<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[x] Definitive Proxy Statement RULE 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ASSET MANAGEMENT FUND, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
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(1) Amount previously paid:
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<PAGE> 2
ASSET MANAGEMENT FUND, INC.
IMPORTANT INFORMATION
FOR SHAREHOLDERS August 31, 1999
Asset Management Fund, Inc. (the "Fund") will hold a special meeting
of shareholders on September 28, 1999. It is important for you to vote on the
issues described in this Proxy Statement. We recommend that you read the Proxy
Statement in its entirety; the explanations it includes will help you decide
upon the issues.
TIME IS OF THE ESSENCE ... YOUR PARTICIPATION IN THIS PROCESS IS
IMPORTANT! BE SURE TO COMPLETE AND RETURN YOUR PROXY CARD PROMPTLY TO AVOID
ADDITIONAL EXPENSE TO THE FUND.
Q: WHY AM I BEING ASKED TO VOTE?
A: Mutual funds are required to obtain shareholders' votes for
certain types of changes, like those included in this Proxy
Statement. You have a right to vote on these changes.
Q: WHAT ISSUES AM I BEING ASKED TO VOTE ON?
A: The proposals include (1) the reorganization of the Fund from
a Maryland corporation into a Delaware business trust and (2)
changes to the Fund's fundamental investment policies of the
U.S. Government Mortgage Securities Portfolio, the
Intermediate Mortgage Securities Portfolio, the Short U.S.
Government Portfolio, the Adjustable Rate Mortgage (ARM)
Portfolio and the Money Market Portfolio (individually, a
"Portfolio," or collectively, the "Portfolios").
Q: WHY IS THE FUND BEING REORGANIZED INTO A DELAWARE BUSINESS TRUST?
A: We believe that a reorganization of the Fund into a Delaware
business trust will be beneficial. Currently, the Fund is
organized as a Maryland corporation. Under its current
charter, the Fund cannot issue classes of shares. After the
reorganization the Fund will be able to create additional
classes of shares. Also, as a Delaware business trust, the
Fund will have a greater amount of flexibility to conduct its
business. The reorganization would not change your
Portfolio's investment objective or policies (except for any
changes approved by shareholders under Proposal 2). The Fund
also would keep the same Directors, officers, investment
advisers, and auditors, and the Fund's current contracts,
including the Fund's contract with its investment adviser,
would remain unchanged.
Q: WHY ARE THE FUND'S "FUNDAMENTAL POLICIES" BEING CHANGED?
A: Every mutual fund has certain investment policies that can be
changed only with the approval of its shareholders. These are
referred to as "fundamental" investment policies. In the
past, these policies were adopted to reflect regulatory,
business, or industry conditions that no longer exist or no
longer are necessary. By reducing the number of "fundamental
policies," the Fund may be able to minimize the costs and
delays associated with future shareholder meetings. Also, the
investment adviser's ability to manage the Portfolios' assets
may be enhanced and investment opportunities increased.
Q: HOW DO I VOTE MY SHARES?
A: You may vote in person at the special meeting of shareholders
or simply sign and return the enclosed Proxy Card. You may
also vote by telephone or as described below in the Proxy
Statement. If we do not receive your proxy card, an employee
of Shay Assets Management, Inc., the Fund's investment
adviser, and/or an employee of Shay Financial Services Inc.,
the Fund's distributor, may contact you to request that you
cast your vote.
<PAGE> 3
Q: WHO DO I CALL IF I HAVE QUESTIONS ABOUT THE PROXY STATEMENT?
A: Call the Fund's toll-free number: 1-800-527-3713.
Q: I'M A SMALL INVESTOR. WHY SHOULD I BOTHER TO VOTE?
A: Your vote makes a difference. If numerous shareholders just
like you fail to vote their proxies, your Fund may not
receive enough votes to go forward with its meeting. If this
happens, we'll need to mail proxies again--a costly
proposition for your Fund!
Q: WHO GETS TO VOTE?
A: Any person who owned shares of the Fund on the "record date,"
which was August 24, 1999, gets to vote--even if the investor
later sold the shares. Shareholders are entitled to cast one
vote for each Fund share owned on the record date.
Q: HOW CAN I VOTE?
A: You can vote in any one of three ways:
o By facsimile, using the number listed on your proxy card.
o By mail, with the enclosed ballot.
o In person at the meeting.
Q: HOW DO THE MEMBERS OF THE BOARD OF DIRECTORS SUGGEST THAT I VOTE?
A: After careful consideration, the Board of Directors has
unanimously approved these proposals. The Board recommends
that you read the enclosed materials carefully and vote FOR
all proposals.
<PAGE> 4
PROXY STATEMENT
ASSET MANAGEMENT FUND, INC.
U.S. GOVERNMENT MORTGAGE SECURITIES PORTFOLIO
INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO
ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO
MONEY MARKET PORTFOLIO
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 28, 1999
August 31, 1999
To the Shareholders:
You are invited to attend a special meeting of the shareholders of
Asset Management Fund, Inc. (the "Fund") to be held at the offices of the
Fund's investment adviser, Shay Assets Management, Inc., 230 West Monroe
Street, Chicago, Illinois 60606, at 10:00 a.m. (Central time), on September 28,
1999, for the following purposes and to transact such other business, if any,
as may properly come before the meeting:
(1) To approve a proposal to reorganize the Fund into a
Delaware business trust.
(2) To make changes to the Fund's fundamental investment
policies for each of the U.S. Government Mortgage
Securities Portfolio, the Intermediate Mortgage
Securities Portfolio, the Short U.S. Government
Securities Portfolio, the Adjustable Rate Mortgage (ARM)
Portfolio and the Money Market Portfolio, unless
otherwise indicated:
(a) adopting a fundamental policy limiting investments.
(b) changing the fundamental policy on high quality
assets to a non-fundamental policy.
(c) eliminating the fundamental policy on OTS qualifying
securities.
(d) changing the fundamental policy on investments in
mortgage securities to a non-fundamental policy.
(e) amending the fundamental policy on Portfolio lending.
(f) changing the fundamental policy on illiquid
investments to a non-fundamental policy.
(g) eliminating the fundamental policy on Money Market
instruments.
The Board of Directors has fixed August 24, 1999 as the record date
for determination of shareholders entitled to vote at the meeting.
By Order of the Directors
Daniel K. Ellenwood
Secretary
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY TO AVOID ADDITIONAL EXPENSE.
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE
UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED
PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL MEETING.
THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOU
MAY ALSO VOTE BY FACSIMILE BY USING THE FUND'S FACSIMILE NUMBER:
1-312-214-4149.
<PAGE> 5
PROXY STATEMENT
ASSET MANAGEMENT FUND, INC.
230 WEST MONROE STREET
CHICAGO, ILLINOIS 60606
ABOUT THE PROXY SOLICITATION AND THE SPECIAL MEETING
The enclosed proxy is solicited on behalf of the Board of Directors of
the Fund (the "Board" or "Directors"). The proxies will be voted at the special
meeting of shareholders of the Fund to be held on September 28, 1999, at the
offices of the Fund's investment adviser, Shay Assets Management, Inc., 230
West Monroe Street, Chicago, Illinois 60606 at 10:00 a.m. (Central time) (such
special meeting and any adjournment or postponement thereof are referred to as
the "Special Meeting").
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Fund. In addition to solicitations
through the mails, proxies may be solicited by officers, employees, and agents
of the Fund, Shay Assets Management, Inc., the Fund's investment adviser,
and/or Shay Financial Services, Inc., the Fund's distributer, or, if necessary,
a communications firm retained for this purpose. Such solicitations may be by
telephone, or otherwise. The Fund will reimburse custodians, nominees, and
fiduciaries for the reasonable costs incurred by them in connection with
forwarding solicitation materials to the beneficial owners of shares held of
record by such persons.
Shareholders may vote by filling out and signing the enclosed proxy
card and returning it in the postage paid envelope provided. You may also vote
by facsimile. To vote by facsimile, you may use the Fund's facsimile number:
1-312-214-4149. Shareholders who communicate proxies by facsimile have the same
power and authority to issue, revoke, or otherwise change their voting
instruction as currently exists for instructions communicated by mail described
below under "Additional Information -- Quorum and Voting Requirements."
At its meeting on July 22, 1999, the Board (i) considered and approved
a plan to reorganize the Fund into a Delaware business trust, subject to
shareholder approval, (ii) reviewed the investment policies of the U.S.
Government Mortgage Securities Portfolio, the Intermediate Mortgage Securities
Portfolio, the Short U.S. Government Securities Portfolio, the Adjustable Rate
Mortgage (ARM) Portfolio and the Money Market Portfolio (individually, a
"Portfolio" or collectively, the "Portfolios") and approved changes to them,
subject to shareholder approval, and (iii) called the Special Meeting for the
purposes set forth in the accompanying Notice. The Directors know of no
business other than that mentioned in the Notice that will be presented for
consideration at the Special Meeting. Should other business properly be brought
before the Special Meeting, proxies will be voted in accordance with the best
judgment of the persons named as proxies. This proxy statement and the enclosed
proxy card are expected to be mailed on or about August 31, 1999, to
shareholders of record at the close of business on August 24, 1999 (the "Record
Date"). On the Record Date, the Fund had 189,090,244.662 outstanding shares of
which 8,438,445.119 were shares of the U.S. Government Mortgage Securities
Portfolio, 11,054,243.143 were shares of the Intermediate Mortgage Securities
Portfolio, 11,437,775.134 were shares of the Short U.S. Government Securities
Portfolio, 96,831,390.716 were shares of the Adjustable Rate Mortgage (ARM)
Portfolio and 61,328,390.550 were shares of the Money Market Portfolio.
Each share is entitled to one vote on each of the matters submitted to
a vote at the Meeting. The shares of all the Portfolios shall vote together as
a single class on all proposals, except on the proposal to approve the proposed
changes to the Portfolios' fundamental policies, on which each Portfolio will
vote separately.
The Fund's principal executive offices are located at 230 West Monroe
Street, Chicago, Illinois 60606. The Fund's toll-free telephone number is
1-800-527-3713. The Fund's Annual Report, which includes audited financial
statements for the fiscal year ended October 31, 1998, and Semi-annual Report
for the period ended April 30, 1999 were previously mailed to shareholders. ANY
SHAREHOLDER WISHING TO RECEIVE WITHOUT CHARGE ANOTHER COPY OF THE ANNUAL REPORT
AND SEMI-ANNUAL REPORT SHOULD CONTACT THE FUND AT 230 WEST MONROE STREET,
CHICAGO, ILLINOIS 60606 OR CALL THE FUND'S TOLL-FREE TELEPHONE NUMBER:
1-800-527-3713.
<PAGE> 6
The Fund has shares of five portfolios outstanding: the U.S.
Government Mortgage Securities Portfolio, the Intermediate Mortgage Securities
Portfolio, the Short U.S. Government Securities Portfolio, the Adjustable Rate
Mortgage (ARM) Portfolio and the Money Market Portfolio. The following table
indicates which shareholders by Portfolio are solicited to vote with respect to
each item:
<TABLE>
<CAPTION>
U.S. ADJUSTABLE
GOVERNMENT INTERMEDIATE SHORT U.S. RATE
MORTGAGE MORTGAGE GOVERNMENT MORTGAGE MONEY
SECURITIES SECURITIES SECURITIES (ARM) MARKET
ITEM PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Reorganization into a
Delaware business trust X X X X X
- ------------------------------------------------------------------------------------------------------
2. Fundamental Investment
Policies X X X X X
- ------------------------------------------------------------------------------------------------------
(a) to adopt a fundamental
policy limiting investments X X X X X
- ------------------------------------------------------------------------------------------------------
(b) to change the fundamental
policy on high quality asset
to a non-fundamental policy X X
- ------------------------------------------------------------------------------------------------------
(c) to eliminate the fundamental
policy on OTS qualifying
securities X X X X X
- ------------------------------------------------------------------------------------------------------
(d) to change the fundamental
policy on investments in
mortgage securities to a non-
fundamental policy X X X
- ------------------------------------------------------------------------------------------------------
(e) to amend the fundamental
policy on Portfolio lending X X X X X
- ------------------------------------------------------------------------------------------------------
(f) to change the fundamental
policy on illiquid
investments to a non-
fundamental policy X X X X X
- ------------------------------------------------------------------------------------------------------
(g) to eliminate the fundamental
policy on Money Market
instruments X
- ------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 7
ITEM 1
REORGANIZATION INTO A DELAWARE BUSINESS TRUST
The Board of Directors has approved a plan to reorganize the Fund into
a Delaware business trust. THE PURPOSES OF THE REORGANIZATION ARE TO ALLOW THE
FUND TO CREATE ADDITIONAL CLASSES OF SHARES AND TO PROVIDE THE FUND WITH
GREATER FLEXIBILITY TO CONDUCT ITS BUSINESS. To proceed with the reorganization
plan, we need shareholder approval. The next few pages of this proxy statement
discuss important details of the reorganization plan, including the following:
o Why we want to reorganize the Fund.
o How we plan to accomplish the reorganization.
o How the reorganization will affect the Fund.
o How a Delaware business trust compares to the Fund's current
legal structure.
o How many shareholder votes we need to approve the
reorganization.
WHY WE WANT TO REORGANIZE THE FUND
DELAWARE LAW IS FAVORABLE TO MUTUAL FUNDS. We have proposed to
reorganize the Fund as a DELAWARE business trust because that state's business
trust law contains provisions that are well suited to mutual funds. Delaware
law provides mutual funds greater flexibility in their operations, and
generally business trusts are not subject to state taxes imposed on foreign
corporations. The "move" to Delaware will be largely on paper; your Fund will
continue to operate out of Illinois, just as it does now.
HOW WE PLAN TO ACCOMPLISH THE REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION. The Board of Directors has
approved a written Agreement and Plan of Reorganization for the Fund. This
document spells out the terms and conditions that will apply to the Fund's
reorganization into a Delaware business trust. We have attached the Agreement
and Plan of Reorganization for your information.
THREE STEPS TO REORGANIZE. In essence, the reorganization will be a
three-step process. The first step is already taken: We have established a
Delaware business trust especially for the Fund. Prior to the reorganization,
this trust will issue a single share--to the Fund. Second, if this proposal is
approved, the Fund will transfer all of its assets and liabilities to the
trust. As part of this second step, the trust will open an account for each
Fund shareholder. The trust will then credit these accounts with the exact
number of full and fractional shares that each shareholder owned in the Fund on
the reorganization date. And third, we will dissolve the Fund's Maryland
corporate entity.
EFFECTIVE AS SOON AS PRACTICABLE. If approved by shareholders, the
reorganization will take place as soon as feasible after the Fund receives the
necessary regulatory approvals and legal opinions. We think this could be
accomplished by October of 1999. However, at any time prior to the
reorganization, the Board of Directors may decide that it is in the best
interest of the Fund and its shareholders not to go forward with this project.
If that happens, the Fund will continue to operate as it is currently
organized.
HOW THE REORGANIZATION WILL AFFECT THE FUND
THE FUND'S INVESTMENT OBJECTIVE, POLICIES, INVESTMENT ADVISER, AND
FISCAL YEAR WILL STAY THE SAME (EXCEPT FOR ANY CHANGES APPROVED BY SHAREHOLDERS
UNDER PROPOSAL 2). The reorganization will not change any of these.
THE REORGANIZATION WILL HAVE NO IMPACT ON THE FUND'S SHARE PRICE. On
the day of the reorganization, the newly formed trusts's share price will be
the same as that of the Fund. The reorganization will not cause the Fund's
share price to go up or down, and you will own the same number of shares. Any
declared but undistributed dividends or capital gains for the Fund will carry
over in the reorganization.
3
<PAGE> 8
THE FUND'S EXISTING DIRECTORS WILL BE REELECTED. Federal securities
laws require that at least one-half of the Fund's Directors be elected by
shareholders. While the Fund more than meets this standard now, that
technically will not be true once it reorganizes as a trust. Rather than call
another shareholder meeting to vote on Trustees after the reorganization, we
will treat shareholder approval of this proposal as authorization to elect the
Fund's current Board members to the same positions with the trust. This
approach will avoid the considerable expense of printing, mailing, and
tabulating more proxies after the reorganization.
THE FUND'S EXISTING INDEPENDENT AUDITORS WILL BE RATIFIED. We will
treat shareholder approval of the reorganization as ratification of the Fund's
existing independent auditors, PricewaterhouseCoopers LLP.
PricewaterhouseCoopers LLP is the independent auditor for all of the
Portfolios. In this role, PricewaterhouseCoopers LLP audits and certifies the
Portfolios' financial statements. PricewaterhouseCoopers LLP reviews the
Portfolios' Annual Reports to Shareholders and their filings with the U.S.
Securities and Exchange Commission. Neither PricewaterhouseCoopers LLP nor any
of its partners have any direct or material indirect financial interest in the
Fund. If you wish to request the attendance of a PricewaterhouseCoopers LLP
representative at the shareholder meeting, you should contact the Fund's
Secretary at 230 West Monroe Street, Chicago, Illinois 60606.
THE FUND'S EXISTING INVESTMENT ADVISORY AGREEMENT WILL BE ASSIGNED TO
THE NEW DELAWARE BUSINESS TRUST. We will treat shareholder approval of the
reorganization as authorization to assign the Fund's existing Investment
Advisory Agreement with the Fund's investment adviser, Shay Assets Management,
Inc., to the new Delaware business trust.
THE REORGANIZATION IS CONDITIONED ON TAX-FREE TREATMENT AT THE FEDERAL
LEVEL. We fully expect that the reorganization will have no federal income tax
consequences for you or the Fund. We will not proceed with the reorganization
until this point is confirmed by an opinion of counsel. Following the
reorganization, from a tax standpoint, the adjusted basis of your Fund shares
will be the same as before. We do not expect shareholders to incur any personal
state or local taxes as a result of the reorganization, but you should consult
your own tax adviser to be sure.
THE FUND GENERALLY WILL STOP ISSUING SHARE CERTIFICATES AND WILL
CONVERT ANY OUTSTANDING SHARE CERTIFICATES TO RECORD ENTRY FORM. In today's
financial world, very few investors hold share certificates as physical
evidence of their mutual fund investments. Instead, investors' mutual fund
holdings are maintained and accounted for as "record entries" on the fund's
computer system. The main problems with share certificates are that:
o They present opportunities for theft, loss and fraud--and
therefore offer less protection to shareholders, rather than
more.
o They're especially inconvenient--you must return your
certificates to the fund before your shares can be redeemed
or exchanged.
In light of these downsides and the minimal demand for share
certificates, the Fund generally will stop issuing them after the
reorganization. Outstanding share certificates typically will be converted to
record entry form. This will not happen automatically; we will arrange
conversion details separately with the Fund's certificate holders.
HOW THE PROPOSED DELAWARE BUSINESS TRUST COMPARES TO THE FUND'S CURRENT LEGAL
STRUCTURE
Federal securities laws have much to say about the way that mutual
funds operate, but they do not cover every aspect of a fund's existence. State
law and each fund's governing documents fill in most of the gaps. The following
discussion compares the state law and documents currently governing the Fund
with the state law and documents that will apply if it reorganizes as a
Delaware business trust. This discussion is not a comprehensive review of all
technical distinctions between the different legal structures, but it provides
you with a comparison in certain key areas of a Delaware business trust to a
Maryland corporation--the Fund's present legal structure. We have attached the
proposed Declaration of Trust for your information.
4
<PAGE> 9
Classes of shares. Currently, your Fund's Articles of Incorporation
allow for multiple portfolios, but not various classes within a portfolio. The
proposed structure allows for classes of shares. These classes will be sold to
different groups of investors and will offer differing levels of service with
differing levels of charges.
Shareholder liability. Absent unusual circumstances, shareholders of a
Fund organized as a Maryland corporation have no personal liability for the
Fund's obligations. The same is true for shareholders of a Fund organized as a
Delaware business trust.
Director/Trustee liability and indemnification. With a Maryland
corporation, Directors cannot be held liable for their activities in that role
so long as they perform their duties in good faith, prudently, and in the Fund's
best interests. The same is generally true for Trustees of a Delaware business
trust, if so provided in the Fund's governing documents, which your Fund's
documents will so provide. Under each legal structure, the Fund can indemnify
its Directors/Trustees from claims and expenses arising out of their service to
the Fund--unless, that is, a Director/Trustee has acted improperly in a
particular matter. In addition, any such indemnification shall be subject to the
requirements and limitations of Section .17(h) of the Investment Company Act of
1940, as amended.
Shareholder voting rights and meetings. Under a Fund organized as a
Maryland corporation, shareholders' voting rights are based on the number of
shares they own. As a Delaware business trust, your Fund will continue to
utilize a share-based voting rights system. As a Maryland corporation, a Fund
generally must call a shareholder meeting if one is requested in writing by
investors entitled to cast 25% or more of the Fund's votes. As a Delaware
business trust, the Fund will adopt a 10% standard.
Share certificates. If requested, Funds organized as Maryland
corporations will issue share certificates to their investors. Your Fund's past
practice generally has been not to issue share certificates. As a Delaware
business trust, a Fund is not required to issue share certificates.
Termination of the Fund. As a Maryland corporation, the Fund can be
terminated by the Trustees upon the affirmation of a majority of all
shareholder votes entitled to be cast. As a Delaware business trust, the Fund
can be terminated by the Trustees at their discretion, with written notice to
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
THE REORGANIZATION.
ITEM 2
APPROVAL OR DISAPPROVAL OF CHANGES TO THE FUND'S FUNDAMENTAL INVESTMENT
POLICIES OF THE PORTFOLIOS
The Investment Company Act of 1940 (the "1940 Act") requires
investment companies such as the Fund to adopt certain specific investment
policies that can be changed only by shareholder vote. An investment company
may also elect to designate other policies that may be changed only by
shareholder vote. Both types of policies are often referred to as "fundamental
policies." All other policies are non-fundamental and may be changed with Board
approval and without a shareholder vote. Certain of the fundamental policies of
the Portfolios have been adopted in the past to reflect regulatory, business or
industry conditions that are no longer in effect. Accordingly, the Directors
have approved, and have authorized the submission to the Fund's shareholders of
the respective Portfolios for their approval, the removal, amendment, and/or
reclassification as non-fundamental of certain of each Portfolio's fundamental
policies.
The proposed amendments would:
(i) simplify and modernize the policies that are required to be
fundamental by the 1940 Act;
(ii) reclassify those fundamental policies that are not required
to be fundamental by the 1940 Act as non-fundamental
policies; and
5
<PAGE> 10
(iii) eliminate fundamental policies that are no longer required by
the securities laws of individual states.
By reducing to a minimum those policies that can be changed only by
shareholder vote, the Directors believe that the Fund would be able to minimize
the costs and delay associated with holding frequent shareholder meetings. The
Directors also believe that the proposals will enhance the flexibility of the
investment adviser to manage the Portfolios in a changing investment
environment and increase the investment management opportunities available to
the Portfolios.
As a general matter, if these proposals are not approved, the policies
will continue as currently stated. The Board of Directors will then consider
what future action should be taken.
ITEM 2(a)
TO ADOPT A FUNDAMENTAL POLICY LIMITING INVESTMENTS
Currently, each Portfolio of the Fund has one or more fundamental
investment policies limiting the Portfolio's investment to particular types of
securities; in each case, these are securities which are themselves eligible
for purchase by national banks, federal savings associations, and federal
credit unions. The Board of Directors has determined, and has recommended that
shareholders approve, that each of these policies, which are set forth in items
2(b) through 2(d) below, should be made non-fundamental (i.e., subject to
change by the Board of Directors without shareholder approval) and that the
following fundamental policy (which may be changed only with shareholder
approval) be adopted by each Portfolio.
The Portfolio will limit its investments and investment techniques so
as to qualify for investment by national banks, federal savings associations,
and federal credit unions.
Due to federal regulations, national banks, federal savings
associations and federal credit unions, each of which invests in the
Portfolios, may only invest in the Portfolios so long as each Portfolio
satisfies certain investment restrictions. For this reason, each Portfolio
seeks to maintain the appropriate fundamental investment restrictions as are
required by federal regulations so that these institutions may continue to
invest in the Portfolios. However, from time to time, the federal regulations
governing the permitted investments for these institutions may change. This
amendment would allow each Portfolio the flexibility to appropriately and
efficiently adjust its investment restrictions in order to satisfy the changing
regulations governing these investing institutions. In particular, this
amendment would save time and money for the Portfolio by allowing the Board to
make necessary investment adjustments as needed without the necessity of a
shareholders meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
THIS PROPOSAL.
ITEM 2(b)
TO CHANGE THE FUNDAMENTAL POLICY ON HIGH QUALITY
ASSETS TO A NON-FUNDAMENTAL POLICY FOR THE MONEY MARKET
PORTFOLIO AND SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO
The current fundamental investment policy of the Money Market
Portfolio and Short U.S. Government Securities Portfolio is as follows:
The Portfolio invests only in high quality assets (including assets
subject to repurchase agreements) that qualify as "Liquid Assets" for
savings associations under the regulations of the Office of Thrift
Supervision of the Department of the Treasury ("OTS Regulations") and
that, if included in the Portfolio, will qualify its shares as "Liquid
Assets."
6
<PAGE> 11
The Board of Directors has approved and recommended that this policy
be changed from fundamental to non-fundamental.
Due to federal regulations, national banks, federal savings
associations and federal credit unions, each of which invests in the
Portfolios, may only invest in the Portfolios so long as each Portfolio
satisfies certain investment restrictions. For this reason, each Portfolio
seeks to maintain the appropriate fundamental investment restrictions as are
required by federal regulations so that these institutions may continue to
invest in the Portfolios. However, from time to time, the federal regulations
governing the permitted investments for these institutions may change. This
amendment would allow each Portfolio the flexibility to appropriately and
efficiently adjust its investment restrictions in order to satisfy the changing
regulations governing these investing institutions. In particular, this
amendment would save time and money for the Portfolio by allowing the Board to
make necessary investment adjustments as needed without the necessity of a
shareholders meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
THIS PROPOSAL.
ITEM 2(c)
TO ELIMINATE THE FUNDAMENTAL POLICY ON
OTS QUALIFYING SECURITIES
The current fundamental policy of the Money Market Portfolio and Short
U.S. Government Securities Portfolio is as follows:
Each Portfolio may not purchase securities other than those qualifying
under OTS Regulations. In the event that the OTS Regulations (as
defined in the Prospectus) are amended to remove assets from the list
of assets which qualify as permissible investments, the Fund will
dispose of any nonqualifying assets held by the Portfolio in such time
and manner as may be permitted by relevant OTS Regulations or, if
none, in such time and manner as the Fund's Board of Directors may
determine. Conversely, if the list of qualifying assets is expanded,
the Portfolio will be free to make investments therein.
The Board of Directors has approved and recommended that this
fundamental policy be eliminated.
The current fundamental policy of the ARM Portfolio, the Intermediate
Mortgage Securities Portfolio and the U.S. Government Mortgage Securities
Portfolio is as follows:
Each Portfolio may not purchase securities other than those qualifying
under OTS Regulations. In the event that the OTS Regulations (as
defined in the Prospectus) applicable to Federal savings associations
are amended to remove assets from the list of assets which qualify as
permissible investments, the Fund will dispose of any nonqualifying
assets held by the Portfolio in such time and manner as may be
permitted by relevant OTS Regulations or, if none, in such time and
manner as the Fund's Board of Directors may determine. Conversely, if
the list of qualifying assets is expanded, the Portfolio will be free
to make investments therein, to the extent consistent with the Fund's
investment objective and the Portfolio's management policies.
The Board of Directors has approved and recommended that this
fundamental policy be eliminated.
Due to federal regulations, national banks, federal savings
associations and federal credit unions, each of which invests in the
Portfolios, may only invest in the Portfolios so long as each Portfolio
satisfies certain investment restrictions. For this reason, each Portfolio
seeks to maintain the appropriate fundamental investment restrictions as are
required by federal regulations so that these institutions may continue to
invest in the Portfolios. However, from time to time, the federal regulations
governing the permitted investments of these institutions may change. This
amendment would allow each Portfolio the flexibility to appropriately and
efficiently adjust its investment restrictions in order to satisfy the changing
regulations governing these investing institutions. In particular, this
amendment would save time
7
<PAGE> 12
and money for the Portfolio by allowing the Board to make necessary investment
adjustments as needed without the necessity of a shareholders meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
THIS PROPOSAL.
ITEM 2(d)
TO CHANGE THE FUNDAMENTAL POLICY ON INVESTMENTS
IN MORTGAGE SECURITIES TO A NON-FUNDAMENTAL POLICY
The current fundamental policy of the ARM Portfolio, the Intermediate
Mortgage Securities Portfolio and the U.S. Government Mortgage Securities
Portfolio is as follows:
The Adjustable Rate Mortgage (ARM) Portfolio, the Intermediate
Mortgage Securities Portfolio, and the U.S. Government Mortgage
Securities Portfolio (collectively referred to as the "Mortgage
Securities Portfolios") invest primarily in "securities backed by or
representing an interest in mortgages on domestic residential housing
or manufactured housing" meeting the definition of such assets for
purposes of the qualified thrift lender ("QTL") test under the current
Office of Thrift Supervision ("OTS") Regulations. Pending any
revisions of the current OTS Regulations, each Mortgage Securities
Portfolio expects that, absent extraordinary market developments, at
least 65% of its assets will qualify for QTL purposes for savings
associations, although actual percentages may be higher. In addition,
each Mortgage Securities Portfolio will not purchase any investments
having a risk-based weighting in excess of 20% under the current
risk-based capital regulations established by the OTS. Also, each
Mortgage Securities Portfolio will not purchase any investments having
a risk-based weighting for banks in excess of 50% under current
federal regulations of the appropriate regulatory agencies.
Furthermore, each Mortgage Securities Portfolio will not invest in
"high risk" securities that do not meet the tests contained in the
"Supervisory Policy Statement on Securities Activities" adopted by the
Federal Deposit Insurance Corporation, the Office of the Comptroller
of the Currency, the OTS and the National Credit Union Administration,
respectively, and each Mortgage Securities Portfolio limits its
investments to those permissible without limitation for federal
savings associations, national banks and federal credit unions under
current applicable regulations.
The Board of Directors has approved and recommended that this policy
be changed to a non-fundamental policy.
Due to federal regulations, national banks, federal savings
associations and federal credit unions, each of which invests in the
Portfolios, may only invest in the Portfolios so long as each Portfolio
satisfies certain investment restrictions. For this reason, each Portfolio
seeks to maintain the appropriate fundamental investment restrictions as are
required by federal regulations so that these institutions may continue to
invest in the Portfolios. However, from time to time, the federal regulations
governing the permitted investments of these institutions may change. This
amendment would allow each Portfolio the flexibility to appropriately and
efficiently adjust its investment restrictions in order to satisfy the changing
regulations governing these investing institutions. In particular, this
amendment would save time and money for the Portfolio by allowing the Board to
make necessary investment adjustments as needed without the necessity of a
shareholders meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
THIS PROPOSAL.
8
<PAGE> 13
ITEM 2(e)
TO AMEND THE FUNDAMENTAL POLICY ON PORTFOLIO LENDING
The current fundamental investment policy of the Portfolio with regard
to the lending of portfolio securities is as follows:
Each Portfolio may not make loans except that the Portfolio may
purchase or hold debt obligations, enter into repurchase agreements
and loan Federal funds and other day(s) funds to FDIC Insured
Institutions (as defined in the Prospectus), in each case to the
extent permitted by the Fund's investment objective and management
policies.
The Board of Directors has approved and recommended that this policy
be amended to read as follows:
Each Portfolio may not lend any of its assets, except portfolio
securities. This shall not prevent the Portfolio from purchasing or
holding debt obligations, entering into repurchase agreements, and
loaning Federal funds and other day(s) funds to FDIC Insurance
Institutions (as defined in the Prospectus), in each case to the
extent permitted by the Portfolio's investment objective and
management policies.
This amendment would permit the Portfolios to loan their portfolio
securities in accordance with such policies as the Board of Directors and the
Investment Adviser of the Portfolios establish from time to time. Of course,
such policies would be in accordance with any applicable guidelines issued by
the Securities and Exchange Commission ("SEC") or any other regulatory body
having jurisdiction over such transactions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
THIS PROPOSAL.
ITEM 2(f)
TO CHANGE THE FUNDAMENTAL POLICIES ON ILLIQUID INVESTMENTS TO
NON-FUNDAMENTAL POLICIES
The current fundamental policy of the Money Market Portfolio and the
Short U.S. Government Securities Portfolio is as follows:
Each Portfolio may not enter into repurchase agreements or purchase
any other investments for which market quotations are not readily
available, in each case maturing in more than 7 days if, as a result,
more than 10% of the market value of its total assets would be
invested in such repurchase agreements and such other illiquid
investments.
The Board of Directors has approved and recommended that the policy be
changed to the following non-fundamental policy:
Each Portfolio may not invest more than 10% (in the case of the Money
Market Portfolio) or 15% (in the case of the Short U.S. Government
Securities Portfolio) of its net assets in illiquid securities,
including repurchase agreements maturing in more than seven days.
The current fundamental policies of the ARM Portfolio, the
Intermediate Mortgage Securities Portfolio and the U.S. Government Mortgage
Securities Portfolio are as follows:
The Adjustable Rate Mortgage (ARM) Portfolio will not purchase any
securities maturing in more than seven days for which market
quotations are not readily available, or purchase interest rate caps
and floors, or enter into any repurchase agreements maturing in more
than seven days if, as a result, more than 10% of the market value of
its total assets would be invested in such illiquid securities.
The Intermediate Mortgage Securities Portfolio will not purchase any
securities maturing in more than seven days for which market
quotations are not readily available and will not enter into any
repurchase agreements maturing in more than seven days if, as a
result, more than 15% of the market value of its total assets would be
invested in such illiquid securities together with repurchase
agreements maturing in more than seven days. To the extent Rule 144A
securities are deemed by the Adviser, subject to the supervision of
the Board of Directors, to be illiquid, they will be subject to the
foregoing 15% limitation on illiquid securities.
9
<PAGE> 14
The U.S. Government Mortgage Securities Portfolio will not purchase
any Mortgage-Related Securities or other securities maturing in more
than seven days for which market quotations are not readily available
and will not enter into any repurchase agreements maturing in more
than seven days if, as a result, more than 10% of the market value of
its total assets would be invested in such illiquid securities
together with such repurchase agreements maturing in more than seven
days.
The Board of Directors has approved and recommended that each of these
policies be changed to the following non-fundamental policy:
Each Portfolio may not invest more than 15% of its net assets in
illiquid securities, including repurchase agreements maturing in more
than seven days.
Recently, the SEC has changed its position regarding the amount of
total assets the Portfolios may invest in illiquid securities. As a result of
these changes, the Portfolios will have the opportunity to expand their
investments in certain securities. This amendment will allow the Portfolios
greater flexibility to invest the Portfolios' assets in income producing
securities without the necessity of a shareholder meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
THIS PROPOSAL.
ITEM 2(g)
TO ELIMINATE THE FUNDAMENTAL POLICY ON MONEY
MARKET INSTRUMENTS
The current fundamental policy of the Money Market Portfolio is as
follows:
The Portfolio invests in high quality short-term money market
instruments that are determined to present minimal credit risks and
that meet the quality and diversification requirements of Rule 2a-7
under the Investment Company Act of 1940. Securities must be rated in
the top two rating categories by the required number of nationally
recognized statistical rating organizations (at least two or, if only
one such organization has rated the security, that one organization)
or, if unrated, must be deemed by the Adviser to be comparable in
quality. The diversification requirements provide generally that the
Portfolio may not at the time of acquisition invest more than 5% of
its assets in securities of any one issuer or invest more than 5% of
its assets in securities that have not been rated in the highest
category by the required number of rating organizations or, if
unrated, have not been deemed comparable, except U.S. Government
securities and repurchase agreements collateralized by such
securities. The Portfolio will maintain a dollar-weighted average
maturity of 90 days or less. It is the policy of the Portfolio that it
generally holds its investments to maturity.
The Board of Directors has approved and recommended that this
fundamental policy be eliminated.
Currently, all money market funds must comply with Rule 2a-7 under the
Investment Company Act of 1940. For this reason, the Portfolio's existing
policy is duplicative and unnecessary. Furthermore, in the event that Rule 2a-7
is changed by SEC action, it may be necessary to call a shareholders meeting to
amend the Portfolio's current policy. Therefore, the elimination of this policy
will allow the Board to make any necessary adjustments under Rule 2a-7 without
the need for a shareholders meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
THIS PROPOSAL.
10
<PAGE> 15
INFORMATION REGARDING DIRECTORS AND OFFICERS
Your approval of the reorganization proposal will be treated as a vote
to elect each of the Fund's current Directors to the position of Trustee with
the newly organized Delaware business trust. Following the reorganization, the
Trustees will serve until the next election or until their terms are for some
reason terminated. This section provides detailed information about the
individual Directors and Officers of the Fund.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH FUND
---------------- ------------------
<S> <C>
RICHARD M. AMIS (AGE 48) Director since 1977
360 Clarksville Street
Paris, TX 75460
</TABLE>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS AND PRIOR RELEVANT EXPERIENCE:
President, First Federal Community Bank since 1984; Director, First
Financial Trust Company; formerly Chairman, Texas Savings and Community Bankers
Association.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH FUND
---------------- ------------------
<S> <C>
ARTHUR G. DERUSSO (AGE 78) Director since 1993
5397 S.E. Major Way
Stuart, FL 34997
</TABLE>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS AND PRIOR RELEVANT EXPERIENCE:
Chief Executive Officer, Eastern Financial Federal Credit Union from
1974 to 1992; Chairman and Director, First Credit Union Trust Co., Inc. from
1988 to 1992; President of the Airline Credit Union Conference in 1991;
Director, Honor ATM Network, Florida from 1985 to 1990.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH FUND
---------------- ------------------
<S> <C>
DAVID F. HOLLAND (AGE 57) Director 1988-1989 and since 1993
17 Ledgewood Circle
Topsfield, MA 01983
</TABLE>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS AND PRIOR RELEVANT EXPERIENCE:
Chairman of the Board since 1989 and Chief Executive Officer since
1986 of Boston Federal Savings Bank; Director of Fund from 1988 to 1989 and
since 1993; Director of Federal Home Loan Bank of Boston; until December 1997
Chairman of America's Community Banking Partners, Inc. and Director of ACB
Investment Services, Inc.; Director of M.S.B. Fund, Inc. since 1997; Director
and Chairman since December 1995 of Center for Financial Studies; Director of
NYCE Corporation since 1995; Director from 1990 to 1995 and Chairman 1993-1994
of America's Community Bankers; member from 1995 to 1997 and President in 1997
of Thrift Institutions Advisory Council.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH FUND
---------------- ------------------
<S> <C>
GERALD J. LEVY (AGE 67) Vice Chairman of the Board and Director since 1985
4000 W. Brown Deer Road
Milwaukee, WI 53209
</TABLE>
11
<PAGE> 16
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS AND PRIOR RELEVANT EXPERIENCE:
Chairman and Chief Executive Officer, Guaranty Bank, S.S.B. since 1984
(from 1959 to 1984, he held a series of officer's positions, including
President). Chairman, 1986, United States League of Savings Institutions;
Director of Fiserv, Inc. since 1986; Director since 1995 of the Republic
Mortgage Insurance Company; Director of the Federal Asset Disposition
Association from 1986 to 1989; and, previously Director and Vice Chairman,
Federal Home Loan Bank of Chicago and member of Advisory Committee of the
Federal Home Loan Mortgage Corporation and Federal National Mortgage
Corporation.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH FUND
---------------- ------------------
<S> <C>
RODGER D. SHAY* (AGE 62) Chairman of the Board and Director 1985-1990 and
1000 Brickell Avenue 1993 to present
Miami, FL 33131
</TABLE>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS AND PRIOR RELEVANT EXPERIENCE:
Chairman and Director of Shay Assets Management, Inc. since August
1997 (previously President and Director from 1990 to August 1997); Chairman and
Director of Shay Financial Services, Inc. since August 1997 (previously
President and Director from 1990 to August 1997); President, Chief Executive
Officer and member of the Managing Board of Shay Assets Management Co. from
1990 to December 1997; President, Chief Executive Officer and member of the
Managing Board of Shay Financial Services Co. from 1990 to December 1997;
Director from 1986 to 1991 and President from 1986 to 1992, U.S. League
Securities, Inc.; Vice President since 1995 of Institutional Investors Capital
Appreciation Fund, Inc. and M.S.B. Fund, Inc.; previously Director, Asset
Management Fund, Inc., from 1985 to 1990; President of Bolton Shay and Company
and Director and officer of its affiliates from 1981 to 1985; Director and
Chairman, Horizon Bank, FSB since 1998; previously, employed by certain
subsidiaries of Merrill Lynch & Co. from 1955 to 1981, where he served in
various executive positions including Chairman of the Board of Merrill Lynch
Government Securities, Inc., Chairman of the Board of Merrill Lynch Money
Market Securities, Inc. and Managing Director of the Debt Trading Division of
Merrill Lynch, Pierce, Fenner & Smith Inc.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH FUND
---------------- ------------------
<S> <C>
EDWARD E. SAMMONS, JR. (AGE 59) President since 1998 (prior thereto, Vice
230 West Monroe Street President)
Chicago, IL 60606
</TABLE>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS AND PRIOR RELEVANT EXPERIENCE:
President of Shay Assets Management, Inc. since August 1997
(previously Executive Vice President from 1990 to August 1997); Executive Vice
President and member of the Managing Board of Shay Assets Management Co. from
1990 to December 1997; Executive Vice President and member of the Managing
Board of Shay Financial Services Co. from 1990 to December 1997 and Executive
Vice President of the managing partner of the Shay Financial Services, Inc.,
from 1990 to December 1997; Vice President and Secretary since 1995 of
Institutional Investors Capital Appreciation Fund, Inc. and M.S.B. Fund, Inc.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH FUND
---------------- ------------------
<S> <C>
ROBERT T. PODRAZA (AGE 54) Vice President and Assistant Treasurer since 1998
230 West Monroe Street
Chicago, IL 60606
</TABLE>
12
<PAGE> 17
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS AND PRIOR RELEVANT EXPERIENCE:
Vice President of Shay Investment Services, Inc. since 1990; Vice
President since 1990 and Chief Compliance Officer since 1997 of Shay Financial
Services, Inc.; Vice President since 1990 and Chief Compliance Officer since
1997 of Shay Assets Management, Inc.; Chief Compliance Officer of Shay
Financial Services Co. and Shay Assets Management Co. from 1989 to 1997;
Director of the National Society of Compliance Professionals since 1996.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH FUND
---------------- ------------------
<S> <C>
DANIEL K. ELLENWOOD (AGE 29) Secretary since 1998
230 West Monroe Street
Chicago, IL 60606
</TABLE>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS AND PRIOR RELEVANT EXPERIENCE:
Secretary of the Fund since April 1998; Operations Analyst, Shay Assets
Management, Inc. since November 1997; Compliance Analyst, Shay Financial
Services, Inc. since October 1996.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH FUND
---------------- ------------------
<S> <C>
STEVE PIERCE (AGE 33) Treasurer since 1999
3435 Stelzer Road
Columbus, OH 43219
</TABLE>
PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS AND PRIOR RELEVANT EXPERIENCE:
Director of Financial Services of BISYS Fund Services since 1998;
Manager of Financial Operations at CNA Insurance from 1996-1998; Trust Officer
of First Chicago NBD Corporation from 1994-1996; Senior Financial Accountant at
Kemper Financial Services from 1989-1994.
*Mr. Shay is an "interested person" of the Fund, as defined in the
1940 Act, by reason of his affiliations with the Fund's investment adviser.
Since the beginning of the most recently completed fiscal year of the
Fund, Mr. Shay sold 230 shares (representing 11 1/2% of the outstanding shares)
of Shay Investment Services, Inc., parent to the Fund's investment adviser and
distributor, to ten individuals for aggregate cash consideration of $1,150,000.
The officers of the Fund are elected by the Board on an annual basis
to serve until their successors are elected and qualified. As of August 24,
1999, the executive officers of the Fund held in the aggregate directly and
beneficially less than one percent of the outstanding common stock of each
Portfolio.
The Audit Committee of the Board of Directors is currently composed of
Messrs. Holland, Levy and Amis. The Audit Committee makes recommendations to
the Board of Directors with respect to the selection of the independent
accountants for the Fund, reviews with the independent accountants the
arrangements and scope of the auditing engagement, reviews and approves
non-audit service provided by the independent accountants, considers the amount
of their audit and non-audit fees, considers the effect of the foregoing on
their independence, considers comments and recommendations from the independent
accountants with respect to internal accounting controls and reviews the annual
financial statements. The Nominating Committee of the Board of Directors is
currently composed of Messrs. Amis, DeRusso, Kendall and Levy. The Board of
Directors does not have a compensation committee.
During the Fund's most recent fiscal year ended October 31, 1998,
there were five meetings of the Board of Directors and one meeting of the Audit
Committee. The Nominating Committee did not meet. During this
13
<PAGE> 18
period, each then current director attended 75% or more of the meetings of the
Board and the committees on which they served for such period.
The Fund pays the following fees to directors who are not officers or
employees of Shay Assets Management Co., the Fund's investment adviser, or Shay
Financial Services Co., the Fund's distributor: $7,500 per annum in
compensation, a fee of $1,500 for attendance at each meeting of the Board of
Directors, and $1,000 for attendance at each meeting of any committee thereof.
The Fund also reimburses the out-of-pocket expenses incurred by all directors
of the Fund in attending meetings of the Board of Directors and the committees
thereof. The table below sets forth the compensation earned by directors from
the Fund for the fiscal year ended October 31, 1998. The directors do not
receive any pension or retirement benefits from the Fund.
<TABLE>
<CAPTION>
AGGREGATE PENSION OR RETIREMENT ESTIMATED ANNUAL
COMPENSATION BENEFITS ACCRUED AS PART BENEFITS UPON TOTAL
DIRECTOR FROM THE FUND OF FUND EXPENSES RETIREMENT COMPENSATION
- -------- ------------- ------------------------ ---------------- ------------
<S> <C> <C> <C> <C>
Richard M. Amis $14,500 0 0 $14,500
Arthur G. DeRusso 13,500 0 0 13,500
David F. Holland 14,500 0 0 14,500
Leon T. Kendall(1) 3,375 0 0 3,375
Gerald J. Levy 13,000 0 0 13,000
Rodger D. Shay 0 0 0 0
</TABLE>
- ------------------
(1) Retired December 6, 1997.
The following table shows each Director's beneficial interest in
shares of the Portfolios as of August 31, 1999:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF DIRECTOR PORTFOLIO BENEFICIALLY OWNED
- ---------------- --------- ------------------
<S> <C> <C>
Richard M. Amis None None
Arthur G. DeRusso ARM 1,142.9
David F. Holland None None
Gerald J. Levy None None
Rodger D. Shay ARM 1,258.861
Money Market Portfolio 2,658.360
U.S. Government Mortgage 1,245.130
Securities Portfolio
Short U.S. Government Securities 10,012.92
Portfolio
</TABLE>
14
<PAGE> 19
FUND INFORMATION
This section contains background information about the Fund.
THE FUND (AS OF AUGUST 24, 1999)
<TABLE>
<CAPTION>
OUTSTANDING
PORTFOLIO NET ASSETS SHARES
--------- ---------- -----------
<S> <C> <C>
U.S. Government $ 86,747,215.82 8,438,445.119
Mortgage Securities
Portfolio
Intermediate $ 103,357,173.39 11,054,243.143
Mortgage Securities
Portfolio
Short U.S. $ 118,838,483.64 11,437,775.134
Government
Securities Portfolio
Adjustable Rate $ 955,725,826.37 96,831,390.716
Mortgage Portfolio
Money Market $ 61,328,390.55 62,328,390.550
Portfolio
</TABLE>
ADDITIONAL INFORMATION
QUORUM AND VOTING REQUIREMENTS
Item 1, Reorganization of the Fund into a Delaware Business Trust;
requires the vote of the holders of a majority of the total number of shares
outstanding and entitled to vote. Item 2, Changes to the Fund's Fundamental
Investment Policies of the Portfolios; requires the favorable vote of: (a) the
holders of 67% or more of the outstanding voting securities of the appropriate
Portfolio present at the meeting, if the holders of 50% or more of the
outstanding voting securities of the Portfolio are present or represented by
proxy; or (b) the vote of the holders of more than 50% of the outstanding
voting securities of the appropriate Portfolio, whichever is less, to approve
the amendment of the investment policies which apply to that Portfolio.
Only shareholders of record on the Record Date will be entitled to
vote at the Special Meeting. Each share of the Fund (or portfolio, where
appropriate) is entitled to one vote. Fractional shares are entitled to
proportionate shares of one vote.
Any person giving a proxy has the power to revoke it any time prior to
its exercise by executing a superseding proxy or by submitting a written notice
of revocation to the Secretary of the Fund. In addition, although mere
attendance at the Special Meeting will not revoke a proxy, a shareholder
present at the Special Meeting may withdraw his or her proxy and vote in
person. All properly executed and unrevoked proxies received in time for the
Special Meeting will be voted in accordance with the instructions contained in
the proxies. If no instruction is given on the proxy, the persons named as
proxies will vote the shares represented thereby in favor of the matters set
forth in the attached Notice.
In order to hold the Special Meeting, a "quorum" of shareholders must
be present. Because approval of changes to the Fund's investment restrictions
require approval by the shareholders of each affected Portfolio of the Fund,
holders of one-third (1/3) of the total number of outstanding shares of each
Portfolio of the Fund (i.e., the
15
<PAGE> 20
U.S. Government Mortgage Securities Portfolio, the Intermediate Mortgage
Securities Portfolio, the Short U.S. Government Securities Portfolio, the
Adjustable Rate Mortgage (ARM) Portfolio and the Money Market Portfolio),
present in person or by proxy, shall be required to constitute a quorum for the
purpose of voting on the proposals made.
For purposes of determining a quorum for transacting business at the
Special Meeting, abstentions and broker "non-votes" (that is, proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owner or other persons entitled to vote shares on a
particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated as shares that are present but which have
not been voted. For this reason, abstentions and broker non-votes will have the
effect of a "no" vote for purposes of obtaining the requisite approval of the
proposals.
If a quorum is not present, the Special Meeting may be adjourned to a
later date by the affirmative vote of a majority of the shares of each
Portfolio present or represented by proxy. If a quorum is not present, the
stockholders of a majority of the shares of all Portfolios or an individual
Portfolio or Portfolios, as the case may be, present in person or by proxy and
entitled to vote shall have the power to adjourn the Meeting from time to time
as to all Portfolios or as to such individual Portfolio or Portfolios, as the
case may be, without notice other than announcement at the Meeting, until the
requisite number of shares entitled to vote at such Meeting shall be present.
In the event that a quorum is present at the Meeting but sufficient votes to
approve any of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will be approved if the votes cast in favor of
such adjournment exceed the votes cast opposing such adjournment. It is
anticipated that the persons named as proxies would vote in favor of
adjournment. In tallying stockholder votes, abstentions and broker non-votes
(i.e., shares held by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or persons entitled to vote and (ii)
the broker or nominee does not have discretionary voting power on a particular
matter) will be counted for determining whether a quorum is present for
purposes of convening the Meeting and will be considered present at the
Meeting.
INVESTMENT ADVISER AND DISTRIBUTOR
Shay Assets Management, Inc., a Florida corporation, is the investment
adviser to the Fund. Shay Assets Management, Inc. is a registered investment
adviser under the Investment Advisers Act of 1940. Shay Financial Services,
Inc., a Florida corporation, is the Distributor of the Fund's shares. Shay
Financial Services, Inc., a registered broker/dealer, is a wholly-owned
subsidiary of Shay Investment Services, Inc. which is a closely held
corporation controlled by Rodger D. Shay. The principal offices of Shay Assets
Management, Inc. and Shay Financial Services, Inc. are located at 230 West
Monroe Street, Chicago, Illinois 60606.
PROPOSALS OF SHAREHOLDERS
Any shareholder who wishes to submit proposals for consideration at a
meeting of shareholders should send such proposal to the Fund at 230 West
Monroe Street, Chicago, Illinois 60606. To be considered for presentation at a
shareholders meeting, rules promulgated by the SEC require that, among other
things, a shareholder's proposal must be received at the offices of the Fund a
reasonable time before a solicitation is made. Timely submission of a proposal
does not mean that such proposal will be included.
16
<PAGE> 21
5% SHAREHOLDERS
The following table provides certain information on August 24, 1999
with respect to persons known to the Fund to be beneficial (and record) owners
(having sole voting and dispositive power) of five percent (5%)* or more of the
shares of the common stock of the Money Market Portfolio and the Intermediate
Mortgage Portfolio:
<TABLE>
<CAPTION>
Percent of Portfolio's
Owner Number of Shares Outstanding Common Stock Portfolio
----- ---------------- ------------------------ ---------
<S> <C> <C> <C>
Brooklyn Federal Savings Bank 4,264,160.970 6.950% Money
Attn: Angelo J. DiLorenzo Market
81 Court Street
Brooklyn, NY 11201
AnchorBank, S.S.B. 12,000,000.000 19.560% Money
Attn: Michael W. Helser Market
P.O. Box 7933
Madison, WI 53707
Windsor Federal Savings Bank 5,205,047.940 8.480% Money
Attn: David W. Shaw Market
250 Broad Street
Windsor, CT 06095
First Federal Savings & Loan of 11,507,634.300 18.760% Money
East Hartford Market
Attn: Carol Oliveri
1007 Main Street
Manchester, CT 06040
Fullerton Community Bank 1,208,746.179 10.740% Intermediate
Attn: Jon Shigematsu Mortgage
200 W. Commonwealth Avenue
Fullerton, CA 92832
Fox Valley Savings and Loan 662,027.981 5.880% Intermediate
Attn: Peter R. Ludovic Mortgage
P.O. Box 1216
51 E. First Street
Fond Du Lac, WI 54935
Sovereign Bank 1,533,197.228 13.630% Intermediate
Attn: Patricia Fonde Heck Mortgage
11-900-FM5
P.O. Box 12646
Reading, PA 19612
</TABLE>
- -----------
* SEC rules require each Portfolio to tell you the name and address of
any person known to be the beneficial owner of more than 5% of any
class of the Portfolio's outstanding shares. The Portfolio must also
tell you how many shares such persons own and what percentage of the
class these shares represent.
17
<PAGE> 22
<TABLE>
<S> <C> <C> <C>
First Federal Savings and Loan of 936,722.297 8.320% Intermediate
Martinsville Mortgage
Attn: John N. Hornsby, President
P.O. Box 684
Martinsville, VA 24114
BFS Security Corporation 861,641.665 7.660% Intermediate
Attn: Sharon Borbee Mortgage
17 New England Executive Park
Burlington, MA 01803
Cuero State Bank, S.S.B. 808,858.552 7.190% Intermediate
Attn: William E. Howard, Mortgage
President
P.O. Box 808
Cuero, TX 77954
</TABLE>
DISCRETION OF PERSONS NAMED IN THE PROXY
No business other than the matter described above is expected to come
before the Special Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment or postponement
of the Special Meeting, the persons named on the enclosed proxy card will vote
on such matters according to their best judgment in the interests of the Fund.
SHAREHOLDERS ARE REQUESTED TO COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY CARD AND
RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES.
By Order of the Directors
Daniel K. Ellenwood
Secretary
August 31, 1999
18
<PAGE> 23
ASSET MANAGEMENT FUND, INC.
Investment Adviser
SHAY ASSETS MANAGEMENT, INC.
230 West Monroe Street
Chicago, Illinois 60606
Distributor
Shay Financial Services, Inc.
230 West Monroe Street
Chicago, Illinois 60606
19
<PAGE> 24
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
ASSET MANAGEMENT FUND, INC., a Maryland corporation (the "Company"),
for itself and on behalf of its series of shares designated as Money Market
Portfolio; Short U.S. Government Securities Portfolio; Adjustable Rate Mortgage
(ARM) Portfolio; Intermediate Mortgage Securities Portfolio; and U.S.
Government Mortgage Securities Portfolio (each referred to herein as an
"Acquired Portfolio"), and Asset Management Fund, a Delaware business trust
(the "Trust"), for itself and on behalf of its series of shares designated as
the Money Market Portfolio, the Short U.S. Government Securities Portfolio, the
Adjustable Rate Mortgage (ARM) Portfolio, the Intermediate Mortgage Securities
Portfolio and the U.S. Government Mortgage Securities Portfolio (each an
"Acquiring Portfolio"), agree upon the following plan of reorganization (the
"Plan") with regard to each Company:
1. Prior to the closing provided for in section 4 below, the Company
and the Trust will execute and file articles of transfer with respect to the
transactions contemplated hereby with the Department of Assessments and
Taxation of the State of Maryland. The Company, on behalf of each of the
Acquired Portfolios, shall transfer to the corresponding Acquiring Portfolio
all of the assets of the Acquired Portfolio (including the share of the
Acquiring Portfolio owned by the Acquired Portfolio, which shall immediately
thereafter be cancelled), in exchange for which the Acquiring Portfolio shall
simultaneously assume all of the liabilities of the Acquired Portfolio, and
shall issue to the Company a number of Acquiring Portfolio shares equal in
number and net asset value to the number and net asset value of shares
(including fractional shares) of the Acquired Portfolio then outstanding. The
Company then will distribute to each registered shareholder of the Acquiring
Portfolio shares of the Acquiring Portfolio in a number and net asset value
equal to the number and net asset value of shares (including any fractional
share) of the Acquired Portfolio then owned by the shareholder, in liquidation
of the Acquired Portfolio and in exchange for and cancellation of the
shareholder's shares of the Acquired Portfolio. The Company, on behalf of each
Acquired Portfolio, covenants that each Acquired Portfolio shall not sell or
otherwise dispose of any Acquiring Portfolio Shares to be received in the
transactions contemplated herein, except in distribution to shareholders of the
Acquired Portfolio in accordance with the terms of this Agreement.
2. The distribution to the shareholders of each Acquired Portfolio
shall be accomplished by establishing an account on the share records of the
Acquiring Portfolio in the name of each registered shareholder of the Acquired
Portfolio, and crediting that account with a number of shares of the Acquiring
Portfolio equal to the number of shares (including any fractional share) of the
Acquired Portfolio owned of record by the shareholder at the time of the
distribution. Outstanding certificates representing shares of the Acquired
Portfolio shall thereafter represent an equal number of shares of the same
class of the Acquiring Portfolio.
3. Promptly thereafter, the Company shall be liquidated and dissolved
pursuant to the Maryland General Corporation Law.
4. The transaction in section 1 above shall occur at the close of
business on September 30, 1999, at the offices of the Trust, or at such other
date, time or place as may be agreed upon by the parties (the "Closing").
5. The obligations of each of the Company and the Trust to effect the
transactions contemplated hereunder shall be subject to the satisfaction of
each of the following conditions:
(a) All necessary filings shall have been made with the
Securities and Exchange Commission and state securities commissions and no
order or directive shall have been received that any other or further action is
required to permit the parties to carry out the transactions contemplated by
this Plan.
(b) The Company and the Trust shall have received an opinion
from its legal counsel substantially to the effect that for federal income tax
purposes: (i) no gain or loss will be recognized by any Acquired Portfolio upon
the transfer of its assets and liabilities to the corresponding Acquiring
Portfolio or upon the distribution to its shareholders of shares of the
Acquiring Portfolio received as a result of such transfer; (ii) the tax basis
of the assets
A-1
<PAGE> 25
of the Company in the hands of the corresponding Acquiring Portfolio will be
the same as the tax basis of such assets in the hands of the Acquired Portfolio
immediately prior to the transfer; (iii) the holding period of the assets of
the Acquired Portfolio transferred to the corresponding Acquiring Portfolio
will include the period during which such assets were held by the Acquired
Portfolio; (iv) no gain or loss will be recognized by the Acquiring Portfolio
upon the receipt of the assets of the Acquired Portfolio in exchange for shares
of the Acquiring Portfolio and the assumption by the Acquiring Portfolio of the
liabilities and obligations of the Acquired Portfolio; (v) no gain or loss will
be recognized by the shareholders of the Acquired Portfolio upon receipt of the
shares of the Acquiring Portfolio; (vi) the basis of the shares of the
Acquiring Portfolio received by the shareholders of the Acquired Portfolio will
be the same as the basis of the shares of the Acquired Portfolio exchanged
therefor; and (vii) the holding period of shares of the Acquiring Portfolio
received by the shareholders of the Acquired Portfolio will include the holding
period of the shares of the Acquired Portfolio exchanged therefor, provided
that at the time of the exchange the shares of the Acquired Portfolio were held
as capital assets; and as to such other matters as it may reasonably request.
(c) This Plan and the reorganization contemplated hereby
shall have been adopted and approved by the affirmative vote of the holders of
the requisite number of the outstanding shares of the Company and of each
Acquired Portfolio entitled to vote thereon as required by law at the time such
vote is taken.
(d) The Trustees of the Trust shall have authorized, and the
Acquiring Portfolio shall have issued, one share of the Acquiring Portfolio to
the corresponding Acquired Portfolio in consideration of the payment equal to
the net asset value of one share of the Acquired Portfolio on the day of the
Closing for the purpose of enabling the Company to approve as sole shareholder
of the Acquiring Portfolio the investment management between the Trust and Shay
Assets Management, Inc., for the Acquiring Portfolio; such approval shall have
taken place and the Acquiring Portfolio shall have become subject to said in
accordance with the terms thereof.
At any time prior to the Closing, any of the foregoing conditions may
be waived by the Company and the Trust if such a waiver will not have a
material adverse effect on the interests of the shareholders of the Company or
the Trust, as the case may be.
6. The Trust, on behalf of itself and the Acquiring Portfolios,
represents and warrants to the Company as follows:
(a) The Trust was duly created pursuant to its Agreement and
Declaration of Trust by the Trustees for the purpose of acting as a management
investment company under the 1940 Act and is validly existing under the laws of
the State of Delaware, and the Agreement and Declaration of Trust directs the
Trustees to manage the affairs of the Trust and grants them all powers
necessary or desirable to carry out such responsibility, including
administering Trust business as it is anticipated to be conducted by the Trust
and as described in the current prospectuses of the Company; upon the closing
described in Section 4, above, the Trust will succeed to the registration of
the Company with the SEC as an open-end management investment company under the
1940 Act;
(b) All issued and outstanding shares of the Acquiring
Portfolios class will, as of the Closing Date, be duly authorized and validly
issued and outstanding, fully paid and non-assessable by the Trust and the
Acquiring Portfolios do not have outstanding any option, warrants or other
rights to subscribe for or purchase any of their shares nor is there
outstanding any security convertible into any of their shares;
(c) The execution, delivery, and performance of this
Agreement on behalf of the Acquiring Portfolios will have been duly authorized
prior to the Closing Date by all necessary action on the part of the Trust and
the Trustees, and this Agreement constitutes a valid and binding obligation of
the Trust and the Acquiring Portfolios enforceable in accordance with its
terms, subject as to enforcement, to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(d) The Acquiring Portfolio Shares to be issued and delivered
to the corresponding Acquired Portfolio for the account of the Acquired
Portfolio Investors, pursuant to the terms hereof, will have been duly
authorized as of the Closing Date and, when so issued and delivered, will be
duly and validly issued, fully paid and non-
A-2
<PAGE> 26
assessable, and the shares of the class of the Acquiring Portfolio issued and
outstanding prior to the Closing Date were offered and sold in compliance with
the applicable registration requirements, or exemptions therefrom, of the 1933
Act, and the applicable notice or filing requirements, or exemptions therefrom,
of all applicable state securities laws, and the regulations thereunder, and no
shareholder of the Acquiring Portfolio shall have any preemptive right of
subscription or purchase in respect thereto;
(e) No governmental consents, approvals, authorizations or
filings are required under the 1933 Act, the Securities Exchange Act of 1934
(the "1934 Act"), the 1940 Act or Delaware law for the execution of this
Agreement by the Trust, for itself and on behalf of the Acquiring Portfolios,
or the performance of the Agreement by the Trust, for itself and on behalf of
the Acquiring Portfolios, except for such consents, approvals, authorizations
and filings as have been made or received, and except for such consents,
approvals, authorizations and filings as may be required subsequent to the
Closing Date; and
(f) The Trust intends to qualify as a "regulated investment
company" under the Code, and will elect to qualify as a "regulated investment
company" under the Code, as of its first taxable year.
7. This Plan may be amended at any time, and may be terminated at any
time before the completion of the transaction in section 1, regardless of
whether or not this Plan has been approved by the shareholders of the Company
or any Acquired Portfolio, by agreement of the Company and the Trust, provided
that no amendment shall have a material adverse effect upon the interests of
shareholders of the Company. In any case, this Plan may be terminated by either
the Company or the Trust, if the transaction in section 1 has not occurred by
the close of business on March 31, 2000.
8. A copy of the Trust's Certificate of Trust is on file with the
Secretary of the State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as the Trustees
of the Trust and not individually and that the obligations under this
instrument are not binding upon any of the Trustees, officers or shareholders
of the Trust individually, but binding only upon the assets and property of the
Acquiring Portfolio.
9. At any time after the completion of the transaction in section 1,
the Company acting through its officers, or if then dissolved through its last
officers, shall execute and deliver to the Trust, such additional instruments
of transfer or other written assurances as the Trust may reasonably request in
order to vest in the Trust, acting for the Acquiring Portfolio, title to the
assets transferred by the Acquired Portfolios under this Plan.
10. This Plan shall be construed in accordance with applicable federal
law and the laws of the State of Illinois, except as to the provisions of
section 8 hereof, which shall be construed in accordance with the laws of the
State of Delaware.
11. This Plan may be executed in any number of counterparts, each of
which shall be deemed an original.
12. No Acquired Portfolio shall have any liability for the obligations
of any other Acquired Portfolio hereunder, and no Acquired Portfolio shall have
any liability for the obligation of any other Acquiring Portfolio.
Dated: July 22, 1999
Asset Management Fund, Inc.
By: /s/ Edward E. Sammons, Jr.
-----------------------------
President
Asset Management Fund
By: /s/ Edward E. Sammons, Jr.
-----------------------------
President
A-3
<PAGE> 27
EXHIBIT B
DECLARATION OF TRUST
OF
ASSET MANAGEMENT FUND
A Delaware Business Trust
July 22, 1999
<PAGE> 28
DECLARATION OF TRUST
OF
ASSET MANAGEMENT FUND
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
The Trust.......................................................................................B-1
1.1 Name..........................................................................B-1
1.2 Trust Purpose.................................................................B-1
1.3 Definitions...................................................................B-1
ARTICLE II
Trustees........................................................................................B-3
2.1 Number and Qualification......................................................B-3
2.2 Term and Election.............................................................B-3
2.3 Resignation and Removal.......................................................B-3
2.4 Vacancies.....................................................................B-3
2.5 Meetings......................................................................B-4
2.6 Officers; Chairperson of the Board............................................B-4
2.7 By-Laws.......................................................................B-4
ARTICLE III
Powers of Trustees..............................................................................B-5
3.1 General.......................................................................B-5
3.2 Investments...................................................................B-5
3.3 Legal Title...................................................................B-5
3.4 Sale of Interests.............................................................B-5
3.5 Borrow Money..................................................................B-5
3.6 Delegation; Committee.........................................................B-6
3.7 Collection and Payment........................................................B-6
3.8 Expenses......................................................................B-6
3.9 Miscellaneous Powers..........................................................B-6
3.10 Further Powers................................................................B-6
ARTICLE IV
Investment Advisory, Administrative, and Placement Agent Services...............................B-6
4.1 Investment Advisory and Other Services........................................B-6
4.2 Parties to Contract...........................................................B-7
ARTICLE V
Limitations of Liability........................................................................B-7
5.1 No Personal Liability of Trustees, Officers, Employees or Agents..............B-7
5.2 Indemnification of Trustees, Officers, Employees and Agents...................B-7
5.3 Liability of Holders; Indemnification.........................................B-8
5.4 No Bond Required of Trustees..................................................B-8
5.5 No Duty of Investigation; Notice in Trust Instruments, Etc....................B-8
5.6 Reliance on Experts, Etc......................................................B-8
5.7 Assent to Declaration.........................................................B-8
</TABLE>
B-i
<PAGE> 29
<TABLE>
<S> <C> <C>
ARTICLE VI
Interests in the Trust......................................................................B-9
6.1 General Characteristics...................................................B-9
6.2 Establishment of Series of Interests......................................B-9
6.3 Establishment of Classes.................................................B-10
6.4 Assets of Series.........................................................B-10
6.5 Liabilities of Series....................................................B-10
6.6 Dividends and Distributions..............................................B-11
6.7 Voting Rights............................................................B-11
6.8 Record Dates.............................................................B-11
6.9 Transfer.................................................................B-11
6.10 Equality.................................................................B-11
6.11 Fractions................................................................B-12
6.12 Class Differences........................................................B-12
6.13 Conversion of Interests..................................................B-12
6.14 Investments in the Trust.................................................B-12
6.15 Trustees and Officers as Holders.........................................B-12
6.16 No Preemptive Rights; Derivative Suits...................................B-12
6.17 No Appraisal Rights......................................................B-12
6.18 Status of Interests and Limitation of Personal Liability.................B-12
6.19 Elimination of Series....................................................B-13
ARTICLE VII
Purchases and Redemptions..................................................................B-13
7.1 Purchases................................................................B-13
7.2 Redemption by Holder.....................................................B-13
7.3 Redemption by Trust......................................................B-13
7.4 Net Asset Value..........................................................B-13
ARTICLE VIII
Holders....................................................................................B-14
8.1 Rights of Holders........................................................B-14
8.2 Register of Interests....................................................B-14
8.3 Notices..................................................................B-14
8.4 Meetings of Holders......................................................B-14
8.5 Notice of Meetings.......................................................B-15
8.6 Record Date..............................................................B-15
8.7 Proxies, Etc.............................................................B-15
8.8 Reports..................................................................B-15
8.9 Inspection of Records....................................................B-15
8.10 Voting Powers............................................................B-15
8.11 Holder Action by Written Consent.........................................B-16
8.12 Holder Communications....................................................B-16
ARTICLE IX
Duration; Termination of Trust; Amendment; Mergers; Etc....................................B-16
9.1 Duration.................................................................B-16
9.2 Termination of Trust.....................................................B-16
9.3 Amendment Procedure......................................................B-17
9.4 Merger, Consolidation and Sale of Assets.................................B-17
9.5 Incorporation............................................................B-18
</TABLE>
B-ii
<PAGE> 30
<TABLE>
<S> <C> <C>
ARTICLE X
Miscellaneous..............................................................................B-18
10.1 Certificate of Designation; Agent for Service of Process.................B-18
10.2 Governing Law............................................................B-18
10.3 Counterparts.............................................................B-18
10.4 Reliance by Third Parties................................................B-18
10.5 Provisions in Conflict With Law or Regulations...........................B-19
10.6 Trust Only...............................................................B-19
10.7 Withholding..............................................................B-19
10.8 Headings and Construction................................................B-19
</TABLE>
B-iii
<PAGE> 31
DECLARATION OF TRUST
OF
ASSET MANAGEMENT FUND
This DECLARATION OF TRUST OF ASSET MANAGEMENT FUND is made on
the 22nd day of July, 1999 by the parties signatory hereto, as Trustees.
WHEREAS, the Trustees desire to form a business trust under
the law of Delaware for the investment and reinvestment of its assets; and
WHEREAS, it is proposed that the Trust assets be composed of
cash, securities and other assets contributed to the Trust by the Holders of
Interests in the Trust entitled to ownership rights in the Trust;
NOW, THEREFORE, the Trustees hereby declare that the Trustees
will hold in trust all cash, securities and other assets which they may from
time to time acquire in any manner as Trustees hereunder, and manage and
dispose of the same for the benefit of the Holders of Interests in the Trust,
and subject to the following terms and conditions.
ARTICLE I
The Trust
1.1 Name. The name of the Trust created hereby (the "Trust") shall be
"Asset Management Fund," and so far as may be practicable the Trustees shall
conduct the Trust's activities, execute all documents and sue or be sued under
that name, which name (and the word "Trust" wherever hereinafter used) shall
not refer to the Trustees in their individual capacities or to the officers,
agents, employees or Holders of Interest in the Trust. However, should the
Trustees determine that the use of the name of the Trust is not advisable, they
may select such other name for the Trust as they deem proper and the Trust may
hold its property and conduct its activities under such other name. Any name
change shall become effective upon the execution by a majority of the then
Trustees of an instrument setting forth the new name and the filing of a
certificate of amendment pursuant to Section 3810(b) of the DBTA. Any such
instrument shall not require the approval of the Holders of Interests in the
Trust, but shall have the status of an amendment to this Declaration.
1.2 Trust Purpose. The purpose of the Trust is to conduct, operate and
carry on the business of an open-end management investment company registered
under the 1940 Act. In furtherance of the foregoing, it shall be the purpose of
the Trust to do everything necessary, suitable, convenient or proper for the
conduct, promotion and attainment of any businesses and purposes which at any
time may be incidental or may appear conducive or expedient for the
accomplishment of the business of an open-end management investment company
registered under the 1940 Act and which may be engaged in or carried on by a
trust organized under the DBTA, and in connection therewith, the Trust shall
have and may exercise all of the powers conferred by the laws of the State of
Delaware upon a Delaware business trust.
1.3 Definitions. As used in this Declaration, the following terms
shall have the following meanings:
(a) "1940 Act" shall mean the Investment Company Act of 1940,
as amended from time to time, and the rules and regulations thereunder, as
adopted or amended from time to time.
(b) "Affiliated Person," "Assignment" and "Interested Person"
shall have the meanings given such terms in the 1940 Act.
<PAGE> 32
(c) "Administrator" shall mean any party furnishing services
to the Trust pursuant to any administrative services contract described in
Section 4.1.
(d) "By-Laws" shall mean the By-Laws of the Trust as amended
from time to time.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations thereunder, as adopted
or amended from time to time.
(f) "Commission" shall mean the Securities and Exchange
Commission.
(g) "Declaration" shall mean this Declaration of Trust, as
amended from time to time. References in this Declaration to "Declaration,"
"hereof," "herein" and "hereunder" shall be deemed to refer to the Declaration
rather than the article or section in which such words appear. This Declaration
shall, together with the By-Laws, constitute the governing instrument of the
Trust under the DBTA.
(h) "DBTA" shall mean the Delaware Business Trust Act,
Delaware Code Annotated Title 12, Sections 3801, et seq., as amended from time
to time.
(i) "Fiscal Year" shall mean an annual period as determined
by the Trustees unless otherwise provided by the Code or applicable
regulations.
(j) "Holders" shall mean as of any particular time any or all
holders of record of Interests in the Trust or in Trust Property, as the case
may be, at such time.
(k) "Interest" shall mean a Holder's units of interest into
which the beneficial interest in the Trust and each series and class of the
Trust shall be divided from time to time.
(l) "Investment Adviser" shall mean any party furnishing
services to the Trust pursuant to any investment advisory contract described in
Section 4.1 hereof.
(m) "Majority Interests Vote" shall mean the vote, at a
meeting of the Holders of Interests, of the lesser of (i) 67% or more of the
Interests present or represented at such meeting, provided the Holders of more
than 50% of the Interests are present or represented by proxy or (ii) more than
50% of the Interests.
(n) "Person" shall mean and include an individual,
corporation, partnership, trust, foundation, plan, association, joint venture,
estate and other entity, whether or not a legal entity, and a government and
agencies and political subdivisions thereof, whether domestic or foreign.
(o) "Registration Statement" as of any particular time shall
mean the Registration Statement of the Trust which is effective at such time
under the 1940 Act.
(p) "Trust Property" shall mean as of any particular time any
and all property, real or personal, tangible or intangible, which at such time
is owned or held by or for the account of the Trust or the Trustees or any
series of the Trust established in accordance with Section 6.2.
(q) "Trustees" shall mean such persons who have signed this
Declaration, so long as they shall continue in office in accordance with the
terms of this Declaration, and all other persons who at the time in question
have been duly elected or appointed as trustees in accordance with the
provisions of this Declaration and are then in office, in their capacity as
trustees hereunder.
B-2
<PAGE> 33
ARTICLE II
Trustees
2.1 Number and Qualification. The number of Trustees shall initially
be five and shall thereafter be fixed from time to time by written instrument
signed, or by resolution approved at a duly constituted meeting, by a majority
of the Trustees so fixed, then in office, provided, however, that the number of
Trustees shall in no event be less than one. A Trustee shall be an individual
at least 21 years of age who is not under a legal disability.
(a) Any vacancy created by an increase in Trustees shall be
filled by the appointment or election of an individual having the
qualifications described in this Article as provided in Section 2.4. Any such
appointment shall not become effective, however, until the individual appointed
or elected shall have accepted in writing such appointment or election and
agreed in writing to be bound by the terms of the Declaration. No reduction in
the number of Trustees shall have the effect of removing any Trustee from
office.
(b) Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled as provided in Section 2.4 hereof, the Trustees in
office, regardless of their number, shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by this
Declaration.
2.2 Term and Election. Each Trustee named herein, or elected or
appointed prior to the first meeting of the Holders, shall (except in the event
of resignations or removals or vacancies pursuant to Section 2.3 or 2.4 hereof)
hold office until his or her successor has been elected at such meeting and has
qualified to serve as Trustee. Beginning with the Trustees elected at the first
meeting of Holders, each Trustee shall hold office during the lifetime of this
Trust and until its termination as hereinafter provided unless such Trustee
resigns or is removed as provided in Section 2.3 below or his term expires
pursuant to Section 2.4 hereof.
2.3 Resignation and Removal. Any Trustee may resign (without need for
prior or subsequent accounting) by an instrument in writing signed by him or
her and delivered or mailed to the Chairperson, if any, the President or the
Secretary and such resignation shall be effective upon such delivery, or at a
later date according to the terms of the instrument.
(a) Any of the Trustees may be removed with or without cause
by the affirmative vote of the Holders of two-thirds (2/3) of the Interests or
(provided the aggregate number of Trustees, after such removal and after giving
effect to any appointment made to fill the vacancy created by such removal,
shall not be less than the number required by Section 2.1 hereof) with cause,
by the action of two-thirds (2/3) of the remaining Trustees, or without cause,
by the action of eighty percent (80%) of the remaining Trustees. Removal with
cause shall include, but not be limited to, the removal of a Trustee due to
physical or mental incapacity.
(b) Upon the resignation or removal of a Trustee, or his or
her otherwise ceasing to be a Trustee, he or she shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of conveying
to the Trust or the remaining Trustees any Trust Property held in the name of
the resigning or removed Trustee. Upon the death of any Trustee or upon removal
or resignation due to any Trustee's incapacity to serve as trustee, his or her
legal representative shall execute and deliver on his or her behalf such
documents as the remaining Trustees shall require as provided in the preceding
sentence.
2.4 Vacancies. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of the earliest to occur of the following: the
Trustee's death, resignation, adjudicated incompetence or other incapacity to
perform the duties of the office, or the removal of the Trustee. A vacancy
shall also occur in the event of an increase in the number of Trustees as
provided in Section 2.1. No such vacancy shall operate to annul this
Declaration or to revoke any existing trust created pursuant to the terms of
this Declaration. In the case of a vacancy, the Holders of a plurality of the
Interests entitled to vote, acting at any meeting of the Holders held in
accordance with Article VIII hereof, or, to the extent permitted by the 1940
Act, a majority vote of the Trustees continuing in office acting by written
instrument or instruments, may fill such vacancy, and any Trustee so elected by
the Trustees or the Holders shall hold office as provided in this Declaration.
There shall be no cumulative voting by the Holders in the election of Trustees.
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2.5 Meetings. Meetings of the Trustees shall be held from time to time
within or without the State of Delaware upon the call of the Chairperson, if
any, the President, the Chief Operating Officer, the Secretary, an Assistant
Secretary or any two Trustees.
(a) Regular meetings of the Trustees may be held without call
or notice at a time and place fixed by the By-Laws or by resolution of the
Trustees. Notice of any other meeting shall be given not later than 72 hours
preceding the meeting by United States mail or by electronic transmission to
each Trustee at his or her business address as set forth in the records of the
Trust or otherwise given personally not less than 24 hours before the meeting
but may be waived in writing by any Trustee either before or after such
meeting. The attendance of a Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Trustee attends a meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting has not been lawfully called or convened.
(b) A quorum for all meetings of the Trustees shall be
one-third of the total number of Trustees, but (except at such time as there is
only one Trustee) no less than two Trustees. Unless provided otherwise in this
Declaration, any action of the Trustees may be taken at a meeting by vote of a
majority of the Trustees present (a quorum being present) or without a meeting
by written consent of a majority of the Trustees, which written consent shall
be filed with the minutes of proceedings of the Trustees or any such committee.
If there be less than a quorum present at any meeting of the Trustees, a
majority of those present may adjourn the meeting until a quorum shall have
been obtained.
(c) Any committee of the Trustees, including an executive
committee, if any, may act with or without a meeting. A quorum for all meetings
of any such committee shall be two or more of the members thereof, unless the
Board shall provide otherwise. Unless provided otherwise in this Declaration,
any action of any such committee may be taken at a meeting by vote of a
majority of the members present (a quorum being present) or without a meeting
by written consent of a majority of the members, which written consent shall be
filed with the minutes of proceedings of the Trustees or any such committee.
(d) With respect to actions of the Trustees and any committee
of the Trustees, Trustees who are Interested Persons of the Trust or are
otherwise interested in any action to be taken may be counted for quorum
purposes under this Section 2.5 and shall be entitled to vote to the extent
permitted by the 1940 Act.
(e) All or any one or more Trustees may participate in a
meeting of the Trustees or any committee thereof by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting pursuant to such communications system shall constitute presence in
person at such meeting, unless the 1940 Act specifically requires the Trustees
to act "in person," in which case such term shall be construed consistent with
Commission or staff releases or interpretations.
2.6 Officers; Chairperson of the Board. The Trustees shall, from time
to time, elect officers of the Trust, including a President, a Secretary and a
Treasurer. The Trustees shall elect or appoint, from time to time, a Trustee to
act as Chairperson of the Board who shall preside at all meetings of the
Trustees and carry out such other duties as the Trustees shall designate. The
Trustees may elect or appoint or authorize the President to appoint such other
officers or agents with such powers as the Trustees may deem to be advisable.
The President, Secretary and Treasurer may, but need not, be a Trustee. The
Chairperson of the Board and such officers of the Trust shall serve in such
capacity for such time and with such authority as the Trustees may, in their
discretion, so designate or as provided for in the By-Laws.
2.7 By-Laws. The Trustees may adopt and, from time to time, amend or
repeal the By-Laws for the conduct of the business of the Trust not
inconsistent with this Declaration, and such By-Laws are hereby incorporated in
this Declaration by reference thereto.
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ARTICLE III
Powers of Trustees
3.1 General. The Trustees shall have exclusive and absolute control
over management of the business and affairs of the Trust, but with such powers
of delegation as may be permitted by this Declaration and the DBTA. The
Trustees may perform such acts as in their sole discretion are proper for
conducting the business and affairs of the Trust. The enumeration of any
specific power herein shall not be construed as limiting the aforesaid power.
Such powers of the Trustee may be exercised without order of, or recourse to,
any court.
3.2 Investments. The Trustees shall have power to:
(a) conduct, operate and carry on the business of an
investment company; and
(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, lend, transfer, exchange,
distribute, write or otherwise deal in or dispose of United States and foreign
currencies and related instruments including forward contracts, and securities,
including common and preferred stock, warrants, bonds, debentures, time notes,
bankers acceptances and all other evidences of indebtedness, negotiable or
non-negotiable instruments, obligations, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, reverse repurchase
agreements, convertible securities, forward contracts, options, futures
contracts, and other securities, including, without limitation, those issued,
guaranteed or sponsored by any state, territory or possession of the United
States and the District of Columbia and their political subdivisions, agencies
and instrumentalities, or by the United States Government, any foreign
government, or any agency, instrumentality or political subdivision of the
United States Government or any foreign government, or international
instrumentalities, or by any bank, savings institution, corporation or other
business entity organized under the laws of the United States or under foreign
laws or in "when-issued" contracts for such securities; and to exercise any
and all rights, powers and privileges of ownership or interest in respect of
any and all such investments of every kind and description, including, without
limitation, the right to consent and otherwise act with respect thereto, with
power to designate one or more persons, firms, associations, or corporations to
exercise any of said rights, powers and privileges in respect of any of said
instruments; and the Trustees shall be deemed to have the foregoing powers with
respect to any additional securities in which the Trustees may determine to
invest.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
3.3 Legal Title. Legal title to all the Trust Property shall be vested
in the Trust as a separate legal entity under the DBTA, except that the
Trustees shall have the power to cause legal title to any Trust Property to be
held by or in the name of one or more of the Trustees or in the name of any
other Person on behalf of the Trust on such terms as the Trustees may
determine.
In the event that title to any part of the Trust Property is vested in
one or more Trustees, the right, title and interest of the Trustees in the
Trust Property shall vest automatically in each person who may hereafter become
a Trustee upon his or her due election and qualification. Upon the resignation,
removal or death of a Trustee he or she shall automatically cease to have any
right, title or interest in any of the Trust Property, and the right, title and
interest of such Trustee in the Trust Property shall vest automatically in the
remaining Trustees. To the extent permitted by law, such vesting and cessation
of title shall be effective whether or not conveyancing documents have been
executed and delivered.
3.4 Sale of Interests. Subject to the more detailed provisions set
forth in Article VII, the Trustees shall have the power to permit persons to
purchase Interests and to add or reduce, in whole or in part, their Interest in
the Trust.
3.5 Borrow Money. The Trustees shall have power to borrow money or
otherwise obtain credit and to secure the same by mortgaging, pledging or
otherwise subjecting as security the assets of the Trust, including the lending
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of portfolio securities, and to endorse, guarantee or undertake the performance
of any obligation, contract or engagement of any other person, firm,
association or corporation.
3.6 Delegation; Committee. The Trustees shall have the power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such
things and the execution of such instruments, either in the name of the Trust
or the names of the Trustees or otherwise, as the Trustees may deem expedient.
3.7 Collection and Payment. The Trustees shall have the power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.
3.8 Expenses. The Trustees shall have the power to incur and pay any
expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of this Declaration, and to pay reasonable
compensation from the funds of the Trust to themselves as Trustees. The
Trustees shall fix the compensation of all officers, employees and Trustees.
The Trustees may pay themselves such compensation for special services,
including legal and brokerage services, as they in good faith may deem
reasonable (subject to any limitations in the 1940 Act), and reimbursement for
expenses reasonably incurred by themselves on behalf of the Trust. There shall
be no retirement compensation plan for the Trustees; provided, however, that
the Trustees may adopt a deferred compensation plan consistent with industry
and regulatory standards.
3.9 Miscellaneous Powers. The Trustees shall have the power to: (a)
employ or contract with such Persons as the Trustees may deem desirable for the
transaction of the business of the Trust and terminate such employees or
contractual relationships as they consider appropriate; (b) enter into joint
ventures, partnerships and any other combinations or associations; (c)
purchase, and pay for out of Trust Property, insurance policies (including, but
not limited to, fidelity bonding and errors and omission policies) insuring the
Investment Adviser, Administrator, distributor, Holders, Trustees, officers,
employees, agents, or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not the Trust would
have the power to indemnify such Person against liability; (d) establish
pension, profit-sharing and other retirement, incentive and benefit plans for
any officers, employees and agents of the Trust; (e) to the extent permitted by
law, indemnify any Person with whom the Trust has dealings, including the
Investment Adviser, Administrator, distributor, Holders, Trustees, officers,
employees, agents or independent contractors of the Trust, to such extent as
the Trustees shall determine; (f) guarantee indebtedness or contractual
obligations of others; (g) determine and change the Fiscal Year of the Trust
and the method by which its accounts shall be kept; and (h) adopt a seal for
the Trust, but the absence of such seal shall not impair the validity of any
instrument executed on behalf of the Trust.
3.10 Further Powers. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its
branches and maintain offices, whether within or without the State of Delaware,
in any and all states of the United States of America, in the District of
Columbia, in any foreign countries, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies or instrumentalities
of the United States of America and of foreign countries, and to do all such
other things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive
and shall be binding upon the Trust and the Holders, past, present and future.
In construing the provisions of this Declaration, the presumption shall be in
favor of a grant of power to the Trustees. The Trustees shall not be required
to obtain any court order to deal with Trust Property.
ARTICLE IV
Investment Advisory, Administrative, and Placement Agent Services
4.1 Investment Advisory and Other Services. The Trustees may in their
discretion, from time to time, enter into contracts or agreements for
investment advisory services, administrative services (including management,
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transfer and dividend disbursing agency services), distribution services,
fiduciary (including custodian, subcustodian and depository) services,
placement agent services, Holder servicing and distribution services, or other
services, whereby the other party to such contract or agreement shall undertake
to furnish the Trustees such services as the Trustees shall, from time to time,
consider desirable and all upon such terms and conditions as the Trustees may
in their discretion determine. Notwithstanding any other provisions of this
Declaration to the contrary, the Trustees may authorize any Investment Adviser
(subject to such general or specific instructions as the Trustees may, from
time to time, adopt) to effect purchases, sales, loans or exchanges of Trust
Property on behalf of the Trustees or may authorize any officer, employee or
Trustee to effect such purchases, sales, loans or exchanges pursuant to
recommendations of any such Investment Adviser (all without further action by
the Trustees). Any such purchases, sales, loans or exchanges shall be binding
upon the Trust.
4.2 Parties to Contract. Any contract or agreement of the character
described in Section 4.1 of this Article IV or in the By-Laws of the Trust may
be entered into with any Person, although one or more of the Trustees or
officers of the Trust or any Holder may be an officer, director, trustee,
shareholder, or member of such other party to the contract or agreement, and no
such contract or agreement shall be invalidated or rendered voidable by reason
of the existence of any such relationship, nor shall any person holding such
relationship be liable merely by reason of such relationship for any loss or
expense to the Trust under or by reason of such contract or agreement or held
accountable for any profit realized directly or indirectly therefrom, provided
that the contract or agreement when entered into was reasonable and fair and
not inconsistent with the provisions of this Article IV or the By-Laws. Any
Trustee or officer of the Trust or any Holder may be the other party to
contracts or agreements entered into pursuant to Section 4.1 hereof or the
By-Laws of the Trust, and any Trustee or officer of the Trust or any Holder may
be financially interested or otherwise affiliated with Persons who are parties
to any or all of the contracts or agreements mentioned in this Section 4.2.
ARTICLE V
Limitations of Liability
5.1 No Personal Liability of Trustees, Officers, Employees or Agents.
No Trustee, officer, employee or agent of the Trust when acting in such
capacity shall be subject to any personal liability whatsoever, in his or her
individual capacity, to any Person, other than the Trust or its Holders, in
connection with Trust Property or the affairs of the Trust; and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature against a Trustee, officer, employee or agent of the Trust arising
in connection with the affairs of the Trust. No Trustee, officer, employee or
agent of the Trust shall be liable to the Trust, Holders of Interests therein,
or to any Trustee, officer, employee, or agent thereof for any action or
failure to act (including, without limitation, the failure to compel in any way
any former or acting Trustee to redress any breach of trust), except for his or
her own bad faith, willful misfeasance, gross negligence or reckless disregard
of his or her duties.
5.2 Indemnification of Trustees, Officers, Employees and Agents. The
Trust shall indemnify each of its Trustees, officers, employees, and agents
(including Persons who serve at its request as directors, officers or trustees
of another organization in which it has any interest, as a shareholder,
creditor or otherwise) against all liabilities and expenses (including amounts
paid in satisfaction of judgments, in compromise, as fines and penalties, and
as counsel fees) reasonably incurred by him or her in connection with the
defense or disposition of any action, suit or other proceeding, whether civil
or criminal, in which he or she may be involved or with which he or she may be
threatened, while in office or thereafter, by reason of his or her being or
having been such a Trustee, officer, employee or agent, except with respect to
any matter as to which he or she shall have been adjudicated to have acted in
bad faith, willful misfeasance, gross negligence or reckless disregard of his
or her duties; provided, however, that as to any matter disposed of by a
compromise payment by such Person, pursuant to a consent decree or otherwise,
no indemnification either for said payment or for any other expenses shall be
provided unless there has been a determination that such Person did not engage
in willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office by the court or other
body approving the settlement or other disposition or by a reasonable
determination, based upon review of readily available facts (as opposed to a
full trial-type inquiry), that he or she did not engage in such conduct or by a
reasonable determination, based upon a review of the facts, that such Person
was not liable by reason of such conduct, by (a) the vote of a majority of a
quorum of Trustees who are neither
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"interested persons" of the Trust as defined in Section 2(a)(19) of the 1940
Act nor parties to the proceeding, or (b) a written opinion from independent
legal counsel approved by the Trustees. The rights accruing to any Person under
these provisions shall not exclude any other right to which he or she may be
lawfully entitled; provided that no Person may satisfy any right of indemnity
or reimbursement granted herein or in Section 5.1 or to which he or she may be
otherwise entitled except out of the Trust Property. The Trustees may make
advance payments in connection with indemnification under this Section 5.2,
provided that the indemnified Person shall have given a written undertaking to
reimburse the Trust in the event it is subsequently determined that he or she
is not entitled to such indemnification. All payments shall be made in
compliance with Section 17(h) of the 1940 Act.
5.3 Liability of Holders; Indemnification. The Trust shall indemnify
and hold each Holder harmless from and against any claim or liability to which
such Holder may become subject solely by reason of his or her being or having
been a Holder and not because of such Holder's acts or omissions or for some
other reason, and shall reimburse such Holder for all legal and other expenses
reasonably incurred by him or her in connection with any such claim or
liability (upon proper and timely request by the Holder); provided, however,
that no Holder shall be entitled to indemnification by any series established
in accordance with Section 8.8 unless such Holder is a Holder of Interests of
such series. The rights accruing to a Holder under this Section 5.3 shall not
exclude any other right to which such Holder may be lawfully entitled, nor
shall anything herein contained restrict the right of the Trust to indemnify or
reimburse a Holder in any appropriate situation even though not specifically
provided herein.
5.4 No Bond Required of Trustees. No Trustee shall, as such, be
obligated to give any bond or surety or other security for the performance of
any of his or her duties hereunder.
5.5 No Duty of Investigation; Notice in Trust Instruments, Etc. No
purchaser, lender, or other Person dealing with the Trustees or any officer,
employee or agent of the Trust shall be bound to make any inquiry concerning
the validity of any transaction purporting to be made by the Trustees or by
said officer, employee or agent or be liable for the application of money or
property paid, loaned, or delivered to or on the order of the Trustees or of
said officer, employee or agent. Every obligation, contract, instrument,
certificate or other interest or undertaking of the Trust, and every other act
or thing whatsoever executed in connection with the Trust, shall be
conclusively relied upon as having been executed or done by the executors
thereof only in their capacities as Trustees, officers, employees or agents of
the Trust. Every written obligation, contract, instrument, certificate or other
interest or undertaking of the Trust made by the Trustees or by any officer,
employee or agent of the Trust, in his or her capacity as such, shall contain
an appropriate recital to the effect that the Trustee, officer, employee or
agent of the Trust shall not personally be bound by or liable thereunder, nor
shall resort be had to their private property or the private property of the
Holders for the satisfaction of any obligation or claim thereunder, and
appropriate references shall be made therein to the Declaration, and may
contain any further recital which they may deem appropriate, but the omission
of such recital shall not operate to impose personal liability on any of the
Trustees, officers, employees or agents of the Trust. The Trustees may maintain
insurance for the protection of the Trust Property, Holders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
advisable.
5.6 Reliance on Experts, Etc. Each Trustee and officer or employee of
the Trust shall, in the performance of his or her duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other
records of the Trust, upon an opinion of counsel, or upon reports made to the
Trust by any of its officers or employees or by any Investment Adviser,
Administrator, accountant, appraiser or other experts or consultants selected
with reasonable care by the Trustees, officers or employees of the Trust,
regardless of whether such counsel or expert may also be a Trustee.
5.7 Assent to Declaration. Every Holder, by virtue of having become a
Holder in accordance with the terms of this Declaration, shall be held to have
expressly assented and agreed to the terms hereof and to have become a party
hereto.
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ARTICLE VI
Interests in the Trust
6.1 General Characteristics. (a) The Trustees shall have the power and
authority, without Holder approval, to issue Interests in one or more series
from time to time as they deem necessary or desirable. Each series shall be
separate from all other series in respect to the assets and liabilities
allocated to that series and shall represent a separate investment portfolio of
the Trust. The Trustees shall have exclusive power, without Holder approval, to
establish and designate such separate and distinct series, as set forth in
Section 6.2, and to fix and determine the relative rights and preferences as
between the Interests of the separate series as to right of redemption, special
and relative rights as to dividends and other distributions and on liquidation,
conversion rights, and conditions under which the series shall have separate
voting rights or no voting rights.
(b) The Trustees may, without Holder approval, divide
Interests of any series into two or more classes, Interests of each such class
having such preferences and special or relative rights and privileges
(including conversion rights, if any) as the Trustees may determine as provided
in Section 6.3. The fact that a series shall have been initially established
and designated without any specific establishment or designation of classes,
shall not limit the authority of the Trustees to divide a series and establish
and designate separate classes thereof.
(c) The number of Interests authorized shall be unlimited,
and the Interests so authorized may be represented in part by fractional
Interests. From time to time, the Trustees may divide or combine the Interests
of any series or class into a greater or lesser number without thereby changing
the proportionate beneficial interests in the series or class. The Trustees may
issue Interests of any series or class thereof for such consideration and on
such terms as they may determine (or for no consideration if pursuant to an
Interest dividend or split-up), all without action or approval of the Holders.
All Interests when so issued on the terms determined by the Trustees shall be
fully paid and non-assessable. The Trustees may classify or reclassify any
unissued Interests or any Interests previously issued and reacquired of any
series or class thereof into one or more series or classes thereof that may be
established and designated from time to time. The Trustees may hold as treasury
Interests, reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Interests of
any series or class thereof reacquired by the Trust.
6.2 Establishment of Series of Interests. (a) Without limiting the
authority of the Trustees set forth in Section 6.2(b) to establish and
designate any further series, the Trustees hereby establish and designate five
series, as follows:
Money Market Portfolio
Short U.S. Government Securities Portfolio
Adjustable Rate Mortgage (ARM) Portfolio
Intermediate Mortgage Securities Portfolio
U.S. Government Mortgage Securities Portfolio
The provisions of this Article VI shall be applicable to the
above designated series and any further series that may from time to time be
established and designated by the Trustees as provided in Section 6.2(b).
(b) The establishment and designation of any series of
Interests other than the one set forth above shall be effective upon the
execution, by a majority of the Trustees, of an instrument setting forth such
establishment and designation and the relative rights and preferences of such
series, or as otherwise provided in such instrument. At any time that there are
no Interests outstanding of any particular series previously established and
designated, the Trustees may by an instrument executed by a majority of their
number abolish that series and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
of this Declaration.
(c) Section 9.2 of this Declaration of Trust shall apply also
with respect to each such series as if such series were a separate trust.
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6.3 Establishment of Classes. (a) Without limiting the authority of
the Trustees set forth in Section 6.3(b) to establish and designate any further
series, the Trustee hereby establish two classes of Money Market Portfolio as
follows:
I Shares Class
D Shares Class
The provision of this Article VI shall be applicable to the above
designated classes and any further classes that may from time to time be
established and designated by the Trustees as provided in Section 6.3(b).
(b) The division of any series into two or more classes and
the establishment and designation of such classes shall be effective upon the
execution by a majority of the Trustees of an instrument setting forth such
division, and the establishment, designation, and relative rights and
preferences of such classes, or as otherwise provided in such instrument. The
relative rights and preferences of the classes of any series may differ in such
respects as the Trustees may determine to be appropriate, provided that such
differences are set forth in the aforementioned instrument. At any time that
there are no Interests outstanding of any particular class previously
established and designated, the Trustees may by an instrument executed by a
majority of their number abolish that class and the establishment and
designation thereof. Each instrument referred to in this paragraph shall have
the status of an amendment to this Declaration.
(c) Section 9.2 of this Declaration of Trust shall apply also
with respect to each such class as if such class were a separate trust.
6.4 Assets of Series. All consideration received by the Trust for the
issue or sale of Interests of a particular series together with all Trust
Property in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may
be, shall irrevocably belong to that series for all purposes, subject only to
the rights of creditors of such series and except as may otherwise be required
by applicable tax laws, and shall be so recorded upon the books of account of
the Trust. Separate and distinct records shall be maintained for each series
and the assets associated with a series shall be held and accounted for
separately from the other assets of the Trust, or any other series. In the
event that there is any Trust Property, or any income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable as
belonging to any particular series, the Trustees shall allocate them among any
one or more of the series established and designated from time to time in such
manner and on such basis as they, in their sole discretion, deem fair and
equitable. Each such allocation by the Trustees shall be conclusive and binding
upon the Holders of all Interests for all purposes.
6.5 Liabilities of Series. (a) The Trust Property belonging to each
particular series shall be charged with the liabilities of the Trust in respect
to that series and all expenses, costs, charges and reserves attributable to
that series, and any general liabilities, expenses, costs, charges or reserves
of the Trust which are not readily identifiable as belonging to any particular
series shall be allocated and charged by the Trustees to and among any one or
more of the series established and designated from time to time in such manner
and on such basis as the Trustees in their sole discretion deem fair and
equitable. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the Holders of
all Interests for all purposes. The Trustees shall have full discretion, to the
extent not inconsistent with the 1940 Act, to determine which items shall be
treated as income and which items as capital, and each such determination and
allocation shall be conclusive and binding upon the Holders.
(b) Without limitation of the foregoing provisions of this
Section, but subject to the right of the Trustees in their discretion to
allocate general liabilities, expenses, costs, charges or reserves as herein
provided, the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular series shall be
enforceable against the assets of such series only, and not against the assets
of any other series. Notice of this limitation on interseries liabilities shall
be set forth in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of State of
the State of Delaware pursuant to the
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DBTA, and upon the giving of such notice in the certificate of trust, the
statutory provisions of Section 3804 of the DBTA relating to limitations on
interseries liabilities (and the statutory effect under Section 3804 of setting
forth such notice in the certificate of trust) shall become applicable to the
Trust and each series. Every note, bond, contract or other undertaking issued
by or on behalf of a particular series shall include a recitation limiting the
obligation represented thereby to that series and its assets.
6.6 Dividends and Distributions. (a) Dividends and distributions on
Interests of a particular series or any class thereof may be paid with such
frequency as the Trustees may determine, which may be daily or otherwise,
pursuant to a standing resolution or a resolution adopted only once or with
such frequency as the Trustees may determine, to the Holders of Interests in
that series or class, from such of the income and capital gains, accrued or
realized, from the Trust Property belonging to that series, or in the case of a
class, belonging to that series and allocable to that class, as the Trustees
may determine, after providing for actual and accrued liabilities belonging to
that series. All dividends and distributions on Interests in a particular
series or class thereof shall be distributed pro rata to the Holders of
Interests in that series or class in proportion to the total outstanding
Interests in that series or class held by such Holders at the date and time of
record established for the payment of such dividends or distribution, except to
the extent otherwise required or permitted by the preferences and special or
relative rights and privileges of any series or class. Such dividends and
distributions may be made in cash or Interests of that series or class or a
combination thereof as determined by the Trustees or pursuant to any program
that the Trustees may have in effect at the time for the election by each
Holder of the mode of the paying of such dividend or distribution to that
Holder. Any such dividend or distribution paid in Interests will be paid at the
net asset value thereof as determined in accordance with Section 7.4.
(b) The Interests in a series or a class of the Trust shall
represent beneficial interests in the Trust Property belonging to such series
or in the case of a class, belonging to such series and allocable to such
class. Each Holder of Interests in a series or a class shall be entitled to
receive its pro rata share of distributions of income and capital gains made
with respect to such series or such class. Upon reduction or withdrawal of its
Interests or indemnification for liabilities incurred by reason of being or
having been a Holder of Interests in a series or a class, such Holder shall be
paid solely out of the funds and property of such series or in the case of a
class, the funds and property of such series and allocable to such class of the
Trust. Upon liquidation or termination of a series or class of the Trust,
Holders of Interests in such series or class shall be entitled to receive a pro
rata share of the Trust Property belonging to such series or in the case of a
class, belonging to such series and allocable to such class.
6.7 Voting Rights. Notwithstanding any other provision hereof, on each
matter submitted to a vote of the Holders, each Holder shall be entitled to one
vote for each whole Interest standing in his name on the books of the Trust,
and each fractional Interest shall be entitled to a proportionate fractional
vote, irrespective of the series thereof or class thereof, and all Interests of
all series and classes thereof shall vote together as a single class; provided,
however, that (a) as to any matter with respect to which a separate vote of one
or more series or classes thereof is permitted or required by the 1940 Act or
the provisions of the instrument establishing and designating the series or
class, such requirements as to a separate vote by such series or class thereof
shall apply in lieu of all Interests of all series and classes thereof voting
together; and (b) as to any matter which affects only the interests of one or
more particular series or classes thereof, only the Holders of the one or more
affected series or classes shall be entitled to vote, and each such series or
class shall vote as a separate series or class.
6.8 Record Dates. The Trustees may from time to time close the
transfer books or establish record dates and times for the purposes of
determining the Holders entitled to be treated as such, to the extent provided
or referred to in Section 8.6.
6.9 Transfer. All Interests of each particular series or class thereof
shall be transferable, but transfers of Interests of a particular series or
class thereof will be recorded on the Interest transfer records of the Trust
applicable to that series or class only at such times as Holders shall have the
right to require the Trust to redeem Interests of that series or class and at
such other times as may be permitted by the Trustees.
6.10 Equality. Except as provided herein or in the instrument
designating and establishing any class or series, all Interests of each
particular series or class thereof shall represent an equal proportionate
interest in the assets belonging to that series, or in the case of a class,
belonging to that series and allocable to that class, subject to the
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liabilities belonging to that series, and each Interest of any particular
series or class shall be equal to each other Interest of that series or class;
but the provisions of this sentence shall not restrict any distinctions
permissible under Section 6.6 that may exist with respect to dividends and
distributions on Interests of the same series or class. The Trustees may from
time to time divide or combine the Interests of any particular series or class
into a greater or lesser number of Interests of that series or class without
thereby changing the proportionate beneficial interest in the assets belonging
to that series or class or in any way affecting the rights or Interests of any
other series or class.
6.11 Fractions. Any fractional Interest of any series or class, if any
such fractional Interest is outstanding, shall carry proportionately all the
rights and obligations of a whole Interest of that series or class, including
rights and obligations with respect to voting, receipt of dividends and
distributions, redemption of Interests, and liquidation of the Trust.
6.12 Class Differences. Subject to Section 6.3, the relative rights
and preferences of the classes of any series may differ in such other respects
as the Trustees may determine to be appropriate in their sole discretion,
provided that such differences are set forth in the instrument establishing and
designating such classes and executed by a majority of the Trustees.
6.13 Conversion of Interests. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to provide
that Holders of Interests of any series shall have the right to convert said
Interests into one or more other series in accordance with such requirements
and procedures as may be established by the Trustees. The Trustees shall also
have the authority to provide that Holders of Interests of any class of a
particular series shall have the right to convert said Interests into one or
more other classes of that particular series or any other series in accordance
with such requirements and procedures as may be established by the Trustees.
6.14 Investments in the Trust. The Trustees may accept investments in
the Trust from such persons and on such terms and for such consideration, not
inconsistent with the provisions of the 1940 Act, as they from time to time
authorize. The Trustees may authorize any distributor, principal underwriter,
custodian, transfer agent or other person to accept orders for the purchase of
Interests that conform to such authorized terms and to reject any purchase
orders for Interests whether or not conforming to such authorized terms.
6.15 Trustees and Officers as Holders. Any Trustee, officer or other
agent of the Trust, and any organization in which any such person is
interested, may acquire, own, hold and dispose of Interests of the Trust to the
same extent as if such person were not a Trustee, officer or other agent of the
Trust; and the Trust may issue and sell or cause to be issued and sold and may
purchase Interests from any such person or any such organization subject only
to the general limitations, restrictions or other provisions applicable to the
sale or purchase of Interests generally.
6.16 No Preemptive Rights; Derivative Suits. Holders shall have no
preemptive or other right to subscribe to any additional Interests or other
securities issued by the Trust. No action may be brought by a Holder on behalf
of the Trust unless Holders owning no less than 10% of the then outstanding
Interests, or series or class thereof, join in the bringing of such action. A
Holder of Interests in a particular series or a particular class of the Trust
shall not be entitled to participate in a derivative or class action lawsuit on
behalf of any other series or any other class or on behalf of the Holders of
Interests in any other series or any other class of the Trust.
6.17 No Appraisal Rights. Holders shall have no right to demand
payment for their Interests or to any other rights of dissenting Holders in the
event the Trust participates in any transaction which would give rise to
appraisal or dissenters' rights by a stockholder of a corporation organized
under the General Corporation Law of Delaware, or otherwise.
6.18 Status of Interests and Limitation of Personal Liability.
Interests shall be deemed to be personal property giving only the rights
provided in this Declaration of Trust. Every Holder by virtue of acquiring
Interests shall be held to have expressly assented and agreed to the terms
hereof and to be bound hereby. The death, incapacity, dissolution, termination
or bankruptcy of a Holder during the continuance of the Trust shall not operate
to dissolve or terminate the Trust or any series thereof nor entitle the
representative of such Holder to an accounting or to take any action in court
or elsewhere against the Trust or the Trustees, but shall entitle the
representative of such Holder only to
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the rights of such Holder under this Trust. Ownership of Interests shall not
entitle the Holder 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 Interests constitute the Holders as
partners or joint venturers. Neither the Trust nor the Trustees, nor any
officer, employee or agent of the Trust, shall have any power to bind
personally any Holder, nor except as specifically provided herein to call upon
any Holder for the payment of any sum of money or assessment whatsoever other
than such as the Holder may at any time personally agree to pay.
6.19 Elimination of Series. Without limiting the authority of the
Trustees set forth in Section 9.2 of this Declaration of Trust, at any time
that there are no Interests outstanding of a series (or class), the Trustees
may abolish such series (or class).
ARTICLE VII
Purchases and Redemptions
7.1 Purchases. The Trustees, in their discretion, may, from time to
time, without a vote of the Holders, permit the purchase of Interests by such
party or parties (or increase in the Interests of a Holder), for such type of
consideration, including, without limitation, cash or property, at such time or
times (including, without limitation, each business day), and on such terms as
the Trustees may deem best, and may in such manner acquire other assets
(including, without limitation, the acquisition of assets subject to, and in
connection with the assumption of, liabilities) and businesses.
7.2 Redemption by Holder. Each Holder of Interests of the Trust or any
series or class thereof shall have the right at such times as may be permitted
by the Trust to require the Trust to redeem all or any part of his or her
Interests of the Trust, or series or class thereof, at a redemption price equal
to the net asset value per Interest of the Trust or series or class thereof,
next determined in accordance with Section 7.4 hereof after the Interests are
properly tendered for redemption, subject to any contingent deferred sales
charge or redemption charge in effect at the time of redemption. Payment of the
redemption price shall be in cash; provided, however, that if the Trustees
determine, which determination shall be conclusive, that conditions exist which
make payment wholly in cash unwise or undesirable, the Trust may, subject to
the requirements of the 1940 Act, make payment wholly or partly in securities
or other assets belonging to the Trust or series or class thereof of which the
Interests being redeemed are part of the value of such securities or assets
used in such determination of the net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the Holders of Interests of the
Trust, or series or class thereof, to require the Trust to redeem Interests of
the Trust, or of any series or class thereof, during any period or at any time
when and to the extent permissible under the 1940 Act.
7.3 Redemption by Trust. Each Interest of the Trust, or series or
class thereof that has been established and designated is subject to redemption
by the Trust at the redemption price which would be applicable if such Interest
was then being redeemed by the Holder pursuant to Section 7.2 hereof: (a) at
any time, if the Trustees determine in their sole discretion and by majority
vote that it is in the best interest of the Trust, or any series or class
thereof, to so redeem, or (b) upon such other conditions as may from time to
time be determined by the Trustees and set forth in the then current Prospectus
of the Trust with respect to maintenance of Holder accounts of a minimum or
maximum amount or percentage. Upon such redemption the Holders of the Interests
so redeemed shall have no further right with respect thereto other than to
receive payment of such redemption price.
7.4 Net Asset Value. The net asset value per Interest of any series
shall be (a) in the case of a series whose Interests are not divided into
classes, the quotient obtained by dividing the value of the net assets of that
series (being the value of the assets belonging to that series less the
liabilities belonging to that series) by the total number of Interests of that
series outstanding, and (b) in the case of a class of Interests of a series
whose Interests are divided into classes, the quotient obtained by dividing the
value of the net assets of that series allocable to such class (being the value
of the assets belonging to that series allocable to such class less the
liabilities belonging to such class) by the total number of
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Interests of such class outstanding; all determined in accordance with the
methods and procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time.
The Trustees may determine to maintain the net asset value per
Interest of any series or any class at a designated constant dollar amount and
in connection therewith may adopt procedures consistent with the 1940 Act for
continuing declarations of income attributable to that series or that class as
dividends payable in additional Interests of that series at the designated
constant dollar amount and for the handling of any losses attributable to that
series or that class. Such procedures may provide that in the event of any loss
each Holder shall be deemed to have contributed to the capital of the Trust
attributable to that series his or her pro rata portion of the total number of
Interests required to be canceled in order to permit the net asset value per
Interest of that series or class to be maintained, after reflecting such loss,
at the designated constant dollar amount. Each Holder of the Trust shall be
deemed to have agreed, by his or her investment in any series or class with
respect to which the Trustees shall have adopted any such procedure, to make
the contribution referred to in the preceding sentence in the event of any such
loss.
ARTICLE VIII
Holders
8.1 Rights of Holders. The right to conduct any business hereinbefore
described is vested exclusively in the Trustees, and the Holders shall have no
rights under this Declaration or with respect to the Trust Property other than
the beneficial interest conferred by their Interests and the voting rights
accorded to them under this Declaration.
8.2 Register of Interests. A register shall be kept by the Trust under
the direction of the Trustees which shall contain the names and addresses of
the Holders and the number of Interests held by each Holder. Each such register
shall be conclusive as to the identity of the Holders of the Trust and the
Persons who shall be entitled to payments of distributions or otherwise to
exercise or enjoy the rights of Holders. No Holder shall be entitled to receive
payment of any distribution, nor to have notice given to it as herein provided,
until it has given its address to such officer or agent of the Trustees as
shall keep the said register for entry thereon. No certificates certifying the
ownership of interests need be issued except as the Trustees may otherwise
determine from time to time.
8.3 Notices. Any and all notices to which any Holder hereunder may be
entitled and any and all communications shall be deemed duly served or given if
presented personally to a Holder, left at his or her residence or usual place
of business, or sent via United States mail or by electronic transmission to a
Holder at his or her address as it is registered with the Trust, as provided in
Section 8.2. If mailed, such notice shall be deemed to be given when deposited
in the United States mail addressed to the Holder at his or her address as it
is registered with the Trust, as provided in Section 8.2, with postage thereon
prepaid.
8.4 Meetings of Holders. Meetings of the Holders may be called at any
time by a majority of the Trustees and shall be called by any Trustee upon
written request of Holders holding, in the aggregate, not less than 10% of the
Interests (or series or class thereof), such request specifying the purpose or
purposes for which such meeting is to be called. Any such meeting shall be held
within or without the State of Delaware on such day and at such time as the
Trustees shall designate. Holders of one-third of the Interests in the Trust,
present in person or by proxy, shall constitute a quorum for the transaction of
any business, except as may otherwise be required by the 1940 Act or other
applicable law or by this Declaration or the By-Laws of the Trust. If a quorum
is present at a meeting, an affirmative vote by the Holders present, in person
or by proxy, holding more than 50% of the total Interests (or series or class
thereof) of the Holders present, either in person or by proxy, at such meeting
constitutes the action of the Holders, unless the 1940 Act, other applicable
law, this Declaration or the By-Laws of the Trust require a greater number of
affirmative votes. Notwithstanding the foregoing, the affirmative vote by the
Holders present, in person or by proxy, holding less than 50% of the Interests
(or class or series thereof) of the Holders present, in person or by proxy, at
such meeting shall be sufficient for adjournments. Any meeting of Holders,
whether or not a quorum is present, may be adjourned for any lawful purpose
provided that no meeting shall be adjourned for more than six months beyond the
originally scheduled meeting date. 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.
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8.5 Notice of Meetings. Written or printed notice of all meetings of
the Holders, stating the time, place and purposes of the meeting, shall be
given as provided in Section 8.3. At any such meeting, any business properly
before the meeting may be considered, whether or not stated in the notice of
the meeting. Any adjourned meeting held as provided in Section 8.4 shall not
require the giving of additional notice.
8.6 Record Date. For the purpose of determining the Holders who are
entitled to notice of any meeting, to vote at any meeting, to participate in
any distribution, or for the purpose of any other action, the Trustees may from
time to time fix a date, not more than 90 calendar days prior to the date of
any meeting of the Holders or payment of distributions or other action, as the
case may be, as a record date for the determination of the persons to be
treated as Holders of record for such purposes, and any Holder who was a Holder
at the date and time so fixed shall be entitled to vote at such meeting or to
be treated as a Holder of record for purposes of such other action, even though
he or she has since that date and time disposed of his or her Interests, and no
Holder becoming such after that date and time shall be so entitled to vote at
such meeting or to be treated as a Holder of record for purposes of such other
action. If the Trustees shall divide the Interests into two or more series in
accordance with Section 6.2 herein, nothing in this Section shall be construed
as precluding the Trustees from setting different record dates for different
series and if the Trustees shall divide any series into two or more classes in
accordance with Section 6.3 herein, nothing in this Section 8.6 shall be
construed as precluding the Trustees from setting different record dates for
different classes.
8.7 Proxies, Etc. At any meeting of Holders, any Holder entitled to
vote thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Secretary, or with
such other officer or agent of the Trust as the Secretary may direct, for
verification prior to the time at which such vote shall be taken.
(a) Pursuant to a resolution of a majority of the Trustees,
proxies may be solicited in the name of one or more Trustees or one or more of
the officers of the Trust. Only Holders of record shall be entitled to vote.
Each Holder shall be entitled to a vote proportionate to its Interest in the
Trust.
(b) When Interests are held jointly by several persons, any
one of them may vote at any meeting in person or by proxy in respect to such
Interest, but if more than one of them shall be present at such meeting in
person or by proxy, and such joint owners or their proxies so present disagree
as to any vote to be cast, such vote shall not be received in respect to such
Interest.
(c) A proxy purporting to be executed by or on behalf of a
Holder shall be deemed valid unless challenged at or prior to its exercise, and
the burden of proving invalidity shall rest on the challenger. If the Holder is
a minor or a person of unsound mind, and subject to guardianship or to the
legal control of any other person regarding the charge or management of his or
her Interest, he or she may vote by his or her guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.
8.8 Reports. The Trustees shall cause to be prepared, at least
annually, a report of operations containing a balance sheet and statement of
income and undistributed income of the Trust prepared in conformity with
generally accepted accounting principles and an opinion of an independent
public accountant on such financial statements. The Trustees shall, in
addition, furnish to the Holders at least semi-annually an interim report
containing an unaudited balance sheet as of the end of such period and an
unaudited statement of income and surplus for the period from the beginning of
the current Fiscal Year to the end of such period.
8.9 Inspection of Records. The records of the Trust shall be open to
inspection by Holders during normal business hours and for any purpose not
harmful to the Trust.
8.10 Voting Powers. (a) The Holders shall have power to vote only (i)
for the election or removal of Trustees as contemplated by Section 2.2 and 2.3
hereof, (ii) with respect to any investment advisory contract as contemplated
by Section 4.1 hereof, (iii) with respect to termination of the Trust as
provided in Section 9.2 hereof, (iv) with respect to amendments to the
Declaration of Trust as provided in Section 9.3 hereof, (v) with respect to any
merger, consolidation or sale of assets as provided in Section 9.4 hereof, (vi)
with respect to incorporation of the Trust to the extent and as provided in
Section 9.5 hereof, and (vii) with respect to such additional matters relating
to the Trust
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as may be required by the 1940 Act, DBTA, or any other applicable law, the
Declaration, the By-Laws or any registration of the Trust with the Commission
(or any successor agency) or any state, or as and when the Trustees may
consider necessary or desirable.
(b) Each Holder shall be entitled to vote based on the ratio
his or her Interest bears to the Interests of all Holders entitled to vote.
Until Interests are issued, the Trustees may exercise all rights of Holders and
may take any action required by law, the Declaration or the By-Laws to be taken
by Holders. The By-Laws may include further provisions for Holders' votes and
meetings and related matters not inconsistent with this Declaration.
8.11 Holder Action by Written Consent. Any action which may be taken
by the Holders may be taken without notice and without a meeting if Holders
holding more than 50% of the total Interests entitled to vote (or such larger
proportion thereof as shall be required by any express provision of this
Declaration) shall consent to the action in writing and the written consents
shall be filed with the records of the meetings of Holders. Such consents shall
be treated for all purposes as votes taken at a meeting of the Holders.
8.12 Holder Communications. (a) Whenever ten or more Holders who have
been such for at least six months preceding the date of application, and who
hold in the aggregate at least 1% of the total Interests, shall apply to the
Trustees in writing, stating that they wish to communicate with other Holders
with a view to obtaining signatures for a request for a meeting of Holders and
accompanied by a form of communication and request which they wish to transmit,
the Trustees shall within five business days after receipt of such application
either (i) afford to such applicants access to a list of the names and
addresses of all Holders as recorded on the books of the Trust; or (ii) inform
such applicants as to the approximate number of Holders, and the approximate
cost of transmitting to them the proposed communication and form of request.
(b) If the Trustees elect to follow the course specified in
clause (ii) above, the Trustees, upon the written request of such applicants,
accompanied by a tender of the material to be transmitted and of the reasonable
expenses of transmission, shall, with reasonable promptness, transmit, by
United States mail or by electronic transmission, such material to all Holders
at their addresses as recorded on the books, unless within five business days
after such tender the Trustees shall transmit, by United States mail or by
electronic transmission, to such applicants and file with the Commission,
together with a copy of the material to be transmitted, a written statement
signed by at least a majority of the Trustees to the effect that in their
opinion either such material contains untrue statements of fact or omits to
state facts necessary to make the statements contained therein not misleading,
or would be in violation of applicable law, and specifying the basis of such
opinion. The Trustees shall thereafter comply with any order entered by the
Commission and the requirements of the 1940 Act and the Securities Exchange Act
of 1934.
ARTICLE IX
Duration; Termination of Trust; Amendment; Mergers; Etc.
9.1 Duration. Subject to possible termination in accordance with the
provisions of Section 9.2, the Trust created hereby shall continue perpetually
pursuant to Section 3808 of DBTA.
9.2 Termination of Trust. (a) The Trust may be terminated (i) by the
affirmative vote of the Holders of not less than two-thirds of the Interests in
the Trust at any meeting of the Holders, or (ii) by an instrument in writing,
without a meeting, signed by a majority of the Trustees and consented to by the
Holders of not less than two-thirds of such Interests, or (iii) by the Trustees
by written notice to the Holders. Upon any such termination,
(i) The Trust shall carry on no business except for
the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the
affairs of the Trust and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust shall have
been wound up, including the power to fulfill or discharge the
contracts of the Trust, collect its assets, sell, convey, assign,
exchange, or otherwise dispose of all or any part of the remaining
Trust Property to one or more Persons at
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public or private sale for consideration which may consist in whole or
in part of cash, securities or other property of any kind, discharge
or pay its liabilities, and do all other acts appropriate to liquidate
its business; provided that any sale, conveyance, assignment,
exchange, or other disposition of all or substantially all of the
Trust Property shall require approval of the principal terms of the
transaction and the nature and amount of the consideration by the
Holders with a Majority Interests Vote.
(iii) After paying or adequately providing for the
payment of all liabilities, and upon receipt of such releases,
indemnities and refunding agreements, as they deem necessary for their
protection, the Trustees may distribute the remaining Trust Property,
in cash or in kind or partly each, among the Holders according to
their respective rights.
(b) Upon termination of the Trust and distribution to the
Holders as herein provided, a majority of the Trustees shall execute and lodge
among the records of the Trust an instrument in writing setting forth the fact
of such termination and file a certificate of cancellation in accordance with
Section 3810 of the DBTA. Upon termination of the Trust, the Trustees shall
thereon be discharged from all further liabilities and duties hereunder, and
the rights and interests of all Holders shall thereupon cease.
9.3 Amendment Procedure.
(a) All rights granted to the Holders under this Declaration
of Trust are granted subject to the reservation of the right of the Trustees to
amend this Declaration of Trust as herein provided, except as set forth herein
to the contrary. Subject to the foregoing, the provisions of this Declaration
of Trust (whether or not related to the rights of Holders) may be amended at
any time, so long as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a majority of the
Trustees (or by an officer of the Trust pursuant to the vote of a majority of
such Trustees). Any such amendment shall be effective as provided in the
instrument containing the terms of such amendment or, if there is no provision
therein with respect to effectiveness, upon the execution of such instrument
and of a certificate (which may be a part of such instrument) executed by a
Trustee or officer of the Trust to the effect that such amendment has been duly
adopted.
(b) No amendment may be made, under Section 9.3(a) above,
which would change any rights with respect to any Interest in the Trust by
reducing the amount payable thereon upon liquidation of the Trust, by repealing
the limitations on personal liability of any Holder or Trustee, or by
diminishing or eliminating any voting rights pertaining thereto, except with a
Majority Interests Vote.
(c) A certification signed by a majority of the Trustees
setting forth an amendment and reciting that it was duly adopted by the Holders
or by the Trustees as aforesaid or a copy of the Declaration, as amended, and
executed by a majority of the Trustees, shall be conclusive evidence of such
amendment when lodged among the records of the Trust.
(d) Notwithstanding any other provision hereof, until such
time as Interests are first sold, this Declaration may be terminated or amended
in any respect by the affirmative vote of a majority of the Trustees or by an
instrument signed by a majority of the Trustees.
9.4 Merger, Consolidation and Sale of Assets. The Trust may merge or
consolidate with any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of its
property, including its good will, upon such terms and conditions and for such
consideration when and as authorized by no less than a majority of the Trustees
and by a Majority Interests Vote of the Trust or by an instrument or
instruments in writing without a meeting, consented to by the Holders of not
less than 50% of the total Interests of the Trust or such series, as the case
may be, and any such merger, consolidation, sale, lease or exchange shall be
deemed for all purposes to have been accomplished under and pursuant to the
statutes of the State of Delaware. In accordance with Section 3815(f) of DBTA,
an agreement of merger or consolidation may effect any amendment to the
Declaration or By-Laws or effect the adoption of a new declaration of trust or
by-laws of the Trust if the Trust is the surviving or resulting business trust.
A certificate of merger or consolidation of the Trust shall be signed by a
majority of the Trustees.
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9.5 Incorporation. Upon a Majority Interests Vote, the Trustees may
cause to be organized or assist in organizing a corporation or corporations
under the laws of any jurisdiction or any other trust, partnership, association
or other organization to take over all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any interest, and
to sell, convey and transfer the Trust Property to any such corporation, trust,
association or organization in exchange for the equity interests thereof or
otherwise, and to lend money to, subscribe for the equity interests of, and
enter into any contracts with any such corporation, trust, partnership,
association or organization, or any corporation, partnership, trust,
association or organization in which the Trust holds or is about to acquire
equity interests. The Trustees may also cause a merger or consolidation between
the Trust or any successor thereto and any such corporation, trust,
partnership, association or other organization if and to the extent permitted
by law, as provided under the law then in effect. Nothing contained herein
shall be construed as requiring approval of the Holders for the Trustees to
organize or assist in organizing one or more corporations, trusts,
partnerships, associations or other organizations and selling, conveying or
transferring a portion of the Trust Property to such organizations or entities.
ARTICLE X
Miscellaneous
10.1 Certificate of Designation; Agent for Service of Process. The
Trust shall file, in accordance with Section 3812 of DBTA, in the office of the
Secretary of State of Delaware, a certificate of trust, in the form and with
such information required by Section 3810 of DBTA and executed in the manner
specified in Section 3811 of DBTA. In the event the Trust does not have at
least one Trustee qualified under Section 3807(a) of DBTA, then the Trust shall
comply with Section 3807(b) of DBTA by having and maintaining a registered
office in Delaware and by designating a registered agent for service of process
on the Trust, which agent shall have the same business office as the Trust's
registered office. The failure to file any such certificate, to maintain a
registered office, to designate a registered agent for service of process, or
to include such other information shall not affect the validity of the
establishment of the Trust, the Declaration, the By-Laws or any action taken by
the Trustees, the Trust officers or any other Person with respect to the Trust
except insofar as a provision of the DBTA would have governed, in which case
the Delaware common law governs.
10.2 Governing Law. This Declaration is executed by all of the
Trustees and delivered with reference to DBTA and the laws of the State of
Delaware, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to DBTA and
the laws of the State of Delaware (unless and to the extent otherwise provided
for and/or preempted by the 1940 Act or other applicable federal securities
laws); provided, however, that there shall not be applicable to the Trust, the
Trustees or this Declaration (a) the provisions of Section 3540 of Title 12 of
the Delaware Code, or (b) any provisions of the laws (statutory or common) of
the State of Delaware (other than the DBTA) pertaining to trusts which are
inconsistent with the rights, duties, powers, limitations or liabilities of the
Trustees set forth or referenced in this Declaration.
10.3 Counterparts. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
10.4 Reliance by Third Parties. The original or a copy of this
instrument and of each restatement and/or amendment hereto shall be kept at the
office of the Trust where it may be inspected by any Holder. Any certificate
executed by an individual who, according to the records of the Trust or of any
recording office in which this Declaration may be recorded, appears to be a
Trustee hereunder, certifying to (a) the number or identity of Trustees or
Holders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or Holders,
(d) the fact that the number of Trustees or Holders present at any meeting or
executing any written instrument satisfies the requirements of this
Declaration, (e) the form of any By-Laws adopted by or the identity of any
officers elected by the Trustees, or (f) the existence of any fact or facts
which in any manner relate to the affairs of the Trust, shall be conclusive
evidence as to the matters so certified in favor of any person dealing with the
Trustees and their successors.
B-18
<PAGE> 49
10.5 Provisions in Conflict With Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the DBTA, or with other applicable laws and
regulations, the conflicting provisions shall be deemed never to have
constituted a part of this Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of this Declaration in any jurisdiction.
10.6 Trust Only. It is the intention of the Trustees to create only a
business trust under DBTA with the relationship of trustee and beneficiary
between the Trustees and each Holder from time to time. It is not the intention
of the Trustees to create a general partnership, limited partnership, joint
stock association, corporation, bailment, or any form of legal relationship
other than a Delaware business trust except to the extent such trust is deemed
to constitute a corporation under the Code and applicable state tax laws.
Nothing in this Declaration of Trust shall be construed to make the Holders,
either by themselves or with the Trustees, partners or members of a joint stock
association.
10.7 Withholding. Should any Holder be subject to withholding pursuant
to the Code or any other provision of law, the Trust shall withhold all amounts
otherwise distributable to such Holder as shall be required by law and any
amounts so withheld shall be deemed to have been distributed to such Holder
under this Declaration of Trust. If any sums are withheld pursuant to this
provision, the Trust shall remit the sums so withheld to and file the required
forms with the Internal Revenue Service, or other applicable government agency.
10.8 Headings and Construction. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument.
Whenever the singular number is used herein, the same shall include the plural;
and the neuter, masculine and feminine genders shall include each other, as
applicable.
IN WITNESS WHEREOF, the undersigned have caused these
presents to be executed as of the day and year first above written.
<TABLE>
<S> <C> <C>
Richard M. Amis, Trustee /s/ Richard M. Amis July 22, 1999
---------------------------------
Arthur G. De Russo, Trustee /s/ Arthur G. De Russo July 22, 1999
--------------------------------
David F. Holland, Trustee /s/ David F. Holland July 22, 1999
---------------------------------
Gerald J. Levy, Trustee /s/ Gerald J. Levy July 22, 1999
--------------------------------
Rodger D. Shay, Trustee /s/ Rodger D. Shay July 22, 1999
--------------------------------
</TABLE>
B-19
<PAGE> 50
CERTIFICATE OF TRUST
OF
ASSET MANAGEMENT FUND
The undersigned, constituting the members of the Board of Trustees of
Asset Management Fund (the "Trust"), in order to form a Delaware business trust
pursuant to Section 3810 of the Delaware Business Trust Act, hereby certify the
following:
1. The name of the Delaware business trust is Asset Management Fund.
2. Prior to the issuance of beneficial interests, the Trust will
become a registered investment company under the Investment Company Act of
1940, as amended.
3. Notice is hereby given that pursuant to Section 3804 of the
Delaware Business Trust Act, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a particular
series of the Trust shall be enforceable against the assets of such series only
and not against the assets of the Trust generally.
4. The registered office of the Trust in Delaware is c/o The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
5. The registered agent for service of process on the Trust is The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
6. This Certificate of Trust shall be effective on the date it is
filed with the Office of the Delaware Secretary of State.
IN WITNESS WHEREOF, the undersigned Trustees of Asset Management Fund
have executed this Certificate as of the 22nd day of July, 1999.
Richard M. Amis, Trustee /s/ Richard M. Amis
-----------------------------
Arthur G. De Russo, Trustee /s/ Arthur G. De Russo
-----------------------------
David F. Holland, Trustee /s/ David F. Holland
-----------------------------
Gerald J. Levy, Trustee /s/ Gerald J. Levy
-----------------------------
Rodger D. Shay, Trustee /s/ Rodger D. Shay
-----------------------------
<PAGE> 51
SPECIAL MEETING OF SHAREHOLDERS OF THE
ASSET MANAGEMENT FUND, INC. TO BE HELD
ON SEPTEMBER 28, 1999
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders
of Asset Management Fund, Inc. hereby appoint Rodger D. Shay or Daniel K.
Ellenwood, or either of them, true and lawful attorneys, with the power of
substitution of each, to vote all shares of Asset Management Fund, Inc., 230
West Monroe Street, Chicago, Illinois 60606, which the undersigned is entitled
to vote at the Special Meeting of Shareholders to be held on September 28,
1999, at 230 West Monroe Street, Chicago, Illinois 60606, at 10:00 a.m. Central
Standard time, and at any adjournments thereof.
The persons named will vote the shares represented by this proxy in
accordance with the choices made on this ballot. If no choice is indicated as
to the item, this proxy will be voted affirmatively on the matters.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
YOU MAY ALSO VOTE BY FACSIMILE USING THE FUND'S FACSIMILE NUMBER:
1-312-214-4149.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ASSET
MANAGEMENT FUND, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS.
Proposal 1 To approve or disapprove the Plan of Reorganization which will
reorganize the Fund into a Delaware business trust.
(All Portfolios)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2 To approve or disapprove of changes to the Fund's fundamental
investment policies of the Portfolios.
MARK HERE TO VOTE ALL SHARES
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(a) To adopt a fundamental policy limiting investments.
(All Portfolios)
Proposal 2(b) To change the fundamental policy on high quality assets to a
non-fundamental policy. (Short U.S. Government Securities
Portfolio and Money Market Portfolio only)
Proposal 2(c) To eliminate the fundamental policy on OTS qualifying
securities. (All Portfolios)
Proposal 2(d) To change the fundamental policy on investments in mortgage
securities to a non-fundamental policy. (U.S. Government
Mortgage Securities Portfolio, Intermediate Mortgage
Securities Portfolio and Adjustable Rate Mortgage Portfolio
only)
Proposal 2(e) To amend the fundamental policy on Portfolio lending.
(All Portfolios)
Proposal 2(f) To change the fundamental policy on illiquid investments to
a non-fundamental policy. (All Portfolios)
Proposal 2(g) To eliminate the fundamental policy on Money Market
instruments. (Money Market Portfolio only)
20
<PAGE> 52
TO VOTE SEPARATELY MARK BELOW.
U.S. GOVERNMENT MORTGAGE SECURITIES PORTFOLIO
Proposal 2(a) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(c) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(d) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(e) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(f) FOR [ ] AGAINST [ ] ABSTAIN [ ]
INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO
Proposal 2(a) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(c) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(d) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(e) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(f) FOR [ ] AGAINST [ ] ABSTAIN [ ]
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO
Proposal 2(a) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(b) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(c) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(e) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(f) FOR [ ] AGAINST [ ] ABSTAIN [ ]
ADJUSTABLE RATE MORTGAGE PORTFOLIO
Proposal 2(a) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(c) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(d) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(e) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(f) FOR [ ] AGAINST [ ] ABSTAIN [ ]
MONEY MARKET PORTFOLIO
Proposal 2(a) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(b) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(c) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(e) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(f) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Proposal 2(g) FOR [ ] AGAINST [ ] ABSTAIN [ ]
Mark with an X in the box.
YOUR VOTE IS IMPORTANT. Please complete, sign and return this card as
soon as possible.
Date
-------------------------------------
Signature
-------------------------------------
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of
the Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
21
<PAGE> 53
[Vedder Price Letterhead]
August 31, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: PROXY MATERIALS FOR
ASSET MANAGEMENT FUND("REGISTRANT")
FILE NOS.: 2-78808 AND 811-3541
To the Commission:
On behalf of the above Registrant, electronically transmitted herewith
is the definitive proxy statement, form of proxy and other soliciting materials
for the Registrant. It is intended that the proxy materials will be mailed on or
about August 31, 1999. Please call the undersigned at (312) 609-7763 or Byron F.
Bowman and (312)609-7643 with any questions or comments regarding this filing.
Very truly yours,
/s/Allison A. Gross
-------------------
Allison A. Gross
AAG/sp
Enclosures
