------------
Chalkley J. Hambleton
------------------------
Patrick B. Long
- ---------------- ------------------------
Philip Hummer
- ----------------
Philip M. Burno
- ----------------
-4-
<PAGE>
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
Then personally appeared before me on this 12th day of July, 1984 the above
named George E. Barnes, Steven R. Becker, Philip M. Burno, Joel D. Gingiss,
Chalkley J. Hambleton, Philip Wayne Hummer, Patrick B. Long, Samuel B. Lyons and
Eustace K. Shaw known to me and known to be trustees of Wayne Hummer Money Fund
Trust, and acknowledged the foregoing instrument to be their free act and deed.
Patricia S. Irmiter
--------------------------------
Notary Public
My Commission Expires: 4-21-88
---------
-5-
<PAGE>
EXHIBIT 2
BY-LAWS
-------
OF
--
WAYNE HUMMER MONEY FUND TRUST
-----------------------------
Section 1. Agreement and Declaration of
Trust and Principal Office
---------------------------------------
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of WAYNE HUMMER MONEY FUND TRUST, the Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust; Resident Agent. The principal office of the
Trust shall be located in Chicago, Illinois. Its resident agent in Massachusetts
shall be CT Corporation System, 2 Oliver Street, Boston, Massachusetts.
Section 2. Shareholders
-----------------------
2.1 Annual Meeting. The annual meeting of the shareholders shall be at such time
and on such date in each year as the president or Trustees may from time to time
determine.
2.2 Special Meeting in Place of Annual Meeting. If no annual meeting has been
held in accordance with the foregoing provisions, a special meeting of the
shareholders may be held in place thereof, and any action taken at such special
meeting shall have the same force and effect as if taken at the annual meeting,
and in such case all references in these By-Laws to the annual meeting of the
shareholders shall be deemed to refer to such special meeting.
2.3 Special Meetings. A special meeting of the shareholders may be called at
any time by the Trustees, by the president or, if the Trustees and the president
shall fail to call any meeting of shareholders for a period of 30 days after
written application of one or more shareholders who hold at least 25% of all
shares issued and outstanding and entitled to vote at the meeting, then such
shareholders may call such meeting. Each call of a meeting shall state the
place, date, hour and purposes of the meeting.
2.4 Place of Meetings. All meetings of the shareholders shall be held at the
principal office of the Trust, or, to the extent permitted by the Declaration of
Trust, at such other place within the United States as shall be designated by
the Trustees or the president of the Trust.
<PAGE>
2.5 Notice of Meetings. A written notice of each meeting of shareholders,
stating the place, date and hour and the purposes of the meeting, shall be given
at least seven days before the meeting to each shareholder entitled to vote
thereat by leaving such notice with him or at his residence or usual place of
business or by mailing it, postage prepaid, and addressed to such shareholder at
his address as it appears in the records of the Trust. Such notice shall be
given by the secretary or an assistant secretary or by an officer designated by
the Trustees. No notice of any meeting of shareholders need be given to a
shareholder if a written waiver of notice, executed before or after the meeting
by such shareholder or his attorney thereunto duly authorized, is filed with the
records of the meeting.
2.6 Ballots. No ballot shall be required for any election unless requested by a
shareholder present or represented at the meeting and entitled to vote in the
election.
2.7 Proxies. Shareholders entitled to vote may vote either in person or by proxy
in writing dated not more than six months before the meeting named therein,
which proxies shall be filed with the secretary or other person responsible to
record the proceedings of the meeting before being voted. Unless otherwise
specifically limited by their terms, such proxies shall entitle the holders
thereof to vote at any adjournment of such meeting but shall not be valid after
the final adjournment of such meeting.
Section 3. Trustees
-------------------
3.1 Committees and Advisory Board. The Trustees may appoint from their number an
executive committee and other committees. Except as the Trustees may otherwise
determine, any such committee may make rules for conduct of its business. The
Trustees may appoint an advisory board to consist of not less than two nor more
than five members. The members of the advisory board shall be compensated in
such manner as the Trustees may determine and shall confer with and advise the
Trustees regarding the investments and other affairs of the Trust. Each member
of the advisory board shall hold office until the first meeting of the Trustees
following the next annual meeting of the shareholders and until his successor is
elected and qualified, or until he sooner dies, resigns, is removed, or becomes
disqualified, or until the advisory board is sooner abolished by the Trustees.
3.2 Regular Meetings. Regular meetings of the Trustees may be held without call
or notice at such places and at such times as the Trustees may from time to time
determine,
-2-
<PAGE>
provided that notice of the first regular meeting following any such
determination shall be given to absent Trustees. A regular meeting of the
Trustees may be held without call or notice immediately after and at the same
place as the annual meeting of the shareholders.
3.3 Special Meetings. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the secretary
or an assistant secretary or by the officer or one of the Trustees calling the
meeting.
3.4 Notice. It shall be sufficient notice to a Trustee to send notice by mail at
least forty-eight hours or by telegram at least twenty-four hours before the
meeting addressed to the Trustee at his or her usual or last known business or
residence address or to give notice to him or her in person or by telephone at
least twenty-four hours before the meeting. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by him or her
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her. Neither notice of a meeting nor a
waiver of a notice need specify the purposes of the meeting.
3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then in
office shall constitute a quorum; provided, however, a quorum shall not be less
than two. Any meeting may be adjourned from time to time by a majority of the
votes cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned without further notice.
Section 4. Officers and Agents
------------------------------
4.1 Enumeration; Qualification. The officers of the Trust shall be a president,
a treasurer, a secretary and such other officers, if any, as the Trustees from
time to time may in their discretion elect or appoint. The Trust may also have
such agents, if any, as the Trustees from time to time may in their discretion
appoint. Any officer may be but none need be a Trustee or shareholder. Any two
or more offices may be held by the same person.
4.2 Powers. Subject to the other provisions of these By-Laws, each officer shall
have, in addition to the duties and powers herein and in the Declaration of
Trust set forth,
-3-
<PAGE>
such duties and powers as are commonly incident to his or her office as if the
Trust were organized as a Massachusetts business corporation and such other
duties and powers as the Trustees may from time to time designate.
4.3 Election. The president, the treasurer and the secretary shall be elected
annually by the Trustees at their first meeting following the annual meeting of
the shareholders. Other officers, if any, may be elected or appointed by the
Trustees at said meeting or at any other time.
4.4 Tenure. The president, the treasurer and the secretary shall hold office
until the first meeting of Trustees following the next annual meeting of the
shareholders and until their respective successors are chosen and qualified, or
in each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each agent shall retain his or her authority at the pleasure of
the Trustees.
4.5 President and Vice Presidents. The president shall be the chief executive
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust. Any
vice president shall have such duties and powers as shall be designated from
time to time by the Trustees.
4.6 Chairman of the Board. If a Chairman of the Board of Trustees is elected,
he shall have the duties and powers specified in these bylaws and, except as the
Trustees shall otherwise determine, preside at all meetings of the shareholders
and of the Trustees at which he or she is present and have such other duties and
powers as may be determined by the Trustees.
4.7 Treasurer and Controller. The treasurer shall be the chief financial
officer of the Trust and subject to any arrangement made by the Trustees with a
bank or trust company or other organization as custodian or transfer or
shareholder services agent, shall be in charge of its valuable papers and shall
have such other duties and powers as may be designated from time to time by the
Trustees or by the president. If at any time there shall be no controller, the
treasurer shall also be the chief accounting officer of the Trust and shall have
the duties and power prescribed herein for the controller. Any assistant
treasurer shall have such duties and powers as shall be designated from time to
time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer of the
Trust and shall be in charge of its books of account and accounting records.
The Controller
-4-
<PAGE>
shall be responsible for preparation of financial statements of the Trust and
shall have such other duties and powers as may be designated from time to time
by the Trustees or the President.
4.8 Secretary and Assistant Secretaries. The secretary shall record all
proceedings of the shareholders and the Trustees in books to be kept therefor,
which books shall be kept at the principal office of the Trust. In the absence
of the secretary from any meeting of shareholders of Trustees, an assistant
secretary, or if there be none or he or she is absent, a temporary clerk chosen
at the meeting shall record the proceedings thereof in the aforesaid books.
Section 5. Resignations and Removals
------------------------------------
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee, officers,
or advisory board member resigning, and no officer or advisory board member
removed shall have any right to any compensation for any period following his or
her resignation or removal, or any right to damages on account of such removal.
Section 6. Vacancies
--------------------
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
Section 7. Shares of Beneficial Interest
----------------------------------------
7.1 Share Certificates. No certificates certifying the ownership of shares
shall be issued except as the Trustees may otherwise authorize. In the event
that the Trustees authorize the issuance of share certificates, subject to the
provisions of Section 7.3, each shareholder shall be entitled to a certificate
stating the number of shares owned by him or her, in such form as shall be
prescribed from time to time by the trustees. Such certificate shall be signed
by the president or a vice president and by the treasurer or
-5-
<PAGE>
an assistant treasurer. Such signatures may be facsimiles if the certificate is
signed by a transfer or shareholder services agent or by a registrar, other than
a Trustee, officer or employee of the Trust. In case any officer who has signed
or whose facsimile signature has been placed on such certificate shall have
ceased to be such officer before such certificate is issued, it may be issued by
the Trust with the same effect as if he or she were such officer at the time of
its issue.
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
7.2 Loss of Certificates. In the case of the alleged loss or destruction or the
mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
7.3 Discontinuance of Issuance of Certificates. The Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each shareholder, require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect the ownership of
shares in the Trust.
Section 8. Record Date
----------------------
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.
Section 9. Seal
---------------
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts" together with the name of
the Trust and the
-6-
<PAGE>
year of its organization, cut or engraved thereon; but, unless otherwise
required by the Trustees, the seal shall not be necessary to be placed on,
and its absence shall not impair the validity of, any document, instrument or
other paper executed and delivered by or on behalf of the Trust.
Section 10. Execution of Papers
--------------------------------
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
Section 11. Fiscal Year
-----------------------
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
Section 12. Provisions Relating to the
Conduct of the Trust's Business
--------------------------------------------
12.1 Dealings with Affiliates. The Trust shall not purchase or retain securities
issued by any issuer if one or more of the holders of the securities of such
issuer or one or more of the officers or directors of such issuer is an officer
or Trustee of the Trust or officer or director of any organization, association
or corporation with which the Trust has an investment advisor's contract
("investment advisor"), if to the knowledge of the Trust one or more of such
officers or Trustees of the Trust or such officers or directors of such
investment advisors owns beneficially more than one-half of one percent of the
shares or securities of such issuer and such officers, Trustees and directors
owning more than one-half of one percent of such shares or securities together
own beneficially more than five percent of such outstanding shares or
securities. Each Trustee and officer of the Trust shall give notice to the
secretary of the identity of all issuers whose securities are held by the Trust
of which such officer or Trustee owns as much as one-half of one percent of the
outstanding securities, and the Trust shall not be charged with the knowledge of
such holdings in the absence of receiving such notice if the
-7-
<PAGE>
Trust has requested such information not less often than quarterly.
Subject to the provisions of the preceding paragraph, no officer, Trustee or
agent of the Trust and no officer, director or agent of any investment advisor
shall deal for or on behalf of the Trust with himself as principal or agent, or
with any partnership, association or corporation in which he has a material
financial interest; provided that the foregoing provisions shall not prevent (a)
officers and Trustees of the Trust from buying, holding or selling shares in the
Trust, or from being partners, officers or directors of or financially
interested in any investment advisor to the Trust or in any corporation, firm or
association which may at any time have a distributor's or principal
underwriter's contract with the Trust; (b) purchases or sales of securities or
other property if such transaction is permitted by or is exempt or exempted from
the provisions of the Investment Company Act of 1940 for any Rule or Regulation
thereunder and if such transaction does not involve any commission or profit to
any security dealer who is, or one or more of whose partners, shareholders,
officers or directors is an officer or Trustee of the Trust or an officer or
director of the investment advisor, manager or principal underwriter of the
Trust; (c) employment of legal counsel, registrar, transfer agent, shareholder
services, dividend disbursing agent or custodian who is, or has a partner,
stockholder, officer or director who is, an officer or Trustee of the Trust; (d)
sharing statistical, research and management expenses, including office hire and
services, with any other company in which an officer or Trustee of the Trust is
an officer or director or financially interested.
12.2 Dealing in Securities of the Trust. The Trust, the investment advisor, any
corporation, firm or association which may at any time have an exclusive
distributor's or principal underwriter's contract with the Trust (the
"distributor") and the officers and Trustees of the Trust and officers and
directors of every investment advisor and distributor, shall not take long or
short positions in the securities of the Trust, except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset value
for investment by the investment advisor and by officers and directors of
the distributor, investment advisor, or the Trust and by any trust,
pension, profit-sharing or other benefit plan for
-8-
<PAGE>
such persons, no such purchase to be in contravention of any applicable
state or federal requirement.
12.3 Limitation on Certain Loans. The Trust shall not make loans to any
officer, Trustee or employee of the Trust or any investment advisor or
distributor or their respective officers, directors or partners or employees.
12.4 Custodian. All securities and cash owned by the Trust shall be maintained
in the custody of one or more banks or trust companies having (according to its
last published report) not less than two million dollars ($2,000,000) aggregate
capital, surplus and undivided profits (any such bank or trust company is
hereinafter referred to as the "custodian"); provided, however, the custodian
may deliver securities as collateral on borrowings effected by the Trust,
provided, that such delivery shall be conditioned upon receipt of the borrowed
funds by the custodian except where additional collateral is being pledged on an
outstanding loan and the custodian may deliver securities lent by the Trust
against receipt of initial collateral specified by the Trust. Subject to such
rules, regulations and orders, if any, as the Securities and Exchange Commission
may adopt, the Trust may, or may permit any custodian to, deposit all or any
part of the securities owned by the Trust in a system for the central handling
of securities operated by the Federal Reserve Banks, or established by a
national securities exchange or national securities association registered with
said Commission under the Securities Exchange Act of 1934, or such other person
as may be permitted by said Commission, pursuant to which system all securities
of any particular class or series of any issue deposited with the system are
treated as fungible and may be transferred or pledged by bookkeeping entry,
without physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its custodian or
upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
(b) require that the cash and securities owned by this corporation be
delivered directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the cash and securities owned
by this Trust otherwise than to a successor custodian, the question
-9-
<PAGE>
whether or not this Trust shall be liquidated or shall function without a
custodian.
12.5 Limitations on Investment. The Trust may not:
-------------------------
(a) Purchase any securities other than those described in the Trust's then
current prospectus as appropriate for the portfolio for which such
securities are being purchased.
(b) Purchase in the government portfolio authorized by the Trustees (the
"Government Portfolio") any investments other than U.S. Government, its
agencies and instrumentalities and repurchase agreements and reverse
repurchase agreements in connection with any of the forgoing.
(c) Purchase in the money market portfolio authorized by the Trustees (the
"Money Market Portfolio") the securities of issuers whose principal
business is in the same industry (other than with respect to purchases of
U.S. Treasury Bills, other obligations issued or guaranteed by the U.S.
Government, its agencies and instrumentalities, certificates of deposits,
bankers' acceptances and bank repurchase agreements) if immediately after
such purchase the value of such portfolio's investments in such industry
would exceed 25% of the value of its total assets (taken at market value at
the time of each investment). For purposes of this limitation the personal
credit and business credit businesses of finance companies will be
considered separately and, as to utilities, the water, gas, electric and
telephone businesses will be considered separately.
(d) Purchase in the Money Market Portfolio the securities of any one issuer
(other than the U.S. Government, its agencies and instrumentalities) if
immediately after such purchase more than 5% of the value of such
portfolio's total assets (taken at market value at the time of each
investment) would be invested in such issuer, except that up to 25% of the
value of the portfolio's total assets may be invested without regard to
such 5% limitation but shall instead be subject to a 10% limitation.
(e) Purchase in the Money Market Portfolio more than 10% of any class of an
issuer's outstanding securities, except that such restriction shall not
apply to securities of the U.S. Government, its agencies or
instrumentalities, certificates of deposit, bankers' acceptances or
repurchase agreements.
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<PAGE>
(f) Make investments for the Money Market Porfolio for the purpose of
exercising control or management.
(g) Make loans from either portfolio, except that securities owned or held
by the applicable portfolio may be loaned pursuant to subparagraph (h)
below, provided that the Trust may purchase money market securities and
enter into repurchase agreements with banks, brokers, dealers and other
financial institutions; provided, however, that repurchase agreements
maturing in more than seven days may not, at the time entered into, exceed
10% in value of the total assets of such portfolio and further providing
that reverse repurchase agreements will not, at the time entered into,
exceed one-third of the net assets of such portfolio.
(h) Lend either portfolio's securities in excess of 20% of such
portfolio's total assets, taken at market value, provided that loans not
exceeding 20% of a portfolio's total assets are made according to the
guidelines of the Securities and Exchange Commission and the Trust's Board
of Trustees, including maintaining collateral from the borrower equal at
all times to the current market value of the securities loaned.
(i) Purchase securities in the Money Market Portfolio of other investment
companies, except in connection with a merger, consolidation, acquisition
or reorganization.
(j) Purchase in either portfolio any securities on margin, except for use
of short-term credit necessary for clearance of purchases and sales of
portfolio securities; make short sales of securities or maintain a short
position or write, purchase or sell puts, calls, straddles, spreads or
combinations thereof.
(k) Purchase or sell real estate in the Money Market Portfolio (other than
money market securities secured by real estate or interests therein or
money market securities issued by companies which invest in real estate, or
interests therein), commodities or commodity contracts, oil or gas
interests or other mineral exploration or development programs.
(1) Purchase securities in the Money Market Portfolio (except for
repurchase agreements or variable amount master demand notes) with legal or
contractual restrictions on resale or for which no readily available market
exists, or purchase securities of issuers (other than securities of
Government agencies or instrumentalities) having a record, together with
its predecessors, of less than three years of continuous
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<PAGE>
operation if, regarding all such securities, more than 5% of the
applicable portfolio's total assets, taken at market value, would be
invested in such securities.
(m) Borrow in either portfolio amounts in excess of 20% of the applicable
portfolio's total assets, taken at market value; provided that such
borrowings are only from banks and only as a temporary measure for
extraordinary or emergency purposes and not to increase income.
(n) Mortgage, pledge or hypothecate or in any manner transfer in either
portfolio (except as provided in (h) above) as security for indebtedness
any securities owned or held by the Trust except as may be necessary in
connection with borrowings mentioned in (m) above, and then such
mortgaging, pledging or hypothecating may not exceed 25% of the applicable
portfolio's total assets taken at market value.
(o) Act as an underwriter of securities in either portfolio.
(p) Purchase securities in the Money Market Portfolio of any issuer
employing, as an officer or director, any person serving as an officer or
Trustee of the Trust, or purchase or retain the securities of any issuer,
if to the Trustee's knowledge, those officers, directors or Trustees of
the Trust or its Investment Adviser who individually either directly or
indirectly own, control or hold with power to vote more than 0.5% of the
outstanding securities of such issuer, together directly or indirectly
own, control or hold with power to vote more than 5% of such outstanding
securities.
(q) Issue a class of securities which is senior to the Shares, except
pursuant to (m) above and the Investment Company Act of 1940.
12.6 Reports to Shareholders; Distributions from Realized Gains. The Trust
shal1 send to each shareholder of record at least annually a statement of the
condition of the Trust and of the results of its operation, containing all
information required by applicable laws or regulations.
Section 13. Amendments
----------------------
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.
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BY-LAWS
-------
OF
--
WAYNE HUMMER MONEY FUND TRUST
-----------------------------
(As amended through March 11, 1982)
Section 1. Agreement and Declaration of
Trust and Principal Office
----------------------------------------
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of WAYNE HUMMER MONEY FUND TRUST, the Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust; Resident Agent. The principal office of the
Trust shall be located in Chicago, Illinois. Its resident agent in Massachusetts
shall be CT Corporation System, 2 Oliver Street, Boston, Massachusetts.
Section 2. Shareholders
------------------------
2.1 Annual Meeting. The annual meeting of the shareholders shall be at such
time and on such date in each year as the president or Trustees may from time to
time determine.
2.2 Special Meeting in Place of Annual Meeting. If no annual meeting has been
held in accordance with the foregoing provisions, a special meeting of the
shareholders may be held in place thereof, and any action taken at such special
meeting shall have the same force and effect as if taken at the annual meeting,
and in such case all references in these By-Laws to the annual meeting of the
shareholders shall be deemed to refer to such special meeting.
2.3 Special Meetings. A special meeting of the shareholders may be called at
any time by the Trustees, by the president or, if the Trustees and the president
shall fail to call any meeting of shareholders for a period of 30 days after
written application of one or more shareholders who hold at least 25% of all
shares issued and outstanding and entitled to vote at the meeting, then such
shareholders may call such meeting. Each call of a meeting shall state the
place, date, hour and purposes of the meeting.
2.4 Place of Meetings. All meetings of the shareholders shall be held at the
principal office of the Trust, or, to the extent permitted by the Declaration of
Trust, at such other place within the United States as shall be designated by
the Trustees or the president of the Trust.
<PAGE>
2.5 Notice of Meetings. A written notice of each meeting of shareholders,
stating the place, date and hour and the purposes of the meeting, shall be given
at least seven days before the meeting to each shareholder entitled to vote
thereat by leaving such notice with him or at his residence or usual place of
business or by mailing it, postage prepaid, and addressed to such shareholder at
his address as it appears in the records of the Trust. Such notice shall be
given by the secretary or an assistant secretary or by an officer designated by
the Trustees. No notice of any meeting of shareholders need be given to a
shareholder if a written waiver of notice, executed before or after the meeting
by such shareholder or his attorney thereunto duly authorized, is filed with the
records of the meeting.
2.6 Ballots. No ballot shall be required for any election unless requested by
a shareholder present or represented at the meeting and entitled to vote in the
election.
2.7 Proxies. Shareholders entitled to vote may vote either in person or by
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after the final adjournment of such meeting.
Section 3. Trustees
-------------------
3.1 Committees and Advisory Board. The Trustees may appoint from their number
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not less than
two nor more than five members. The members of the advisory board shall be
compensated in such manner as the Trustees may determine and shall confer with
and advise the Trustees regarding the investments and other affairs of the
Trust. Each member of the advisory board shall hold office until the first
meeting of the Trustees following the next annual meeting of the shareholders
and until his successor is elected and qualified, or until he sooner dies,
resigns, is removed, or becomes disqualified, or until the advisory board is
sooner abolished by the Trustees.
3.2 Regular Meetings. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from time to
time determine, provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees. A regular
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<PAGE>
meeting of the Trustees may be held without call or notice immediately after and
at the same place as the annual meeting of the shareholders.
3.3 Special Meetings. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the secretary
or an assistant secretary or by the officer or one of the Trustees calling the
meeting.
3.4 Notice. It shall be sufficient notice to a Trustee to send notice by mail
at least forty-eight hours or by telegram at least twenty-four hours before the
meeting addressed to the Trustee at his or her usual or last known business or
residence address or to give notice to him or her in person or by telephone at
least twenty-four hours before the meeting. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by him or her
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her. Neither notice of a meeting nor a
waiver of a notice need specify the purposes of the meeting.
3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then in
office shall constitute a quorum; provided, however, a quorum (unless the Board
of Trustees consists of two or fewer persons) shall not be less than two. Any
meeting may be adjourned from time to time by a majority of the votes cast upon
the question, whether or not a quorum is present, and the meeting may be held as
adjournment without further notice.
Section 4. Officers and Agents
------------------------------
4.1 Enumeration; Qualification. The officers of the Trust shall be a
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The Trust
may also have such agents, if any, as the Trustees from time to time may in
their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
4.2 Powers. Subject to the other provisions of these By-Laws, each officer
shall have, in addition to the duties and powers herein and in the Declaration
of Trust set forth, such duties and powers as are commonly incident to his or
her office as if the Trust were organized as a Massachusetts business
corporation and such other duties and powers as the Trustees may from time to
time designate.
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<PAGE>
4.3 Election. The president, the treasurer and the secretary shall be elected
annually by the Trustees at their first meeting following the annual meeting of
the shareholders. Other officers, if any, may be elected or appointed by the
Trustees at said meeting or at any other time.
4.4 Tenure. The president, the treasurer and the secretary shall hold office
until the first meeting of Trustees following the next annual meeting of the
shareholders and until their respective successors are chosen and qualified, or
in each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each agent shall retain his or her authority at the pleasure of
the Trustees.
4.5 President and Vice Presidents. The president shall be the chief executive
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust. Any
vice president shall have such duties and powers as shall be designated from
time to time by the Trustees.
4.6 Chairman of the Board. If a Chairman of the Board of Trustees is elected,
he shall have the duties and powers specified in these By-Laws and, except as
the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees at which he or she is present and have such
other duties and powers as may be determined by the Trustees.
4.7 Treasurer and Controller. The treasurer shall be the chief financial officer
of the Trust and subject to any arrangement made by the Trustees with a bank or
trust company or other organization as custodian or transfer or shareholder
services agent, shall be in charge of its valuable papers and shall have such
other duties and powers as may be designated from time to time by the Trustees
or by the president. If at any time there shall be no controller, the treasurer
shall also be the chief accounting officer of the Trust and shall have the
duties and power prescribed herein for the controller. Any assistant treasurer
shall have such duties and powers as shall be designated from time to time by
the Trustees.
The controller, if any be elected, shall be the chief accounting officer of the
Trust and shall be in charge of its books of account and accounting records. The
Controller shall be responsible for preparation of financial statements of the
Trust and shall have such other duties and powers as may be designated from time
to time by the Trustees or the president.
4.8 Secretary and Assistant Secretaries. The secretary shall record all
proceedings of the shareholders and the Trustees in books to be kept therefor,
which books shall be kept at the principal office of the Trust. In the absence
of the secretary
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<PAGE>
from any meeting of shareholders or Trustees, an assistant secretary, or if
there be none or he or she is absent, a temporary clerk chosen at the meeting
shall record the proceedings thereof in the aforesaid books.
Section 5. Resignations and Removals
------------------------------------
Any Trustees, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee, officer,
or advisory board member resigning, and no officer or advisory board member
removed shall have any right to any compensation for any period following his or
her resignation or removal, or any right to damages on account of such removal.
Section 6. Vacancies
--------------------
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
Section 7. Shares of Beneficial Interest
----------------------------------------
7.1 Share Certificates. No certificates certifying the ownership of shares shall
be issued except as the Trustees may otherwise authorize. In the event that the
Trustees authorize the issuance of share certificates, subject to the provisions
of Section 7.3, each shareholder shall be entitled to a certificate stating the
number of shares owned by him or her, in such form as shall be prescribed from
time to time by the Trustees. Such certificate shall be signed by the president
or a vice president and by the treasurer or an assistant treasurer. Such
signatures may be facsimiles if the certificate is signed by a transfer or
shareholder services agent or by a registrar, other than a Trustee, officer or
employee of the Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the Trust with
the same effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue
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<PAGE>
receipts therefor or may keep accounts upon the books of the Trust for the
record holders of such shares, who shall in either case be deemed, for all
purposes hereunder, to be the holders of certificates for such shares as if they
had accepted such certificates and shall be held to have expressly assented and
agreed to the terms hereof.
7.2 Loss of Certificates. In the case of the alleged loss or destruction or the
mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
7.3 Discontinuance of Issuance of Certificates. The Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each shareholder, require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect the ownership of
shares in the Trust.
Section 8. Record Date
----------------------
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.
Section 9. Seal
---------------
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts" together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
Section 10. Execution of Papers
-------------------------------
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by
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<PAGE>
whomsoever else shall be designated for that purpose by the vote of the Trustees
and need not bear the seal of the Trust.
Section 11. Fiscal Year
-----------------------
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
Section 12. Provisions Relating to the Conduct of the Trust's Business
----------------------------------------------------------------------
12.1 Dealings with Affiliates. The Trust shall not purchase or retain
securities issued by any issuer if one or more of the holders of the securities
of such issuer or one or more of the officers or directors of such issuer is an
officer or Trustee of the Trust or officer or director of any organization,
association or corporation with which the Trust has an investment advisor's
contract ("investment advisor"), if to the knowledge of the Trust one or more of
such officers or Trustees of the Trust or such officers or directors of such
investment advisors owns beneficially more than one-half of one percent of the
shares or securities of such issuer and such officers, Trustees and directors
owning more than one-half of one percent of such shares or securities together
own beneficially more than five percent of such outstanding shares or
securities. Each Trustee and officer of the Trust shall give notice to the
secretary of the identity of all issuers whose securities are held by the Trust
of which such officer or Trustee owns as much as one-half of one percent of the
outstanding securities, and the Trust shall not be charged with the knowledge of
such holdings in the absence of receiving such notice if the Trust has requested
such information not less often than quarterly.
Subject to the provisions of the preceding paragraph, no officer, Trustee or
agent of the Trust and no officer, director or agent of any investment advisor
shall deal for or on behalf of the Trust with himself as principal or agent, or
with any partnership, association or corporation in which he has a material
financial interest; provided that the foregoing provisions shall not prevent (a)
officers and Trustees of the Trust from buying, holding or selling shares in the
Trust, or from being partners, officers or directors of or financially
interested in any investment advisor to the Trust or in any corporation, firm or
association which may at any time have a distributor's, principal
underwriter's contract with the Trust; (b) purchases or sales of securities or
other property if such transaction is permitted by or is exempt or exempted from
the provisions of the Investment Company Act of 1940 or any Rule or Regulation
thereunder and if such transaction does not involve any commission or profit to
any security dealer who is, or one or more of whose partners, shareholders,
officers or directors is an officer or Trustee of the Trust or an officer or
director
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<PAGE>
of the investment advisor, manager or principal underwriter of the Trust; (c)
employment of legal counsel, registrar, transfer agent, shareholder services,
dividend disbursing agent or custodian who is, or has a partner, stockholder,
officer or director who is, an officer or Trustee of the Trust; (d) sharing
statistical, research and management expenses, including office hire and
services, with any other company in which an officer or Trustee of the Trust is
an officer or director or financially interested.
12.2 Dealing in Securities of the Trust. The Trust, the investment advisor,
any corporation, firm or association which may at any time have an exclusive
distributor's or principal underwriter's contract with the Trust (the
"distributor") and the officers and Trustees of the Trust and officers and
directors of every investment advisor and distributor, shall not take long or
short positions in the securities of the Trust, except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset value
for investment by the investment advisor and by officers and directors of
the distributor, investment advisor, or the Trust and by any trust, pension,
profit-sharing or other benefit plan for such persons, no such purchase to
be in contravention of any applicable state or federal requirements.
12.3 Limitation on Certain Loans. The Trust shall not make loans to any
officer, Trustee or employee of the Trust or any investment advisor or
distributor or their respective officers, directors or partners or employees.
12.4 Custodian. All securities and cash owned by the Trust shall be maintained
in the custody of one or more banks or trust companies having (according to its
last published report) not less than two million dollars ($2,000,000) aggregate
capital, surplus and undivided profits (any such bank or trust company is
hereinafter referred to as the "custodian"); provided, however, the custodian
may deliver securities as collateral on borrowings effected by the Trust,
provided, that such delivery shall be conditioned upon receipt of the borrowed
funds by the custodian except where additional collateral is being pledged on an
outstanding loan and the custodian may deliver securities lent by the Trust
against receipt of initial collateral specified by the Trust. Subject to such
rules, regulations and orders, if any, as the Securities and Exchange Commission
may adopt, the Trust may, or may permit any custodian to, deposit all or any
part of the securities owned by the Trust in a system for the central handling
of securities operated by the Federal Reserve Banks, or established by a
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<PAGE>
national securities exchange or national securities association registered with
said Commission under the Securities Exchange Act of 1934, or such other person
as may be permitted by said Commission, pursuant to which system all securities
of any particular class or series of any issue deposited with the system are
treated as fungible and may be transferred or pledged by bookkeeping entry,
without physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its custodian or
upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
(b) require that the cash and securities owned by the Trust be delivered
directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the cash and securities owned
by the Trust otherwise than to a successor custodian, the question
whether or not the Trust shall be liquidated or shall function without a
custodian.
12.5 Limitations on Investment. The Trust may not:
(1) Purchase in either portfolio any securities other than money
market instruments and securities described in the Trust's then current
prospectus;
(2) Purchase in the Government portfolio any investments other than
United States Treasury Bills, other obligations issued or guaranteed by the
United States Government, its agencies and instrumentalities and repurchase
agreements in connection with any of the foregoing;
(3) Purchase in the Money Market portfolio the securities of issuers
whose principal business is in the same industry (other than United States
Government securities, United States Government agency or instrumentality
securities or bank money instruments) if immediately after such purchase
the value of such portfolio's investments in such industry would exceed 25%
of the value of its total assets (taken at market value at the time of each
investment). For purposes of this subparagraph the personal credit and
business credit businesses of finance companies will be considered separate
industries and, as to utilities, the water, gas, electric and telephone
businesses will be considered separate industries;
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<PAGE>
(4) Purchase in the Money Market portfolio the securities (other than
of the United States Government, its agencies and instrumentalities) of any one
issuer if immediately after such purchase more than 5% of the value of such
portfolio's total assets (taken at market value at the time of each investment)
would be invested in such issuer, except that up to 25% of the value of the
portfolio's total assets may be invested without regard to such 5% limitation
but shall instead be subject to a 10% limitation;
(5) Purchase in the Money Market portfolio more than 10% of any one
class of an issuer's outstanding securities, except that such restriction shall
not apply to securities of the United States Government, its agencies or
instrumentalities, certificates of deposit, bankers' acceptances or repurchase
agreements;
(6) Make investments in the Money Market portfolio for the purpose of
exercising control or management;
(7) Make loans from either portfolio, except that securities owned or
held by the applicable portfolio may be loaned pursuant to paragraph (8) below;
provided, however, that the Trust may purchase money market securities and enter
into repurchase agreements with banks, brokers and dealers provided further,
however, that repurchase agreements maturing in more than seven days may not, at
the time entered into, exceed 10% in value of the total assets of such
portfolio;
(8) Lend either portfolio's securities in excess of 20% of such
portfolio's total assets, taken at market value; provided, however, that loans
not exceeding 20% of a portfolio's total assets may be made if collateral is
maintained from the borrower equal at all times to the current market value of
the securities loaned;
(9) Purchase in the Money Market portfolio securities of other
investment companies, except in connection with a merger, consolidation,
acquisition or reorganization;
(10) Purchase in either portfolio any securities on margin, except for
use of short-term credits necessary for clearance of purchases and sales of
portfolio securities; make short sales of securities or maintain a short
position or write, purchase or sell puts, calls, straddles, spreads or
combinations thereof;
(11) Purchase or sell real estate in the Money Market portfolio (other
than money market securities secured by real estate or interests therein or
money market securities issued by companies which invest in real estate, or
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<PAGE>
interests therein), commodities or commodity contracts, oil or gas
interests or other mineral exploration or development programs;
(12) Purchase in the Money Market portfolio securities of issuers
(other than securities of United States Government, its agencies or
instrumentalities) having a record, together with its predecessors, of less
than three years of continuous operation, if, regarding all such
securities, more than 5% of the applicable portfolio's total assets, taken
at market value, would be invested in such securities;
(13) Purchase in the Money Market portfolios securities (1) which may
require registration under the Securities Act of 1933 before sale to the
public, or (2) for which there are no readily available market quotations;
(14) Borrow money in either portfolio except from banks and only as
a temporary measure for extraordinary or emergency purposes, but not for
investment purposes nor in any amount exceeding 5% of the applicable
portfolio's total assets, taken at market value;
(15) Mortgage, pledge or hypothecate or in any manner transfer in
either portfolio (except as provided in paragraph (8) above) as security
for indebtedness any securities owned or held by the Trust except as may be
necessary in connection with borrowings mentioned in paragraph (14) above,
and then such mortgaging, pledging or hypothecating may not exceed 25% of
the applicable portfolio's total assets, taken at market value;
(16) Act as an underwriter of securities in either portfolio;
(17) Purchase or retain securities in the Money Market portfolio of
any issuer employing, as an officer or director, any person serving as an
officer or Trustee of the Trust, or purchase or retain the securities of
any issuer, if to the Trustees' knowledge, those officers, directors or
Trustees of the Trust or its investment adviser who individually either
directly or indirectly own, control or hold with power to vote more than
0.5% of the outstanding securities of such issuer, together own directly or
indirectly, control or hold with power to vote more than 5% of such
outstanding securities;
(18) Issue a class of securities which is senior to the shares, except
as provided pursuant to paragraph (14) and in accordance with the
Investment Company Act of 1940.
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<PAGE>
12.6 Reports to Shareholders; Distributions from Realized Gains. The Trust shall
send to each shareholder of record at least annually a statement of the
condition of the Trust and of the results of its operation, containing all
information required by applicable laws or regulations.
Section 13. Amendments
----------------------
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority; provided, however, that this Section 13 may
not be amended or repealed without the approval of the holders of a majority of
the outstanding shares of the Trust and that the limitations on investment set
forth in Section 12.5 of these By-Laws, if applicable to both portfolios, may
not be amended or repealed without the approval of the holders of a majority of
the outstanding shares of the Trust, without distinction as to portfolio, and,
if applicable to only one of the portfolios, may not be amended or repealed
without the approval of the holders of a majority of the outstanding shares of
such portfolio. The term "majority of the outstanding shares" of either the
Trust or a portfolio means the vote of the lesser of (i) the holders of 67% or
more of the shares of the Trust or such portfolio present at a meeting if the
holders of more than 50% of the outstanding shares of the Trust or such
portfolio are present or represented by proxy, or (ii) the holders of more than
50% of the outstanding shares of the Trust or such portfolio.
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<PAGE>
EXHIBIT 2(a)
AMENDMENT TO BY-LAWS
OF
WAYNE HUMMER MONEY FUND TRUST
APRIL 13, 1984
-----------------------------
WHEREAS, there has been presented to this Board of Trustees a proposal that
the Agreement and Declaration of Trust dated December 4, 1981 as amended and
restated through March 11, 1982 (the "Declaration of Trust") and the By-Laws of
the Trust be amended to provide for the elimination of any requirement for an
annual meeting of Shareholders of the Trust; and
WHEREAS, this Board of Trustees, having given due consideration to such
proposal, deems it desirable and in the best interests of the Trust and the
Shareholders of the Trust that the aforementioned amendments be adopted subject
to any required approvals by the Shareholders of the Trust as hereinafter
provided; and
NOW THEREFORE BE IT RESOLVED, that subject to the approval, if any, of the
Amendments to the Declaration of Trust by the Shareholders of the Trust and
subject to said Amendments thereafter becoming effective, the By-Laws of the
Trust shall be amended in the following respects:
(a) Section 2 of the By-Laws shall be amended by deleting Sections
2.1, 2.2 and 2.3 in their entirety and replacing the same with new Section
2.1 in the form set forth below and by renumbering Sections 2.4, 2.5, 2.6
and 2.7 of said By-Laws as Sections 2.2, 2.3, 2.4 and 2.5 respectively:
"2.1 Shareholder Meetings.
Meetings of the Shareholders may be called at any time by the Trustees, by
the president or if the Trustees and the president shall fail to call any
meeting of Shareholders for a period of thirty (30) days after written
application of one or more shareholders who hold at least twenty-five
percent (25%) of all shares issued and outstanding and entitled to vote at
the meeting (or ten percent (10%) if the purpose of the meeting is to
determine if a Trustee shall be removed from office), then such
Shareholders may call such meeting. Each call of a meeting shall state the
place, date, hour and purposes of the meeting."
(b) The last sentence of Section 3.1 of the By-Laws shall be amended
and restated in its entirety as follows:
<PAGE>
"Each member of the Advisory Board shall hold office until the first
meeting of the Trustees following the meeting of Shareholders, if any, next
following his appointment and until his successor is appointed and
qualified, or until he sooner dies, resigns, is removed or becomes
dasqualified, or until the Advisory Board is sooner abolished by the
Trustees."
(c) The last sentence of Section 3.2 of the By-Laws shall be amended
and restated in its entirety as follows:
"A regular meeting of the Trustees may be held without call or notice
immediately after and at the same place as any meeting of the
Shareholders."
Sections 4.3 and 4.4 of the By-Laws shall be amended and
restated in their entirety as follows:
"4.3 Election. The president, treasurer and the secretary shall be elected
annually by the Trustees at their first meeting in each calendar year or at
such later meeting in such year as the Trustees shall determine. Other
officers, if any, may be elected or appointed by the Trustees at said
meeting or at any other time.
4.4 Tenure. The president, treasurer and secretary shall hold office until
the first meeting of Trustees in each calendar year and until their
respective successors are chosen and qualified, or in each case until he or
she sooner dies, resigns, is removed or becomes disqualified. Each other
officer shall hold office and each agent shall retain his or her authority
at the pleasure of the Trustees."
(e) Section 6 of the By-Laws shall be amended by adding the followlng
sentence at the end of such Section:
"A vacancy of the office of Trustee shall be filled in accordance with the
Declaration of Trust"; and
WHEREAS, the Government Portfolio of this Trust was terminated on
March 23, 1984; and
WHEREAS, Section 12.5 of the Trust's By-Laws define certain investment
restrictions that are set forth in their entirety in the Trust's current
prospectus; and
WHEREAS, Section 12.5 of the Trust's current By-Laws make specific
reference to the Government Portfolio; and
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<PAGE>
WHEREAS, Subsection 13 of Section 12.5 of the Trust's By-Laws restricts the
Trust from purchasing securities for which there are no readily available market
quotations and it is believed that the Trust would be more appropriately
restricted from purchasing securities for which no readily available market
exists;
NOW THEREFORE BE IT RESOLVED, that subject to approval by the shareholders
of this Trust at their next meeting, Section 12.5 of the By-Laws of this Trust
is deleted in its entirety and a new Section 12.5 is substituted in its place
to read as follows:
"12.5 Limitations on Investment. The Trust may not:
(1) Purchase any securities other than money market instruments and
securities described in the Trust's then current prospectus;
(2) Purchase the securities of issuers whose principal business is in
the same industry (other than United States Government securities, United
States Government agency or instrumentality securities or bank money
instruments) if immediately after such purchase the value of the Trust's
investments in such industry would exceed 25% of the value of its total
assets (taken at market value at the time of each investment). For purposes
of this subparagraph the personal credit and business credit businesses of
finance companies will be considered separate industries and, as to
utilities, the water, gas, electric and telephone businesses will be
considered separate industries;
(3) Purchase the securities (other than of the United States
Government, its agencies and instrumentalities) of any one issuer if
immediately after such purchase more than 5% of the value of the Trust's
total assets (taken at market value at the time of each investment) would
be invested in such issuer, except that up to 25% of the value of the
Trust's total assets may be invested without regard to such 5% limitation
but shall instead be subject to a 10% limitation;
(4) Purchase more than 10% of any one class of an issuer's
outstanding securities, except that such restriction shall not apply to
securities of the United States Government, its agencies or
instrumentalities, certificates of deposit, bankers' acceptances or
repurchase agreements;
(5) Make investments for the purpose of exercising control or
management;
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<PAGE>
(6) Make loans, except that securities owned or held by the Trust may be
loaned pursuant to paragraph (7) below; provided, however, that the Trust may
purchase money market securities and enter into repurchase agreements with
banks, brokers and dealers provided further, however, that repurchase agreements
maturing in more than seven days may not, at the time entered into, exceed 10%
in value of the total assets of the Trust;
(7) Lend securities in excess of 20% of the Trust's total assets, taken at
market value; provided, however, that loans not exceeding 20% of the Trust's
total assets may be made if collateral is maintained from the borrower equal at
all times to the current market value of the securities loaned;
(8) Purchase securities or other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;
(9) Purchase any securities on margin, except for use of short-term
credits necessary for clearance of purchases and sales of portfolio securities;
make short sales of securities or maintain a short position or write, purchase
or sell puts, calls, straddles, spreads or combinations thereof;
(10) Purchase or sell real estate (other than money market securities
secured by real estate or interests therein or money market securities issued by
companies which invest in real estate, or interests therein), commodities or
commodity contracts, oil or gas interests or other mineral exploration or
development programs;
(11) Purchase securities of issuers (other than securities of United States
Government, its agencies or instrumentalities) having a record, together with
their predecessors, of less than three years of continuous operation if,
regarding all such securities, more than 5% of the Trust's total assets, taken
at market value, would be invested in such securities;
(12) Purchase securities (a) which may require registration under the
Securities Act of 1933 before sale to the public, or (b) for which no readily
available market exists;
(13) Borrow money except from banks and only as a temporary measure for
extraordinary or emergency purposes, but not for investment purposes nor in any
amount exceeding 5% of the Trust's total assets, taken at market value;
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<PAGE>
(14) Mortgage, pledge or hypothecate or in any manner transfer (except
as provided in paragraph (7) above) as security for indebtedness any
securities owned or held by the Trust except as may be necessary in
connection with borrowings mentioned in paragraph (13) above, and then such
mortgaging, pledging or hypothecating may not exceed 25% of the Trust's
total assets, taken at market value;
(15) Act as an underwriter of securities;
(16) Purchase or retain securities of any issuer employing, as an
officer or director, any person serving as an officer or Trustee of the
Trust, or purchase or retain the securities of any issuer, if, to the
Trustees' knowledge, those officers, directors or Trustees of the Trust or
its investment adviser who individually either directly or indirectly own,
control or hold with power to vote more than 0.5% of the outstanding
securities of such issuer, together own directly or indirectly, control or
hold with power to vote more than 5% of such outstanding securities;
(17) Issue a class of securities which is senior to the shares, except
as provided pursuant to paragraph (13) and in accordance with the
Investment Company Act of 1940."
CERTIFICATION
The undersigned, being the duly elected and acting Secretary of the Wayne
Hummer Money Fund Trust (the "Trust") does hereby certify that the above stated
amendments to the By-Laws of the Trust were duly adopted by the Board of
Trustees of the Trust on April 13, 1984.
/s/ Robert J. Moran
--------------------------------------
Robert J. Moran
Secretary
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<PAGE>
EXHIBIT 2(b)
BY-LAWS
-------
OF
--
WAYNE HUMMER MONEY FUND TRUST
-----------------------------
(Amended and Restated as of October 17, 1990)
Section 1. Agreement and Declaration of
Trust and Principal Office
---------------------------------------
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to
the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of WAYNE HUMMER MONEY FUND TRUST, the Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust; Resident Aaent. The principal office of
the Trust shall be located in Chicago, Illinois. Its resident agent in
Massachusetts shall be CT Corporation System, 2 Oliver Street, Boston,
Massachusetts.
Section 2. Shareholders
-----------------------
2.1 Special Meetings. A special meeting of the shareholders may be called
at any time by the Trustees, by the President or, if the Trustees and the
President shall fail to call any meeting of shareholders for a period of 30 days
after written application of one or more shareholders who hold at least 25% of
all shares issued and outstanding and entitled to vote at the meeting (or 10% if
the purpose of the meeting is to determine if a Trustee shall be removed from
office), then such shareholders may call such meeting. Each call of a meeting
shall state the place, date, hour and purposes of the meeting.
2.2 Place of Meetings. All meetings of the shareholders shall be held at
the principal office of the Trust, or, to the extent permitted by the
Declaration of Trust, at such other place within the United States as shall be
designated by the Trustees or the president of the Trust.
2.3 Notice of Meetings. A written notice of each meeting of shareholders,
stating the place, date and hour and the purposes of the meeting, shall be given
at least seven days before the meeting to each shareholder entitled to vote
thereat by leaving such notice with him or at his residence or usual place of
business or by mailing it, postage prepaid, and addressed to such shareholder at
his address as it appears in the records of the Trust. Such notice shall be
given by the secretary or an assistant secretary or by an officer designated by
the Trustees. No notice of any meeting of shareholders need be given to a
shareholder if a written waiver of notice, executed before or after
<PAGE>
the meeting by such shareholder or his attorney thereunto duly authorized, is
filed with the records of the meeting.
2.4 Ballots. No ballot shall be required for any election unless requested by
a shareholder present or represented at the meeting and entitled to vote in the
election.
2.5 Proxies. Shareholders entitled to vote may vote either in person or by
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after the final adjournment of such meeting.
Section 3. Trustees
-------------------
3.1 Committees and Advisory Board. The Trustees may appoint from their number
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not less than
two nor more than five members. The members of the advisory board shall be
compensated in such manner as the Trustees may determine and shall confer with
and advise the Trustees regarding the investments and other affairs of the
Trust. Each member of the advisory board shall hold office until the first
meeting of the Trustees following the next annual meeting of the shareholders
and until his successor is elected and qualified, or until he sooner dies,
resigns, is removed, or becomes disqualified, or until the advisory board is
sooner abolished by the Trustees.
3.2 Regular Meetings. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from time to
time determine, provided that notice of the first regular meeting following any
such determination shall be given to absent Trustees. A regular meeting of the
Trustees may be held without call or notice immediately after and at the same
place as the annual meeting of the shareholders.
3.3 Special Meetings. Special meetings of the Trustees may be held at any
time and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the
secretary or an assistant secretary or by the officer or one of the Trustees
calling the meeting.
3.4 Notice. It shall be sufficient notice to a Trustee to send notice by mail
at least forty-eight hours or by telegram at
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<PAGE>
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then
in office shall constitute a quorum; provided, however, a quorum (unless the
Board of Trustees consists of two or fewer persons) shall not be less than two.
Any meeting may be adjourned from time to time by a majority of the votes cast
upon the question, whether or not a quorum is present, and the meeting may be
held as adjourned without further notice.
Section 4. Officers and Agents
------------------------------
4.1 Enumeration; Qualification. The officers of the Trust shall be a
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The Trust
may also have such agents, if any, as the Trustees from time to time may in
their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
4.2 Powers. Subject to the other provisions of these ByLaws, each officer
shall have, in addition to the duties and powers herein and in the Declaration
of Trust set forth, such duties and powers as are commonly incident to his or
her office as if the Trust were organized as a Massachusetts business
corporation and such other duties and powers as the Trustees may from time to
time designate.
4.3 Election. The president, the treasurer and the secretary shall be
elected annually by the Trustees at their first meeting following the annual
meeting of the shareholders. Other officers, if any, may be elected or appointed
by the Trustees at said meeting or at any other time.
4.4 Tenure. The president, the treasurer and the secretary shall hold
office until the first meeting of Trustees following the next annual meeting of
the shareholders and until their respective successors are chosen and qualified,
or in each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each agent shall retain his or her authority at the pleasure of
the Trustees.
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<PAGE>
4.5 President and Vice Presidents. The president shall be the chief
executive officer of the Trust. The president shall, subject to the control of
the Trustees, have general charge and supervision of the business of the Trust.
Any vice president shall have such duties and powers as shall be designated from
time to time by the Trustees.
4.6 Chairman of the Board. If a Chairman of the Board of Trustees is
elected, he shall have the duties and powers specified in these By-Laws and,
except as the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees at which he or she is present and have such
other duties and powers as may be determined by the Trustees.
4.7 Treasurer and Controller. The treasurer shall be the chief financial
officer of the Trust and, subject to any arrangement made by the Trustees with a
bank or trust company or other organization as custodian or transfer or
shareholder services agent, shall be in charge of its valuable papers and shall
have such other duties and powers as may be designated from time to time by the
Trustees or by the president. If at any time there shall be no controller, the
treasurer shall also be the chief accounting officer of the Trust and shall have
the duties and powers prescribed herein for the controller. Any assistant
treasurer shall have such duties and powers as shall be designated from time to
time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer of
the Trust and shall be in charge of its books of account and accounting records.
The Controller shall be responsible for preparation of financial statements of
the Trust and shall have such other duties and powers as may be designated from
time to time by the Trustees or the president.
4.8 Secretaries and Assistant Secretaries. The secretary shall record a11
proceedings of the shareholders and the Trustees in books to be kept therefor,
which books shall be kept at the principal office of the Trust. In the absence
of the secretary from any meeting of shareholders or Trustees, an assistant
secretary, or if there be none or he or she is absent, a temporary clerk chosen
at the meeting shall record the proceedings thereof in the aforesaid books.
Section 5. Resignations and Removals
Any Trustees, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no
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<PAGE>
Trustee, officer, or advisory board member resigning, and no officer or advisory
board member removed shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages on account
of such removal.
Section 6. Vacancies
A vacancy in any office may be filled at any time. Each successor shall
hold office for the unexpired term, and in the case of the president, the
treasurer and the secretary, until his or her successor is chosen and qualified,
or in each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
Section 7. Shares of Beneficial Interest
7.1 Share Certificates. No certificates certifying the ownership of shares
shall be issued except as the Trustees may otherwise authorize. In the event
that the Trustees authorize the issuance of share certificates, subject to the
provisions of Section 7.3, each shareholder shall be entitled to a certificate
stating the number of shares owned by him or her, in such form as shall be
prescribed from time to time by the Trustees. Such certificate shall be signed
by the president or a vice president and by the treasurer or an assistant
treasurer. Such signatures may be facsimiles if the certificate is signed by a
transfer or shareholder services agent or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
7.2 Loss of Certificates. In the case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
7.3 Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the
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<PAGE>
surrender of share certificates to the Trust for cancellation. Such surrender
and cancellation shall not affect the ownership of shares in the Trust.
Section 8. Record Date
The Trustees may fix in advance a time, which shall not be more than 60
days before the date of any meeting of shareholders of the date for the payment
of any dividend or making of any other distribution to shareholders, as the
record date for determining the shareholders having the right to notice and to
vote at such meeting and any adjournment thereof or the right to receive such
dividend or distribution, and in such case only shareholders of record on such
record date shall have such right, notwithstanding any transfer of shares on the
books of the Trust after the record date.
Section 9. Seal
The seal of the Trust shall, subject to alteration by the Trustees, consist
of a flat-faced circular die with the word "Massachusetts" together with the
name of the Trust and the year of its organization, cut or engraved thereon;
but, unless otherwise required by the Trustees, the seal shall not be necessary
to be placed on, and its absence shall not impair the validity of, any document,
instrument or other paper executed and delivered by or on behalf of the Trust.
Section 10. Execution of Papers
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
Section 11. Fiscal Year
The fiscal year of the Trust shall end on such date in each year as the
Trustees shall from time to time determine.
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<PAGE>
Section 12. Provisions Relating to
the Conduct of the Trust's Business
12.1 Dealings with Affiliates. The Trust shall not purchase or retain
securities issued by any issuer if one or more of the holders of the securities
of such issuer or one or more of the officers or directors of such issuer is an
officer or Trustee of the Trust or officer or director of any organization,
association or corporation with which the Trust has an investment advisor's
contract ("investment advisor"), if to the knowledge of the Trust one or more of
such officers or Trustees of the Trust or such officers or directors of such
investment advisors owns beneficially more than one-half of one percent of the
shares or securities of such issuer and such officers, Trustees and directors
owning more than one-half of one percent of such shares or securities together
own beneficially more than five percent of such outstanding shares or
securities. Each Trustee and officer of the Trust shall give notice to the
secretary of the identity of all issuers whose securities are held by the Trust
of which such officer or Trustee owns as much as one-half of one percent of the
outstanding securities, and the Trust shall not be charged with the knowledge of
such holdings in the absence of receiving such notice if the Trust has requested
such information not less often than quarterly.
Subject to the provisions of the preceding paragraph, no officer, Trustee
or agent of the Trust and no officer, director or agent of any investment
advisor shall deal for or on behalf of the Trust with himself as principal or
agent, or with any partnership, association or corporation in which he has a
material financial interest; provided that the foregoing provisions shall not
prevent (a) officers and Trustees of the Trust from buying, holding or selling
shares in the Trust, or from being partners, officers or directors of or
financially interested in any investment advisor to the Trust or in any
corporation, firm or association which may at any time have a distributor's,
principal underwriter's contract with the Trust; (b) purchases or sales of
securities or other property if such transaction is permitted by or is exempt or
exempted from the provisions of the Investment Company Act of 1940 or any rule
or regulation thereunder and if such transaction does not involve any commission
or profit to any security dealer who is, or one or more of whose partners,
shareholders, officers or directors is an officer or Trustee of the Trust or an
officer or director of the investment advisor, manager or principal underwriter
of the Trust; (c) employment of legal counsel, registrar, transfer agent,
shareholder services, dividend disbursing agent or custodian who is, or has a
partner, stockholder, officer or director who is, an officer or Trustee of the
Trust; (d) sharing statistical, research and management expenses, including
office hire and services, with any other company in which an officer or Trustee
of the Trust is an officer or director or financially interested.
-7-
<PAGE>
12.2 Dealing in Securities of the Trust. The Trust, the investment advisor,
any corporation, firm or association which may at any time have an exclusive
distributor's or principal underwriter's contract with the Trust (the
"distributor") and the officers and Trustees of the Trust and officers and
directors of every investment advisor and distributor, shall not take long or
short positions in the securities of the Trust; except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset
value for investment by the investment advisor and by officers and directors of
the distributor, investment advisor, or the Trust and by any trust, pension,
profit-sharing or other benefit plan for such persons, no such purchase to be
in contravention of any applicable state or federal requirements.
12.3 Limitation on Certain Loans. The Trust shall not make loans to any
officer, Trustee or employee of the Trust or any investment advisor or
distributor or their respective officers, directors or partners or employees.
12.4 Custodian. All securities and cash owned by the Trust shall be
maintained in the custody of one or more banks or trust companies having
(according to its last published report) not less than two million dollars
($2,000,000) aggregate capital, surplus and undivided profits (any such bank or
trust company is hereinafter referred to as the "custodian"); provided, however,
the custodian may deliver securities as collateral on borrowings effected by the
Trust, provided, that such delivery shall be conditioned upon receipt of the
borrowed funds by the custodian except where additional collateral is being
pledged on an outstanding loan and the custodian may deliver securities lent by
the Trust against receipt of initial collateral specified by the Trust. Subject
to such rules, regulations and orders, if any, as the Securities and Exchange
Commission may adopt, the Trust may, or may permit any custodian to, deposit all
or any part of the securities owned by the Trust in a system for the central
handling of securities operated by the Federal Reserve Banks, or established by
a national securities exchange or national securities association registered
with said Commission under the Securities Exchange Act of 1934, or such other
person as may be permitted by said Commission, pursuant to which system all
securities of any particular class or series of any issue deposited with the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry, without physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its custodian
or upon change of the custodian:
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<PAGE>
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
(b) require that the cash and securities owned by the Trust be
delivered directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to
the shareholders, before permitting delivery of the cash and securities owned by
the Trust otherwise than to a successor custodian, the question whether or not
the Trust shall be liquidated or shall function without a custodian.
12.5 Limitations on Investment. The Trust may not:
(1) Purchase any securities other than money market instruments and
securities described in the Trust's then current prospectus or statement of
additional information;
(2) Purchase the securities of issuers whose principal business is in
the same industry (other than United States Government securities, United States
Government agency or instrumentality securities or bank money instruments) if
immediately after such purchase the value of the Trust's investments in such
industry would exceed 25% of the value of its total assets (taken at market
value at the time of each investment). For purposes of this subparagraph the
personal credit and business credit businesses of finance companies will be
considered separate industries and, as to utilities, the water, gas, electric
and telephone businesses will be considered separate industries;
(3) Purchase the securities (other than of the United States
Government, its agencies and instrumentalities) of any one issuer if immediately
after such purchase more than 5% of the value of the Trust's total assets (taken
at market value at the time of each investment) would be invested in such
issuer, except that up to 25% of the value of the Trust's total assets may be
invested without regard to such 5% limitation but shall instead be subject to a
10% limitation;
(4) Purchase more than 10% of any one class of an issuer's outstanding
securities, except that such restriction shall not apply to securities of the
United States Government, its agencies or instrumentalities, certificates of
deposit, bankers' acceptances or repurchase agreements;
(5) Make investments for the purpose of exercising control or
management;
(6) Make loans, except that securities owned or held by the Trust may
be loaned pursuant to paragraph (7) below; provided, however, that the Trust
may purchase money market securities and enter into repurchase agreements with
banks, brokers and dealers;
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<PAGE>
(7) Lend securities in excess of 20% of the Trust's total assets,
taken at market value; provided, however, that loans not exceeding 20% of the
Trust's total assets may be made if collateral is maintained from the borrower
equal at all times to the current market value of the securities loaned;
(8) Purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization;
(9) Purchase any securities on margin, except for use of short-term
credits necessary for clearance of purchases and sales of portfolio securities;
make short sales of securities or maintain a short position or write, purchase
or sell puts, calls, straddles, spreads or combinations thereof;
(10) Purchase or sell real estate (other than money market securities
secured by real estate or interests therein or money market securities issued by
companies which invest in real estate, or interests therein), commodities or
commodity contracts, oil or gas interests or other mineral exploration or
development programs;
(11) Purchase securities of issuers (other than securities of the
United States Government, its agencies or instrumentalities) having a record,
together with their predecessors, of less than three years of continuous
operation if, regarding all such securities, more than 5% of the Trust's total
assets, taken at market value, would be invested in such securities;
(12) Invest in securities restricted as to disposition under the
federal securities laws (except money market instruments issued under Section
4(2) of the Securities Act);
(13) Invest more than 10% of its assets in securities (including
repurchase agreements maturing in more than 7 days), which are considered
illiquid;
(14) Borrow money except from banks and only as a temporary measure
for extraordinary or emergency purposes, but not for investment purposes nor in
any amount exceeding 5% of the Trust's total assets, taken at market value;
(15) Mortgage, pledge or hypothecate or in any manner transfer (except
as provided in paragraph (7) above) as security for indebtedness any securities
owned or held by the Trust except as may be necessary in connection with
borrowings mentioned in paragraph (14) above, and then such mortgaging, pledging
or hypothecating may not exceed 25% of the Trust's total assets, taken at market
value;
(16) Act as an underwriter of securities;
-10-
<PAGE>
(17) Purchase or retain securities of any issuer employing, as an
officer or director, any person serving as an officer or Trustee of the Trust,
or purchase or retain the securities of any issuer, if, to the Trustees'
knowledge, those officers, directors or Trustees of the Trust or its investment
adviser who individually either directly or indirectly own, control or hold
with power to vote more than 0.5% of the outstanding securities of such issuer,
together own directly or indirectly, control or hold with power to vote more
than 5% of such outstanding securities; or
(18) Issue a class of securities which is senior to the shares, except
as provided pursuant to paragraph (13) and in accordance with the Investment
Company Act of 1940.
12.6 Reports to Shareholders; Distributions from Realized Gains. The Trust
shall send to each shareholder of record at least annually a statement of the
condition of the Trust and of the results of its operation, containing all
information required by applicable laws or regulations.
Section 13. Amendments
----------------------
These By-Laws may be amended or repealed, in whole or in part, by a
majority of the Trustees then in office at any meeting of the Trustees, or by
one or more writings signed by such majority; provided, however, that this
Section 13 may not be amended or repealed without the approval of the holders of
a majority of the outstanding shares of the Trust and that the limitations on
investment set forth in Section 12.5 of these By-Laws, if applicable to both
portfolios, may not be amended or repealed without the approval of the holders
of a majority of the outstanding shares of the Trust, without distinction as to
portfolio, and, if applicable to only one of the portfolios, may not be amended
or repealed without the approval of the holders of a majority of the outstanding
shares of such portfolio. The term "majority of the outstanding shares" of
either the Trust or a portfolio means the vote of the lesser of (i) the holders
of 67% or more of the shares of the Trust or such portfolio present at a meeting
if the holders of more than 50% of the outstanding shares of the Trust or such
portfolio are present or represented by proxy, or (ii) the holders of more than
50% of the outstanding shares of the Trust or such portfolio.
-11-
<PAGE>
EXHIBIT 5
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
--------------------------------------------
This AGREEMENT made this 11th day of March, 1982 between WAYNE HUMMER MONEY
FUND TRUST, a Massachusetts business trust (the "Fund"), and WAYNE HUMMER
MANAGEMENT COMPANY, an Illinois corporation (the "Adviser");
WITNESSETH:
WHEREAS, the Fund is a no-load, open-end, diversified management investment
company registered under the Investment Company Act of 1940, the units of
beneficial interest ("Shares") of which are registered under the Securities Act
of 1933; and
WHEREAS, the Fund is authorized to issue Shares in separate series with
each such series representing the interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends initially to offer Shares in two portfolios, the
Money Market Portfolio and the Government Portfolio [such Portfolios (the
"Initial Portfolios"), 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 managerial services to the Initial Portfolios and the
Fund, and the Adviser is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Initial Appointment of Adviser. The Fund hereby appoints the Adviser
to act as investment adviser to each of the Initial Portfolios and manager of
the Fund for the period and on the terms herein set forth. The Adviser accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Subsequent Appointments of Adviser. In the event that the Fund
establishes one or more portfolios other than the Initial Portfolios with
respect to which it desires to retain the Adviser to render investment advisory
and managerial
<PAGE>
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. Delivery of Documents. The Fund has delivered (or will deliver as
soon as is possible) to the Adviser copies of each of the following documents
and will deliver to the Adviser all future amendments and supplements.
(a) Agreement and Declaration of Trust of the Fund (such Agreement
and Declaration of Trust, as presently in effect and as amended from time
to time, is herein called the "Trust Agreement"), a copy of which also is
on file with the Secretary of the Commonwealth of Massachusetts.
(b) By-Laws of the Fund (such By-Laws, as presently in effect and as
amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees and Shareholders of the
Fund authorizing the appointment of the Adviser and approving this
Agreement;
(d) Registration Statement under the Securities Act of 1933 and under
the Investment Company Act of 1940, as amended, on Form N-1 (the
"Registration Statement") as filed with the Securities and Exchange
Commission and all amendments thereto;
(e) Prospectus of the Fund to be dated April 2, 1982, (such
prospectus, as then in effect and as amended, supplemented and/or
superseded from time to time, is herein called the "Prospectus");
(f) Exemptive Order permitting the Fund to use amortized cost
valuation of Portfolio securities.
4. Duties of and Expenses Borne by the Adviser. Subject to the general
supervision of the Trustees of the Fund, the Adviser shall manage the investment
operations of each of the Portfolios and the composition of each of the
Portfolios' assets, including the purchase, retention and disposition thereof,
in accordance with the policies of the Fund and of each of the Portfolios as
stated in the Prospectus and with the Fund's and each such Portfolio's
investment objective(s) and subject to the following understandings:
(a) the Adviser shall, in the management of the Portfolios, use the
same skill and care in the management of the Portfolios as is required to
be used in the discharge of fiduciary duties under the
-2-
<PAGE>
Investment Company Act of 1940, the Investment Advisers Act of 1940, the
Securities Act of 1933 and the Internal Revenue Code of 1954;
(b) the Adviser shall provide supervision of the Portfolios' assets;
furnish a continuous investment program for such Portfolios; determine from
time to time what investments or securities will be purchased, retained or
sold by the Portfolios, and what portion of the assets will be invested or
held uninvested as cash;
(c) the Adviser, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Trust Agreement,
By-Laws and Prospectus and with the instructions and directions of the
Trustees of the Fund, and will comply with and conform to the requirements
of the Investment Company Act of 1940, the Investment Advisers Act of 1940,
the Securities Act of 1933 and the Internal Revenue Code of 1954, as each
may from time to time be amended and all other applicable federal and state
laws, regulations and rulings;
(d) the Adviser shall determine the securities to be purchased or
sold by the Portfolios and will place orders pursuant to its determinations
either directly with the issuer or underwriter or with any broker and/or
dealer who deals in the securities in which the Portfolio in question is
active. In placing orders with brokers or dealers the Adviser will attempt
to obtain prompt and effective execution of orders at the best price. In
seeking to achieve the best combination of price and execution, an effort
shall be made to evaluate the overall quality and reliability of broker-
dealers and the service they provide, including their general execution
capability, reliability and integrity, willingness to take positions in
securities, general operational capabilities and financial condition. When
the execution and price offered by two or more brokers or dealers are
comparable, the Adviser may, in its discretion, purchase and sell Portfolio
securities to and from brokers or dealers who provide the Investment
Adviser with research, statistical or other services. In no instance will
Portfolio securities be purchased from or sold to the Fund's Distributor or
the Adviser or an affiliate (as defined in the Investment Company Act of
1940) of either. In addition, no Portfolio will purchase securities of
United States Government agencies during the existence of any underwriting
or selling group relating thereto of which the Fund's Distributor or the
Adviser is a member;
-3-
<PAGE>
(e) on occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of a Portfolio as well as other
clients, if any (including any other Portfolio), the Adviser, to the
extent permitted by applicable laws and regulations, may aggregate the
securities to be purchased or sold. In such event, allocation of the
securities so purchased or sold will be made by the Adviser in a manner it
considers to be equitable to each, and transaction costs will be allocated
so that each receives, to the extent possible, the same price;
(f) the Adviser shall render to the Trustees of the Fund such periodic
and special reports as the Trustees may reasonably request;
(g) the services of the Adviser to the Portfolios under this Agreement
are not to be deemed exclusive and the Adviser shall be free to render
similar or other services in the future to the Fund or to others so long as
its services under this Agreement are not impaired thereby;
(h) the Adviser shall provide the Fund with, or obtain for it,
adequate office space and such basic office equipment and services
including furnishings, telephone service, heat, utilities, stationery
supplies and similar items as may reasonably be necessary for managing the
Fund's affairs and conducting the business of the Fund as well as employing
or providing and compensating officers and other personnel for the
management of the Fund's Portfolios;
(i) the Adviser shall arrange, but not pay for, the periodic updating
of the Prospectus and supplements thereto, proxy material, tax returns,
reports to the Fund's shareholders and filings with and reports to the
Securities and Exchange Commission and state securities authorities;
(j) the Adviser shall pay any salaries and fees of any officers of the
Fund and salaries and fees of all Trustees of the Fund who are "interested
persons" (as defined in the Investment Company Act of 1940) and of all
other personnel of the Adviser performing services relating to research,
statistical and investment activities.
5. Expenses Borne by the Fund. It is expressly understood that the
Fund will pay all its expenses other than those expressly stated to be payable
by the Adviser pursuant to paragraph 4 hereunder, unless otherwise agreed in
writing,
-4-
<PAGE>
which expenses payable by the Fund shall include, without limitation:
(i) all federal, state and local or other governmental agency taxes or
fees levied against the Fund;
(ii) costs, including the interest expense, of borrowing money;
(iii) brokerage commissions and other transaction costs in connection
with the purchase or sale of Portfolio securities by the Adviser for the
Fund;
(iv) fees and expenses of its Trustees other than those who are
"interested persons" (as defined in the Investment Company Act of 1940);
(v) expenses incidental to holding meetings of the Fund's
Shareholders, including proxy solicitations therefor, and meetings of the
Board of Trustees and committees of the Board of Trustees;
(vi) fees and expenses in connection with legal services rendered to
the Fund, the Board of Trustees of the Fund and duly appointed committees
of the Board of Trustees of the Fund, including fees and expenses of
special counsel to those Trustees who are not "interested persons" (as
defined in the Investment Company Act of 1940) and litigation;
(vii) audit and accounting expenses;
(viii) custodian and transfer agent fees and expenses and
shareholder service expenses;
(ix) fees and expenses related to the registering, qualifying and
maintaining registration and qualification of the Fund and its Shares for
distribution under federal, state and other laws;
(x) fees and expenses incidental to filing reports with regulatory
agencies;
(xi) expenses of preparation, printing (including typesetting) and
mailing prospectuses, shareholder reports, proxy materials and notices to
shareholders of the Fund;
(xii) premiums for insurance carried by the Fund pursuant to the
requirements of Section 17(g) or permissible under any other provision
of the
-5-
<PAGE>
Investment Company Act of 1940 and the regulations promulgated
thereunder;
(xiii) the allocated portion of fees and expenses incurred in
connection with any investment company organization or trade association
of which the Fund may be a member;
(xiv) costs and expenses incurred for promotion or advertising of the
Fund's Shares, but only pursuant to a 12b-1 Plan duly adopted in
accordance with Rule 12b-1 of the Securities and Exchange Commission and to
the extent that such Plan may from time to time provide.
6. Books and Records The Adviser agrees that all records which it maintains
for the Fund are the property of the Fund and it will surrender promptly to the
Fund any of such records upon the Fund's request. The Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 of the Commission under the
Investment Company Act of 1940 any such records as are required to be maintained
by Rule 31a-1 of the Securities Exchange Commission under said Act.
7. Compensation Subject to the provisions of subparagraph (b) of this
paragraph 7 and subject to the provisions of paragraph 8 of this Agreement, for
the services provided and the expenses assumed by the Adviser pursuant to this
Agreement, the Fund will pay to the Adviser as full compensation therefor a fee
based on net assets on each day, paid monthly and computed at the following
annual rates:
(a) Portion of Average Daily Value of Net Assets of the Fund:
FEE:
---
Up to $500 million 0.50%
In excess of $500 million but
not exceeding $750 million 0.425%
In excess of $750 million but
not exceeding $1 billion 0.375%
In excess of $1 billion but
not exceeding S1.5 billion 0.350%
In excess of $1.5 billion but
not exceeding $2 billion 0.325%
In excess of $2 billion but
not exceeding $2.5 billion 0.300%
In excess of $2.50 billion 0.275%
-6-
<PAGE>
(b) Notwithstanding anything herein to the contrary, the Adviser agrees
to waive all right to compensation provided in paragraph 7(a) herein
until the expiration of ninety (90) days from the date on which the Fund
commences an offering of its Shares to the public, or until the daily net
assets of the Fund reach $25,000,000, whichever shall first occur.
The fee payable to the Adviser shall be allocated pro rata between or
among the Portfolios on the basis of relative net asset value.
(c) In addition to the compensation provided pursuant to subparagraph (a)
of this paragraph 7 and notwithstanding the provision of subparagraph (b)
of this paragraph 7, the Fund shall reimburse to the Adviser on a monthly
basis those expenses which the Fund has agreed to bear pursuant to the
provisions of paragraph 5 of this Agreement, which expenses may from time
to time be incurred by the Adviser for the benefit of the Fund in the
performance of the Adviser's duties pursuant to paragraph 4 hereunder.
8. Compensation Limitation In the event the operating expenses of the Fund,
including all investment advisory and administrative fees, for any fiscal year
ending on a date on which this Agreement is in effect exceed either (i) the
expense limitations applicable to the Fund imposed by the securities laws or
regulations thereunder of any state in which the Fund's Shares are qualified for
sale, as such limitations may be raised or lowered from time to time, or (ii) 1%
of the Fund's average daily net assets; the Adviser shall reduce its investment
advisory fee to the extent of its share of such excess expenses and, if
required, pursuant to any such laws or regulations, will reimburse the Fund for
its share of annual operating expenses in excess of any expense limitation that
may be applicable; provided, however, there shall be excluded from such expenses
the amount of any interest, taxes, brokerage commissions, and extraordinary
expenses (including but not limited to legal claims and liabilities and
litigation costs and any indemnification related thereto) paid or payable by the
Fund. Such reduction, if any, shall be computed and accrued daily, shall be
settled on a monthly basis and shall be based upon the expense limitation
applicable to the Fund as at the end of the last business day of the month.
Should two or more such expense limitations be applicable as at the end of the
last business day of the month, that expense limitation which results in the
largest reduction in the Adviser's fee shall be applicable.
9. Limitation of Liability Subject to Section 36 of the Investment Company
Act of 1940, neither the Adviser nor any of its agents or employees shall be
liable for any error of
-7-
<PAGE>
judgment or mistake of law or for any loss suffered by any Portfolio in
connection with the matters to which this Agreement relates, except liability to
the Fund or the Shareholders to which the Adviser would otherwise be subject by
reason of the Adviser's willfull misfeasance, bad faith, or gross negligence
in the performance of its duties, or by reason of its reckless disregard of
its obligations and duties under this Agreement.
10. Duration and Termination This Agreement, unless sooner terminated as
provided herein, shall remain in force until July 31, 1983 and shall be
submitted to the holders of Shares of each Portfolio at the first annual or
special meeting of shareholders held after commencement of the public offering
of the Fund's Shares, and thereafter in the case of each Initial Portfolio
shall continue automatically so long as such continuance is approved at least
annually (a) by the vote of a majority of the Trustees of the Fund who are not
parties to this Agreement or interested persons (as defined in the Investment
Company Act of 1940) of any such party, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the Trustees of the Fund or
by vote of a majority of the outstanding Shares (as defined with respect to
voting securities in the Investment Company Act of 1940) representing the
interests in such Portfolio; provided, however, that (a) the continuance of this
Agreement insofar as it pertains to each of the Portfolios other than the
Initial Portfolios, be subject to the approval of this Agreement by a majority
of the outstanding Shares (as so defined) representing the interests in such
Portfolio at the next annual meeting or special meeting of Shareholders to be
held following the public offering of such Portfolio and that (b) this Agreement
may be terminated with respect to all or any of the Portfolios by the Fund at
any time, without the payment of any penalty, by vote of a majority of the
Trustees of the Fund or by vote of a majority of the outstanding Shares (as so
defined) representing the interests in each Portfolio with respect to which this
Agreement is to be terminated on sixty (60) days' written notice to the Adviser,
or by the Adviser at any time, without the payment of any penalty, on sixty (60)
days' written notice to the Fund. This Agreement will automatically and
immediately terminate in the event of its assignment (as defined in the
Investment Company Act of 1940).
11. Status of Adviser as Independent Contractor The Adviser shall for all
purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Trustees of the Fund
from time to time, have no authority to act for or represent the Fund in any way
or otherwise be deemed an agent of the Fund.
12. Amendment of Agreement This Agreement may be amended by mutual consent,
but the consent of the Fund must be (a) by
-8-
<PAGE>
vote of a majority of those Trustees of the Fund who are not parties to this
Agreement or interested persons (as defined in the Investment Company Act of
1940) of any such party, at a meeting called for the purpose of voting on such
amendment, and (b) by vote of a majority of the outstanding Shares (as defined
with respect to voting securities in the Investment Company Act of 1940)
representing the interests in each Portfolio affected by such amendment.
13. Limitation of Liability This Agreement is executed by or on behalf of the
Fund and the Adviser is hereby expressly put on notice of the limitation of
Shareholder liability as set forth in the Trust Agreement and agrees that the
obligations assumed by the Fund pursuant to this Agreement shall be limited in
all cases to the Fund and its assets, and the Adviser shall not seek
satisfaction of any such obligations from the Shareholders or any Shareholder of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or Officers of the Fund or any individual Trustee
or Officer.
14. Miscellaneous The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be construed in accordance with applicable federal law and
(except as to paragraph 13 hereof which shall be construed in accordance with
the laws of the Commonwealth of Massachusetts) the laws of the State of
Illinois and shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, subject to paragraph 10 hereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
ATTEST: WAYNE HUMMER MONEY FUND TRUST
- ------------------------ By
--------------------------
ATTEST: WAYNE HUMMER MANAGEMENT
COMPANY
- ------------------------ By
--------------------------
-9-
<PAGE>
EXHIBIT 6
DISTRIBUTION AGREEMENT
----------------------
This AGREEMENT made this 11th day of March, 1982 between WAYNE HUMMER MONEY
FUND TRUST, a Massachusetts Business Trust (the "Fund"), and WAYNE HUMMER & CO.,
an Illinois general partnership (the "Distributor");
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Fund is a no-load, open-end, diversified management investment
company registered under the Investment Company Act of 1940 (the 1940 Act), the
units of beneficial interest ("Shares") of which are registered under the
Securities Act of 1933, as amended; and
WHEREAS, the Fund is authorized to issue Shares in separate series with
each such series representing the interests in a separate portfolio of
securities and other assets and intends initially to offer Shares in two
portfolios, the Money Market Portfolio and the Government Portfolio
(hereinafter, together with any other portfolios(s) established by the Fund
collectively referred to as the "Portfolios"); and
WHEREAS, the Fund desires at this time to retain the Distributor as the
sole and exclusive distributor for Shares of the Portfolios and the Distributor
is willing to act in such capacity;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
<PAGE>
1. Appointment of the Distributor. The Fund hereby appoints the
Distributor as the sole and exclusive distributor of the Shares of each of the
Portfolios upon the terms and for the periods set forth in this Agreement.
The Distributor hereby accepts such appointment and agrees to render the
services and perform the duties set forth in this paragraph 1 and paragraph 2.
2. Duties of the Distributor. The following provisions shall apply to the
Distributor's obligations as distributor under this Agreement:
(a) The Fund agrees to sell Shares of each of the Portfolios
exclusively through the Distributor, as agent, from time to time during the
term of this Agreement upon the terms and at the current offering price
described in the prospectus. Such sales may, however, be suspended whenever
in the judgment of the Fund it is in the best interests to do so;
(b) The Distributor will hold itself available to receive or will
arrange for the receipt of orders for the purchase of Shares of each
Portfolio and will (and shall have the authority to) receive and accept or
reject or arrange for the receipt and acceptance or rejection of such
orders on behalf of the Fund in accordance with the provisions of the
Prospectus;
(c) The Distributor shall not be obligated to sell any certain number
of Shares of any Portfolio;
(d) In performing its duties hereunder, the Distributor shall act in
conformity with the Trust Agreement, By-Laws, Registration Statement,
Prospectus and Federal Registration Statement of the Fund and with the
instructions and directions of the Trustees of the Fund; and will comply
with and conform to the requirements of the 1940 Act, the Securities Act of
1933, the Securities Exchange Act of 1934 and all other applicable federal
and state laws, regulations and rulings;
(e) The Distributor shall be free to render to others services
different from or similar to those rendered to the Fund hereunder so long
as the Distributor's services hereunder are not impaired thereby. It
further is understood and agreed that by separate agreement with the Fund,
the Distributor may
-2-
<PAGE>
also serve the Fund in other capacities; that partners or employees of the
Distributor may serve as officers or Trustees of the Fund to the extent
permitted by law; and that the Distributor or its partners or employees are
not prohibited from engaging in any other business activity or from
rendering services to any other entity, or from serving as officers,
directors or trustees of any other organizations including investment
companies.
3. Unreimbursable Distribution Costs. During the term of this Agreement,
the Distributor will pay the following costs:
(a) Except as provided in paragraph 4 of this Agreement, costs of all
sales presentations, mailing, advertising and any other distribution
efforts which may be undertaken by the Distributor in its discretion with
respect to the Shares of each of the Portfolios. Such costs shall not be
deemed to include the costs of preparing and setting in type Prospectuses,
proxy materials, reports and notices or the costs of printing and
distributing the same to existing shareholders and regulatory authorities;
and
(b) Compensation of any personnel of the Distributor for activities in
connection with the distribution or sale of the Shares of each of the
Portfolios.
4. Reimbursable Distribution Costs. During the term of this Agreement,
and pursuant to the Wayne Hummer Money Fund Trust 12b-1 Plan (the "Plan"), a
copy of which is attached hereto and by reference made a part hereof, the Fund
shall reimburse the Distributor for distribution costs as specified therein. The
Distributor hereby agrees to be bound by the terms and conditions of the Plan
and to take all steps as may be reasonably necessary to comply therewith. To the
extent that any provision of the Plan is inconsistent with a provision of this
Agreement, the provision of the Plan will control. The waiver of any
reimbursements to which the Distributor is entitled under
-3-
<PAGE>
the Plan shall not be deemed a waiver as to any subsequent reimbursement.
Nothing in this Agreement or in the Plan shall be construed to obligate the
Distributor to incur costs which may be reimbursable under the Plan.
5. Duration and Termination. This Agreement shall continue, unless sooner
terminated as provided herein, until July 31, 1983 and shall be submitted to
Shareholders of the Fund's shares at the first annual or special meeting of the
Shareholders of the Fund after a public offering of the Fund's Shares, and
thereafter shall continue for periods of one year so long as each such latter
continuance is approved at least annually (a) by the vote of a majority of the
Trustees of the Fund who are not parties to this Agreement or interested persons
(as defined in the 1940 Act) of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Trustees of
the Fund or by vote of a majority of the outstanding Shares of the Fund (as
defined with respect to voting securities in the 1940 Act); provided, however,
that this Agreement may be terminated by the Fund at any time, without the
payment of any penalty, on 60 days' written notice to the Distributor or by the
Distributor at any time, without the payment of any penalty, on 90 days' written
notice to the Fund. This Agreement will automatically and immediately terminate
in the event of its assignment (as defined in the 1940 Act).
-4-
<PAGE>
6. Amendment of Agreement. This Agreement (excluding the
Plan which may only be amended as provided for therein) may be amended by mutual
consent, but the consent of the Fund must be by vote of a majority of those
Trustees of the Fund who are not parties to this Agreement or interested persons
(as defined in the 1940 Act) of any such party, cast in person at a meeting
called for the purpose of voting on such amendment.
7. Shareholder Liability. This Agreement is executed by or on behalf of the
Fund and the obligations hereunder are not binding upon any of the Trustees,
officers or shareholders of the Fund individually but are binding only upon the
Fund and its assets and property.
8. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be construed in accordance with
applicable federal law and (except as to paragraph 7 hereof which shall be
construed in accordance with the laws of The Commonwealth of Massachusetts) the
laws of the State of Illinois and shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, subject to
paragraph 5 hereof.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
Attest: WAYNE HUMMER MONEY FUND TRUST
By /s/ David H. Slavik
- ------------------------ ------------------------------
its as its President
----------------------- --------------------------
Witness: WAYNE HUMMER & CO.
By
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A General Partner
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<PAGE>
EXHIBIT 8(a)
CUSTODIAN AGREEMENT
Between
WAYNE HUMMER MONEY FUND TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
<TABLE>
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Table of Contents
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Page
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<S> <C>
1. Employment of Custodian and Property to be
Held by It........................................... 1 - 2
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian.................... 2
2.1 Holding Securities............................. 2
2.2 Delivery of Securities......................... 2 - 5
2.3 Registration of Securities..................... 6
2.4 Bank Accounts.................................. 6 - 7
2.5 Payments for Shares............................ 7
2.6 Investment and Availability of Federal Funds... 7 - 8
2.7 Collection of Income........................... 8
2.8 Payment of Fund Moneys......................... 8 - 11
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased................ 11
2.10 Payments for Repurchases or Redemptions
of Shares of the Fund.......................... 12
2.11 Appointment of Agents.......................... 12 - 13
2.12 Deposit of Fund Assets in Securities Systems... 13 - 16
2.13 Ownership Certificates for Tax Purposes........ 16
2.14 Proxies........................................ 16
2.15 Communications Relating to Fund
Portfolio Securities........................... 17
2.16 Proper Instructions............................ 17 - 18
2.17 Actions Permitted Without Express Authority.... 18 - 19
2.18 Evidence of Authority.......................... 19
3. Duties of Custodian With Respect to the Books
of Account and Calculation of Net Asset Value
and Net Income....................................... 20 - 21
4. Records.............................................. 21 - 22
5. Opinion of Fund's Independent Accountant 22
6. Reports to Fund by Independent Public Accountants.... 22
7. Compensation of Custodian............................ 22 - 23
8. Responsibility of Custodian.......................... 23 - 24
9. Limitation of Liability.............................. 24
10. Effective Period, Termination and Amendment.......... 24 - 26
11. Successor Custodian.................................. 26 - 27
12. Interpretive and Additional Provisions............... 27
13. Massachusetts Law to Apply........................... 28
14. Prior Contracts...................................... 28
</TABLE>
<PAGE>
CUSTODIAN AGREEMENT
-------------------
This Agreement between the Wayne Hummer Money Fund Trust, a Massachusetts
business trust organized and existing under the laws of Massachusetts
hereinafter called the "Fund, and State Street Bank and Trust Company,
hereinafter called the "Custodian,"
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
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The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the provisions of the Agreement and Declaration of Trust of the
Fund. The Custodian hereby acknowledges that the Fund will be issuing units of
beneficial interest ("Shares") in two series ("Portfolios") and that both
Portfolios shall be subject to this Agreement. The Fund agrees to deliver to the
Custodian all securities and cash owned by it, and all payments of income,
payments of principal or capital distributions received by it with respect to
all securities owned by the Fund in its Portfolios from time to time, and the
cash consideration received by it for the issuance and sale of its Shares from
time to time. The Custodian shall not be responsible for any property of the
Fund held or received by the Fund and not delivered to the Custodian.
The Custodian may from time to time employ one or more sub-custodians,
but only in accordance with a vote by the
<PAGE>
Trustees of the Fund. The Custodian shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of any sub-
custodian so employed.
2. Duties of the Custodian with Respect to Property of the Fund Held by
the Custodian
2.1 Holding Securities. The Custodian shall hold and physically segregate for
the account of the Fund and for each Portfolio all non-cash property,
including all securities owned by the Fund other than securities which
are maintained in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department of the
Treasury pursuant to Section 2.12, collectively referred to herein as
"Securities System."
2.2 Delivery of Securities. The Custodian shall release and deliver
securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of proper instructions,
which may be continuing instructions when deemed appropriate by the
parties, and only in the following cases:
1) Upon sale of such securities for the account
of the Fund and receipt of payment therefor;
2) Upon the receipt of payment in connection
with any repurchase agreement related to
such securities entered into by the Fund;
-2-
<PAGE>
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other
similar offers for Portfolio securities of the Fund;
5) To the Issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the Issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee or nominees
of the Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.11 or into the name or nominee
name of any sub-custodian appointed pursuant to Article 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
securities are to be delivered to the Custodian;
7) To the broker selling the same for examination in accordance
with the "street delivery" custom;
-3-
<PAGE>
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the Issuer of such securities, or pursuant to provisions
for conversion contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities
or the surrender of interim receipts or temporary securities for
definitive securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by the
Fund, but only against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund in accordance with the
Fund's then current prospectus, which collateral may be in the form of
cash or obligations issued by the United States government, its
agencies or instrumentalities;
-4-
<PAGE>
11) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Fund, but only
against receipt of amounts borrowed;
12) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer
Agent or to the holders of Shares in connection with
distributions in kind, as may be described from time to time
in the Fund's then current prospectus, in satisfaction of
requests by holders of Shares for repurchase or redemption;
and
13) For any other proper purpose, but only upon receipt of, in
addition to proper instructions, a certified copy of a
resolution of the Trustees or of the Executive Committee of
the Board of Trustees signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary,
specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such
purposes to be proper purposes, and naming the person or
persons to whom delivery of such securities shall be made.
-5-
<PAGE>
2.3 Registration of Securities. Securities held by the Custodian (other than
bearer securities) shall be registered in the name of the Fund or if in
the name of any nominee of the Fund or of the Custodian, each Portfolio
shall have a nominee assigned exclusively to that Portfolio, unless the
Fund has authorized in writing the appointment of a nominee to be used in
common with other registered investment companies having the same
investment adviser as the Fund, or in the name or nominee name of any
agent appointed pursuant to Section 2.11 or in the name or nominee name
of any sub-custodian appointed pursuant to Article 1. All securities
accepted by the Custodian on behalf of the Fund under the terms of this
Agreement shall be in "street" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts for each Portfolio in the name of the Fund, subject
only to draft or order by the Custodian acting pursuant to the terms of
this Agreement, and shall hold in such account or accounts, subject to
the provisions hereof, all cash received by it from or for the account of
the applicable Portfolio, other than cash maintained by the Fund in a
bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for the
Fund's Portfolios may be deposited by it to its
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<PAGE>
credit as Custodian for the exclusive benefit of the applicable Portfolio
of the Fund in the Banking Department of the Custodian or in such other
banks or trust companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust company shall
be qualified to act as a custodian under the Investment Company Act of
1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be approved by vote
of a majority of the Trustees of the Fund. Such funds shall be deposited
by the Custodian in its capacity as Custodian and shall be withdrawable
by the Custodian only in that capacity.
2.5 Payments for Shares. The Custodian shall receive from the distributor of
the Fund's Shares and deposit into the Fund's account such payments as
are received for Shares of the Fund issued or sold from time to time by
the Fund. The Custodian will provide timely notification to the Fund and
the Transfer Agent of any receipt by it of payments for Shares of the
Fund.
2.6 Investment and Availability of Federal Funds. Upon mutual agreement
between the Fund and the Custodian, the Custodian shall, upon the receipt
of proper instructions, invest in such instruments for such Portfolio or
Portfolios as may be set forth in such instructions, on the same day as
received, all federal
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<PAGE>
funds received after a time agreed upon between the Custodian and the
Fund.
2.7 Collection of Income. The Custodian shall collect on a timely basis all
income and other payments with respect to registered securities held
hereunder to which the Fund shall be entitled either by law or pursuant
to custom in the securities business, and shall collect on a timely basis
all income and other payments with respect to bearer securities if, on
the date of payment by the Issuer, such securities are held by the
Custodian or agent thereof and shall credit such income, as collected, to
the Fund's custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all coupons
and other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder. Any
loss of income and other damages sustained by the Fund as the result of
the Custodian's failure to request timely payment or failure to present
for collection coupons or other items requiring presentation, as provided
in this paragraph, shall be borne by the Custodian.
2.8 Payment of Fund Moneys. Upon receipt of proper instructions, which may be
continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of the Fund in the following cases only:
-8-
<PAGE>
1) Upon the purchase of securities for the account of a Portfolio of the
Fund but only (a) against the delivery of such securities to the
Custodian (or any bank, banking firm or trust company doing business in
the United States or abroad which is qualified under the Investment
Company Act of 1940, as amended, to act as a custodian and has been
designated by the Custodian as its agent for this purpose) registered in
the name of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for transfer; (b) in
the case of a purchase effected through a Securities System, in
accordance with the conditions set forth in Section 2.12 hereof or (c)
in the case of repurchase agreements entered into between the Fund and
the Custodian, or another bank, (i) against delivery of the securities
either in certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Fund of securities
owned by the Custodian along with written evidence of the agreement by
the
-9-
<PAGE>
Custodian to repurchase such securities from the Fund;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund
as set forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of
the Fund: interest, taxes, management, accounting, transfer agent and
legal fees, and operating expenses of the Fund whether or not such
expenses are to be in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends declared pursuant to the governing
documents of the Fund;
6) For any other proper purpose, but only upon receipt of, in addition to
proper instructions, a certified copy of a resolution of the Trustees or
of the Executive Committee of the Board of Trustees of the Fund signed
by an officer of the Fund and certified by its Secretary or an
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<PAGE>
Assistant Secretary, specifying the amount of such payment, setting
forth the purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or persons to whom
such payment is to be made.
2.9 Liability for Payment in Advance of Receipt of Securities Purchased. In any
and every case where payment for the purchase of securities on behalf of
the Fund is made by the Custodian in advance of the receipt of the
securities purchased and in the absence of specific written instructions
from the Fund to so pay in advance, the Custodian shall be absolutely
liable to the Fund for such securities to the same extent as if the
securities had been received by the Custodian, except that in the case of
repurchase agreements entered into by the Fund with a bank which is a
member of the Federal Reserve System, the Custodian may transfer funds to
the account of such bank prior to the receipt of written evidence that the
securities subject to such repurchase agreement have been transferred by
book-entry into a segregated non-proprietary account of the Custodian
maintained with the Federal Reserve Bank of Boston or of the safe-keeping
receipt, provided that such securities have in fact been so transferred by
book-entry.
-11-
<PAGE>
2.10 Payments for Repurchases or Redemptions of Shares of the Fund. From such
funds as may be available for the purpose but subject to the limitations
of the Agreement and Declaration of Trust and by-laws and any applicable
votes of the Trustees of the Fund pursuant thereto, the Custodian shall,
upon receipt of instructions from the Transfer Agent, make funds
available to Wayne Hummer & Co. for payment to holders of Shares who have
made a request for redemption of Shares to Wayne Hummer & Co. In
connection with the redemption or repurchase of Shares of the Fund, the
Custodian is authorized upon receipt of instructions from the Transfer
Agent to wire funds to Wayne Hummer & Co. In connection with the
redemption or repurchase of Shares of the Fund, the Custodian shall honor
checks drawn on the Custodian by a holder of Shares, which checks have
been furnished by the Fund to the holder of Shares, when presented to the
Custodian in accordance with the then current prospectus and with such
procedures and controls and for such fees as are mutually agreed upon in
writing from time to time between the Fund and the Custodian in
accordance with Section 7 of this Agreement.
2.11 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint as its agent to carry out such provisions of this
Article 2 as the Custodian may from time to time direct (and may at any
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<PAGE>
time remove) any other bank or trust company which is itself qualified
to act as a custodian under the Investment Company Act of 1940, as
amended.
2.12 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by the Fund in a clearing agency
registered with the Securities and Exchange Commission under Section 17A of
the Securities Exchange Act of 1934, which acts as a securities depository,
or in the book-entry system authorized by the U.S. Department of the
Treasury and certain federal agencies, collectively referred to herein as
"Securities System" in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and
subject to the following provisions:
1) The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an account
("Account") of the Custodian in the Securities System which shall
not include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for the exclusive benefit of
customers;
The records of the Custodian with respect to securities of
the Fund which are maintained in a Securities System shall
identify by
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<PAGE>
book-entry those securities belonging to each Portfolio
of the Fund;
3. The Custodian shall pay for securities purchased for the Account of
a Portfolio of the Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the Account of a
Portfolio of the Fund. The Custodian shall transfer securities sold
for the Account of a Portfolio of the Fund upon (i) receipt of
advice from the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer and
payment for the Account of such Portfolio of the Fund. Copies of
all advices from the Securities System of transfers of securities
for the Account of the Fund shall identify the Fund, the Portfolio,
and shall be maintained for the Fund by the Custodian and be
provided to the Fund at its request. The Custodian shall furnish to
the Fund confirmations of each transfer to or from
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<PAGE>
the account of a Portfolio of the Fund in the form of a written
advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of each Portfolio of the Fund on
the next business day;
4. The Custodian shall provide the Fund with any report obtained by
the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System and shall make a
reasonable effort to inform the Fund of any material deficiencies
of which the Custodian may be aware;
5. The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 10 hereof;
6. Anything to the contrary in this agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use Of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees or from failure of
-15-
<PAGE>
the Custodian or any such agent to enforce effectively such rights
as it may have against the Securities System; at the election of
the Fund, it shall be entitled to be subrogated to the rights which
the Custodian may have with respect to any claim against the
Securities System or any other person as a consequence of any such
loss or damage if and to the extent that the Fund has otherwise not
been made whole for any such loss or damage.
2.13 Ownership Certificates for Tax Purposes. In connection with the receipt
of income or other payments, and in connection with transfers of
securities of the Fund held by it, the Custodian shall execute ownership
certificates and affidavits as well as other certificates and affidavits
for all federal and state tax purposes.
2.14 Proxies. With respect to securities held hereunder, which are registered
otherwise than in the name of the Fund or a nominee of the Fund, the
Custodian shall cause to be promptly executed all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Fund such proxies as well as all proxy
soliciting materials and all notices relating to such securities.
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<PAGE>
2.15 Communications Relating to Fund Portfolio Securities. The Custodian
shall transmit promptly to the Fund all written information received by
the Custodian from issuers of the securities being held for the Fund
including, without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith. With
respect to tender or exchange offers, the Custodian shall transmit
promptly to the fund all written information received by the Custodian
from issuers of the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or exchange offer. If
the Fund desires to take action with respect to any tender offer,
exchange offer or any other similar transaction, the Fund shall notify
the Custodian at least three business days prior to the date on which
the Custodian is to take such action.
2.16 Proper Instructions. "Proper Instructions" as used throughout this
Article 2 means a writing signed or initialled by one or more person or
persons as the Trustees shall have from time to time authorized. Each
such writing shall set forth the specific transaction or type of
transaction involved, including a specific statement of the purpose for
which such action is requested. Oral instructions will be considered
Proper Instructions if the Custodian reasonably believes them to have
been given by a
-17-
<PAGE>
person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary or
an Assistant Secretary as to the authorization by the Trustees of the
Fund accompanied by a detailed description of procedures approved by the
Trustees, Proper Instructions may also include communications effected
directly between electro-mechanical or electronic devices provided that
both the Trustees and the custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets.
2.17 Actions Permitted without Express Authority. The Custodian may in its
discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this contract, provided that all such payments shall be accounted
for to the Fund; and that all such payments shall not exceed the
amount agreed to between the parties and set forth in the then
current fee schedule attached to this Agreement in any one month
unless prior approval is obtained from the Fund.
-18-
<PAGE>
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Fund except
as otherwise directed by the Trustees of the Fund.
2.18 Evidence of Authority. The Custodian shall be protected in acting upon
any instructions, notice, request, consent, certificate or other
instrument or paper reasonably believed by it to be genuine and to have
been properly executed by or on behalf of the Fund. The Custodian may
receive and accept a certified copy of a vote of the Board of Trustees
or the Executive Committee of the Board of Trustees of the Fund as
conclusive evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination or of any action
by the Trustees pursuant to the Agreement and Declaration of Trust and
by-laws as described in such vote, and such vote may be considered as in
full force and effect until receipt by the Custodian of written notice
to the contrary.
-19-
<PAGE>
3. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Trustees of the Fund or the Executive
Committee of the Board of Trustees to keep the books of account of the Fund. The
Custodian will keep those accounts and records set forth in Schedule A which
shall be generated and transmitted to the Fund as set forth in Schedule A.
Schedule A, attached hereto, may at any time and from time to time be modified
or amended by agreement of the parties in the form of an amended or supplemental
schedule initialed by their authorized representatives.
In addition the Custodian will: (1) Advise the Fund, or any entity or
entities appointed by the Fund, telephonically at the beginning of each business
day as to the cash available in each Portfolio and confirm transaction data
daily and telephonically at the close of each business day. Cash reports and
transaction data reports shall be confirmed by the Custodian, in writing, to the
Fund within three (3) business days thereafter. (2) Provide the Fund, or any
entity or entities appointed by the Fund, with such information as may be
required by them to compute the net asset value per Share of the outstanding
Shares of each Portfolio of the Fund or, if directed in writing to do so by the
Fund, shall keep such books of account and compute such net asset value per
Share. If so directed, the Custodian shall also calculate daily the net
-20-
<PAGE>
income of each Portfolio of the Fund as net income is described in the Fund's
then current prospectus and shall advise the Fund and the Transfer Agent daily
of the total amounts of such net income and, if instructed in writing by an
officer of the Fund to do so, shall advise the Transfer Agent periodically of
the division of such net income among its various components. The calculations
of the net asset value per Share and the daily income of a Portfolio of the Fund
shall be made at the time or times described from time to time in the Fund's
currently effective prospectus.
4. Records.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All such records shall be the
property of the Fund and shall at all times during the regular business hours of
the Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the Securities and Exchange
Commission. The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned in each Portfolio of the Fund and held by the
Custodian or for the benefit of the fund under the provisions of Section 2.12,
and shall, when requested to do so by the Fund
-21-
<PAGE>
and for such compensation as shall be agreed upon between the Fund and the
Custodian, include, where available, certificate numbers in such tabulations.
5. Opinion of Fund's Independent Accountant.
----------------------------------------
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to obtain from year to year favorable opinions from the
Fund's independent accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N1, and Form N-1R or other
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
6. Reports to Fund by Independent Public Accountants.
-------------------------------------------------
The Custodian shall provide the Fund, at such times as the Fund may
reasonably request, with reports by independent public accountants on the
accounting system, internal accounting controls and procedures for safeguarding
securities, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Agreement.
Such reports shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund, to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, shall so state.
7. Compensation of Custodian.
-------------------------
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian which initial compensation shall be as set
forth in the current fee
-22-
<PAGE>
schedule agreed upon between the parties and attached to this Agreement as
Schedule B; provided, however, that such compensation for fees and expenses
reasonably may be changed by the Custodian upon thirty (30) days prior written
notice to the Fund.
8. Responsibility of Custodian.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this agreement and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Agreement, but shall be kept indemnified by the Fund,
exclusively out of Fund assets, and shall be without liability to the Fund for
any action reasonably taken or omitted by it in good faith without negligence.
The Custodian shall be entitled to rely on and may act upon advice of counsel
(who may be counsel for the Fund or counsel appointed by the Fund) on all
matters, and shall be without liability for any actions reasonably taken or
omitted pursuant to such advice. Notwithstanding the foregoing, the
responsibility of the Custodian with respect to redemptions effected by check
shall be in accordance with a separate agreement entered into between the
Custodian and the Fund.
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<PAGE>
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the reasonable opinion of the Custodian, result in the Custodian or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form for which the Custodian would not otherwise be
responsible, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
9. Limitation of Liability.
This agreement is executed by or on behalf of the Fund and the
Custodian is hereby expressly put on notice of the limitation of shareholder
liability as set forth in the Agreement and Declaration of Trust and agrees that
the obligations assumed by the Fund pursuant to this agreement shall be limited
in all cases to the Fund and its assets, and the Custodian shall not seek
satisfaction of any such obligations from the shareholders or any shareholder of
the Fund. In addition, the Custodian shall not seek satisfaction of any such
obligations from the Trustees or Officers of the Fund or any individual Trustee
or Officer.
10. Effective Period Termination and Amendment.
This agreement shall become effective as of the date the Custodian first
receives Fund assets, shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by mutual written agreement
of the
-24-
<PAGE>
parties hereto and may be terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party, such termination to
take effect not sooner than ninety (90) days after the date of such delivery or
mailing; provided, however that the Custodian shall not act under Section 2.12
hereof in the absence of receipt of an initial certificate of the Secretary or
an Assistant Secretary that the Trustees of the Fund have approved the initial
use of a particular Securities System and the receipt of an annual certificate
of the Secretary or an Assistant Secretary that the Trustees have reviewed the
use by the Fund of such Securities System, as required in each case by Rule
17f-4 under the Investment Company Act of 1940, as amended; provided further,
however, that the Fund shall not amend or terminate this Agreement in
contravention of any applicable federal or state regulations, or any provision
of the Agreement and Declaration of Trust; and provided further, that the Fund
may at any time by action of its Trustees (i) substitute another bank or trust
company for the Custodian by giving notice as described above to the Custodian,
or (ii) immediately terminate this agreement in the event of the appointment of
a conservator or receiver for the Custodian by the Comptroller of the Currency
or upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.
Upon termination of the agreement, the Fund shall pay to the Custodian
such compensation as may be due as of the date
-25-
<PAGE>
of such termination and shall likewise reimburse the Custodian for its costs,
expenses and disbursements as provided for by this Agreement.
11. Successor Custodian.
-------------------
If a successor custodian shall be appointed by the Trustees of the Fund,
the Custodian shall, upon termination, deliver to such successor custodian at
the office of the Custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Trustees of the
Fund, deliver at the office of the Custodian such securities, funds and other
properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Trustees shall have been delivered to the
Custodian on or before the date when such termination shall become effective,
then the Custodian shall have the right to deliver to a bank or trust company,
which is a "bank" as defined in the Investment Company Act of 1940, doing
business in Boston, Massachusetts, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $25,000,000, all securities, funds and other properties held by
the Custodian and all instruments held by the Custodian relative thereto and all
other property held by it under this agreement. Thereafter, such bank or trust
-26-
<PAGE>
company shall be the successor of the Custodian under this Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of vote referred to or of the
Trustees to appoint a successor custodian, the Custodian shall be entitled to
reasonable compensation for its services during such period as the Custodian
retains possession of such securities, funds and other properties and the
provisions of this agreement relating to the duties and obligations of the
Custodian shall remain in full force and effect.
12. Interpretive and Additional Provisions.
--------------------------------------
In connection with the operation of this Agreement, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their Joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto; provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Agreement and Declaration of Trust or by-laws of the Fund. No interpretive
or additional provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Agreement.
-27-
<PAGE>
13. Massachusetts Law to Apply.
--------------------------
This Agreement shall be construed and the provisions thereof interpreted
under applicable Federal law and/or in accordance with the laws of the
Commonwealth of Massachusetts.
14. Prior Contracts.
---------------
This Agreement supersedes and terminates, as of the date hereof, all prior
Agreements between the Fund and the Custodian relating to the custody of the
Fund's assets.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 11th day of March, 1982.
SEAL
ATTEST WAYNE HUMMER MONEY FUND TRUST
Robert Johnson, Sec By David H. Slavik
- ------------------------ ------------------------
President
SEAL
ATTEST STATE STREET BANK AND TRUST COMPANY
By L.M. Lake
- ------------------------ ------------------------
ASSISTANT SECRETARY
-28-
<PAGE>
SCHEDULE A
----------
The Custodian will keep the following accounts and records which shall be
generated and transmitted to the Fund daily:
a. money market transaction journal;
b. money market general ledger activity journal;
c. money market daily accrual report;
d. money market daily amortization report;
e. computation of net asset balance (trial balance);
f. statement of condition report;
g. holding report in maturity date order;
h. compliance report - 5% test;
i. compliance report - 25% test.
The Custodian will keep the following accounts and records which shall be
generated and transmitted to the Fund weekly:
a. compliance report $1.00 net asset value.
<PAGE>
SCHEDULE B
STATE STREET BANK AND TRUST COMPANY
CUSTODIAN FEE SCHEDULE
WAYNE HUMMER MONEY FUND TRUST
________________________________________________________________________________
1. Administration
A. Custody, Portfolio and Fund Accounting Service - Maintain
custody of fund assets. Settle portfolio purchases and sales.
Report buy and sell fails. Determine and collect portfolio
income. Make cash disbursements and report cash transactions,
position and ledgers, provide selected portfolio transactions,
position and income reports. Maintain general ledger and capital
stock accounts. Prepare daily trial balance. Calculate net
asset value daily. Provide selected general ledger reports.
Securities yield or market value quotations will be provided to
State Street by the fund.
The administration fee shown below is an annual charge, billed and payable
monthly, based on average net assets and caculated in the same manner as the
fund management fee.
Annual Fee
----------
A. Custody, Portfolio
Fund Net Assets & Fund Acct
--------------- ---------------------
First $20 million 1/15 of 1%
Next $80 million 1/30 of 1%
Excess 1/100 of 1%
Minimum Monthly Charges
First 2 months $ 500
Next 2 months $ 1,000
Next 2 months $ 1,500
Thereafter $ 2,000
II. Portfolio Trades - For each line item processed
State Street Bank Repos $ 7.00
All other trades $12.00
<PAGE>
III. Holding Charge
For each issue maintained -
monthly charge $ 5.00
IV. Special Services
Fees for activities of a non-recurring nature such as fund
consolidations or reorganizations, extraordinary security shipments and
the preparation of special reports will be subject to negotiation.
V. Out-of-Pocket Expenses
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but
are not limited to the following items incurred by State Street on
behalf of the Fund:
Telephone
Wire charges ($3.65 per wire in and $3.50 out)
Postage and insurance
Courier service
Legal fees
Supplies related to fund records
Rush transfer - $8 each
Duplicating
DTC Eligibility Books
Transfer fees
Pricing services
Sub-custodian charges
Wayne Hummer State Street Bank and
Fund Trust Trust Company
By: David H. Slavik By: L. G. Locke
----------------- ---------------
President L. G. LOCKE
Vice President
Date: March 11, 1982 Date: March 22, 1982
---------------- ----------------
<PAGE>
[Logo of State Street Bank]
STATE STREET BANK AND TRUST COMPANY
Post Office Box 351
Boston, Massachusetts 02101
Mark J. Bowler
Vice President
Mutual Fund Services Division
(617) 786-5899
June 16, 1989
Ms. Jean Watts
Wanye Hummer
175 West Jackson Blvd.
Chicago, IL 60604
Dear Jean:
Over the last three years, State Street Bank has maintained its charge for wire
transfers at $4.70 and $4.55 for incoming and outgoing wires respectively.
Effective January 1, 1989, the Federal Reserve System increased its charges for
all wire transfer related activities. Due to these circumstances we find it
necessary to increase our fees for wire transfers at this time. The new charges
are $5.25 for incoming wires, $5.00 for outgoing wires and become effective July
1, 1989.
During this period, State Street has invested in a new wire transfer system
which has positioned us to provide you with state of the art capability and
service. The new system features significantly greater capacity, allows for
faster processing of wire transfers, and increased security. We can now offer
you on-line inquiry, and remote user capability. If you would like to know more
about these additional services, please contact me at (617) 786-5899.
cc: M. Lincoln
Sincerely,
Mark Bowler
Vice President
<PAGE>
EXHIBIT 8(b)
AMENDMENT TO
CUSTODIAN CONTRACT
Amendment to Custodian Contract between Wayne Hummer Money Fund Trust, a
business trust organized and existing under the laws of Massachusetts, having a
principal place of business at 175 West Jackson Blvd., Chicago, IL 60604
(hereinafter called the "Fund"), and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts 02110 (hereinafter called the
"Custodian").
WHEREAS: The Fund and the Custodian are parties to a Custodian Contract
dated March 11, 1982 (the "Custodian Contract");
WHEREAS: The Fund desires that the Custodian issue a letter of credit (the
"Letter of Credit") on behalf of the Fund for the benefit of ICI Mutual
Insurance Company (the "Company") in accordance with a Continuing Letter of
Credit and Security Agreement dated of even date herewith between the Fund and
the Custodian, and the Custodian desires that the Fund's obligations to the
Custodian with respect to the Letter of Credit shall be fully collateralized at
all times while the Letter of Credit is outstanding by, among other things,
segregated assets of the Fund equal to 125% of the face amount to the amount of
the Letter of Credit;
WHEREAS: The Fund and the Custodian desire to amend the Custodian Contract
to provide for the establishment of segregated accounts for proper Fund
purposes upon Proper Instructions; and
<PAGE>
WHEREAS: The Fund and the Custodian desire to establish a segregated
account to hold the collateral for the Fund's obligations to the Custodian with
respect to the Letter of Credit and to amend the Custodian Contract to provide
for the establishment and maintenance thereof;
WITNESSETH: That, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto hereby amend the Custodian
Contract as follows:
1. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Custodian Contract.
2. The Custodian Contract is hereby amended by adding the following
as Section 2.19:
2.19. Segregated Account. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated
account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by
the Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the
Fund, the Custodian and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange
Act), relating to compliance with the
-2-
<PAGE>
rules of The Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Fund, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or
written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purpose of compliance by the
Fund with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies, and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the
Board of Directors or of the Executive Committee signed by an officer of
the Fund and certified by the Secretary or an Assistant Secretary, setting
forth the purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
-3-
<PAGE>
3. The Fund hereby instructs the Custodian to establish and maintain a
segregated account (the "Letter of Credit Custody Account") for and in
behalf of the Fund as contemplated by subsection (iv) the newly adopted
Section 2.19 for the purpose of collateralizing the Fund's obligations
under this Amendment to the Custodian Contract.
4. The Fund shall deposit with the Custodian and the Custodian shall hold in
the Letter of Credit Custody Account cash, U.S. government securities and
other high-grade debt securities owned by the Fund acceptable to the
Custodian (collectively "Collateral Securities") equal to 125% of the face
amount to the amount which the Company may draw under the Letter of Credit.
Upon receipt of such Collateral Securities in the Letter of Credit Custody
Account, the Custodian shall issue the Letter of Credit to the Company.
5. The Fund hereby grants to the Custodian a security interest in the
Collateral Securities from time to time in the Letter of Credit Custody
Account (the "Collateral") to secure the performance of the Fund's
obligations to the Custodian with respect to the Letter of Credit,
including, without limitation, under Section 5-114(3) of the Uniform
Commercial Code. The Fund shall register the pledge of Collateral and
execute and deliver to the Custodian such powers and instruments of
-4-
<PAGE>
assignment as may be necessary or otherwise reasonably requested by the
Custodian to evidence and perfect the limited interest in the Collateral
granted hereby.
6. The Collateral Securities in the Letter of Credit Custody Account may be
substituted or exchanged (including substitutions or exchanges which
increase or decrease the aggregate value of the Collateral) only pursuant
to Proper Instructions from the Fund after the Fund notifies the Custodian
of the contemplated substitution or exchange and the Custodian agrees that
such substitution or exchange is acceptable to the Custodian.
7. Upon any payment made pursuant to the Letter of Credit by the Custodian to
the Company, the Custodian may withdraw from the Letter of Credit Custody
Account Collateral Securities in an amount equal in value to the amount
actually so paid. The Custodian shall have with respect to the Collateral
so withdrawn all of the rights of a secured creditor under the Uniform
Commercial Code as adopted in the Commonwealth of Massachusetts at the time
of such withdrawal and all other rights granted or permitted to it under
law.
8. The Custodian will transfer upon receipt all income earned on the
Collateral to the Fund custody account unless the Custodian receives Proper
Instructions from the Fund to the contrary.
-5-
<PAGE>
9. Upon the drawing by the Company of all amounts which may become payable to
it under the Letter of Credit and the appropriate withdrawal of Collateral
Securities with respect thereto by the Custodian pursuant to Section 7
hereof, or upon the termination of the Letter of Credit by the Fund with
the written consent of the Company, the Custodian shall transfer any
Collateral Securities then remaining in the Letter of Credit Custody
Account to another Fund custody account.
10. Collateral held in the Letter of Credit Custody Account shall be released
only in accordance with the provisions of this Amendment to Custodian
Contract. The Collateral shall at all times until withdrawn pursuant to
Section 7 hereof remain the property of the Fund, subject only to the
extent of the interest granted herein to the Custodian.
11. Notwithstanding any other termination of the Custodian Contract, the
Custodian Contract shall remain in full force and effect with respect to
the Letter of Credit Custody Account until transfer of all Collateral
Securities pursuant to Section 9 hereof.
12. The Custodian shall be entitled to reasonable compensation as agreed upon
from time to time between the Fund and the Custodian for its issuance of
the Letter of Credit and for its services in connection with the Letter of
Credit Custody Account.
-6-
<PAGE>
13. The Custodian Contract as amended hereby shall be governed by, and construed
and interpreted under, the laws of the Commonwealth of Massachusetts.
14. The parties agree to execute and deliver all such further documents and
instruments and to take such further action as may be required to carry out
the purposes of the Custodian Contract, as amended hereby.
15. Except as provided in this Amendment to Custody Contract, the Custodian
Contract shall remain in full force and effect, without amendment or
modification, and all applicable provisions of the Custodian Contract, as
amended hereby, including, without limitation, Sections 8 (regarding
limitation of the Custodian's responsibility) and 9 (regarding limitation
of the liability of Fund shareholders and trustees) thereof, shall govern
the Letter of Credit Custody Account and the rights and obligations of the
Fund and the Custodian under this Amendment to Custodian Contract. No
provisions of this Amendment to Custodian Contract shall be deemed to
constitute a waiver of any rights of the Custodian or the Fund under the
Custodian Contract or under law.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to Custodian
Contract to be executed in its name and
-7-
<PAGE>
behalf by its duly authorized representatives and its seal to be hereunder
affixed as of the 11th day of February, 1988.
ATTEST: WAYNE HUMMER MONEY TRUST FUND
By: By:
--------------------------- ----------------------------
Vice President President
ATTEST: STATE STREET BANK AND TRUST
COMPANY
By: By:
--------------------------- ----------------------------
Assistant Secretary Vice President
-8-
<PAGE>
AMENDMENT
---------
The Custodian Agreement dated March 11, 1982 between Wayne Hummer Money Fund
Trust (the "Fund") and State Street Bank and Trust Company (the "Custodian") is
hereby amended as follows:
I. Section 2.1 is amended to read in its entirety as follows:
"Holding Securities. The Custodian shall hold and physically segregate for
the account of the Fund and for each Portfolio all non-cash property, including
all securities owned by the Fund, other than (a) securities which are maintained
pursuant to Section 2.12 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities System," and (b)
commercial paper of an issuer for which State Street Bank and Trust Company acts
as issuing and paying agent ("Direct Paper") which is deposited and/or
maintained in the Direct Paper System of the Custodian pursuant to Section
2.12.A."
II. Section 2.2 is amended to read in relevant part as follows:
"Delivery of Securities. The Custodian shall release and deliver securities
owned by the Fund held by the Custodian or in a Securities System account of the
Custodian or in the Custodian's Direct Paper book entry system account ("Direct
Paper System Account") only upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, and only in the
following cases:
<PAGE>
1) . . . .
.
.
.
13) . . . ."
III. Section 2.8(1) is amended to read in relevant part as follows:
"Payment of Fund Monies. Upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of securities, options, futures contracts or options
on futures contracts for the account of the Fund but only (a) against
the delivery of such securities, or evidence of title to such options,
futures contracts or options on futures contracts, to the Custodian (or
any bank, banking firm or trust company doing business in the United
States or abroad which is qualified under the Investment Company Act of
1940, as amended, to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the name of the
Fund or in the name of a nominee of the Custodian referred to in Section
2.3 hereof or in proper form for transfer; (b) in the case of a purchase
effected through a Securities System, in accordance with the conditions
set forth in
<PAGE>
Section 2.12 hereof; (c) in the case of a purchase involving the Direct
Paper System, in accordance with the conditions set forth in Section
2.12.A; or (d) in the case of repurchase agreements entered into between
the Fund and the Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's account at
the Federal Reserve Bank with such securities or (ii) against delivery of
the receipt evidencing purchase by the Fund of securities owned by the
Custodian along with written evidence of the agreement by the Custodian to
repurchase such securities from the Fund:"
. . . .
IV. Following Section 2.12, there is inserted a new Section 2.12.A to read
as follows:
2.12.A "Fund Assets Held in the Custodian's Direct Paper System. The
Custodian may deposit and/or maintain securities owned by the Fund in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System will be
effected in the absence of Proper Instructions;
2) The Custodian may keep securities of the Fund in the Direct Paper System
only if such securities are
3
<PAGE>
represented in an account ("Account") of the Custodian in the Direct
Paper System which shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the Fund which
are maintained in the Direct Paper System shall identify by book-entry
those securities belonging to each Portfolio of the Fund;
4) The Custodian shall pay for securities purchase for the account of the
Fund upon the making of an entry on the records of the Custodian to
reflect such payment and transfer of securities to the account of the
Fund. The Custodian shall transfer securities sold for the account of the
Fund upon the making of an entry on the records of the Custodian to
reflect such transfer and receipt of payment for the account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each transfer to or
from the account of the Fund, in the form of a written advice or notice,
of Direct Paper on the next business day following such transfer and
shall furnish to the Fund copies of daily transaction sheets reflecting
each day's transaction in the Securities System for the account of each
Portfolio of the Fund;
<PAGE>
6) The Custodian shall provide the Fund with any report on its system of
internal accounting control as the Fund may reasonably request from time
to time."
V. Section 10 is hereby amended to read in its entirety as follows:
"Effective Period, Termination and Amendment
--------------------------------------------
This Agreement shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual written agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than ninety (90) days after the date of such delivery or mailing; provided,
however, that the Custodian shall not act under Section 2.12 hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Trustees of the Fund has approved the initial use of
a particular Securities System and the receipt of an annual certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has reviewed the
use by the Fund of such Securities System, as required in each case by Rule
17f-4 under the Investment Company Act of 1940, as amended, and that the
Custodian shall not act under Section 2.12.A hereof in the absence of receipt
of an initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees has approved the initial use of the Direct Paper System and
the receipt of an
5
<PAGE>
annual certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has reviewed the use by the Fund of the Direct Paper System; provided
further, however, that the Fund shall not amend or terminate this Agreement in
contravention of any applicable federal or state regulations, or any provision
of the Declaration of Trust, and further provided, that the Fund may at any time
by action of its Board of Trustees (i) substitute another bank or trust company
for the custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Agreement, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements as provided
for by this Agreement."
Except as otherwise expressly amended and modified herein, the provisions of
the Custodian Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be executed in its name and on its behalf by
6
<PAGE>
its duly authorized representatives and its Seal to be hereto affixed as of the
4th day of February, 1988.
ATTEST: WAYNE HUMMER MONEY FUND TRUST
- ---------------------------- By: /s/ Jean M. Watts, Treas.
-----------------------------
ATTEST:
STATE STREET BANK AND TRUST COMPANY
/s/ J. Farrell
- --------------------------- By: /s/ Thomas E. Swedlund
------------------------------
Vice President
7
<PAGE>
WAYNE HUMMER MONEY FUND TRUST
UNANIMOUS WRITTEN CONSENT OF
EXECUTIVE COMMITTEE MEMBERS
JUNE 1, 1988
------------
The undersigned being all of the members of the Executive Committee
of the Board of Trustees of Wayne Hummer Money Fund Trust, a Massachusetts
business trust (the "Trust") hereby consent and agree in lieu of a special
meeting of the Executive Committee to the adoption of the following
resolutions:
1. With respect to the approval of an amendment to the Trust's
Custodian Contract with State Street Bank and Trust Company ("State Street")
regarding prepayment of any advances, charges, expenses or other liabilities
made by the Custodian on behalf of the Trust:
RESOLVED, that the proposed amendment to the Trust's Custodian
Agreement with State Street as set forth as Exhibit A to these
Unanimous Written Consents be and the same hereby is approved;
FURTHER RESOLVED, that the appropriate officers of the Trust be
and they hereby are authorized and directed to execute and deliver to
State Street said amendment on behalf of the Trust in substantially in
the form of Exhibit A, with such changes, amendments or additions and
with such other documents and certifications as such officers deem
necessary and advisable to carry out the intent of this resolution.
2. With respect to the approval of an amendment to the Trust's
Custodian Contract with State Street Bank and Trust Company ("State Street")
regarding tendering securities against window receipt in conformity with "Street
Delivery" custom and practice:
RESOLVED, that the form of the proposed amendment to the Fund's
Custodian Agreement with State Street as set forth as Exhibit B to
these Unanimous Written Consents be and the same hereby is approved;
<PAGE>
FURTHER RESOLVED, that the appropriate officers of the Trust be and they
hereby are authorized and directed to execute and deliver to State Street said
amendment on behalf of the Trust in substantially in the form of Exhibit B, with
such changes, amendments or additions and with such other documents and
certifications as such officers deem necessary and advisable to carry out the
intent of this resolution.
This consent shall have the same force and effect as a unanimous vote of
all the members of the Executive Committee at a duly called meeting thereof.
Dated: June 1, 1988.
/s/ Philip M. Burno
-----------------------------
Philip M. Burno
/s/ Philip Wayne Hummer
-----------------------------
Philip Wayne Hummer
/s/ Patrick B. Long
-----------------------------
Patrick B. Long
<PAGE>
AMENDMENT TO THE
CUSTODIAN AGREEMENT
AGREEMENT made this 1st day of June, 1988 by and between STATE STREET
BANK AND TRUST COMPANY ("Custodian") and WAYNE HUMMER MONEY FUND TRUST (the
"Fund").
WITNESSETH THAT:
----------------
WHEREAS, the Custodian and the Fund are parties to a Custodian
Agreement dated March 11, 1982 (as amended to date, the "Agreement") which
governs the terms and conditions under which the Custodian maintains custody of
the securities and other assets of the Fund:
NOW THEREFORE, the Custodian and the Fund hereby amend the terms of
the Custodian Agreement and mutually agree to the following:
Replace subsection 7) of Section 2.2 Delivery of Securities with the
following new subsection 7):
7) Upon the sale of such securities for the account of the Fund,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom; provided
that in any such case, the Custodian shall have no responsibility
or liability for any loss arising from the delivery of such
securities prior to receiving payment for such securities except
as may arise from the Custodian's own negligence or willful
misconduct;
IN WITNESS WHEREOF, each of the parties has caused this Amendment to
be executed in its name and on its behalf by a duly authorized officer as of the
day and year first above written.
ATTEST WAYNE HUMMER MONEY FUND TRUST
- ------------------------------- ----------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
- ------------------------------- ----------------------------------
Assistant Secretary Vice President
<PAGE>
AMENDMENT TO THE
CUSTODIAN AGREEMENT
AGREEMENT made this 1st day of June 1988 by and between STATE STREET
BANK AND TRUST COMPANY ("Custodian") and WAYNE HUMMER MONEY FUND TRUST (the
"Fund").
WITNESSETH THAT:
WHEREAS, the Custodian and the Fund are parties to a Custodian Agreement
dated March 11, 1982 (as amended to date, the "Agreement") which governs the
terms and conditions under which the Custodian maintains custody of the
securities and other assets of the Fund:
NOW THEREFORE, the Custodian and the Fund hereby amend the terms of the
Custodian Agreement and mutually agree to the following:
Insert as the final paragraph under Responsibility of Custodian:
If the Fund requires the Custodian to advance cash or securities for any
purpose or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise
from its or its nominee's own negligent action, negligent failure to act or
willful misconduct, any property at any time held for the account of the
Fund shall be security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall be entitled to utilize available
cash and to dispose of Fund assets to the extent necessary to obtain
reimbursement.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and on its behalf by a duly authorized officer as of the
day and year first above written.
ATTEST WAYNE HUMMER MONEY FUND TRUST
________________________________ ___________________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
________________________________ ___________________________________
Assistant Secretary Vice President
<PAGE>
[STATE STREET LOGO]
STATE STREET BANK AND TRUST COMPANY
Custodian Fee Schedule
WAYNE HUMMER
GROWTH FUND TRUST
MONEY FUND TRUST
- -------------------------------------------------------------------------------
I. Administration
Custody, Portfolio and Fund Accounting Service - Maintain custody of fund
assets. Settle portfolio purchases and sales. Report buy and sell fails.
Determine and collect portfolio income. Make cash disbursements and report
cash transactions. Maintain investment ledgers, provide selected portfolio
transactions, position and income reports. Maintain general ledger and
capital stock accounts. Prepare daily trial balance. Calculate net asset
value daily. Provide selected general ledger reports. Securities yield or
market value quotations will be provided to State Street by the fund.
The administration fee shown below is an annual charge, billed and payable
monthly, based on average monthly net assets.
ANNUAL FEES PER PORTFOLIO
-------------------------
Custody, Portfolio
Fund Net Assets & Fund Acct.
--------------- ------------------
First $20 Million 1/ 15 of 1%
Next $80 Million 1/ 30 of 1%
Excess 1/100 of 1%
Minimum Monthly Charges $3,000
New Fund Phase In
Months 1 and 2 $ 500
Months 3 and 4 $1,000
Months 5 and 6 $1,500
Months 7-12 $2,000
<PAGE>
[STATE STREET LOGO]
II. Portfolio Trades - For each line item processed
State Street Bank Repos $ 7.00
DTC or Fed Book Entry $ 12.00
New York Physical Settlements $ 25.00
III. Options
Option charge for each option written or
closing contract, per issue, per broker $ 25.00
Option expiration charge, per issue, per broker $ 15.00
Option exercised charge, per issue, per broker $ 15.00
IV. Lending of Securities
Deliver loaned securities versus cash
collateral $ 20.00
Deliver loaned securities versus securities
collateral $ 30.00
Receive/deliver additional cash collateral $ 6.00
Substitutions of securities collateral $ 30.00
Deliver cash collateral versus receipt of
loaned securities $ 15.00
Deliver securities collateral versus receipt
of loaned securities $ 25.00
Loan administration -- mark-to-market per
day, per loan $ 3.00
V. Interest Rate Futures
Transactions -- no security movement $ 8.00
VI. Coupon Bonds
Monitoring for calls and processing coupons --
for each coupon issue held -- monthly charge $ 5.00
VII. Holdings Charge
For each issue maintained - monthly charge $ 5.00
<PAGE>
[STATE STREET LOGO]
VIII. Principal Reduction Payments
Per paydown $ 10.00
IX. Dividend Charges (For items held at the Request
of Traders over record date in street form) $ 50.00
X. Special Services
Fees for activities of a non-recurring nature such as fund consolidations
or reorganizations, extraordinary security shipments and the preparation
of special reports will be subject to negotiation. Fees for tax
accounting/recordkeeping for options, financial futures, and other special
items will be negotiated separately.
XI. Out-of-Pocket Expenses
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but are
not limited to the following:
Telephone
Wire Charges ($5.25 per wire in and $5.00 out)
Postage and Insurance
Courier Service
Duplicating
Legal Fees
Supplies Related to Fund Records
Rush Transfer -- $8.00 Each
Transfer Fees
Sub-custodian Charges
Price Waterhouse Audit Letter
Federal Reserve Fee for Return Check items over $2,500 - $4.25
GNMA Transfer - $15 each
XII. Payment
The above fees will be charged against the fund's custodian checking
account five (5) days after the invoice is mailed to the fund's offices.
WAYNE HUMMER STATE BANK AND TRUST COMPANY
- ------------------------ -----------------------------
By Jean M. Watts By
----------------- ----------------------
Title Treasurer Title Vice President
----------------- ----------------------
Date 11/12/92 Date 11/4/92
----------------- ----------------------
<PAGE>
[STATE STREET LOGO]
STATE STREET BANK AND TRUST COMPANY
DOMESTIC CUSTODY FEE SCHEDULE
WAYNE HUMMER MONEY FUND
WAYNE HUMMER GROWTH FUND
WAYNE HUMMER INCOME FUND
I. DOMESTIC CUSTODY
Custody: Maintain custody of fund assets. Settle portfolio purchases and
sales. Report buy and sell fails. Determine and collect portfolio income.
Make cash disbursements and report cash transactions. Monitor corporate
actions. Report portfolio positions.
The fee shown below is an annual charge, billed and payable monthly, based
on a average monthly net assets.
ANNUAL FEES PER COMPLEX*
-----------------------
Fund Net Assets
---------------
First $100 Million 1/30 of 1%
Excess 1/100 of 1%
*Complex refers to the existing three funds only.
II. PORTFOLIO TRANSACTIONS
State Street Bank Repos $ 7.00
DTC, Fed Book or Boston Book Entry $ 12.00
New York Physical Settlements $ 25.00
Maturity Collections $ 8.00
PTC Purchase, Sale, Deposit or Withdrawal $ 20.00
Per Paydown $ 10.00
All Other Trades $ 25.00
<PAGE>
[STATE STREET LOGO]
III. FUTURES AND OPTIONS
Options charge for each option written or closing contract,
per issue, per broker $ 25.00
Option expiration or exercised charge, per issue, per broker $ 15.00
Futures transactions -- no security movement $ 8.00
IV. HOLDINGS CHARGE
For each issue maintained -- monthly charge $ 5.00
V. STATE STREET BANK REPURCHASE AGREEMENT CREDIT
A credit to the monthly invoice will be given for investment in State
Street Bank repurchase agreements as follows:
Average daily investment by Complex (up to $4 million only) x 25 basis
points [divided by] 12 = credit for the month.
VI. SPECIAL SERVICES
Fees for activities of a non-recurring nature such as fund consolidations
or reorganizations, extraordinary security shipments and the preparation
of special reports will be subject to negotiation. Fees for fund
accounting, SEC yield calculation, fund administration activities, self
directed securities lending transactions, SaFiRe financial reporting,
multiple class and core/feeder accounting, and other special items will
be negotiated separately.
VII. OUT-OF-POCKET EXPENSES
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but are
not limited to the following:
- - Telephone - Transfer Fees
- - Wire Charges ($5.25 in and $5.00 out) - Sub-custodian Charges
- - Postage and Insurance - Price Waterhouse Audit Letter
- - Courier Service - Federal Reserve Fee for Return Check
- - Duplicating Items Over $2,500 ($4.25 each)
- - Legal Fees - GNMA Transfer ($15.00 each)
- - Supplies Related to Fund Records - PTC Deposit/Withdrawal For Same
- - Rush Transfer ($8.00 each) Day Turnaround ($50.00 each)
- - Items Held in Street Name Over Record
Date At The Request of Traders ($50.00 each)
<PAGE>
[STATE STREET LOGO]
VIII. PAYMENT
The above fees will be charged against the fund's custodian checking
account five (5) days after the invoice is mailed to the fund's offices.
WAYNE HUMMER STATE STREET BANK & TRUST COMPANY
By Jean M. Watts By
------------- --------------
Title Treasurer Title Vice President
------------- --------------
Date 11/7/94 Date 9/15/94
------------- --------------
<PAGE>
EXHIBIT 9(a)
SHAREHOLDER SERVICE AGREEMENT
This AGREEMENT made this 11th day of March, 1982 between WAYNE HUMMER MONEY
FUND TRUST, a Massachusetts Business Trust (the "Fund") and WAYNE HUMMER & CO.,
an Illinois general partnership ("WH & Co.");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Fund is a no-load, open-end, diversified management investment
company registered under the Investment Company Act of 1940, the units of
beneficial interest ("Shares") of which are registered under the Securities Act
of 1933; and
WHEREAS, the Fund is authorized to issue Shares in separate series with each
such series representing the interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund intends initially to offer Shares in two portfolios, the
Money Market Portfolio and the Government Portfolio (hereinafter, together with
any other portfolio(s) established by the Fund, collectively referred to as the
"Portfolios"); and
WHEREAS, the Fund desires at this time to retain WH & Co. to render services
to the Fund and its shareholders and WH & Co. is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
<PAGE>
1. Services. The services to be performed by WH & Co. hereunder are
set forth in Schedule A hereto which may at any time or from time to time be
modified or amended by agreement of the parties in the form of an amended or
supplemental schedule initialed by their authorized representatives.
2. Additional Services. WH & Co. also agrees to perform such
additional services within its capacity of shareholder service agent as may,
from time to time, be requested by the Fund, provided that such additional
services are the subject of a supplement to Schedule A hereto as contemplated by
paragraph 1 of this Agreement.
3. Costs and Expenses of Performance. The Fund will reimburse WH & Co.
for WH & Co.'s approximate out-of-pocket cost, if any, of providing the services
contemplated by this Agreement as set forth on Schedule A, including the costs
of data entry, modification and printout; stationery; tax forms; and all other
external forms or printed material which may be required for performance by WH &
Co. of the services contemplated by this Agreement ("Reimbursable Expenses").
Such Reimbursable Expenses shall not include any out-of-pocket cost to WH & Co.
for labor or overhead incurred in rendering such services, nor shall such
Reimbursable Expenses include any promotional or distribution costs incurred by
WH & Co. All charges (such as for improperly written checks or checks written in
an amount greater than the value of the Shares of the Portfolio on which the
check is drawn) required by the Fund's prospectus to be paid by an investor will
be collected
-2-
<PAGE>
by WH & Co. and credited against the amount of Reimbursable Expenses.
WH & Co. shall submit to the Fund a monthly report setting forth in
reasonable detail the Reimbursable Expenses of WH & Co. paid or incurred during
such month. The Fund agrees to cause all such reports to be reviewed promptly
(in no event less frequently than quarterly) after receipt. Immediately
thereafter, WH & Co. will be notified of any discernable errors, discrepancies
or omissions and, in the absence of such notification, the report will, for all
purposes, be received as accurate and complete.
4. Effective Date and Time. This Agreement shall become effective on March
11, 1982 (the "Effective Date") and shall continue until terminated as provided
in paragraph 13 of this Agreement.
5. Standard of Care. WH & Co. will make every effort and take all reasonably
available measures to assure the accurate performance of all services to be
performed by it hereunder within, at a minimum, the time requirements of any
statute, rule or regulation pertaining to the mutual fund industry and any time
requirements set forth in the prospectus of the Fund. WH & Co. also shall
promptly correct any error or omission made by it in the performance of its
duties hereunder of which it shall have received notice in writing and any
necessary substantiating data. In effecting any such corrections, WH & Co. shall
take all reasonable steps necessary to trace and correct any related errors and
omissions which
-3-
<PAGE>
might cause an over-issue of the Fund's shares and/or the excess payment of
dividends. All allocable costs of corrections shall be charged to the Fund and
the liability of WH & Co. under this paragraph shall be subject to the
limitations provided in paragraph 10 of this Agreement.
6. Record Retention and Confidentiality. WH & Co. shall keep and
maintain on behalf of the Fund all records which are required to be maintained
pursuant to Rule 31a-1 of the Securities and Exchange Commission and to preserve
such records for the time periods prescribed therein, provided, however, that WH
& Co. shall not be required to maintain those records which would duplicate
records required to be maintained pursuant to any other agreement entered into
by the Fund. In addition, WH & Co. wi11 maintain all records it is required to
maintain pursuant to any applicable statutes, rules and regulations relating to
the maintenance of records in connection with the services to be performed
hereunder. Notwithstanding the foregoing, WH & Co. shall maintain, for a period
of at least six (6) years, all records and documents which may be needed or
required to support or document the entries made by WH & Co. in its performance
of services hereunder. WH & Co. agrees that all records required to be
maintained under this paragraph shall be the property of the Fund; shall be
maintained in such fashion as to preserve the confidentiality thereof and to
comply with applicable rules and regulations of federal and/or state securities
laws; and shall, in whole or any specified part, be available for inspection by
-4-
<PAGE>
or surrender to the Fund at any reasonable time after receipt of an appropriate
written request.
7. Bankinq Accounts. WH & Co. shall open such banking accounts as it deems
reasonably required in controlling the conversion of investors' funds into
Federal funds or for other purposes it deems necessary or beneficial and shall
be accountable to the Fund on a fiduciary basis for the management of such
accounts and the funds at any time on deposit therein.
8. Indemnification of WH & Co. The Fund shall indemnify WH & Co. and hold
it, its employees and agents harmless from and against any and all claims,
demands, actions and suits, whether groundless or otherwise, and from and
against all judgments, liabilities, losses, damages, costs, charges, counsel
fees and other expenses arising from or relating to any action taken or omitted
to be taken by WH & Co. in good faith in reliance upon:
(a) The authenticity of any letter or any other instrument or
communication reasonably believed by it to be genuine and to have been
properly made or signed by an authorized officer or agent of the Fund or by
a shareholder or the authorized agent of a shareholder, as the case may be;
(b) The accuracy of any records or information provided to it by the
Fund except to the extent the same may contain obvious errors or omissions;
(c) Any certificate by an authorized officer of the Fund or any other
person authorized by the Fund's Board of
-5-
<PAGE>
Trustees as conclusive proof of any fact or matter required to be
ascertained by WH & Co. hereunder;
(d) Instructions at any time given by an authorized officer of the
Fund with respect to WH & Co.'s duties and responsibilities hereunder
including, as to legal matters pertaining to the performance of its duties
hereunder, such advice or instructions as may be given to WH & Co. by the
counsel to the Fund or any counsel appointed by such counsel or any
authorized officer of the Fund;
(e) Instructions regarding the redemptions, exchanges, or other
treatment of the shares of the Fund, together with all dividends thereon,
and any reinvestment thereof, held or shown to the credit of any shareholder
account which shall satisfy the requirements of the Fund as contained in
its then current prospectus or as communicated in writing to WH & Co. by the
Fund; and
(f) The advice or opinion of legal counsel furnished to it pursuant
to paragraph 11 hereof.
9. Insurance. WH & Co. shall use its best efforts to obtain or keep in
effect a broad form of Brokers' Blanket Bond (Form 14) in the minimum amount of
$1,000,000 covering theft, embezzlement, forgery and other specified acts of
malfeasance and misfeasance by WH & Co., its agents and employees, with
aggregate coverage for forged signatures in the minimum amount of $1 million.
In the event that WH & Co. shall be unable to obtain or keep in
effect any of the insurance coverage herein referred
-6-
<PAGE>
to, it shall promptly notify the Fund in writing of such inability and shall use
its best efforts to obtain and keep in effect such other insurance coverages as
the Fund shall reasonably require in lieu of the coverage described above.
10. Limitation of WH & Co. Liability. WH & Co. assumes no liability and
shall not be liable for any damage, loss of data, delay or other loss caused by
circumstances or events beyond its control which it would not reasonably have
anticipated.
11. Legal Advice and Instructions. WH & Co. may, at any time, request
instructions from any authorized officer of the Fund with respect to the
performance of its duties and responsibilities hereunder and may consult with
counsel for the Fund relative to any such matter and shall not be liable
hereunder for any action taken or omitted by it in good faith in accordance with
such instructions or with an opinion of such counsel or of counsel appointed by
an authorized officer of the Fund to deal with inquiries or requests for
instructions by WH & Co.
12. Documents and Information. As soon as feasible prior to the Effective
Date of the Agreement, the Fund will supply to WH & Co. such documents and
information, including the preliminary current prospectus of the Fund, which WH
& Co. may determine in its reasonable discretion to be necessary or appropriate
for it to perform the services to be performed hereunder and will thereafter
supply all amendments or supplemental documents with respect thereto as soon as
the same shall be effective or available for distribution. WH & Co. as
-7-
<PAGE>
Shareholder Service Agent, has no responsibility for the preparation, content
and clearance of its prospectus under federal or state securities laws and any
rules or regulations thereunder. The Fund will not make any change in its
Prospectus affecting the services and functions to be performed by WH & Co.
hereunder without a written supplement to Schedule A hereof as contemplated by
paragraphs 1 and 2 of this Agreement
13. Termination. This Agreement may be terminated by either party only upon
sixty (60) days' prior written notice; provided, however, that the Fund may
terminate without prior notice to preserve the integrity of its shareholder
records from material and continuing errors and omissions on the part of WH &
Co. In the event of any such termination, WH & Co. will provide full
cooperation, assistance and documentation within its capabilities as shall be
necessary or desirable, in the reasonable judgment of the Fund, to ensure that
any transfer of the duties and responsibilities of WH & Co. is accomplished with
maximum efficiency and with minimum cost and disruption to the Fund's
activities. Such cooperation will include the delivery of all files, documents
and records used, kept or maintained by WH & Co. in the performance of its
services hereunder (except records or documents destroyed pursuant to the
provisions hereof or with the approval of the Fund) together with such of the
Fund's records as may be maintained by WH & Co. in a form other than hard copy
as well as such summary and/or control data relating thereto, if any,
-8-
<PAGE>
used by or available to WH & Co. as may be requested by the Fund. The cost of
all such termination services on the part of WH & Co. shall be paid by the Fund
without prejudice, however, to the rights of the Fund to recover any amounts so
paid in the event that WH & Co. shall be liable to the Fund under paragraph 10
hereof.
14. Assignment. This Agreement and the rights and duties hereunder shall not
be assignable by any of the parties hereto.
15. Limitation of Liability. This Agreement is executed by or on behalf of
the Fund and WH & Co. is hereby expressly put on notice of the limitation of
Shareholder liability as set forth in the Trust Agreement and agrees that the
obligations assumed by the Fund pursuant to this Agreement shall be limited in
all cases to the Fund and its assets, and WH & Co. shall not seek satisfaction
of any such obligations from the Shareholders or any Shareholder of the Fund. In
addition, WH & Co. shall not seek satisfaction of any such obligations from the
Trustees or Officers of the Fund or any individual Trustee or Officer.
16. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be construed in accordance with
applicable federal law and (except
-9-
<PAGE>
as to paragraph 15 hereof which shall be construed in accordance with the laws
of the Commonwealth of Massachusetts) the laws of the State of Illinois and
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors, subject to paragraph 14 hereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
ATTEST: WAYNE HUMMER MONEY FUND TRUST
By
- ----------------------------- ---------------------------------
Its President
-----------------------------
WITNESS: WAYNE HUMMER & CO.
By
- ----------------------------- --------------------------------
A General Partner
-10-
<PAGE>
EXHIBIT 9(a)(i)
SHAREHOLDER SERVICE AGREEMENT
SCHEDULE A
REVISED EFFECTIVE NOVEMBER 1, 1985
SERVICE TO BE RENDERED CHARGE TO FUND
- ---------------------- --------------
I. SHAREHOLDER ACCOUNTS
--------------------
1. Open brokerage accounts, as necessary, and
maintain therein current records for Fund shareholder
accounts showing as to each shareholder (to the extent
such information is available or obtainable):
A. Name(s) and address(es) with zip code(s);
B. Type of account and taxpayer identification or
social security number;
C. Representative affiliated with the account;
D. Number of full Fund Shares currently owned;
E. Account transaction history, including records
of initial and additional purchases, redemptions,
dividends and other distributions, and related
tax information................................... No Charge
2. Maintain files of Fund-related brokerage account
applications, requests and correspondence from or on
behalf of shareholders in relation to Fund Shares as
well as copies of all written responses thereto.................. No Charge
3. Process with ADP and revise brokerage account
records to show all changes or corrections to share-
holders' registration and address records authorized
in writing by or on behalf of the shareholder........................ Cost*
- ----------------
* The term "Cost" as used in this Schedule A includes only approximate
out-of-pocket tangible expenses and does not include any reimbursement
for labor or overhead.
<PAGE>
4. Maintain records of shareholders' transactions in
Fund Shares for federal and state tax and securities law purposes.......Cost
II. PURCHASES, DIVIDENDS AND REDEMPTIONS
------------------------------------
1. Conversion of monies to Federal funds...................No Charge
2. Request from the Fund's transfer agent and record
on the brokerage accounts of Fund shareholders electing to reinvest
dividends, the Fund Shares declared as dividends .........................Cost
3. Request from the Fund's transfer agent and record
on the shareholder's brokerage account records cash dividends to
Fund shareholders electing cash payment of Fund dividends.................Cost
4. Requisition from the Fund's custodian and forward
by check to the Fund's shareholders the properly computed amounts
of dividends payable in cash to shareholders electing such payment........Cost*
5. Prepare and transmit by mail to each shareholder
confirmations of all purchases and redemptions of Fund Shares
when and if required by Rules of the Securities and Exchange Commission...Cost
6. Prepare and transmit by mail to each shareholder
monthly statements reflecting all purchases, dividends and redemptions
of full Fund Shares.......................................................Cost**
7. Receive, ascertain the adequacy of, and transmit
to the Fund's transfer agent through the ADP system, all purchase orders or
- --------------------
* In the case where a Fund shareholder has other brokerage activity resulting in
the payment of cash dividends and only one check is drawn by Wayne Hummer &
Co. for payment of al1 Fund and non-Fund cash dividends, no charge will be
made to the Fund.
**In the case where a Fund shareholder has other brokerage activity reflected
on a monthly statement, Wayne Hummer & Co. shall only be reimbursed for
the cost of the line item(s) reflecting Fund (as opposed to other brokerage)
activity.
-2-
<PAGE>
redemption requests (other than redemption requests made by check) and all
transactions made pursuant to the "cash sweep program" in accordance with the
requirements set forth in the current prospectus* of the Fund...............Cost
8. Record on shareholder brokerage account records the number of
Shares purchased or redeemed ...............................................Cost
9. Requisition from the Fund's custodian and remit the proceeds of
redemption (other than redemption requests made by check or effected through the
Fund's cash sweep program) as directed by the individual shareholder in
accordance with the current prospectus of the Fund.....................No Charge
III. SHAREHOLDER COMMUNICATIONS & SERVICES
-------------------------------------
1. Provide, maintain and man telephone communication systems for
shareholder inquiries concerning the administration of their accounts..No Charge
2. Receive and answer promptly all correspondence or similar inquiries
from or on behalf of shareholders concerning the administration of their
accounts ..............................................................No Charge
3. Refer to the Fund's investment adviser questions or matters related
to its function........................................................No Charge
4. Prepare such reports and summaries of shareholder communications as
may be requested by the Fund's officers for the preparation of reports to the
Fund's trustees and appropriate regulatory authorities ................No Charge
5. Provide and maintain an ADP terminal with on line facilities to
provide information reqarding Fund shareholder accounts ...............No Charge
6. Order and transmit checks to shareholders requesting and qualifying
for check writing privileges, periodically return honored checks to
shareholders, and provide to the Fund, the transfer agent and custodian such
check writing documentation as required and in accordance with the Fund's
current prospectus..........................................................Cost
- --------------
* "Prospectus," as used herein, shall include the Fund's current statement
of additional information.
-3-
<PAGE>
IV. PROXY MATERIALS, ANNUAL AND OTHER REPORTS
------------------------------------------
1. Transmit (but not prepare) notices of meetings and proxy
statements, prospectuses, annual, semi-annual and quarterly reports as shall
be requested by the Fund and coordinate such mai1ings to appropriate
categories of Fund shareholders ........................................... Cost
2. Furnish to the Fund, by Portfolio, a list of Fund shareholders
eligible to vote at shareholder meetings showing addresses of record and Shares
held together with an affidavit or other appropriate certification of the
mailing of proxy materials .......................................... No Charge
V. TAX MATTERS
-----------
1. Prepare and transmit federal and state tax information
returns relating to Share transactions to shareholders and governmental
agencies ............................................................. No Charge
VI. CASH SWEEP PROGRAM
------------------
1. Develop in conjunction with ADP a "cash sweep program" which
automatically will (a) cause free credit balances in a shareholder's brokerage
account in excess of $500 (on a daily basis) or $100 (on a weekly basis) to be
used to purchase Fund shares, and (b) cause Fund shares to be redeemed on a
dai1y basis to satisfy any debit ba1ances in a shareholders' brokerage account
in excess of $10 ..........................................................Cost*
October 22, 1985
WAYNE HUMMER MONEY FUND TRUST WAYNE HUMMER & CO.
by: by:
------------------------- -------------------------
its: a general partner
--------------------
__________
* The Fund wi11 reimburse Wayne Hummer & Co. for the cost of developing the
"cash sweep program" in 36 equa1 month1y installments, not to exceed $800
each, commencing on the 5th day of the month next following the month during
which the program becomes operational.
-4-
<PAGE>
SCHEDULE A
Service to be rendered Charge to Fund
I. SHAREHOLDER ACCOUNTS
1. Open brokerage accounts, as necessary, and maintain
therein current records for Fund shareholder accounts showing
as to each shareholder (to the extent such information is available
or obtainable):
A. Name(s) and address(es) with zip code(s);
B. Type of account and taxpayer identification or social
security number;
C. Representative affiliated with the account;
D. Number of full Fund Shares currently owned;
E. Account transaction history, including records of
initial and additional purchases, redemptions, dividends and
other distributions, and related tax information............... No Charge
2. Maintain files of Fund-related brokerage account applications,
requests and correspondence from or on behalf of shareholders in
relation to Fund Shares as well as copies of all written responses
thereto.............................................................. No Charge
3. Process with ADP and revise brokerage account records to show
all changes or
<PAGE>
corrections to shareholders' registration and address records
authorized in writing by or on behalf of the shareholder............. Cost*
4. Maintain records of shareholders' transactions in Fund
Shares for federal and state tax and securities law purposes......... Cost
II PURCHASES, DIVIDENDS AND REDEMPTIONS
1. Conversion of monies to Federal funds........................ No Charge
2. Request from the Fund's transfer agent and record on the
brokerage accounts of Fund shareholders electing to reinvest
dividends, the Fund Shares declared as dividends..................... Cost
3. Request from the Fund's transfer agent and record on the
Shareholder's brokerage account records cash dividends to Fund
shareholders electing cash payment of Fund dividends................. Cost
4. Requisition from the Fund's custodian and forward by check
to the Fund's shareholders the properly computed amounts of
dividends payable in cash to shareholders electing such payment...... Cost**
5. Prepare and transmit by mail to each shareholder,
confirmations of all purchases and redemptions of Fund Shares........ Cost
6. Prepare and transmit by mail to each shareholder, monthly
statements reflecting all purchases, dividends and redemptions of
full Fund Shares..................................................... Cost***
________________________________________________________________________________
*The term "Cost" as used in this Schedule A includes only approximate out-of-
pocket tangible expenses and does not include any reimbursement for labor or
overhead.
**In the case where a Fund shareholder has other brokerage activity resulting
in the payment of cash dividends, no charge will be made to the Fund.
***In the case where a Fund shareholder has other brokerage activity reflected
on a monthly statement, Wayne Hummer & Co. shall only be reimbursed for the
cost of the line item(s) reflecting Fund (as opposed to other brokerage)
activity.
<PAGE>
7. Receive, ascertain the adequacy of, and transmit to the
Fund's transfer agent through the ADP system, all purchase orders
or redemption requests (other than redemption requests made by
check) in accordance with the requirements set forth in the
current prospectus of the Fund...................................... Cost
8. Record on shareholder brokerage account records the number
of Shares purchased or redeemed..................................... Cost
9. Requisition from the Fund's custodian and remit the
proceeds of redemption (other than redemption requests made by
check) as directed by the individual shareholder in accordance
with the current prospectus of the Fund............................. No Charge
III SHAREHOLDER COMMUNICATIONS & SERVICES
1. Provide, maintain and man telephone communication systems
for shareholder inquiries concerning the administration of their
accounts............................................................ No Charge
2. Receive and answer promptly all correspondence or similar
inquiries from or on behalf of shareholders concerning the
administration of their accounts.................................... No Charge
3. Refer to the Fund's investment adviser questions or matters
related to its function............................................. No Charge
4. Prepare such reports and summaries of shareholder
communications as may be requested by the Fund's officers for
the preparation of reports to the Fund's trustees and appropriate
regulatory authorities.............................................. No Charge
5. Provide and maintain an ADP terminal with on line
facilities to provide information regarding Fund shareholder
accounts............................................................ No Charge
6. Have checks printed according to the Fund's requirements
and furnish checks to shareholders requesting and qualifying for
check writing privileges, periodically return honored checks to
shareholders, as well as provide to the Fund, the transfer agent
and custodian, such check writing documentation as required and
in accordance with the Fund's current prospectus.................... Cost
<PAGE>
IV PROXY MATERIALS, ANNUAL AND OTHER REPORTS
1. Transmit (but not prepare) notices of meetings and
proxy statements, prospectuses, annual, semi-annual and quarterly
reports as shall be requested by the Fund and coordinate such
mailings to appropriate categories of Fund shareholders............. Cost
2. Furnish to the Fund, by Portfolio, a list of
Fund shareholders eligible to vote at shareholder meetings
showing addresses of record and Shares held together with an
affidavit or other appropriate certification of the mailing of
proxy materials..................................................... No Charge
V TAX MATTERS
1. Prepare and transmit federal and state tax informational
returns relating to Share transactions to shareholders and
governmental agencies............................................... No Charge
<PAGE>
EXHIBIT 9(b)
TRANSFER AND DIVIDEND CREDITING AGENCY AGREEMENT
------------------------------------------------
This AGREEMENT made as of this 11th day of March, 1982 by and between the
WAYNE HUMMER MONEY FUND TRUST, a Massachusetts business trust having its
principal place of business at 175 West Jackson Boulevard, Chicago, Illinois
60604 and STATE STREET BANK AND TRUST COMPANY, a Massachusetts banking
corporation having its principal place of business at 225 Franklin Street,
Boston, Massachusetts 02110.
WITNESSETH THAT:
---------------
State Street Bank and Trust Company is hereby appointed Transfer Agent for
the units of beneficial interest in the Fund and Dividend Crediting Agent for
the Fund under the following terms and conditions:
DEFINITIONS
- -----------
1. "Fund" means the Wayne Hummer Money Fund Trust.
2. "State Street" means State Street Bank and Trust Company.
3. "Shares" mean units of beneficial interest in the Fund.
4. "Portfolios" mean the two series of Shares of the Fund.
5. "to the Fund" or "from the Fund" means to a person or entity
designated by the Fund, in writing.
6. "Wayne Hummer & Co." means the Fund's Shareholder Service Agent and
sole distributor of the Fund's Shares.
7. "Shareholder" means an individual who or entity which has
purchased Shares in either or both Portfolios.
<PAGE>
8. "Agreement" means the contract between the Fund and State Street.
9. "Custodian" means State Street Bank and Trust Company in its capacity as
Custodian under the Custodian Agreement with the Fund.
DOCUMENTS
- ---------
1. In connection with the appointment of State Street as Transfer Agent and
Dividend Crediting Agent, the Fund shall file with State Street the following
documents:
A. Certified copies of the Agreement and Declaration of Trust of the
Fund and all amendments thereto;
B. A certified copy of the by-laws of the Fund as amended to date;
C. A copy of the resolution of the Board of Trustees of the Fund
authorizing the Agreement;
D. Copies of all checking account application forms and other documents
relating to Shareholder accounts;
E. As to each Portfolio, an opinion of counsel for the Fund with respect
to the validity of the Shares, the number of Shares authorized for
each Portfolio, the status of redeemed Shares and the number of Shares
with respect to which a Registration Statement has been filed with the
Securities and Exchange Commission and is in effect.
FURTHER DOCUMENTATION
- ---------------------
2. The Fund will also furnish from time to time the following documents:
A. Each resolution of the Board of Trustees of the Fund authorizing the
issue of its Shares and specifying the Portfolios under which said
Shares will be issued;
B. Each Registration Statement filed with the Securities and Exchange
Commission, amendments
-2-
<PAGE>
thereto and orders relating thereto in effect with respect to the
sale of Shares of the Fund;
C. A certified copy of each amendment to the Agreement and
Declaration of Trust and the by-laws of the Fund;
D. Certified copies of each resolution of the Board of Trustees
authorizing officers to give instructions to the Transfer Agent;
E. Such other certificates, documents or opinions which State Street
may, in its discretion, deem necessary or appropriate in the
proper performance of its duties.
AUTHORIZED SHARES
- -----------------
3. The Fund certifies to State Street that as of the close of business on
the date of the Agreement it has authorized an unlimited number of Shares in its
Money Fund Portfolio and an unlimited number of Shares in its Government
Portfolio and certifies that, by virtue of its Agreement and Declaration of
Trust and the provisions of the laws of the Commonwealth of Massachusetts, all
Shares of beneficial interest which are redeemed by the Fund from their holders
are restored to the status of authorized and unissued Shares.
STATE STREET TO REGISTER SHARES
- -------------------------------
4. State Street shall record issues of Shares of the Fund. Except as
specifically agreed in writing between State Street and the Fund, State Street
shall have no obligation when crediting Shares to take cognizance of any
securities laws relating to the issue and sale of such Shares.
STATE STREET TO RECORD TRANSFER
- -------------------------------
5. State Street, upon receipt of proper instructions for transfer, is
authorized, on the records of the Fund maintained
-3-
<PAGE>
by it, from time to time, to transfer Shares of the Fund and to credit a like
number of Shares to the transferee.
CERTIFICATES
- ------------
6. No Share certificates will be issued.
RECEIPT OF FUNDS
- ----------------
7. Upon receipt of Federal funds transmitted by Wayne Hummer & Co. or
otherwise identified as being for the account of the Fund to the office
designated by State Street, State Street shall immediately credit such Federal
funds to the applicable Portfolio or Portfolios of the Fund and shall deposit
the amount due the Portfolio or Portfolios of the Fund to the Custodial Account
of the Fund. Upon receipt of funds specified above or through the Federal
Reserve Wire System, or upon conversion into Federal funds of funds transmitted
by other bank wire transfer systems, State Street shall notify the Fund and
Wayne Hummer & Co. of receipt of such deposits, such notification to be given on
a daily basis. State Street, within the time period set forth in the Fund's then
current prospectus, shall credit the Shareholder's account with the number of
Shares purchased in a particular Portfolio according to the price of such
Portfolio's Shares in effect for such purchases computed as set forth in the
Fund's then current prospectus.
NOTICE OF DISTRIBUTION
- ----------------------
8. The Fund shall promptly inform State Street with respect to each
Portfolio of the declaration of any dividend or distribution on account of its
Shares.
-4-
<PAGE>
DISTRIBUTIONS
- -------------
9. State Street shall act as Dividend Crediting Agent for the Fund and, as
such, in accordance with the provisions of the Fund's Agreement and Declaration
of Trust, by-laws and then current prospectus, shall compute cash accruals to be
declared as dividends or distributions and notify Wayne Hummer & Co. of such
accruals daily. If a Shareholder is entitled to receive additional Shares,
rather than cash dividends by virtue of any such distribution or dividend,
appropriate credits will be made monthly to his account by State Street. With
respect to cash dividends or distributions payable to Shareholders, State
Street, on or before the first business day next following the 20th day of each
month, shall notify the Custodian of the estimated amount required to pay any
portion of said dividends or distributions; and the Fund agrees that on or
before the date of such dividends or distributions (as hereinbefore specified),
it shall instruct the Custodian to wire Federal funds to Wayne Hummer & Co. on
behalf of the Fund, in an amount sufficient for the cash dividend or
distribution to be paid to Shareholders. Wayne Hummer & Co., acting on behalf of
the Fund, shall distribute all cash dividends and distributions to Shareholders.
REDEMPTIONS
- -----------
10. State Street shall process each order for the redemption of Shares
transmitted by Wayne Hummer & Co. to State Street on behalf of the Fund. State
Street shall keep records and shall supply daily information sufficient to
enable Wayne
-5-
<PAGE>
Hummer & Co. to confirm Shareholder transactions including the trade date, the
number of full and fractional Shares redeemed, the Portfolio from which such
Shares have been redeemed, the price per Share and the total redemption
proceeds. In the event of a complete redemption of a Shareholder's Shares, State
Street shall also supply and record (and the confirmation provided by Wayne
Hummer & Co. shall show) the amount of accumulated dividends included in such
total redemption proceeds not previously reported to the Shareholder in a
monthly statement and the total dividends and/or distributions for the year to
date. Wayne Hummer & Co., acting on behalf of the Fund, will distribute all
redemption proceeds to Shareholders. The requirements as to documentation and
the applicable redemption price shall be as provided in the then currently
effective prospectus. State Street shall notify the Custodian and the Fund on
each business day of the amount of cash required to meet payments made pursuant
to the provisions of this paragraph and the Fund shall instruct the Custodian to
make available from time to time sufficient funds therefor in the liquidation
account(s) of the Fund. Redemption proceeds are to be wired through the Federal
Reserve Wire System or by bank wire in Federal funds to the bank or trust
company account designated by Wayne Hummer & Co. for receiving such proceeds on
behalf of Shareholders. The time of payment shall be such as to allow Wayne
Hummer & Co. to comply with the then currently effective prospectus, subject to
such supplemental requirements
-6-
<PAGE>
consistent with such prospectus as may be established by mutual agreement
between the Fund and State Street.
State Street agrees on behalf of the Fund to accept redemption requests
directly from Shareholders when made by check and in accordance with the then
current prospectus. State Street agrees that upon receipt of any redemption
check which does not comply with the requirements as to redemption by check, as
set forth in the then current prospectus, it shall notify the Fund on the next
business day, stating the basis of such failure to meet the requirements as to
redemption by check. State Street shall not process any such redemption by check
unless and until such redemption request complies with the requirements as to
redemption as set forth in the then current prospectus. All redemptions by eheck
shall be effected at the price in effect at the time the redemption request
meets the requirements as to redemption by check as set forth in the then
current prospectus. State Street shall notify the Custodian and the Fund on each
business day of the amount of cash required to make payments pursuant to the
provisions of this paragraph and the Fund shall instruct the Custodian to make
available from time to time sufficient funds therefor in the liquidation
account(s) of the Fund. The authority of State Street to process redemptions
under this paragraph 10 shall be suspended upon receipt of notification by it of
the suspension of the determination of the Fund's net asset value.
TAX RETURNS
- -----------
11. State Street shall provide to the Fund such books, records and
information as is necessary to permit the Fund to
-7-
<PAGE>
file with the Internal Revenue Service and with the appropriate state agencies,
and shall provide to Wayne Hummer & Co. such records and information as may be
necessary to allow Wayne Hummer & Co. to prepare and mail to Shareholders such
returns for reporting dividends and distributions paid as are required by law to
be so filed and mailed, and shall indicate to Wayne Hummer & Co. such sums as
are required to be withheld under applicable Federal tax laws, rules and
regulations.
B00KS AND RECORDS
- -----------------
12. State Street shall maintain records showing for each Shareholder's
account the following:
A. Number of Shares held, the state of residence, the Wayne Hummer &
Co. account number in which such Shares are held and the Portfolio
in which such Shares are held;
B. Historical information regarding each Shareholder identified by a
Wayne Hummer & Co. account number, including dividends paid,
dividends reinvested and date and price for all transactions;
C. Any stop or restraining order placed against each Shareholder
account; and
D. Any information required in order for State Street to perform the
calculations contemplated or required by this Agreement.
Any such records required to be maintained by Rule 31a-1 of the General
Rules and Regulations under the Investment Company Act of 1940, as said rule is
in effect from time to time, shall be preserved for the periods prescribed in
said Rule. Such record retention shall be at the expense of the Fund and
records may be inspected by the Fund at reasonable times. State Street may, at
its option at any time, and shall
-8-
<PAGE>
forthwith upon the Fund's demand, turn over to the Fund and cease to retain in
State Street's files, records and documents created and maintained by State
Street pursuant to this Agreement which are no longer needed by State Street in
performance of its services or for its protection. If not so turned over to the
Fund, such records and documents will be retained by State Street for six years
from the year of creation, during the first two of which such documents will be
in readily accessible form. At the end of the six year period, such records and
documents will either be turned over to the Fund, or destroyed in accordance
with the Fund's authorization.
INFORMATION TO BE FURNISHED TO THE FUND
- ---------------------------------------
13. State Street shall, in a manner to be agreed upon in writing, furnish to
the Fund daily and confirm in writing not less often than monthly, the following
information:
A. Entries in the daily transaction register;
B. Entries in the dividend and reinvestment blotters;
C. Entries as to the total number of Shares sold in each state.
OTHER INFORMATION TO THE FUND
- ------------------------------
14. State Street shall furnish to the Fund such other information, including
account lists, and statistical information as may be agreed upon from time to
time.
FEES AND CHARGES
- ----------------
15. State Street shall receive such compensation from the Fund for its
services hereunder and for such other duties performed by it pursuant hereto as
may be agreed from time to
-9-
<PAGE>
time, as set forth in the then current fee schedule as agreed to between the
parties and attached hereto and shall be reimbursed for the cost of any and all
forms especially prepared for use in connection with its actions hereunder, it
being agreed that State Street, prior to ordering any forms in such supply as it
estimates will be adequate for more than two years use or cost in excess of
$2,000, shall obtain the prior written consent of the Fund. All forms for which
State Street has received reimbursement from the Fund shall be and remain the
property of the Fund until used. Unless subsequently modified in writing upon
thirty (50) days prior notice by State Street to the Fund, fees and charges
shall be as set forth in the then current fee schedule as agreed to between the
parties and attached hereto.
COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS
- --------------------------------------------------
16. The Fund assumes full responsibility for insuring that the contents of
each prospectus of the Fund complies with all applicable requirements of the
Securities Act of 1933, as amended, the Investment Company Act of 1940, as
amended, and any laws, rules and regulations of governmental authorities having
jurisdiction.
REFERENCES T0 STATE STREET
- --------------------------
17. The Fund shall not circulate any printed matter which contains any
reference to State Street without the prior written approval of State Street,
excepting solely such printed matter as merely identifies State Street as
Transfer Agent and Dividend Crediting Agent for the Fund. The Fund shall submit
-10-
<PAGE>
printed matter requiring approval to State Street in draft form, allowing
sufficient time for review by State Street and its counsel prior to any deadline
for printing.
FORCE MAJEURE
- --------------
18. Subject to the provisions of paragraph 19, State Street shall not be
liable for loss of data occurring by reason of circumstance beyond its control,
including but not limited to acts of civil or military authority, national
emergencies, fire, flood or catastrophe, acts of God, insurrection, war or
riots. State Street shall use its best efforts to minimize the likelihood of
such damage, loss of data, delays or errors resulting from uncontrollable
events, and if such damage, loss of data, delays or errors occur, State Street
shall use its best efforts to mitigate the effects of such occurrence.
STANDARD OF CARE
- ----------------
19. State Street shall at all times act in good faith and agrees to use its
best efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall not be
liable for loss or damage due to errors unless said error is caused by its
negligence, bad faith or wilful misconduct or that of its employees.
INDEMNIFICATION
- ---------------
20. The Fund shall, exclusively from Fund assets, indemnify and hold State
Street harmless from all loss, cost, damage and expense incurred by it resulting
from any claim, demand, action or suit arising out of the performance of State
-11-
<PAGE>
Street's duties hereunder as Transfer and Dividend Crediting Agent, or as a
result of acting upon any instruction reasonably believed by it to have been
executed by a duly authorized officer of the Fund, or upon any information,
data, records or documents provided State Street or its agents by computer tape,
telex, CRT data entry or other similar means authorized by the Fund; provided,
however, that this indemnification shall not apply to actions or omissions of
State Street in cases of its own wilful misconduct or ordinary negligence. In
order that the indemnification provision contained in this paragraph 20 shall
apply, however, it is understood that if in any case the Fund may be asked to
indemnify or save State Street harmless, the Fund shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that State Street will use all reasonable care to identify
and notify the Fund promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Fund. The Fund shall have the option to defend State Street against any
claim which may be the subject of this indemnification, and in the event that
the Fund so elects it will so notify State Street, and thereupon the Fund shall
take over complete defense of the claim, and in such situations State Street
shall incur no further legal or other expenses for which it shall seek
indemnification under this paragraph. State Street shall in no case confess any
claim or make any compromise in any case in which the Fund will be asked to
indemnify State Street except with the Fund's prior written consent.
-12-
<PAGE>
LIMITATION OF LIABILITY
- -----------------------
21. Notwithstanding anything hereinbefore to the contrary, State Street
acknowledges that this Agreement is executed by or on behalf of the Fund and
State Street is hereby expressly put on notice of the limitation of Shareholder
liability as set forth in the Agreement and Declaration of Trust and agrees that
the obligations assumed by the Fund pursuant to this Agreement shall be limited
in all cases to the Fund and its assets, and State Street shall not seek
satisfaction of any such obligations from the Shareholders or any Shareholder of
the Fund. In addition, State Street shall not seek satisfaction of any such
obligations from the Trustees or Officers of the Fund or any individual Trustee
or Officer.
FURTHER ACTIONS
- ---------------
22. Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
AMENDMENT AND TERMINATION
- -------------------------
23. Except as provided in paragraph 15 hereunder, this Agreement may be
modified or amended from time to time in writing by mutual agreement between the
parties hereto. The Agreement may be terminated at any time by one hundred
twenty (120) days written notice given by one party to the other.
LAW TO GOVERN
- -------------
24. This Agreement shall be construed and the provisions hereof interpreted
under applicable Federal law and the law of the Commonwealth of Massachusetts.
-13-
<PAGE>
EXECUTED under seal as of the day and year first above written:
ATTEST: WAYNE HUMMER MONEY FUND TRUST
/s/ Robert Johnson By /s/ David H. Slavik
- ------------------------ ------------------------
Secretary President
ATTEST: STATE STREET BANK AND TRUST COMPANY
By
- ------------------------ ------------------------
Assistant Secretary Vice President
-14-
<PAGE>
[Logo of State Street]
STATE STREET BANK & TRUST COMPANY
WAYNE HUMMER MONEY FUND TRUST
WAYNE HUMMER GROWTH FUND
Fee Information for Services as
Plan, Transfer, and Dividend Disbursing Agent
Effective Date - 8/01/92 through 12/31/93
- -------------------------------------------------------------------------------
General - Fees are based on an annual per shareholder account charge for account
maintenance plus out-of-pocket expenses. Annual maintenance charges for various
kinds of mutual funds are given below. There is a minimum charge per fund on the
following schedule which will be charged in the event the base fee does not
equal the minimum amount agreed to.
Per Fund $2,500 per month
Annual Maintenance Charges - Fees are billable on a monthly basis at the rate of
1/12 of the annual fee. A charge is made for an account in the month that an
account opens or closes.
Base Fee
8/92
W.H. Money Fund Trust 9.50
W.H. Growth Fund 7.85
Out-of-Pocket Expenses - Out-of-Pocket expenses include but are not limited to:
confirmation statements, postage, forms, telephone, microfilm, microfiche,
customized system enhancement requests, and any expenses incurred at the
specific direction of the Fund. Postage for mass mailings is due seven days in
advance of the mailing date.
WAYNE HUMMER MONEY FUND TRUST STATE STREET BANK AND TRUST CO.
WAYNE HUMMER GROWTH FUND
By: /s/ Jean M. Watts By: /s/ Janet Wertheim
------------------------- ----------------------------
Title: Treasurer Title: Vice President
---------------------- -------------------------
Date: 9/14/92 Date: 9/1/92
----------------------- --------------------------
<PAGE>
STATE STREET BANK & TRUST COMPANY
WAYNE HUMMER MONEY FUND TRUST
WAYNE HUMMER GROWTH FUND
Fee Information for Services as
Plan, Transfer and Dividend Disbursing Agent
- --------------------------------------------------------------------------------
General - Fees are based on an annual per shareholder account charge for account
maintenance plus out-of-pocket expenses. Annual maintenance charges for various
kinds of mutual funds are given below. There is a minimum charge per fund on the
following schedule:
One Fund $2,000/month per fund
Annual Maintenance Charges - Fees are billable on a monthly basis at the rate of
1/12 of the annual fee. A charge is made for an account in the month that an
account opens or closes. Includes processing of 8 transactions/account/year for
W.H. Money Fund Trust. Includes 4 transactions/account/Year for W.H. Growth
Fund.
Base Fee
W.H. Money Fund Trust $8.80
W.H. Growth Fund 7.25
Other Fees
Share and maintenance transactions*
W.H. Money Fund Trust .80 each
W.H. Growth Fund 1.50 each
* In excess of transactions included in base fee
<PAGE>
Out-of-Pocket Expenses- Out-of-Pocket expenses include but are not limited to:
postage, forms, telephone, microfilm, microfiche, and expenses incurred at the
specific direction of the Fund. Postage for mass mailings is due seven days in
advance of the mailing date.
Wayne Hummer Money Fund Trust STATE STREET BANK AND TRUST CO.
Wayne Hummer Growth Fund
By: /s/ Jean M. Watts By: /s/ Mark Toomey
--------------------------- ---------------------------
Title: Treasurer Title: Vice President
------------------------ ------------------------
Date: 1-7-91 Date:
------------------------- -------------------------
<PAGE>
FEE SCHEDULE
State Street Bank and Trust Company
Fee Information for Services as Plan,
Transfer and Dividend Disbursing Agent
Wayne Hummer Money Fund Trust
- --------------------------------------------------------------------------------
General - Fees are based on an annual per shareholder account charge for account
maintenance plus out-of-pocket expenses. There is a minimum charge of $2,000 per
month applicable to both or all of the portfolios of the Fund phased in over six
months as per custody fees. Annual maintenance charges for various kinds of
mutual funds are given below.
Annual Maintenance Charges - The annual maintenance charge includes the
processing of all transactions and correspondence. The fee is billable on a
monthly basis at the rate of 1/12 of the annual fee. A charge is made for an
account in the month that an account opens or closes.
. Money Market Funds
- Institutional/Broker Funds
. Fund entering new account information, same
day redemptions, next day redemptions and
purchases when this system is available.
Basic annual per account fee: $13.20
This includes the processing of 8 share
transactions/account on an average for
the entire account base over the year.
Any share transactions over the 8/year $ .80 each
Out-of-Pocket Expenses - Out-of-Pocket expenses include but are not limited to:
postage, forms, telephone, microfilm, microfiche, and expenses incurred at the
specific direction of the Fund. Postage for mass mailings is due seven days in
advance of the mailing date.
Wayne Hummer Money Fund State Street Bank and
Trust Trust Company
By: David H. Slavik By: K. G. Locke
---------------------- ---------------------
President K. G. LOCKE
Vice President
Date: March 11, 1982 Date: March 22, 1982
------------------- ------------------
<PAGE>
- -------------------------------------------------------------------------------
NATIONAL FINANCIAL DATA SERVICES, INC.
FEE INFORMATION FOR SERVICES AS PLAN, TRANSFER AND DIVIDEND DISBURSING AGENT FOR
STATE STREET BANK & TRUST CO.
THE WAYNE HUMMER FUNDS
- --------------------------------------------------------------------------------
EFFECTIVE FROM JANUARY 1, 1995 THROUGH DECEMBER 31, 1997
- --------------------------------------------------------------------------------
ACCOUNT MAINTENANCE FEES
Wayne Hummer Money Fund Trust $9.50 per year*
Wayne Hummer Growth Fund $7.85 per year*
Wayne Hummer Income Fund $7.85 per year*
Future Income/Equity Fund(s) $7.85 per year*
A MONTHLY MINIMUM ACCOUNT MAINTENANCE FEE APPLIES FOR EACH FUND/CUSIP AT THE
FOLLOWING RATES:
Wayne Hummer Money Fund Trust $2,500
Wayne Hummer Growth Fund $2,500
Wayne Hummer Income Fund $1,750
Future Income/Equity Fund(s) $1,750
OUT-OF-POCKET EXPENSES
Out-of-Pocket expenses include but are not limited to: mailing expenses
(statements, stationary, checks, certificates, sales literature, printing,
postage, etc), automated telephone servicing charges, custom programming,
telecommunication expenses, equipment/software expenses (client-site only),
microfiche, freight and all other expenses incurred on the fund's behalf. Due to
the pass-through nature of out-of-pocket expenses, all charges are subject to
change.
*Fees are billed monthly at 1/12 of the annual rate.
The Wayne Hummer Funds State Street Bank & Trust
By: Jean M. Watts By:
--------------- ----------------
Title: Treasurer Title: Vice President
--------------- ----------------
Date: 4/20/95 Date: 4/15/95
--------------- ----------------
<PAGE>
May 2, 1983
State Street Bank and Trust Company
P.O. Box 315
Boston, Massachusetts 02101
Attention: Leonard Locke
Gentlemen:
Pursuant to the Custodian Agreement dated March 11, 1982 and the Transfer
Agency Agreement dated March 11, 1982, between State Street Bank and Trust
Company (the "Bank") and Wayne Hummer Money Fund Trust (the "Fund"), the Fund
hereby advises, authorizes and instructs the Bank to permit redemption of Fund
shares by check as follows:
1. A shareholder requesting the checkwriting privilege must complete and
furnish the Bank, through Wayne Hummer & Co., an authorization form (Exhibit A)
and a signature card (Exhibit B) for each Fund portfolio as to which
checkwriting is requested.
2. Upon receipt from Wayne Hummer & Co. of the appropriate authorization
form and signature card properly completed and executed, the Bank will establish
a checking account for the shareholder and instruct the printer agreed upon
by the parties to deliver Fund checks bearing the name of the Bank, the Fund and
the Portfolio, as well as the account number of such shareholder, to Wayne
Hummer & Co.
3. Upon the presentment of a Fund check to the Bank for payment, the Bank
may accept such check as a proper redemption request, redeem sufficient shares
in the shareholder's portfolio account on which the check is drawn to cover
such check, deposit the proceeds of such redemption into the shareholder's
checking account and pay such check if:
(a) The Fund check meets the Bank's normal standards, rules and regulations
for honoring checks presented to it; provided, however, with respect to an
account with a signature card signed by more than one person, the Bank may
accept less than all the signatures on the Fund check if so authorized by such
persons on such signature card and may accept a signature differing from that
appearing on such signature card by having an abbreviated first name or by
lacking or adding a middle initial, provided the signature otherwise is
acceptable;
<PAGE>
State Street Bank and Trust Company
Page 2
May 2, 1983
(b) The amount of the Fund check does not exceed $250,000, is neither
greater than nor less than the amounts set forth in the Fund's then current
prospectus and meets all other requirements as set forth in the Fund's then
current prospectus; and
(c) There are sufficient shares in the Fund portfolio account to cover the
amount of such Fund check not including (i) shares which have been purchased by
other than Federal Funds wire within 15 days immediately prior to the
presentment of such Fund check and (ii) shares for which stock certificates
have been issued.
4. At the close of each business day, the Bank shall supply via CRT to the
offices of the Fund a listing of all checks received on such business day,
indicating the dollar amount of each such check and the account number of the
shareholder effecting the check redemption. In addition, on the business day
each check is cleared, the Bank shall forward all data regarding cleared checks
to the Fund in the form of transmitted entries to ADP, the record keeping
service bureau for the Fund. The information so transmitted shall reflect (a)
the clearance of each check and (b) an appropriate reduction in the
shareholder's portfolio account on which the check was drawn.
5. The Bank will return through normal check collection channels, any Fund
check which is not acceptable as a proper redemption request.
6. Within a reasonable time after a check redemption is made, the Bank will
return all honored Fund checks to Wayne Hummer & Co.
7. The Fund agrees to pay the additional fees as set forth in Schedule A
attached to and made a part of this Agreement and reasonable out-of-pocket
expenses resulting from the Bank's performance of the services contemplated
hereunder. The parties hereto agree that said Schedule A may at any time and
from time to time be modified or amended by agreement of the parties in the form
of an amended or supplemental schedule initialled by their authorized
representatives.
<PAGE>
State Street Bank and Trust Company
Page 3
May 2, 1983
8. This agreement is executed by or on behalf of the Fund and the Bank is
hereby expressly put on notice of the limitation of shareholder liability as set
forth in the Agreement and Declaration of Trust and agrees that the obligations
assumed by the Fund pursuant to this agreement shall be limited in all cases to
the Fund and its assets, and the Bank shall not seek satisfaction of any such
obligations from the shareholders or any shareholder of the Fund. In addition,
the Bank shall not seek satisfaction of any such obligations from the Trustees
or Officers of the Fund or any individual Trustee or Officer.
9. In rendering services hereunder, the parties hereto agree to be bound by
the terms and provisions of the above-referenced Custodian Agreement and
Transfer Agency Agreement, except to the extent such terms and conditions are
specifically modified hereunder.
WAYNE HUMMER MONEY FUND TRUST
by /s/ David H. Slavik
----------------------------
David H. Slavik, President
Accepted and agreed to this 28th day of June, 1983.
STATE STREET BANK AND TRUST COMPANY
by /s/ L. G. Locke
----------------------------
<PAGE>
EXHIBIT A
APPLICATION FOR REDEMPTION BY DRAFT (CHECK)
Individual or Joint Account
This authorization is valid only for Wayne Hummer Money Fund Trust and the
Account specified below. Acceptance by State Street Bank and Trust Company of
Boston (the "Bank") allows designated persons to draw drafts (checks) on the
Fund to redeem shares from the portfolio indicated below in accordance with the
instructions and certifications provided herein.
PLEASE RETURN THIS FORM WITH TWO COMPLETED SIGNATURE CARDS TO WAYNE HUMMER MONEY
FUND TRUST. UPON RECEIPT OF THIS FORM, IT WILL TAKE APPROXIMATELY TWO WEEKS TO
PRINT AND DELIVER YOUR CHECKS TO YOU.
- --------------------------------------------------------------------------------
ACCOUNT IDENTIFICATION
Please print or type account names and addresses exactly as they appear in the
registration of your shareholder account. Also, please indicate whether checks
are to be drawn on the Money Market Portfolio or the Government Portfolio, and
enter your account number.
- -------------------------------------- ------- MONEY MARKET PORTFOLIO
- -------------------------------------- ------- GOVERNMENT PORTFOLIO
- -------------------------------------- -------------------------------
ACCOUNT NUMBER
- --------------------------------------
- --------------------------------------
- --------------------------------------------------------------------------------
REDEMPTION BY DRAFT PRIVILEGE
When a draft drawn on the account shown above is presented to the Bank for
payment, a sufficient number of full and fractional shares of the Fund will be
redeemed by the Bank to cover the amount of the draft subject to the following
conditions:
1. This Authorization must be completed and received by the Bank before
redemptions by draft will be honored.
2. This Authorization must be accompanied by two signature cards bearing
the signatures of all individuals authorized to sign the drafts, signed
exactly as shown on this Authorization and the Account Registration.
3. Drafts may not be drawn on the account for less than $500.00, nor in
amounts of more than $250,000.
4. The Fund will not honor drafts in amounts exceeding the value of
shares in the account held in non-certificate form at the time the draft is
presented for payment. Only drafts drawn on the printed form supplied by the
Fund will be honored. Drafts may only be drawn for whole dollar amounts (zero
pennies).
<PAGE>
5. Shares held in the account for fourteen (14) business days or less will
not be redeemed; drafts written for amounts which include such shares will be
returned marked "Non-Sufficient Funds"; and a fee will be imposed.
6. The Redemption by Draft Privilege is subject to all applicable rules
and regulations (including those adopted by governmental or quasi-governmental
bodies) governing such accounts.
7. The undersigned shareholder(s) and/or person(s) signing on behalf of
the shareholder(s) represent and warrant that they are duly authorized to
execute this form, it is further agreed that the Fund and/or its Agents will not
be liable for any loss, expense or cost arising from redemptions by draft or any
unpaid drafts.
8. The Fund reserves the right to change, modify or terminate this
privilege at any time.
9. Any amendment or modification of the information contained in this
Authorization will require that a new Authorization Form and new signature cards
be completed and submitted to the Bank.
10. Any check which fails to meet the criteria specified above will be
returned to the writer unpaid; and a fee will be imposed.
- --------------------------------------------------------------------------------
CERTIFICATIONS
By execution of this Authorization for Redemption by Draft, we represent and
warrant that we have the full right, power and authority to take the action
called for by this Authorization. We affirm that we have read and understand
the provisions and conditions pertaining to the Redemption by Draft Privilege
and agree to the provisions and conditions set forth.
The certifications, authorizations and appointments in this document wi11
continue until the Bank receives actual written notice of any change thereof.
We further certify that the signatures on the two signature cards submitted with
this Application, and incorporated in this Agreement as if set forth herein, are
authentic and represent individuals with full legal capacity to sign on behalf
of the above account.
SIGN BELOW
-----------------------------
- ------------------- -----------------------------
Date
-----------------------------
- --------------------------------------------------------------------------------
SIGNATURE GUARANTEE
The above signature(s) must be guaranteed by a commercial bank, trust company,
Wayne Hummer & Co., or any other member firm of a national securities exchange.
Affix Guarantee Stamp Here
--------------------------
<PAGE>
EXHIBIT B
SIGNATURE CARD [_] Money Market Portfolio
- --------------- WAYNE HUMMER MONEY FUND TRUST [_] Government Portfolio
Account #
State Street Bank and Trust Company
- -------------------------------------------------------------------------------
Print Name(s) as Registered
- -------------------------------------------------------------------------------
Authorized Signature(s) Individuals must sign as their names appear in
account registration
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[_] Check if all signatures are required
Date
[_] Check if only one signature is required --------------------------
[_] Check if combination of signatures is required and specify number and/or
individual(s)
<PAGE>
SCHEDULE A
State Street Bank and Trust Company
Summary Description and Fee Schedule
for Providing Shareholder Check Service
Wayne Hummer Money Fund Trust
- --------------------------------------------------------------------------------
Service Description
- -------------------
A check writing service is by necessity divided into two separate and distinct
functions - the banking function and the transfer agent function. The banking
function involves the normal responsibilities of a check-clearing institution
and includes the following services:
Maintenance of signature cards and appropriate corporate resolutions, if
required.
Comparison of the signature on the check to the signature on the
signature card for the purpose of paying the face amount of the check
only.
Payment of the check upon proper authorization from the transfer agent
to do so.
Preparation and mailing of cancelled checks and a statement to
Wayne Hummer & Co.
The transfer agent's duties include:
Mailing of blank signature cards and appropriate corporate resolutions
to shareholders requesting the service. (This could also be done by the
Fund.)
Receiving complete signature cards for review and forwarding the bank's
Operations Department.
Receiving checks presented for payment and liquidating account if
signature on the check is the same as appears on the Mutual Fund account
and if the shares balance in the account is sufficient to cover the
amount of the check.
Timely return of all paid and unpaid checks to the bank's Operations
Department.
Note: By allowing the checkwriting service, the Fund is waiving its
right to request a signature guarantee. While the bank would be
responsible for the face amount of any check paid on a forged
endorsement, the Fund or its Management Company would accept
responsibility for any
<PAGE>
consequential damages claimed by the rightful owner of the
account as a result of an improper liquidation.
Fees
- ----
The fees for this service are as follows: (Assumes $500 minimum on each check)
A. Bank function - With State Street $1 per check presented
Bank as transfer agent and custodian for payment.
and Boston Financial Data Service
as the bank's servicing agent.
B. Transfer agent functions - With $5 set up new account.
State Street Bank as custodian.
Note: Cost of checks, covers, signature cards and other materials required to
operate the accounts are considered an out-of-pocket expense to the Fund
and if incurred by State Street 8ank and Trust Company, will be
reimbursed by the Fund.
Wayne Hummer Money Fund State Street Bank and
Trust Trust Company
By: /s/ David H. Slavik By:
------------------------- --------------------------
President
Date: 5/3/83 Date: June 28, 1983
------------------------ ------------------------
<PAGE>
AMENDMENT TO TRANSFER AGENCY
AND SERVICE AGREEMENT
---------------------
AGREEMENT made this 10th day of December, 1985 by and between STATE STREET
BANK AND TRUST COMPANY (the "Bank") and WAYNE HUMMER MONEY FUND TRUST (the
"Fund").
WHEREAS, the Bank and the Fund are parties to a Transfer Agency and Service
Agreement dated March 11, 1982 (the "Agreement") governing the terms and
conditions under which the Bank provides transfer agent, dividend disbursing and
other shareholder services to the Fund; and
WHEREAS, the parties thereto and hereto desire to amend the Agreement in
certain respects in order to comply with the views of the Staff of the
Securities and Exchange Commission regarding the processing of certain orders to
purchase and to redeem shares of mutual funds;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Bank and the Fund hereby amend the Agreement effective the 1st day
of October 1985 to provide as follows:
1. The Bank shall implement a system to identify all share transactions of
the type set forth in Schedule A hereto, which involve purchase and redemption
orders that are processed at a time other than the time of the computation of
net asset
<PAGE>
value per share next computed after receipt of such orders, and shall compute
the net effect upon the Fund of such transactions so identified on a daily and
cumulative basis.
2. If upon any day the cumulative net effect of such transactions upon the
Fund is negative and exceeds a dollar amount equivalent to 1/2 of 1 cent per
share, the Bank shall promptly make a payment to the Fund in cash or through the
use of a credit, in the manner described in paragraph 4 below, in such amount as
may be necessary to reduce the negative cumulative net effect to less than 1/2
of 1 cent per share.
3. If on the last business day of any month the cumulative net effect upon
the Fund (adjusted by the amount of all prior payments and credits by the Bank
and the Fund) is negative, the Fund shall be entitled to a reduction in the fee
next payable under the Agreement by an equivalent amount, except as provided in
paragraph 4 below. If on the last business day in any month the cumulative net
effect upon the Fund (adjusted by the amount of all prior payments and credits
by the Bank and the Fund) is positive, the Bank shall be entitled to recover
certain past payments and reductions in fees, and to a credit against all future
payments and fee reductions that may be required under the Agreement as herein
described in paragraph 4 below.
-2-
<PAGE>
4. At the end of each month, any positive cumulative net effect upon the
Fund shall be deemed to be a credit to the Bank which shall first be applied to
permit the Bank to recover any prior cash payments and fee reductions made by it
to the Fund under paragraphs 2 and 3 above during the calendar year, by
increasing the amount of the monthly fee under the Agreement next payable in an
amount equal to prior payments and fee reductions made by the Bank during such
calendar year, but not exceeding the sum of that month's credit and credits
arising in prior months during such calendar year to the extent such prior
credits have not previously been utilized as contemplated by this paragraph 4.
Any portion of a credit to the Bank not so used by it shall remain as a credit
to be used as payment against the amount of any future negative cumulative net
effects that would otherwise require a cash payment or fee reduction to be made
to the Fund pursuant to paragraphs 2 and 3 above (regardless of whether or not
the credit or any portion thereof arose in the same calendar year as that in
which the negative cumulative net effects or any portion thereof arose).
5. The Bank shall supply to the Fund from time to time, as mutually agreed
upon, reports summarizing the transactions identified pursuant to paragraph 1
above, and the daily and cumulative net effect of such transactions, and shall
advise the Fund at the end of each month of the net cumulative effect at such
time. The Bank shall promptly advise the Fund if at any time the cumulative net
effect exceeds a dollar amount equivalent to 1/2 of 1 cent per share.
-3-
<PAGE>
6. In the event that the Agreement is terminated for whatever cause, or
this amendment terminated pursuant to paragraph 8 below, the Fund shall promptly
pay to the Bank an amount in cash equal to the amount by which the cumulative
net effect upon the Fund is positive or, if the cumulative net effect upon the
Fund is negative, the Bank shall promptly pay to the Fund an amount in cash
equal to the amount of such cumulative net effect.
7. The Bank's responsibilities and obligations hereunder may, without
further consent on the part of the Fund, be subcontracted to Boston Financial
Data Services, Inc. ("BFDS") or to a wholly owned subsidiary of BFDS that is
duly registered as a transfer agent as contemplated by the Agreement.
8. This amendment to the Agreement may be terminated by the Bank without
cause upon 30 days prior written notice to the Fund. Under such circumstances,
the Bank need not also give notice of a termination of the Agreement.
9. Except as explicitly modified by the terms of this Amendment, the terms
and provisions of the Agreement shall continue to apply with full force and
effect.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this amendment to the
Agreement to be executed in their names and on their behalf under the seals by
and through their duly authorized officers, as of the date first written above.
STATE STREET BANK AND TRUST COMPANY
Dated: By:
-----------------------------------
Vice President
ATTEST:
- ----------------------------
Assistant Secretary
WAYNE HUMMER MONEY FUND TRUST
Dated: By:
-----------------------------------
President
ATTEST:
- ----------------------------
Vice President
-5-
<PAGE>
EXHIBIT 9(c)
TRADE NAME
----------
AND
---
SERVICE MARK LICENSE AGREEMENT
------------------------------
THIS AGREEMENT made this ninth day of December, 1981, by and between Wayne
Hummer Management Company, a corporation organized and existing under the laws
of the State of Illinois, having its principal office and place of business at
175 West Jackson Boulevard, Chicago, Illinois, hereinafter for convenience
referred to as "ADVISOR", and Wayne Hummer Money Fund Trust, a Massachusetts
Business trust having its principal office and place of business at 175 West
Jackson Boulevard, Chicago, Illinois, hereinafter for convenience referred to as
"FUND".
WHEREAS, ADVISER has obtained a license together with the right to
sublicense the trade name and service mark "Wayne Hummer" for financial and
investment services and organizations, by mesne license from Wayne Hummer & Co.,
an Illinois partnership, hereinafter referred to as "OWNER"; and WHEREAS, FUND
desires the right to use said trade name and service mark for the described
businesses and services;
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration by each of the parties to the other in hand paid, the
receipt of which is hereby acknowledged, and of the following mutual promises,
covenants and undertakings, the parties hereto have agreed and do hereby agree
as follows:
-1-
<PAGE>
1. ADVISER hereby grants to FUND a non-exclusive, royalty-free right and
license to use the trade name and service mark "Wayne Hummer", hereinafter
referred to as the "Licensed Name and Mark", for financial and investment
businesses and services, hereinafter referred to as the "Licensed Businesses
and Services", in the territory consisting of the United States of America, its
territories and dependencies, hereinafter referred to as the "Licensed
Territory".
2. The nature and quality of the Licensed Businesses and Services in
connection with which the Licensed Name and Mark may be used, including but not
limited to the manner of use by FUND, shall have the approval of ADVISER.
3. Upon execution of this Agreement and from time to time thereafter,
ADVISER will furnish FUND with written standards of quality for the Licensed
Businesses and Services; and FUND agrees to meet the standards of quality so
established. OWNER shall be the sole judge of whether or not FUND has met or is
meeting the standards of quality so established.
4. ADVISER and OWNER shall each have the right to inspect the premises of
FUND where the Licensed Businesses and Services are being conducted and offered,
at reasonable intervals and during regular business hours in order to determine
that said written standards of quality are being met.
5. FUND shall obtain the written approval of ADVISER with respect to all
signs, brochures, bulletins, promotional materials, advertising or the like
bearing the Licensed Name and Mark prior to the use thereof; and such approval
of ADVISER shall not be unreasonably withheld.
-2-
<PAGE>
For the term of this Agreement, FUND shall not use a name or mark identical
with or confusingly similar to the Licensed Name and Mark except as permitted
by the license hereof.
6. FUND shall have the right to terminate this Agreement at any time upon
thirty (30) days' written notice to ADVISER.
7. In the event that FUND shall substantially breach any of the terms of this
Agreement, ADVISER shall have the right to terminate the license granted
hereunder by ninety (90) days' written notice to FUND specifying the breach
complained of, provided that, if during such ninety (90) day period FUND shall
correct the breach, then this license shall continue as if no notice had been
given.
8. ADVISER shall have the right to terminate this Agreement immediately in
the event of the bankruptcy of FUND, or upon the appointment of a receiver for
the assets of FUND, or in the event FUND shall make an assignment for the
benefit of creditors, or in the event that ADVISER shall cease to act as the
investment adviser to the FUND, or in the event that OWNER shall cease to act as
the distributor for the FUND.
9. FUND agrees: (a) that nothing contained in this Agreement shall give
FUND any right, title or interest in the Licensed Name and Mark, except the
right to use the Licensed Name and Mark in accordance with the terms of this
Agreement; (b) that the Licensed Name and Mark is the sole property of OWNER;
and (c) that any and all uses of the Licensed Name and Mark by FUND shall inure
to the benefit of OWNER.
-3-
<PAGE>
10. FUND agrees not to raise or to cause to be raised any questions
concerning or objections to the validity of the Licensed Name and Mark or any
registrations thereof or to the right of OWNER thereto, on any grounds
whatsoever.
11. In the event of cancellation or termination of this Agreement in
accordance with Paragraphs 6, 7 or 8 hereof, FUND shall thereupon cease to use
and shall never again use the Licensed Name and Mark and to deliver to ADVISER,
free of any charge to ADVISER, all signs, brochures, bulletins, promotional
materials, advertising or the like bearing the Licensed Name and Mark that are
then in the possession of FUND.
12. In the event of cancellation or termination in accordance with the
provisions of Paragraphs 6, 7 or 8 hereof, FUND's obligations and agreements
set forth in Paragraphs 9, 10 and 11 hereof shall remain in full force and
effect.
13. FUND agrees to notify ADVISER of any adverse use in the Licensed
Territory of a name or names or a mark or marks confusingly similar to the
Licensed Name and Mark and agrees to take no action of any kind with respect
thereto except by the express written authorization of ADVISER and concurrence
by OWNER; and OWNER agrees to protect FUND against any unauthorized use, in the
Licensed Territory, of the Licensed Name and Mark, or any name or mark
confusingly similar thereto, to the extent that OWNER, upon being given notice
of activities deemed to constitute an infringement of the Licensed Name and Mark
and upon concurring in the determination that such activities constitute
infringement, which concurrence shall not be unreasonably withheld, shall file
suit or resolve
-4-
<PAGE>
the matter within ninety (90) days of such notification. In any suit brought by
OWNER for infringement of the Licensed Name and Mark, FUND shall have the right
to be represented by counsel of its own selection and at its own expense.
14. The license herein granted shall not be assignable or transferable in
any manner whatsoever nor shall FUND have the right to grant any sublicenses.
15. This Agreement embodies the entire understanding of the parties and
supersedes any prior understanding or agreement entered into by the parties
either written or oral. No variation or modification of this Agreement or waiver
of the terms or provisions hereof shall be operative or valid unless in writing
and signed by both parties.
16. All notices, disclosures and other communications hereunder shall be in
writing and shall be deemed to be duly given if delivered or mailed by certified
mail addressed to the parties as indicated hereinabove or to such other address
as either of the parties may furnish to the other in writing.
17. This Agreement is executed by or on behalf of the Fund and the Adviser
is hereby expressly put on notice of the limitation of Shareholder liability as
set forth in the FUND'S Agreement and Declaration of Trust and agrees that
the obligations assumed by the Fund pursuant to this Agreement shall be limited
in all cases to the Fund and its assets, and the Adviser shall not seek satis-
faction of any such obligations from the Shareholders or any Shareholder of the
Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or Officers of the Fund or any individual Trustee
or Officer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their duly authorized representatives as of the day and
year first set forth above.
-5-
<PAGE>
WAYNE HUMMER MANAGEMENT COMPANY
By
-----------------------------------
WAYNE HUMMER MONEY FUND TRUST
By /s/ David Slavik
-----------------------------------
CONSENTED TO:
WAYNE HUMMER & CO.
By
-----------------------------------
Date
---------------------------------
-6-
<PAGE>
EXHIBIT 9(d)
PORTFOLIO ACCOUNTING SERVICES AGREEMENT
This Agreement is entered into as of the 1st day of November, 1994 by and
among Wayne Hummer Management Company, an Illinois corporation ("WH Mgt. Co."),
Wayne Hummer Money Fund Trust, a Massachusetts business trust ("WHMFT"), and
Wayne Hummer Investment Trust, a Massachusetts business trust ("WHIT") (WHMFT
and WHIT hereinafter being occasionally referred to individually as a "Fund" and
collectively as the "Funds").
W I T N E S S E T H:
-------------------
WHEREAS, each Fund is a no-load, open-end, diversified, management
investment Company registered under the Investment Company Act of 1940 (the
"1940 Act"), the units of beneficial interest ("Shares") of which are registered
under the Securities Act of 1933; and
WHEREAS, each Fund is authorized to issue Shares in separate series with each
such series representing the interests in a separate portfolio of securities and
other assets; and
WHEREAS, WHMFT currently offers Shares in one portfolio, the Money Market
Portfolio, and WHIT currently offers Shares in two portfolios, the Growth Fund
Portfolio and the Income Fund Portfolio (hereinafter, together with any other
Portfolio(s) established by the Funds, referred to as a "Portfolio" or the
"Portfolios"); and
WHEREAS, each Fund desires at this time to retain WH Mgt. Co. to render
certain portfolio accounting services to such Fund and its Portfolios and WH
Mgt. Co. is willing to render such services;
NOW THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
<PAGE>
1. Appointment of Portfolio Accounting Services Agent. Each Fund hereby
appoints WH Mgt. Co. as the Portfolio Accounting Services Agent for the Fund
upon the terms and for the period set forth in this Agreement. WH Mgt. Co.
hereby accepts such appointment and agrees to render the services and perform
the duties of Portfolio Accounting Services Agent as set forth herein.
2. Services. The services to be performed by WH Mgt. Co. hereunder are set
forth in Schedule A attached hereto which may, at any time or from time to time,
be modified or amended by agreement of the parties in the form of an amended or
supplemental schedule initiated by their authorized representatives. WH Mgt. Co.
also agrees to perform such additional portfolio accounting services within its
capacity of Portfolio Accounting Services Agent as may, from time to time, be
requested by a Fund, provided that such additional services are the subject of a
supplement to Schedule A attached hereto, as contemplated above.
3. Fees, Costs and Expenses of Performance.
----------------------------------------
3.1 Commencing on January 1, 1995, each Fund will pay WH Mgt. Co. an
equipment fee of Fifty Dollars ($50.00) per Portfolio per month;
3.2 Commencing on the dates set forth below, each Fund will pay WH
Mgt. Co an annual fee computed by aggregating the below stated percentages of
the average daily net assets of each of its Portfolios, which fee will be
accrued daily and payable monthly but which fee shall not exceed $15,000 per
Portfolio per annum:
DATE FEE
---- ---
January 1 through December 31, 1995 1/400th of 1%
January 1, 1996 and thereafter 1/100th of 1%
2
<PAGE>
3.3 Commencing on January 1, 1995, with respect to items (i) and (ii) and
November 1, 1994, with respect to item (iii) each Fund will reimburse WH Mgt.
Co. for its approximate out-of-pocket costs of obtaining (i) securities pricing
services through Muller Data Service (or any reasonably similar successor
pricing service) ("Pricing Costs"),/1/ and (ii) a license to use the Global
Investment Systems L.P. Mutual Fund Accounting System software for portfolio
accounting (or any reasonably similar successor portfolio accounting software)
("Software Costs"),/2/ and (iii) all such other out-of-pocket costs (exclusive
of labor or WH Mgt. Co. overhead) ("OPC's"), which are incurred by WH Mgt. Co.
in providing the pricing and software services, including without limitation,
such things as training expenses, postage, and travel expenses (collectively,
the "Reimbursable Expenses"). Each Fund will reimburse WH Mgt. Co. by the 15th
day of each calendar month (or quarter, as applicable) for that portion of such
costs allocated to its Portfolio(s) during the previous calendar month (or
quarter, as applicable) as follows:
(a) The amount of Pricing Costs allocated to a particular Portfolio for
a particular month will be based upon (1) the average number of securities
in such Portfolio during such calendar month, and (2) the actual Pricing
Costs incurred by WH Mgt. Co. with respect to such Portfolio for such month.
(b) The amount of Software Costs allocated to a particular Portfolio for
a particular calendar quarter will be equal to one-fourth (1/4) of the
annual Software Costs incurred by WH Mgt. Co. from time to time times a
fraction (1) the numerator of which
- -------------------------
/1/ The initial Pricing Costs are approximately $21,000 per year.
/2/ The initial Software Costs are approximately $18,750 per year.
3
<PAGE>
is one (1), and (2) the denominator of which is the total number of
Portfolios being serviced under this Agreement during such calendar quarter.
(c) When a particular OPC expense relates to more than one
Portfolio, such expense shall be allocated equally among all Portfolios to
which it relates.
3.4 On or before the fifth day of each month, WH Mgt. Co. shall submit
to each Fund a monthly report setting forth in reasonable detail the
Reimbursable Expenses and their allocation. Each Fund agrees to cause all such
reports to be reviewed promptly after receipt. Immediately thereafter, WH Mgt.
Co. will be notified of any discernable errors, discrepancies or omissions and,
in the absence of such notification, the report will, for all purposes, be
received as accurate and complete.
4. Effective Date and Term. This Agreement shall become effective on
November 1, 1994 (the "Effective Date") and shall continue until terminated as
provided in paragraph 11 of this Agreement.
5. Standard of Care. WH Mgt. Co. shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement and will make every
reasonable effort and take all reasonably available measures to assure the
accurate performance of all services to be performed by it hereunder within, at
a minimum, the time requirements of any statute, rule or regulation pertaining
to the mutual fund industry and any time requirements set forth in the
Prospectus or Statement of Additional Information of a Fund. WH Mgt. Co. also
shall promptly correct any error or omission made by it in the performance of
its duties hereunder of which it shall have received notice in writing. In
effecting any such corrections, WH Mgt. Co. shall take all reasonable steps
necessary to trace and correct any related errors and omissions. Any costs
4
<PAGE>
or losses incurred by a Fund as a result of any such error or omission or the
correction thereof shall be reimbursed by WH Mgt. Co. and allocated pursuant to
paragraph 3.3 (a) or (b), as appropriate, and the liability of WH Mgt. Co. under
this paragraph shall be subject to the limitations provided in paragraph 8 of
this Agreement.
6. Record Retention and Confidentiality. WH Mgt. Co. shall keep and
maintain on behalf of the Fund all records which are required to be maintained
pursuant to Rule 31a-1 under the 1940 Act and to preserve such records for the
time periods prescribed therein, provided, however, that WH Mgt. Co. shall not
be required to maintain those records which would duplicate records required to
be maintained pursuant to any other agreement entered into by a Fund. In
addition, WH Mgt. Co. will maintain all records it is required to maintain
pursuant to any applicable statutes, rules and regulations regulating to the
maintenance of records in connection with the services to be performed
hereunder. Notwithstanding the foregoing, WH Mgt. Co. shall maintain, for a
period of at least six (6) years, all records and documents which may be needed
or required to support or document the entries made by WH Mgt. Co. in its
performance of services hereunder. WH Mgt. Co. agrees that all records required
to be maintained under this paragraph shall be the property of the appropriate
Fund; shall be maintained in such fashion as to preserve the confidentiality
thereof and to comply with applicable rules and regulations of federal and/or
state securities laws; and shall, in whole or any specified part, be available
for inspection by or surrender to the Fund at any reasonable time after receipt
of an appropriate request.
7. Indemnification of WH Mgt. Co. Each Fund shall indemnify, exclusively
out of Fund assets, WH Mgt. Co. and hold it, its employees and agents harmless
from and against any
5
<PAGE>
and all claims, demands, actions and suits, whether groundless or otherwise, and
from and against all judgments, liabilities, losses, damages, costs, charges,
counsel fees and other expenses arising from or relating to any action taken or
omitted to be taken by WH Mgt. Co. in good faith without negligence. WH Mgt. Co.
may rely and/or act upon:
(a) the authenticity of any letter or any other instrument or
communication reasonably believed by it to be genuine and to have been
properly made or signed by an authorized officer or agent of such Fund;
(b) the accuracy of any records or information provided to it by such
Fund, except to the extent the same may contain obvious errors or
omissions;
(c) any certificate by an authorized officer of such Fund or any
other person authorized by such Fund's Board of Trustees as conclusive
proof of any fact or matter required to be ascertained to WH Mgt. Co.
hereunder;
(d) instructions at any time given by an authorized officer of such
Fund with respect to WH Mgt. Co.'s duties and responsibilities hereunder
including, as to legal matters pertaining to the performance of its duties
hereunder, such advice or instructions as may be given to WH Mgt. Co. by
the counsel to such Fund or any counsel appointed by such counsel or any
authorized officer of such Fund; and
(e) the advice or opinion of legal counsel furnished to it pursuant to
paragraph 9 hereof.
8. Limitation of WH Mgt. Co. Liability. WH Mgt. Co. assumes no liability
and shall not be liable for any damage, loss of data, delay or other loss
caused by circumstances or events beyond its control which it could not
reasonably have anticipated.
6
<PAGE>
9. Legal Advice and Instructions. WH Mgt. Co. may, at any time, request
instructions from any authorized officer of a Fund with respect to the
performance of its duties and responsibilities to such Fund hereunder and may
consult with counsel for such Fund relative to any such matter and shall not be
liable hereunder for any action taken or omitted by it in good faith, in
accordance with such instructions, or with an opinion of such counsel or of
counsel appointed by an authorized officer of such Fund to deal with inquiries
or requests or instructions by WH Mgt. Co.
10. Documents and Information. As soon as feasible prior to the Effective
Date of the Agreement, each Fund wi11 supply to WH Mgt. Co. such documents and
information, including the current Prospectus and Statement of Additional
Information of the Fund, which WH Mgt. Co. may determine, in its reasonable
discretion, to be necessary or appropriate for it to perform the services to be
performed hereunder and wi11 thereafter supply all amendments or supplemental
documents with respect thereto as soon as the same shall be effective or
available for distribution.
11. Termination. This Agreement may be terminated by a party only upon
sixty (60) days' prior written notice; provided, however that a Fund may
terminate this Agreement without prior notice in order to preserve the integrity
of its records from material and continuing errors and omissions on the part of
WH Mgt. Co. In the event of any such termination, WH Mgt. Co. will provide full
cooperation, assistance and documentation within its capabilities as shall be
necessary or desirable, in the reasonable judgment of the Fund, to ensure that
any transfer of the duties and responsibilities of WH Mgt. Co. is accomplished
with maximum efficiency and with minimum cost and disruption to the Fund's
activities. Such cooperation will include the delivery of all files, documents
and records used, kept or maintained by WH Mgt. Co. in the performance
7
<PAGE>
of its services hereunder (except records or documents destroyed pursuant to the
provisions hereof or with the approval of the Fund) together with such of the
Fund's records as may be maintained by WH Mgt. Co. in a form other than hard
copy as well as such summary and/or control data relating thereto, if any, used
by or available to WH Mgt. Co. as may be requested by the Fund. The cost of all
such termination services on the part of WH Mgt. Co. shall be paid by the Fund
without prejudice subject, however, to the rights of the Fund to recover any
amounts so paid in the event that WH Mgt. Co. shall be liable to the Fund under
paragraph 5 hereof.
12. Assignment. This Agreement and the rights and duties hereunder shall
not be assignable by any of the parties hereto.
13. Limitation of Liability. This Agreement is executed by or on behalf of
each Fund, and WH Mgt. Co. is hereby expressly put on notice of the limitation
of shareholder liability as set forth in the Agreement and Declaration of Trust
of each Fund and agrees that the obligations assumed by a Fund pursuant to this
Agreement shall be limited in all cases to such Fund and its assets, and WH Mgt.
Co. shall not seek satisfaction of any such obligations from the Trustees,
Officers or shareholders of such Fund.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be construed in accordance with
applicable federal law and (except as to paragraph 13 hereof which shall be
construed in accordance with the laws of the Commonwealth of Massachusetts) the
laws of the State of Illinois and shall be binding upon and
8
<PAGE>
shall inure to the benefit of the parties hereto and their respective
successors, subject to paragraph 12 hereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
ATTEST: WAYNE HUMMER MANAGEMENT COMPANY
/s/ W. A. Rogers By:
- -------------------------- ----------------------------
Its: President
------------------------
ATTEST: WAYNE HUMMER MONEY FUND TRUST
By:
- -------------------------- ----------------------------
Its: President
------------------------
ATTEST: WAYNE HUMMER INVESTMENT TRUST
/s/ Jean M. Watts By:
- -------------------------- ----------------------------
Its: Vice President
------------------------
9
<PAGE>
SCHEDULE A
----------
Services to Be Rendered
- -----------------------
A. Maintain all books, accounts, ledgers, journals, supporting documents
and supplementary records pertaining to each Portfolio of a Fund which
constitute the record forming the basis for financial statements required of
such Fund by law or required by resolution of the Fund's Board of Trustees.
B. Maintain Capital Stock Accounts for each Portfolio.
C. Prepare for each Portfolio a daily trial balance.
D. Price each Portfolio's securities pursuant to the Prospectus and
Statement of Additional Information of the Fund and appropriate laws and
regulations.
E. Calculate the net asset value of each of the Portfolios in accordance
with the appropriate Fund's current Prospectus and Statement of Additional
Information and communicate same to the appropriate Fund's transfer agent on
each day that the net asset value per share is required to be calculated.
F. Maintain all records of a financial nature pertaining to Portfolio
transactions, including without limitation investment ledgers, as are required
by law or resolution of a Fund's Board of Trustees.
G. On demand, process and print all special ledgers and other reports
required by Rule 31(a)-1, Regulations SX and the compliance tests promulgated
under both the Investment Company Act of 1940 and the Internal Revenue Code of
1986, as amended, that are not required to be maintained under any other
agreement between such Fund and WH Mgt. Co. or a third party.
<PAGE>
Dated: November 1, 1994.
WAYNE HUMMER MANAGEMENT COMPANY
By:
-----------------------------
Its: President
--------------------------
WAYNE HUMMER MONEY FUND TRUST
By:
-----------------------------
Its: President
--------------------------
WAYNE HUMMER INVESTMENT TRUST
By: Jean M. Watts
-----------------------------
Its: Secretary
--------------------------
A-2
<PAGE>
Exhibit 11(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" and "Independent Auditors" and to the use of our report dated
April 28, 1995 in the Registration Statement (Form N-1A) and its incorporation
by reference in the related Prospectus and Statement of Additional Information
of Wayne Hummer Money Fund Trust, filed with the Securities and Exchange
Commission in this Post-Effective Amendment No. 16 to the Registration Statement
under the Securities Act of 1933 (Registration No. 2-75443) and in this
Amendment No. 16 to the Registration Statement under the Investment Company Act
of 1940 (Registration No. 811-3359).
/s/ Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois
July 25, 1995
<PAGE>
Exhibit 11(b)
[LETTERHEAD OF VEDDER, PRICE, KAUFMAN & KAMMHOLZ]
July 26, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Wayne Hummer Money Fund Trust
To the Commission:
We are counsel to the above-referenced investment company (the "Fund") and
as such have participated in the preparation and review of Post-Effective
Amendment No. 16 to the Fund's Registration Statement being filed pursuant to
Rule 485(b) under the Securities Act of 1933. In accordance with paragraph
(b)(4) of Rule 485, we hereby represent that such amendment does not contain
disclosures that would render it ineligible to become effective pursuant to
paragraph (b) thereof.
Very truly yours,
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
By /s/ Robert J. Moran
--------------------
Robert J. Moran
RJM/cy
<PAGE>
EXHIBIT 13
WAYNE HUMMER MONEY FUND TRUST
Subscription Agreement
and
Investment Letter
1. Capital Stock Subscription. The undersigned agrees to purchase from
Wayne Hummer Money Fund Trust (the "Fund") the number of units of beneficial
interest ("Shares") of each series of shares ("Portfolio") set forth herein and
in the preliminary prospectus ("Preliminary Prospectus") described below, and
hereby tenders the amount of the price required to purchase these shares at a
price of $1.00 per share.
The undersigned understands that the Fund filed a registration statement
with the Securities and Exchange Commission (No. 2-75443) on Form N-1, which
contains the Preliminary Prospectus which describes the Fund and the Shares. By
execution hereof, the undersigned hereby acknowledges receipt of a copy of the
Preliminary Prospectus.
The undersigned recognizes that the Fund will not be fully operational until
such time as the Fund commences the public offering of its shares. Accordingly,
a number of features of the Fund described in the Preliminary Prospectus,
including, without limitation, the declaration and payment of dividends, and
redemption of shares upon request of shareholders, are not in existence at the
present time and will not be instituted until the Fund's registration under the
Securities Act of 1933 is made effective.
The undersigned also acknowledges that the costs of organization of the Fund
will be borne by the Fund up to a maximum of $150,000 and will be amortized, on
a straight-line basis, over a five-year period beginning on the 90th day next
following investment operations commenced after a public offering by the Fund.
As a condition of this Subscription Agreement and Investment Letter, the
undersigned agrees that it will not redeem any of the Shares purchased hereunder
until (1) the Fund maintains a net asset value (as described in the Preliminary
Prospectus) of $60,000,000 for ninety consecutive days, or (2) the five year
period for amortization of costs of organization has expired, whichever first
occurs.
2. Representation and Warranties. The undersigned hereby represents and
warrants as follows:
(a) It is aware that no Federal or state agency has made any finding or
determination as to the fairness for the investment, nor any recommendation
or endorsement of the Shares;
<PAGE>
(b) It has such knowledge and experience of financial and business
matters as will enable it to utilize the information made available to it
in connection with the offering of the Shares, to evaluate the merits and
risks of the prospective investment and to make an informed investment
decision;
(c) It recognizes that the Fund has only recently been organized and
has no financial or operating history and, further, that investment in the
Fund involves certain risks, and it has taken full cognizance of and
acknowledges that it and its parent corporation have suitable financial
resources and anticipated income to bear the economic risk of such an
investment;
(d) It is purchasing the Shares for its own account, for investment,
and not with any intention of redemption, distribution, or resale of the
Shares, either in whole or in part;
(e) It will not sell the Shares purchased by it without registration
of the Shares under the Securities Act of 1933 or exemption therefrom;
(f) It has been furnished with, and has carefully read, this Agreement
and the Preliminary Prospectus and such material documents relating to the
Fund as it has requested and as have been provided to it by the Fund;
(g) It also has had the opportunity to ask questions of, and receive
answers from, the Fund concerning the Fund and the terms of the offering.
3. The undersigned recognizes that the Fund reserves the unrestricted
right to reject or limit any subscription and to close the offer at any time.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 24 day of March 1982.
Number of Shares: Government Portfolio: 50,000 Shares
Subscription Price: $1.00 per Share
Money Market Portfolio: 50,000 Shares
Subscription Price: $1.00 per Share
WAYNE HUMMER MANAGEMENT COMPANY
By:
-----------------------------
Its President
175 West Jackson Boulevard
Chicago, Illinois 60604
36-3153396
---------------------------
(Tax Identification Number)
<PAGE>
EXHIBIT 14(a)
IRA
Individual Retirement Account
A TAX DEFERRED RETIREMENT SAVINGS PROGRAM
REGULAR IRA
SPOUSAL IRA
ROLLOVER IRA
Wayne Hummer & Co.
SELF-DIRECTED INDIVIDUAL RETIREMENT CUSTODIAL AGREEMENT
The individual whose name appears on the Plan Agreement attached hereto
(hereinafter called "Depositor") is establishing an Individual Retirement
Account (under Section 408(a) of the Internal Revenue Code) to provide for his
or her retirement and for the support of his or her beneficiaries after death.
Wayne Hummer & Co. (hereinafter called "Custodian") has agreed to serve as
Custodian of Depositor's Individual Retirement Account established hereunder.
The Depositor has assigned the trust the amount indicated as the initial
contribution on the Plan Agreement. Such amount and any additions thereto and
earnings thereon held by the Custodian pursuant to this agreement may be
hereafter referred to as the "Custodial Account," "Account" or "Custodial
Funds."
The Depositor and the Custodian make the following agreement:
ARTICLE I
1.1 The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in Sections 402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8),
408(d)(3), of the Code or an employer contribution to a simplified employee
pension plan as described in 408(k).
ARTICLE 11
2.1 The Depositor's interest in the balance in the Custodial Account is
nonforfeitable.
ARTICLE 111
3.1 No part of the Custodial Funds may be invested in life insurance contracts,
nor may the assets of the Custodial Account be commingled with other property
except in a common trust fund or common investment fund (within the meaning of
Section 408(a)(5) of the Code).
3.2 No part of the Custodial Funds may be invested in collectibles (within the
meaning of Section 408(m) of the Code).
ARTICLE IV
4.1 The Depositor's entire interest in the Custodial Account must be or begin to
be, distributed by the Depositor's required beginning date, the April 1
following the calendar year end in which the Depositor reaches age 70-1/2. By
that date the Depositor may elect, in a manner acceptable to the Custodians to
have the balance in the Custodial Account distributed in:
a. A single sum payment.
<PAGE>
b. An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor. The payments must
begin by April 1 following the calendar year in which the Depositor reaches age
70-1/2.
c. An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor of the Depositor
and his or her designated beneficiary. The payments must begin by April 1
following the calendar year in which the Depositor reaches 70-1/2.
d. Equal or substantially equal annual payments over a specified period that may
not be longer than the Depositor's life expectancy.
e. Equal or substantially equal annual payments over a specified period that may
not be longer than the joint life and last survivor expectancy of the Depositor
and his or her designated beneficiary.
Even if distributions have begun to be made under option (d) or (e), the
Depositor may receive a distribution of the balance in the Custodial Account at
any time by giving written notice to the Custodian. If the Depositor does not
choose any of the methods of distribution described above by the April 1
following the calendar year in which he or she reaches age 70-1/2, distribution
to the Depositor will be made on that date by a single sum payment. If the
Depositor elects as a means of distribution (b) or (c) above, the annuity
contract must satisfy the requirements of Section 408(b)(1),(3), and (4) of the
Code. If the Depositor elects as a means of distribution (d) or (e) above, the
annual payment required to be made by the Depositor's required beginning date is
for the calendar year the Depositor reached age 70-1/2. Annual payments for
subsequent years, including the year the Depositor's required beginning date
occurs, must be made by December 31 of that year.
4.2 If the Depositor dies before his or her interest is distributed to him or
her, the entire remaining interest will be distributed as follows:
a. If the Depositor dies on or after the Depositor's required beginning date,
distribution must continue to be made in accordance with paragraph 4.1.
b. If the Depositor dies before the Depositor's required beginning date, the
entire remaining interest will, at the election of the beneficiary(ies), either
i. Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
ii. Be distributed in equal or substantially equal payments over the life or
life expectancy of the designated beneficiary(ies).
The election of either (i) or (ii) must be made by December 31 of the year
following the year of the Depositor's death. If the beneficiary or beneficiaries
do not elect either of the distribution options described in (i) and ( ii),
distribution will be made in accordance with (ii) if the beneficiary is the
Depositor's surviving spouse, and in accordance with (i) if the beneficiary or
beneficiaries are or include anyone other than the surviving spouse. In the case
of distributions under (ii), distributions must commence by the December 31 of
the year following the year of the Depositor's death. If the Depositor's spouse
is the beneficiary, distributions need not commence until the December 31 of the
year the Depositor would have attained age 70-1/2, if later.
c. If the Depositor dies before his or her entire interest has been distributed
and if the beneficiary is other than the surviving spouse, no additional cash
contributions or rollover contributions may be accepted in the account.
4.3 In the case of distribution over life expectancy in equal or substantially
equal annual payments, to determine the minimum annual payment for each year,
divide the Depositor's entire interest in the Custodial Account as of the close
of business on December 31 of the preceding year by the life expectancy of the
Depositor (or the joint life and last survivor expectancy of the Depositor and
the Depositor's designated beneficiary, or the life expectancy of the designated
beneficiary, whichever
<PAGE>
applies). In the case of distributions under paragraph 4.1, determine the
initial life expectancy (or joint life and last survivor expectancy) using the
attained ages of the Depositor and designated beneficiary as of their birthdays
in the year the Depositor reaches age 70-1/2. In the case of distribution in
accordance with paragraph 4.2(b)(ii), determine life expectancy using the
attained age of the designated beneficiary as of the beneficiary's birthday in
the year distributions are required to commence. Unless the Depositor (or
spouse) elects not to have life expectancy recalculated, the Depositor's life
expectancy (and the life expectancy of the Depositor's spouse, if applicable)
will be recalculated annually using their attained ages as of their birthdays in
the year for which the minimum annual payment is being determined. The life
expectancy of the designated beneficiary (other than the spouse) will not be
recalculated. The minimum annual payment may be made in a series of installments
(e.g., monthly, quarterly, etc.) as long as the total payments for the year made
by the date required are not less than the minimum amounts required.
ARTICLE V
5.1 Unless the Depositor dies, is disabled (as defined in Section 72(m) of the
Code), or reaches age 59-1/2 before any amount is distributed from the account,
the Custodian must receive from the Depositor a statement explaining how he or
she intends to dispose of the amount distributed.
ARTICLE VI
6.1 The Depositor agrees to provide the Custodian with information necessary for
the Custodian to prepare any reports required under Section 408(i) of the Code
and the related regulations.
6.2 The Custodian agrees to submit reports to the Internal Revenue Service and
the Depositor as prescribed by the Internal Revenue Service.
ARTICLE VII
7.1 Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with Section 408(a) of the Code and
related regulations will be invalid.
ARTICLE VIII
8.1 This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear on the Plan Agreement.
ARTICLE IX
9.1 Designation of Depository: The term "Depository" as used herein shall mean
the financial institution or securities firm designated as such. It is
permissible for the same financial institution or securities firm to serve as
both Depository and Custodian.
9.2 Investment Powers of the Custodian--Generally: The Custodian shall have the
power and authority in the administration of this Custodial Account to do all
acts conferred by law, including, but not limited to the following:
a. Pursuant to directions from the Depositor or the Depositor's agent,
1. To invest and reinvest the Custodial Account Corpus, any additional
contributions and any Custodial Account earnings as directed by the Depositor in
any form of investment authorized under law and agreed to by the Custodian.
2. To invest and reinvest all or any part of the Custodial Account in securities
obtainable through the Custodian either "Over the Counter" or on a recognized
exchange, and to invest in mutual funds, savings instruments and any other
lawful custodial investment which is administratively acceptable to
<PAGE>
the Custodian without any duty to diversify, and without regard to whether such
property is authorized by the laws of any jurisdiction for custodial investment.
b. Subject to prior approval by the Custodian:
1. To accept rollover contributions which include property other than cash as
described in Sections 402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8), or 408(d)(3)
of the Code.
2. To accept assets transferred directly for the benefit of the Depositor to the
Custodial Account from the Trustee or Custodian of another Individual Retirement
Account (IRA) as described in Section 408(a) of the Code. The Custodian is
prohibited from directly or indirectly engaging in any transaction prohibited by
Section 4975 of the Code.
c. Subject to prior approval of the Depositor or the Depositor's agent, to hold
any part or all of the Custodial Fund uninvested or, pursuant to directions of
the Depositor to place the same in a savings account approved by the Custodian
or to purchase a Certificate of Deposit with an institution chosen by the
Depositor or the Depositor's agent. However, the Custodian may, but need not,
establish a program under which cash deposits in excess of a minimum set by it
will periodically be invested in a savings account or in a money market fund
without direction of the Depositor or the Depositor's agent, and the terms of
any such program may be determined and altered at the discretion of the
Custodian.
d. To hold any securities in bearer form or in the name of the Custodian;
e. To employ suitable agents and counsel and to pay their reasonable expenses
and compensation;
f. Subject to the provisions of paragraph 9.5(d), to vote in person or by proxy
upon securities held by the Custodian and to delegate its discretionary powers.
g. To consent to or participate in dissolutions, reorganizations,
consolidations, mergers, sales, leases, mortgages, transfers or other changes
affecting securities held by the Custodian;
h. The Custodian is authorized by the Depositor to purchase and sell securities
for the Depositor's account. Prior to entering any orders to purchase or sell
securities in this account, the Depositor shall approve all such orders, and
shall direct the Custodian to implement the Depositor's instructions. Selling
short, and/or executing purchases in an amount which is greater than the
available cash are each prohibited transactions. Investments in life insurance
and collectibles are not permitted. All investments outside of the brokerage
account shall be accompanied by additional written instructions.
i. In accordance with Section 404(c) of the Employee Retirement Income Security
Act ("the Act"), since the Depositor exercises control over the assets in this
Individual Retirement Custodial Account, such Depositor or such Depositor's
Beneficiary shall not be deemed to be a fiduciary by reason of the exercise of
any such control, and no person who is otherwise a fiduciary shall be liable
under this Custodial Account for any loss, or by reason of any breach, which
results from such Depositor's exercise of control.
j. The Depositor may appoint in writing an Investment Manager or Managers to
manage (including the power to acquire and dispose of) any assets of this
Custodial Account.
Any such Investment Manager shall be registered as an Investment Adviser under
the Investment Advisers Act of 1940. If investment of the Custodial Account is
to be directed by an Investment Manager, the Depositor shall deliver to the
Custodian a copy of the instruments appointing the Investment Manager and
evidencing the Investment Manager's acceptance of such appointment, an
acknowledgement by the Investment Manager that it is a fiduciary of the
Custodial Account, and a certificate evidencing the Investment Manager's current
registration under said Act. The Custodian shall be fully protected in relying
upon such instruments and certificate until otherwise notified in writing by the
Depositor.
<PAGE>
The Custodian shall follow the directions of any duly appointed Investment
Manager regarding the investment and reinvestment of the Custodial Account, or
such portion thereof as shall be under management by the Investment Manager. The
Custodian shall be under no duty or obligation to review any investment to be
acquired, held or disposed of pursuant to such directions, nor to make any
recommendations with respect to the disposition or continued retention of any
such investment or the exercise or non-exercise of the powers. Therefore, and in
accordance with Section 405(d)(1) of the Act, the Custodian shall have no
liability or responsibility for acting or not acting pursuant to the direction
of, or failing to act in the absence of any direction from, the Investment
Manager, unless the Custodian knows that by such action or failure to act it
would be itself committing or participating in a breach of fiduciary duty by the
Investment Manager. The Depositor hereby agrees to indemnify the Custodian and
to hold it harmless from and against any claim or liability which may be
asserted against the Custodian by reason of its acting or not acting pursuant to
any direction from the Investment Manager or failing to act in the absence of
any such direction.
The Investment Manager at any time and from time to time may issue orders for
the purchase or sale of securities directly to a broker; and in order to
facilitate such transaction, the Custodian upon request shall execute and
deliver appropriate trading authorizations. Written notification of the issuance
of each such order shall be given promptly to the Custodian by the Investment
Manager, and the execution of each such order shall be confirmed by written
advice via confirmations or otherwise to the Custodian by the broker.
In the event that an Investment Manager should resign or be removed by the
Depositor, the Depositor shall manage the investments pursuant to this Agreement
unless and until the Custodian shall be notified of the appointment of another
Investment Manager with respect thereto as provided in this Article.
k. Notwithstanding anything contained herein to the contrary, the Custodian
shall not lend any part of the corpus or income of the Custodial Account, pay
any compensation for personal services rendered to the Custodial Account, make
any part of its services available on a preferential basis, or acquire for the
Custodial Account any property, other than cash, from or sell any property to
any Depositor, or to any member of a Depositor's family, or to a corporation
controlled by any Depositor through the ownership, directly or indirectly, of 50
percent or more of the total combined voting power of all classes of stock
entitled to vote or 50 percent or more of the total value of shares of all
classes of stock of such corporation.
1. All contributions made by the Depositor and all investments made with such
contributions and the earnings thereon shall be credited to an account
maintained for the Depositor by the Custodian. Such account shall reflect the
amounts contributed by the Depositor.
m. The surviving spouse and/or any other beneficiary shall be bound by Article
IX and the Custodial Account regarding investments and administration of their
interest. However, should the beneficiary be a minor or in the discretion of the
Custodian be of unsound mind, the Custodian is permitted to liquidate the
interests of such beneficiary and hold such amounts in an interest bearing
account or money market account until distributed.
9.3 Investment Powers of the Custodian--Absence of Investment Authority or
Discretion
a. The Custodian shall not make any investment or dispose of any investment held
in custody, except upon the direction of the Depositor or the Depositor's Agent.
<PAGE>
b. The Custodian shall be fully protected acting upon any instrument,
certificate, or paper believed by it to be genuine and to be signed or presented
by the proper person or persons, and the Custodian shall be under no duty to
make any investigation or inquiry as to any statement contained in any such
writing but may accept the same as conclusive evidence of the truth and accuracy
of the statements therein contained.
c. The Custodian will not be liable for any loss which may result by reason of
investments made by it in accordance with the direction of a Depositor or of the
Depositor's agent.
9.4 Expenses and Compensation: The Custodian may charge against and deduct from
the Custodial Account all reasonable expenses incurred by the Custodian in the
administration of the Custodial Account. These amounts shall be collected from
the account in cash. If no free cash is available, the Custodian shall convert
into cash sufficient assets in the Custodial Account to collect such amounts.
Brokerage commissions attributable to the acquisition or distribution of assets
in the Custodial Account will be charged to the Custodial Account and may not be
reimbursed by the Depositor.
The Custodian shall also have the right to charge and deduct from the Custodial
Account an annual fee. The Custodian reserves the right to modify the schedule
of annual Custodian fees or other fees on at least 30 days advance written
notice to Depositor.
9.5 Custodian Responsibilities: The Custodian shall have such powers as may from
time to time be necessary, appropriate, or expedient for it to fulfill its
duties and responsibilities as Custodian;
a. shall receive all contributions and pay benefits from the Custodial Account;
b. shall keep adequate records of all receipts, investments, reinvestments,
disbursements and other transactions hereunder;
c. shall establish and maintain a separate account for the Depositor;
d. shall deliver, cause to be delivered to the Depositor all notices,
prospectuses, financial statements, proxies and proxy soliciting materials
relating to assets held in the Custodial Account. Full shares held in the
Custodial Account will be voted upon only as instructed in the proxy completed,
signed and returned by the Depositor;
e. shall as soon as practicable furnish the Depositor with a confirmation of
such purchases and sales made in the Custodial Account. Upon written request,
copies will be forwarded to any other person(s);
f. shall use reasonable care, skill, prudence and diligence in the
administration of the Custodial Account and in the investments allowed pursuant
to paragraphs 9.2 and 9.3. The Custodian shall be entitled to rely on
information and instructions submitted by or on behalf of the Depositor to the
Custodian, whether directly or indirectly.
9.6 Scope of the Depository's and the Custodian's Duties: If the Custodian and
the Depository are not the same entity, the Depository shall have no duty under
this Agreement and no responsibility for the administration of the Custodial
Account, except for such duties as are imposed by law with respect to Depository
Institutions as applicable.
The Custodian shall not be liable for any loss of any kind which may result from
any action taken by the Custodian in accordance with the directions of the
Depositor or the Depositor's designated agent or attorney in fact or from any
failure to act because of the absence of any such directions. The Custodian is
entitled to act upon any instrument, certificate, or form it believes is genuine
and believes is signed or presented by the proper person or persons, and the
Custodian need not investigate or inquire as to any statement contained in such
document, but may accept it as true and accurate. The Depositor shall at all
times fully indemnify and hold harmless the Custodian, and its successors or
assignees from any liability which may arise hereunder, except liability arising
from the gross negligence or willful misconduct of the Custodian.
<PAGE>
9.7 Judicial Settlement of Accounts: In the event of any dispute or uncertainty
as to the person to whom payment of any funds shall be made hereunder, the
Custodian may withhold such payment until such dispute or uncertainty shall have
been determined or resolved by a court of competent jurisdiction, or settled by
the parties concerned.
The Custodian shall have the right to apply, at any time, to a court of
competent jurisdiction for the judicial settlement of its accounts. In any such
judicial action or proceeding, only the Custodian, and the Depositor (or in the
event of the Depositor's death, his representative) shall be necessary parties,
and no other person having an interest in the Custodial Account shall be
entitled to any notice or service of process. Any judgment entered in such
proceeding or action shall be conclusive upon all persons claiming under this
Agreement. In the event that this Custodian applies for a judicial settlement of
its accounts or any individual account, all fees and disbursements it incurs,
including but not limited to legal and accounting fees, shall be paid from the
Custodial Account and shall constitute a lien upon the account until paid.
9.8 Deduction of Taxes: Any taxes, whether federal, state, local, income, gift,
estate, inheritance or other taxes of any kind whatsoever, including transfer
taxes incurred in connection with the investment or reinvestment of the assets
imposed with respect to the Depositor's account may, in the discretion of the
Custodian be deducted from and charged against such account.
9.9 Notices:
a. Any notice herein required or permitted to be given to the Custodian shall be
deemed, for all purposes of this Agreement, to have been given on the date
received by the Custodian. No notice, instruction, declaration, election,
Beneficiary Designation or change of Beneficiary Designation, required or
permitted to be made by the Depositor or any Beneficiary herein, shall be
effective unless delivered to the Custodian in writing.
b. Any notice herein required or permitted to be given to the Depositor shall be
deemed sufficient if mailed to the Depositor at the Depositor's resident address
as herein stated, or at such other address as shall be provided to the Custodian
from time to time in writing stating that such other address shall be used for
purposes of this Agreement.
c. Provided the Custodian has been notified of the Depositor's death, any notice
herein required or permitted to be given to the Depositor may be given to any
and all Beneficiaries, including the legal representative of the Depositor's
estate. Notice to a Beneficiary shall be sufficient if mailed to the address of
the Beneficiary(ies) last provided in writing to the Custodian by the Depositor
or such Beneficiary(ies).
9.10 Annual Accounting: Within 90 days after the close of each calendar year,
the Custodian shall render an accounting valuing the assets at fair market value
to the Depositor. If the Depositor fails to file any written exceptions or
objections to any such accounting within sixty (60) days after the mailing of
such accounting, the Depositor shall be deemed to have approved of such
accounting; and in such case, or upon the written approval of the Depositor of
any such accounting, the Custodian shall be released, relieved and discharged
with respect to all matters and things set forth in such accounting as though
such accounting had been determined by the decree of a court of competent
jurisdiction. No person other than the Depositor may require an accounting or
bring any action against the Custodian with respect to the Custodial Account or
its actions as Custodian.
<PAGE>
9.11 Penalties: The Custodian shall not be responsible for any tax or other
penalty resulting from any contribution, investment, or distribution selected or
required under the terms of this Agreement.
9.12 Resignation, Removal and Appointment of Custodian:
a. The Custodian may resign, and appoint as successor Custodian any "Depository
Institution or Securities Firm," by sending written notice to the Depositor;
such resignation to take effect not less than 30 days from the date of such
notice. Upon acceptance of such appointment, a successor Custodian shall be
vested with all the authority, discretionary or otherwise, and obligations of
the Custodian hereunder.
b. The Depositor may remove the Custodian or terminate the Custodial
relationship at any time, and the Custodian shall then deliver the Custodial
Account assets as directed by the Depositor.
9.13 Designation of Beneficiary:
a. The Depositor may designate and redesignate his Beneficiary(ies) in writing
on a form provided by the Custodian for such purpose. Upon the Depositor's
death, such Beneficiary(ies) shall be entitled to the balance in the Custodial
Account of the Depositor. Such designation may be changed or revoked only by
written instrument filed with the Custodian. The Custodian may rely upon the
last written designation received by it which shall supersede all prior
designations. If the Beneficiary(ies) shall predecease the Depositor, the
designation shall be ineffective. Subject to the provisions of the law, if
another designation is not made, or if no designation is in effect at the time
of the Depositor's death, his Beneficiary shall be his estate.
b. Notwithstanding anything to the contrary in paragraph 9.13(a) above, upon the
Depositor's death, a surviving spouse Beneficiary may designate and redesignate
his or her Beneficiary(ies) in writing on a form provided by the Custodian for
such purpose. In a manner similar to that provided for the Depositor in
paragraph 9.13(a) above, such Beneficiary(ies) shall be entitled to the balance
in the Custodial Fund upon the death of the surviving spouse.
9.14 Payment in the Event of Disability: If the Depositor is disabled (as
defined in Section 72(m) of the Code), he shall be entitled to the balance in
the Custodial Fund and such balance shall be distributed to him as soon as
practicable after his disability. Prior to the time that amounts are distributed
to the Depositor on account of disability, the Custodian may require such proof
of the Depositor's disability as it deems necessary.
9.15 Disposition of Funds: Except in the case of the Depositor's death or
disability (as defined in Section 72(m) of the Code) or the attainment of age
59-1/2, before distributing an amount from the account, the Depositor shall, by
written notice to the Custodian, certify that such withdrawal or benefit is
payable and, in the case of a withdrawal, shall certify the amount of withdrawal
and the Custodian shall as soon as practicable thereafter distribute such
benefit or withdrawal as the Depositor directs in writing in accordance with
Article IV.
If the distribution is made in stock or other securities, the Custodian shall
transfer such number of shares of stock or other securities as the Depositor
shall direct into the name of such Depositor and distribute such stock or other
securities to the Depositor together with any cash, including the cash
equivalent of any fractional shares credited to such Account, as may be required
in order to comply with the Depositor's written directions.
<PAGE>
If the Depositor directs that the distribution be made in cash, the Custodian
shall, in accordance with the Depositor's written instructions, sell or redeem
stock or other securities credited to the Depositor's Account (or if such
distribution is to be made in periodic installments, such lesser amounts as the
Depositor's direction shall specify) and distribute the proceeds thereof to the
Depositor together with any cash credited to such Account.
9.16 Assignment, Pledge, Attachment, etc. of Custodial Account: No interest,
right or claim in or to any part of the Custodial Fund or any payment therefrom
shall be assignable, transferable or subject to sale, mortgage, pledge,
hypothecation, commutation, anticipation, garnishment, attachment, execution, or
levy of any kind, and the Custodian shall not recognize any attempt to assign,
transfer, sell, mortgage, pledge, hypothecate, commute, or anticipate the same,
except to the extent required by law.
9.17 Exclusive Benefit: The Custodial Account is established for the exclusive
benefit of the Depositor and his or her Beneficiary(ies).
9.18 Interpretation and Amendment:
a. This Agreement is intended to create a qualified Individual Retirement
Account within the meaning of Section 408(a) of the Internal Revenue Code, and
each provision is intended to be consistent with Section 408(a) of the Code and
the regulations thereunder. The Depositor irrevocably delegates to the Custodian
the exclusive authority to interpret the provisions of this Agreement, as from
time to time amended, and the Custodian shall exercise such authority, where
possible, to make the provisions of this Agreement consistent with Section
408(a) of the Code and the regulations thereunder.
b. The Depositor irrevocably delegates to the Custodian the power to amend this
Agreement upon 30 days prior written notice to the Depositor setting forth such
amendment.
c. If the Custodian requests the consent of the Depositor to an amendment to
this Agreement, the Depositor will be deemed to have consented to such amendment
unless the Depositor responds in writing within 30 days of the mailing of Such
request, indicating his refusal to consent.
9.19 Continuance of the Custodial Relationship: The Custodial Relationship shall
continue in effect until the Custodian shall have completed the distribution of
the Custodial Account and the accounts of the Custodian have been settled.
9.20 Governing Law: This Agreement and the Custodial Account created hereby
shall be governed by and construed, administered and enforced according to the
laws of the State in which the Custodian maintains its principal place of
business. All contributions to the Custodial Account shall be deemed to take
place in said State.
9.21 Minimum Distribution Provisions:
a. Standard Minimum Distribution Provisions
i. Pursuant to Article IV, the Depositor and/or spouse beneficiary has the
option of electing irrevocably whether or not life expectancy(ies) will be
recalculated. Such irrevocable election as is in effect by the Depositor's
required beginning date shall apply to all subsequent distributions
Notwithstanding the provisions of paragraph 4.3, if the Depositor does not make
a timely election, distribution shall be made to the Depositor and/or spouse
beneficiary, if applicable, with life expectancy(ies) not being recalculated.
<PAGE>
ii. Notwithstanding the provisions of paragraph 4.1, the Depositor does not
choose any of the methods of distribution described under paragraph 4.1 (a)
through (e) by April 1 following the calendar year in which he or she reaches
age 70-1/2, distribution to the Depositor will be made on that date by a payment
arrived at by dividing the balance in the account as of the close of business on
December 31 of the year prior to the year in which the Depositor reaches age
70-1/2, by the life expectancy based upon the Depositor's attained age in the
year in which the Depositor reaches age 70-1/2.
iii. In the case of death distributions, any beneficiary shall have the option
to elect the method of distribution pursuant to paragraph 4.2(b)(i) or (ii).
Such election must be made by December 31 of the year following the year of the
Depositor's death. If the beneficiary(ies) does not elect either of these
distribution options on a timely basis, distribution shall be made pursuant to
paragraph 4.2(b)(ii).
iv. A surviving spouse beneficiary shall have the option to elect to recalculate
his or her life expectancy. Such election must be made by December 31 of the
year during which payments are required to commence pursuant to paragraph
4.2(b). If the surviving spouse beneficiary does not make an election on a
timely basis, life expectancy shall not be recalculated.
v. The provisions of paragraph 4.2(c) above shall not apply if the Depositor's
death occurred prior to 1984.
vi. Notwithstanding the provisions of paragraph 4.2(b), if the beneficiary is
the surviving spouse, such spouse may make the election specified under
paragraph 4.2(b)(i) or (ii) by the earlier of the December 31 of the calendar
year: (1 ) which contains the 5th anniversary of the date of death of the
Depositor, or (2) in which the Depositor would have attained age 70-1/2.
b. Optional Minimum Distribution Provisions--If the Custodian does not elect to
use the Standard Minimum Distribution Provision under paragraph 9.21 (a) above,
the boxes checked below shall indicate the minimum distribution provision(s)
applicable to this IRA Custodial Account. If no provision is selected by the
Custodian under this paragraph 9.21(b), the provision of paragraph 9.21(a) shall
automatically apply
i. Before Death Distribution
[_] The Depositor shall have the option of electing whether or not life
expectancy(ies) will be recalculated. If such election is not made by the
Depositor's required beginning date, life expectancies shall automatically be
recalculated.
[_] The Depositor's life expectancy and Depositor's designated beneficiary's
life expectancy (if applicable) shall be determined in the first year in which a
minimum is required, and shall then be reduced by one for each year that passes
(i.e. no election to recalculate life expectancies shall be available).
[_] The Depositor's life expectancy and the Depositor's spouse beneficiary's
life expectancy (if applicable) shall be determined in the first year in which a
minimum is required, and such life expectancies shall then be recalculated in
each subsequent year (i.e. an election not to recalculate shall not be
available).
ii. Death Distributions
<PAGE>
[_] Any beneficiary shall have the option to elect whether distributions will be
made pursuant to paragraph 4.2(b)(i) or (ii). If such election is not made on a
timely basis, distribution shall be made pursuant to paragraph 4.2(b)(i).
[_] A surviving spouse beneficiary shall have the option to elect to recalculate
his or her life expectancy. If such election is not made on a timely basis, life
expectancy shall be recalculated.
[_] If the Depositor dies before the Depositor's required beginning date the
entire remaining interest will be distributed pursuant to paragraph 4.2(b)(i).
[_] If the Depositor dies before the Depositor's required beginning date, and
the surviving spouse is the beneficiary, such beneficiary's life expectancy
shall not be recalculated.
[_] If the Depositor dies before the Depositor's required beginning date, and
the surviving spouse is the beneficiary, such beneficiary's life expectancy
shall be recalculated.
9.22 Simplified Employee Pension Plan:
a. Annual contributions may be made by or on behalf of the Depositor into a
Simplified Employee Pension Plan - Individual Retirement Account (SEP-IRA) under
section 408(k). Contributions by the Depositor's employer(s) may not exceed the
lesser of 15% of the Depositor's compensation from each such employer or
$30,000 per employer. Employer contributions shall be made, with respect to any
year, on or before the due date for filing the employer's federal tax return for
such taxable year (including extensions thereof).
b. If otherwise eligible, in addition to any amount contributed by his
employer(s) under a SEP Plan, the Depositor may make a regular IRA contribution
into this account which may not exceed the lesser of 100% of his compensation or
$2,000.
c. When a SEP contribution is made in or for any year in which the Depositor
attains age 70-1/2, or thereafter, the minimum distribution required under
section 4.01 of this Individual Retirement Account Agreement shall be computed
in accordance with Articles IV and IX of this Agreement.
d. The Depositor shall, if required by the Custodian, deliver a written form to
the Custodian indicating that the contribution is eligible to be treated as a
SEP-IRA contribution. The Custodian may rely upon such statement and may treat
the contribution as a SEP-IRA thereafter.
e. Although the termination of the Depositor's SEP-IRA account may have an
adverse effect on the SEP Plan in which the Depositor participates, the
Custodian shall not have any liability to the Depositor and/or his employer(s)
with respect to such termination and shall not have an obligation to provide any
notice thereof.
SELF-DIRECTED INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
GENERAL
Your Individual Retirement Account ("IRA") is a Custodial Account for the
benefit of you or your beneficiaries. The Custodian of the account which you
have established is Wayne Hummer & Co.
<PAGE>
Internal Revenue Service regulations require that you be given this Disclosure
Statement to assure that you are made aware of some of the statutory rules
governing an Individual Retirement Account.
Because the rules with respect to IRAs are very complex, and because
misunderstanding or disregarding the rules may have serious tax implications,
you should consult your own tax advisor if you have questions about the
information contained in this disclosure statement. Further information can also
be obtained from any district office of the Internal Revenue Service.
REVOKING YOUR ACCOUNT
This Disclosure Statement is being furnished to you on the date on which your
IRA is being established. If, after you have read this Disclosure Statement, you
decide for any reason not to participate in this retirement savings program,
government regulations require that you be given the right to revoke this
account. Therefore, you may revoke this account at any time on or before the
seventh day after you established it and treat it as though it had never been
established. This institution will refund your contribution in full, neither
crediting your account for earnings, nor charging it with any administrative
expenses. In order to effect a timely revocation, you must notify us in writing.
Your letter must be postmarked no later than the seventh day after you
established the account and should be addressed to the person designated to
receive such notice of revocation shown on the Plan Agreement.
The following words should be used in the revocation.
"I hereby elect to revoke my IRA Account No. ___________________________
established on __________________________________
Signature _______________________________________
Print Name ________________________________ Date ______________________
Any questions regarding this procedure may be directed to this institution.
DEFINITION OF ACTIVE PARTICIPANT
Congress has changed the rules for determining the tax deductibility of
contributions to an IRA. Beginning in 1987, if you are eligible to make regular
contributions to an IRA, the deductibility of any contributions which you make
will depend upon whether or not you are an "active participant." You are
considered to be an active participant if at any time during the year you are
covered under an employer's "qualified retirement plan." A qualified retirement
plan is a:
1. Pension, profit-sharing or stock bonus plan qualified under Section 401(a)
of the Internal Revenue Code ("the Code");
2. Qualified annuity under Section 403(a) of the Code;
3. Simplified Employee Pension Plan (SEP) under Section 408(k) of the Code;
4. Retirement plan established by a government for its employees
(does not include a Section 457 plan);
5. Annuity contract purchased by certain tax exempt organizations or public
schools under Section 403(b) of the Code; and
6. Pre-1959 pension trust described in Section 501(c)(18) of the Code.
<PAGE>
It should be noted that even sole proprietors with no employees who
adopt Keogh plans or SEPs are considered to be active participants.
The Internal Revenue Service Regulations contain a series of rather complex
rules pertaining to whether an individual is an active participant. If you are
involved with any of the plans described above, we suggest that you seek
assistance from your employer or your tax advisor to determine whether you are
an active participant.
REGULAR IRAs--Persons who are not active participants.
Eligibility: You are allowed to make "regular" contributions into a
"contributory" IRA for a year only if you have received compensation during that
year from the performance of personal services. If you are unmarried and are not
an active participant you can deduct the full amount which you are allowed to
contribute. "Compensation" includes such items as salaries, bonuses,
commissions, and in the case of a self-employed person, net earnings from self-
employment. For tax years beginning after 1984, all taxable alimony and separate
maintenance payments received by an individual under a decree of divorce or a
separate maintenance agreement are treated as compensation.
You may not make regular contributions into an IRA for the taxable year in which
you attain the age of 70-1/2 or thereafter.
Regular Contributions: The law permits you to make regular contributions to your
IRA of up to 100% of your earned income, not to exceed $2,000, for each year in
which you are eligible. If you are a married taxpayer and both you and your
spouse are eligible, each of you is separately entitled to contribute up to 100%
Of your respective income, not to exceed $2,000.
REGULAR IRAs--Active Participants
The deductibility of regular IRA contributions by persons who are active
participants depends upon their marital status, tax filing status and the amount
of their adjusted gross income (AGI). If you are an active participant, the
following charts will assist you in calculating your allowable contribution and
deduction.
UNMARRIED INDIVIDUALS:
If your Adjusted Your contribution Your deduction
Gross Income is: limit is: limit is:
$25,000 or Less Lesser of 100% of Lesser of 100% of
compensation or compensation or
$2,000 $2,000
Between $25,000 and Lesser of 100% of $2,000 limit is
$35,000 compensation or reduced by .20 for
$2,000 every $1 of AGI
between $25,000 and
$35,000
$35,000 or over Lesser of 100% of No deduction
compensation or permitted
$2,000
<PAGE>
Example:
Q. Jane is a single individual who participates in her employer's plan. If
Jane's earned income is $23,000 and her AGI is $28,000, how much may she
contribute and deduct?
A. Jane may contribute up to $2,000 but she may deduct more than $1,400 computed
as follows:
Jane's AGI $28,000.00
Lower Level $25,000.00
Difference $ 3,000.00
x adjustment .20
__________
Reduction $ 600.00
Jane's $2,000 limit is reduced by $600 to $1,400. Any amount which Jane
contributes in excess of $1,400 is non-deductible. If Jane contributes less than
$1,400 only the amount contributed is deductible.
NOTE: An individual who does not live with their spouse at any time during the
year, and does not file a joint return, is treated as "unmarried" and may
utilize the calculation above to calculate his or her deduction limit.
MARRIED PERSONS FILING JOINT RETURNS:
If your Adjust Your contribution Your deduction
Gross Income is: limit is: limit is:
$40,000 or less Lesser of 100% of Lesser of 100% of
compensation or compensation or
$2,000 (applied $2,000 (applied
separately to separately to
each spouse) each spouse)
Between $40,000 and Lesser of 100% of Each spouse's $2,000
$50,000 compensation or limit is reduced by
$2,000 (applied .20 for every $1 of
separately to AGI between $40,000
each spouse) and $50,000)
$50,000 or over Lesser of 100% of No deduction
compensation or permitted
$2,000 (applied
separately to
each spouse)
Example:
Q. Bruce and Betty Bertam are a married couple. Bruce earns a salary of $30,000
and Betty earns a salary of $6,000. When their other income (such as interest or
dividends) is added to their salary, their
<PAGE>
joint AGI is $44,000. They are filing a joint Federal Income Tax return for the
year. Betty is an active participant in her employer's plan, under which her
account has been credited with a 3% contribution ($180). How much may the
Bertam's contribute and deduct for the year?
A. They may each contribute up to $2,000 (for a total up to $4,000), but
their joint deduction is limited to $2,400, computed as follows:
<TABLE>
<CAPTION>
<S> <C>
The Couple's Joint AGI $44,000.00
Lower Level $40,000.00
Difference $ 4,000.00
x adjustment .20
---------------
Reduction $800 per person
</TABLE>
Each person's $2,000 deduction limit is reduced by $800 to $1,200. The couple's
combined deduction limit is, therefore, $2,400. Any amount either spouse
contributes above the deduction limit is a non-deductible IRA contribution. If
either spouse contributes less than $1,200 only the amount contributed by that
spouse is deductible.
For example, let's say that Bruce contributed $2,000 into his IRA and Betty
contributed $1,000 into her IRA. Their deduction on the joint return would be
limited to $2,200, and Bruce will have made an $800 non-deductible contribution
to his IRA.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Actual Contribution Deduction Non-Deductible
Bruce's $2,000 $1,200 $800
Betty's $1,000 $1,000 --
------ ------ ------
$3,000 $2,200 $800
</TABLE>
Although Betty could have contributed up to $1,200 on a deductible basis, the
fact that she didn't does not increase Bruce's deduction limit.
NOTE: For Married Persons Filing Separately, refer to chart below. Married
persons filing separately are treated as covered by a plan if their spouse was
covered by a plan and they lived with their spouse at any time during the year.
MARRIED PERSONS FILING SEPARATELY:
<TABLE>
<CAPTION>
<S> <C> <C>
If your Adjusted Your contribution Your deduction
Gross Income is: limit is: limit is:
Between $0 and Lesser of 100% $2,000 limit is reduced
$10,000 of compensation by .20 for every $1 of
or $2,000 AGI between $0 and $10,000
$10,000 or over Lesser of 100% of No deduction
compensation or permitted
$2,000
</TABLE>
Example:
<PAGE>
Q. Frank and Phyllis are a married couple who live together. Frank earns $50,000
and Phyllis earns $37,000. Frank is covered under his employer's plan, but
Phyllis is not covered under any plan. If they decided to file separately,
how much will each be able to contribute and deduct?
A. Frank will be able to contribute up to $2,000, but since he is an active
participant with an AGI greater than $10,000, none of it will be deductible.
Phyllis will similarly be able to contribute up to $2,000. Although she is
not an active participant, she is "treated" as an active participant due to
her husband's status. Therefore, none of her contribution will be deductible
because her AGI exceeds $10,000.
$200 Minimum Deduction: No matter in which of the above categories you fall,
your minimum allowable deduction shall be $200 until phased out on the
appropriate chart. For example, if you are an unmarried individual with Adjusted
Gross Income of $34,800, your allowable deduction would be $200, even though by
using the reduction explained above you would arrive at a $40 deduction. You are
never allowed to deduct more than you are allowed to contribute for the year.
Rounding Your Reduction Amount: The reduction amount (.20 for every $1 of AGI
over the appropriate level--$25,000, $40,000 and $0) is rounded down to the next
lowest $10. For example, if you are Married filing jointly with adjusted gross
income of $46,255, the $2,000 limit would be reduced by $1,251 ($46,255-$40,000
= $6.255 x .20 = $1,251). Rounding down, this reduction amount would be $1,250,
leaving a higher allowable deduction for you and your spouse of $750 each
($2,000-$1,250).
SPOUSAL IRAs
Eligibility: If during the year you have received compensation and your spouse
did not receive any compensation, so long as you are eligible for an IRA (see
eligibility requirements above), you may make contributions into separate IRA
accounts for both yourself and for your unemployed spouse. These are sometimes
called Spousal IRAs. No spousal contributions may be made into either spouse's
account for the year in which he/she attains the age of 70-1/2, or thereafter.
The account which has been established for the unemployed spouse, and all
contributions to that account, are deemed to be the property of the unemployed
spouse, and such account will be subject to all deposit regulations, and laws,
as well as this institution's policies regarding Individual Retirement Accounts.
Contributions: Married persons who file joint returns who qualify may still make
"spousal contributions" of up to 100% of the compensation of the "working
spouse" not to exceed $2,250. The amount of the contribution may still be
divided between the two spouses' accounts in any way they want, so long as no
more than $2,000 goes into either spouse's account. The spousal IRA is available
if one spouse has compensation and the other spouse either (1) has no
compensation or (2) elects to be treated for the taxable year as having received
no compensation.
For example, if you earn $20,000 and your spouse receives $100, you would still
be eligible for the full spousal contribution and deduction of $2,250.
Joint Return Required: In order to claim the expanded deduction for
contributions to Spousal IRAs, the couple must file a joint federal income tax
return for the year for which the deduction is being claimed.
Working Spouse 70-1/2 or Older: If you are a working spouse and qualify for an
IRA contribution in all respects except for your age (70-1/2 or older), and you
have a non-working spouse under the age of 70-1/2, you may contribute to your
non-working spouse's IRA any amount up to the lesser of $100% of your
compensation for the year or $2,000.00.
<PAGE>
Active Participants: If you are an active participant, then your spousal IRA
deduction may be limited as follows, depending upon the amount of your adjusted
gross income:
<TABLE>
<CAPTION>
<S> <C> <C>
If your Adjusted Your contribution Your deduction
Gross Income is: limit is: limit is:
$40,000 or less Lesser of 100% of Lesser of 100% of
compensation or compensation or
$2,250 $2,250
Between $40,000 and Lesser of 100% of $2,250 limit reduced
$50.000 compensation or by .225 for every $1
$2,250 of AGI between
$40,000 and $50,000
$50,000 or over Lesser of 100% of No deduction
compensation or permitted
$2,250
</TABLE>
Example:
Q1. Mr. and Mrs. Young file a joint tax return. Each spouse earns more than
$2,000 and one is an active participant. They have a combined AGI of $44,255.
How much may the Young's contribute and deduct for the year?
A1. They may contribute up to $2,000 each for a total of $4,000, but their joint
deduction is limited to $2,300 computed as follows:
<TABLE>
<CAPTION>
<S> <C>
The Couples Joint AGI $44,255.00
Lower Level $40,000.00
Difference $ 4,255.00
x adjustment .20
-------------------
$ 851.00 per person
rounded to $ 850.00 per person
</TABLE>
Each person's separate $2,000 deduction limit is reduced by $850 to $1,150.
Therefore, although the couple's combined contribution limit is $4,000, their
combined deduction limit is $2,300.
Q2. If, in the example above, Mr. Young did not earn any compensation, or
elected to be treated as having earned no compensation, Mrs. Young could
establish a Spousal IRA (consisting of an account for herself and one for her
husband). How much may the Young's contribute and deduct for the year?
A2. They may contribute up to a total of $2,250 between their two IRAs, but
their joint deduction is limited to $1,300, computed as follows:
<TABLE>
<CAPTION>
<S> <C>
The Couples Joint AGI $44,255.00
Lower Level $40,000.00
Difference $ 4,255.00
x adjustment .225
----------
$ 957.00
</TABLE>
<PAGE>
rounded to $ 950.00
The $2,250 deduction limited is reduced by $950 to $1,300. The $1,300 can be
divided between the two accounts, but neither IRA may receive a deductible
contribution of more than $1,150 (See Q1 above for computing this dollar
amount).
NON-DEDUCTIBLE IRA CONTRIBUTIONS
All eligible individuals may make IRA contributions of up to 100% of their
earned income not to exceed $2,000. To the extent that amounts are not eligible
for federal tax deduction, these amounts may remain in the account as non-
deductible contributions.
An individual may make non-deductible IRA contributions to the following extent:
1. to make up the difference (if any) between the allowable deduction limit and
$2,000;
2. in the case of spousal IRAs, to make up the difference (if any) between the
allowable deduction limit and $2,250; or
3. where a taxpayer elects to treat otherwise deductible IRA contributions as
non-deductible.
ADDITIONAL INFORMATION REGARDING IRAs
Cash Contributions: All regular or spousal contributions to an IRA, must be made
in cash.
$2,000 Limit: Except in the case of rollover contributions or contributions to a
Simplified Employee Pension Plan ("SEP"), this institution may not accept IRA
contributions for either you or your spouse in excess of $2,000 per person for
any taxable year.
Deduction: Your contributions, to the extent deductible, may be deducted from
your gross income on your federal income tax return, even if you do not itemize
your deductions. In order to be eligible to take a deduction, you must establish
the account prior to the end of the period during which contributions are
allowed to be made.
Deadline for Contributions: Contributions must be made no later than the due
date (not including extensions) for filing your federal income tax return for
the taxable year for which they apply. Therefore, if you wish to make a
contribution for any year, the plan must be established and the contribution
must be made no later than April 15th of the following year, even if an
extension has been granted for the filing of your federal income tax return.
No Commingling: Your IRA will be clearly identified and will not be commingled
with the property of any other depositor.
No Forfeitures: Your contributions into this IRA are not subject to forfeiture.
No Life Insurance: No part of the IRA will be invested in life insurance
contracts.
No Collectibles: Generally, no part of the IRA may be invested in
"collectibles", such as works of art, rugs, antiques, metals, gems, stamps,
coins, alcoholic beverages, or other similar property. For
<PAGE>
acquisitions made after December 31, 1986, certain gold and silver coins issued
by the United States and certain state issued coins acquired by the IRA after
November 10, 1988, will no longer be included in the definition of collectibles.
Penalty on Excess Distributions: If during any taxable year beginning after
December 31, 1986, you receive total distributions from IRAs, Qualified Plans
and/or Tax-Sheltered Annuities in excess of the greater of $150,000 (unindexed)
or $112,500 (indexed beginning in 1988 for cost of living adjustments) any
amount which is received in excess of such amount may be subject to a penalty of
15%. Before taking aggregate distributions in this range you should contact your
tax advisor with respect to the proper application of these rules.
CONTRIBUTIONS TO A SIMPLIFIED EMPLOYEE PENSION PLAN
Your employer or employers may make contributions into your IRA under the rules
which pertain to Simplified Employee Pension Plans (SEPs) in amounts which do
not exceed the lesser of 15% of your compensation from each such employer or
$30,000 per employer. The contributions must be made based upon a written
allocation formula developed by your employer, a copy of which will be provided
to you. Your employer may contribute to this or any other SEP-IRA, even if you
are a participant in a qualified plan in the year for which the SEP contribution
is being made, and even if you have attained the age of 70-1/2 (the age at which
you would normally no longer be eligible to make regular IRA contributions).
EXCESS CONTRIBUTIONS
Under the Internal Revenue Code, any contributions to your IRA above the
permissible limits described above, even if subsequently withdrawn, are subject
to an annual non-deductible excise tax of 6% of the principal amount of the
excess contribution. However, the penalty may be avoided by withdrawing the
principal amount of the excess contribution, and any earnings on the excess, on
or before the due date for filing your federal income tax return for the year
for which the contribution was made (including extensions). For example, if you
make a contribution in excess of the 100% limitation, you could withdraw the
excess amount plus the earnings on the excess within the allowable time and
avoid the penalty altogether.
Under a Spousal IRA, an otherwise eligible couple makes an excess contribution
in any year in which more than $2,000 is contributed into either account or when
more than a total of $2,250 is contributed into the accounts of both spouses.
The excess contributed into either spouse's account for any year will be subject
to the 6% penalty mentioned above.
If the excess plus earnings is not withdrawn by the due date for filing your
federal income tax return, the penalty will not only be applied in the year for
which the excess is made, but it will be reapplied for each subsequent year
during which the amount in the account continues to exceed the allowable
contribution limitations. In order to avoid the initial penalty, you must
withdraw the earnings on the excess. The reapplication of the penalty may be
avoided by either withdrawing the excess, or by making reduced contributions in
subsequent years.
You may not claim a deduction for the amount of any excess contribution for the
year for which it is made.
<PAGE>
If the amount contributed into an IRA for the year exceeds $2,250, and rather
than making a reduced contribution in a later year, you withdraw the excess
after the due date for filing the return for the year for which you originally
made the excess contribution, not only will the excess be subject to the
previously mentioned 6% penalty, but the amount withdrawn will also be included
in your income in the year in which it is withdrawn. If you have not attained
the age of 59-1/2, the amount withdrawn will also be subject to the 10% penalty
on premature distributions (discussed below).
The only way to avoid (a) paying the 6% excess contribution penalty, (b) the
income inclusion, and (c) the 10% premature withdrawal penalty if you have not
reached age 59-1/2, is to remove not only the excess contribution, but the
earnings thereon on or before the due date for filing your federal income tax
return, with extensions.
Even if the excess contribution and earnings are withdrawn on or before the due
date for filing your federal income tax return, the amount earned on the excess
contribution, even if withdrawn, must be included in your income in the year in
which the excess contribution was made. If the earnings are not withdrawn within
this period, they are included in your income in the year in which you withdraw
them. Any earnings withdrawn before you attain the age of 59-1/2 may be subject
to the 10% penalty as a premature distribution. However, in no event will the
earnings be subject to the 6% excise tax on excess contributions, whether or not
they are withdrawn prior to or after the tax due date.
Except for a SEP contribution, an IRA may not accept contributions made in the
year in which you attain the age of 70-1/2, or thereafter. Any regular IRA
contributions made after that time shall be considered an excess contribution
subject to the 6% penalty referred to above. This will not preclude you from
making a rollover after you have attained the age of 70-1/2.
An excess contribution will not occur unless the 100% of compensation up to
$2,000 ($2,250 in the case of spousal contributions) limit is exceeded. In other
words, if you are an unmarried active participant with adjusted gross income of
$30,000, $2,000 is still your contribution limit, even though you may only
deduct $1,000. The remaining $1,000 is a non-deductible contribution. You will
not incur an excess contribution penalty unless more than your contribution
limit ($2,000 in this example) is contributed. If, on the other hand, your
earned income was only $1,500 and you contributed $2,000, you will have made a
$500 excess contribution.
ROLLOVER IRA
Procedure for Rollover: You may make a tax-free rollover to an IRA if:
a. you receive a "lump-sum distribution" (as defined below) from a qualified
plan or from a tax-sheltered annuity for teachers or employees of certain tax-
exempt organizations;
b. you receive a distribution of the balance in your account because of
termination of a qualified plan;
c. you receive a "partial distribution" (as defined below) from a qualified plan
or from a tax-sheltered annuity for teachers or employees of certain tax exempt
organizations;
d. you receive a distribution of your deductible voluntary employee
contributions from a qualified plan; or
e. you receive a distribution from a qualified plan pursuant to a "Qualified
Domestic Relations Order" as defined below.
<PAGE>
In order to make a tax-free rollover, you must, within 60 days of the date you
receive a distribution described above, move all or any part of the amount
received into an IRA. When you place the money in the IRA, you must make a
written, irrevocable election to treat the contribution as a rollover
contribution. This is sometimes called a "Rollover IRA." Any distribution or any
part of a distribution not rolled over will be subject to federal income tax to
the extent that it exceeds any non-deductible amounts which you contributed into
the plan from which the distribution is being received.
Definition of Lump-Sum Distribution: In order for a distribution to qualify as a
lump-sum distribution for purposes of a rollover, the entire distribution must
be received by you within one taxable year, the amount received must represent
the entire balance in your or your deceased spouse's qualified plan, and the
amount must have been paid:
a. because you separated from the service of your employer, unless you are a
self-employed individual;
b. after you attained age 59-1/2;
c. after you became disabled, if you are a self employed individual; or
d. because your spouse died.
Partial Distribution: In order for a distribution to qualify as a "partial
distribution" for purposes of a rollover, you must receive at least 50% of the
balance in your account (determined immediately prior to the distribution),
receive the distribution due to disability, death or separation from service and
make an irrevocable election to treat the contribution as a rollover
contribution. In addition, the distribution may not be one of a series of
periodic payments.
Miscellaneous Rollover Rules:
a. The amount rolled over may not include the principal amount of any non-
deductible amounts which you contributed to the qualified plan.
b. The tax which you would otherwise have had to pay on the amount rolled over
will be deferred until distributions begin from the IRA.
c. No deduction is allowed for a rollover contribution, nor is the rollover
limited to a dollar amount, or to a percentage of your income.
d. If you roll over a part of the distribution, only the portion not rolled over
will be included in your income for that year.
Rollover from a Rollover IRA: The law generally allows you to roll the amount
from your "Rollover IRA" back into a qualified pension or profit-sharing plan,
tax sheltered annuity, or into another IRA. However, if the funds in your
Rollover IRA came from a "partial distribution" (as described above), you may
roll the funds only to another IRA; you may not roll them back into a qualified
plan or tax-sheltered annuity. If you plan to use the IRA as a conduit between
plans, then qualified plan funds, "partial distribution" funds (as described
above), tax-sheltered annuity funds, and regular contributory IRA funds should
not be combined in a single account. Also, in order to roll back into either a
qualified plan or a tax-sheltered annuity the entire balance in the IRA account
must be withdrawn, and then either the entire amount or a partial amount may be
rolled over. If only part is rolled over, the portion not rolled over will be
included in your taxable income for the year in which you received the
distribution.
<PAGE>
Rollover from Contributory IRA: You may also roll over amounts between a
contributory IRA and another IRA. You may not roll over amounts from a
contributory IRA to a qualified plan or a tax-sheltered annuity.
Rollover Between IRA's: If you have made a rollover between one IRA and another,
you may not have any other rollovers between the first IRA and any other IRAs
for a 12-month period. The law does not, however, prohibit you from making a
direct transfer of funds between IRAs during this period. If you take a
distribution from an IRA, you may use the funds as you see fit for up to 60
days. If you wish to roll them back into an IRA, the amount rolled over need not
be exactly equal to the amount withdrawn from the first IRA, but any amount not
rolled over must be included in your taxable income for the year of
distribution.
Rollover Pursuant To a Qualified Domestic Relations Order: Beginning January 1,
1985, if you receive from a Qualified Plan a distribution that results from
divorce or similar proceedings, you may be able to rollover all or part of it,
tax-free, into an IRA. You can roll over the distribution if:
a. it is the balance to your credit in the plan;
b. it is made under a Qualified Domestic Relations Order;
c. you are the spouse or former spouse of the Qualified Plan Participant;
d. you receive it within one tax year (your tax year, not the plan's year);
e. you roll only part or all of the amount otherwise taxable to you into an IRA;
and
f. in the case of a distribution of property other than money, you roll over the
same property you received from the plan.
Qualified Domestic Relations Order: A "Domestic Relations Order" is a judgment,
decree or court order, including an approved property settlement agreement, that
is issued under the Domestic Relations Law of a state. A "Qualified Domestic
Relations Order" gives to a spouse, former spouse, child or dependent of a
participant in a retirement plan the right to receive all or part of the
benefits that would be payable to the participant under the plan. The order
requires certain specific information and it may not alter the amount or form of
the benefits of the plan.
Required Distributions Not Eligible for Rollover Treatment: Amounts that are
required to be distributed from a Qualified Plan, tax-sheltered annuity, or IRA
under the required distribution rules are not eligible for rollover treatment.
For example, if you are required to take a minimum distribution after having
attained age 70-1/2, the first amounts distributed to you during a taxable year
are treated as amounts required to be distributed, and are ineligible for
rollover.
DISTRIBUTIONS
Taxation of Distributions: If you take a distribution from your IRA, after
December 31, 1986, other than refunds of excess contributions and rollovers to
other IRAs or to qualified plans, the non-taxable portion of the distribution,
if any, will be a percentage based on the ratio of your previously unrecovered
non-deductible contributions to the aggregate of all IRA balances, including SEP
and rollover contributions generally as of the end of the calendar year in which
you take the distribution, plus distributions from the account during the year.
Due to the complexity of these rules, you should consult with your own tax
advisor prior to taking a distribution.
All distributions from an IRA are subject to federal income tax at ordinary
rates and are not eligible for either capital gains treatment or the elective
10/5 year averaging which is available to certain lump-sum distributions from
qualified plans.
<PAGE>
Incidental Death Benefit Rules: For years beginning after 1988, certain
incidental death benefit rules apply to IRAs. This rule specifies that benefits
provided under a retirement plan must be primarily for the benefit of a
participant rather than for the participant's beneficiaries. Rules similar to
the rules which have applied to Keogh and other qualified plans will now apply
to distributions from IRAs. This rule does not apply to IRA distributions which
must be taken by April 1, 1989 by persons who turned age 70-1/2 during the 1988
calendar year. It does apply, however, to such persons and all other
participants who are required to take distributions by December 31, 1989, with
respect to the 1989 Distribution Calendar Year; and with respect to all required
distributions for IRA participants thereafter. Since an exception to this rule
may apply in certain cases where you have designated your spouse as the
beneficiary of your IRA, before beginning your retirement distributions you
should consult with your tax advisor with respect to this rule.
Premature IRA Distribution Penalty: If you receive a distribution from your IRA,
there will be a 10% penalty tax on the taxable amount unless you:
1. attain age 59-1/2;
2. die;
3. become disabled; or
4. request distributions in the form of substantially equal periodic payments
(at least annually) in the form of a life or life expectancy annuity.
If you request a distribution in the form of periodic payments under reason #4
above, and you modify the payments before 5 years have elapsed and before
attaining age 59-1/2 you may be subject to substantial tax penalties.
DISTRIBUTIONS AT AGE 70-1/2--
STANDARD PROVISIONS
When you reach age 70-1/2 the law requires that you begin taking certain minimum
distributions from your IRA. If your 70th birthday occurs prior to July 1, you
will reach age 70-1/2 in the same calendar year as your 70th birthday. If your
70th birthday is on or after July 1, you will reach age 70-1/2 in the calendar
year that follows the calendar year in which your 70th birthday occurs. For
example, persons born on July 10, 1921, will celebrate their 70th birthday on
July 10, 1991, and will reach age 70-1/2 during 1992.
The year in which you reach age 70-1/2 is referred to as your "first
distribution calendar year." A person is required to take distribution for the
"first distribution calendar year" by April 1 of the following calendar year
(the required beginning date). Therefore, were you to attain age 70-1/2 at any
time during 1992, you would be required to take your required distribution for
the 1992 year by April 1, 1993.
The minimum amount required to be distributed with respect to your first
distribution calendar year is arrived at by dividing your IRA account balance
determined as of the close of business on December 31 of the preceding calendar
year by your life expectancy (or, by the joint life expectancy of you and your
designated beneficiary, if applicable) taken from the life expectancy table in
Sec. 172-9 of the IRS regulations.
<PAGE>
By your required beginning date you must elect to have the balance in the
Custodial Account distributed in (a) a single sum payment; (b) an annuity
contract in equal or substantially equal payments over your single life, (c) an
annuity contract in equal or substantially equal payments over the joint and
last survivor lives of yourself and your designated beneficiary; (d) equal or
substantially equal payments over a specified term not exceeding your single
life expectancy; or (e) equal or substantially equal payments over a specified
term not exceeding the joint life and last survivor expectancy of yourself and
your designated beneficiary.
If distribution is being made under either of the last two methods, you may
elect to receive any part or all of the remaining balance at any time by giving
written notice to the Custodian.
In the absence of an election you will be deemed to have elected to take your
distribution over a specified term not exceeding the joint life and last
survivor expectancy of yourself and your designated beneficiary, if there is a
designated beneficiary; and over a specified term not exceeding your single life
expectancy, if there is no designated beneficiary. However, until a formal
written election is received, the Custodian shall make distribution to you over
a specified term based upon your single life expectancy,
The distribution required to be taken for your second distribution calendar
year, and for each subsequent distribution calendar year, must be taken by
December 31 of each such year.
In determining the amount required to be withdrawn with respect to your second
distribution calendar year and each subsequent distribution calendar year, you
may either elect to recalculate your life expectancy (and your spouse's life
expectancy, if applicable), or not to recalculate.
If you elect to recalculate, the life expectancy used to determine the minimum
distribution for each year after the first distribution calendar year is arrived
at by taking the figure from the life expectancy tables based upon your attained
age (and that of your spouse, if applicable) for each such year. Since
distributions may accelerate upon your death, we suggest that you contact your
tax advisor before electing to recalculate.
If you elect not to recalculate the life expectancy, in each year after the
first distribution calendar year you reduce the life expectancy determined for
the first distribution calendar year by one for each calendar year since the
first distribution calendar year.
The elections referred to above must be made by April 1 of the year following
the first distribution calendar year. If you fail to make any election by that
time on a form prescribed by the Custodian you are deemed to have elected not to
recalculate. Any election, or failure to elect, which is in effect on this April
1 date shall be irrevocable, and shall apply to all subsequent distributions.
In any distribution calendar year you may take more than the minimum required
amount. However, if less than the minimum required amount is withdrawn with
respect to any distribution calendar year, you will be subjected to a federal
excise tax penalty of 50% of the difference between the required minimum for the
year and the amount actually withdrawn.
DISTRIBUTIONS AT AGE 70-1/2
OPTIONAL PROVISIONS
<PAGE>
The distribution provisions below shall only apply if any boxes are checked by
the Custodian. If no boxes are checked then the Standard Provisions above apply
to your IRA Account.
[_] You may elect by April 1, following the end of the year in which you reach
age 70-1/2, either to recalculate or not to recalculate your life expectancy
and/or your spouse beneficiary's life expectancy, if applicable. If you make
neither election, your life expectancy and/or your spouse's life expectancy
shall automatically be recalculated.
[_] You may elect by April 1, following the end of the year in which you reach
age 70-1/2, which method of distribution you desire. If you do not make this
election, a single sum payment will be made to you by such April 1.
[_] Your life expectancy and your designated beneficiary's life expectancy, if
applicable, shall be determined in the first year in which a minimum
distribution is required and shall then be reduced by one for each year that
passes.
[_] Your life expectancy and/or your spouse beneficiary's life expectancy, if
applicable shall be determined in the first year in which a minimum distribution
is required and such life expectancy(ies) shall then be recalculated in each
subsequent year.
DEATH DISTRIBUTIONS--STANDARD PROVISIONS
If you die before your required beginning date your beneficiary(ies) shall have
the option to elect by December 31, following the year of your death, to have
the entire account balance distributed either: (1) Within 5 years after your
death, or (2) over a period not to exceed the life expectancy of your designated
beneficiary. If your Beneficiary(ies) does not make an election, then
distribution will be made over the life expectancy of your designated
beneficiary. If your Beneficiary is your surviving spouse, he or she also has
the option of electing to recalculate his or her life expectancy. If your
surviving spouse does not make this election by December 31 following the year
of your death, your surviving spouse's life expectancy shall not be
recalculated. In addition a spouse beneficiary has the option of delaying
distributions until you would have attained age 70-1/2.
If you die on or after your required beginning date, your Beneficiary(ies) must
continue at least as rapidly the method of distribution selected by you prior to
your death.
DEATH DISTRIBUTIONS--OPTIONAL PROVISIONS
The death distribution provisions below shall only apply to the extent any boxes
are checked by the Custodian. If no boxes are checked then the Standard
Provisions above apply to your IRA Account.
[_] Your Beneficiary has the option to elect by December 31 of the year
following the year of your death whether to take a total distribution by the end
of the year which contains the 5th anniversary of your death or to take
distributions over such Beneficiary's life expectancy. If your Beneficiary does
not make either election, a total distribution must be made from your IRA to
your Beneficiary by December 31 of the year containing the 5th anniversary of
your death.
[_] If your Beneficiary is your surviving spouse, he or she has the option to
elect whether or not to recalculate his or her life expectancy. If neither
election is made by the December 31 following the year of your death, your
surviving spouse's life expectancy shall automatically be recalculated.
[_] If you die before your required beginning date, the remaining interest in
your IRA shall be paid to your Beneficiary no later than the last day of the
year containing the 5th anniversary of your death.
[_] If your surviving spouse is Beneficiary, his or her life expectancy shall
not be recalculated.
[_] If your surviving spouse is Beneficiary, his or her life expectancy shall be
recalculated.
ESTATE TAXES ON DISTRIBUTIONS UPON DEATH
<PAGE>
As a general rule, in the event of your death, the value of your account will be
includable in your gross estate for federal estate tax purposes, since there is
no specific estate tax exclusion for IRAs. Whether or not any estate taxes will
be payable with respect to your IRA will depend on the size of your taxable
estate. However, if your surviving spouse is the beneficiary of your IRA, the
amount in your IRA may qualify for the "marital deduction" under Section 2056 of
the Internal Revenue Code Designation of a beneficiary for your IRA is not
considered a transfer of property for federal gift tax purposes.
PROHIBITED TRANSACTIONS
If you or your beneficiary engage in a "prohibited transaction" as described in
Section 4975(c) of the Internal Revenue Code with respect to your IRA (such as
borrowing money from the IRA), your account will lose its tax exemption, and you
will be immediately taxed on the entire account balance. If you have not yet
attained the age of 59-1/2 at the time, the 10% penalty for premature
distributions will be applied to the entire amount in the account.
PLEDGING YOUR IRA AS SECURITY
If you pledge your IRA as security for a loan, the amount pledged will be deemed
to have been distributed to you and that amount will be includable in your gross
income in the year of the pledge. If you have not yet attained the age of 59-
1/2, the 10% penalty will be applied to the amount pledged.
WITHHOLDING ON DISTRIBUTIONS
The entire distribution (whether or not taxable) from your IRA account will be
subject to income tax withholding, at the source. This means that unless you
provide a written election to waive withholding, a part of each distribution
will be withheld and paid to the government as a prepayment of your federal
income tax liability for that year. The election to waive withholding does not
apply to any distribution which is delivered outside the United States to a U.S
citizen. Certain exceptions apply if payments are made from an IRA to non-U.S.
citizens, and the appropriate certifications are made by them.
FILING REQUIREMENTS
A Form 5329 (Return for Individual Retirement Savings Arrangement and Qualified
Retirement Plan Taxes) is required to be filed with the Internal Revenue Service
only in those years in which you are subject to a 6% penalty for excess
contributions, a 10% penalty for premature distributions, a 50% penalty for
failure to distribute at age 70-1/2, or a 15% penalty for excess distributions.
Separate Forms 5329 must be prepared for each spouse for whom an IRA account is
being maintained where any of the above referenced penalties apply. If you
receive a distribution from a qualified plan and roll all or part of that
distribution into a Rollover IRA, you have to reflect the distribution on your
tax return and indicate that part or all of the funds you received are not
subject to taxation because you rolled them into an IRA. A Form 8606
(Nondeductible IRA Contributions, IRA Basis, and Nontaxable IRA Distributions)
is required to be filed as an attachment to your federal income tax return
reflecting nondeductible contributions and nontaxable IRA distributions.
IRS APPROVAL OF PLAN'S FORMAT AND TAX STATUS
This IRA Account has been approved as to form by the Internal Revenue Service.
The Internal Revenue Service approval is a determination only as to the form of
the account, and does not represent a determination of the merits of the
account. This IRA account is exempt from tax unless you engage in a prohibited
transaction.
FINANCIAL DISCLOSURE
Growth in the Value of Your IRA: Growth in the value of your IRA is neither
guaranteed nor projected. The value of your IRA will be computed by totaling the
fair market value of the assets credited to your
<PAGE>
account. At least once a year the Custodian will send you a written report
stating the current value of your IRA assets. The Custodian shall disclose
separately a description of:
1) the type and amount of each charge;
2) the method of computing and allocating
earnings.
Charges by Custodian: The Custodian may charge reasonable compensation for its
services, and it may deduct all reasonable expenses incurred by it in the
administration of the IRA, including the cost of fiduciary insurance and counsel
fees. Any charges made by the Custodian will be separately disclosed on an
attachment hereto. Such fees may be charged to you or directly to your Custodial
Account. In addition, depending on your choice of investment vehicles, you may
incur brokerage commissions attributable to the purchase or sale of assets.
Wayne Hummer & Co.
300 South Wacker Drive
Chicago, IL 60606
Please retain
IMPORTANT INFORMATION
about your IRA
Bulk Rate
U.S. Postage
PAID
Permit No. 6724
Chicago, IL
5
<PAGE>
EXHIBIT 14(b)
===============================================================================
SIMPLIFIED
EMPLOYEE PENSION
PLAN
===============================================================================
<PAGE>
ABOUT THIS SEP PLAN
WHAT IS A SEP?
A Simplified Employee Pension (SEP) Plan is a type of retirement plan which
allows you, the employer, to provide an important employee benefit to the
employees of your business (including yourself if you perform services for the
business). An "employer" may be a sole proprietor, partnership or corporation.
Amounts you contribute for your employees under the SEP are deposited into your
employees' IRAs.
WHAT ARE THE BENEFITS OF A SEP?
TAX ADVANTAGES: SEP contributions you make to your own IRA and your employees'
IRAs are tax deductible to you, the employer. Because SEP contributions are
in an IRA, all earnings are tax-sheltered, meaning the earnings are not
taxed until they are withdrawn from the IRA. In addition, a SEP retirement
plan helps you attract and retain quality employees as you help meet the
increasing need for financial security at retirement.
ELIGIBILITY REQUIREMENTS: Not all employees have to be covered under a SEP plan.
At your option, you can exclude employees who have not reached age 21,
those who have not worked for you during at least 3 of the immediately
preceding 5 years and those who earn less than $300 per year. (This amount
is increased by the IRS each year based on changes in the cost of living.)
In addition, you may exclude employees who are nonresident aliens and
certain union members.
CONTRIBUTIONS: Each year you may decide if you want to make a SEP contribution.
The maximum contribution which can be made each year for any employee is
15% of compensation or $30,000, whichever is less.
You have until the due date for filing your business's tax return (plus
extensions) to fund your SEP plan. In addition, you and your employees may
also make regular IRA contributions of up to 100% of earned income or
$2,000, whichever is less.
PLACE OF DEPOSIT: All contributions made under the plan must be deposited into
each eligible employee's SEP-IRA. Your employees must maintain their SEP-
IRAs with the financial organization which sponsors this prototype SEP
plan.
INTEGRATION: The plan allows you to integrate your contributions with Social
Security under the "permitted disparity" rules. If your plan is integrated,
contributions made for higher paid employees may be greater (as a
percentage of their pay) than contributions made for lower paid employees.
DISTRIBUTIONS: Once SEP contributions are made, the normal IRA rules apply. For
example, all earnings are tax-sheltered until they are withdrawn from the
IRA. In addition, distributions must begin by April 1 of the year following
the year the IRA holder reaches age 70 1/2.
WHAT ABOUT SET UP?
A SEP is easy to set up and administer. As the employer, you have until the due
date for your business' tax return (plus extensions) to set up a SEP. To
establish a SEP, you must sign an adoption agreement. Once the plan is set up,
all eligible employees (including yourself) establish IRAs to receive the SEP
contributions.
Maintaining a SEP is also easy. Unlike other qualified plans and Koeghs, no
extra reporting is required. You simply take a deduction on your tax return for
the SEP contributions and notify employees of the contribution.
EMPLOYEE COMMUNICATIONS
SEP SUMMARY FOR EMPLOYEES: If you have employees, complete the SEP SUMMARY FOR
EMPLOYEES form in accordance with the elections you made on the adoption
agreement. Provide each employee with a completed copy.
EMPLOYEE INFORMATION BOOKLET: If you have employees, provide each employee with
an EMPLOYEE INFORMATION BOOKLET. whether or not he or she is currently
eligible to participate in this SEP plan.
ESTABLISH IRAs: Make sure all participating employees have established an IRA
with the Plan Sponsor.
SUMMARY
If you are interested in establishing this SEP plan, consult your tax and legal
advisors for guidance in selecting the plan features which best suit your
business's needs. Once you are ready to adopt the plan, refer to the
instructions for completing the enclosed forms and properly establishing your
plan.
<PAGE>
Instructions for Establishing
the Standard Simplified Employee Pension Plan
These instructions are designed to help you, the employer, along with
your attorney and/or tax advisor, establish your SEP plan. The
instructions are meant to be used only as a general guide and are not
intended as a substitute for qualified legal or tax advice.
ADOPTION AGREEMENT
If you wish to have us, the financial organization sponsoring this
prototype plan, help you fill out the Adoption Agreement, we will do
so. However, we recommend that you obtain the advice of your legal or
tax advisor before you sign the Adoption Agreement.
This Adoption Agreement has been designed for easy completion. There
is one page requiring your completion. It contains the original and
one carbonless copy. Insert the page into a typewriter and follow the
section instructions below to complete.
SECTION 1 EMPLOYER INFORMATION
Fill in the requested information.
SECTION 2 EFFECTIVE DATES
This SEP plan is either a new plan (an initial adoption) or an
amendment and restatement of an existing SEP plan.
If this is a new SEP plan, check Option A and fill in the effective
date. The effective date is usually the first day of the plan year in
which this Adoption Agreement is signed. For example, if an employer
maintains a plan on a calendar year basis and this Adoption Agreement
is signed on September 24, 1991, the effective date would be January
1, 1991.
If the reason you are adopting this plan is to amend and replace an
existing SEP plan, check Option B. The existing SEP plan which will
be replaced is called a "prior plan." You will need to know the
effective date of the prior plan. The best way to determine its
effective date is to refer to the prior plan Adoption Agreement. The
effective date of this amendment and restatement is usually the first
day of the plan year in which the Adoption Agreement is signed.
SECTION 3 ELIGIBILITY REQUIREMENTS
NOTE: Section 3 should be completed even if you do not have
employees.
Within limits, you as the employer can specify the number of years
your employees must work for you and the age they must attain before
they are eligible to participate in this plan. Note that the
eligibility requirements which you set up for the plan also apply to
you.
Suppose, for example, you establish a service requirement of three of
the immediately preceding five years and an age requirement of 21. In
that case, only those employees (including yourself) who have worked
for you for three of the immediately preceding five years and are at
least 21 years old are eligible to participate in this plan.
PART A. YEARS OF ELIGIBILITY SERVICE REQUIREMENT
Fill in the number of years of service (0,1,2 or 3). This number must
be either 0,1,2, or 3.
PART B. AGE REQUIREMENT
Fill in the age an employee must attain (no more than 21) to be
eligible to participate in the plan.
PART C. CLASS OF EMPLOYEES ELIGIBLE TO PARTICIPATE
1. Generally you are permitted to exclude employees covered by the
terms of a collective bargaining agreement (e.g., a union
agreement) where retirement benefits were bargained for and
those employees who are nonresident aliens with no U.S. income.
If you wish to exclude those employees, check the first box
under Section 3, Part C.
2. You are permitted to exclude those employees who have received
less than $300 (indexed for cost of living increases) of
compensation during the plan year. If you want to exclude those
employees, check the second box under Section 3, Part C.
SECTION 4 EMPLOYER CONTRIBUTION AND ALLOCATION FORMULA
PART A. CONTRIBUTION FORMULA
Because a SEP plan allows for flexible contributions, the amount of
the contribution will be determined from year to year. There are no
blanks to be completed in Part A.
PART B. ALLOCATION FORMULA
Once the contribution amount has been decided for a plan year, it
must be allocated among the participants in the plan. The
contribution can be allocated using either a pro rata formula or an
integrated formula. Check either Option 1 or 2.
OPTION 1. PRO RATA FORMULA
Check this option if you wish to have the contribution
allocated to all qualifying participants based on their
compensation for the plan year.
OPTION 2. INTEGRATED FORMULA
Check this option if the plan is to be integrated.
Generally, integration is a method of giving some
participants in the plan an extra contribution allocation.
Because of the complexity of integration, you should
consult your tax advisor regarding this issue.
SECTION 5 EMPLOYER SIGNATURE
An authorized representative of the employer must sign and date the
Adoption Agreement. In addition, the prototype sponsor must provide
its name, address and telephone number.
<PAGE>
ELIGIBILITY FORM
The following questions are designed to help you, the employer,
along with your attorney and tax advisor, determine if you are
eligible to adopt a SEP Plan. Answer the following questions:
YES NO
REQUIREMENTS [_] [_] 1. Do you own or control a business from which your
personal services are an income producing factor?
If the answer is NO, STOP. You are not eligible to
establish this Plan.
[_] [_] 2. Has your business ever maintained a defined benefit
plan which is now terminated?
If the answer is YES, STOP. You are not eligible to
establish this Plan.
[_] [_] 3. Is the business a member of a controlled group of
corporations, businesses, or trades, (whether or not
incorporated) within the meaning of IRC Section
414(b) or 414(c)?
[_] [_] 4. Is the business a member of an affiliated service
group within the meaning of IRC Section 414(m)?
[_] [_] 5. Does the business use the services of leased
employees within the meaning of IRC Section 414(n)?
If you answered any of the above questions 3 through 5 YES, you
may have to include the leased employees and/or employees of the
other business(es) in this Plan. Consult your tax advisor to
determine what additional action, if any, you must take.
SIGNATURE IMPORTANT: PLEASE READ BEFORE SIGNING:
I certify that: 1. I am an authorized representative of the
employer and the employer is eligible to
establish the SEP Plan of the Prototype
Sponsor.
2. In determining my eligibility to adopt this
Plan, I relied solely upon the advice of my
own advisors.
3. I agree not to hold the Prototype Sponsor
responsible for any liabilities I may suffer
as a result of being found ineligible to
establish this Plan.
DATE EXECUTED___________________________________________________________________
TYPE NAME OF EMPLOYER___________________________________________________________
SIGNATURE OF EMPLOYER___________________________________________________________
<PAGE>
Basic Plan Document
- --------------------------------------------------------------------------------
SECTION ONE ESTABLISHMENT AND PURPOSE OF PLAN
1.01 PURPOSE The purpose of this Plan is to provide, in accordance with its
provisions, a Simplified Employee Pension Plan providing benefits upon
retirement for the individuals who are eligible to participate hereunder.
1.02 INTENT TO QUALIFY It is the intent of the Employer that this Plan shall be
for the exclusive benefit of its Employees and shall qualify for approval
under Section 408(k) of the Internal Revenue Code, as amended from time to
time (or corresponding provisions of any subsequent Federal law at that
time in effect). In case of any ambiguity, it shall be interpreted to
accomplish such result. It is further intended that it comply with the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA)
as amended from time to time.
1.03 WHO MAY ADOPT An employer who has ever maintained a defined benefit plan
which is now terminated may not participate in this prototype Simplified
Employee Pension Plan. If, subsequent to adopting this Plan, any defined
benefit plan of the Employer terminates, the Employer will no longer
participate in this prototype plan and will be considered to have an
individually designed plan.
1.04 USE WITH IRA This prototype Simplified Employee Pension Plan must be used
with an Internal Revenue Service model IRA (Form 5305 or Form 5305-A) or an
Internal Revenue Service approved master or prototype IRA.
- --------------------------------------------------------------------------------
SECTION TWO DEFINITIONS
2.01 ADOPTION AGREEMENT Means the document executed by the Employer through
which it adopts the Plan and thereby agrees to be bound by all terms and
conditions of the Plan.
2.02 CODE Means the Internal Revenue Code of 1986 as amended.
2.03 COMPENSATION For the purposes of the $300 limit of Section 408(k)(2)(C) of
the Code shall be defined as Section 414(q)(7) Compensation.
For all other purposes, Compensation shall mean all of a Participant's
wages as defined in Section 3401(a) of the Code for the purposes of income
tax withholding at the source but determined without regard to any rules
that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception
for agricultural labor in Section 3401(a)(2) of the Code.
For any Self-Employed Individual covered under the Plan, Compensation will
mean Earned Income.
Compensation shall include only that Compensation which is actually paid or
made available to the Participant during the Plan Year.
Compensation shall include any amount which is contributed by the Employer
pursuant to a salary reduction agreement and which is not includible in the
gross income of the Employee under Sections 125, 402(a)(8), 402(h) or
403(b) of the Code.
The annual Compensation of each Participant taken into account under the
Plan for any year shall not exceed $200,000. This limitation shall be
adjusted by the Secretary at the same time and in the same manner as under
Section 415(d) of the Code, except the dollar increase in effect on
January 1 of any calendar year is effective for years beginning in such
calendar year and the first adjustment to the $200,000 limitation is
effected on January 1, 1990. If a Plan determines Compensation on a period
of time that contains fewer than 12 calendar months, then the annual
Compensation limit is an amount equal to the annual Compensation limit for
the calendar year in which the compensation period begins multiplied by the
ratio obtained by dividing the number of full months in the period by 12.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual Compensation of
each Employee taken into account under the Plan shall not exceed the OBRA
'93 annual Compensation limit. The OBRA '93 annual Compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year applies
to any period, not exceeding 12 months, over which Compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
Compensation limit will be multiplied by a fraction, the numerator of which
is the number of months in the determination period, and the denominator of
which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual Compensation limit set forth in this provision.
2.04 EARNED INCOME Means the net earnings from self-employment in the trade or
business with respect to which the Plan is established, for which personal
services of the individual are a material income-producing factor. Net
earnings will be determined without regard to items not included in gross
income and the deductions allocable to such items. Net earnings are reduced
by contributions by the Employer to a qualified plan or to a Simplified
Employee Pension Plan to the extent deductible under Section 404 of the
Code. Net earnings shall be determined with regard to the deduction allowed
to the Employer by Section 164(f) of the Code for taxable years beginning
after December 31, 1989.
2.05 EFFECTIVE DATE Means the date the Plan becomes effective as indicated in
the Adoption Agreement.
2.06 EMPLOYEE Means any person who is a natural person employed by the Employer
as a common law employee and if the Employer is a sole proprietorship or
partnership, any Self-Employed Individual who performs services with
respect to the trade or business of the Employer. Further, any employee of
any other employer required to be aggregated under Section 414(b), (c),
(m), or (o) of the Code and any leased employee required to be treated as
an employee of the Employer under Section 414(n) of the Code shall also be
considered an Employee.
2.07 EMPLOYER Means any corporation, partnership or sole proprietorship named in
the Adoption Agreement and any successor who by merger, consolidation,
purchase or otherwise assumes the obligations of the Plan. A partnership is
considered to be the Employer of each of the partners and a sole
proprietorship is considered to be the Employer of the sole proprietor.
2.08 EMPLOYER CONTRIBUTION Means the amount contributed by the Employer to this
Plan.
2.09 IRA Means the designated Individual Retirement Account or Individual
Retirement Annuity, which satisfies the requirements of Section 408 of the
Code, and which is maintained with the Prototype Sponsor by a Participant.
2.10 PARTICIPANT Means any Employee who has met the participation requirements
of Section 3.01 and who is or may become eligible to receive an Employer
Contribution.
2.11 PLAN Means this plan document plus the corresponding Adoption Agreement as
completed and signed by the Employer.
2.12 PLAN YEAR Means the 12 consecutive month period which coincides with
Employer's taxable year or such other 12 consecutive month period as is
designated in the Adoption Agreement.
2.13 PRIOR PLAN Means a plan which was amended or replaced by adoption of this
plan document, as indicated in the Adoption Agreement.
2.14 PROTOTYPE SPONSOR Means the entity specified in the Adoption Agreement
which sponsors this prototype Plan.
2.15 SELF-EMPLOYED INDIVIDUAL Means an individual who has Earned Income for a
Plan Year from the trade or business for which the Plan is established;
also, an individual who would have had Earned Income but for the fact that
the trade or business had no net profits for the Plan Year.
2.16 SERVICE Means the performance of duties by an Employee for the Employer,
for any period of time, however short, for which the Employee is paid or
entitled to payment. When the Employer maintains the Plan of a predecessor
employer, an Employee's Service will include his service for such
predecessor employer.
2.17 TAXABLE WAGE BASE Means the maximum amount of earnings which may be
considered wages for a year under Section 3121(a)(1) of the Code in effect
as of the beginning of the Plan Year.
- --------------------------------------------------------------------------------
SECTION THREE ELIGIBILITY AND PARTICIPATION
3.01 ELIGIBILITY REQUIREMENTS Except for those Employees excluded pursuant to
Section 3.02, each Employee of the Employer who fulfills the eligibility
requirements specified in the Adoption Agreement shall, as a condition for
further employment, become a Participant. Each Participant must establish
an IRA with the Prototype Sponsor to which Employer Contributions under
this Plan will be made.
<PAGE>
3.02 EXCLUSION OF CERTAIN EMPLOYEES If the Employer has so indicated in the
Adoption Agreement, the following Employees shall not be eligible to
become a Participant in the Plan: (1) Those Employees included in a unit
of Employees covered by the terms of a collective bargaining agreement,
provided retirement benefits were the subject of good faith bargaining;
and (2) those Employees who are nonresident aliens, who have received no
earned income from the Employer which constitutes earned income from
sources within the United States.
3.03 ADMITTANCE AS A PARTICIPANT
A. PRIOR PLAN If this Plan is an amendment or continuation of a Prior
Plan, each Employee of the Employer who immediately before the
Effective Date was a participant in said Prior Plan shall be a
Participant in this Plan as of said date.
B. NOTIFICATION OF ELIGIBILITY The Employer shall notify each Employee
who becomes a Participant of his status as a Participant in the Plan
and of his duty to establish an IRA with the Prototype Sponsor to
which Employer Contributions may be made.
C. ESTABLISHMENT OF AN IRA If a Participant fails to establish an IRA
for whatever reason, the Employer may execute any necessary documents
to establish an IRA with the Prototype Sponsor on behalf of the
Participant.
3.04 DETERMINATIONS UNDER THIS SECTION The Employer shall determine the
eligibility of each Employee to be a Participant. This determination
shall be conclusive and binding upon all persons except as otherwise
provided herein or by law.
3.05 LIMITATION RESPECTING EMPLOYMENT Neither the fact of the establishment
of the Plan nor the fact that a common-law employee has become a
Participant shall give to that common-law employee any right to continued
employment; nor shall either fact limit the right of the Employer to
discharge or to deal otherwise with a common-law employee without regard
to the effect such treatment may have upon the Employee's rights under
the Plan.
________________________________________________________________________________
SECTION FOUR CONTRIBUTIONS AND ALLOCATIONS
4.01 EMPLOYER CONTRIBUTIONS
A. Allocation Formula - Employer Contributions shall be allocated in
accordance with the allocation formula selected in the Adoption
Agreement. Each Employee who has satisfied the eligibility
requirements pursuant to Section 3.01 (thereby becoming a Participant)
will share in such allocation.
Employer Contributions made for a Plan Year on behalf of any
Participant shall not exceed the lesser of 15% of Compensation or the
limitation in effect under Code Section 415(c)(1)(A) (indexed for cost
of living increases in accordance with Code Section 415(d)).
B. Integrated Allocation Formula - If the Employer has selected the
integrated allocation formula in the Adoption Agreement, then Employer
Contributions for the Plan Year will be allocated to Participants'
IRAs as follows:
STEP 1 Employer Contributions will be allocated to each Participant's IRA in the
ratio that each Participant's total Compensation bears to all
Participants' total Compensation, but not in excess of 3% of each
Participant's Compensation.
STEP 2 Any Employer Contributions remaining after the allocation in Step 1 will
be allocated to each Participant's IRA in the ratio that each
Participant's Compensation for the Plan Year in excess of the integration
level bears to the Compensation of all Participants in excess of the
integration level, but not in excess of 3%.
STEP 3 Any Employer Contributions remaining after the allocation in Step 2 will
be allocated to each Participant's IRA in the ratio that the sum of each
Participant's total Compensation and Compensation in excess of the
integration level bears to the sum of all Participants' total
Compensation and Compensation in excess of the integration level, but not
in excess of the maximum disparity rate described in the table below.
STEP 4 Any Employer Contributions remaining after the allocation in Step 3 will
be allocated to each Participant's IRA in the ratio that each
Participant's total Compensation for the Plan Year bears to all
Participants' total Compensation for that Plan Year.
The integration level shall be equal to the Taxable Wage Base or such
lesser amount elected by the Employer in the Adoption Agreement.
INTEGRATION LEVEL MAXIMUM DISPARITY RATE
Taxable Wage Base (TWB) 2.7%
More than $0 but not more than X* 2.7%
More than X* of TWB but not more
than 80% of TWB 1.3%
More than 80% of TWB but not
more than TWB 2.4%
*X mean the greater of $10,000 or 20% of TWB.
C. Timing of Employer Contribution - Employer Contributions, if any, made
on behalf of Participants for a Plan Year shall be allocated and
deposited to the IRA of each Participant no later than the due date
for filing the Employer's tax return (including extensions).
4.02 VESTING, WITHDRAWAL RIGHTS TO CONTRIBUTIONS All Employer Contributions
made under the Plan on behalf of Employees shall be fully vested and
nonforfeitable at all times. Each Employee shall have an unrestricted
right to withdraw at any time all or a portion of the Employer
Contributions made on his behalf. However, withdrawals taken are subject
to the same taxation and penalty provisions of the Code which are
applicable to IRA distributions.
4.03 SIMPLIFIED EMPLOYER REPORTS The Employer shall furnish reports, relating
to contributions made under the Plan, in the time and manner and
containing the information prescribed by the Secretary of the Treasury,
to Participants. Such reports shall be furnished at least annually and
shall disclose the amount of the contribution made under the Plan to the
Participant's IRA.
________________________________________________________________________________
SECTION FIVE AMENDMENT OR TERMINATION OF PLAN
5.01 AMENDMENT BY EMPLOYER The Employer reserves the right to amend the
elections made or not made on the Adoption Agreement by executing a new
Adoption Agreement and delivering a copy of the same to the Prototype
Sponsor. The Employer shall not have the right to amend any nonelective
provision of the Adoption Agreement nor the right to amend provisions of
this plan document. If the Employer adopts an amendment to the Adoption
Agreement or plan document in violation of the preceding sentence, the
Plan will be deemed to be an individually designed plan and may no longer
participate in this prototype Plan.
5.02 AMENDMENT BY PROTOTYPE SPONSOR By adopting this Plan, the Employer
delegates to the Prototype Sponsor the power to amend or replace the
Adoption Agreement or the Plan to conform them to the provisions of any
law, regulations or administrative rulings pertaining to Simplified
Employee Pensions and to make such other changes to the Plan, which, in
the judgment of the Prototype Sponsor, are necessary or appropriate. The
Employer shall be deemed to have consented to all such amendments;
provided however, that no changes may be made without the consent of the
Employer if the effect would be to substantially change the costs or
benefits under the Plan. The Prototype Sponsor shall not have the
obligation to exercise or not to exercise the power delegated to it nor
shall the Prototype Sponsor incur liability of any nature for any act
done or failed to be done by the Prototype Sponsor in good faith in the
exercise or nonexercise of the power delegated hereunder.
5.03 LIMITATIONS ON POWER TO AMEND No amendment by either the Employer or the
Prototype Sponsor shall reduce or otherwise adversely affect any benefits
of a Participant or Beneficiary acquired prior to such amendment unless
it is required to maintain compliance with any law, regulation or
administrative ruling pertaining to Simplified Employee Pensions.
5.04 TERMINATION While the Employer expects to continue the Plan
indefinitely, the Employer shall not be under any obligation or liability
to continue contributions or to maintain the Plan for any given length of
time. The Employer may terminate this Plan at any time by appropriate
action of its managing body. This Plan shall terminate on the occurrence
of any of the following events:
A. Delivery to the Prototype Sponsor of a notice of termination executed
by the Employer specifying the effective date of the Plan's
termination.
B. Adjudication of the Employer as bankrupt or the liquidation or
dissolution of the Employer.
5.05 NOTICE OF AMENDMENT, TERMINATION Any amendment or termination shall be
communicated by the Employer to all appropriate parties as required by
law. Amendments made by the Prototype Sponsor shall be furnished to the
Employer and communicated by the Employer to all appropriate parties as
required by law. Any filings required by the Internal Revenue Service or
any other regulatory body relating to the amendment or termination of the
Plan shall be made by the Employer.
5.06 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER A successor of the Employer
may continue the Plan and be substituted in the place of the present
Employer. The successor and present Employer (or if deceased, the
executor of the estate of a deceased Self-Employed Individual who was the
Employer) must execute a written instrument authorizing such substitution
and the successor must complete and sign a new Adoption Agreement.
<PAGE>
[LOGO OF SEP PLAN]
Simplified Employee Pension Plan
________________________________________________________________________________
ADOPTION AGREEMENT
________________________________________________________________________________
SECTION 1. EMPLOYER INFORMATION
Name of Employer ___________________________________________________
Address ____________________________________________________________
City ______________________________ State _____________ Zip ________
Telephone _________________________ Federal Tax Identification
Number _________________________
Income Tax Year End________________ Plan Year End __________________
(month) (day) (month) (day)
SECTION 2. EFFECTIVE DATES Check and complete Option A or B
OPTION A: [_] This is the initial adoption of a Simplified Employee
Pension plan by the Employer.
The Effective Date of this Plan is ____________, 19__.
NOTE: The effective date is usually the first day of
the Plan Year in which this Adoption Agreement is
signed.
OPTION B: [_] This is an amendment and restatement of an existing
Simplified Employee Pension plan (a Prior Plan).
The Prior Plan was initially effective on ___________,
19____.
The Effective Date of this amendment and restatement
is ______________, 19____.
NOTE: The effective date is usually the first day of
the Plan Year in which this Adoption Agreement is
signed.
SECTION 3. ELIGIBILITY REQUIREMENTS Complete Parts A, B and C
PART A. Service Requirement: An Employee will be eligible to become a
Participant in the Plan after having performed Service for the
Employer during at least ____ (enter 0, 1, 2 or 3) of the
immediately preceding 5 Plan Years.
NOTE: If left blank, the Service Requirement will be deemed to be 0.
PART B. Age Requirement: An Employee will be eligible to become a
Participant in the Plan after attaining age ____ (no more than 21).
NOTE: If left blank, it will be deemed there is no age requirement
for eligibility.
PART C. Class of Employees Eligible to Participate: All Employees shall be
eligible to become a Participant in the Plan, except the following
(if checked):
[_] Certain Employees covered by a collective bargaining agreement
and nonresident aliens, as described in Section 3.02 of the
Plan.
[_] Those Employees who have received less than $300 (indexed for
cost of living increases in accordance with Section 408(k)(8) of
the Code) of Compensation from the Employer during the Plan
Year.
SECTION 4. EMPLOYER CONTRIBUTION AND ALLOCATION FORMULA
PART A. Contribution Formula:
For each Plan Year the Employer will contribute an amount to be
determined from year to year.
PART B. Allocation Formula: Check Option 1 or 2
OPTION 1: [_] Pro Rata Formula. The Employer Contribution for each
Plan Year shall be allocated to the IRA of each
Participant in the same proportion as such
Participant's Compensation (not in excess of $200,000,
indexed for cost of living increases in accordance
with Section 408(k)(8) of the Code) for the Plan Year
bears to the total Compensation of all Participants
for such year. The amount allocated to each
Participant's IRA shall be limited to the lesser of 15
percent of the first $200,000 (indexed) of the
Participant's Compensation or $30,000.
OPTION 2: [_] Integrated Formula. Employer Contributions shall be
allocated in the manner described in Section 4.01(B)
of the Plan.
For purposes of the integrated formula, the
integration level shall be (Choose one):
OPTION 1: [_] The Taxable Wage Base (TWB)
OPTION 2: [_] _______% of the TWB
NOTE: If no box is checked, the integration level
shall be the Taxable Wage Base.
SECTION 5. EMPLOYER SIGNATURE
Signature for Employer ____________________ Date Signed ____________
(Type Name) ________________________________________________________
Name of Prototype Sponsor __________________________________________
Address ____________________________________________________________
Telephone Number ___________________________________________________
Note to Employer: Before signing this Adoption Agreement, you
should obtain the advice of a qualified attorney and tax advisor
regarding its completion and the legal and tax implications of
adopting this Plan.
<PAGE>
[LOGO OF SEP PLAN]
SEP Summary for Employees
________________________________________________________________________________
Please read together with your Employee Information Booklet.
________________________________________________________________________________
ESTABLISHMENT Your employer has adopted a type of employee benefit plan known
OF SEP PLAN as a Simplified Employee Pension (SEP) Plan. In order to become
a participant in the Plan, you must meet the Plan's eligibility
requirements specified below. Once you become a participant, you
are entitled to receive a certain share of the amounts your
employer contributes to the Plan. All contributions will be
deposited into a SEP-IRA for you. Contributions made to the Plan
for you are yours to keep. These features of the Plan are
explained further in the Employee Information Booklet.
The actual Plan is a complex legal document that has been written
in a manner required by the Internal Revenue Service. This
document is called a SEP Summary for Employees. It is designed to
explain and summarize the important features of the Plan. If you
have any questions or need additional information about the Plan,
consult _________________________________________________________
(Name of Employer Representative)
You may examine the Plan itself at a reasonable time by making
arrangements with the above mentioned representative of your
employer.
_________________________________________________________________
ELIGIBILITY Employer Contributions: Your employer is not required to make
REQUIREMENTS contributions to the Plan. However, if a contribution is made,
your SEP-IRA will receive a share of that contribution if you are
an "eligible" employee and if you have met the age and service
requirements set forth below.
Eligible Employees: Under the SEP Plan, all employees can
participate except the classifications of employees checked
below:
[_] Those employees covered by the terms of a collective
bargaining agreement (a union agreement) where retirement
benefits were negotiated and those employees who are
nonresident aliens.
[_] Those employees who did not earn at least $300 from the
employer during the year. (This $300 figure is increased by
the IRS each year based on changes in the cost of living.)
Age Requirement: You must be at least ______ years old.
Service Requirement: You must have worked for your employer in at
least _______ (must be 0, 1, 2 or 3) of the immediately
preceding 5 years.
_________________________________________________________________
CONTRIBUTION Any employer contribution will be allocated to your SEP-IRA in
FORMULA accordance with the formula selected below (check one):
[_] Pro Rata Formula: Each eligible employee will receive a pro
rata portion of the employer contribution equal to the ratio
of his or her compensation to the total compensation of all
eligible employees. Thus, the contribution will be the same
percentage of compensation for all employees.
[_] Integrated Formula: Integration allows contribution
percentages among eligible employees to vary. Details about
integration are provided in your Employee Information
Booklet. The integration level is (check one):
[_] The Taxable Wage Base (TWB)
[_] ______% of the TWB
_________________________________________________________________
SEP-IRA WITH Under this SEP Plan, you must maintain your SEP-IRA at the
PLAN SPONSOR following financial organization subject to the following terms:
Name and Address of Financial Organization: _____________________
INVESTMENT OPTIONS CURRENT INTEREST RATE(S):
[_] CDs or share certificates* ______% to ______%
[_] Savings or share accounts ______% to ______%
[_] Money Market accounts ______% to ______%
[_] Self-directed IRA
[_] Other ______% to ______%
FIXED VARIABLE MINIMUM INVESTMENT
[_] [_] ___________________
[_] [_] ___________________
[_] [_] ___________________
[_] [_] ___________________
*CDs or share certificates are subject to __________ loss of
interest or dividends penalty for withdrawal prior to
maturity.
Please refer to the Disclosure Statement and other documentation
given to you by the above named financial organization for the
other terms and conditions which apply to your SEP-IRA.
<PAGE>
UNIVERSAL/STANDARD SEP
- -------------------------- OBRA-93 AMENDMENT TO ---------------------------
BASIC PLAN DOCUMENTS
Section 2.03 is amended by adding the following two paragraphs after the last
paragraph thereof:
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under the Plan shall
not exceed the OBRA '93 annual Compensation limit. The OBRA '93 annual
Compensation limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with Section 401(a)(17)(B)
of the Internal Revenue Code. The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual Compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall
mean the OBRA '93 annual Compensation limit set forth in this provision.
<PAGE>
27
Internal Revenue Service Department of the Treasury
Prototype SEP 002
FFN: 50459012700-002
Case: 9380142 EIN: 36-1245570 Washington, DC 20224
Letter Serial No: D420529a
WAYNE HUMMER & CO Person to Contact: Ms. Arrington
300 SOUTH WACKER DRIVE Telephone Number: (202) 566-6814
CHICAGO, IL 60606 Refer Reply to: E:EP:Q:O
Date: 08/10/93
Dear Applicant:
In our opinion, the form of your Simplified Employee Pension (SEP)
arrangement is acceptable under section 408(k) of the Internal Revenue
Code. This SEP arrangement is approved for use only in conjunction with an
Individual Retirement Arrangement (IRA) which meets the requirements of
Code section 408 and has received a favorable opinion letter, or a model
IRA (Forms 5305 and 5305-A).
Employers who adopt this approved plan will be considered to have a
retirement savings program that satisfies the requirements of Code section
408 provided that it is used in conjunction with an approved IRA. Please
provide a copy of this letter to each adopting employer.
Code section 408(l) and related regulations require that employers who
adopt this SEP arrangement furnish employees in writing certain
information about this SEP arrangement and annual reports of savings
program transactions.
Your program may have to be amended to include or revise provisions in
order to comply with future changes in the law or regulations.
If you have any questions concerning IRS processing of this case, call us
at the above telephone number. Please refer to the Letter Serial Number and
File Folder Number shown in the heading of this letter. Please provide
those adopting this plan with your phone number, and advise them to contact
your office if they have any questions about the operation of this plan.
You should keep this letter as a permanent record. Please notify us if you
terminate the form of this plan.
Sincerely yours,
/s/ John Swieca
John Swieca
Chief, Employee Plans
Qualifications Branch
<PAGE>
EXHIBIT 14c
================================================================================
QUALIFIED
RETIREMENT
PLAN
----------
ADOPTION AGREEMENT
STANDARDIZED
MONEY PURCHASE PENSION PLAN
================================================================================
<PAGE>
Instructions for Completing Adoption Agreement
Standardized Money Purchase Pension Plan and Trust
These instructions are designed to help you, the employer, along with
your attorney and/or tax advisor, complete the Adoption Agreement
for the Qualified Retirement Plan. The instructions are meant to be
used only as a general guide and are not intended as a substitute for
qualified legal and tax advisors.
SECTION 1 EMPLOYER INFORMATION
Fill in the requested information. The "Federal Tax Identification
Number" is the tax identification number assigned to your business.
If your business does not have a Federal Tax Identification Number,
complete and file an Internal Revenue Service (IRS) Form SS4 to
obtain a number. The IRS Form SS4 can be obtained from an IRS office
or from your tax advisor. If you have already filed a Form SS4,
print "Applied for" on the "Federal Tax Identification Number" line.
After you receive a tax identification number, be sure to let our
financial organization know what that number is. In the space marked
"Nature of Business," accurately describe the type of business (e.g.,
radio and TV repair, agricultural, etc.). The "Plan Sequence Number"
is used for annual reporting to the IRS. The IRS uses this number to
identify your plan. For example, if this is the fourth plan you have
ever opened, the Plan Sequence Number would be 004 and so on.
SECTION 2 EFFECTIVE DATES
This money purchase pension plan is either a new plan (an initial
adoption) or an amendment and restatement of an existing money
purchase pension plan.
If this is a new money purchase pension plan, check Option A and fill
in the effective date. The effective date is usually the first day of
the plan year in which this Adoption Agreement is signed. For
example, if an employer maintains a plan on a calendar year basis and
this Adoption Agreement is signed on September 24, 1991, the
effective date would be January 1, 1991.
If the reason you are adopting this plan is to amend and replace an
existing money purchase pension plan, check Option B. The existing
money purchase pension plan which will be replaced is called a "prior
plan." You will need to know the effective date of the prior plan.
The best way to determine its effective date is to refer to the prior
plan adoption agreement. The effective date of this amendment and
restatement is usually the first day of the plan year in which the
Adoption Agreement is signed. However, if you are adopting this
plan to update a prior plan for changes brought about by the Tax
Reform Act of 1986 (and other recent changes which apply to qualified
plans), the effective date will be the first day of the plan year
which begins in 1989 (January 1, 1989 for a calendar year plan).
SECTION 3 ELIGIBILITY REQUIREMENTS
NOTE: Section 3 should be completed even if you do not have
employees.
Within limits, you as the employer can specify the number of years
your employees must work for you and the age they must attain before
they are eligible to participate in this plan. Note that the
eligibility requirements which you set up for the plan also apply to
you.
Suppose, for example, you establish a service requirement of two
years and an age requirement of 21. In that case, only those
employees (including yourself) who have worked for you for two years
and are at least 21 years old are eligible to participate in this
plan.
Part A. Years of Eligibility Service Requirement
Fill in the number of years of service (no more than 2). This number
must be either 0, 1, or 2.
Part B. Age Requirement
Fill in the age an employee must attain (no more than 21) to be
eligible to participate in the plan.
Part C. Class of Employees Eligible to Participate
Generally you are permitted to exclude certain employees covered by
the terms of a collective bargaining agreement (e.g., a union
agreement) where retirement benefits were bargained for and
nonresident aliens who have no U.S. income. If you wish to exclude
those employees, check the box under Section 3, Part C.
SECTION 4 EMPLOYER CONTRIBUTION AND ALLOCATION FORMULA
Because a money purchase pension plan has a fixed contribution, the
percent of the contribution must be completed.
Option A. Check Option A if you wish to have the contribution allocated to all
qualifying participants based on their compensation for the plan
year.
Option B. Check Option B and complete the percentage in Step l if the plan is
to be integrated. Generally, integration is a method of giving some
participants in the plan an extra contribution allocation. Because of
the complexity of integration, you should consult your tax advisor on
this issue.
SECTION 5 VESTING
The vesting schedule determines how fast the money in a
participant's plan account becomes nonforfeitable. For example,
suppose you select the vesting schedule of Option B. If a
participant quits work after 4 years of service, the participant
would be entitled to 60% of his or her plan account. The remaining
40% would remain in the plan and become a forfeiture.
NOTE: If you choose more than 1 year of service as an eligibility
requirement in Section 3, Part A, you must choose the 100% vesting
schedule in Section 5 (Option C).
SECTION 6 NORMAL RETIREMENT AGE
Fill in the desired normal retirement age. When a participant attains
normal retirement age, he or she can request a distribution from the
plan.
<PAGE>
SECTION 7 HOURS REQUIRED
Part A. In the blank provided, fill in the number of hours of service which
shall be required to constitute a year of service for vesting and
eligibility. This can be no more than 1,000. If you fail to fill in
the blank, the number of hours required will be deemed to be 1,000.
Suppose, for example, you fill in 1,000 hours of service. This means
any employee who works at least 1,000 hours during the appropriate
period will be credited with a year of service for the purposes of
vesting, eligibility, etc. On the other hand, if the employee works
less than 1,000 hours, he or she will not be credited with a year of
service for those purposes.
Part B. In the blank provided, fill in the number of hours of service which
must be exceeded to avoid a break in service. This can be no more
than 500. If you fail to fill in the blank, the number of hours
required to avoid a break in service will be deemed to be 500.
SECTION 8 OTHER OPTIONS
Part A. Check whether or not you wish to allow loans to participants. Note
that loans cannot be made to an owner of an unincorporated business
(whether a sole proprietor or a partner) or an owner of a
Subchapter S corporation.
Part B. Check whether or not you wish to allow each participant to direct the
investment of his or her own plan account.
SECTION 9 JOINT AND SURVIVOR ANNUITY
A distribution to a participant must generally be made in the form of
a joint and survivor annuity purchased from an insurance company.
When a participant who is receiving payments under a joint and
survivor annuity dies, the participant's spouse will receive a
survivor annuity. This section determines the percentage of the
survivor annuity. If this is an amendment and restatement of a money
purchase pension plan that was subject to the joint and survivor
annuity rules, this percentage must be at least as great as the
survivor annuity percentage in the prior plan.
SECTION 10 ADDITIONAL PLANS
This plan is a standardized plan under applicable IRS procedures. An
employer who adopts a standardized plan generally does not have to
request a ruling from a Key District Office of the IRS (called a
determination letter) that the plan, under facts and circumstances
unique to that particular employer, meets the requirements for
qualification under the tax laws and regulations.
Section 10 states an exception to the procedures for standardized
plans, namely, if you maintain another plan (other than a paired
standardized profit sharing plan using the same Basic Plan Document),
you must obtain a determination letter if you wish to obtain
assurance that the plan is qualified.
SECTION 11 EMPLOYER SIGNATURE
An authorized representative of the employer must sign and date the
Adoption Agreement.
SECTION 12 TRUSTEE OR CUSTODIAN
A trustee or custodian must be named for this plan.
If the financial organization will be acting as trustee or custodian,
the financial organization should complete Option A. Section 5.03 of
the Basic Plan Document will apply if "Custodian" or "Trustee
without full trust powers" is checked. Section 5.04 of the Basic Plan
Document will apply if "Trustee with full trust power" is checked.
If an individual (e.g., the employer, partners, or an appointed
individual) will be acting as individual trustee, complete Option B.
If Option B is completed, Section 5.04 of the Basic Plan Document
will apply.
SECTION 13 PROTOTYPE SPONSOR
The prototype sponsor must fill in its name, address and telephone
number.
SECTION 14 LIMITATION ON ALLOCATIONS - MORE THAN ONE PLAN
You must read and complete this section if, in addition to this plan:
1) You ever maintained a defined benefit plan, or
2) You currently maintain an individually designed plan.
Individually designed plans are not master or prototype plans,
but rather, plans written for just one particular employer.
In addition, if you want to select a definition of compensation other
than the Internal Revenue Code Section 3401(a) wages (that is, W-2
wages), you must complete Part C.
<PAGE>
27
Internal Revenue Service Department of the Treasury
Plan Description: Prototype
Standardized Money Purchase
Pension Plan Washington, DC 20224
FFN: 50259012701-002 Case: 9307211
EIN: 36-1245570
BPD: 01 Plan: 002 Letter Serial No: D260917a
Person to Contact: Ms. Arrington
WAYNE HUMMER & CO
Telephone Number: (202) 622-8173
300 SOUTH WACKER DRIVE
Refer Reply to: E:EP:Q:ICU
CHICAGO, IL 60606
Date: 06/07/93
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one or
more employees who are covered by this plan, other than a specified paired plan
within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780; or (2)
after December 31, 1985, the employer maintains a welfare benefit fund defined
in Code section 419(e), which provides postretirement medical benefits allocated
to separate accounts for key employees as defined in Code section 419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to the
plan satisfies the nondiscrimination requirements of section 1.401(a)(4)-5(a) of
the regulations, except with respect to plan amendments granting past service
that meet the safe harbor described in section 1.401(a)(4)-5(a)(5) and are not
part of a pattern of amendments that significantly discriminates in favor of
highly compensated employees; or (2) whether the plan satisfies the effective
availability requirement of section 1.401(a)(4)-4(c) of the regulations with
respect to any benefit, right or feature.
An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
<PAGE>
WAYNE HUMMER & CO
FFN: 50259012701-002
Page 2
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service; and (3) with respect to
whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the continued
and interim reliance provisions of section 13 of Rev. Proc. 89-9, 1989-1, C.B.
780, are not applicable. However, solely for purposes of section 17.03 of Rev.
Proc. 89-9, you are deemed to have submitted this plan prior to March 31, 1991,
and therefore the extended reliance provisions of section 17.03 are applicable.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by
adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/
Chief, Employee Plans Qualifications Branch
<PAGE>
QUALIFIED STANDARDIZED MONEY PURCHASE PENSION PLAN Page 1 of 3
________________________________________________________________________________
Retirement Plan ADOPTION AGREEMENT
________________________________________________________________________________
SECTION 1. EMPLOYER INFORMATION
Name of Employer ______________________________________________
Address _______________________________________________________
City ___________________________ State ____________ Zip _______
Telephone ______________________ Federal Tax Identification
Number _______________________
Income Tax Year End ___________________________
(month) (day)
Type of Business (Check only one)
[_] Sole Proprietorship [_] Partnership [_] Corporation
[_] Other (Specify)____________________________________________
Nature of Business (Describe) _________________________________
Plan Sequence No.________ Enter 001 if this is the first
qualified plan the Employer has ever maintained, enter 002 if
it is the second, etc.
For a plan which covers only the owner of the business, please
provide the following information about the owner.
Social Security No. ___________________________
Date Business Established ___________________________
Date of Birth ___________________________
Marital Status ___________________________
Home Address ___________________________
SECTION 2. EFFECTIVE DATES Check and complete Option A or B
OPTION A. [_] This is the initial adoption of a money purchase pension
plan by the Employer.
The Effective Date of this Plan is _________________,19___.
NOTE: The effective date is usually the first day of the
Plan Year in which this Adoption Agreement is signed.
OPTION B. [_] This is an amendment and restatement of an existing money
purchase pension plan (a Prior Plan).
The Prior Plan was initially effective on ________________,
19_____.
The Effective Date of this amendment and restatement is
________________, 19_____.
NOTE: The effective date is usually the first day of the
Plan Year in which this Adoption Agreement is signed.
SECTION 3. ELIGIBILITY REQUIREMENTS Complete Parts A, B and C
PART A. Years of Eligibility Service Requirement:
An Employee will be eligible to become a Participant in the
Plan after completing _____ (enter 0, 1 or 2) Years of
Eligibility Service.
NOTE: If more than 1 year is selected, the immediate 100%
vesting schedule of Section 5, Option C will automatically
apply.
If left blank, the Years of Eligibility Service required will
be deemed to be 0.
PART B. Age Requirement:
An Employee will be eligible to become a Participant in the
Plan after attaining age ______ (no more than 21).
NOTE: If left blank, it will be deemed there is no age
requirement for eligibility.
Class of Employees Eligible to Participate:
All Employees shall be eligible to become a Participant in the
Plan, except the following (if checked):
[_] Those Employees included in a unit of Employees covered by
the terms of a collective bargaining agreement between
Employee representatives (the term "Employee
representatives" does not include any organization more
than half of whose members are Employees who are owners,
officers or executives of the Employer) and the Employer
under which retirement benefits were the subject of good
faith bargaining unless the agreement provides that such
Employees are to be included in the Plan, and except those
Employees who are non-resident aliens pursuant to Section
410(b)(3)(C) of the Code and who received no earned income
from the Employer which constitutes income from sources
within the United States.
<PAGE>
STANDARDIZED MONEY PURCHASE PENSION PLAN_____________________________Page 2 of 3
ADOPTION AGREEMENT
SECTION 4. EMPLOYER CONTRIBUTION FORMULA Check and Complete either Option
A or B
OPTION A. [_] NONINTEGRATED FORMULA:
For each Plan Year the Employer will contribute for each
qualifying Participant an amount equal to ________% (not to
exceed 25%) of the qualifying Participant's Compensation for
the Plan Year.
OPTION B. [_] INTEGRATED FORMULA:
For each Plan Year, the Employer will contribute for each
qualifying Participant an amount equal to the sum of the
amounts determined in Step 1 and Step 2:
Step 1. An amount equal to ________% (the base contribution
percentage) of the Participant's Compensation for the
Plan Year up to the integration level; plus
Step 2. An amount equal to ________% (not to exceed the base
contribution percentage by more than the lesser of:
(1) the base contribution percentage, or (2) the
money purchase maximum disparity rate as described in
Section 3.01(B)(3) of the Plan) of such Participant's
Compensation for the Plan Year in excess of the
integration level.
The integration level shall be (Choose one):
OPTION 1. [_] The Taxable Wage Base
OPTION 2. [_] $___________________ (a dollar amount less than
the Taxable Wage Base)
OPTION 3. [_] ________________% of the Taxable Wage Base
NOTE: If no box is checked, the integration level shall be
the Taxable Wage Base.
SECTION 5. VESTING
A Participant shall become Vested in his or her Individual
Account attributable to Employer Contributions and Forfeitures as
follows (Choose one):
<TABLE>
<CAPTION>
______________________________________________________________________________________________________
YEARS OF VESTED PERCENTAGE
______________________________________________________________________________________
VESTING SERVICE OPTION A [_] OPTION B [_] OPTION C [_] OPTION D [_] (Complete if chosen)
______________________________________________________________________________________________________
<S> <C> <C> <C> <C>
1 0% 0% 100% ________%
2 0% 20% 100% ________% (not less than 20%)
3 100% 40% 100% ________% (not less than 40%)
4 100% 60% 100% ________% (not less than 60%)
5 100% 80% 100% ________% (not less than 80%)
6 100% 100% 100% ________% (not less than 100%)
______________________________________________________________________________________________________
NOTE: If left blank, Option C, 100% vesting, will be deemed to be selected.
</TABLE>
SECTION 6. NORMAL RETIREMENT AGE
The Normal Retirement Age under the Plan is age ________ (not to
exceed 65).
NOTE: If left blank, the Normal Retirement Age will be deemed to
be age 59 1/2.
SECTION 7. HOURS REQUIRED Complete Parts A and B
PART A. ____ Hours of Service (no more than 1,000) shall be required to
constitute a Year of Vesting Service or a Year of Eligibility
Service.
PART B. ____ Hours of Service (no more than 500) must be exceeded to
avoid a Break in Vesting Service or a Break in Eligibility
Service.
NOTE: The number of hours in Part A must be greater than the
number of hours in Part B.
SECTION 8. OTHER OPTIONS
Answer "Yes" or "No" to each of the following questions by
checking the appropriate box.
A. Loans: Will loans to Participants pursuant
to Section 6.08 of the Plan be permitted? [_] Yes [_] No
B. Participant Direction of Investments: Will
Participants be permitted to direct the
investment of their Individual Accounts
pursuant to Section 5.14 of the Plan? [_] Yes [_] No
SECTION 9. JOINT AND SURVIVOR ANNUITY
The survivor annuity portion of the Joint and Survivor Annuity
shall be a percentage equal to _________% (at least 50% but no
more than 100%) of the amount paid to the Participant prior to
his or her death.
<PAGE>
STANDARDIZED MONEY PURCHASE PENSION PLAN_____________________________Page 3 of 3
ADOPTION AGREEMENT
SECTION 10. ADDITIONAL PLANS
An Employer who has ever maintained or who later adopts any plan
(including a welfare benefit fund, as defined in Section 419(e)
of the Code, which provides post-retirement medical benefits
allocated to separate accounts for key employees as defined in
Section 419A(d)(3) of the Code or an individual medical account,
as defined in Section 415(1)(2) of the Code) in addition to this
Plan (other than a paired standardized profit sharing plan using
Basic Plan Document No. 03) may not rely on the opinion letter
issued by the National Office of the Internal Revenue Service as
evidence that this Plan is qualified under Section 401 of the
Code. If the Employer who adopts or maintains multiple plans
wishes to obtain reliance that the Employer's plan(s) are
qualified, application for a determination letter should be made
to the appropriate Key District Director of Internal Revenue.
This Adoption Agreement may be used only in conjunction with
Basic Plan Document No. 03.
SECTION 11. EMPLOYER SIGNATURE Important: Please read before signing.
I am an authorized representative of the Employer named above
and I state the following:
1. I acknowledge that I have relied upon my own advisors
regarding the completion of this Adoption Agreement and the
legal and tax implications of adopting this Plan.
2. I understand that my failure to properly complete this
Adoption Agreement may result in disqualification of the
Plan.
3. I understand that the Prototype Sponsor will inform me of any
amendments made to the Plan and will notify me should it
discontinue or abandon the Plan.
4. I have received a copy of this Adoption Agreement and the
corresponding Basic Plan Document.
Signature for Employer _________________ Date Signed ___________
(Type Name) ____________________________________________________
SECTION 12. TRUSTEE OR CUSTODIAN Check and complete only one Option
[_] OPTION A. FINANCIAL ORGANIZATION AS TRUSTEE OR CUSTODIAN
CHECK ONE: [_] Custodian, [_] Trustee without full trust
powers, [_] Trustee with full trust powers
NOTE: Custodian will be deemed selected if no box is checked.
Financial Organization _________________________
Signature ______________________________________
(Type Name) ____________________________________
[_] OPTION B. INDIVIDUAL TRUSTEE(S)
Signature ___________________ Signature _____________________
(Type Name) _________________ (Type Name) ___________________
SECTION 13. PROTOTYPE SPONSOR
Name of Prototype Sponsor ______________________
Address ________________________________________
Telephone Number _______________________________
SECTION 14. LIMITATION ON ALLOCATIONS - MORE THAN ONE PLAN
If you maintain or ever maintained another qualified plan (other
than a paired standardized profit sharing plan using Basic Plan
Document No. 03) in which any Participant in this Plan is (or
was) a Participant or could become a participant, you must
complete this section. You must also complete this section if
you maintain a welfare benefit fund, as defined in Section
419(e) of the Code, or an individual medical account, as defined
in Section 415(1)(2) of the Code, under which amounts are
treated as annual additions with respect to any Participant in
this Plan.
PART A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
master or prototype plan:
1. [_] The provisions of Sections 3.05(B)(1) through 3.05(B)(6)
of the Plan will apply as if the other plan were a master or
prototype plan.
2. [_] Other method. (Provide the method under which the plans
will limit total annual additions to the maximum permissible
amount, and will properly reduce any excess amounts, in a
manner that precludes Employer discretion.) _________________
_____________________________________________________________
PART B. If the Participant is or has ever been a participant in a
defined benefit plan maintained by the Employer, the Employer
will provide below the language which will satisfy the 1.0
limitation of Section 415(e) of the Code. Such language must
preclude Employer discretion. (Complete) _______________________
________________________________________________________________
PART C. Compensation will mean all of each Participant's (Choose one):
OPTION 1. [_] Section 3121(a) wages
OPTION 2. [_] Section 3401(a) wages
OPTION 3. [_] 415 safe-harbor compensation
NOTE: If no box is checked, Option 2 will be deemed to be
selected.
PART D. The limitation year is the following 12-consecutive month
period: ________________________________________________________
<PAGE>
================================================================================
QUALIFIED
RETIREMENT
PLAN
----------
ADOPTION AGREEMENT
SIMPLIFIED
STANDARDIZED
MONEY PURCHASE PENSION PLAN
================================================================================
<PAGE>
INSTRUCTIONS FOR COMPLETING ADOPTION AGREEMENT
SIMPLIFIED STANDARDIZED MONEY PURCHASE PENSION PLAN AND TRUST
These instructions are designed to help you, the employer, along
with your attorney and/or tax advisor, complete the Adoption
Agreement for the Qualified Retirement Plan. The instructions are
meant to be used only as a general guide and are not intended as a
substitute for qualified legal and tax advisors.
If you wish to have us, the financial organization sponsoring this
prototype plan, help you fill our the Adoption Agreement, we will
do so. However, we recommend that you obtain the advice of your
legal or tax advisor before you sign the Adoption Agreement.
This Adoption Agreement has been designed for easy completion.
There is one page (an original plus two carbonless copies) which
require your completion. Insert the adoption agreement into a
typewriter and follow the section instructions to complete. When
furnished, detach at the top and you will have three copies.
EMPLOYER Fill in the requested information. The "Federal Tax Identification
INFORMATION Number" is the tax identification number assigned to your business.
If your business does not have a Federal Tax Identification Number,
complete and file an Internal Revenue Service (IRS) Form SS4 to
obtain a number. The IRS Form SS4 can be obtained from an IRS
office or from your tax advisor. If you have already filed a Form
SS4, print "Applied for" on the "Federal Tax Identification Number"
line. After you receive a tax identification number, be sure to let
our financial organization know what that number is. In the space
marked "Nature of Business," accurately describe the type of
business (e.g., radio and TV repair, agricultural, etc.). The
"Plan Sequence Number" is used for annual reporting to the IRS. The
IRS uses this number to identify your plan. For example, if this is
the fourth plan you have ever opened, the Plan Sequence Number
would be 004 and so on.
EFFECTIVE This money purchase pension plan is either a new plan (an initial
DATES adoption) or an amendment and restatement of an existing money
purchase pension plan.
If this is a new money purchase pension plan, check Option A and
fill in the effective date. The effective date is usually the first
day of the plan year in which this Adoption Agreement is signed.
For example, if an employer maintains a plan on a calendar year
basis and this Adoption Agreement is signed on September 24, 1991,
the effective date would be January 1, 1991.
If the reason you are adopting this plan is to amend and replace an
existing money purchase pension plan, check Option B. The existing
money purchase pension plan which will be replaced is called a
"prior plan." You will need to know the effective date of the prior
plan. The best way to determine its effective date is to refer to
the prior plan adoption agreement. The effective date of this
amendment and restatement is usually the first day of the plan year
in which the Adoption Agreement is signed. However, if you are
adopting this plan to update a prior plan for changes brought about
by the Tax Reform Act of 1986 (and other recent changes which apply
to qualified plans), the effective date will be the first day of
the plan year which begins in 1989 (January 1, 1989 for a calender
year plan).
PLAN NOTE: This section should be completed even if you do not have
PROVISIONS employees.
Within limits, you as the employer can specify the number of years
your employees must work for you and the age they must attain
before they are eligible to participate in this plan. Note that the
eligibility requirements which you set up for the plan also apply
to you.
Suppose, for example, you establish a service requirement of two
years and an age requirement of 21. In that case, only those
employees (including yourself) who have worked for you for two
years and are at least 21 years old are eligible to participate in
this plan.
PART A. YEARS OF ELIGIBILITY SERVICE REQUIREMENT
Fill in the number of years of service (no more than 2).
This number must be either 0, 1, or 2.
PART B. AGE REQUIREMENT
Fill in the age an employee must attain (no more than 21)
to be eligible to participate in the plan.
PART C. CONTRIBUTION FORMULA
Fill in the percentage of each participant's compensation
which you will contribute to the plan each year.
<PAGE>
EMPLOYER An authorized representative of the employer must sign and
SIGNATURE date the Adoption Agreement.
TRUSTEE OR A trustee or custodian must be named for this plan.
CUSTODIAN
If the financial organization will be acting as trustee or
custodian, the financial organization should fill in its name.
The financial organization should check the box if it will be
acting as trustee with full trust powers.
If an individual (e.g., the employer, partners, or an appointed
individual) will be acting as individual trustee, the
individual's name and signature should be entered.
PROTOTYPE The prototype sponsor must fill in its name, address and
SPONSOR telephone number.
ADDITIONAL This plan is a standardized plan under applicable IRS
PLANS procedures. An employer who adopts a standardized plan
generally does not have to request a ruling from a Key District
Office of the IRS (called a determination letter) that the
plan, under facts and circumstances unique to that particular
employer, meets the requirements for qualification under the
tax laws and regulations.
This section states an exception to the procedures for
standardized plans, namely, if you maintain another plan (other
than a paired standardized profit sharing plan using the same
Basic Plan Document), you must obtain a determination letter
if you wish to obtain assurance that the plan is qualified.
LIMITATION ON You must read and complete this section if, in addition to the
ALLOCATIONS- plan:
MORE THAN 1. You ever maintained a defined benefit plan, or
ONE PLAN 2. You currently maintain an individually designed plan.
Individually designed plans are not master or prototype
plans, but rather, plans written for just one particular
employer.
<PAGE>
27
SIMPLIFIED
INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Standardized Washington, DC 20224
Money Purchase Pension Plan
FFN: 50259012701-004 Case: 9307213 EIN: 36-1245570 Person to Contact:
BPD: 01 Plan: 004 Letter Serial No: D260919a Ms. Arrington
Telephone Number:
WAYNE HUMMER & CO (202) 622-8173
300 SOUTH WACKER DRIVE Refer Reply to:
E:EP:Q:ICU
CHICAGO, IL 60606
Date: 06/07/93
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code
section 401(a)(16) if: (1) an employer ever maintained another qualified plan
for one or more employees who are covered by this plan, other than a specified
paired plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780;
or (2) after December 31, 1985, the employer maintains a welfare benefit fund
defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section
419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to the
plan satisfies the nondiscrimination requirements of section 1.401(a)(4)-5(a) of
the regulations, except with respect to plan amendments granting past service
that meet the safe harbor described in section 1.401(a)(4)-5(a)(5) and are not
part of a pattern of amendments that significantly discriminates in favor of
highly compensated employees; or (2) whether the plan satisfies the effective
availability requirement of section 1.401(a)(4)-4(c) of the regulations with
respect to any benefit, right or feature.
An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
<PAGE>
WAYNE HUMMER & CO
FFN: 50259012701-004
Page 2
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service; and (3) with respect to
whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the
continued and interim reliance provisions of section 13 of Rev. Proc. 89-9,
1989-1 C.B. 780, are not applicable. However, solely for purposes of section
17.03 of Rev. Proc. 89-9, you are deemed to have submitted this plan prior to
March 31, 1991, and therefore the extended reliance provisions of section 17.03
are applicable.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ John Swi___
Chief, Employee Plans Qualifications Branch
<PAGE>
QUALIFIED SIMPLIFIED STANDARDIZED MONEY PURCHASE PENSION PLAN
________________________________________________________________________________
Retirement Plan ADOPTION AGREEMENT
________________________________________________________________________________
EMPLOYER Name of Employer _____________________ Telephone ______________
INFORMATION
Business Address ______________________________________________
City ___________________________ State ____________ Zip _______
Federal Tax Identification Number _____________________________
Income Tax Year End ___________________________________________
(month) (day)
Type of Business (Check only one)
[_] Sole Proprietorship [_] Partnership [_] Corporation
[_] Other (Specify)____________________________________________
Plan Sequence No.________ Enter 001 if this is the first
qualified plan the Employer has ever maintained, enter 002 if
it is the second, etc.
For a plan which covers only the owner of the business, please
provide the following information about the owner:
Social Security No. _________________________________
Date Business Established ___________________________
Date of Birth _______________________________________
Marital Status ______________________________________
Home Address ________________________________________
EFFECTIVE DATES Check and complete Option A or B
OPTION A. [_] This is the initial adoption of a money purchase pension
plan by the Employer.
The Effective Date of this Plan is _________________,
19_____.
NOTE: The effective date is usually the first day of the
Plan Year in which this Adoption Agreement is signed.
OPTION B. [_] This is an amendment and restatement of an existing money
purchase pension plan (a prior plan). NOTE: the effective
date is usually the first day of the Plan Year in which
this Adoption Agreement is signed.
The Prior Plan was initially effective on ________________,
19_____.
The Effective Date of this amendment and restatement is
________________, 19_____.
PLAN
PROVISIONS Complete Parts A through E
PART A. Service Requirement: An Employee will be eligible to become a
Participant in the Plan after completing _____ (enter 0, 1 or
2) Years of Eligibility Service. NOTE: If left blank, the Years
of Eligibility Service required will be deemed to be 0.
PART B. Age Requirement: An Employee will be eligible to become a
Participant in the Plan after attaining age ______ (no more
than 21). NOTE: If left blank, it will be deemed there is no
age requirement for eligibility.
PART C. 100% Vesting: A Participant shall be fully Vested at all times
in his or her Individual Account.
PART D. Normal Retirement Age: The Normal Retirement Age under the Plan
is age 59 1/2.
PART E. Contribution Formula: For each Plan Year the Employer will
contribute for each qualifying Participant an amount equal to
_____% (not to exceed 25%) of the qualifying Participant's
Compensation for the Plan Year.
EMPLOYER I am an authorized representative of the Employer named above
SIGNATURE and I state the following:
Important: 1. I acknowledge that I have relied upon my own advisors
Please read regarding the completion of this Adoption Agreement and
before signing the legal and tax implications of adopting this Plan.
2. I understand that my failure to properly complete this
Adoption Agreement may result in disqualification of the
Plan.
3. I understand that the Prototype Sponsor will inform me of
any amendments made to the Plan and will notify me should it
discontinue or abandon the Plan.
4. I have received a copy of this Adoption Agreement and the
corresponding Basic Plan Document.
Signature for Employer ______________________________
Date signed _________________________________________
Type Name ___________________________________________
TRUSTEE OR Trustee or Custodian ________________________________
CUSTODIAN
Signature ___________________________________________
Type Name ___________________________________________
[_] Check this box only if a financial organization is named as
Trustee and it has full trust powers.
PROTOTYPE Name of Prototype Sponsor ___________________________
SPONSOR
Telephone Number ____________________________________
Address _____________________________________________
ADDITIONAL An Employer who has ever maintained or who later adopts any
PLANS plan (including a welfare benefit fund, as defined in Section
419(e) of the Code, which provides post-retirement medical
benefits allocated to separate accounts for key employees as
defined in Section 419A(d)(3) of the Code or an individual
medical account, as defined in Section 415(1)(2) of the Code)
in addition to this Plan (other than a paired standardized
profit sharing plan using Basic Plan Document No. 03) may not
rely on the opinion letter issued by the National Office of the
Internal Revenue Service as evidence that this Plan is
qualified under Section 401 of the Code. If the Employer who
adopts or maintains multiple plans wishes to obtain reliance
that the Employer's plan(s) are qualified, application for a
determination letter should be made to the appropriate Key
District Director of Internal Revenue. This Adoption Agreement
may be used only in conjunction with Basic Plan Document
No. 03.
<PAGE>
Simplified Standardized Money Purchase Pension Plan_____________________________
ADOPTION AGREEMENT
LIMITATION ON More Than One Plan
ALLOCATIONS If you maintain or ever maintained another qualified plan
(other than a paired standardized profit sharing plan using
Basic Plan Document No. 03) in which any Participant in this
Plan is (or was) a participant or could become a participant,
you must complete this section. You must also complete this
section if you maintain a welfare benefit fund, as defined in
Section 419(e) of the Code, or an individual medical account,
as defined in Section 415(1)(2) of the Code, under which
amounts are treated as annual additions with respect to any
Participant in this Plan.
Part A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
master or prototype plan:
1. [ ] The provisions of Sections 3.05(B)(1) through
3.05(B)(6) of the Plan will apply as if the other plan
were a master or prototype plan.
2. [ ] Other method. (Provide the method under which the plans
will limit total annual additions to the maximum
permissible amount, and will properly reduce any excess
amounts, in a manner that precludes Employer
discretion.)___________________________________________
_______________________________________________________
Part B. If the Participant is or has ever been a participant in a
defined benefit plan maintained by the Employer, the Employer
will provide below the language which will satisfy the 1.0
limitation of Section 415(e) of the Code. Such language must
preclude Employer discretion. (Complete)______________________
Part C. The limitation year is the following 12-consecutive month
period: ___________________________
<PAGE>
================================================================================
QUALIFIED
RETIREMENT
PLAN
----------
ADOPTION AGREEMENT
STANDARDIZED
PROFIT SHARING PLAN
================================================================================
<PAGE>
Instructions for Completing Adoption Agreement
Standardized Profit Sharing Plan and Trust
These instructions are designed to help you, the employer, along with
your attorney and/or tax advisor, complete the Adoption Agreement for
the Qualified Retirement Plan. The instructions are meant to be used
only as a general guide and are not intended as a substitute for
qualified legal and tax advisors.
SECTION 1 EMPLOYER INFORMATION
Fill in the requested information. The "Federal Tax Identification
Number" is the tax identification number assigned to your business.
If your business does not have a Federal Tax Identification Number,
complete and file an Internal Revenue Service (IRS) Form SS4 to
obtain a number. The IRS Form SS4 can be obtained from an IRS office
or from your tax advisor. If you have already filed a Form SS4, print
"Applied for" on the "Federal Tax Identification Number" line. After
you receive a tax identification number, be sure to let our financial
organization know what that number is. In the space marked "Nature of
Business," accurately describe the type of business (e.g., radio and
TV repair, agricultural, etc.). The "Plan Sequence Number" is used
for annual reporting to the IRS. The IRS uses this number to identify
your plan. For example, if this is the fourth plan you have ever
opened, the Plan Sequence Number would be 004 and so on.
SECTION 2 EFFECTIVE DATES
This profit sharing plan is either a new plan (an initial adoption)
or an amendment and restatement of an existing profit sharing plan.
If this is a new profit sharing plan, check Option A and fill in the
effective date. The effective date is usually the first day of the
plan year in which this Adoption Agreement is signed. For example, if
an employer maintains a plan on a calendar year basis and this
Adoption Agreement is signed on September 24, 1991, the effective
date would be January 1, 1991.
If the reason you are adopting this plan is to amend and replace an
existing profit sharing plan, check Option B. The existing profit
sharing plan which will be replaced is called a "prior plan." You
will need to know the effective date of the prior plan. The best way
to determine its effective date is to refer to the prior plan
adoption agreement. The effective date of this amendment and
restatement is usually the first day of the plan year in which the
Adoption Agreement is signed. However, if you are adopting this plan
to update a prior plan for changes brought about by the Tax Reform
Act of 1986 (and other recent changes which apply to qualified
plans), the effective date will be the first day of the plan year
which begins in 1989 (January 1, 1989 for a calendar year plan).
SECTION 3 ELIGIBILITY REQUIREMENTS
NOTE: Section 3 should be completed even if you do not have
employees.
Within limits, you as the employer can specify the number of years
your employees must work for you and the age they must attain before
they are eligible to participate in this plan. Note that the
eligibility requirements which you set up for the plan also apply to
you.
Suppose, for example, you establish a service requirement of two
years and an age requirement of 21. In that case, only those
employees (including yourself) who have worked for you for two years
and are at least 21 years old are eligible to participate in this
plan.
PART A. YEARS OF ELIGIBILITY SERVICE REQUIREMENT
Fill in the number of years of service (no more than 2). This number
must be either 0,1, or 2.
PART B. AGE REQUIREMENT
Fill in the age an employee must attain (no more than 21) to be
eligible to participate in the plan.
PART C. CLASS OF EMPLOYEES ELIGIBLE TO PARTICIPATE
Generally you are permitted to exclude certain employees covered by
the terms of a collective bargaining agreement (e.g., a union
agreement) where retirement benefits were bargained for and
nonresident aliens who have no U.s. income. If you wish to exclude
those employees, check the box under Section 3, Part C.
SECTION 4 EMPLOYER CONTRIBUTION AND ALLOCATION FORMULA
PART A. CONTRIBUTION FORMULA
Because a profit sharing plan allows for flexible contributions, the
amount of the contribution will be determined from year to year.
There are no blanks to be completed in Part A.
PART B. ALLOCATION FORMULA
Once the contribution amount has been decided for a plan year, it
must be allocated among the participants in the plan. The
contribution can be allocated using either a pro rata formula or an
integrated formula. Check either Option 1 or 2.
OPTION 1. Pro Rata Formula
Check this option if you wish to have the contribution allocated to
all qualifying participants based on their compensation for the
plan year.
OPTION 2. Integrated Formula
Check this option if the plan is to be integrated. Generally,
integration is a method of giving some participants in the plan an
extra contribution allocation. Because of the complexity of
integration, you should consult your tax advisor on this issue.
SECTION 5 VESTING
The vesting schedule determines how fast the money in a participant's
plan account becomes nonforfeitable. For example, suppose you select
the vesting schedule of Option B. If a participant quits work after 4
years of service, the participant would be entitled to 60% of his or
her plan account. The remaining 40% would remain in the plan and
become a forfeiture.
<PAGE>
NOTE: If you choose more than 1 year of service as an eligibility
requirement in Section 3, Part A, you must choose the 100% vesting
schedule in Section 5 (Option C).
SECTION 6 NORMAL RETIREMENT AGE
Fill in the desired normal retirement age. When a participant
attains normal retirement age, he or she can request a
distribution from the plan.
SECTION 7 HOURS REQUIRED
Part A. In the blank provided, fill in the number of hours of service
which shall be required to constitute a year of service for
vesting and eligibility. This can be no more than 1,000. If you
fail to fill in the blank, the number of hours required will be
deemed to be 1,000. Suppose, for example, you fill in 1,000 hours
of service. This means any employee who works at least 1,000 hours
during the appropriate period will be credited with a year of
service for the purposes of vesting, eligibility, etc. On the
other hand, if the employee works less than 1,000 hours, he or she
will not be credited with a year of service for those purposes.
Part B. In the blank provided, fill in the number of hours of service
which must be exceeded to avoid a break in service. This can be no
more than 500. If you fail to fill in the blank, the number of
hours required to avoid a break in service will be deemed to be
500.
SECTION 8 OTHER OPTIONS
Part A. Check whether or not you wish to allow loans to participants. Note
that loans cannot be made to an owner of an unincorporated
business (whether a sole proprietor or a partner) or an owner of a
Subchapter S corporation.
Part B. Check whether or not you wish to allow each participant to direct
the investment of his or her own plan account.
Part C. Check whether or not you wish to allow in-service withdrawals.
Generally, an in-service withdrawal is a distribution to a
participant who is still working for your company. If this is an
amendment and restatement of a prior plan that allowed in-service
withdrawals, this plan must also allow in-service withdrawals.
SECTION 9 JOINT AND SURVIVOR ANNUITY
Part A. As a general rule, the Retirement Equity Act requires that a
distribution from a plan to a participant be made in the form of a
joint and survivor annuity purchased from an insurance company,
unless the participant elects otherwise and his or her spouse
consents. However, the Retirement Equity Act allows employers who
maintain certain profit sharing plans to elect to have a safe
harbor rule apply. If you check "yes" indicating that the safe
harbor rule applies, then payouts from the plan to participants
and beneficiaries will not be subject to the annuity requirements.
Part B. If the safe harbor rules do not apply, you must complete Part B.
When a participant who is receiving payments under a joint and
survivor annuity dies, the participant's spouse will receive a
survivor annuity. This section determines the percentage of the
survivor annuity. If this is an amendment and restatement of a
profit sharing plan that was subject to the joint and survivor
annuity rules, this percentage must be at least as great as the
survivor annuity percentage in the prior plan.
SECTION 10 ADDITIONAL PLANS
This plan is a standardized plan under applicable IRS procedures.
An employer who adopts a standardized plan generally does not have
to request a ruling from a Key District Office of the IRS (called
a determination letter) that the plan, under facts and
circumstances unique to that particular employer, meets the
requirements for qualification under the tax laws and regulations.
Section 10 states an exception to the procedures for standardized
plans, namely, if you maintain another plan (other than a paired
standardized money purchase pension plan using the same Basic Plan
Document), you must obtain a determination letter if you wish to
obtain assurance that the plan is qualified.
SECTION 11 EMPLOYER SIGNATURE
An authorized representative of the employer must sign and date
the Adoption Agreement.
SECTION 12 TRUSTEE OR CUSTODIAN
A trustee or custodian must be named for this plan.
If the financial organization will be acting as trustee or
custodian, the financial organization should complete Option A.
Section 5.03 of the Basic Plan Document will apply if "Custodian"
or "Trustee without full trust powers" is checked. Section 5.04 of
the Basic Plan Document will apply if "Trustee with full trust
powers" is checked.
If an individual (e.g., the employer, partners, or an appointed
individual) will be acting as individual trustee, complete Option
B. If Option B is completed, Section 5.04 of the Basic Plan
Document will apply.
SECTION 13 PROTOTYPE SPONSOR
The prototype sponsor must fill in its name, address and telephone
number.
SECTION 14 LIMITATION ON ALLOCATIONS - MORE THAN ONE PLAN
You must read and complete this section if, in addition to this
plan:
1) You ever maintained a defined benefit plan, or
2) You currently maintain an individually designed plan.
Individually designed plans are not master or prototype plans,
but rather, plans written for just one particular employer.
In addition, if you want to select a definition of compensation
other than the Internal Revenue Code Section 3401(a) wages (that
is, W-2 wages), you must complete Part C.
<PAGE>
27
INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Standardized Washington, DC 20224
Profit Sharing Plan
FFN: 50259012701-001 Case: 9307210 EIN: 36-1245570 Person to Contact:
BPD: 01 Plan: 001 Letter Serial No: D260916a Ms. Arrington
Telephone Number:
WAYNE HUMMER & CO (202) 622-8173
300 SOUTH WACKER DRIVE Refer Reply to:
E:EP:Q:ICU
CHICAGO, IL 60606
Date: 06/07/93
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code
section 401(a)(16) if: (1) an employer ever maintained another qualified plan
for one or more employees who are covered by this plan, other than a specified
paired plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780;
or (2) after December 31, 1985, the employer maintains a welfare benefit fund
defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section
419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to the
plan satisfies the nondiscrimination requirements of section 1.401(a)(4)-5(a) of
the regulations, except with respect to plan amendments granting past service
that meet the safe harbor described in section 1.401(a)(4)-5(a)(5) and are not
part of a pattern of amendments that significantly discriminates in favor of
highly compensated employees; or (2) whether the plan satisfies the effective
availability requirement of section 1.401(a)(4)-4(c) of the regulations with
respect to any benefit, right or feature.
An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
<PAGE>
WAYNE HUMMER & CO
FFN: 50259012701-001
Page 2
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service; and (3) with respect to
whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5,) 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the
continued and interim reliance provisions of section 13 of Rev. Proc. 89-9,
1989-1 C.B. 780, are not applicable. However, solely for purposes of section
17.03 of Rev. Proc. 89-9, you are deemed to have submitted this plan prior to
March 31, 1991, and therefore the extended reliance provisions of section 17.03
are applicable.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
Chief, Employee Plans Qualifications Branch
<PAGE>
Qualified Standardized Profit Sharing Plan Page 1 of 4
________________________________________________________________________________
Retirement Plan ADOPTION AGREEMENT
________________________________________________________________________________
SECTION 1. EMPLOYER INFORMATION
Name of Employer____________________________________________________
Address_____________________________________________________________
City________________________ State________________ Zip______________
Telephone__________ Federal Tax Identification Number_______________
Income Tax Year End______________________________
(month) (day)
Type of Business (Check only one)
[_]Sole Proprietorship [_]Partnership [_]Corporation
[_]Other (Specify)
____________________________________________________________________
Nature of Business (Describe)_______________________________________
Plan Sequence No.___________ Enter 001 if this is the first
qualified plan the Employer has ever maintained, enter 002 if it is
the second, etc.
For a plan which covers only the owner of the business, please
provide the following information about the owner:
Social Security No._______________ Date Business Established________
Date of Birth_____________________ Marital Status___________________
Home Address________________________________________________________
SECTION 2. EFFECTIVE DATES Check and complete Option A or B
OPTION A. [_] This is the initial adoption of a profit sharing plan by the
Employer.
The Effective Date of this Plan is ________________________, 19__.
NOTE: The effective date is usually the first day of the Plan Year
in which this Adoption Agreement is signed.
OPTION B. [_] This is an amendment and restatement of an existing profit
sharing plan (a Prior Plan).
The Prior Plan was initially effective on__________________, 19__.
The Effective Date of this amendment and restatement is_____________
_______________________, 19__.
NOTE: The effective date is usually the first day of the Plan Year
in which the Adoption Agreement is signed.
SECTION 3. ELIGIBILITY REQUIREMENTS Complete Parts A, B and C
PART A. Years of Eligibility Service Requirement:
An Employee will be eligible to become a Participant in the Plan
after completing _______ (enter 0,1 or 2) Years of Eligibility
Service.
NOTE: If more than 1 year is selected, the immediate 100% vesting
schedule of Section 5, Option C will automatically apply.
If left blank, the Years of Eligibility Service required will be
deemed to be 0.
PART B. Age Requirement:
An Employee will be eligible to become a Participant in the Plan
after attaining age ______ (no more than 21).
NOTE: If left blank, it will be deemed there is no age requirement
for eligibility.
PART C. Class of Employees Eligible to Participate:
All Employees shall be eligible to become a Participant in the Plan,
except the following (if checked):
[ ] Those Employees included in a unit of Employees covered by the
terms of a collective bargaining agreement between Employee
representatives (the term "Employee representatives" does not
include any organization more than half of whose members are
Employees who are owners, officers or executives of the Employer)
and the Employer under which retirement benefits were the subject of
good faith bargaining unless the agreement provides that such
Employees are to be included in the Plan, and except those Employees
who are non-resident aliens pursuant to Section 410(b)(3)(C) of the
Code and who received no earned income from the Employer which
constitutes income from sources within the United States.
<PAGE>
STANDARDIZED PROFIT SHARING PLAN------------------------------------Page 2 of 4
ADOPTION AGREEMENT
SECTION 4. EMPLOYER CONTRIBUTION AND ALLOCATION FORMULA
PART A. CONTRIBUTION FORMULA:
For each Plan Year the Employer will contribute an amount to be
determined from year to year.
PART B. ALLOCATION FORMULA: (Check Option 1 or 2)
OPTION 1. [_] Pro Rata Formula. Employer Contributions and Forfeitures shall
be allocated to the Individual Accounts of qualifying
Participants in the ratio that each qualifying Participant's
Compensation for the Plan Year bears to the total Compensation
of all qualifying Participants for the Plan Year.
OPTION 2. [_] Integrated Formula. Employer Contributions and Forfeitures shall
be allocated as follows
(Start with Step 3 if this Plan is not a Top-Heavy Plan):
Step 1. Employer Contributions and Forfeitures shall first be
allocated pro rata to qualifying Participants in the
manner described in Section 4, Part B, Option 1. The
percent so allocated shall not exceed 3% of each
qualifying Participant's Compensation.
Step 2. Any Employer Contributions and Forfeitures remaining
after the allocation in Step 1 shall be allocated to
each qualifying Participant's Individual Account in the
ratio that each qualifying Participant's Compensation
for the Plan Year in excess of the integration level
bears to all qualifying Participant's Compensation in
excess of the integration level, but not in excess of
3%.
Step 3. Any Employer Contributions and Forfeitures remaining
after the allocation in Step 2 shall be allocated to
each qualifying Participant's Individual Account in the
ratio that the sum of each qualifying Participant's
total Compensation and Compensation in excess of the
integration level bears to the sum of all qualifying
Participant's total Compensation and Compensation in
excess of the integration level, but not in excess of
the profit sharing maximum disparity rate as described
in Section 3.01(B)(3) of the Plan.
Step 4. Any Employer Contributions and Forfeitures remaining
after the allocation in Step 3 shall be allocated pro
rata to qualifying Participants in the manner described
in Section 4, Part B, Option 1.
The integration level shall be (Choose one):
OPTION 1. [_] The Taxable Wage Base
OPTION 2. [_] $__________________________ (a dollar amount less
than the Taxable Wage Base)
OPTION 3. [_] __________________% of the Taxable Wage Base
NOTE: If no box is checked, the integration level shall be the
Taxable Wage Base.
SECTION 5. VESTING
A Participant shall become Vested in his or her Individual Account
attributable to Employer Contributions and Forfeitures as follows
(Choose one):
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
YEARS OF VESTED PERCENTAGE
---------------------------------------------------------------------------------------
VESTING SERVICE Option A [_] Option B [_] Option C[_] Option D [_] (Complete if chosen)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 0% 0% 100% __________%
2 0% 20% 100% __________% (not less than 20%)
3 100% 40% 100% __________% (not less than 40%)
4 100% 60% 100% __________% (not less than 60%)
5 100% 80% 100% __________% (not less than 80%)
6 100% 100% 100% __________% (not less than 100%)
----------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: If left blank, Option C, 100% vesting, will be deemed to be
selected.
SECTION 6. NORMAL RETIREMENT AGE
The Normal Retirement Age under the Plan is age ________ (not to
exceed 65).
NOTE: If left blank, the Normal Retirement Age will be deemed to be
age 59 1/2.
SECTION 7. HOURS REQUIRED Complete Parts A and B
PART A. ______ Hours of Service (no more than 1,000) shall be required to
constitute a Year of Vesting Service or a Year of Eligibility
Service.
PART B. ______ Hours of Service (no more than 500) must be exceeded to avoid
a Break in Vesting Service or a Break in Eligibility Service.
NOTE: The number of hours in Part A must be greater than the number
of hours in Part B.
<PAGE>
STANDARDIZED PROFIT SHARING PLAN_____________________________________Page 3 of 4
ADOPTION AGREEMENT
SECTION 8. OTHER OPTIONS
Answer "Yes" or "No" to each of the following questions by
checking the appropriate box.
If a box is not checked for a question, the answer will be
deemed to be "No."
A. Loans: Will loans to Participants pursuant
to Section 6.08 of the Plan be permitted? [_] Yes [_] No
B. Participant Direction of Investments: Will
Participants be permitted to direct the
investment of their Individual Accounts
pursuant to Section 5.14 of the Plan? [_] Yes [_] No
C. In-Service Withdrawals: Will Participants
be permitted to make withdrawals during
service pursuant to Section 6.01(A)(3)
of the Plan? NOTE: If the Plan is being
adopted to amend and replace a Prior Plan
which permitted in-service withdrawals you
must answer "Yes." [_] Yes [_] No
Check here if such withdrawals will be
permitted only on account of hardship [_].
SECTION 9. JOINT AND SURVIVOR ANNUITY
PART A. Retirement Equity Act Safe Harbor:
Will the safe harbor provisions of Section 6.05(F) of the Plan
apply? (Choose only one Option)
OPTION 1. [_] Yes
OPTION 2. [_] No
NOTE: You must select "No" if you are adopting this Plan as an
amendment and restatement of a Prior Plan that was subject to
the joint and survivor annuity requirements.
PART B. Survivor Annuity Percentage: (Complete only if your answer in
Section 9, Part A is "No.")
The survivor annuity portion of the Joint and Survivor Annuity
shall be a percentage equal to __________%
(at least 50% but no more than 100%) of the amount paid to the
Participant prior to his or her death.
SECTION 10. ADDITIONAL PLANS
An Employer who has ever maintained or who later adopts any
plan (including a welfare benefit fund, as defined in Section
419(e) of the Code, which provides post-retirement medical
benefits allocated to separate accounts for key employees as
defined in Section 419A(d)(3) of the Code or an individual
medical account, as defined in Section 415(1)(2) of the Code)
in addition to this Plan (other than a paired standardized
money purchase pension plan using Basic Plan Document No. 03)
may not rely on the opinion letter issued by the National
Office of the Internal Revenue Service as evidence that this
Plan is qualified under Section 401 of the Code. If the
Employer who adopts or maintains multiple plans wishes to
obtain reliance that the Employer's plan(s) are qualified,
application for a determination letter should be made to the
appropriate Key District Director of Internal Revenue.
This Adoption Agreement may be used only in conjunction with
Basic Plan Document No. 03.
SECTION 11. EMPLOYER SIGNATURE Important: Please read before signing.
I am an authorized representative of the Employer named above
and I state the following:
1. I acknowledge that I have relied upon my own advisors
regarding the completion of this Adoption Agreement and the
legal and tax implications of adopting this Plan.
2. I understand that my failure to properly complete this
Adoption Agreement may result in disqualification of the
Plan.
3. I understand that the Prototype Sponsor will inform me of
any amendments made to the Plan and will notify me should
it discontinue or abandon the Plan.
4. I have received a copy of this Adoption Agreement and the
corresponding Basic Plan Document.
Signature for Employer ___________________ Date Signed _______
(Type Name) __________________________________________________
SECTION 12. TRUSTEE OR CUSTODIAN Check and complete only one Option
[_] OPTION A. FINANCIAL ORGANIZATION AS TRUSTEE OR CUSTODIAN
CHECK ONE: [_] Custodian [_] Trustee without full trust
powers, or
[_] Trustee with full trust powers
NOTE: Custodian will be deemed selected if no box is checked.
Financial Organization _______________________________________
Signature ____________________________________________________
(Type Name) __________________________________________________
[_] OPTION B. INDIVIDUAL TRUSTEE(S)
Signature ____________________ Signature _________________
(Type Name) __________________ (Type Name) _______________
<PAGE>
STANDARDIZED PROFIT SHARING PLAN_____________________________________Page 4 of 4
ADOPTION AGREEMENT
SECTION 13. PROTOTYPE SPONSOR
Name of Prototype Sponsor_____________________________________
Address_______________________________________________________
Telephone Number______________________________________________
SECTION 14. LIMITATION ON ALLOCATIONS - MORE THAN ONE PLAN
If you maintain or ever maintained another qualified plan
(other than a paired standardized money purchase pension plan
using Basic Plan Document No. 03) in which any Participant in
this Plan is (or was) a Participant or could become a
participant, you must complete this section. You must also
complete this section if you maintain a welfare benefit fund,
as defined in Section 419(e) of the Code, or an individual
medical account, as defined in Section 415(1)(2) of the Code,
under which amounts are treated as annual additions with
respect to any Participant in this Plan.
PART A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
master or prototype plan:
1. [_] The provisions of Sections 3.05(B)(1) through
3.05(B)(6) of the Plan will apply as if the other plan were
a master or prototype plan.
2. [_] Other method. (Provide the method under which the plans
will limit total annual additions to the maximum
permissible amount, and will properly reduce any excess
amounts, in a manner that precludes Employer discretion.)
__________________________________________________________
______________________
PART B. If the Participant is or has ever been a participant in a
defined benefit plan maintained by the Employer, the Employer
will provide below the language which will satisfy the 1.0
limitation of Section 415(e) of the Code. Such language must
preclude Employer discretion. (Complete) ____________________
_____________________________________________________________
PART C. Compensation will mean all of each Participant's (Choose one):
OPTION 1. [_] Section 3121(a) wages
OPTION 2. [_] Section 3401(a) wages
OPTION 3. [_] 415 safe-harbor compensation
NOTE: If no box is checked, Option 2 will be deemed to be
selected.
PART D. The limitation year is the following 12-consecutive month
period: _______________________________________________
<PAGE>
================================================================================
QUALIFIED
RETIREMENT
PLAN
----------
ADOPTION AGREEMENT
SIMPLIFIED
STANDARDIZED
PROFIT SHARING PLAN
================================================================================
<PAGE>
Instructions for Completing Adoption Agreement
Simplified Standardized Profit Sharing Plan and Trust
These instructions are designed to help you, the employer, along
with your attorney and/or tax advisor, complete the Adoption
Agreement for the Qualified Retirement Plan. The instructions are
meant to be used only as a general guide and are not intended as a
substitute for qualified legal and tax advisors.
If you wish to have us, the financial organization sponsoring this
prototype plan, help you fill out the Adoption Agreement, we will
do so. However, we recommend that you obtain the advice of your
legal or tax advisor before you sign the Adoption Agreement.
This Adoption Agreement has been designed for easy completion.
There is one page (an original plus two carbonless copies) which
require your completion. Insert the adoption agreement into a
typewriter and follow the section instructions to complete. When
finished, detach at the top and you will have three copies.
EMPLOYER Fill in the requested information. The "Federal Tax Identification
INFORMATION Number" is the tax identification number assigned to your
business. If your business does not have a Federal Tax
Identification Number, complete and file an Internal Revenue
Service (IRS) Form SS4 to obtain a number. The IRS Form SS4 can
be obtained from an IRS office or from your tax advisor. If you
have already filed a Form SS4, print "Applied for" on the "Federal
Tax Identification Number" line. After you receive a tax
identification number, be sure to let our financial organization
know what that number is. In the space marked "Nature of
Business," accurately describe the type of business (e.g., radio
and TV repair, agricultural, etc.). The "Plan Sequence Number" is
used for annual reporting to the IRS. The IRS uses this number to
identify your plan. For example, if this is the fourth plan you
have ever opened, the Plan Sequence Number would be 004 and so on.
EFFECTIVE This profit sharing plan is either a new plan (an initial
DATES adoption) or an amendment and restatement of an existing profit
sharing plan.
If this is a new profit sharing plan, check Option A and fill in
the effective date. The effective date is usually the first day of
the plan year in which this Adoption Agreement is signed. For
example, if an employer maintains a plan on a calendar year basis
and this Adoption Agreement is signed on September 24, 1991, the
effective date would be January 1, 1991.
If the reason you are adopting this plan is to amend and replace
an existing profit sharing plan, check Option B. The existing
profit sharing plan which will be replaced is called a "prior
plan." You will need to know the effective date of the prior plan.
The best way to determine its effective date is to refer to the
prior plan adoption agreement. The effective date of this
amendment and restatement is usually the first day of the plan
year in which the Adoption Agreement is signed. However, if you
are adopting this plan to update a prior plan for changes brought
about by the Tax Reform Act of 1986 (and other recent changes
which apply to qualified plans), the effective date will be the
first day of the plan year which begins in 1989 (January 1, 1989
for a calendar year plan).
PLAN NOTE: This section should be completed even if you do not have
PROVISIONS employees.
Within limits, you as the employer can specify the number of years
your employees must work for you and the age they must attain
before they are eligible to participate in this plan. Note that
the eligibility requirements which you set up for the plan also
apply to you.
Suppose, for example, you establish a service requirement of two
years and an age requirement of 21. In that case, only those
employees (including yourself) who have worked for you for two
years and are at least 21 years old are eligible to participate in
this plan.
Part A. Years of Eligibility Service Requirement
Fill in the number of years of service (no more than 2).
This number must be either 0, 1, or 2.
Part B. Age Requirement
Fill in the age an employee must attain (no more than 21)
to be eligible to participate in the plan.
Part F. Retirement Equity Act Safe Harbor
As a general rule, the Retirement Equity Act requires that
a distribution from a plan to a participant be made in the
form of a joint and survivor annuity purchased from an
insurance company, unless the participant elects otherwise
and his or her spouse consents. However, the Retirement
Equity Act allows employers who maintain certain profit
sharing plans to elect the have a safe harbor rule apply.
If you check "yes" indicating that the safe harbor rule
applies, then payouts from the plan to participants and
beneficiaries will not be subject to the annuity
requirements.
<PAGE>
EMPLOYER An authorized representative of the employer must sign and date
SIGNATURE the Adoption Agreement.
TRUSTEE OR A trustee or custodian must be named for this plan.
CUSTODIAN If the financial organization will be acting as trustee or
custodian, the financial organization should fill in its name. The
financial organization should check the box if it will be acting
as trustee with full trust powers.
If an individual (e.g., the employer, partners, or an appointed
individual) will be acting as individual trustee, the individual's
name and signature should be entered.
PROTOTYPE The prototype sponsor must fill in its name, address and telephone
SPONSOR number.
ADDITIONAL This plan is a standardized plan under applicable IRS procedures.
PLANS An employer who adopts a standardized plan generally does not
have to request a ruling from a Key District Office of the IRS
(called a determination letter) that the plan, under facts and
circumstances unique to that particular employer, meets the
requirements for qualification under the tax laws and regulations.
This section states an exception to the procedures for
standardized plans, namely, if you maintain another plan (other
than a paired standardized money purchase pension plan using the
same Basic Plan Document), you must obtain a determination letter
if you wish to obtain assurance that the plan is qualified.
LIMITATION ON You must read and complete this section if, in addition to the
ALLOCATIONS- plan:
MORE THAN 1. You ever maintained a defined benefit plan, or
ONE PLAN 2. You currently maintain an individually designed plan.
Individually designed plans are not master or prototype plans,
but rather, plans written for just one particular employer.
<PAGE>
27
INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Standardized Washington, DC 20224
Profit Sharing Plan
FFN: 50259012701-003 Case: 9307212 EIN: 36-1245570 Person to Contact:
BPD: 01 Plan: 003 Letter Serial No: D260918a Ms. Arrington
Telephone Number:
WAYNE HUMMER & CO (202) 622-8173
300 SOUTH WACKER DRIVE Refer Reply to:
E:EP:Q:ICU
CHICAGO, IL 60606
Date: 06/07/93
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code
section 401(a)(16) if: (1) an employer ever maintained another qualified plan
for one or more employees who are covered by this plan, other than a specified
paired plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780;
or (2) after December 31, 1985, the employer maintains a welfare benefit fund
defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section
419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to the
plan satisfies the nondiscrimination requirements of section 1.401(a)(4)-5(a) of
the regulations, except with respect to plan amendments granting past service
that meet the safe harbor described in section 1.401(a)(4)-5(a)(5) and are not
part of a pattern of amendments that significantly discriminates in favor of
highly compensated employees; or (2) whether the plan satisfies the effective
availability requirement of section 1.401(a)(4)-4(c) of the regulations with
respect to any benefit, right or feature.
An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
<PAGE>
WAYNE HUMMER & CO
FFN: 50259012701-003
Page 2
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service; and (3) with respect to
whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the
continued and interim reliance provisions of section 13 of Rev. Proc. 89-9,
1989-1 C.B. 780, are not applicable. However, solely for purposes of section
17.03 of Rev. Proc. 89-9, you are deemed to have submitted this plan prior to
March 31, 1991, and therefore the extended reliance provisions of section 17.03
are applicable.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
Chief, Employee Plans Qualifications Branch
<PAGE>
QUALIFIED SIMPLIFIED STANDARDIZED PROFIT SHARING PLAN
________________________________________________________________________________
Retirement Plan ADOPTION AGREEMENT
________________________________________________________________________________
EMPLOYER Name of Employer _____________________ Telephone ______________
INFORMATION
Business Address ______________________________________________
City ___________________________ State ____________ Zip _______
Federal Tax Identification Number _____________________________
Income Tax Year End ___________________________________________
(month) (day)
Type of Business (Check only one)
[_] Sole Proprietorship [_] Partnership [_] Corporation
[_] Other (Specify)____________________________________________
Plan Sequence No.________ Enter 001 if this is the first
qualified plan the Employer has ever maintained, enter 002 if
it is the second, etc.
For a plan which covers only the owner of the business, please
provide the following information about the owner:
Social Security No. _________________________________
Date Business Established ___________________________
Date of Birth _______________________________________
Marital Status ______________________________________
Home Address ________________________________________
EFFECTIVE DATES Check and complete Option A or B
OPTION A. [_] This is the initial adoption of a profit sharing plan by
the Employer. The Effective Date of this Plan is
__________________, 19_____. NOTE: The effective date is
usually the first day of the Plan Year in which this
Adoption Agreement is signed.
OPTION B. [_] This is an amendment and restatement of an existing profit
sharing plan (a prior plan). NOTE: the effective date is
usually the first day of the Plan Year in which this
Adoption Agreement is signed.
The Prior Plan was initially effective on ________________,
19_____.
The Effective Date of this amendment and restatement is
________________, 19_____.
PLAN
PROVISIONS Complete Parts A through F
PART A. Service Requirement: An Employee will be eligible to become a
Participant in the Plan after completing _____ (enter 0, 1 or
2) Years of Eligibility Service. NOTE: If left blank, the Years
of Eligibility Service required will be deemed to be 0.
PART B. Age Requirement: An Employee will be eligible to become a
Participant in the Plan after attaining age ______ (no more
than 21). NOTE: If left blank, it will be deemed there is no
age requirement for eligibility.
PART C. 100% Vesting: A Participant shall be fully Vested at all times
in his or her Individual Account.
PART D. Normal Retirement Age: The Normal Retirement Age under the Plan
is age 59 1/2.
PART E. Contribution Formula: For each Plan Year the Employer will
contribute an amount to be determined from year to year.
Such contribution shall be allocated to the Individual Accounts
of qualifying Participants in the ratio that each qualifying
Participant's Compensation for the Plan Year bears to the total
Compensation of all qualifying Participants for the Plan Year.
PART F. Retirement Equity Act Safe Harbor: Will the safe harbor
provisions of Section 6.05(F) apply? [_] Yes [_] No
NOTE: If left blank, it will be deemed, yes.
EMPLOYER I am an authorized representative of the Employer named above
SIGNATURE and I state the following:
Important: 1. I acknowledge that I have relied upon my own advisors
Please read regarding the completion of this Adoption Agreement and
before signing the legal and tax implications of adopting this Plan.
2. I understand that my failure to properly complete this
Adoption Agreement may result in disqualification of the
Plan.
3. I understand that the Prototype Sponsor will inform me of
any amendments made to the Plan and will notify me should it
discontinue or abandon the Plan.
4. I have received a copy of this Adoption Agreement and the
corresponding Basic Plan Document.
Signature for Employer ______________________________
Date Signed _________________________________________
Type Name ___________________________________________
TRUSTEE OR Trustee or Custodian ________________________________
CUSTODIAN
Signature ___________________________________________
Type Name ___________________________________________
[_] Check this box only if a financial organization is named as
Trustee and it has full trust powers.
PROTOTYPE Name of Prototype Sponsor ___________________________
SPONSOR
Telephone Number ____________________________________
Address _____________________________________________
ADDITIONAL An Employer who has ever maintained or who later adopts any
PLANS plan (including a welfare benefit fund, as defined in Section
419(e) of the Code, which provides post-retirement medical
benefits allocated to separate accounts for key employees as
defined in Section 419A(d)(3) of the Code or an individual
medical account, as defined in Section 415(1)(2) of the Code)
in addition to this Plan (other than a paired standardized
money purchase pension plan using Basic Plan Document No. 03)
may not rely on the opinion letter issued by the National
Office of the Internal Revenue Service as evidence that this
Plan is qualified under Section 401 of the Code. If the
Employer who adopts or maintains multiple plans wishes to
obtain reliance that the Employer's plan(s) are qualified,
application for a determination letter should be made to the
appropriate Key District Director of Internal Revenue.
This Adoption Agreement may be used only in conjunction with
Basic Plan Document No. 03.
<PAGE>
SIMPLIFIED STANDARDIZED PROFIT SHARING PLAN ____________________________________
ADOPTION AGREEMENT
LIMITATION ON More Than One Plan
ALLOCATIONS If you maintain or ever maintained another qualified plan (other
than a paired standardized money purchase pension plan using
Basic Plan Document No. 03) in which any Participant in this Plan
is (or was) a participant or could become a participant, you must
complete this section. You must also complete this section if you
maintain a welfare benefit fund, as defined in Section 419(e) of
the Code, or an individual medical account, as defined in Section
415(1)(2) of the Code, under which amounts are treated as annual
additions with respect to any Participant in this Plan.
PART A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a master
or prototype plan:
1. [_] The provisions of Sections 3.05(B)(1) through 3.05(B)(6)
of the Plan will apply as if the other plan were a master
or prototype plan.
2. [_] Other method. (Provide the method under which the plans
will limit total annual additions to the maximum
permissible amount, and will properly reduce any excess
amounts, in a manner that precludes Employer discretion.)
_________________________________________________________
_________________________________________________________
PART B. If the Participant is or has ever been a participant in a defined
benefit plan maintained by the Employer, the Employer will
provide below the language which will satisfy the 1.0 limitation
of Section 415(e) of the Code. Such language must preclude
Employer discretion. (Complete)__________________________________
PART C. The limitation year is the following 12-consecutive month period:
___________________
<PAGE>
QUALIFIED
RETIREMENT
PLAN
BASIC PLAN
DOCUMENT
<PAGE>
REVENUE PROCEDURE 93-47/OBRA-93
- ------------------------- AMENDMENT TO --------------------------
BASIC PLAN DOCUMENT
DATE RECEIVED BY EMPLOYER:
---------------
Section l.06 is amended by adding the following three paragraphs after the last
paragraph thereof:
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under the Plan shall
not exceed the OBRA '93 annual Compensation limit. The OBRA '93 annual
Compensation limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with Section 401(a)(17)(B)
of the Internal Revenue Code. The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual Compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall
mean the OBRA '93 annual Compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account
in determining an Employee's benefits accruing in the current Plan Year,
the Compensation for that prior determination period is subject to the
OBRA '93 annual Compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA '93 annual Compensation limit is
$150,000.
Section 6.02(B)(1) is amended by adding the following sentence to the end of the
first paragraph thereof:
If a distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less
than 30 days after the notice required under Section 1.411(a)-11(c) of
the Income Tax Regulations is given, provided that:
a. the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
b. the Participant, after receiving the notice, affirmatively elects
a distribution.
<PAGE>
==============================================================================
TABLE OF CONTENTS
SECTION ONE DEFINITIONS
1.01 Adoption Agreement......................................... 1
1.02 Basic Plan Document........................................ 1
1.03 Break In Eligibility Service............................... 1
1.04 Break In Vesting Service................................... 1
1.05 Code....................................................... 1
1.06 Compensation............................................... 1
1.07 Custodian.................................................. 2
1.08 Disability................................................. 2
1.09 Earned Income.............................................. 2
1.10 Effective Date............................................. 2
1.11 Eligibility Computation Period............................. 2
1.12 Employee................................................... 2
1.13 Employer................................................... 2
1.14 Employer Contribution...................................... 2
1.15 Entry Dates................................................ 2
1.16 ERISA...................................................... 2
1.17 Forfeiture................................................. 2
1.18 Fund....................................................... 2
1.19 Highly Compensated Employee................................ 2
1.20 Hours Of Service........................................... 3
1.21 Individual Account......................................... 3
1.22 Investment Fund............................................ 3
1.23 Key Employee............................................... 3
1.24 Leased Employee............................................ 3
1.25 Normal Retirement Age...................................... 3
1.26 Owner-Employee............................................. 3
1.27 Participant................................................ 4
1.28 Plan....................................................... 4
1.29 Plan Administrator......................................... 4
1.30 Plan Year.................................................. 4
1.31 Prior Plan................................................. 4
1.32 Prototype Sponsor.......................................... 4
1.33 Self-Employed Individual................................... 4
1.34 Separate Fund.............................................. 4
1.35 Taxable Wage Base.......................................... 4
1.36 Termination Of Employment.................................. 4
1.37 Top-Heavy Plan............................................. 4
1.38 Trustee ................................................... 4
1.39 Valuation Date............................................. 4
1.40 Vested..................................................... 4
1.41 Year Of Eligibility Service................................ 4
1.42 Year Of Vesting Service.................................... 4
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 Eligibility To Participate................................. 5
2.02 Plan Entry................................................. 5
2.03 Transfer To Or From Ineligible Class....................... 5
2.04 Return As A Participant After Break In Eligibility Service. 5
2.05 Determinations Under This Section.......................... 5
2.06 Terms of Employment........................................ 5
SECTION THREE CONTRIBUTIONS
3.01 Employer Contributions..................................... 5
3.02 Employee Contributions..................................... 7
3.03 Rollover Contributions..................................... 7
3.04 Transfer Contributions..................................... 7
3.05 Limitation On Allocations.................................. 7
<PAGE>
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS
AND VALUATION
4.01 Individual Accounts........................................ 11
4.02 Valuation Of Fund.......................................... 11
4.03 Valuation Of Individual Accounts........................... 11
4.04 Segregation Of Assets...................................... 11
4.05 Statement Of lndividual Accounts........................... 11
4.06 Modification Of Method For Valuing Individual Accounts..... 11
SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 Creation Of Fund........................................... 11
5.02 Investment Authority....................................... 11
5.03 Financial Organization Custodian Or Trustee
Without Full Trust Powers.................................. 12
5.04 Financial Organization Trustee With Full Trust Powers
And Individual Trustee..................................... 12
5.05 Division Of Fund Into Investment Funds..................... 13
5.06 Compensation And Expenses.................................. 13
5.07 Not Obligated To Question Data............................. 13
5.08 Liability For Withholding On Distributions................. 13
5.09 Resignation Or Removal Of Trustee (Or Custodian)........... 13
5.10 Degree Of Care............................................. 14
5.11 Indemnification Of Prototype Sponsor And Trustee
(Or Custodian)............................................. 14
5.12 Investment Managers........................................ 14
5.13 Matters Relating To Insurance.............................. 14
5.14 Direction Of Investments By Participant.................... 15
SECTION SIX VESTING AND DISTRIBUTION
6.01 Distribution To Participant................................ 15
6.02 Form Of Distribution To A Participant...................... 17
6.03 Distributions Upon The Death Of A Participant.............. 18
6.04 Form Of Distribution To Beneficiary........................ 18
6.05 Joint And Survivor Annuity Requirements.................... 18
6.06 Distribution Requirements.................................. 21
6.07 Annuity Contracts.......................................... 23
6.08 Loans To Participants...................................... 24
6.09 Distribution In Kind....................................... 24
6.10 Direct Rollovers of Eligible Rollover Distributions........ 24
SECTION SEVEN CLAIMS PROCEDURE
7.01 Filing A Claim For Plan Distributions...................... 25
7.02 Denial Of Claim............................................ 25
7.03 Remedies Available......................................... 25
SECTION EIGHT PLAN ADMINISTRATOR
8.01 Employer Is Plan Administrator............................. 25
8.02 Powers And Duties Of The Plan Administrator................ 25
8.03 Expenses And Compensation.................................. 26
8.04 Information From Employer.................................. 26
SECTION NINE AMENDMENT AND TERMINATION
9.01 Right Of Prototype Sponsor To Amend The Plan............... 26
9.02 Right Of Employer To Amend The Plan........................ 26
9.03 Limitation On Power To Amend............................... 26
9.04 Amendment Of Vesting Schedule.............................. 27
9.05 Permanency................................................. 27
9.06 Method And Procedure For Termination....................... 27
9.07 Continuance Of Plan By Successor Employer.................. 27
9.08 Failure Of Plan Qualification.............................. 27
<PAGE>
SECTION TEN MISCELLANEOUS
10.01 State Community Property Laws............................ 27
10.02 Headings................................................. 27
10.03 Gender And Number........................................ 27
10.04 Plan Merger Or Consolidation............................. 27
10.05 Standard Of Fiduciary Conduct............................ 27
10.06 General Undertaking Of All Parties....................... 27
10.07 Agreement Binds Heirs, Etc............................... 28
10.08 Determination Of Top-Heavy Status........................ 28
10.09 Special Limitations For Owner-Employees.................. 29
10.10 Inalienability Of Benefits............................... 29
<PAGE>
QUALIFIED RETIREMENT PLAN AND TRUST
Defined Contribution Basic Plan Document 03
----------------------------------------------------------------------------
----------------------------------------------------------------------------
SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan with initial
capital letters shall, for the purpose of this Plan, have the
meanings set forth below unless the context indicates that other
meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which it
adopts the Plan and Trust and thereby agrees to be bound by all
terms and conditions of the Plan and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BREAK IN ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee fails to
complete more than 500 Hours of Service (or such lesser number of
Hours of Service specified in the Adoption Agreement for this
purpose).
1.04 BREAK IN VESTING SERVICE
Means a Plan Year during which an Employee fails to complete more
than 500 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose).
1.05 CODE
Means the Internal Revenue Code of 1986 as amended from
time-to-time.
1.06 COMPENSATION
For Plan Years beginning on or after January 1, 1989, the
following definition of Compensation shall apply:
Compensation will mean Compensation as that term is defined in
Section 3.05(E)(2) of the Plan. For any Self-Employed Individual
covered under the Plan, Compensation will mean Earned Income.
Compensation shall include only that Compensation which is
actually paid to the Participant during the applicable period.
Except as provided elsewhere in this Plan, the applicable period
shall be the Plan Year unless the Employer has selected another
period in the Adoption Agreement.
Unless otherwise indicated in the Adoption Agreement, Compensation
shall include any amount which is contributed by the Employer
pursuant to a salary reduction agreement and which is not
includible in the gross income of the Employee under Sections 125,
402(a)(8), 402(h) or 403(b) of the Code.
For years beginning after December 31, 1988, the annual
Compensation of each Participant taken into account under the Plan
for any year shall not exceed $20,000. This limitation shall be
adjusted by the Secretary at the same time and in the same manner
as under Section 415(d) of the Code, except that the dollar
increase in effect on January 1 of any calendar year is effective
for years beginning in such calendar year and the first adjustment
to the $200,000 limitation is effected on January 1, 1990. If a
Plan determines Compensation on a period of time that contains
fewer than 12 calendar months, then the annual Compensation limit
is an amount equal to the annual Compensation limit for the
calendar year in which the compensation period begins multiplied
by the ratio obtained by dividing the number of full months in
the period by 12.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of Section 414(q)(6) of the Code shall
apply, except in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the year.
If, as a result of the application of such rules the adjusted
$200,000 limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration
level if this Plan provides for permitted disparity), the
limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined
under this Section prior to the application of this limitation.
If Compensation for any prior Plan Year is taken into account in
determining an Employee's contributions or benefits for the
current year, the Compensation for such prior year is subject to
the applicable annual Compensation limit in effect for that prior
year. For this purpose, for years beginning before January 1,
1990, the applicable annual Compensation limit is $200,000.
Unless otherwise indicated in the Adoption Agreement, where an
Employee enters the Plan (and thus becomes a Participant) on an
Entry Date other than the first Entry Date in a Plan Year, his
Compensation will include any such earnings paid to him during the
whole of such Plan Year.
Where this Plan is being adopted as an amendment and restatement
to bring a Prior Plan into compliance with the Tax Reform Act of
1986, such Prior Plan's definition of Compensation shall apply for
Plan Years beginning before January 1, 1989.
In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1,1994, the
annual Compensation of each Employee taken into account under the
Plan shall not exceed the OBRA '93 annual Compensation limit. The
OBRA '93 annual Compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-
of-living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which Compensation is
determined (determination period) beginning in such calendar year.
If a determination period consists of fewer than 12 months, the
OBRA '93 annual Compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Section 401(a)(17)
of the Code shall mean the OBRA '93 annual Compensation limit set
forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the
current Plan Year, the Compensation for that prior determination
period is subject to the OBRA '93 annual Compensation limit in
effect for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1994, the OBRA '93
annual Compensation limit is $150,000.
<PAGE>
1.07 CUSTODIAN
Means an entity specified in the Adoption Agreement as Custodian
or any duly appointed successor as provided in Section 5.09.
1.08 DISABILITY
Means the inability to engage in any substantial, gainful activity
by reason of any medically determinable physical or mental
impairment that can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not
less than 12 months. The permanence and degree of such impairment
shall be supported by medical evidence.
1.09 EARNED INCOME
Means the net earnings from self-employment in the trade or
business with respect to which the Plan is established, for which
personal services of the individual are a material income-
producing factor. Net earnings will be determined without regard
to items not included in gross income and the deductions allocable
to such items. Net earnings are reduced by contributions by the
Employer to a qualified plan to the extent deductible under
Section 404 of the Code.
Net earnings shall be determined with regard to the deduction
allowed to the Employer by Section 164(f) of the Code for taxable
years beginning after December 31, 1989.
1.10 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in the
Adoption Agreement. However, where a separate date is stated in
the Plan as of which a particular Plan provision becomes
effective, such date will control with respect to that provision.
1.11 ELIGIBILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period shall be the
12 consecutive month period commencing with the date such Employee
first performs an Hour of Service (employment commencement date).
His subsequent Eligibility Computation Periods shall be the 12
consecutive month periods commencing on the anniversaries of his
employment commencement date; provided, however, if pursuant to
the Adoption Agreement, an Employee is required to complete one or
less Years of Eligibility Service to become a Participant, then
his subsequent Eligibility' Computation periods shall be the
Plan Years commencing with the Plan Year beginning during his
initial Eligibility Computation Period.
1.12 EMPLOYEE
Means any person employed by the Employer maintaining the Plan or
of any other employer required to be aggregated with such Employer
under Sections 414(b), (c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee deemed
to be an Employee of any Employer described in the previous
paragraph as provided in Sections 414(n) or (o) of the Code.
1.13 EMPLOYER
Means any corporation, partnership, sole-proprietorship or other
entity named in the Adoption Agreement and any successor who by
merger, consolidation, purchase or otherwise assumes the
obligations of the Plan. A partnership is considered to be the
Employer of each of the partners and a sole-proprietorship is
considered to be the Employer of a sole proprietor.
1.14 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as
determined under this Plan.
1.15 ENTRY DATES
Means the first day of the Plan Year and the first day of the
seventh month of the Plan Year, unless the Employer has specified
more frequent dates in the Adoption Agreement.
1.16 ERISA
Means the Employee Retirement Income Security Act of 1974 as
amended from time-to-time.
1.17 FORFEITURE
Means that portion of a Participant's Individual Account as
derived from Employer Contributions which he or she is not
entitled to receive (i.e., the nonvested portion).
1.18 FUND
Means the Plan assets held by the Trustee or Custodian for the
Participants' exclusive benefit.
1.19 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee includes highly compensated
active employees and highly compensated former employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year
and who, during the look-back year: (a) received Compensation
from the Employer in excess of $75,000 (as adjusted pursuant to
Section 415(d) of the Code); (b) received Compensation from the
Employer in excess of $50,000 (as adjusted pursuant to Section
415(d) of the Code) and was a member of the top-paid group for
such year; or (c) was an officer of the Employer and received
Compensation during such vear that is greater than 50% of the
dollar limitation in effect under Section 415(b)(1)(A) of the
Code. The term Highly Compensated Employee also includes: (a)
Employees who are both described in the preceding sentence if
the term "determination year" is substituted for the term "look-
back year" and the Employee is one of the 100 Employees who
received the most Compensation from the Employer during the
determination year; and (b) Employees who are 5% owners at any
time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (c)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose. the determination year shall be the Plan Year.
The look-back year shall be the 12 month period immediately
preceding the determination year.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to
the determination year, performs no service for the Employer
during the determination year, and was a highly compensated active
employee for either the separation year or any determination
year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year,
a family member of either a 5% owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10
most Highly Compensated Employees ranked
<PAGE>
================================================================================
3
on the basis of Compensation paid by the Employer during such
year, then the family member and the 5% owner or top 10 Highly
Compensated Employee shall be aggregated. In such case, the family
member and 5% owner or top 10 Highly Compensated Employee shall be
treated as a single Employee receiving Compensation and Plan
contributions or benefits equal to the sum of such Compensation
and contributions or benefits of the family member and 5% owner or
top 10 Highly Compensated Employee. For purposes of this Section,
family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of
such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the Compensation that
is considered, will be made in accordance with Section 414(q) of
the Code and the regulations thereunder.
1.20 HOURS OF SERVICE - Means
A. Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours will be credited to the Employee for the computation
period in which the duties are performed; and
B. Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501
Hours of Service will be credited under this paragraph for any
single continuous period (whether or not such period occurs in
a single computation period). Hours under this paragraph shall
be calculated and credited pursuant to Section 2530.200b-2 of
the Department of Labor Regulations which is incorporated
herein by this reference; and
C. Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service will not be credited both under paragraph
(A) or paragraph (B), as the case may be, and under this
paragraph (C). These hours will be credited to the Employee for
the computation period or periods to which the award or
agreement pertains rather than the computation period in which
the award, agreement, or payment is made.
D. Solely for purposes of determining whether a Break in
Eligibility Service or a Break in Vesting Service has occurred
in a computation period (the computation period for purposes of
determining whether a Break in Vesting Service has occurred is
the Plan Year), an individual who is absent from work for
maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day of
such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence (1) by
reason of the pregnancy of the individual, (2) by reason of a
birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes
of caring for such child for a period beginning immediately
following such birth or placement. The Hours of Service
credited under this paragraph shall be credited (1) in the
Eligibility Computation Period or Plan Year in which the
absence begins if the crediting is necessary to prevent a Break
in Eligibility Service or a Break in Vesting Service in the
applicable period, or (2) in all other cases, in the following
Eligibility Computation Period or Plan Year.
E. Hours of Service will be credited for employment with other
members of an affiliated service group (under Section 414(m) of
the Code), a controlled group of corporations (under Section
414(b) of the Code), or a group of trades or businesses under
common control (under Section 414(c) of the Code) of which the
adopting Employer is a member, and any other entity required to
be aggregated with the Employer pursuant to Section 414(o) of
the Code and the regulations thereunder.
Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Code
Sections 414(n) or 414(o) and the regulations thereunder.
F. Where the Employer maintains the plan of a predecessor
employer, service for such predecessor employer shall be
treated as service for the Employer.
G. The above method for determining Hours of Service may be
altered as specified in the Adoption Agreement.
1.21 INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan
for each Participant in accordance with Section 4.01.
1.22 INVESTMENT FUND
Means a subdivision of the Fund established pursuant to Section
5.05.
1.23 KEY EMPLOYEE
Means any person who is determined to be a Key Employee under
Section 10.08.
1.24 LEASED EMPLOYEE
Means any person (other than an Employee of the recipient) who
pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined
in accordance with Section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one
year, and such services are of a type historically performed by
Employees in the business field of the recipient Employer.
Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services
performed for the recipient Employer shall be treated as
provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the
recipient if: (1) such employee is covered by a money purchase
pension plan providing: (a) a nonintegrated employer
contribution rate of at least 10% of compensation, as defined
in Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are
excludible from the employee's gross income under Section 125,
Section 402(a)(8), Section 402(h) or Section 403(b) of the
Code, (b) immediate participation, and (c) full and immediate
vesting; and (2) Leased Employees do not constitute more than
20% of the recipient's nonhighly compensated work force.
1.25 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement. However, if
the Employer enforces a mandatory retirement age which is less
than the Normal Retirement Age, such mandatory age is deemed to
be the Normal Retirement Age. If no age is specified in the
Adoption Agreement, the Normal Retirement Age shall be age
59 1/2.
1.26 OWNER-EMPLOYEE
Means an individual who is a sole proprietor, or who is a
partner owning more than 10% of either the capital or profits
interest of the partnership.
<PAGE>
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4
1.27 PARTICIPANT
Means any Employee or former Employee of the Employer who has met
the Plan's eligibility requirements, has entered the Plan and who
is or may become eligible to receive a benefit of any type from
this Plan or whose Beneficiary may be eligible to receive any such
benefit.
1.28 PLAN
Means the prototype defined contribution plan adopted by the
Employer. The Plan consists of this Basic Plan Document plus the
corresponding Adoption Agreement as completed and signed by the
Employer.
1.29 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan
Administrator in accordance with Section 8.01.
1.30 PLAN YEAR
Means the 12 consecutive month period which coincides with the
Employer's tax year or such other 12 consecutive month period as
is designated in the Adoption Agreement.
1.31 PRIOR PLAN
Means a plan which was amended or replaced by adoption of this
Plan document, as indicated in the Adoption Agreement.
1.32 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement. Such entity
must meet the definition of a sponsoring organization set forth in
Section 3.07 of Revenue Procedure 89-9.
1.33 SELF-EMPLOYED INDIVIDUAL
Means an individual who has Earned Income for the taxable year
from the trade or business for which the Plan is established;
also, an individual who would have had Earned Income but for the
fact that the trade or business had no net profits for the taxable
year.
1.34 SEPARATE FUND
Means a subdivision of the Fund held in the name of a particular
Participant representing certain assets held for that Participant.
The assets which comprise a Participant's Separate Fund are those
assets earmarked for him and those assets subject to the
Participant's individual direction pursuant to Section 5.14.
1.35 TAXABLE WAGE BASE
Means, with respect to any taxable year, the maximum amount of
earnings which may be considered wages for such year under
Section 3121(a)(1) of the Code.
1.36 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer shall
occur whenever his status as an Employee of such Employer ceases
for any reason other than his death. An Employee who does not
return to work for the Employer on or before the expiration of an
authorized leave of absence from such Employer shall be deemed to
have incurred a Termination of Employment when such leave ends.
1.37 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it is
determined to be such pursuant to Section 10.08.
1.38 TRUSTEE
Means an individual, individuals or corporation specified in the
Adoption Agreement as Trustee or any duly appointed successor as
provided in Section 5.09. Trustee shall mean Custodian in the
event the financial organization named as Trustee does not have
full trust powers.
1.39 VALUATION DATE
Means the last day of the Plan Year and each other date designated
by the Plan Administrator which is selected in a uniform and
nondiscriminatory manner when the assets of the Fund are valued
at their then fair market value.
1.40 VESTED
Means nonforfeitable, that is, a claim which is unconditional and
legally enforceable against the Plan obtained by a Participant or
his Beneficiary to that part of an immediate or deferred benefit
under the Plan which arises from a Participant's Years of Vesting
Service.
1.41 YEAR OF ELIGIBILITY SERVICE
Means a 12-consecutive month period which coincides with an
Eligibility Computation period during which an Employee completes
at least 1,000 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose).
1.42 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at least
1,000 Hours of Service (or such lesser number of Hours of Service
specified in the Adoption Agreement for this purpose).
In the case of a Participant who has 5 or more consecutive Breaks
in Vesting Service, all Years of Vesting Service after such Breaks
in Vesting Service will be disregarded for the purpose of
determining the Vested portion of his Individual Account derived
from Employer Contributions that accrued before such breaks. Such
Participant's prebreak service will count in vesting the
postbreak Individual Account derived from Employer Contributions
only if either:
(A)such Participant had any Vested right to any portion of his
Individual Account derived from Employer Contributions at
the time of his Termination of Employment; or
(B)upon returning to service, the number of consecutive
Breaks in Vesting Service is less than his number of
Years of Vesting Service before such breaks.
Separate subaccounts will be maintained for the Participant's
prebreak and postbreak portions of his Individual Account derived
from Employer Contributions. Both subaccounts will share in the
gains and losses of the Fund.
<PAGE>
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5
Years of Vesting Service shall not include any period of time
excluded from Years of Vesting Service in the Adoption Agreement.
In the event the Plan Year is changed to a new 12-month period,
Employees shall receive credit for Years of Vesting Service, in
accordance with the preceding provisions of this definition, for
each of the Plan Years (the old and new Plan Years) which overlap
as a result of such change.
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees who belong
to a class of Employees which is excluded from participation as
indicated in the Adoption Agreement, shall be eligible to
participate in this Plan upon the satisfaction of the age and
Years of Eligibility Service requirements specified in the
Adoption Agreement.
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by amendment or
restatement, each Employee of the Employer who was a
Participant in said Prior Plan before the Effective Date shall
continue to be a Participant in this Plan.
B. An Employee will become a Participant in the Plan as of the
Effective Date if he has met the eligibility requirements of
Section 2.01 as of such date. After the Effective Date, each
Employee shall become a Participant on the first Entry Date
following the date the Employee satisfies the eligibility
requirements of Section 2.01.
C. The Plan Administrator shall notify each Employee who becomes
eligible to be a Participant under this Plan and shall furnish
him with the application form, enrollment forms or other
documents which are required of Participants. The eligible
Employee shall execute such forms or documents and make
available such information as may be required in the
administration of the Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible to
participate because he is no longer a member of an eligible class
of Employees, but has not incurred a Break in Eligibility Service,
such Employee shall participate immediately upon his return
to an eligible class of Employees. If such Employee incurs a Break
in Eligibility Service, his eligibility to participate shall be
determined by Section 2.04.
An Employee who is not a member of the eligible class of
Employees will become a Participant immediately upon becoming a
member of the eligible class provided such Employee has satisfied
the age and Years of Eligibility Service requirements. If such
Employee has not satisfied the age and Years of Eligibility
Service requirements as of the date he becomes a member of the
eligible class, he shall become a Participant on the first Entry
Date following the date he satisfies said requirements.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE
A. Employee Not Participant Before Break - If an Employee incurs a
Break in Eligibility Service before satisfying the Plan's
eligibility requirements, such Employee's Years of Eligibility
Service before such Break in Eligibility Service will not be
taken into account.
B. Nonvested Participants - In the case of a Participant who does
not have a Vested interest in his Individual Account
derived from Employer Contributions, Years of Eligibility
Service before a period of consecutive Breaks in Eligibility
Service will not be taken into account for eligibility purposes
if the number of consecutive Breaks in Eligibility Service in
such period equals or exceeds the greater of 5 or the aggregate
number of Years of Eligibility Service before such break. Such
aggregate number of Years of Eligibility Service will not
include any Years of Eligibility Service disregarded under the
preceding sentence by reason of prior breaks.
If a Participant's Years of Eligibility Service are disregarded
pursuant to the preceding paragraph, such Participant will be
treated as a new Employee for eligibility purposes. If a
Participant's Years of Eligibility Service may not be
disregarded pursuant to the preceding paragraph, such
Participant shall continue to participate in the Plan, or, if
terminated, shall participate immediately upon reemployment.
C. Vested Participants - A Participant who has sustained a Break
in Eligibility Service and who had a Vested interest in all or
a portion of his Individual Account derived from Employer
Contributions shall continue to participate in the Plan, or, if
terminated, shall participate immediately upon reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of each
Employee to be a Participant. This determination shall be
conclusive and binding upon all persons except as otherwise
provided herein or by law.
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor the fact
that a common law Employee has become a Participant shall give to
that common law Employee any right to continued employment; nor
shall either fact limit the right of the Employer to discharge or
to deal otherwise with a common law Employee without regard to
the effect such treatment may have upon the Employee's rights
under the Plan.
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. Obligation to Contribute - The Employer shall make
contributions to the Plan in accordance with the contribution
formula specified in the Adoption Agreement. If this Plan is a
profit sharing plan, the Employer shall, in its sole
discretion, make contributions without regard to current or
accumulated earnings or profits.
B. Allocation Formula and the Right to Share in the Employer
Contribution -
1. General - The Employer Contribution for a Plan Year will be
allocated or contributed to the Individual Accounts of
qualifying Participants in accordance with the allocation or
contribution formula specified in the Adoption Agreement.
The Employer Contribution for any Plan Year will be
allocated to each Participant's Individual Account as of
the last day of that Plan Year.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6
Any Employer Contribution for a Plan Year must satisfy Section 401(a)(4)
and the regulations thereunder for such Plan Year.
2. Qualifying Participants - A Participant is a qualifying Participant and
is entitled to share in the Employer Contribution for any Plan Year if
(1) he was a Participant on at least one day during the Plan Year, (2) if
this Plan is a nonstandardized plan, he completes a Year of Vesting
Service during the Plan Year and (3) where the Employer has selected the
"last day requirement" in the Adoption Agreement, he is an Employee of
the Employer on the last day of the Plan Year (except that this last
requirement (3) shall not apply if the Participant has died during the
Plan Year or incurred a Termination of Employment during the Plan Year
after having reached his Normal Retirement Age or having incurred a
Disability). Notwithstanding anything in this paragraph to the contrary,
a Participant will not be a qualifying Participant for a year if he
incurs a Termination of Employment during such Plan Year with not more
than 500 Hours of Service if he is not an Employee on the last day of the
Plan Year. The determination of whether a Participant is entitled to
share in the Employer Contribution shall be made as of the last day of
each Plan Year.
3. Special Rules for Integrated Plans - If the Employer has selected the
integrated contribution or allocation formula in the Adoption Agreement,
then the maximum disparity rate shall be determined in accordance with
the following table.
MAXIMUM DISPARITY RATE
<TABLE>
<CAPTION>
Top-Heavy Nontop-Heavy
Integration Level Money Purchase Profit Sharing Profit Sharing
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but
not more than X* 5.7% 2.7% 5.7%
More than X* of TWB
but not more than
80% of TWB 4.3% 1.3% 4.3%
More than 80% of TWB
but not more than TWB 5.4% 2.4% 5.4%
*X means the greater of $10,000 or 20% of TWB.
</TABLE>
C. ALLOCATION OF FORFEITURES - Forfeitures for a Plan Year which arise as a
result of the application of Section 6.01(D) shall be allocated as follows:
1. Profit Sharing Plan - If this is a profit sharing plan, Forfeitures shall
be allocated in the manner provided in Section 3.01(B) (for Employer
Contributions) to the Individual Accounts of Participants who are entitled
to share in the Employer Contribution for such Plan Year.
2. Money Purchase Pension and Target Benefit Plan - If this Plan is a money
purchase pension plan or a target benefit plan, Forfeitures shall be
applied towards the reduction of Employer Contributions to the Plan.
However, if the Employer has indicated in the Adoption Agreement that
Forfeitures shall be allocated to the Individual Accounts of Participants,
then Forfeitures shall be allocated in the manner provided in Section
3.01(B) (for Employer Contributions) to the Individual Accounts of
Participants who are entitled to share in the Employer Contributions for
such Plan Year.
D. TIMING OF EMPLOYER CONTRIBUTION - The Employer Contribution for each Plan
Year shall be delivered to the Trustee (or Custodian, if applicable) not
later than the due date for filing the Employer's income tax return for its
fiscal year in which the Plan Year ends, including extensions thereof.
E. MINIMUM ALLOCATION FOR TOP-HEAVY PLANS - The contribution and allocation
provisions of this Section 3.01(E) shall apply for any Plan Year with respect
to which this Plan is a Top-Heavy Plan.
1. Except as otherwise provided in (3) and (4) below, the Employer
Contributions and Forfeitures allocated on behalf of any Participant who
is not a Key Employee shall not be less than the lesser of 3% of such
Participant's Compensation or (in the case where the Employer has no
defined benefit plan which designates this Plan to satisfy Section 401 of
Code) the largest percentage of Employer Contributions and Forfeitures, as
a percentage of the first $200,000 (increased by any cost of living
adjustment made by the Secretary of Treasury or his delegate) of the Key
Employee Compensation, allocated on behalf of any Key Employee for that
year. The minimum allocation is determined without regard to any Social
Security contribution. This minimum allocation shall be made even though
under other Plan provisions, the Participant would not otherwise be
entitled to receive an allocation, or would have received a lesser
allocation for the year because of (a) the Participant's failure to
complete 1,000 Hours of Service (or any equivalent provided in the Plan),
or (b) the Participant's failure to make mandatory Employee Contributions
to the Plan, or (c) Compensation less than a stated amount.
2. For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in Section 1.06 of the Plan.
3. The provision in (1) above shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year.
4. The provision in (1) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of the
Employer and the Employer has provided in the Adoption Agreement that the
minimum allocation or benefit requirement applicable to Top-Heavy Plans
will be met in the other plan or plans.
5. The minimum allocation required under this Section 3.01(E) and Section
3.01(F)(1) (to the extent required to be nonforfeitable under Code Section
416(b)) may not be forfeited under Code Section 411(a)(3)(B) or
411(a)(3)(D).
F. SPECIAL REQUIREMENTS FOR PAIRED PLANS - The Employer maintains paired plans
if the Employer has adopted both a standardized profit sharing plan and a
standardized money purchase pension plan using this Basic Plan Document
<PAGE>
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7
1. Minimum Allocation - The mandatory minimum allocation
provision of Section 3.01(E) shall not apply to any
Participant if the Employer maintains paired plans. Rather,
for each Plan Year, the Employer will provide a minimum
contribution equal to 3% of Compensation for each non-Key
Employee who is entitled to a minimum contribution. Such
minimum contribution will only be made to one of the Plans.
If an Employee is a Participant in only one of the Plans,
the minimum contribution shall be made to that Plan. If the
Employee is a Participant in both Plans, the minimum
contribution shall be made to the money purchase plan.
2. Only One Plan can be Integrated - If the Employer maintains
paired plans, only one of the Plans may provide for the
disparity in contributions which is permitted under Section
401(1) of the Code. In the event that both Adoption
Agreements provide for such integration, only the money
purchase pension plan shall be deemed to be integrated.
G. Return of the Employer Contribution to the Employer Under
Special Circumstances - Any contribution made by the Employer
because of a mistake of fact must be returned to the Employer
within one year of the contribution.
In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under the
Code, any contributions made incident to that initial
qualification by the Employer must be returned to the Employer
within one year after the date the initial qualification is
denied, but only if the application for qualification is made
by the time prescribed by law for filing the Employer's return
for the taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may prescribe.
In the event that a contribution made by the Employer under
this Plan is conditioned on deductibility and is not deductible
under Code Section 404, the contribution, to the extent of the
amount disallowed, must be returned to the Employer within one
year after the deduction is disallowed.
H. Omission of Participant
1. If the Plan is a money purchase plan or a target benefit
plan and, if in any Plan Year, any Employee who should be
included as a Participant is erroneously omitted and
discovery of such omission is not made until after a
contribution by the Employer for the year has been made and
allocated, the Employer shall make a subsequent contribution
with respect to the omitted Employee in the amount which the
Employer would have contributed with respect to that
Employee had he not been omitted.
2. If the Plan is a profit sharing plan, and if in any Plan
Year, any Employee who should be included as a Participant
is erroneously omitted and discovery of such omission is
not made until after the Employer Contribution has been made
and allocated, then the Plan Administrator must re-do the
allocation (if a correction can be made) and inform the
Employee. Alternatively, the Employer may choose to
contribute for the omitted Employee the amount which the
Employer would have contributed for him.
3.02 EMPLOYEE CONTRIBUTIONS
This Plan will not accept nondeductible employee contributions and
matching contributions for Plan Years beginning after the Plan
Year in which this Plan is adopted by the Employer. Employee
contributions for Plan Years beginning after December 31, 1986,
together with any matching contributions as defined in Section
401(m) of the Code, will be limited so as to meet the
nondiscrimination test of Section 401(m) of the Code.
A separate account will be maintained by the Plan Administrator
for the nondeductible employee contributions of each Participant.
A Participant may, upon a written request submitted to the Plan
Administrator, withdraw the lesser of the portion of his
Individual Account attributable to his nondeductible employee
contributions or the amount he contributed as nondeductible
employee contributions.
Employee contributions and earnings thereon will be nonforfeitable
at all times. No Forfeiture will occur solely as a result of an
Employee's withdrawal of employee contributions.
The Plan Administrator will not accept deductible employee
contributions which are made for a taxable year beginning after
December 31, 1986. Contributions made prior to that date will be
maintained in a separate account which will be nonforfeitable at
all times. The account will share in the gains and losses of the
Fund in the same manner as described in Section 4.03 of the Plan.
No part of the deductible employee contribution account will be
used to purchase life insurance. Subject to Section 6.05, joint
and survivor annuity requirements (if applicable), the Participant
may withdraw any part of the deductible employee contribution
account by making a written application to the Plan Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If the Plan Administrator so permits in a uniform and
nondiscriminatory manner, an Employee may contribute a rollover
contribution to the Plan; provided that such Employee submits a
written certification, satisfactory to the Trustee (or Custodian),
that the contribution qualifies as a rollover contribution.
A separate account shall be maintained by the Plan Administrator
for each Employee's rollover contributions which will be
nonforfeitable at all times. Such account will share in the income
and gains and losses of the Fund in the manner described in
Section 4.03 and shall be subject to the Plan's provisions
governing distributions.
For purposes of this Section 3.03, "rollover contribution" means a
contribution described in Sections 402(a)(5), 403(a)(4) or
408(d)(3) of the Code or in any other provision which may be added
to the Code which may authorize rollovers to the Plan.
3.04 TRANSFER CONTRIBUTIONS
If the Plan Administrator so permits in a uniform and
nondiscriminatory manner, the Trustee (or Custodian, if
applicable) may receive any amounts transferred to it from the
trustee or custodian of another plan qualified under Code Section
401(a).
A separate account shall be maintained by the Plan Administrator
for each Employee's transfer contributions which will be
nonforfeitable at all times. Such account will share in the income
and gains and losses of the Fund in the manner described in
Section 4.03 and shall be subject to the Plan's provisions
governing distributions.
3.05 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer or a welfare benefit fund, as defined in Section
419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in Section 415(1)(2) of
the Code, maintained by the Employer, which provides an annual
addition as defined in Section 3.05(E)(1), the following rules
shall apply:
<PAGE>
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8
1. The amount of annual additions which may be credited to the
Participant's Individual Account for any limitation year
will not exceed the lesser of the maximum permissible amount
or any other limitation contained in this Plan. If the
Employer Contribution that would otherwise be contributed
or allocated to the Participant's Individual Account would
cause the annual additions for the limitation year to exceed
the maximum permissible amount, the amount contributed or
allocated will be reduced so that the annual additions for
the limitation year will equal the maximum permissible
amount.
2. Prior to determining the Participant's actual compensation
for the limitation year, the Employer may determine the
maximum permissible amount for a Participant on the basis of
a reasonable estimation of the Participant's Compensation
for the limitation year, uniformly determined for all
participants similarly situated.
3. As soon as is administratively feasible after the end of the
limitation year, the maximum permissible amount for the
limitation year will be determined on the basis of the
Participant's actual compensation for the limitation year.
4. If pursuant to Section 3.05(A)(3) or as a result of the
allocation of Forfeitures there is an excess amount, the
excess will be disposed of as follows:
a. Any nondeductible voluntary employee contributions, to
the extent they would reduce the excess amount, will be
returned to the Participant;
b. If after the application of paragraph (a) an excess
amount still exists, and the Participant is covered
by the Plan at the end of the limitation year, the excess
amount in the Participant's Individual Account will be
used to reduce Employer Contributions (including any
allocation of Forfeitures) for such Participant in the
next limitation year, and each succeeding limitation year
if necessary;
c. If after the application of paragraph (a) an excess
amount still exists, and the Participant is not covered
by the Plan at the end of a limitation year, the excess
amount will be held unallocated in a suspense account.
The suspense account will be applied to reduce future
Employer Contributions (including allocation of any
Forfeitures) for all remaining Participants in the next
limitation year, and each succeeding limitation year if
necessary;
d. If a suspense account is in existence at any time during
a limitation year pursuant to this Section, it will not
participate in the allocation of the Fund's investment
gains and losses. If a suspense account is in existence
at any time during a particular limitation year, all
amounts in the suspense account must be allocated and
reallocated to Participants' Individual Accounts before
any Employer Contributions or any Employee contributions
may be made to the Plan for that limitation year. Excess
amounts may not be distributed to Participants or former
Participants.
B. If, in addition to this Plan, the Participant is covered under
another qualified master or prototype defined contribution plan
maintained by the Employer, a welfare benefit fund, as defined
in Section 419(e) of the Code maintained by the Employer, or
an individual medical account, as defined in Section 415(1)(2)
of the Code, maintained by the Employer, which provides an
annual addition as defined in Section 3.05(E)(1), during any
limitation year, the following rules apply:
1. The annual additions which may be credited to a
Participant's Individual Account under this Plan for any
such limitation will not exceed the maximum permissible
amount reduced by the annual additions credited to a
Participant's Individual Account under the other plans and
welfare benefit funds for the same limitation year. If the
annual additions with respect to the Participant under other
defined contribution plans and welfare benefit funds
maintained by the employer are less than the maximum
permissible amount and the Employer Contribution that would
otherwise be contributed or allocated to the Participant's
Individual Account under this Plan would cause the annual
additions for the limitation year to exceed this limitation,
the amount contributed or allocated will be reduced so that
the annual additions under all such plans and funds for the
limitation year will equal the maximum permissible amount.
If the annual additions with respect to the Participant
under such other defined contribution plans and welfare
benefit funds in the aggregate are equal to or greater than
the maximum permissible amount, no amount will be
contributed or allocated to the Participant's Individual
Account under this Plan for the limitation year.
2. Prior to determining the Participant's actual compensation
for the limitation year, the Employer may determine the
maximum permissible amount for a Participant in the manner
described in Section 3.05(A)(2).
3. As soon as is administratively feasible after the end of the
limitation year, the maximum permissible amount for the
limitation year will be determined on the basis of the
Participant's actual compensation for the limitation year.
4. If, pursuant to Section 3.05(B)(3) or as a result of the
allocation of Forfeitures, a Participant's annual additions
under this Plan and such other plans would result in an
excess amount for a limitation year, the excess amount
will be deemed to consist of the annual additions last
allocated, except that annual additions attributable to a
welfare benefit fund or individual medical account will be
deemed to have been allocated first regardless of the actual
allocation date.
5. If an excess amount was allocated to a Participant on an
allocation date of this Plan which coincides with an
allocation date of another plan, the excess amount
attributed to this Plan will be the product of,
a. the total excess amount allocated as of such date, times
b. the ratio of (i) the annual additions allocated to the
Participant for the limitation year as of such date under
this Plan to (ii) the total annual additions allocated to
the Participant for the limitation year as of such date
under this and all the other qualified master or
prototype defined contribution plans.
6. Any excess amount attributed to this Plan will be disposed
in the manner described in Section 3.05(A)(4).
C. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a
master prototype plan, annual additions which may be credited
to the Participant's Individual Account under this Plan for any
limitation year will be limited in accordance with Sections
3.05(B)(1) through 3.05(B)(6) as though the other plan were a
master or prototype plan unless the Employer provides other
limitations in the Section of the Adoption Agreement titled
"Limitation on Allocation - More Than One Plan."
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9
D. If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in
this Plan, the sum of the Participant's defined benefit plan
fraction and defined contribution plan fraction will not exceed
1.0 in any limitation year. The annual additions which may be
credited to the Participant's Individual Account under this
Plan for any limitation year will be limited in accordance with
the Section of the Adoption Agreement titled "Limitation on
Allocation - More Than One Plan."
E. The following terms shall have the following meanings when
used in this Section 3.05:
1. Annual additions: The sum of the following amounts credited
to a Participant's Individual Account for the limitation
year:
a. Employer Contributions,
b. Employee contributions,
a. Forfeitures, and
d. amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Section 415(1)(2) of the
Code, which is part of a pension or annuity plan
maintained by the Employer are treated as annual
additions to a defined contribution plan. Also amounts
derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such
date, which are attributable to post-retirement medical
benefits, allocated to the separate account of a key
employee, as defined in Section 419A(d)(3) of the Code,
under a welfare benefit fund, as defined in Section
419(a) of the Code, maintained by the Employer are
treated as annual additions to a defined contribution
plan.
For this purpose, any excess amount applied under Section
3.05(A)(4) or 3.05(B)(6) in the limitation year to reduce
Employer Contributions will be considered annual
additions for such limitation year.
2. Compensation: As elected by the Employer in the Adoption
Agreement (and if no election is made, Section 3401(a) wages
will be deemed to have been selected), Compensation
shall mean all of a Participant's:
a. Section 3121 wages. Wages as defined in Section 3121(a)
of the Code, for purposes of calculating Social Security
taxes, but determined without regard to the wage base
limitation in Section 3121(a)(1), the special rules in
Section 3121(v), any rules that limit covered employment
based on the type or location of an Employee's Employer,
and any rules that limit the remuneration included in
wages based on familial relationship or based on the
nature or location of the employment or the services
performed (such as the exceptions to the definition of
employment in Section 3121(b)(1) through (20)).
b. Section 3401(a) wages. Wages as defined in Section
3401(a) of the Code, for the purposes of income tax
withholding at the source but determined without regard
to any rules that limit the remuneration included in
wages based on the nature or location of the employment
or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2)).
c. 415 safe-harbor compensation. Wages, salaries, and fees
for professional services and other amounts received
(without regard to whether or not an amount is paid in
cash) for personal services actually rendered in the
course of employment with the Employer maintaining the
Plan to the extent that the amounts are includable in
gross income (including, but not limited to, commissions
paid salesmen, compensation for services on the basis of
a percentage of profits, commissions on insurance
premiums, tips, bonuses fringe benefits, reimbursements,
and expense allowances), and excluding the following:
1. Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in which
contributed, or employer contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the Employee or any
distributions from a plan of deferred compensation;
2. Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
3. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
4. Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity described in Section 403(b) of
the Code (whether or not the amounts are actually
excludible from the gross income of the Employee).
For any Self-Employed Individual, Compensation will
mean Earned Income. For limitation years beginning
after December 31, 1991, for purposes of applying the
limitations of this Section 3.05, compensation for a
limitation year is the compensation actually paid or
includible in gross income during such limitation
year.
Notwithstanding the preceding sentence, compensation
for a Participant in a defined contribution plan who
is permanently and totally disabled (as defined in
Section 22(e)(3) of the Code) is the compensation such
Participant would have received for the limitation
year if the Participant had been paid at the rate of
compensation paid immediately before becoming
permanently and totally disabled; such imputed
compensation for the disabled participant may be taken
into account only if the Participant is not a Highly
Compensated Employee (as defined in Section 414(q) of
the Code) and contributions made on behalf of such
Participant are nonforfeitable when made.
3. Defined benefit fraction: A fraction, the numerator of which
is the sum of the Participant's projected annual benefits
under all the defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator
of which is the lesser of 125% of the dollar limitation
determined for the limitation year under Section 15(b) and
(d) of the Code or 140% of the highest average compensation,
including any adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first limitation year
beginning after December 31, 1986, in one or more defined
benefit plans maintained by the employer which were in
existence on May 6, 1986, the denominator of this fraction
will not be less than 125% of the sum of the annual
benefits under such plans which the participant had
accrued as of the close of the last limitation year
beginning
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10
before January l, l987, disregarding any changes in the
terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code for all limitation
years beginning before January 1, 1987.
4. Defined contribution dollar limitation: $30,000 or if
greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code as in
effect for the limitation year.
5. Defined contribution fraction: A fraction, the numerator of
which is the sum of the annual additions to the
Participant's account under all the defined contribution
plans (whether or not terminated) maintained by the
Employer for the current and all prior limitation years
(including the annual additions attributable to the
Participant's nondeductible employee contributions to all
defined benefit plans, whether or not terminated,
maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in
Section 419(e) of the Code, and individual medical
accounts, as defined in Section 415(1)(2) of the Code,
maintained by the Employer), and the denominator of which
is the sum of the maximum aggregate amounts for the current
and all prior limitation years of service with the Employer
(regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount
in any limitation year is the lesser of 125% of the dollar
limitation determined under Section 415(b) and (d) of the
Code in effect under Section 415(c)(1)(A) of the Code or
35% of the Participant's compensation for such year.
If the Employee was a participant as of the end of the
first day of the first limitation year beginning after
December 31, 1986, in one or more defined contribution
plans maintained by the Employer which were in existence on
May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under the terms
of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over
1.0 times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction.
The adjustment is calculated using the fractions as they
would be computed as of the end of the last limitation year
beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the Plan made after
May 5, 1986, but using the Section 415 limitation
applicable to the first limitation year beginning on or
after January 1, 1987.
The annual addition for any limitation year beginning
before January 1, 1987, shall not be recomputed to treat
all employee contributions as annual additions.
6. Employer: For purposes of this Section 3.05, Employer shall
mean the Employer that adopts this Plan, and all members of
a controlled group of corporations (as defined in Section
414(b) of the Code as modified by Section 415(h)), all
commonly controlled trades or businesses (as defined in
Section 414(c) as modified by Section 415(h)) or affiliated
service groups (as defined in Section 414(m)) of which the
adopting Employer is a part, and any other entity required
to be aggregated with the Employer pursuant to regulations
under Section 414(o) of the Code.
7. Excess amount: The excess of the Participant's annual
additions for the limitation year over the maximum
permissible amount.
8. Highest average compensation: The average compensation for
the three consecutive years of service with the Employer
that produces the highest average.
9. Limitation year: A calendar year, or the 12-consecutive
month period elected by the Employer in the Section of the
Adoption Agreement titled "Limitation on Allocation - More
Than One Plan." All qualified plans maintained by the
Employer must use the same limitation year. If the
limitation year is amended to a different 12-consecutive
month period, the new limitation year must begin on a date
within the limitation year in which the amendment is made.
10. Master or prototype plan: A plan the form of which is the
subject of a favorable opinion letter from the Internal
Revenue Service.
11. Maximum permissible amount: The maximum annual addition
that may be contributed or allocated to a Participant's
Individual Account under the Plan for any limitation year
shall not exceed the lesser of:
a. the defined contribution dollar limitation, or
b. 25% of the Participant's compensation for the limitation
year.
The compensation limitation referred to in (b) shall not
apply to any contribution for medical benefits (within
the meaning of Section 401(h) or Section 419A(f)(2) of
the Code) which is otherwise treated as an annual
addition under Section 415(1)(1) or 419A(d)(2) of the
Code.
If a short limitation year is created because of an
amendment changing the limitation year to a different
12-consecutive month period, the maximum permissible
amount will not exceed the defined contribution dollar
limitation multiplied by the following fraction:
Number of months in the short limitation year
---------------------------------------------
12
12. Projected annual benefit: The annual retirement benefit
(adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than a
straight life annuity or qualified joint and survivor
annuity) to which the Participant would be entitled under
the terms of the Plan assuming:
a. the Participant will continue employment until normal
retirement age under the Plan (or current age, if
later), and
b. the Participant's compensation for the current
limitation year and all other relevant factors used to
determine benefits under the Plan will remain constant
for all future limitation years.
<PAGE>
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11
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and maintain an
Individual Account in the name of each Participant to reflect
the total value of his interest in the Fund. Each Individual
Account established hereunder shall consist of such
subaccounts as may be needed for each Participant including:
1. a subaccount to reflect Employer Contributions and
Forfeitures allocated on behalf of a Participant;
2. a subaccount to reflect a Participant's rollover
contributions;
3. a subaccount to reflect a Participant's transfer
contributions;
4. a subaccount to reflect a Participant's nondeductible
employee contributions; and
5. a subaccount to reflect a Participant's deductible
employee contributions.
Such subaccounts are primarily for accounting purposes, and do
not necessarily require a segregation of the Fund.
B. The Plan Administrator may establish additional accounts as it
may deem necessary for the proper administration of the Plan,
including, but not limited to, a suspense account for
Forfeitures as required pursuant to Section 6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at fair market value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a Participant's
Individual Account are invested in a Separate Fund for the
Participant, then the value of that portion of such
Participant's Individual Account at any relevant time equals
the sum of the fair market values of the assets in such
Separate Fund, less any applicable charges or penalties.
B. The fair market value of the remainder of each Individual
Account is determined in the following manner:
1. First, the portion of the Individual Account invested in
each Investment Fund as of the previous Valuation Date is
determined. Each such portion is reduced bv any withdrawal
made from the applicable Investment Fund to or for the
benefit of a Participant or his Beneficiary, further
reduced by any amounts forfeited by the Participant
pursuant to Section 6.01(D) and further reduced by any
transfer to another Investment Fund since the previous
Valuation Date and is increased by any amount transferred
from another Investment Fund since the previous Valuation
Date. The resulting amounts are the net Individual Account
portions invested in the Investment Funds.
2. Secondly, the net Individual Account portions invested in
each Investment Fund are adjusted upwards or downwards, pro
rata (i.e., ratio of each net Individual Account portion to
the sum of all net Individual Account portions) so that the
sum of all the net Individual Account portions invested in
an Investment Fund will equal the then fair market value of
the Investment Fund. Notwithstanding the previous sentence,
for the first Plan year only, the net Individual Account
portions shall be the sum of all contributions made to each
Participant's Individual Account during the first Plan
Year.
3. Thirdly, any contributions to the Plan and Forfeitures are
allocated in accordance with the appropriate allocation
provisions of Section 3. For purposes of Section 4,
contributions made by the Employer for any Plan Year but
after that Plan Year will be considered to have been made
on the last day of that Plan Year regardless of when paid
to the Trustee (or Custodian, if applicable).
Amounts contributed between Valuation Dates will not be
credited with investment gains or losses until the next
following Valuation Date.
4. Finally, the portions of the Individual Account invested in
each Investment Fund (determined in accordance with (1),
(2) and (3) above) are added together.
4.04 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than a lump
sum, the Plan Administrator may place that Participant's account
balance into a segregated Investment Fund for the purpose of
maintaining the necessary liquidity to provide benefit
installments on a periodic basis.
4.05 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year, the Plan
Administrator shall furnish a statement to each Participant
indicating the Individual Account balances of such Participant as
of the last Valuation Date in such Plan Year.
4.06 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may establish
different or additional procedures (which shall be uniform and
nondiscriminatory) for determining the fair market value of the
Individual Accounts.
SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund which
shall consist of the assets of the Plan held bv the Trustee (or
Custodian, if applicable) pursuant to this Section 5. Assets
within the Fund may be pooled on behalf of all Participants,
earmarked on behalf of each Participant or be a combination of
pooled and earmarked. To the extent that assets are earmarked for
a particular Participant, they will be held in a Separate Fund for
that Participant.
No part of the corpus or income of the Fund may be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to individual
direction of investments by Participants), the Employer, not the
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12
Trustee (or Custodian, if applicable), shall have exclusive
management and control over the investment of the Fund into any
permitted investment. Notwithstanding the preceding sentence, a
Trustee with full trust powers (under applicable law) may make an
agreement with the Employer whereby the Trustee will manage the
investment of all or a portion of the Fund. Any such agreement
shall be in writing and set forth such matters as the Trustee
deems necessary or desirable.
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST
POWERS
This Section 5.03 applies where a financial organization has
indicated in the Adoption Agreement that it will serve, with
respect to this Plan, as Custodian or as Trustee without full
trust powers (under applicable law). Hereinafter, a financial
organization Trustee without full trust powers (under applicable
law) shall be referred to as a Custodian.
A. Permissible Investments - The assets of the Plan shall be
invested only in those investments which are available through
the Custodian in the ordinary course of business which the
Custodian may legally hold in a qualified plan and which the
Custodian chooses to make available to Employers for
qualified plan investments.
B. Responsibilities of the Custodian - The responsibilities of the
Custodian shall be limited to the following:
1. To receive Plan contributions and to hold, invest and
reinvest the Fund without distinction between principal and
interest; provided, however, that nothing in this Plan shall
require the Custodian to maintain physical custody of stock
certificates (or other indicia of ownership of any type of
asset) representing assets within the Fund;
2. To maintain accurate records of contributions, earnings,
withdrawals and other information the Custodian deems
relevant with respect to the Plan;
3. To make disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a statement which
reflects the value of the investments in the hands of the
Custodian as of the end of each Plan Year.
C. Powers of the Custodian - Except as otherwise provided in this
Plan, the Custodian shall have the power to take any action
with respect to the Fund which it deems necessary or advisable
to discharge its responsibilities under this Plan including,
but not limited to, the following powers:
1. To invest all or a portion of the Fund (including idle cash
balances) in time deposits, savings accounts, money market
accounts or similar investments bearing a reasonable rate of
interest in the Custodian's own savings department or the
savings department of another financial organization;
2. To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges or subscription rights and to make any payments
incidental thereto; to oppose, or to consent to, or
otherwise participate in, corporate reorganizations or other
changes affecting corporate securities, and to pay any
assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with
respect to stocks, bonds, securities or other property;
3. To hold securities or other property of the Fund in its own
name, in the name of its nominee or in bearer form; and
4. To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry
out the powers herein granted.
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND
INDIVIDUAL TRUSTEE
This Section 5.04 applies where a financial organization has
indicated in the Adoption Agreement that it will serve as
Trustee with full trust powers. This Section also applies
where one or more individuals are named in the Adoption
Agreement to serve as Trustee(s).
A. Permissible Investments - The Trustee may invest the
assets of the Plan in property of any character, real or
personal, including, but not limited to the following:
stocks, including shares of open-end investment companies
(mutual funds); bonds; notes; debentures; options;
limited partnership interests; mortgages; real estate or
any interests therein; unit investment trusts; Treasury
Bills, and other U.S. Government obligations; common
trust funds, combined investment trusts, collective trust
funds or commingled funds maintained by a bank or similar
financial organization (whether or not the Trustee
hereunder); savings accounts, time deposits or money
market accounts of a bank or similar financial
organization (whether or not the Trustee hereunder);
annuity contracts; life insurance policies; or in such
other investments as is deemed proper without regard to
investments authorized by statute or rule of law
governing the investment of trust funds but with regard
to ERISA and this Plan.
Notwithstanding the preceding sentence, the Prototype
Sponsor may, as a condition of making the Plan available
to the Employer for adoption, limit the types of property
in which the Trustee (other than a financial organization
Trustee with full trust powers), is permitted to invest.
B. Responsibilities of the Trustee - The responsibilities of
the Trustee shall be limited to the following:
1. To receive Plan contributions and to hold, invest and
reinvest the Fund without distinction between
principal and interest; provided, however, that
nothing in this Plan shall require the Trustee to
maintain physical custody of stock certificates (or
other indicia of ownership) representing assets within
the Fund;
2. To maintain accurate records of contributions,
earnings, withdrawals and other information the
Trustee deems relevant with respect to the Plan;
3. To make disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the
Plan Administrator; and
4. To furnish to the Plan Administrator a statement which
reflects the value of the investments in the hands of
the Trustee as of the end of each Plan Year.
C. Powers of the Trustee - Except as otherwise provided in
this Plan, the Trustee shall have the power to take any
action with respect to the Fund which it deems necessary
or advisable to discharge its responsibilities under this
Plan including, but not limited to, the following powers:
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13
1. To hold any securities or other property of the Fund in its
own name, in the name of its nominee or in bearer form;
2. To purchase or subscribe for securities issued, or real
property owned, by the Employer or any trade or business
under common control with the Employer but only if the
prudent investment and diversification requirements of ERISA
are satisfied;
3. To sell, exchange, convey, transfer or otherwise dispose of
any securities or other property held by the Trustee, by
private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency,
or propriety of any such sale or other disposition, with or
without advertisement;
4. To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges or subscription rights and to make any payments
incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes
affecting corporate securities, and to delegate discretionary
powers, and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities or other
property;
5. To invest any part or all of the Fund (including idle cash
balances) in certificates of deposit, demand or time
deposits, savings accounts, money market accounts or similar
investments of the Trustee (if the Trustee is a bank or
similar financial organization), the Prototype Sponsor or any
affiliate of such Trustee or Prototype Sponsor, which bear a
reasonable rate of interest;
6. To provide sweep services without the receipt by the Trustee
of additional compensation or other consideration (other than
reimbursement of direct expenses properly and actually
incurred in the performance of such services);
7. To hold in the form of cash for distribution or investment
such portion of the Fund as, at any time and from time-
to-time, the Trustee shall deem prudent and deposit such cash
in interest bearing or noninterest bearing accounts;
8. To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out
the powers herein granted;
9. To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to
commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and legal
and administrative proceedings;
10. To employ suitable agents and counsel, to contract with
agents to perform administrative and recordkeeping duties and
to pay their reasonable expenses, fees and compensation, and
such agent or counsel may or may not be agent or counsel for
the Employer;
11. To cause any part or all of the Fund, without limitation as
to amount, to be commingled with the funds of other trusts
(including trusts for qualified employee benefit plans) by
causing such money to be invested as a part of any pooled,
common, collective or commingled trust fund heretofore or
hereafter created by any trustee (if the Trustee is a
bank), by the Prototype Sponsor, by any affiliate bank of
such a Trustee or the Prototype Sponsor, or by such a
Trustee, the Prototype Sponsor or such an affiliate in
participation with others; the instrument or Instruments
establishing such trust fund or funds, as amended, being made
part of this Plan and trust so long as any portion of the
Fund shall be invested through the medium thereof.
12. Generally to do all such acts, execute all such instruments,
initiate all such proceedings, and exercise all such rights
and privileges with relation to property constituting the
Fund as if the Trustee were the absolute owner thereof.
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee (or Custodian, if applicable)
from time-to-time to divide and redivide the Fund into one or more
Investment Funds. Such Investment Funds may include, but not be
limited to, Investment Funds representing the assets under the
control of an investment manager pursuant to Section 5.12 and
Investment Funds representing investment options available for
individual direction by Participants pursuant to Section 5.14.
Upon each division or redivision, the Employer may specify the
part of the Fund to be allocated to each such Investment Fund and
the terms and conditions, if any, under which the assets in such
Investment Fund shall be invested.
5.06 COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall receive such
reasonable compensation as may be agreed upon by the Trustee (or
Custodian) and the Employer. The Trustee (or Custodian) shall be
entitled to reimbursement by the Employer for all proper expenses
incurred in carrying out his duties under this Plan, including
reasonable legal, accounting and actuarial expenses. If not paid
by the Employer, such compensation and expenses may be charged
against the Fund.
All taxes of any kind that may be levied or assessed under
existing or future laws upon, or in respect of, the Fund or the
income thereof shall be paid from the Fund.
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if
applicable) and Plan Administrator the information which each
party deems necessary for the administration of the Plan
including, but not limited to, changes in a Participant's status,
eligibility, mailing addresses and other such data as may be
required. The Trustee (or Custodian) and Plan Administrator shall
be entitled to act on such information as is supplied them and
shall have no duty or responsibility to further verify or question
such information.
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding
federal income taxes from distributions from the Plan, unless the
Participant (or Beneficiary, where applicable) elects not to have
such taxes withheld. However, the Trustee (or Custodian, if
applicable) shall act as agent for the Plan Administrator to
withhold such taxes and to make the appropriate distribution
reports, subject to the Plan Administrator's obligation to furnish
all the necessary information to so withhold to the Trustee (or
Custodian).
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign at any time
by giving 30 days advance written notice to the Employer. The
resignation shall become effective 30 days after receipt of such
notice unless a shorter period is agreed upon.
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14
The Employer may remove any Trustee (or Custodian) at any time by
giving written notice to such Trustee (or Custodian) and such
removal shall be effective 30 days after receipt of such notice
unless a shorter period is agreed upon. The Employer shall have
the power to appoint a successor Trustee (or Custodian).
Upon such resignation or removal, if the resigning or removed
Trustee (or Custodian) is the sole Trustee (or Custodian), he
shall transfer all of the assets of the Fund then held by him as
expeditiously as possible to the successor Trustee (or Custodian)
after paying or reserving such reasonable amount as he shall deem
necessary to provide for the expense in the settlement of the
accounts and the amount of any compensation due him and any sums
chargeable against the Fund for which he may be liable. If the
Funds as reserved are not sufficient for such purpose, then he
shall be entitled to reimbursement from the successor Trustee (or
Custodian) out of the assets in the successor Trustee's (or
Custodian's) hands under this Plan. If the amount reserved shall
be in excess of the amount actually needed, the former Trustee (or
Custodian) shall return such excess to the successor Trustee (or
Custodian).
Upon receipt of such assets, the successor Trustee (or Custodian)
shall thereupon succeed to all of the powers and responsibilities
given to the Trustee (or Custodian) by this Plan.
The resigning or removed Trustee (or Custodian) shall render an
accounting to the Employer and unless objected to by the Employer
within 30 days of its receipt, the accounting shall be deemed to
have been approved and the resigning or removed Trustee (or
Custodian) shall be released and discharged as to all matters set
forth in the accounting. Where a financial organization is serving
as Trustee (or Custodian) and it is merged with or bought by
another organization (or comes under the control of any federal or
state agency), that organization shall serve as the successor
Trustee (or Custodian) of this Plan, but only if it is the type of
organization that can so serve under applicable law.
Where the Trustee or Custodian is serving as a nonbank trustee or
custodian pursuant to Section 1.401-12(n) of the Income Tax
Regulations, the Employer will appoint a successor Trustee (or
Custodian) upon notification by the Commissioner of Internal
Revenue that such substitution is required because the Trustee (or
Custodian) has failed to comply with the requirements of Section
1.401-12(n) or is not keeping such records or making such returns
or rendering such statements as are required by forms or
regulations.
5.10 DEGREE OF CARE
Limitations of Liability - The Trustee (or Custodian, if
applicable) shall not be liable for any losses incurred by the
Fund by any lawful direction to invest communicated by the
Employer, Plan Administrator or any Participant or Beneficiary.
The Trustee (or Custodian) shall be under no liability for
distributions made or other action taken or not taken at the
written direction of the Plan Administrator. It is specifically
understood that the Trustee (or Custodian) shall have no duty or
responsibility with respect to the determination of matters
pertaining to the eligibility of any Employee to become a
Participant or remain a Participant hereunder, the amount of
benefit to which a Participant or Beneficiary shall be entitled
to receive hereunder, whether a distribution to Participant or
Beneficiary is appropriate under the terms of the Plan or the size
and type of any policy to be purchased from any insurer for any
Participant hereunder or similar matters; it being understood that
all such responsibilities under the Plan are vested in the Plan
Administrator.
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR CUSTODIAN)
Notwithstanding any other provision herein, and except as may be
otherwise provided by ERISA, the Employer shall indemnify and hold
harmless the Trustee (or Custodian, if applicable) and the
Prototype Sponsor, their officers, directors, employees, agents,
their heirs, executors, successors and assigns, from and against
any and all liabilities, damages, judgments, settlements, losses,
costs, charges, or expenses (including legal expenses) at any time
arising out of or incurred in connection with any action taken by
such parties in the performance of their duties with respect to
this Plan, unless there has been a final adjudication of gross
negligence or willful misconduct in the performance of such
duties.
Further, except as may be otherwise provided by ERISA, the
Employer will indemnify the Trustee (or Custodian) and Prototype
Sponsor from any liability, claim or expense (including legal
expense) which the Trustee (or Custodian) and Prototype Sponsor
shall incur by reason of or which results, in whole or in part,
from the Trustee's (or Custodian's) or Prototype Sponsor's
reliance on the facts and other directions and elections the
Employer communicates or fails to communicate.
5.12 INVESTMENT MANAGERS
A. Definition of Investment Manager - The Employer may appoint one
or more investment managers to make investment decisions with
respect to all or a portion of the Fund. The investment manager
shall be any firm or individual registered as an investment
adviser under the Investment Advisers Act of 1940, a bank as
defined in said Act or an insurance company qualified under the
laws of more than one state to perform services consisting of
the management, acquisition or disposition of any assets of the
Plan.
B. Investment Manager's Authority - A separate Investment Fund
shall be established representing the assets of the Fund
invested at the direction of the investment manager. The
investment manager so appointed shall direct the Trustee (or
Custodian, if applicable) with respect to the investment of
such Investment Fund. The investments which may be acquired at
the direction of the investment manager are limited to those
described in Section 5.03(A) (for Custodians) Section 5.04(A)
(for Trustees).
C. Written Agreement - The appointment of any investment manager
shall be by written agreement between the Employer and the
investment manager and a copy of such agreement (and any
modification or termination thereof) must be given to the
Trustee (or Custodian).
The agreement shall set forth, among other matters, the
effective date of the investment manager's appointment and an
acknowledgment by the investment manager that it is a fiduciary
of the Plan under ERISA.
D. Concerning the Trustee (or Custodian) - Written notice of each
appointment of an investment manager shall be given to the
Trustee (or Custodian) in advance of the effective date of such
appointment. Such notice shall specify which portion of the
Fund will constitute the Investment Fund subject to the
investment manager's direction. The Trustee (or Custodian)
shall comply with the investment direction given to it by the
investment manager and will not be liable for any loss which
may result by reason of any action (or inaction) it takes at
the direction of the investment manager.
5.13 MATTERS RELATING TO INSURANCE
A. If a life insurance policy is to be purchased for a
Participant, the aggregate premium for certain life insurance
for each Participant must be less than a certain percentage of
the aggregate Employer Contributions and Forfeitures allocated
to a Participant's Individual Account at any particular time as
follows:
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15
1. Ordinary Life Insurance - For purposes of these incidental
insurance provisions, ordinary life insurance contracts are
contracts with both nondecreasing death benefits and
nonincreasing premiums. If such contracts are purchased,
less than 50% of the aggregate Employer Contributions and
Forfeitures allocated to any Participant's Individual
Account will be used to pay the premiums attributable to
them.
2. Term and Universal Life Insurance - No more than 25% of the
aggregate Employer Contributions and Forfeitures allocated
to any Participant's Individual Account will be used to pay
the premiums on term life insurance contracts, universal
life insurance contracts, and all other life insurance
contracts which are not ordinary life.
3. Combination - The sum of 50% of the ordinary life insurance
premiums and all other life insurance premiums will not
exceed 25% of the aggregate Employer Contributions and
Forfeitures allocated to any Participant's Individual
Account.
B. Any dividends or credits earned on insurance contracts for a
Participant shall be allocated to such Participant's
Individual Account.
C. Subject to Section 6.05, the contracts on a Participant's life
will be converted to cash or an annuity or distributed to the
Participant upon commencement of benefits.
D. The Trustee (or Custodian, if applicable) shall apply for and
will be the owner of any insurance contract(s) purchased under
the terms of this Plan. The insurance contract(s) must provide
that proceeds will be payable to the Trustee (or Custodian),
however, the Trustee (or Custodian) shall be required to pay
over all proceeds of the contract(s) to the Participant's
designated Beneficiary in accordance with the distribution
provisions of this Plan. A Participant's spouse will be the
designated Beneficiary of the proceeds in all circumstances
unless a qualified election has been made in accordance with
Section 6.05, Joint and Survivor Annuity Requirements, if
applicable. Under no circumstances shall the Fund retain any
part of the proceeds. In the event of any conflict between the
terms of this Plan and the terms of any insurance contract
purchased hereunder, the Plan provisions shall control.
E. The Employer may direct the Trustee (or Custodian) to sell and
distribute insurance or annuity contracts to a Participant (or
other party as may be permitted) in accordance with applicable
law or regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each Participant may
individually direct the Trustee (or Custodian, if applicable)
regarding the investment of part or all of his Individual
Account. To the extent so directed, the Employer, Plan
Administrator, Trustee (or Custodian) and all other fiduciaries
are relieved of their fiduciary responsibility under Section
404 of ERISA.
The Plan Administrator shall direct that a Separate Fund be
established in the name of each Participant who directs the
investment of part or all of his Individual Account. Each
Separate Fund shall be charged or credited (as appropriate)
with the earnings, gains, losses or expenses attributable to
such Separate Fund. No fiduciary shall be liable for any loss
which results from a Participant's individual direction. The
assets subject to individual direction shall not be invested in
collectibles as that term is defined in Section 408(m) of the
Code.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction as it
deems necessary or advisable including, but not limited to,
rules describing (1) which portions of Participant's
Individual Account can be individually directed; (2) the
frequency of investment changes; (3) the forms and procedures
for making investment changes; and (4) the effect of a
Participant's failure to make a valid direction.
Subject to the approval of the Prototype Sponsor, the Plan
Administrator may, in a uniform and nondiscriminatory manner,
limit the available investments for Participants' individual
direction to certain specified investment options (including,
but not limited to, certain mutual funds, investment contracts,
deposit accounts and group trusts). The Plan Administrator may
permit, in a uniform and nondiscriminatory manner, a
Beneficiary of a deceased Participant to individually direct
in accordance with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. When Distributable
1. Entitlement to Distribution - The Vested portion of a
Participant's Individual Account shall be distributable
to the Participant upon the occurrence of any of the
following events:
a. the Participant's Termination of Employment;
b. the Participant's attainment of Normal Retirement Age;
c. the Participant's Disability; or
d. the termination of the Plan.
2. Written Request: When Distributed - A Participant
entitled to distribution who wishes to receive a
distribution must submit a written request to the Plan
Administrator. Such request shall be made upon a form
provided by the Plan Administrator. Upon a valid request,
the Plan Administrator shall direct the Trustee (or
Custodian, if applicable) to commence distribution no
later than 90 days following the later of:
a. the close of the Plan Year within which the event
occurs which entitles the Participant to distribution;
or
b. the close of the Plan Year in which the request is
received.
3. Special Rules For Withdrawals During Service - If this is
a profit sharing plan and the Adoption Agreement so
provides, a Participant who is not otherwise entitled to
a distribution under Section 6.01(A)(1) may elect to
receive a distribution of all or a part of the Vested
portion of his Individual Account, subject to the
requirements of Section 6.05 and further subject to the
following limits:
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16
a. Participant for 5 or more years. An Employee who has been
a Participant in the Plan for 5 or more years may
withdraw up to his entire Vested portion of his
Individual Account.
b. Participant for less than 5 years. An Employee who has
been a Participant in the Plan for less than 5 years may
withdraw only the amount which has been in his Vested
Individual Account attributable to Employer Contributions
for at least 2 full Plan Years.
However, if the distribution is on account of hardship,
the Participant may withdraw up to his entire Vested
portion of his Individual Account. For purposes of the
preceding sentence, hardship is defined as an immediate
and heavy financial need of the Participant where such
Participant lacks other available resources. The
following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for
medical care, described in Section 213(d) of the Code, of
the Employee, the Employee's spouse or dependents; the
purchase (excluding mortgage payments) of a principal
residence for the Employee; payment of tuition and
related educational fees for the next 12 months of post-
secondary education for the Employee, the Employee's
spouse, children or dependents; or the need to prevent
the eviction of the Employee from, or a foreclosure on
the mortgage of, the Employee's principal residence.
A distribution will be considered as necessary to satisfy
an immediate and heavy financial need of the Employee
only if:
1) The employee has obtained all distributions, other
than hardship distributions, and all nontaxable loans
under all plans maintained by the Employer;
2) The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts
necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result
from the distribution).
4. Commencement of Benefits - Notwithstanding any other
provision, unless the Participant elects otherwise,
distribution of benefits will begin no later than the 60th
day after the latest of the close of the Plan Year in which:
a. the Participant attains Normal Retirement Age;
b. occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or
c. the Participant incurs a Termination of Employment.
Notwithstanding the foregoing, the failure of a
Participant and spouse to consent to a distribution while
a benefit is immediately distributable, within the
meaning of Section 6.02(B), shall be deemed to be an
election to defer commencement of payment of any benefit
sufficient to satisfy this Section 6.01(A)(4).
B. Determining the Vested Portion - In determining the Vested
portion of a Participant's Individual Account, the following
rules apply:
1. Employer Contributions and Forfeitures - The Vested portion
of a Participant's Individual Account derived from Employer
Contributions and Forfeitures is determined by applying the
vesting schedule selected in the Adoption Agreement (or the
vesting schedule described in Section 6.01(C) if the Plan is
a Top-Heavy Plan).
2. Rollover and Transfer Contributions - A Participant is fully
Vested in his rollover contributions and transfer
contributions.
3. Fully Vested Under Certain Circumstances - A Participant is
fully Vested in his Individual Account if any of the
following occurs:
a. the Participant reaches Normal Retirement Age;
b. the Participant incurs a Disability;
c. the Participant dies;
d. the Plan is terminated or partially terminated; or
e. there exists a complete discontinuance of contributions
under the Plan (if this Plan is a profit sharing plan).
4. Participants in a Prior Plan - If a Participant was a
participant in a Prior Plan on the Effective Date, his
Vested percentage shall not be less than it would have been
under such Prior Plan as computed on the Effective Date.
C. Minimum Vesting Schedule for Top-Heavy Plans - The following
vesting provisions apply for any Plan Year in which this Plan
is a Top-Heavy Plan.
Notwithstanding the other provisions of this Section 6.01 or
the vesting schedule selected in the Adoption Agreement (unless
those provisions or that schedule provide for more rapid
vesting), a Participant's Vested portion of his Individual
Account attributable to Employer Contributions and Forfeitures
shall be determined in accordance with the following minimum
vesting schedule:
Years of Vesting Service Vested Percentage
1 0
2 20
3 40
4 60
5 80
6 100
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17
This minimum vesting schedule applies to all benefits within
the meaning of Section 411(a)(7) of the Code, except those
attributable to employee contributions including benefits
accrued before the effective date of Section 416 of the Code
and benefits accrued before the Plan became a Top-Heavy Plan.
Further, no decrease in a Participant's Vested percentage may
occur in the event the Plan's status as a Top-Heavy Plan
changes for any Plan Year. However, this Section 6.01(C) does
not apply to the Individual Account of any Employee who does
not have an Hour of Service after the Plan has initially become
a Top-Heavy Plan and such Employee's Individual Account
attributable to Employer Contributions and Forfeitures will be
determined without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan, then in accordance
with the above restrictions, the vesting schedule as selected
in the Adoption Agreement will govern. If the vesting schedule
under the Plan shifts in or out of top-heavy status, such shift
is an amendment to the vesting schedule and the election in
Section 9.04 applies.
D. Break in Vesting Service and Forfeitures - If a Participant
incurs a Termination of Employment, any portion of his
Individual Account which is not Vested shall be held in a
suspense account. Such suspense account shall share in any
increase or decrease in the fair market value of the assets of
the Fund in accordance with Section 4 of the Plan. The
disposition of such suspense account shall be as follows:
1. No Breaks in Vesting Service - If a Participant neither
receives nor is deemed to receive a distribution pursuant to
Section 6.01(D)(2) or (3) and the Participant returns to the
service of the Employer before incurring 5 consecutive
Breaks in Vesting Service, there shall be no Forfeiture and
the amount in such suspense account shall be recredited to
such Participant's Individual Account.
2. Cash-out of Certain Participants - If the value of the
Vested portion of such Participant's Individual Account
derived from Employee and Employer Contributions does not
exceed $3,500, the Participant shall receive a distribution
of the entire Vested portion of such Individual Account and
the portion which is not Vested shall be treated as a
Forfeiture. For purposes of this Section, if the value of
the Vested portion of a Participant's Individual Account is
zero, the Participant shall be deemed to have received a
distribution of such Vested Individual Account. A
Participant's Vested Individual Account balance shall not
include accumulated deductible employee contributions within
the meaning of Section 72(o)(5)(B) of the Code for Plan
Years beginning prior to January 1, 1989.
3. Participants Who Elect to Receive Distributions - If such
Participant elects to receive a distribution, in accordance
with Section 6.02(B), of the value of the Vested portion of
his Individual Account derived from Employee and Employer
Contributions, the portion which is not Vested shall be
treated as a Forfeiture.
4. Re-employed Participants - If a Participant receives or is
deemed to receive a distribution pursuant to Section
6.01(D)(2) or (3) above and the Participant resumes
employment covered under this Plan, the Participant's
Employer-derived Individual Account balance will be restored
to the amount on the date of distribution if the Participant
repays to the Plan the full amount of the distribution
attributable to Employer Contributions before the earlier of
5 years after the first date on which the Participant is
subsequently re-employed by the Employer, or the date the
Participant incurs 5 consecutive Breaks in Vesting Service
following the date of the distribution.
Amounts forfeited under Section 6.01(D) shall be allocated
in accordance with Section 3.01(C) as of the last day of the
Plan Year during which the Forfeiture arises. Any
restoration of a Participant's Individual Account pursuant
to Section 6.01(D)(4) shall be made from other Forfeitures,
income or gain to the Fund or contributions made by the
Employer.
E. Distribution Prior to Full Vesting - If a distribution is
made to a Participant who was not then fully Vested in his
Individual Account derived from Employer Contributions and
the Participant may increase his Vested percentage in his
Individual Account, then the following rules shall apply:
1. a separate account will be established for the
Participant's interest in the Plan as of the time of the
distribution, and
2. at any relevant time the Participant's Vested portion of
the separate account will be equal to an amount ("X")
determined by the formula: X=P (AB + (R x D))-(R x D)
where "P" is the Vested percentage at the relevant time,
"AB" is the separate account balance at the relevant
time; "D" is the amount of the distribution; and "R" is
the ratio of the separate account balance at the relevant
time to the separate account balance after distribution.
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. Value of Individual Account Does Not Exceed $3,500 -
If the value of the Vested portion of a Participant's
Individual Account derived from Employee and Employer
Contributions does not exceed $3,500, distribution
from the Plan shall be made to the Participant in a
single lump sum in lieu of all other forms of
distribution from the Plan.
B. Value of Individual Account Exceeds $3,500
1. If the value of the Vested portion of a
Participant's Individual Account derived from
Employee and Employer Contributions exceeds (or at
the time of any prior distribution exceeded)
$3,500, and the Individual Account is immediately
distributable, the Participant and the
Participant's spouse (or where either the
Participant or the spouse died, the survivor) must
consent to any distribution of such Individual
Account. The consent of the Participant and the
Participant's spouse shall be obtained in writing
within the 90-day period ending on the annuity
starting date. The annuity starting date is the
first day of the first period for which an amount
is paid as an annuity or any other form. The Plan
Administrator shall notify the Participant and the
Participant's spouse of the right to defer any
distribution until the Participant's Individual
Account is no longer immediately distributable.
Such notification shall include a general
description of the material features, and an
explanation of the relative values of, the optional
forms of benefit available under the Plan in a
manner that would satisfy the notice requirements
of Section 417(a)(3) of the Code, and shall be
provided no less than 30 days and no more than 90
days prior to the annuity starting date. If a
distribution is one to which Sections 401(a)(11)
and 417 of the Internal Revenue Code do not apply
such distribution may commence less than 30 days
after the notice required under Section 1.411(a)-
11(c) of the Income Tax Regulations is given,
provided that:
a. the Plan Administrator clearly informs the
Participant that the Participant has a right to
a period of at least 30 days after receiving the
notice to consider the decision of whether or
not to elect a distribution (and, if applicable,
a particular distribution option), and
b. the Participant, after receiving the notice,
affirmatively elects a distribution.
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18
Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form of
a qualified joint and survivor annuity while the Individual
Account is immediately distributable. Neither the consent of
the Participant nor the Participant's spouse shall be
required to the extent that a distribution is required to
satisfy Section 401(a)(9) or Section 415 of the Code. In
addition, upon termination of this Plan if the Plan does not
offer an annuity option (purchased from a commercial
provider), the Participant's Individual Account may, without
the Participant's consent, be distributed to the Participant
or transferred to another defined contribution plan (other
than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code) within the same controlled group.
An Individual Account is immediately distributable if any
part of the Individual Account could be distributed to the
Participant (or surviving spouse) before the Participant
attains or would have attained (if not deceased) the later
of Normal Retirement Age or age 62.
2. For purposes of determining the applicability of the
foregoing consent requirements to distributions made before
the first day of the first Plan year beginning after
December 31, 1988, the Vested portion of a Participant's
Individual Account shall not include amounts attributable to
accumulated deductible employee contributions within the
meaning of Section 72(o)(5)(B) of the Code.
C. Other Forms of Distribution to Participant - If the value of
the Vested portion of a Participant's Individual Account
exceeds $3,500 and the Participant has properly waived the
joint and survivor annuity, as described in Section 6.05, the
Participant may request in writing that the Vested portion of
his Individual Account be paid to him in one or more of the
following forms of payment: (1) in a lump sum; (2) in
installment payments over a period not to exceed the life
expectancy of the Participant or the joint and last survivor
life expectancy of the Participant and his designated
Beneficiary; or (3) applied to the purchase of an annuity
contract.
Notwithstanding anything in this Section 6.02 to the contrary,
a Participant cannot elect payments in the form of an annuity
if the safe harbor rules of Section 6.05(F) apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. Designation of Beneficiary - Spousal Consent - Each Participant
may designate, upon a form provided by and delivered to the
Plan Administrator, one or more primary and contingent
Beneficiaries to receive all or a specified portion of his
Individual Account in the event of his death. A Participant may
change or revoke such Beneficiary designation from time to time
by completing and delivering the proper form to the Plan
Administrator.
In the event that a Participant wishes to designate a primary
Beneficiary who is not his spouse, his spouse must consent in
writing to such designation, and the spouse's consent must
acknowledge the effect of such designation and be witnessed by
a notary public. Notwithstanding this consent requirement, if
the Participant establishes to the satisfaction of the Plan
Administrator that such written consent may not be obtained
because there is no spouse or the spouse cannot be located, no
consent shall be required. Any change of Beneficiary will
require a new spousal consent.
B. Payment to Beneficiary - If a Participant dies before his
entire Individual Account has been paid to him, such deceased
Participant's Individual Account shall be payable to any
surviving Beneficiary designated by the Participant, or, if no
Beneficiary survives the Participant, to the Participant's
estate.
C. Written Request: When Distributed - A Beneficiary of a deceased
Participant entitled to a distribution who wishes to receive
a distribution must submit a written request to the Plan
Administrator. Such request shall be made upon a form provided
by the Plan Administrator. Upon a valid request, the Plan
Administrator shall direct the Trustee (or Custodian) to
commence distribution no later than 90 days following the later
of:
1. the close of the Plan Year within which the Participant
dies; or
2. the close of the Plan Year in which the request is received.
D. Location of Participant or Beneficiary Unknown - In the event
that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the
expiration of 5 years after it becomes payable, remain unpaid
solely by reason of the inability of the Plan Administrator,
after sending a registered letter, return receipt requested, to
the last known address, and after further diligent effort, to
ascertain the whereabouts of such Participant or his
Beneficiary, the amount so distributable shall be forfeited and
allocated in accordance with the terms of the Plan. In the
event a Participant or Beneficiary is located subsequent to his
benefit being forfeited, such benefit shall be restored;
provided, however, if all or a portion of such amount has been
lost by reason of escheat under state law, the Participant or
Beneficiary shall cease to be entitled to the portion so lost.
6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. Value of Individual Account Does Not Exceed $3,500 - If the
value of the Participant's Individual Account derived from
Employee and Employer Contributions does not exceed $3,500,
the Plan Administrator shall direct the Trustee (or
Custodian, if applicable) to make a distribution to the
Beneficiary in a single lump sum in lieu of all other forms
of distribution from the Plan.
B. Value of Individual Account Exceeds $3,500 - If the value of a
Participant's Individual Account derived from Employee and
Employer Contributions exceeds $3,500 the preretirement
survivor annuity requirements of Section 6.05 shall apply
unless waived in accordance with that Section or unless the
safe harbor rules of Section 6.05(F) apply.
C. Other Forms of Distribution to Beneficiary - If the value of a
Participant's Individual Account exceeds $3,500 and the
Participant has properly waived the preretirement survivor
annuity, as described in Section 6.05 (if applicable), the
Beneficiary may, subject to the requirements of Section 6.06,
request in writing that the Participant's Individual Account be
paid to him as follows: (1) in a lump sum; or (2) in
installment payments over a period not to exceed the life
expectancy of such Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any Participant
who is credited with at least one Hour of Eligibility Service
with the Employer on or after August 23, 1984, and such other
participants as provided in Section 6.05(G).
<PAGE>
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19
B. Qualified Joint and Survivor Annuity - Unless an optional form
of benefit is selected pursuant to a qualified election within
the 904-day period ending on the annuity starting date, a
married Participant's Vested account balance will be paid in
the form of a qualified joint and survivor annuity and an
unmarried Participant's Vested account balance will be paid in
the form of a life annuity. The Participant may elect to have
such annuity distributed upon attainment of the earliest
retirement age under the Plan.
C. Qualified Preretirement Survivor Annuity - Unless an optional
form of benefit has been selected within the election period
pursuant to a qualified election, if a Participant dies before
the annuity starting date then the Participant's Vested account
balance shall be applied toward the purchase of an annuity for
the life of the surviving spouse. The surviving spouse may
elect to have such annuity distributed within a reasonable
period after the Participant's death.
D. Definitions
1. Election Period - The period which begins on the first day
of the Plan Year in which the Participant attains age 35 and
ends on the date of the Participant's death. If a
Participant separates from service prior to the first day of
the Plan Year in which age 35 is attained, with respect to
the account balance as of the date of separation, the
election period shall begin on the date of separation.
Pre-age 35 waiver - A Participant who will not yet attain
age 35 as of the end of any current Plan Year may make a
special qualified election to waive the qualified
preretirement survivor annuity for the period beginning on
the date of such election and ending on the first day of the
Plan Year in which the Participant will attain age 35. Such
election shall not be valid unless the Participant receives
a written explanation of the qualified preretirement
survivor annuity in such terms as are comparable to the
explanation required under Section 6.05(E)(1). Qualified
preretirement survivor annuity coverage will be
automatically reinstated as of the first day of the Plan
Year in which the Participant attains age 35. Any new waiver
on or after such date shall be subject to the full
requirements of this Section 6.05.
2. Earliest Retirement Age - The earliest date on which, under
the Plan, the Participant could elect to receive retirement
benefits.
3. Qualified Election - A waiver of a qualified joint and
survivor annuity or a qualified preretirement survivor
annuity. Any waiver of a qualified joint and survivor
annuity or a qualified preretirement survivor annuity shall
not be effective unless: (a) the Participant's spouse
consents in writing to the election, (b) the election
designates a specific Beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not
be changed without spousal consent (or the spouse expressly
permits designations by the Participant without any further
spousal consent); (c) the spouse's consent acknowledges the
effect of the election; and (d) the spouse's consent is
witnessed by a plan representative or notary public.
Additionally, a Participant's waiver of the qualified joint
and survivor annuity shall not be effective unless the
election designates a form of benefit payment which may not
be changed without spousal consent (or the spouse expressly
permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction
of a plan representative that there is no spouse or that the
spouse cannot be located, a waiver will be deemed a
qualified election.
Any consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be
obtained) shall be effective only with respect to such
spouse. A consent that permits designations by the
Participant without any requirement of further consent by
such spouse must acknowledge that the spouse has the right
to limit consent to a specific Beneficiary, and a specific
form of benefit where applicable, and that the spouse
voluntarily elects to relinquish either or both of such
rights. A revocation of a prior waiver may be made by a
Participant without the consent of the spouse at any time
before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under
this provision shall be valid unless the Participant has
received notice as provided in Section 6.05(E) below.
4. Qualified Joint and Survivor Annuity - An immediate annuity
for the life of the Participant with a survivor annuity for
the life of the spouse which is not less than 50% and not
more than 100% of the amount of the annuity which is payable
during the joint lives of the Participant and the spouse and
which is the amount of benefit which can be purchased with
the Participant's vested account balance. The percentage of
the survivor annuity under the Plan shall be 50% (unless a
different percentage is elected by the Employer in the
Adoption Agreement).
5. Spouse (surviving spouse) - The spouse or surviving spouse
of the Participant, provided that a former spouse will be
treated as the spouse or surviving spouse and a current
spouse will not be treated as the spouse or surviving spouse
to the extent provided under a qualified domestic relations
order as described in Section 414(p) of the Code.
6. Annuity Starting Date - The first day of the first period
for which an amount is paid as an annuity or any other
form.
7. Vested Account Balance - The aggregate value of the
Participant's Vested account balances derived from Employer
and Employee contributions (including rollovers), whether
Vested before or upon death, including the proceeds of
insurance contracts, if any, on the Participant's life. The
provisions of this Section 6.05 shall apply to a Participant
who is Vested in amounts attributable to Employer
Contributions, Employee contributions (or both) at the time
of death or distribution.
E. Notice Requirements
1. In the case of a qualified joint and survivor annuity, the
Plan Administrator shall no less than 30 days and not more
than 90 days prior to the annuity starting date provide
each Participant a written explanation of: (a) the terms and
conditions of a qualified joint and survivor annuity; (b)
the Participant's right to make and the effect of an
election to waive the qualified joint and survivor
annuity form of benefit; (c) the rights of a Participant's
spouse; and (d) the right to make, and the effect of, a
revocation of a previous election to waive the qualified
joint and survivor annuity.
2. In the case of a qualified preretirement survivor annuity as
described in Section 6.05(C), the Plan Administrator shall
provide each Participant within the applicable period for
such Participant a written explanation of the qualified
preretirement survivor annuity in such terms and in such
manner as would be comparable to the explanation provided
for meeting the requirements of Section 6.05(E)(1)
applicable to a qualified joint and survivor annuity.
<PAGE>
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20
The applicable period for a Participant is whichever of
the following periods ends last: (a) the period beginning
with the first day of the Plan Year in which the Participant
attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age
35; (b) a reasonable period ending after the individual
becomes a Participant; (c) a reasonable period ending after
Section 6.05(E)(3) ceases to apply to the Participant; (d) a
reasonable period ending after this Section 6.05 first
applies to the Participant. Notwithstanding the foregoing,
notice must be provided within a reasonable period ending
after separation from service in the case of a Participant
who separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a
reasonable period ending after the enumerated events
described in (b), (c) and (d) is the end of the two-year
period beginning one year prior to the date the applicable
event occurs, and ending one year after that date. In the
case of a Participant who separates from service before
the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one year prior
to separation and ending one year after separation. If such
a Participant thereafter returns to employment with the
Employer, the applicable period for such Participant shall
be redetermined.
3. Notwithstanding the other requirements of this Section
6.05(E), the respective notices prescribed by this
Section 6.05(E), need not be given to a Participant if (a)
the Plan "fully subsidizes" the costs of a qualified joint
and survivor annuity or qualified preretirement survivor
annuity, and (b) the Plan does not allow the Participant to
waive the qualified joint and survivor annuity or qualified
preretirement survivor annuity and does not allow a married
Participant to designate a nonspouse beneficiary. For
purposes of this Section 6.05(E)(3), a plan fully subsidizes
the costs of a benefit if no increase in cost, or decrease
in benefits to the Participant may result from the
Participant's failure to elect another benefit.
F. Safe Harbor Rules
1. If the Employer so indicates in the Adoption Agreement, this
Section 6.05(F) shall apply to a Participant in a profit
sharing plan, and shall always apply to any distribution,
made on or after the first day of the first Plan Year
beginning after December 3l, 1988, from or under a separate
account attributable solely to accumulated deductible
employee contributions, as defined in Section 72(o)(5)(B) of
the Code, and maintained on behalf of a Participant in a
money purchase pension plan, (including a target benefit
plan) if the following conditions are satisfied:
a. the Participant does not or cannot elect payments in the
form of a life annuity; and
b. on the death of a participant, the Participant's Vested
account balance will be paid to the Participant's
surviving spouse, but if there is no surviving spouse,
or if the surviving spouse has consented in a manner
conforming to qualified election, then to the
Participant's designated beneficiary. The surviving
spouse may elect to have distribution of the Vested
account balance commence within the 90-day period
following the date of the Participant's death. The
account balance shall be adjusted for gains or losses
occurring after the Participant's death in accordance
with the provisions of the Plan governing the adjustment
of account balances for other types of distributions.
This Section 6.05(F) shall not be operative with respect
to a Participant in a profit sharing plan, the plan is a
direct or indirect transferee of a defined benefit plan,
money purchase plan, a target benefit plan, stock bonus,
or profit sharing plan which is subject to the survivor
annuity requirements of Section 401(a)(11) and Section
417 of the Code. If this Section 6.05(F) is operative,
then the provisions of this Section 6.05 other than
Section 6.05(G) shall be inoperative.
2. The Participant may waive the spousal death benefit
described in this Section 6.05(F) at any time provided that
no such waiver shall be effective unless it satisfies the
conditions of Section 6.05(D)(3) (other than the
notification requirement referred to therein) that would
apply to the Participant's waiver of the qualified
preretirement survivor annuity.
3. For purposes of this Section 6.05(F), Vested account balance
shall mean, in the case of a money purchase pension plan or
a target benefit plan, the Participant's separate account
balance attributable solely to accumulated deduction
employee contributions within the meaning of Section
72(o)(5)(B) of the Code. In the case of a profit sharing
plan Vested account balance shall have the same meaning as
provided in Section 6.05(D)(7).
G. Transitional Rules
1. Any living Participant not receiving benefits on August
23,1984, who would otherwise not receive the benefits
prescribed by the previous subsections of this Section 6.05
must be given the opportunity to elect to have the prior
subsections of this Section apply if such Participant is
credited with at least one Hour of Service under this Plan
or a predecessor plan in a Plan Year beginning on or after
January 1, 1976, and such Participant had at least 10 Years
of Vesting Service when he or she separated from service.
2. Any living Participant not receiving benefits on August
23, 1984, who was credited with at least one Hour of
Service under this Plan or a predecessor plan on or after
September 2, 1974, and who is not otherwise credited with
any service in a Plan Year beginning on or after January
1, 1976, must be given the opportunity to have his or her
benefits paid in accordance with Section 6.05(G)(4).
3. The respective opportunities to elect (as described in
Section 6.05(G)(1) and (2) above) must be afforded to the
appropriate Participants during the period commencing on
August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
4. Any Participant who has elected pursuant to Section
6.05(G)(2) and any Participant who does not elect under
Section 6.05(G)(1) or who meets the requirements of Section
6.05(G)(1) except that such Participant does not have at
least Years of Vesting Service when he or she separates from
service, shall have his or her benefits distributed in
accordance with all of the following requirements if
benefits would have been payable in the form of a life
annuity:
a. Automatic Joint and Survivor Annuity - If benefits in the
form of a life annuity become payable to a married
Participant who:
1. begins to receive payments under the Plan on or
after Normal Retirement Age; or
2. dies on or after Normal Retirement Age while still
working for the Employer; or
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21
3. begins to receive payments on or after the qualified
early retirement age; or
4. separates from service on or after attaining Normal
Retirement Age (or the qualified early retirement age)
and after satisfying the eligibility requirements for the
payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan in
the form of a qualified joint and survivor annuity,
unless the Participant has elected otherwise during the
election period. The election period must begin at least
6 months before the Participant attains qualified early
retirement age and ends not more than 90 days before the
commencement of benefits. Any election hereunder will be
in writing and may be changed by the Participant
at any time.
b. Election of Early Survivor Annuity - A Participant who is
employed after attaining the qualified early retirement age
will be given the opportunity to elect, during the election
period, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have
been made to the spouse under the qualified joint and
survivor annuity if the Participant had retired on the day
before his or her death. Any election under this provision
will be in writing and may be changed by the Participant at
any time. The election period begins on the later of (1) the
90th day before the Participant attains the qualified early
retirement age, or (2) the date on which participation
begins, and ends on the date the Participant terminates
employment.
c. For purposes of Section 6.05(G)(4):
1. Qualified early retirement age is the latest of:
a. the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits,
b. the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
c. the date the Participant begins participation.
2. Qualified joint and survivor annuity is an annuity for
the life of the Participant with a survivor annuity for
the life of the spouse as described in Section 6.05
6.05(D)(4) of this Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. General Rules
1. Subject to Section 6.05, Joint and Survivor Annuity
Requirements, the requirements of this Section shall apply to
any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan.
Unless otherwise specified, the provisions of this Section 6.06
apply to calendar years beginning after December 31, 1984.
2. All distributions required under this Section 6.06 shall be
determined and made in accordance with the Income Tax
Regulations under Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the regulations.
B. Required Beginning Date - The entire interest of a Participant
must be distributed or begin to be distributed no later than the
Participant's required beginning date.
C. Limits on Distribution Periods - As of the first distribution
calendar year, distributions, if not made in a single sum, may
only be made over one of the following periods (or a combination
thereof):
1. the life of the Participant,
2. the life of the Participant and a designated Beneficiary,
3. a period certain not extending beyond the life expectancy of
the Participant, or
4. a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
D. Determination of Amount to be Distributed Each Year - If the
Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or
after the required beginning date:
1. Individual Account
a. If a Participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy
of the Participant and the Participant's designated
Beneficiary or (2) a period not extending beyond the life
expectancy of the designated Beneficiary, the amount
required to be distributed for each calendar year, beginning
with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
b. For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the designated Beneficiary, the
method of distribution selected must assure that at least
50% of the present value of the amount available for
distribution is paid within the life expectancy of the
Participant.
c. For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first distribution calendar year shall
not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable
life expectancy or (2) if the Participant's spouse is not
the designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Section
1.401(a)(9)-2 of the Income Tax Regulations. Distributions
after the death of the Participant shall be distributed
using the applicable life expectancy in Section
6.06(D)(l)(a) above as the relevant divisor without regard
to regulations 1.401(a)(9)-2.
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22
d. The minimum distribution required for the Participant's
first distribution calendar year must be made on or
before the Participant's required beginning date. The
minimum distribution for other calendar years, including
the minimum distribution for the distribution calendar
year in which the Employee's required beginning date
occurs, must be made on or before December 31 of that
distribution calendar year.
2. Other Forms - If the Participant's benefit is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with
the requirements of Section 401(a)(9) of the Code and the
regulations thereunder.
E. Death Distribution Provisions
1. Distribution Beginning Before Death - If the Participant
dies after distribution of his or her interest has begun,
the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
2. Distribution Beginning After Death - If the Participant dies
before distribution of his or her interest begins,
distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death except to the
extent that an election is made to receive distributions in
accordance with (a) or (b) below:
a. if any portion of the Participant's interest is payable
to a designated Beneficiary, distributions may be made
over the life or over a period certain not greater than
the life expectancy of the designated Beneficiary
commencing on or before December 31 of the calendar year
immediately following the calendar year in which the
Participant died;
b. if the designated Beneficiary is the Participant's
surviving spouse, the date distributions are required to
begin in accordance with (a) above shall not be earlier
than the later of (1) December 31 of the calendar year
immediately following the calendar year in which the
Participant dies or (2) December 31 of the calendar year
in which the Participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to
this Section 6.06(E)(2) by the time of his or her death,
the Participant's designated Beneficiary must elect the
method of distribution no later than the earlier of (1)
December 31 of the calendar year in which distributions
would be required to begin under this Section 6.06(E)(2),
or (2) December 31 of the calendar year which contains
the fifth anniversary of the date of death of the
Participant. If the Participant has no designated
Beneficiary, or if the designated Beneficiary does not
elect a method of distribution, distribution of the
Participant's entire interest must be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
3. For purposes of Section 6.06(E)(2) above, if the surviving
spouse dies after the Participant, but before payments to
such spouse begin, the provisions of Section 6.06(E)(2),
with the exception of paragraph (b) therein, shall be
applied as if the surviving spouse were the Participant.
4. For purposes of this Section 6.06(E), any amount paid to a
child of the Participant will be treated as if it had been
paid to the surviving spouse if the amount becomes payable
to the surviving spouse when the child reaches the age of
majority.
5. For purposes of this Section 6.06(E), distribution of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, if Section
6.06(E)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to
Section 6.06(E)(2) above). If distribution in the form of an
annuity irrevocably commences to the Participant before the
required beginning date, the date distribution is considered
to begin is the date distribution actually commences.
F. Definitions
1. Applicable Life Expectancy - The life expectancy (or joint
and last survivor expectancy) calculated using the attained
age of the Participant (or designated Beneficiary) as of the
Participant's (or designated Beneficiary's) birthday in
applicable calendar year reduced by one for each calendar
year which has elapsed since the date life expectancy first
calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy so
recalculated. The applicable calendar year shall be the
first distribution calendar year, and if life expectancy is
being recalculated such succeeding calendar year.
2. Designated Beneficiary - The individual who is designated as
the Beneficiary under the Plan in accordance with Section
401(a)(9) of the Code and the regulations thereunder.
3. Distribution Calendar Year - A calendar year for which a
minimum distribution is required. For distributions
beginning before the Participant's death, the first
distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's
required beginning date. For distributions beginning after
the Participant's death, the first distribution calendar
year is the calendar year in which distributions are
required to begin pursuant to Section 6.06(E) above
4. Life Expectancy - Life expectancy and joint and last
survivor expectancy are computed by use of the expected
multiples in Tables V and Vl of Section 1.72-9 of the Income
Tax Regulations.
Unless otherwise elected bv the Participant (or spouse, in
the case of distributions described in Section 6.06(E)(2)
above) by the time distributions are required to begin, life
expectancies shall be recalculated annually. Such election
shall be irrevocable as to the Participant (or spouse) and
shall apply to all subsequent years. The life expectancy
nonspouse Beneficiary may not be recalculated.
5. Participant's Benefit
a. The account balance as of the last valuation date in the
valuation calendar year (the calendar year immediately
preceding the distribution calendar year) increased by
the amount of any Contributions or Forfeitures allocated
to the account balance as of dates in the valuation
calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after
the valuation date.
<PAGE>
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23
b. Exception for second distribution calendar year. For purposes
of paragraph (a) above, if any portion of the minimum
distribution for the first distribution calendar year is made
in the second distribution calendar year on or before the
required beginning date, the amount of the minimum distribution
made in the second distribution calendar year shall be treated
as if it had been made in the immediately preceding
distribution calendar year.
6. Required Beginning Date
a. General Rule - The required beginning date of a Participant
is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70 1/2.
b. Transitional Rules - The required beginning date of a
Participant who attains age 70 1/2 before January 1, 1988,
shall be determined in accordance with (1) or (2) below:
1. Non 5% Owners - The required beginning date of a
Participant who is not a 5% owner is the first day of
April of the calendar year following the calendar year in
which the later of retirement or attainment of age 70 1/2
occurs.
2. 5% Owners - The required beginning date of a Participant
who is a 5% owner during any year beginning after
December 31, 1979, is the first day of April following
the later of:
a. the calendar year in which the Participant attains age
70 1/2, or
b. the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a
5% owner, or the calendar year in which the
Participant retires.
The required beginning date of a Participant who is
not a 5% owner who attains age 70 1/2 during 1988 and
who has not retired as of January 1, 1989, is April 1,
1990.
c. 5% Owner - A Participant is treated as a 5% owner for
purposes of this Section 6.06(F)(6) if such
Participant is a 5% owner as defined in Section 416(i)
of the Code (determined in accordance with Section 416
but without regard to whether the Plan is top-heavy)
at any time during the Plan Year ending with or within
the calendar year in which such owner attains age
66 1/2 or any subsequent Plan Year.
d. Once distributions have begun to a 5% owner under
this Section 6.06(F)(6) they must continue to be
distributed, even if the Participant ceases to be a 5%
owner in a subsequent year.
G. Transitional Rule
1. Notwithstanding the other requirements of this Section 6.06
and subject to the requirements of Section 6.05, Joint and
Survivor Annuity Requirements, distribution on behalf of any
Employee, including a 5% owner, may be made in accordance
with all of the following requirements (regardless of when
such distribution commences):
a. The distribution by the Fund is one which would not have
disqualified such Fund under Section 401(a)(9) of the
Code as in effect prior to amendment by the Deficit
Reduction Act of 1984.
b. The distribution is in accordance with a method of
distribution designated by the Employee whose interest in
the Fund is being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee.
c. Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before
January 1, 1984.
d. The Employee had accrued a benefit under the Plan as of
December 31, 1983.
e. The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution
will commence, the period over which distributions will
be made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee
listed in order of priority.
2. A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with
respect to the distributions to be made upon the death of
the Employee.
3. For any distribution which commences before January 1, 1984,
but continues after December 31, 1983, the Employee, or the
Beneficiary, to whom such distribution is being made, will
be presumed to have designated the method of distribution
under which the distribution is being made if the method of
distribution was specified in writing and the distribution
satisfies the requirements in Sections 6.06(G)(l)(a) and
(e).
4. If a designation is revoked, any subsequent distribution
must satisfy the requirements of Section 401(a)(9) of the
Code and the regulations thereunder. If a designation is
revoked subsequent to the date distributions are required to
begin, the Plan must distribute by the end of the calendar
year following the calendar year in which the revocation
occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy Section
401(a)(9) of the Code and the regulations thereunder, but
for the Section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the Income Tax
Regulations. Any changes in the designation will be
considered to be a revocation of the designation. However,
the mere substitution or addition of another Beneficiary
(one not named in the designation) under the designation
will not be considered to be a revocation of the
designation, so long as such substitution or addition does
not alter the period over which distributions are to be made
under the designation, directly or indirectly (for example,
by altering the relevant measuring life). In the case in
which an amount is transferred or rolled over from one plan
to another plan, the rules in Q&A J-2 and Q&A J-3 shall
apply.
6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if permitted or
required by this Section 6) must be nontransferable. The terms of
any annuity contract purchased and distributed by the Plan to a
Participant or spouse shall comply with the requirements of the
Plan.
<PAGE>
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24
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant may receive
a loan from the Fund, subject to the following rules:
A. Loans shall be made available to all Participants on a
reasonably equivalent basis.
B. Loans shall not be made available to Highly Compensated
Employees (as defined in Section 414(q) of the Code) in an
amount greater than the amount made available to other
Employees.
C. Loans must be adequately secured and bear a reasonable interest
rate.
D. No Participant loan shall exceed the present value of the
Vested portion of a Participant's Individual Account.
E. A Participant must obtain the consent of his or her spouse, if
any, to the use of the Individual Account as security for the
loan. Spousal consent shall be obtained no earlier than the
beginning of the 90 day period that ends on the date on which
the loan is to be so secured. The consent must be in writing,
must acknowledge the effect of the loan, and must be witnessed
by a plan representative or notary public. Such consent shall
thereafter be binding with respect to the consenting spouse or
any subsequent spouse with respect to that loan. A new consent
shall be required if the account balance is used for
renegotiation, extension, renewal, or other revision of the
loan.
F. In the event of default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs
in the Plan.
G. No loans will be made to any shareholder-employee or Owner-
Employee. For purposes of this requirement, a shareholder-
employee means an employee or officer of an electing small
business (Subchapter S) corporation who owns (or is considered
as owning within the meaning of Section 318(a)(1) of the Code),
on any day during the taxable year of such corporation, more
than 5% of the outstanding stock of the corporation.
If a valid spousal consent has been obtained in accordance with
6.08(E), then, notwithstanding any other provisions of this Plan,
the portion of the Participant's Vested Individual Account used as
a security interest held by the Plan by reason of a loan
outstanding to the Participant shall be taken into account for
purposes of determining the amount of the account balance payable
at the time of death or distribution, but only if the reduction is
used as repayment of the loan. If less than 100% of the
Participant's Vested Individual Account (determined without regard
to the preceding sentence) is payable to the surviving spouse,
then the account balance shall be adjusted by first reducing the
Vested Individual Account by the amount of the security used as
repayment of the loan, and then determining the benefit payable to
the surviving spouse.
No loan to any Participant can be made to the extent that such
loan when added to the outstanding balance of all other loans to
the Participant would exceed the lesser of (a) $50,000 reduced by
the excess (if any) of the highest outstanding balance of loans
during the one year period ending on the day before the loan is
made, over the outstanding balance of loans from the Plan on the
date the loan is made, or (b) 50% of the present value of the
nonforfeitable Individual Account of the Participant or, if
greater, the total Individual Account up to $10,000. For the
purpose of the above limitation, all loans from all plans of the
Employer and other members of a group of employers described in
Sections 414(b), 414(c), and 414(m) of the Code are aggregated.
Furthermore, any loan shall by its terms require that repayment
(principal and interest) be amortized in level payments, not less
frequently than quarterly, over a period not extending beyond 5
years from the date of the loan, unless such loan is used to
acquire a dwelling unit which within a reasonable time (determined
at the time the loan is made) will be used as the principal
residence of the Participant. An assignment or pledge of any
portion of the Participant's interest in the Plan and a loan,
pledge, or assignment with respect to any insurance contract
purchased under the Plan, will be treated as a loan under this
paragraph.
The Plan Administrator shall administer the loan program in
accordance with a written document. Such written document shall
include, at a minimum, the following: (i) the identity of the
person or positions authorized to administer the Participant loan
program; (ii) the procedure for applying for loans; (iii) the
basis on which loans will be approved or denied; (iv) limitations
(if any) on the types and amounts of loans offered; (v) the
procedure under the program for determining a reasonable rate of
interest; (vi) the types of collateral which may secure a
Participant loan; and (vii) the events constituting default and
the steps that will be taken to preserve Plan assets in the event
of such default.
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under this Plan
to be made either in a form actually held in the Fund, or in cash
by converting assets other than cash into cash, or in any
combination of the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. Direct Rollover Option - This Section applies to distributions
made on or after January 1, 1993. Notwithstanding any provision
of the Plan to the contrary that would otherwise limit a
distributee's election under this Section, a distributer may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
B. Definitions
1. Eligible rollover distribution - An eligible rollover
distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that an
eligible rollover distribution does not include:
a. any distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually made for the life (or life expectancy) of the
distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten
years or more;
b. any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and
c. the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer
securities).
2. Eligible retirement plan - An eligible retirement plan is an
individual retirement account described in Section 408(b) of
the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in
<PAGE>
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25
Section 403(a) of the Code, or a qualified trust described
in Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
3. Distributee - A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under
a qualified domestic relations order, as defined in Section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
4. Direct rollover - A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee
SECTION SEVEN CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a claim for the
Vested portion of the Participant's Individual Account shall file
a written request with the Plan Administrator on a form to be
furnished to him by the Plan Administrator for such purpose. The
request shall set forth the basis of the claim. The Plan
Administrator is authorized to conduct such examinations as may be
necessary to facilitate the payment of any benefits to which the
Participant or Beneficiary may be entitled under the terms of the
Plan.
7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any Participant or
Beneficiary has been wholly or partially denied, the Plan
Administrator must furnish such Participant or Beneficiary written
notice of the denial within 60 days of the date the original claim
was filed. This notice shall set forth the specific reasons for
the denial, specific reference to pertinent Plan provisions on
which the denial is based, a description of any additional
information or material needed to perfect the claim, an
explanation of why such additional information or material is
necessary and an explanation of the procedures for appeal.
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from receipt of
the denial notice in which to make written application for review
by the Plan Administrator. The Participant or Beneficiary may
request that the review be in the nature of a hearing. The
Participant or Beneficiary shall have the right to representation,
to review pertinent documents and to submit comments in writing.
The Plan Administrator shall issue a decision on such review
within 60 days after receipt of an application for review as
provided for in Section 7.02. Upon a decision unfavorable to the
Participant or Beneficiary, such Participant or Beneficiary shall
be entitled to bring such actions in law or equity as may be
necessary or appropriate to protect or clarify his right to
benefits under this Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator unless the
managing body of the Employer designates a person or persons
other than the Employer as the Plan Administrator and so
notifies the Prototype Sponsor and the Trustee (or Custodian,
if applicable). The Employer shall also be the Plan
Administrator if the person or persons so designated cease to
be the Plan Administrator.
B. If the managing body of the Employer designates a person or
persons other than the Employer as Plan Administrator, such
person or persons shall serve at the pleasure of the Employer
and shall serve pursuant to such procedures as such managing
body may provide. Each such person shall be bonded as may be
required by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment, allocate the
duties of the Plan Administrator among several individuals
or entities. Such appointments shall not be effective until
the party designated accepts such appointment in writing.
B. The Plan Administrator shall have the authority to control
and manage the operation and administration of the Plan. The
Plan Administrator shall administer the Plan for the
exclusive benefit of the Participants and their
Beneficiaries in accordance with the specific terms of the
Plan.
C. The Plan Administrator shall be charged with the duties of
the general administration of the Plan, including, but not
limited to, the following:
1. To determine all questions of interpretation or policy in
a manner consistent with the Plan's documents and the
Plan Administrator's construction or determination in
good faith shall be conclusive and binding on all persons
except as otherwise provided herein or by law. Any
interpretation or construction shall be done in a
nondiscriminatory manner and shall be consistent with the
intent that the Plan shall continue to be deemed a
qualified plan under the terms of Section 401(a) of the
Code, as amended from time-to-time, and shall comply with
the terms of ERISA, as amended from time-to-time;
2. To determine all questions relating to the eligibility of
Employees to become or remain Participants hereunder;
3. To compute the amounts necessary or desirable to be
contributed to the Plan;
4. To compute the amount and kind of benefits to which a
Participant or Beneficiary shall be entitled under the
Plan and to direct the Trustee (or Custodian, if
applicable) with respect to all disbursements under the
Plan, and, when requested by the Trustee (or Custodian),
to furnish the Trustee (or Custodian) with instructions,
in writing, on matters pertaining to the Plan and the
Trustee (or Custodian) may rely and act thereon;
5. To maintain all records necessary for the administration
of the Plan;
6. To be responsible for preparing and filing such
disclosure and tax forms as may be required from time-to-
time by the Secretary of Labor or the Secretary of the
Treasury; and
<PAGE>
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26
7. To furnish each Employee, Participant or Beneficiary such
notices, information and reports under such circumstances as
may be required by law.
D. The Plan Administrator shall have all of the powers necessary
or appropriate to accomplish his duties under the Plan,
including, but not limited to, the following:
1. To appoint and retain such persons as may be necessary to
carry out the functions of the Plan Administrator;
2. To appoint and retain counsel, specialists or other persons
as the Plan Administrator deems necessary or advisable in
the administration of the Plan;
3. To resolve all questions of administration of the Plan;
4. To establish such uniform and nondiscriminatory rules which
it deems necessary to carry out the terms of the Plan;
5. To make any adjustments in a uniform and nondiscriminatory
manner which it deems necessary to correct any arithmetical
or accounting errors which may have been made for any Plan
Year; and
6. To correct any defect, supply any omission or reconcile any
inconsistency in such manner and to such extent as shall be
deemed necessary or advisable to carry out the purpose of
the Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but not
limited to, those involved in retaining necessary professional
assistance may be paid from the assets of the Fund. Alternatively,
the Employer may, in its discretion, pay such expenses. The
Employer shall furnish the Plan Administrator with such clerical
and other assistance as the Plan Administrator may need in the
performance of his duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his duties, the
Employer shall supply full and timely information to the Plan
Administrator (or his designated agents) on all matters relating
to the Compensation of all Participants, their regular employment
retirement, death, Disability or Termination of Employment and
such other pertinent facts as the Plan Administrator (or his
agents) may require. The Plan Administrator shall advise the
Trustee (or Custodian, if applicable) of such of the foregoing
facts as may be pertinent to the Trustee's (or Custodian's) duties
under the Plan. The Plan Administrator (or his agents) is entitled
to rely on such information as is supplied by the Employer and
shall have no duty or responsibility to verify such information.
SECTION NINE AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, expressly delegates to the
Prototype Sponsor the power but not the duty, to amend the
Plan without any further action or consent of the Employer as
the Prototype Sponsor deems necessary for the purpose of
adjusting the Plan to comply with all laws and regulations
governing pension or profit sharing plans. Specifically, it is
understood that the amendments may be made unilaterally by the
Prototype Sponsor. However, it shall also be understood that
the Prototype Sponsor shall be under no obligation to amend the
Plan documents and the Employer expressly waives any rights or
claims against the Prototype Sponsor for not exercising this
power to amend. For purposes of Prototype Sponsor amendments,
the mass submitter shall be recognized as the agent of the
Prototype Sponsor. If the Prototype Sponsor does not adopt the
amendments made by the mass submitter, it will no longer be
identical to or a minor modifier of the mass submitter plan.
B. An amendment by the Prototype Sponsor shall be accomplished by
giving written notice to the Employer of the amendment to be
made. The notice shall set forth the text of such amendment and
the date such amendment is to be effective. Such amendment
shall take effect unless within the 30 day period after such
notice is provided or within such shorter period as the notice
may specify, the Employer gives the Prototype Sponsor written
notice of refusal to consent to the amendment. Such written
notice of refusal shall have the effect of withdrawing the
Plan as a prototype plan and shall cause the Plan to be
considered an individually designed plan. The right of the
Prototype Sponsor to cause the Plan to be amended shall
terminate should the Plan cease to conform as a prototype plan
as provided in this or any other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
The Employer may (1) change the choice of options in the
Adoption Agreement, (2) add overriding language in the Adoption
Agreement when such language is necessary to satisfy Section
415 or Section 416 of the Code because of the required
aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which
specifically provide that their adoption still not cause the
Plan to be treated as individually designed. An Employer that
amends the Plan for any other reason, including a waiver of the
minimum funding requirement under Section 412(d) of the Code,
will no longer participate in this prototype plan and will be
considered to have an individually designed plan.
An Employer who wishes to amend the Plan to change the options
it has chosen in the Adoption Agreement must complete and
deliver a new Adoption Agreement to the Prototype Sponsor and
Trustee (or Custodian, if applicable). Such amendment shall
become effective upon execution by the Employer and Trustee (or
Custodian).
The Employer further reserves the right to replace the Plan in
its entirety by adopting another retirement plan which the
Employer designates as a replacement plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's Individual
Account may be reduced to the extent permitted under Section
412(c)(8) of the Code. For purposes of this paragraph, a plan
amendment which has the effect of decreasing a Participant's
Individual Account or eliminating an optional form of benefit with
respect to benefits attributable to service before the amendment
shall be treated as reducing an accrued benefit. Furthermore, if
the vesting schedule of a Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the Vested
percentage (determined as of such date) of such Employee's
Individual Account derived from Employer Contributions will not be
less than the percentage computed under the Plan without regard to
such amendment.
<PAGE>
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27
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the Plan is amended
in any way that directly or indirectly affects the computation of
the Participant's Vested percentage, or if the Plan is deemed
amended by an automatic change to or from a top-heavy vesting
schedule, each Participant with at least 3 Years of Vesting
Service with the Employer may elect, within the time set forth
below, to have the Vested percentage computed under the Plan
without regard to such amendment.
For Participants who do not have at least 1 Hour of Service in any
Plan Year beginning after December 31, 1988, the preceding
sentence shall be applied by substituting "5 Years of Vesting
Service" for "3 Years of Vesting Service" where such language
appears.
The Period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and
shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make the necessary
contributions thereto indefinitely, but such continuance and
payment is not assumed as a contractual obligation. Neither the
Adoption Agreement nor the Plan nor any amendment or modification
thereof nor the making of contributions hereunder shall be
construed as giving any Participant or any person whomsoever any
legal or equitable right against the Employer, the Trustee (or
Custodian, if applicable), the Plan Administrator or the Prototype
Sponsor except as specifically provided herein, or as provided by
law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Emplover at any time by
appropriate action of its managing body. Such termination shall be
effective on the date specified by the Employer. The Plan shall
terminate if the Employer shall be dissolved, terminated, or
declared bankrupt. Written notice of the termination and effective
date thereof shall be given to the Trustee (or Custodian, if
applicable), Plan Administrator, Prototype Sponsor, Participants
and Beneficiaries of deceased Participants' and the required
filings (such as the Form 5500 series and others) must be made
with the Internal Revenue Service and any other regulatory body as
required by current laws and regulations. Until all of the assets
have been distributed from the Fund, the Employer must keep the
Plan in compliance with current laws and regulations by (a) making
appropriate amendments to the Plan and (b) taking such other
measures as may be required.
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a successor of the
Employer may continue the Plan and be substituted in the place of
the present Employer. The successor and the present Employer (or,
if deceased, the executor of the estate of a deceased Self-
Employed Individual who was the Employer) must execute a written
instrument authorizing such substitution and the successor must
complete and sign a new Adoption Agreement.
9.08 FAILURE OF PLAN QUALIFICATION
If the Plan fails to attain or retain its qualified status, the
Plan will no longer be considered to be part of a prototype plan,
and such Employer can no longer participate under this prototype.
In such event, the Plan will be considered an individually
designed plan.
SECTION TEN MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable without
regard to the community property laws of any state.
10.02 HEADINGS
The headings of the Plan have been inserted for convenience of
reference only and are to be ignored in any construction of the
provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender they
shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and whenever any
words are used herein in the singular form they shall be construed
as though they were also used in the plural form in all cases
where they would so apply.
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with, or
transfer of assets or liabilities of such Plan to, any other plan,
each Participant shall be entitled to receive benefits immediately
after the merger, consolidation, or transfer (if the Plan had then
terminated) which are equal to or greater than the benefits he
would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated). The
Trustee (or Custodian, if applicable) has the authority to enter
into merger agreements or agreements to directly transfer the
assets of this Plan but only if such agreements are made with
trustees or custodians of other retirement plans described in
Section 401(a) of the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any other fiduciary
under this Plan shall discharge their duties with respect to this
Plan solely in the interests of Participants and their
Beneficiaries and with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting
in like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims.
No fiduciary shall cause the Plan to engage in any transaction
known as a "prohibited transaction" under ERISA.
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any interest
whatsoever hereunder agree to perform any and all acts and execute
any and all documents and papers which may be necessary or
desirable for the carrying out of this Plan and any of its
provisions.
<PAGE>
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28
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as those terms shall apply
to any and all parties hereto, present and future.
10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31, 1983, this Plan
is a Top-Heavy Plan if any of the following conditions exist:
1. If the top-heavy ratio for this Plan exceeds 60% and this
Plan is not part of any required aggregation group or
permissive aggregation group of plans;
2. If this Plan is part of a required aggregation group of
plans but not part of a permissive aggregation group and the
top-heavy ratio for the group of plans exceeds 60%;
3. If this Plan is a part of a required aggregation group and
part of a permissive aggregation group of plans and the top-
heavy ratio for the permissive aggregation group exceeds
60%.
For purposes of this Section 10.08, the following terms
shall have the meanings indicated below:
B. Key Employee - Any Employee or former Employee (and the
beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer if such
individual's annual compensation exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the Code, an owner (or
considered an owner under Section 318 of the Code) of one of
the 10 largest interests in the Employer if such individual's
compensation exceeds 100% of the dollar limitation under
Section 415(c)(1)(A) of the Code, a 5% owner of the Employer,
or a 1% owner of the Employer who has an annual compensation of
more than $150,000. Annual compensation means compensation as
defined in Section 415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the Employee's gross income
under Section 125, Section 402(a)(8), Section 402(h) or Section
403(b) of the Code. The determination period is the Plan Year
containing the determination date and the 4 preceding Plan
Years.
The determination of who is a Key Employee will be made in
accordance with Section 416(i)(1) of the Code and the
regulations thereunder.
C. Top-heavy ratio
1. If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and
the Employer has not maintained any defined benefit plan
which during the 5-year period ending on the determination
date(s) has or has had accrued benefits, the top-heavy
ratio for this Plan alone or for the required or
permissive aggregation group as appropriate is a fraction,
the numerator of which is the sum of the account balances
of all Key Employees as of the determination date(s)
(including any part of any account balance distributed in
the 5-year period ending on the determination date(s)), and
the denominator of which is the sum of all account balances
(including any part of any account balance distributed in
the 5-year period ending on the determination date(s)), both
computed in accordance with Section 416 of the Code and the
regulations thereunder. Both the numerator and the
denominator of the top-heavy ratio are increased to reflect
any contribution not actually made as of the determination
date, but which is required to be taken into account on that
date under Section 416 of the Code and the regulations
thereunder.
2. If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and
the Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the
determination date(s) has or has had any accrued benefits,
the top-heavy ratio for any required or permissive
aggregation group as appropriate is a fraction, the
numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with (1) above, and the
present value of accrued benefits under the aggregated
defined benefit plan or plans for all Key Employees as of
the determination date(s), and the denominator of which is
the sum of the account balances under the aggregated defined
contribution plan or plans for all Participants, determined
in accordance with (1) above, and the present value of
accrued benefits under the defined benefit plan or plans for
all Participants as of the determination date(s), all
determined in accordance with Section 416 of the Code and
the regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator
of the top-heavy ratio are increased for any distribution of
an accrued benefit made in the 5-year period ending on the
determination date.
3. For purposes of (1) and (2) above, the value of account
balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls
within or ends with the 12-month period ending on the
determination date, except as provided in Section 416 of the
Code and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances
and accrued benefits of a Participant (a) who is not a Key
Employee but who was a Key Employee in a Prior Year, or (b)
who has not been credited with at least one Hour of
Service with any employer maintaining the plan at any time
during the 5-year period ending on the determination date
will be disregarded. The calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and
transfers are taken into account will be made in accordance
with Section 416 of the Code and the regulations thereunder.
Deductible employee contributions will not be taken into
account for purposes of computing the top-heavy ratio. When
aggregating plans the value of account balances and accrued
benefits will be calculated with reference to the
determination dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key
Employee shall be determined under (a) the method, if any,
that uniformly applies for accrual purposes under all
defined benefit plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the
fractional rule of Section 411(b)(1)(C) of the Code.
4. Permissive aggregation group: The required aggregation group
of plans plus any other plans of the Employer which, when
considered as a group with the required aggregation group,
would continue to satisfy the requirements of Sections
401(a)(4) and 410 of the Code.
<PAGE>
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29
5. Required aggregation group: (a) Each qualified plan of the
Employer in which at least one Key Employee participates or
participated at any time during the determination period
(regardless of whether the Plan has terminated), and (b) any
other qualified plan of the Employer which enables a plan
described in (a) to meet the requirements of Sections
401(a)(4) or 410 of the Code.
6. Determination date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year.
For the first Plan Year of the Plan, the last day of that
year.
7. Valuation date: For purposes of calculating the top-heavy
ratio, the valuation date shall be the last day of each Plan
Year.
8. Present value: For purposes of establishing the "present
value" of benefits under a defined benefit plan to compute
the top-heavy ratio, any benefit shall be discounted only
for mortality and interest based on the interest rate and
mortality table specified for this purpose in the defined
benefit plan.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan
is established and one or more other trades or businesses, this
Plan and the plan established for other trades or businesses must,
when looked at as a single plan, satisfy Sections 401(a) and (d)
of the Code for the employees of those trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses must
be included in a plan which satisfies Sections 401(a) and (d) of
the Code and which provides contributions and benefits not less
favorable than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans
of two or more trades or businesses which are not controlled and
the individual controls a trade or business, then the
contributions or benefits of the employees under the plan of the
trade or business which is controlled must be as favorable as
those provided for him under the most favorable plan of the trade
or business which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or
two or more Owner-Employees, will be considered to control a trade
or business if the Owner-Employee, or two or more Owner-Employees,
together:
A. own the entire interest in a unincorporated trade or business,
or
B. in the case of a partnership, own more than 50% of either the
capital interest or the profit interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two
or more Owner-Employees, shall be treated as owning any interest
in a partnership which is owned, directly or indirectly, by a
partnership which such Owner-Employee, or such two or more Owner-
Employees, are considered to control within the meaning of the
preceding sentence.
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily. The
preceding sentence shall also apply to the creation, assignment,
or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such
order is determined to be a qualified domestic relations order, as
defined in Section 414(p) of the Code.
Generally, a domestic relations order cannot be a qualified
domestic relations order until January 1, 1985. However, in the
case of a domestic relations order entered before such date, the
Plan Administrator:
(1) shall treat such order as a qualified domestic relations order
if such Plan Administrator is paying benefits pursuant to such
order on such date, and
(2) may treat any other such order entered before such date as a
qualified domestic relations order even if such order does not
meet the requirements of Section 414(p) of the Code.
<PAGE>
EXHIBIT 16
YIELD CALCULATION
Yield = a - b 365/
_______ x / 7 = Base period return
c
_________
d
Whereas: a = dividends and interest earned for the period
b = expenses accrued for the period
c = average shares outstanding for the period
d = value at the beginning of the period
Base period = seven days ended March 31, 1988.
129,736
_______________
116,655,401 365/
___________________ x / 7 = .0579896 = 5.80%
1
365 /
Effective Yield = [(Base period return + 1) / 7 ] - 1
365 /
[(.0579896 + 1) / 7] - 1 = 5.97%
<PAGE>
WORKSHEET FOR CALCULATION
SHARES
MARCH 1988 INCOME EXPENSES OUTSTANDING PER SHARE
- ---------- ------ -------- ----------- ---------
25, 26 + 27 $ 63,687 $ 8,192 $116,568,011 .000476076
28 21,295 2,731 116,594,413 .000159218
29 21,278 2,735 116,742,791 .000158841
30 21,328 2,738 116,898,363 .000159027
31 21,272 2,728 116,473,425 .000159212
-------- ------- ------------ ----------
$148,860 $19,124 AVG. EQUALS .001112374
$116,655,401
$148,860 - 19,124 = $129,736
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> APR-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 154,828,799
<INVESTMENTS-AT-VALUE> 154,828,799
<RECEIVABLES> 456,645
<ASSETS-OTHER> 184,626
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 155,470,070
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 222,193
<TOTAL-LIABILITIES> 222,193
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 155,247,877
<SHARES-COMMON-STOCK> 155,247,877
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 155,247,877
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,308,352
<OTHER-INCOME> 0
<EXPENSES-NET> 1,179,192
<NET-INVESTMENT-INCOME> 6,129,160
<REALIZED-GAINS-CURRENT> (164,303)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 5,964,857
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,129,160<F1>
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 380,661,450
<NUMBER-OF-SHARES-REDEEMED> (384,805,251)
<SHARES-REINVESTED> 5,862,996
<NET-CHANGE-IN-ASSETS> 1,719,195
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 736,790
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,179,192
<AVERAGE-NET-ASSETS> 147,360,153
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> Includes capital contribution of $164,303.
</FN>
</TABLE>
