<PAGE> 1
1933 Act Registration No. 2-84169
1940 Act File No. 811-3760
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 ( )
Pre-Effective Amendment No. ( )
Post-Effective Amendment No. 15 (X)
and/or
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 ( )
Amendment No. 16 (X)
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GRADISON GROWTH TRUST
(Exact Name of Registrant as Specified in Declaration of Trust)
580 Walnut Street, Cincinnati, Ohio 45202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (513) 579-5700
Copy to:
Bradley E. Turner , Jr. Richard M. Wachterman
Gradison Growth Trust Gradison Growth Trust
580 Walnut Street 580 Walnut Street
Cincinnati, Ohio 45202 Cincinnati, Ohio 45202
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485.
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X on August 1, 1995 pursuant to paragraph (b) of Rule 485.
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days after filing pursuant to paragraph (a) of Rule 485.
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on pursuant to paragraph (a) of Rule 485
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Registrant has heretofore registered an indefinite number of shares of
beneficial interest, without par value, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended. Registrant's Rule 24f-2 Notice was
filed on May 25 1995.
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GRADISON GROWTH TRUST
CONTENTS OF POST-EFFECTIVE AMENDMENT
The post-effective amendment to the registration statement of Gradison Growth
Trust contains the following documents:
Facing Sheet
Contents of Post-Effective Amendment
Cross-Reference Sheet
Part A - Prospectus
Gradison-McDonald Growth and Income Fund
Part B - Statement of Additional Information
Gradison-McDonald Growth and Income Fund
Part C - Other Information
Signature Page
Exhibits
- --------------------------
The currently effective prospectuses and statements of additional information
for the following series of the Registrant are not affected by this Amendment:
Gradison-McDonald Established Value Fund
Gradison-McDonald Opportunity Value Fund
Gradison-McDonald International Fund ("GM-Int")
<PAGE> 3
GRADISON GROWTH TRUST
Cross-Reference Sheet
Pursuant to Item 501(b) of Regulation S-K
Under the Securities Act of 1933
<TABLE>
<CAPTION>
Form N-1A
Item Number Location in Prospectus
- ----------- ----------------------
<S> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . Cover Page of Prospectus
2. Synopsis . . . . . . . . . . . . . . . . . . . . Expense Summary
3. Condensed Financial Information . . . . . . . . Performance
Calculations
Financial Highlights
4. General Description of Registrant . . . . . . . Cover Page; How the
Fund Invests General
Information
5. Management of Fund . . . . . . . . . . . . . . . Management of the
Fund; Dividends and
Distributions
6. Capital Stock and Other Securities . . . . . . . Cover Page; Dividends
and Distributions;
Taxes; General
Information
7. Purchase of Securities Being Offered . . . . . . Purchases and
Redemptions; Net
Asset Value; Optional
Shareholder Services;
Distribution Plan;
Management of the
Fund
8. Redemption or Repurchase . . . . . . . . . . . . Purchases and
Redemptions
9. Pending Legal Proceedings . . . . . . . . . . . Not applicable
Location in Statement
of Additional Information
------------------------
10. Cover Page . . . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . . . . Not applicable
13. Investment Objectives and Policies . . . . . . . Investment
Restrictions;
Portfolio
Transactions
14. Management of the Fund . . . . . . . . . . . . . Trustees and Officers
of the Trust
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . Not applicable
16. Investment Advisory and Other Services . . . . Investment Adviser
17. Brokerage Allocation and Other Practices . . . Portfolio
Transactions
18. Capital Stock and Other Securities . . . . . . . Description of the
Trust
19. Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . Purchase of Shares;
Redemption of
Shares; Net Asset
Value
20. Tax Status . . . . . . . . . . . . . . . . . . . Taxes
21. Underwriters . . . . . . . . . . . . . . . . . . Investment Adviser
22. Calculation of Yield Quotations of Money
Market Funds . . . . . . . . . . . . . . . . Not applicable
23. Financial Statements . . . . . . . . . . . . . . Financial Statements
</TABLE>
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[Graphics - Portable Telephone and envelopes]
To find out more about the
GRADISON-MCDONALD
GROWTH & INCOME FUND
or other funds in the family
CALL
1-800-869-5999
OR WRITE
Gradisono McDonald Mutual Funds
580 Walnut Street
Cincinnati, Ohio 45202
GRADISON-MCDONALD
The investment return and value of an investment in the Fund will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than the
original cost. McDonald & Company Securities, Inc.-Distributor
GROWTH & INCOME
FUND
GRADISON-MCDONALD
[Graphic - Fishing equipment and sewing items including a tape measure with
"Your Future Starts Today" on the reverse of Tape measure.]
PROSPECTUS
AUGUST 1, 1995
<PAGE> 5
SIGNIFICANT FEATURES
Professional Management
Portfolio Diversification
Dividends Paid in Additional Shares or Cash
Daily Liquidity at Net Asset Value
$1,000 Minimum Initial Investment
$50 Minimum Additional Investment
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS AUGUST 1, 1995
GROWTH & INCOME FUND
A COMMON STOCK FUND INVESTING FOR GROWTH OF
CAPITAL, CURRENT INCOME, AND GROWTH OF INCOME
The Gradison-McDonald Growth & Income Fund ("Fund") is a diversified series of
the Gradison Growth Trust, an open-end management investment company. The Fund
seeks long-term growth of capital, current income, and growth of income
consistent with reasonable investment risk. McDonald & Company Securities, Inc.
("McDonald" or the "Adviser") is the investment adviser for the Fund. The
Gradison Division of McDonald ("Gradison") acts as transfer agent of the Fund.
This Prospectus is designed to provide you with information that you should know
before investing and should be retained for future reference. A Statement of
Additional Information for the Fund, dated August 1, 1995, has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
This Statement is available upon request without charge from the Fund by calling
the phone numbers provided below.
For all information (including purchases, redemptions, and most recent share
price), call 579-5700 from Cincinnati, Ohio or 1-800-869-5999 toll free.
Shares of the Fund are not deposits or obligations of any credit union or other
depository institution and are not guaranteed or endorsed by the Federal Deposit
Insurance Corporation, or any other agency.
1-800-869-5999[GRAPHIC]
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Expense Summary 2
Financial Highlights 3
Investment Objective 4
Investment Policies and Risks 4
Purchases and Redemptions 5
Dividends and Distributions 7
Taxes 7
Net Asset Value 7
Optional Shareholder Services 7
Management of the Fund 8
Distribution Plan 9
Performance Calculations 9
Individual Retirement Accounts 10
General Information 10
</TABLE>
EXPENSE SUMMARY
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales load on purchases None
- -------------------------------------------------
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees .65%
12b-1 Fees (after waiver)* .00%
Other Expenses (after reimbursement)* 1.35%
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TOTAL FUND OPERATING EXPENSES 2.00%
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- -------------------------------------------------
</TABLE>
The Fund is sold without a front-end or back-end sales charge. Long-term
shareholders may pay more than the economic equivalent of the maximum front-end
sales charge permitted under the rules of the National Association of Securities
Dealers. However, in order for a Fund investor to exceed the maximum permitted
front-end sales charge, a continuous investment in the Fund for 25 years would
be required.
*Since the Fund has not yet been in operation for a full year, the "Other
Expenses" category is an estimate. The "12b-1 Fees" category would be .50% and
it is estimated that the "Other Expenses" category would be 2.60% absent fee
waiver and expense reimbursement by the Adviser. It is estimated that the total
expenses of the Fund absent waiver and reimbursement by the Adviser would be
3.75%. The fee waiver and expense reimbursement will be in effect through August
1, 1996 and may continue thereafter. For further information about fee waiver
and expense reimbursement see "Management of the Fund."
The purpose of the preceding table is to assist investors in understanding the
various costs and expenses that an investor in the Fund will bear directly and
indirectly. (For more information about Fund expenses, see "Purchases and
Redemptions," "Distribution Plan," and "Management of the Fund.")
Example: You would pay the following expenses on a $1,000 investment, assuming a
5% annual return** and redemption at the end of each period:
<TABLE>
<CAPTION>
----------------
1 YEAR 3 YEARS
<S> <C>
$20 $63
----------------
</TABLE>
The example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.
**The 5% annual return is a standardized rate prescribed for use by all mutual
funds for the purpose of this example and does not represent the past or future
return of the Fund.
2
<PAGE> 7
FINANCIAL HIGHLIGHTS
The table below summarizes the financial highlights of the Fund's operations
from the date of public offering (February 28, 1995) through March 31, 1995. The
information is expressed in terms of a single share outstanding throughout the
period and has been audited by Arthur Andersen LLP, independent public
accountants as indicated in their report which appears in the Statement of
Additional Information.
<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 28, 1995
THROUGH MARCH 31, 1995
<S> <C>
Net asset value at beginning of period $15.000
Income from investment operations:
Net investment income .030
Net realized and unrealized gains on investments .159
-------
Total income from investment operations .189
-------
Distributions to shareholders --
-------
Net asset value at end of period $15.189
=======
Total return 1.27%(1)
=======
Ratios/Supplemental data:
Net assets at end of period (in millions) $ 12
Ratios net of expenses waived and reimbursed by the adviser (2) (3):
Ratio of expenses to average net assets 0.00%
Ratio of net investment income to average net assets 4.09%
Ratios assuming no adviser waiver or reimbursement of expenses (2) (3)
Ratio of expenses to average net assets 3.88%
Ratio of net investment income to average net assets (9.79%)
Portfolio turnover rate 3.62%
</TABLE>
(1) Total return represents the actual return over the period and has not
been annualized.
(2) The adviser absorbed expenses of the Fund through waiver of fees and
reimbursement of certain expenses.
(3) Annualized.
1-800-869-5999[GRAPHIC]
3
<PAGE> 8
INVESTMENT OBJECTIVE
The investment objective of the Fund is to seek long-term growth of capital,
current income, and growth of income consistent with reasonable investment risk.
There can be no assurance that the Fund's objective will be achieved.
WHO MAY WANT TO INVEST
The Fund may be appropriate for investors who are willing to be subject to stock
market fluctuations in pursuit of potentially high long-term returns. The Fund
is designed for those who seek a combination of growth and income from equity
investments. The Fund is not in itself a complete investment plan.
INVESTMENT POLICIES AND RISKS
McDonald will seek to achieve the Fund's objective by investing principally in
common stocks of companies that it considers undervalued and which offer
earnings growth potential while paying current dividends. Particular emphasis
will be placed on the identification of dividend paying securities issued by
companies which have, on average, records of historic growth in earnings that
are higher than the growth in earnings of the Standard & Poor's 500 Composite
Stock Price Index ("S&P 500"). The companies which will be sought will also have
had higher returns on shareholder equity than the S&P 500. McDonald believes
that above average dividend returns and below average price/earnings ratios are
factors that generally tend to moderate risk and afford opportunity for
appreciation of securities owned by the Fund, while also providing current
income. The selection process also utilizes research oriented to quality,
predictability of operating growth, and financial strength. The equity
securities invested in by the Fund will usually be dividend paying securities
although the Fund may purchase securities that are not paying dividends but
offer prospects for growth of capital or future income. In selecting equity
securities for investment, the Fund does not utilize any specific criteria
regarding the length of time the company has paid dividends or the rate of
growth of a company's dividend. The Fund will generally invest in securities of
companies with capitalizations in excess of $500 million, the securities of
which are traded on recognized securities exchanges or in the over-the-counter
market.
The Fund ordinarily invests principally in common stocks and avoids
market-timing or speculating on broad market conditions. The Fund may also
invest in securities convertible into common stocks, warrants, straight debt
securities (rated in the top three quality categories by Standard & Poor's
Corporation or Moody's Investors Service, Inc. or determined to be of equivalent
quality by the Adviser), cash equivalents, U.S. Government securities, or
non-convertible preferred stocks. The cash equivalents which the Fund may invest
in are short term U.S. Government obligations, certificates of deposit of
domestic depository institutions, high grade commercial paper, and fully
collateralized repurchase agreements with banks or securities dealers. In a
repurchase agreement, the Fund buys a security at one price and simultaneously
agrees to sell it back at a higher price. Delays or losses could result if the
other party to the agreement defaults or becomes insolvent. For temporary
defensive purposes, such as when the market for common stocks is extremely
unfavorable, the Fund may invest an unlimited portion of its assets in cash
equivalents.
It is the policy of the Fund not to engage in trading for short-term profits.
Nevertheless, changes in the portfolio will be made promptly when determined to
be advisable by reason of developments not foreseen at the time of the initial
investment decision, and usually without reference to the length of time a
security has
4
<PAGE> 9
been held. Accordingly, portfolio turnover rate will not be considered a
limiting factor in the execution of investment decisions.
Julian C. Ball, Executive Vice President and Portfolio Manager of the Fund has
been primarily responsible for the day-to-day management of the Fund's portfolio
since the Fund's inception. Mr. Ball has been a Vice President of McDonald since
July of 1994. Prior to that he was Vice President and Portfolio Manager at Duff
& Phelps Investment Management Company. Mr. Ball is a Chartered Financial
Analyst.
The value of the Fund's investments and the income they generate varies from day
to day, generally reflecting changes in market conditions, interest rates, and
other company, political, and economic news. Stocks, although generally subject
to greater price volatility than fixed income securities and money market
investments, have historically shown greater growth potential than those
securities but may decline over short or even extended periods. The fixed income
securities in which the Fund may invest have market values which tend to vary
inversely with the level of interest rates - when interest rates rise, their
value will tend to decline and vice versa. When you redeem your Fund shares,
they may be worth more or less than what you paid for them.
DIVERSIFICATION, CONCENTRATION AND OTHER
INVESTMENT RESTRICTIONS
With respect to 75% of its total assets, the Fund will not purchase securities
of any issuer (other than securities issued or guaranteed by the U.S. Government
or its agencies or instrumentalities) if, as a result, more than 5% of the
Fund's assets would be invested in securities of that issuer or the Fund would
hold more than 10% of the voting securities of that issuer. The Fund may not
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities) if, as a
result, more than 25% of the Fund's total assets would be invested in the
securities of companies whose principal business activities are in the same
industry. The Fund may not borrow money, except from banks as a temporary
measure or for extraordinary or emergency purposes, and then only in amounts not
exceeding 10% of its total assets. While any borrowing of greater than 5% of its
assets occurs, the Fund will not purchase additional portfolio securities. The
foregoing are fundamental restrictions. The Fund may not invest more than 15% of
its assets in securities that are not readily marketable nor may it pledge more
than 15% of its assets.
The Fund's investment objective and the fundamental investment restrictions set
forth in this Prospectus and in the Statement of Additional Information may not
be changed without shareholder approval. Certain other investment policies and
strategies and restrictions on investment are noted throughout the Prospectus
and are set forth in the Statement of Additional Information. These investment
policies and strategies and restrictions may be changed at any time by a vote of
the Board of Trustees of the Trust. Shareholders will be notified of material
changes.
PURCHASES AND REDEMPTIONS
HOW TO PURCHASE SHARES
You may purchase shares of the Fund by bringing or mailing funds to Gradison,
McDonald, or the Fund. Checks should be made payable to the order of
"Gradison-McDonald Growth & Income Fund" and should be accompanied by your
account name, and account number if one has been assigned. A completed Account
Information Form must accompany or precede the initial purchase. The minimum
investment required to open an account in the Fund, including Individual
1-800-869-5999[GRAPHIC]
5
<PAGE> 10
Retirement Accounts, is $1,000 and additional investments must be at least $50.
These minimums may be waived for certain group purchases. Purchase orders become
effective when the Fund receives the necessary information about your account
and provision for payment has been made.
HOW TO REDEEM SHARES
You may redeem Fund shares without charge by sending a signed redemption request
to the Fund identifying the account name and number and the number of shares or
dollar amount to be redeemed. You may redeem shares by telephone and have the
proceeds of your redemption mailed to the address on the Fund's records. The
Fund normally makes payment for redeemed shares within one business day and,
except in extraordinary circumstances, within seven days after receipt of a
properly executed redemption request. The Fund may delay payment for the
redemption of shares where the shares were purchased with a personal check (or
any other method of payment subject to collection), but only until the purchase
payment has cleared, which may be up to 15 days from the day the purchase
payment is received by the Fund. If you need more immediate access to your
investment, you should consider purchasing shares by wire, cash or other
immediately available funds. Shareholders may make special arrangements for wire
transfer of redemption proceeds by contacting the Fund in advance of a share
redemption.
TRANSACTIONS THROUGH GRADISON AND MCDONALD
Investors who maintain brokerage accounts with Gradison or McDonald may purchase
or redeem Fund shares without incurring any fees. The Fund may agree to modify
or waive its purchase and redemption procedures or requirements in order to
facilitate these transactions. No such modification or waiver will result in an
investor being assessed a fee by the Fund in connection with any purchase or
redemption of shares.
ADDITIONAL PURCHASE AND
REDEMPTION INFORMATION
All purchase and redemption information and authorizations (except those
effected by Gradison or McDonald) should be mailed or delivered to
Gradison-McDonald Mutual Funds, 580 Walnut Street, Cincinnati, Ohio 45202.
All purchases and redemptions are made at the net asset value per share next
calculated after receipt of a purchase order (and provision for payment has been
made) or a valid redemption request. Share certificates are not issued. Account
transactions are reported on periodic statements. The Fund reserves the right to
redeem shares in any account if the value of that account falls below $500.
However, shareholders will be given notice and 60 days to increase the value to
at least the minimum amount.
Under extraordinary circumstances, such as periods of drastic economic or market
changes, it is possible that you might not be able to reach the Fund by
telephone to effect a redemption. If such an occasion were ever to occur, you
can make a redemption request in writing (by mail or personally delivered) to
the Fund's offices. Shareholders who have brokerage accounts with Gradison or
McDonald can request that their Investment Consultant arrange the redemption.
The telephone redemption feature may be terminated or modified upon 30 days'
notice to shareholders.
The Fund, Gradison, and McDonald, and their officers and employees will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and if it does
not, in the view of the Securities and
6
<PAGE> 11
Exchange Commission, the Fund may be liable for any losses resulting from
unauthorized instructions. Telephone transactions are available to all
shareholders as a standard service.
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the net investment income of the Fund is distributed to
shareholders as quarterly dividends. Any net capital gains (net profits on the
sale of portfolio securities, less any available capital loss carryovers)
realized by the Fund are distributed to shareholders at least annually.
Additional distributions are sometimes necessary to meet tax requirements. The
record and distribution dates for income dividends and capital gain
distributions will be as determined by the Board of Trustees. Unless you select
the Dividend Distribution Plan, all income dividends and net realized capital
gain distributions from the Fund are automatically paid in additional shares of
the Fund at the net asset value for such shares on the date the distributions
are payable.
TAXES
The Fund intends to qualify as a 'regulated investment company' under the
Internal Revenue Code. In any fiscal year in which the Fund so qualifies and
distributes to shareholders substantially all of its net investment income and
net capital gains, the Fund itself is relieved of federal income tax. All
dividends and capital gains are taxable to shareholders whether they are paid in
shares or received in cash, except as to shareholders who are exempt from
taxation or entitled to tax deferral. Dividends derived from net investment
income and any distributions of net realized short-term capital gains are
taxable to shareholders as ordinary income. Long-term capital gains
distributions are taxable as such regardless of how long shares of the Fund have
been held. Each year, shareholders will be notified of the amount and federal
tax status of all dividends and capital gains paid during the prior year.
The foregoing is only a summary of important generally applicable Federal income
tax provisions in effect as of the date of this Prospectus; see the Statement of
Additional Information for further information. There may be other Federal,
state, or local tax considerations applicable to a particular investor.
NET ASSET VALUE
The net asset value of the shares of the Fund is calculated once daily, as of
the close of regular trading on the New York Stock Exchange (generally 4:00 p.m.
Eastern time) on each day that Exchange is open. The net asset value per share
of the Fund, which is the price at which shares are purchased and redeemed, is
computed by dividing the value of the Fund's net assets (assets minus
liabilities) by the number of shares outstanding of the Fund. Securities owned
by the Fund are generally valued on the basis of market quotations.
OPTIONAL SHAREHOLDER SERVICES
AUTOMATIC INVESTMENT PLAN
You may arrange for a fixed amount of money to be transferred on a regular
automatic basis from your bank or other depository account to your Fund account.
For additional information, obtain the Gradison-McDonald Automatic Investment
Plan form from the Fund. The $1,000 minimum investment in the Fund requirement
will be waived while automatic investment of at least $50 per month is in
effect.
DIVIDEND DISTRIBUTION PLAN
You may elect (on the Account Information Form) to automatically receive cash
payments of dividends and/or capital gains distributions. (For this purpose,
short-term capital gains distributions are considered dividends.) You may change
or terminate this election at any time by written notice to the Fund.
1-800-869-5999[GRAPHIC]
7
<PAGE> 12
AUTOMATIC PAYMENT PLAN
If your account has a value of at least $10,000, you may elect (on the Account
Information Form) to have monthly or quarterly payments of a specified amount
(but not less than $50) mailed to you or anyone specified on the form. You may
change or terminate this election at any time by written notice to the Fund.
Because the Fund cannot guarantee that payments will be made on the exact date
specified, the Plan should not be utilized for time-sensitive payments.
Investors utilizing the Automatic Payment Plan should be aware that each payment
constitutes a redemption for tax purposes.
EXCHANGES
Shares of the Fund may be exchanged, without administrative fees, for shares of
any Gradison-McDonald funds and for shares of certain Federal and Federal/Ohio
tax-free money market funds. You may request exchanges by telephoning or writing
the Fund. Before making an exchange, you should read the prospectus of the fund
in which you are investing which is available upon request. An exchange may not
be made from the Fund to the fund in which you are investing unless the shares
of such fund are registered for sale in the state in which you reside. Exchanges
of Fund shares for shares of funds sold subject to a sales charge will be
subject to such sales charge except to the extent that a sales charge has
previously been paid in connection with the shares. The terms of the exchange
feature are subject to change and the exchange feature is subject to
termination, both upon 60 days' written notice, except that no notice shall be
required under certain circumstances provided for by rules of the Securities and
Exchange Commission.
MANAGEMENT OF THE FUND
The Trust's Board of Trustees is responsible for the direction and supervision
of the Fund's operations. Subject to the authority of the Board of Trustees,
McDonald manages the investment and reinvestment of the assets of the Fund, and
provides its employees to act as the officers of the Trust who are responsible
for the overall management of the Fund. McDonald, a wholly owned subsidiary of
McDonald & Company Investments, Inc., McDonald Investment Center, 800 Superior
Avenue, Cleveland, Ohio 44114, is an investment adviser and a securities
broker-dealer. McDonald, including Gradison's predecessor, has served as an
investment adviser to investment companies since 1976.
The Fund pays the Adviser a fee of .65% of the first $100 million of the Fund's
average daily assets, .55% of the next $100 million and .45% of assets in excess
of $200 million for acting as its investment adviser. Gradison acts as the
Fund's transfer agent, dividend disbursing agent, and accounting services
provider. For providing such services, Gradison receives an annual fee of $18.25
per non-zero balance shareholder account plus out of pocket costs for acting as
transfer agent and dividend disbursing agent and an accounting services fee of
.03% of the first $100 million of average daily net assets, .02% of the next
$100 million of average daily net assets and .01% of average daily net assets in
excess of $200 million, with a minimum fee of $40,000 per year. Gradison's
address is 580 Walnut Street, Cincinnati, Ohio 45202.
All expenses not specifically assumed by the Adviser, Distributor, or transfer
agent and incurred in the operation of the Fund are borne by the Fund. These
expenses include expenses for the cost of preparing, printing and mailing
registration statements, prospectuses, periodic reports and other documents
furnished to shareholders and regulatory authorities; registration, filing and
similar fees; legal expenses, auditing and accounting expenses; taxes and other
fees; brokers' commissions chargeable to the Fund in connection with securities
8
<PAGE> 13
transactions; expenses of Trustees who are not affiliated with the Adviser;
charges and expenses of any transfer and dividend disbursing agent, registrar,
custodian or depository appointed by the Fund; expenses of shareholders' and
Trustees' meetings; and fees and other expenses incurred by the Fund in
connection with its membership in any organization. The Fund reimburses the
Adviser for all costs, direct and indirect, which are fairly allocable to
services performed by the Adviser's employees for which the Fund is responsible.
McDonald may, from time to time, agree to waive the receipt of management fees
from the Fund and/or reimburse the Fund for other expenses in order to limit the
Fund's expenses to a specified percentage of average net assets. Until August 1,
1996, the Adviser has agreed to waive expenses in order to ensure that the
expense ratio of the Fund, except for brokerage costs and extraordinary items,
does not exceed 2%. Waiver and reimbursement arrangements, which may be
terminated at any time after August 1, 1996, without notice, will increase the
Fund's return. If McDonald discontinues a waiver or reimbursement arrangement,
the Fund's expenses will increase and its return will be reduced. McDonald
retains the ability to be repaid by the Fund for fees waived and expenses
reimbursed if expense ratios fall below the specified limit prior to the end of
the fiscal year. McDonald may waive or reimburse fees in a greater amount than
is required by an applicable fee waiver arrangement.
DISTRIBUTION PLAN
Under the terms of a distribution plan and agreement adopted pursuant to Rule
12b-1 under the 1940 Act, the Fund pays to McDonald as Distributor a service fee
at the annual rate of .25% of the average daily net assets of the Fund and a
distribution fee in the same additional amount for a total payment of .50%
annually. Such fees are calculated on a daily basis and paid to the Distributor
monthly. The service fee is paid as compensation to the Distributor for
providing personal services to shareholders of the Fund, including responding to
shareholder inquiries and providing information to shareholders about their Fund
accounts. The distribution fee is paid to the Distributor for general
distribution services and as compensation for selling shares of the Fund. The
Distributor may use the fees to make payments to authorized dealers, including
Gradison and McDonald, for providing these services to Fund shareholders.
PERFORMANCE CALCULATIONS
From time to time the Fund's 'total return' may be presented in advertisements.
THE TOTAL RETURN FIGURE IS AN HISTORICAL FIGURE AND IS NOT INTENDED TO INDICATE
FUTURE PERFORMANCE. The total return of the Fund refers to the average annual
compounded rate of return over specified time periods (which periods will be
stated in the advertisement) that would equate an initial amount of money
invested in the Fund at the beginning of a stated period to the ending
redeemable value of the investment. The calculations of total return assume the
payment of all dividends and other distributions in additional Fund shares.
The total return of the Fund may be presented in different ways. One calculation
will show the average annual compounded rate of return over an indicated period
that would equate an initial amount of money invested in the Fund at the
beginning of a stated period to the ending value of the investment. Another
calculation will show the aggregate total return over an indicated period by
dividing the change in value during the period by the initial amount of the
investment. Advertisements may also include figures (sometimes depicted in
graphs) reflecting the value of a specified amount of money invested in the Fund
over various time periods and comparison of the
1-800-869-5999[GRAPHIC]
9
<PAGE> 14
Fund's performance to the performance of stock indices such as the S&P 500. All
calculations assume the reinvestment of all dividends and distributions. The
Fund may also advertise performance rankings assigned to it by organizations
which evaluate mutual fund performance such as Lipper Analytical Securities
Corp. It may also advertise "ratings" assigned to it by organizations such as
Morningstar Inc.
INDIVIDUAL RETIREMENT ACCOUNTS
Shares of the Fund may be purchased in conjunction with an Individual Retirement
Account ("IRA"), which permits exchange privileges with Gradison-McDonald
mutual funds (see "Exchanges") and which may also be used with a Gradison or
McDonald self-directed brokerage account. Detailed information concerning IRA
accounts is available from the Fund by calling the phone numbers listed on the
first page of this Prospectus.
GENERAL INFORMATION
The Fund is a series of the Gradison Growth Trust which is an Ohio business
trust organized under the laws of the State of Ohio by a Declaration of Trust
dated May 31, 1983. Each share of the Fund has one vote and represents an equal
pro rata interest in the Fund. Shareholder inquiries should be directed to the
phone numbers or address of the Fund listed on the first page of this
Prospectus.
10
<PAGE> 15
This page left intentionally blank.
1-800-869-5999[GRAPHIC]
11
<PAGE> 16
GRADISON GROWTH TRUST
Gradison-McDonald Growth and Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL
INFORMATION
- --------------------------------------------------------------------------------
For information, call:
579-5700 from Cincinnati, Ohio
Toll free (800) 869-5999 from outside Cincinnati
Information may also be obtained from Trust at:
580 Walnut Street
Cincinnati, Ohio 45202
- --------------------------------------------------------------------------------
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Prospectus of the Fund, da ted August 1, 1995,
which has been filed with the Securities and Exchange Commission. The Prospectus
is available upon request without charge from the Trust at the above address or
by calling the phone numbers provided above.
The date of this Statement of Additional Information is August 1, 1995.
<PAGE> 17
<TABLE>
<CAPTION>
CONTENTS LOCATION IN PROSPECTUS
__________________________________________________Page
<S> <C>
INVESTMENT POLICIES AND RESTRICTIONS 3 Diversification, Concentration,
and other Investment Restrictions
PURCHASE OF SHARES 4 Purchases and Redemptions
REDEMPTION OF SHARES 5 Purchases and Redemptions
EXCHANGE PRIVILEGE 5 Optional Shareholder Services
Telephone Exchanges 5
Written Exchanges 5
General Exchange Information 6
TAXES 6 Taxes
NET ASSET VALUE 8 Net Asset Value
PORTFOLIO TRANSACTIONS 8
INVESTMENT ADVISER 10 Management of the Fund
Advisory Agreement 10
Distribution 12
Transfer Agent and Accounting
Services Agreement 14
TRUSTEES AND OFFICERS OF THE TRUST 14
DESCRIPTION OF THE TRUST 17 General Information
INVESTMENT PERFORMANCE 18 Performance Calculations
CUSTODIAN 18
ACCOUNTANTS 19
LEGAL COUNSEL 19
FINANCIAL STATEMENTS Following Page 19 Financial Highlights
SALES BROCHURE INFORMATION Following Financial Statements
</TABLE>
2
<PAGE> 18
INVESTMENT POLICIES AND RESTRICTIONS
In addition to the investment restrictions described in the Prospectus,
Gradison-McDonald Growth and Income Fund (the "Fund") has adopted the following
investment restrictions and limitations, which may not be changed without the
approval of the holders of a majority of the outstanding voting securities of
the Fund (as defined in the Investment Company Act of 1940, as amended, (the
"Act"). See "Description of the Trust." The Fund will not:
(1) Make loans, except that the purchase of debt securities as allowed by
the Fund's investment objective and other investment restrictions, the
loaning of portfolio securities pursuant to guidelines of the Securities
and Exchange Commission, and the entering into of repurchase agreements
shall not be prohibited by this restriction;
(2) Purchase or sell real estate, including real estate partnerships or
trusts owning an equity interest in real estate, unless acquired as a
result of ownership of securities or other instruments. The purchase of
securities secured by real estate or securities of companies engaged in
the real estate business which are otherwise allowed by the Fund's
investment objective and other investment restrictions shall not be
prohibited by this restriction;
(3) Underwrite the securities of other issuers, except insofar as the Fund
may technically be deemed an underwriter under the Securities Act of
1933 in connection with the acquisition or disposition of portfolio
securities;
(4) Purchase or sell commodities or commodity contracts or interests in oil,
gas or other mineral exploration or development programs or leases. The
purchase or sale of financial futures contracts or options on financial
futures contracts for the purposes and within the limits set forth in
the Prospectus and this Statement of Additional Information shall not be
prohibited by this restriction;
(5) Issue senior securities except as permitted under the Investment Company
Act of 1940.
The following limitations are not fundamental and may be changed without
shareholder approval: (1) With respect to the purchase of securities of other
investment companies, the Fund will not (a) purchase more than 3% of the
outstanding voting shares of an investment company; (b) invest more than 5% of
its assets in securities of any one investment company; or (c) invest more than
10% of its assets in securities of all investment companies. (2) The Fund will
not make short sales of securities, or purchase securities on margin, except for
short-term credit as is necessary for the clearance of transactions. The deposit
or payment by the Fund of initial or maintenance margin in connection with
futures contracts or related options transactions is not considered the purchase
of a security on margin. (3) The Fund will not purchase or retain in its
3
<PAGE> 19
portfolio any securities issued by an issuer, if those Trustees and officers of
the Trust or of the Fund's investment adviser, who individually own beneficially
more than 1/2 of 1% of the outstanding securities of such issuer, together own
beneficially more than 5% of such outstanding securities. (4) The Fund will not
mortgage, pledge or hypothecate securities in amounts exceeding 15% of the value
of the assets of the Fund (taken at market value). The deposit of underlying
securities and other assets in escrow or other collateral arrangements in
connection with the writing of options or margin for futures contracts or
options on futures contracts are not deemed to be pledges or hypothecations
subject to this restriction. (5) The Fund may not invest more than 5% of its
assets in securities of unseasoned issuers which with their predecessors have
had less than three years of continuous operations. (6) The Fund will not
purchase any security if, as a result, more than 10% of its total assets would
be invested in securities subject to legal restrictions upon resale.
The cash equivalents which the Fund may invest in are short-term U.S
Government obligations, certificates of deposit of domestic depository
institutions, high grade commercial paper, and bankers acceptances.
At the present time, the Fund does not intend to engage in the loaning
of portfolio securities, the purchase or sale of financial futures contracts or
options on financial futures contracts, the purchase or sale of options, or the
purchase of foreign securities (other than American Deposit Receipts). The Fund
does not intend to purchase warrants, if as a result more than 5% of the Fund's
net assets, valued at lower or cost or market value would be invested in
warrants or more than 2% of its net assets would be invested in warrants, valued
aforesaid, which are not traded on the New York or American Stock Exchanges.
If a percentage restriction set forth above is met at the time of
investment, a later movement above the restriction level resulting from a change
in the value of securities held by the Fund will not be considered a violation
of the investment restriction.
PURCHASE OF SHARES
The Trust reserves the right to impose a charge of $15 for any purchase
check returned to the Trust as uncollectible and to collect such fee by
redeeming shares of the Trust from such shareholder's account.
The Trust reserves the right to limit the amount of any purchase and to
reject any purchase order. Shares of the Fund are offered continuously; however,
the offering of shares of the Fund may be suspended at any time and resumed at
any time thereafter. The Trust intends to waive the initial and subsequent
purchase minimums for employees of McDonald & Company Securities, Inc.
("McDonald") which, through its Gradison Division ("Gradison"), acts as the
investment adviser and distributor ("Adviser" and "Distributor").
4
<PAGE> 20
REDEMPTION OF SHARES
The Trust may suspend the right of redemption or may delay payment (a)
during any period when the New York Stock Exchange is closed other than for
customary weekend and holiday closings, (b) when trading in markets normally
utilized by the Trust is restricted, or an emergency exists (determined in
accordance with the rules and regulations of the Securities and Exchange
Commission) so that disposal of the securities held in the Fund or determination
of the net asset value of the Fund is not reasonably practicable, or (c) for
such other periods as the Securities and Exchange Commission by order may permit
for the protection of the Trust's shareholders.
The Fund transmits redemption proceeds only to shareholder names and
addresses on its records (or which it has otherwise verified), provides written
confirmation of all transactions initiated by telephone (either immediately or
by monthly statement, depending on the circumstances), and requires
identification from individuals picking up checks at its offices.
EXCHANGE PRIVILEGE
If a new account is established by an exchange, the dollar amount of the
exchange must at least be equal to the minimum initial investment ($1,000 in the
case of Gradison-McDonald U.S. Government Reserves ("GMU"), Gradison-McDonald
Government Income Fund ("GIF"), Gradison-McDonald Ohio Tax-Free Income Fund
("GMO"), Gradison-McDonald Intermediate Municipal Income Fund ("IMI"),
Gradison-McDonald Established Value Fund ("EST"), Gradison-McDonald Opportunity
Value Fund ("OPP") and the Gradison-McDonald International Fund); and $2,500 in
the case of any tax free money market funds for which the Distributor will
effect exchanges; if an exchange is made into an existing account, the $50
minimum additional investment must be met.
TELEPHONE EXCHANGES
You may request exchanges by telephoning the Fund at 579-5700 from
Cincinnati, or toll free (800) 869-5999 from outside Cincinnati. Such request
should include your name and account number and the number of shares or dollar
amount of the Fund to be exchanged. Telephone exchanges may be made only when
the registration of the two accounts will be identical and may not be made by
shareholders who have had share certificates issued for their shares.
WRITTEN EXCHANGES
You may also exchange your shares of either Fund by written request
directed to:
Gradison-McDonald Mutual Funds
580 Walnut Street
Cincinnati, Ohio 45202
5
<PAGE> 21
Such written request should include your name and account number and the number
of shares or dollar amount of the Fund to be exchanged. If you have share
certificates for the shares being exchanged, they must accompany or precede the
exchange request and must be properly endorsed with signatures guaranteed by a
domestic commercial bank or trust company or a member firm of a national
securities exchange. Unless otherwise indicated, a new account established by
written exchange will have the same registration and selected options as your
present account.
GENERAL EXCHANGE INFORMATION
An exchange involves a redemption of the shares of the fund being
exchanged and the investment of the redemption proceeds into shares of the fund
being purchased. Both the redemption and investment will occur at the respective
net asset value per share (except in the case of purchases of mutual funds sold
subject to a sales load) next determined after receipt by the Trust of a proper
exchange request. For Federal income tax purposes, an exchange of shares is
considered to be a sale and, depending upon the circumstances, a short or
long-term gain or loss may be realized.
EST, OPP, INT, GMU, GIF, GMO, IMI, and Gradison (with respect to any tax
free money market funds) each reserve the right to reject any exchange request.
The exchange feature may be terminated at any time by the shareholder, the
Trust, GMU, GIF, GMO, IMI, or Gradison. In the case of excessive use of the
exchange feature, the Trust, upon 30 days' written notice, may make reasonable
service charges (as specified in the notice) by redeeming shares from such
shareholder's account.
TAXES
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code (the "Code"). By so qualifying, the
Fund will not be taxed on net investment income and net realized capital gains
distributed to shareholders.
Dividends from net investment income and distributions from net realized
short-term capital gains are taxable to shareholders as ordinary income, whether
paid in cash or in additional shares of the Fund. All or a part of the dividends
distributed to shareholders will qualify for the deduction for dividends
received by corporations. The specific amounts eligible for this deduction
depend upon certain factors set forth in the Code, and the Trust will furnish
shareholders annually with written advice as to the amounts of dividend
distributions eligible for such deduction.
Distributions of any net realized long-term capital gains are taxable to
shareholders as long-term capital gains, whether paid in cash or in additional
shares of the Fund and regardless of the length of time a shareholder has owned
shares of the Fund. These capital gains distributions are not eligible for the
dividends received deduction for corporations. The Trust will furnish
shareholders with written notification as to the
6
<PAGE> 22
amount of any long-term capital gains concurrently with any distribution that
includes long-term capital gains.
Investors should be aware of the tax implications of purchasing shares
shortly before a record date for a dividend or capital gains distribution. To
the extent that the net asset value of the Fund at the time of purchase reflects
undistributed income or capital gains, or net unrealized appreciation of
securities held by the Fund, a subsequent distribution to the shareholder of
such amounts, although in effect constituting a return of his or her investment,
would be taxable as described above. Correspondingly, for Federal income tax
purposes, a shareholder's tax basis in his or her shares continues to be his or
her original cost, so that upon redemption of shares, capital gain or loss will
be realized in the amount of the difference between the redemption price and the
shareholder's original cost.
In order to qualify for treatment as a regulated investment company
under the Internal Revenue Code of 1986, as amended, the Fund must distribute to
its shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of taxable net investment income plus net
short-term capital gain, if any), and must meet several additional requirements.
These requirements include the following: (1) the Fund must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of
securities and certain other income; (2) the Fund must derive less than 30% of
its gross income each taxable year from the sale or other disposition of
securities held for less than three months; (3) at the close of each quarter of
the Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. government securities and other
securities, with these other securities limited, in respect of any one issuer,
to an amount that does not exceed 5% of the value of the Fund's total assets;
and (4) at the close of each quarter of the Fund's taxable year, not more than
25% of the value of its total assets may be invested in securities (other than
U.S. government securities) of any one issuer.
The Fund will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of its
net investment income for that year and any net realized capital gains for the
one-year period ending on October 31 of that year, plus certain other amounts.
Although dividends generally will be treated as distributed when paid,
dividends declared in October, November or December, payable to shareholders of
record on a specified date in such a month and paid in January of the following
year, will be treated as having been received by shareholders on December 31 of
the year in which the dividend was declared.
Redemption or resale of shares of the Fund will be a taxable transaction
for federal income tax purposes. Redeeming shareholders will recognize a gain or
loss in an amount equal to the difference between their basis in such redeemed
shares of the Fund and the amount received. If such shares are held as a capital
asset, the gain or loss will be a capital gain or loss and will generally be
long-term if such shareholders have held their
7
<PAGE> 23
shares for more than one year. Any loss realized upon a taxable disposition of
shares held for six months or less will be treated as a long-term capital loss
to the extent of any capital gain dividends received with respect to such
shares.
The Fund is required, in certain circumstances, to withhold 31% of
dividends and certain other payments, including redemptions, paid to
shareholders who do not furnish to the Fund their correct taxpayer
identification number or who are otherwise subject to backup withholding.
The Federal income tax matters summarized above are subject to change by
legislation, administrative action and judicial decision. In addition,
shareholders may be subject to state and local taxes with respect to their
ownership of shares or distributions from the Trust. Shareholders should consult
their tax adviser as to their personal tax situation.
NET ASSET VALUE
The net asset value of the Fund is calculated once daily Monday through
Friday except on the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
The assets and liabilities of the Fund are determined in accordance with
generally accepted accounting principles and the applicable rules and
regulations of the Securities and Exchange Commission. Assets and liabilities
attributable to the Fund are allocated to the Fund. Assets and liabilities not
readily attributable to a fund are allocated to each fund in the Trust in a
manner and on a basis determined in good faith by the Trustees to be fair and
equitable.
When calculating the net asset value of the Fund, a security listed or
traded on an exchange is valued at its last sale price on that exchange, or if
there were no sales that day, the security is valued at the closing bid price.
All other portfolio securities for which over-the-counter market quotations are
readily available are valued at the latest bid price. Portfolio securities and
other assets for which market quotations are not readily available are valued at
their fair value as determined by management of the Fund and approved in good
faith by the Board of Trustees. Short-term securities with remaining maturities
of less than 60 days are valued at amortized cost which approximates market
value.
PORTFOLIO TRANSACTIONS
The Adviser is responsible for making the Fund's portfolio decisions,
including allocation of the Fund's brokerage business and negotiation of
brokerage commissions, subject to policies established by the Trust's Board of
Trustees. In purchasing and selling portfolio securities, brokers and dealers
will be selected so as to obtain the most favorable net results, taking into
account various factors, including the price of the security, the commission
rate, the size of the transaction, the difficulty of
8
<PAGE> 24
execution and other services offered by brokers or dealers which are of benefit
to the Fund. The Adviser will select brokers and dealers to execute transactions
on the basis of its judgment of their professional capability to provide the
service at reasonably competitive rates. The Adviser's determination of what
constitutes reasonably competitive rates is based upon its professional judgment
and knowledge as to rates paid and charged for similar transactions throughout
the securities industry. The Adviser may consider sales by brokers or dealers of
shares of the Fund when selecting brokers or dealers to execute portfolio
transactions as long as the most favorable net results are obtained.
The Adviser may receive commissions from the Trust for effecting
transactions only in accordance with procedures adopted by the Board of
Trustees. Any procedures adopted by the Trustees will incorporate the standard
contained in Rule 17e-1 under the Act that the commissions paid must be
"reasonable and fair compared to the commission, fee or other remuneration
received or to be received by other brokers in connection with comparable
transactions involving similar securities during a comparable period of time".
Pursuant to Rule 17e-1, the Board of Trustees will review at least annually the
appropriateness of any procedures in effect and will conduct compliance reviews
at least quarterly and maintain records in connection with such reviews. The
Adviser has assured the Trust that in all transactions placed with the Adviser,
the Fund will be charged a commission that is at least as favorable as the rate
the Adviser charges to its other customers in similar transactions. No
commission charged to the Trust by the Adviser or any broker affiliated with the
Adviser will include compensation for research services provided by the Adviser
or any such affiliated broker.
Brokers who provide supplemental investment research to the Adviser may
receive orders for transactions in portfolio securities of the Fund. Such
supplemental research services ordinarily consist of assessments and analyses of
the business or prospects of a company, industry, or economic sector.
Information so received is in addition to and not in lieu of the services
required to be performed by the Adviser under the Investment Advisory Agreement
with the Trust. If in the judgment of the Adviser the commission is reasonable
in relation to the brokerage and research services provided, the Adviser is
authorized to pay brokerage commissions in excess of commissions another broker
would have received for effecting the same transaction, subject to the review of
the Trust's Board of Trustees. Not all such research services may be used by the
Adviser in connection with managing the Fund. The expenses of the Adviser will
not necessarily be reduced as a result of the receipt of such supplemental
information, and the Adviser may use such information in servicing its other
accounts.
Because of the affiliation of the Adviser with the Fund, the Fund is
prohibited from engaging in certain transactions involving the Adviser except in
compliance with the provisions of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder. Accordingly, the Fund will
not purchase or sell portfolio securities from or to the Adviser in any
transaction in which the Adviser acts as principal, including transactions in
the over-the-counter market. The Fund may purchase securities from other members
of an underwriting syndicate of which the Adviser is a participant, but only
under the conditions set forth in applicable rules of the Securities and
Exchange Commission.
9
<PAGE> 25
The Board of Trustees of the Trust has considered the possibility of
recapturing, for the benefit of the Fund, underwriting commissions or similar
fees incurred when purchasing portfolio securities and has determined not do so.
The Adviser also serves as the investment adviser to GMU, GMO, IMI, and
GIF (see "Exchange Privilege") and furnishes investment advice to other clients.
Investment decisions for the Fund are made independently from those for EST,
OPP, GMU, GMO, IMI, and GIF although other clients advised by the Adviser may
have similar objectives and investment programs as the Fund. Purchases and sales
of particular securities may be effected simultaneously for such entities and
clients. In such instances, the transactions will be allocated as to price and
amount in a manner the Adviser considers equitable to each of the affected
entities or clients, which could have a detrimental effect upon the price or
amount of the securities purchased or sold for the Fund. On the other hand, in
some cases the ability of the Fund to participate in volume transactions may
produce better executions for the Fund. It is the opinion of the Board of
Trustees that the benefits available to the Fund from retaining the Adviser
outweigh any disadvantages that may arise from exposure to simultaneous
transactions.
It is expected that the Fund's portfolio turnover rate (see page 4 of
the prospectus) will generally not exceed 50% annually.
INVESTMENT ADVISER
The Adviser will manage the investment and reinvestment of the assets of
the Fund in accordance with the Fund's investment objective, policies and
restrictions, subject to the general supervision and control of the Fund's Board
of Trustees and pursuant to the terms of the Investment Advisory Agreement
between the Trust and Adviser.
The Adviser provides to the Fund at its own expense the executive
officers who are necessary for the management and operations of the Fund.
ADVISORY AGREEMENT
The Investment Advisory Agreement provides that the Adviser will manage
the investments of the Fund, subject to review by the Board of Trustees of the
Trust. The Adviser also bears the cost of salaries and related expenses of
executive officers of the Trust who are necessary for the management and
operation of the Trust and compensates the Trustees who are affiliated with the
Adviser. In addition, except as borne by the Trust pursuant to an effective plan
under Rule 12b-1 under the Act, the Adviser bears the expenses related to
distribution of shares of the Fund, such as costs of preparing, printing and
mailing sales literature and other advertising materials, costs of furnishing
prospectuses, annual and semiannual reports of the Trust and other materials
regarding distributing shares of the Trust to potential investors.
10
<PAGE> 26
All expenses not specifically assumed by the Adviser, the Transfer
Agent, or Distributor and incurred in the operation of the Trust are borne by
the Trust pursuant to the Investment Advisory Agreement. Some of these expenses
may be paid by the Adviser subject to reimbursement by the Trust. These expenses
include expenses for office space, facilities and equipment and utilities; cost
of preparing, printing and mailing registration statements, prospectuses,
periodic reports and other documents furnished to shareholders and regulatory
authorities; such distribution/service expenses as may be incurred pursuant to
an effective plan under Rule 12b-1 under the Investment Company Act of 1940;
registration, filing and similar fees; legal expenses ; auditing and accounting
expenses; taxes and other fees; brokers' commissions and issue or transfer taxes
chargeable to the Trust in connection with securities transactions; expenses of
issue, sale, redemption and repurchase of shares; cost of share certificates;
fees of Trustees who are not affiliated with the Adviser; charges and expenses
of any transfer and dividend disbursing agent, registrar, custodian or
depository appointed by the Trust; other expenses of the Trust, including
expenses of shareholders' and Trustees' meetings; and fees and other expenses
incurred by the Trust in connection with its membership in any organization.
Expenses borne by the Trust and attributable to a specific fund are allocated to
that fund; expenses that are not specifically attributable to a fund are
allocated to each fund in a manner and on a basis determined in good faith by
the Adviser to be fair and equitable (generally, on the basis of the respective
net assets of the Fund), subject to review by the Trustees. The Fund reimburses
the Adviser for all costs, direct and indirect, which are fairly allocable to
services provided by the Adviser's employees for which the Fund is responsible.
As compensation for its services under the Investment Advisory
Agreement, the Adviser receives from the Trust a monthly fee based upon the
average value of the daily net assets for the month of the Fund at an annual
rate of .65% on the first $100 million of the Fund, .55% on the next $100
million of the Fund and .45% on any amounts in excess of $200 million of the
Fund. From the inception of the Fund (February 28, 1995) through March 31, 1995,
the Adviser received $0 as investment advisory fees. If not for the waiver of
fees the Adviser would have received $382 as investment advisory fees.
The Adviser will reimburse the Trust for aggregate expenses of the Fund
during any fiscal year which exceed the limits prescribed by any state in which
the shares of the Fund are registered for sale. Currently, the most stringent
limit is 2 1/2% of average net assets up to $30 million, 2% on the next $70
million and 1 1/2% on additional net assets. However, certain expenses such as
brokerage commissions, taxes, interest and items of an extraordinary nature are
excluded from such limitation.
The Investment Advisory Agreement also provides that the Adviser, as a
registered broker-dealer, will distribute the shares of the Fund in states in
which it may be qualified to do so, upon request of the Trust. The Adviser
accepts orders for the purchase of such shares at net asset value only, and no
sales commission, fee or other charge is incurred by the investor other than
charges specified in the Fund's 12b-1 plan. The Adviser receives no compensation
for acting as the Trust's distributor except as may be provided pursuant to the
Distribution Plan of the Trust.
11
<PAGE> 27
The Investment Advisory Agreement further provides that in the absence
of willful misfeasance, bad faith or gross negligence in the performance of its
duties thereunder, or reckless disregard of its obligations thereunder, the
Adviser is not liable to the Fund or any of its shareholders for any act or
omission by the Adviser. The Agreement in no way restricts the Adviser from
acting as an investment manager or adviser for others.
The Investment Advisory Agreement grants to the Trust the right to use
the name "Gradison" and "McDonald" as a part of its name, without charge,
subject to withdrawal of such right by the Adviser upon not less than 30 days'
written notice to the Trust and subject to the automatic termination of such
right within 30 days after the termination of the Investment Advisory Agreement
for any reason. The Investment Advisory Agreement does not impair the right of
the Adviser to use the name Gradison or McDonald in the name of or in connection
with any other business enterprise with which it is or may become associated.
The Investment Advisory Agreement was approved by the vote of a majority
of the Board of Trustees, including the vote cast in person of a majority of the
Trustees who are not "interested persons" (as defined in the Investment Company
Act of 1940) of the Trust or the Adviser, at a meeting held on October 31, 1994,
and was approved by the initial shareholder of the Fund, the Adviser, prior to
commencement of operations of the Fund. The Investment Advisory Agreement
continues in effect as to the Fund until February 28, 1997, and thereafter from
year to year if such continuance is specifically approved at least annually by
the vote of the holders of a majority of the outstanding voting securities of
the Fund or by the vote of a majority of the Trust's Board of Trustees, and in
either event by the vote cast in person of a majority of the Trustees who are
not "interested persons" of any party to the Investment Advisory Agreement.
The Investment Advisory Agreement may be terminated at any time without
penalty upon 60 days' written notice by (i) the Board of Trustees, (ii) the vote
of the holders of a majority of the outstanding voting securities of the Fund or
(iii) the Adviser. The Investment Advisory Agreement will terminate
automatically in the event of its assignment by the Adviser. The Investment
Advisory Agreement may be amended at any time by the mutual consent of the
parties thereto, provided that such consent on the part of the Fund shall have
been approved by the vote of the holders of a majority of the outstanding voting
securities of the Fund and by the vote of a majority of the Board of Trustees,
including the vote cast in person by a majority of the Trustees who are not
"interested persons" of any party to the Investment Advisory Agreement.
DISTRIBUTION
The Fund has adopted a Distribution Plan (the "Plan") under Rule 12b-1
of the Investment Company Act of 1940. Rule 12b-1 permits an investment company
to finance, directly or indirectly, activities primarily intended to result in
the sale of its shares only if it does so in accordance with the provisions of
such Rule. The purpose of the Plan is to increase sales of shares of the Fund to
enable the Fund to acquire and retain a sufficient level of assets to enable it
to operate at an efficient level. Higher levels
12
<PAGE> 28
of assets tend to result in operating efficiencies with respect to the Fund's
fixed costs and portfolio management.
The Plan permits the Fund to incur expenses related to the distribution
its shares, but only as specifically contemplated by the Plan. Under the Plan,
the Trust may incur distribution expenses up to an amount that does not exceed
an annual rate of .50 of 1% of its average daily net assets. Distribution
expenses may be incurred by the Fund under the Plan within the limitation
described above for any activity primarily intended to result in sale of Fund
shares.
The Plan also specifically authorizes the payment of those operational
expenses enumerated as being incurred by the Trust pursuant to the Investment
Advisory Agreement, as described under the caption "Advisory Agreement" above,
to the extent that such payments might be considered to be primarily intended to
result in the sale of shares of the Fund. It further specifically authorizes the
payment of advisory fees pursuant to the Investment Advisory Agreement to the
extent that the Trust might be deemed to be indirectly financing the Adviser's
distribution activities through payment of advisory fees. The Board of Trustees
does not believe that the payment of such operational expenses by the Trust or
payment of the advisory fee constitute the direct or indirect financing of
activities primarily intended to result in the sale of shares of the Fund. Thus,
although such payments are authorized by the Plan as a protective measure, they
are not restricted by the .50% limitation included in the Plan.
The Plan was approved as to the Fund by the vote of a majority of the
Board of Trustees, including the vote of a majority of the Trustees who are not
"interested persons" (as defined in the Investment Company Act of 1940) of the
Trust and have no direct or indirect financial interest in the operation of the
Plan or any agreements related to the Plan (the "Independent Trustees"), cast in
person at a meeting held for such purpose on October 31, 1994. The Plan was
approved by the initial shareholder of the Fund, the Adviser, prior to the
commencement of the Fund's operations. The Plan (together with any agreements
relating to implementation of the Plan) shall continue in effect for a period of
more than one year only so long as such continuance is specifically approved at
least annually by the vote of a majority of the Board of Trustees, including the
vote of a majority of the Independent Trustees, cast in person at a meeting
called for such purpose. The Plan may not be amended to materially increase the
amount of distribution expenses incurred by the Fund without the approval of a
majority of the outstanding voting securities of the Fund, and all material
amendments to the Plan must be approved by a majority of the Board of Trustees
and a majority of the Independent Trustees by votes cast in person at a meeting
called for the purpose of voting on such amendment. The Plan may be terminated
as to the Fund at any time by a vote of a majority of the Independent Trustees
or by a vote of the majority of the outstanding voting securities of the Fund.
Any agreement implementing the Plan may be terminated at any time, without the
payment of any penalty, by a vote of a majority of the Independent Trustees or
by a vote of a majority of the outstanding voting securities of the Fund, on not
more than 60 days' written notice to the other party to the agreement, and any
related agreement will terminate automatically in the event of its assignment.
The Plan requires that the Board of Trustees receive at least quarterly written
reports as to the amounts expended during
13
<PAGE> 29
each quarter pursuant to the Plan and the purposes for which such amounts were
expended. While the Plan is in effect, the selection and nomination of those
Trustees who are not "interested persons" (as defined in the Investment Company
Act of 1940) of the Trust shall be committed to the discretion of the
disinterested Trustees then in office.
Pursuant to the Plan, the Trust has entered into a distribution
agreement ("Agreement") with McDonald. This agreement provides that the Adviser
will receive compensation for rendering personal services to shareholders of the
Fund including providing shareholder liaison services such as responding to
shareholder inquiries and providing information to shareholders about their Fund
accounts at an annual rate of .25% of the average daily net assets of the Fund
and .25% of the value of the average daily net assets of the Fund for rendering
other distribution services to the Fund. The Agreement may be terminated at any
time, without penalty, by a vote of a majority of the Independent Trustees of
the Trust or by a vote of a majority of the outstanding voting securities of the
Fund. The Agreement is contingent on the continued effectiveness of the Trust's
Distribution Expense Plan and automatically terminates in the event of its
assignment. From the inception of the Fund through March 31, l995, the Fund paid
$0 to McDonald pursuant to the Plan. If not for the waiver of fees, the Adviser
would have received $294 pursuant to the Plan.
TRANSFER AGENT AND ACCOUNTING SERVICES AGREEMENT
Pursuant to the Transfer Agent and Accounting Services Agreement,
Gradison provides transfer agent, dividend disbursing, and accounting services
for the Fund. Gradison responds to inquiries from shareholders, processes
purchase and redemption requests, maintains shareholder account records and
provides statements and confirmations to shareholders and maintains the Fund's
books and accounting records. From the inception of the Fund through March 31,
l995, the Fund paid $0 to McDonald pursuant to this Agreement. If not for the
waiver of fees, the Adviser would have received $3,558 pursuant to the Agreement
TRUSTEES AND OFFICERS OF THE TRUST
The Trustees and officers of the Trust, together with information as to
their principal occupations during the past five years and positions currently
held with Gradison-McDonald Cash Reserves Trust ("GMCR"), Gradison Custodian
Trust ("GCT"), and Gradison-McDonald Municipal Custodian Trust ("GMMCT"),
Gradison, and McDonald, are listed below. All principal occupations have been
held for at least five years unless otherwise indicated. Positions held with
Gradison were formerly held with Gradison & Company Incorporated.
14
<PAGE> 30
* DONALD E. WESTON, 580 Walnut Street, Cincinnati, Ohio. Trustee and Chairman of
the Board; Chairman of Gradison; Director of McDonald & Company Investments,
Inc. and Cincinnati Milacron Commercial Corp. (financing of capital goods);
Trustee and Chairman of the Board of GMCR, GCT, and GMMCT.
DANIEL J. CASTELLINI, 312 Walnut Street, Cincinnati, Ohio. Trustee; Senior Vice
President/Finance and Administration of the E. W. Scripps Company
(communications); Director and Treasurer of Scripps Howard Broadcasting Company;
Trustee of GMCR, GCT, and GMMCT.
THEODORE H. EMMERICH, 1201 Edgecliff Place, Cincinnati, Ohio. Trustee. Retired;
Former managing partner (Cincinnati office) Ernst & Young (Public Accountants);
Director of Carillon Fund, Inc., American Financial Group Inc., Citicasters,
Inc., and Cincinnati Milacron Commercial Corp.; Trustee of Summit Investment
Trust and Carillon Investment Trust; Trustee of GMCR, GCT, and GMMCT.
JEROME E. SCHNEE, 11558 Stable Watch Court, Cincinnati, Ohio 45249. Trustee.
Professor of Management, College of Business Administration, University of
Cincinnati, Director of National Sanitary Supply Co. and Roto Rooter, Inc.;
Trustee of GMCR, GCT, and GMMCT.
RICHARD A. RANKIN, 434 Scott Street, Covington, Kentucky 41011. Trustee.
Partner, Rankin and Rankin (Public Accountants); Trustee GMCR, GCT, and GMMCT.
BRADLEY E. TURNER, 580 Walnut Street, Cincinnati, Ohio. President. Managing
Director of McDonald; President of GMCR, GCT, and GMMCT.
WILLIAM J. LEUGERS, JR., 580 Walnut Street, Cincinnati, Ohio. Executive Vice
President and Portfolio Manager of the Gradison-McDonald Established and
Opportunity Value Funds.
JULIAN BALL, 800 Superior Avenue, Cleveland, Ohio. Executive Vice President and
Portfolio Manager of the Fund; Vice President of McDonald since July l994; prior
to that, Vice President of Duff & Phelps Investment Management Company.
PAUL J. WESTON, 580 Walnut Street, Cincinnati, Ohio. Senior Vice President;
Executive Vice President of GMCR; Senior Vice President of GCT, and GMMCT;
Executive Vice President of Gradison. Mr. Weston is the brother of Donald E.
Weston.
DANIEL R. SHICK, 580 Walnut Street, Cincinnati, Ohio. Vice President; Senior
Vice President of Gradison since January 1989.
ALFRED M. BRUNNER, 580 Walnut Street, Cincinnati, Ohio. Vice President; Vice
President of Gradison.
____________________
*Interested and affiliated trustee, as defined by the Investment Company Act of
the Trust and the Investment Adviser as a result of being an officer of the
Adviser and owning securities of the Adviser's parent
15
<PAGE> 31
PATRICIA JAMIESON, 800 Superior Avenue, Cleveland, Ohio 44114. Treasurer;
Managing Director, McDonald; Treasurer of GMCR, GCT, and GMMCT.
RICHARD M. WACHTERMAN, 580 Walnut Street, Cincinnati, Ohio 45202. Secretary;
Senior Vice President and General Counsel of Gradison. Secretary of GMCR, GCT,
and GMMCT.
MARK A. FRIETCH, 580 Walnut Street, Cincinnati, Ohio. Assistant Treasurer.
Assistant Treasurer of GMCR, GCT, and GMMCT (since May 1995); prior to that
Financial Consultant and Assistant Controller of Union Central Life Insurance
Company.
Trustees and officers of the Trust who are affiliated with the Adviser receive
no remuneration from the Trust. Trustees who are not affiliated with the Adviser
receive compensation as determined by the Board of Trustees.
As of July 11, 1995, the trustees and officers of the Fund owned, of record and
beneficially, an aggregate of less than 1% of the outstanding shares of the Fund
and the person only shareholder owning 5% or more of the outstanding shares of
the Fund was McDonald & Company Securities Inc. Individual Retirement Account
Custodian for the benefit of Thomas C. Payne, 1800 Bramble, East Lansing
Michigan, 48823, which owned 8.60% of the Fund's shares as of July 17, 1995.
<TABLE>
<CAPTION>
Trustee Compensation Table
Name of Trustee Aggregate Total Compensation
Compensation From Trust and fund
From Trust* complex (3 additional
Trusts) paid to
trustee*
<S> <C> <C>
Theodore H. Emmerich** 0 $18,833
Richard A. Rankin** 0 $18,833
Jerome E. Schnee** 0 $18,833
Daniel J. Castellini $6,083 $10,500
</TABLE>
* Amounts shown as compensation from the Gradison Growth Trust are for the
fiscal year ending March 31, 1995. Amounts shown as compensation from the Fund
and the fund complex are for the year ending December 31, 1994. The Trust
maintains a deferred compensation plan which allows trustees to defer receipt of
trustee fees otherwise payable to them until a future date. Deferred amounts are
credited with interest at a rate equal to the yield of the Gradison-McDonald
U.S. Government Reserves Fund. The Trust does not maintain any other pension or
retirement plans.
** Commenced service as trustee on April 12, 1995.
16
<PAGE> 32
DESCRIPTION OF THE TRUST
The Trust is a diversified, open-end investment company organized under
the laws of the State of Ohio by a Declaration of Trust dated May 31, 1983. The
Declaration of Trust provides for an unlimited number of full and fractional
shares of beneficial interest, without par value, of any series authorized by
the Board of Trustees. The Board of Trustees has authorized the issuance of
shares of three series, representing the Fund, the Gradison-McDonald Established
Value Fund, and the Gradison-McDonald Opportunity Value Fund. Any additional
series of shares must be issued in compliance with the Investment Company Act of
1940 and must not constitute a security that is senior to the shares offered
pursuant to the Prospectuses. Each share of each series represents an equal,
proportionate interest in the related Fund with each other share of that series.
All shares are of the same class and are freely transferable. Upon issuance and
sale in accordance with the terms of the offering, each share will be fully paid
and nonassessable. Shares have no preemptive, subscription or conversion rights
and are redeemable as set forth under "Redemption of Shares."
Holders of shares of each series are entitled to one vote per share;
however, separate votes are taken by each series on matters specifically
affecting the related Fund. Voting rights are not cumulative, which means that
the holders of more than 50% of the shares voting in any election of Trustees
can elect all of the Trustees of the Trust if they choose to do so, in which
event the holders of the remaining shares will be unable to elect a Trustee.
Trustees were initially elected by the shareholders at the first annual meeting
of shareholders. Under the Declaration of Trust, no further meetings of
shareholders are required to be held for the purpose of electing Trustees,
unless less than a majority of Trustees holding office have been elected by the
shareholders. Shareholders' meetings will be held only when required pursuant to
the Declaration of Trust or the Investment Company Act of 1940, and when called
by the Trust or shareholders pursuant to the Declaration of Trust. Pursuant to
the Declaration of Trust, shareholders of record of not less than two-thirds of
the outstanding shares of the Trust may remove a Trustee through a declaration
in writing or by vote cast in person or by proxy at a meeting called for that
purpose. The Trustees are required to call a meeting of shareholders for the
purpose of voting upon the question of removal of any Trustee when requested in
writing to do so by shareholders of record of not less than 10 percent of the
Trust's outstanding shares. Whenever the approval of a majority of the
outstanding shares of the Fund of the Trust is required in connection with
shareholder approval of the Investment Advisory Agreement or the Distribution
Expense Plan, or changes in the investment objective or the investment
restrictions, a "majority" shall mean the vote of (i) 67% or more of the
outstanding shares of the Fund present at a meeting, if the holders of more than
50% of the outstanding shares of the Fund are present in person or by proxy, or
(ii) more than 50% of the outstanding shares of the Fund, whichever is the
lesser.
The assets of the Trust received upon the issuance of the shares of the
fund and all income, earnings, profits and proceeds thereof, subject only to the
rights of creditors, are especially allocated to each such fund and constitute
the underlying assets of each such fund. The underlying assets of the fund are
segregated on the books of account and
17
<PAGE> 33
are to be charged with the liabilities in respect to each such Fund and with a
share of the general liabilities of the Trust. In the event of the termination
and liquidation of the Trust, the holders of the shares of any series are
entitled to receive, as a class, the underlying assets of the related Fund
available for distribution to shareholders.
The Trust is currently operating, and intends to continue to operate, in
compliance with the Ohio law relating to business trusts. Under Ohio law, the
shareholders of a complying business trust have no liability to third persons
for obligations of the Trust, which are to be satisfied solely from the Trust's
property. The Declaration of Trust provides that no Trustee, officer or agent of
the Trust shall be personally liable to any person for any action or failure to
act except (1) for his own bad faith, willful misfeasance, gross negligence, or
reckless disregard of his duties, (2) with respect to any matters as to which he
did not act in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the Trust, or (3) in the case of any
criminal proceeding, with respect to any conduct which he had reasonable cause
to believe was unlawful.
INVESTMENT PERFORMANCE
Total Return
Percentage Change:
Since Inception (non-annualized)
(2/28/95-3/31/95)
Fund +1.27%
Standard & Poors +2.95%
Composite Stock
Index
The results of the Fund and Index include assumed reinvestment of dividends and
other distributions. The performance results reflect historical performance and
do not ensure future results. The annualized return of the Fund for the period
of time set forth above was 15.98%. This figure represents annualization of
performance for a very short period of time and does not reflect the actual
performance for the entire year.
CUSTODIAN
Star Bank, N.A.. ("Star Bank"), Star Bank Center, Cincinnati, Ohio 45201
acts as the custodian of the portfolio securities and other assets of the Fund.
Star Bank has no part in determining the investment policies of the Fund or the
securities which are to be purchased, held or sold by the Trust. The Fund may
purchase or sell securities from or to Star Bank. The Gradison Division of
McDonald & Company Securities, Inc., 580 Walnut Street, Cincinnati, Ohio 45202,
acts as the transfer agent and dividend disbursing agent.
18
<PAGE> 34
ACCOUNTANTS
Arthur Andersen LLP, 425 Walnut Street, Cincinnati, Ohio 45202, is the
independent public accountant for the Trust.
LEGAL COUNSEL
Kirkpatrick & Lockhart acts as legal counsel to the Trust.
19
<PAGE> 35
PORTFOLIO OF INVESTMENTS MARCH 31, 1995
<TABLE>
<CAPTION>
NUMBER COMMON STOCKS -- 57.69% VALUE
OF SHARES
<S> <C>
BANKS -- 4.06%
500 Huntington Bankshares, Incorporated $ 9,063
300 Morgan, (J.P.) & Company,
Incorporated 18,300
1,000 Norwest Corporation 25,375
--------
52,738
--------
BUSINESS SERVICES -- 6.76%
200 Automatic Data Processing, Inc. 12,600
200 Eastman Kodak Company 10,625
600 Motorola Inc. 32,775
500 Pitney-Bowes, Inc. 18,000
500 WMX Technologies, Inc. 13,750
--------
87,750
--------
CHEMICALS -- 3.03%
500 Du Pont (E.I.) de Nemours
& Company 30,250
300 Schulman, (A.) Inc. 9,150
--------
39,400
--------
CONSUMER DURABLES-- 2.08%
1,000 Shaw Industries 13,250
200 TRW Inc. 13,775
--------
27,025
--------
CONSUMER NON-DURABLES-- 8.75%
300 CPC International, Inc. 16,238
700 Heinz, (H.J.) Company 26,950
500 Pepsico, Inc. 19,500
500 Pioneer Hi-Bred International, Inc. 17,875
500 Procter & Gamble Company 33,125
--------
113,688
--------
FINANCIAL SERVICES-- 3.51%
100 American Express Company 3,488
500 American General Corporation 16,125
500 Cincinnati Financial Corporation 26,000
--------
45,613
--------
INDUSTRIAL PRODUCTS-- 6.40%
500 General Electric Company $ 27,063
500 Minnesota Mining &
Manufacturing Company 29,063
500 Pall Corporation 10,500
700 Premier Industrial Group Corporation 16,538
--------
83,164
--------
NATURAL RESOURCES-- 6.55%
500 Chevron Corporation 24,000
500 Exxon Corporation 33,375
300 Mobil Corporation 27,788
--------
85,163
--------
PHARMACEUTICALS -- 6.64%
200 American Home Products Corporation 14,250
500 Bristol-Myers Squibb Company 31,500
400 Merck & Co., Inc. 17,050
300 Warner-Lambert Company 23,475
--------
86,275
--------
RETAIL TRADE -- 3.09%
1,000 Limited, Inc. 23,125
500 McDonald's Corporation 17,063
--------
40,188
--------
UTILITIES-- 6.82%
500 Ameritech Corporation 20,625
500 Central & South West Corporation 12,125
500 Duke Power Company 19,250
500 GTE Corporation 16,625
500 U.S. WEST, Inc. 20,000
--------
88,625
--------
TOTAL COMMON STOCKS
(COST = $742,417) $749,629
--------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL DISCOUNT NOTES-- 42.31% MATURITY INTEREST VALUE
AMOUNT RATE (1)
<S> <C> <C> <C> <C>
$250,000 Federal Home Loan Bank 04/03/95 6.25% $ 249,836
300,000 Federal Farm Credit Bank 04/05/95 5.92 299,896
---------
TOTAL DISCOUNT NOTES (COST = $549,732) 549,732
---------
TOTAL INVESTMENTS, AT VALUE (NOTE 1)
(COST = $1,292,149)- 100% $1,299,361
=========
</TABLE>
(1) For discount notes, the rate is the discount rate at the time of
purchase by the Fund.
See accompanying notes to financial statements.
Financial Statement Page 1
<PAGE> 36
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (Note 1) (Cost $1,292,149) $ 1,299,361
Cash 43,172
Receivable for Fund shares purchased 54,291
Prepaid registration fees 16,933
Organization expenses, net (Note 1) 6,201
Dividends and interest receivable 712
-----------
TOTAL ASSETS 1,420,670
-----------
LIABILITIES
Payable for securities purchased 189,530
Other liabilities payable to adviser (Note 2) 23,134
-----------
TOTAL LIABILITIES 212,664
-----------
NET ASSETS $ 1,208,006
===========
Net assets consist of:
Aggregate paid-in capital 1,197,980
Accumulated undistributed net investment income 2,404
Accumulated undistributed net realized gains 410
Net unrealized appreciation of investments 7,212
-----------
Net Assets $ 1,208,006
===========
Shares of capital stock outstanding
(no par value - unlimited number of shares authorized) 79,531
===========
Net asset value and redemption price per share (Note 1) $ 15.19
===========
</TABLE>
See accompanying notes to financial statements.
Financial Statement Page 2
<PAGE> 37
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS FOR THE PERIOD FEBRUARY 28, 1995*
TO MARCH 31, 1995
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 1,722
Dividends 682
---------
Total investment income $ 2,404
EXPENSES:
Registration fees 3,818
Transfer agency and accounting services fees (Note 2) 3,558
Investment advisory fees (Note 2) 382
Distribution (Note 2) 294
Amortization of organization expenses (Note 1) 105
---------
Total expenses 8,157
Less fees waived and expenses reimbursed by the adviser (Note 2) (8,157)
---------
Net expenses 0
-----
NET INVESTMENT INCOME 2,404
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 410
Net increase in unrealized appreciation of investments 7,212
---------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 7,622
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 10,026
=========
</TABLE>
*Date of public offering.
See accompanying notes to financial statements.
Financial Statement Page 3
<PAGE> 38
STATEMENTS OF CHANGES IN NET ASSETS FOR THE PERIOD FEBRUARY 28,1995*
TO MARCH 31, 1995
<TABLE>
<S> <C>
FROM OPERATIONS:
Net investment income $ 2,404
Net realized gain on investments 410
Net increase in unrealized appreciation of investments 7,212
-----------
Net increase in net assets resulting from operations 10,026
-----------
FROM DISTRIBUTIONS TO SHAREHOLDERS --
-----------
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold 1,198,480
Payments for shares redeemed (500)
-----------
Net increase in net assets from Fund share transactions 1,197,980
-----------
TOTAL INCREASE IN NET ASSETS 1,208,006
-----------
NET ASSETS:
Beginning of period --
-----------
End of period (including undistributed net investment income of $2,404) $ 1,208,006
===========
NUMBER OF FUND SHARES:
Sold 79,564
Redeemed (33)
-----------
Net increase in shares outstanding 79,531
Outstanding at beginning of period --
-----------
Outstanding at end of period 79,531
===========
</TABLE>
*Date of public offering.
See accompanying notes to financial statements.
Financial Statement Page 4
<PAGE> 39
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
Gradison Growth Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Trust was created under Ohio law on May 31, 1983; it commenced
investment operations and the public offering of its shares on August 16, 1983.
The Trust consists of three series, the Gradison-McDonald Established Value
Fund, the Gradison-McDonald Opportunity Value Fund and the Gradison-McDonald
Growth & Income Fund (collectively, the "Funds"); each of which in effect
represents a separate fund with its own investment policies. This Annual Report
to Shareholders pertains only to the Gradison-McDonald Growth & Income Fund
(the "Fund"), the public offering of shares of which commenced on February 28,
1995.
The following is a summary of the Fund's significant accounting policies:
SECURITIES VALUATION--Portfolio securities listed or traded on the New York or
American Stock Exchanges are valued at the last sale price on that Exchange, or
if there were no sales that day, the securities are valued at the closing bid
price. All other portfolio securities for which over-the-counter market
quotations are readily available are valued at the latest bid price. Commercial
paper and discount notes are valued using the amortized cost method which
approximates market value. This involves initially valuing a security at its
original cost and thereafter assuming a constant amortization to maturity of any
discount or premium. Portfolio securities for which market quotations are not
readily available are valued at their fair value as determined in good faith
under procedures adopted by the Board of Trustees.
Repurchase agreements, which are collateralized by U.S. Government obligations,
are valued at cost which, together with accrued interest, approximates market.
Collateral for repurchase agreements is held in safekeeping in the customer-only
account of the Fund's custodian. At the time the Fund enters into a repurchase
agreement, the seller agrees that the value of the underlying security,
including accrued interest, will be equal to or exceed the face amount of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller of a repurchase agreement, the Fund could experience both delays in
liquidating the underlying security and losses. These losses would not exceed an
amount equal to the difference between the liquidating value of the underlying
security and the face amount of the repurchase agreement and accrued interest.
To minimize the possibility of loss, the Fund enters into repurchase agreements
only with selected domestic banks and securities dealers which the Fund's
investment adviser believes present minimal credit risk. There were no
repurchase agreements held in the portfolio at March 31, 1995.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions are
accounted for on the trade date (the date the order to buy or sell is executed),
and dividend income is recorded on the ex-dividend date. Interest income is
accrued as earned. Gains and losses on sales of investments are calculated on
the identified cost basis for financial reporting and tax purposes.
TAXES -- It is the Fund's policy to comply with the provisions of the Internal
Revenue Code available to regulated investment companies. As provided therein,
in any fiscal year in which the Fund so qualifies, and distributes at least 90%
of its taxable net income, the Fund will be relieved of federal income tax on
the income distributed. Accordingly, no provision for income taxes has been
made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year, at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains, if any (earned during
the twelve months ended October 31), plus undistributed amounts from prior
years.
Financial Statement Page 5
<PAGE> 40
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995
The tax basis of investments is equal to the cost as shown on the Portfolio of
Investments.
For both financial reporting and tax purposes, gross unrealized appreciation and
gross unrealized depreciation of securities at March 31, 1995 was $12,402 and
$5,190, respectively.
FUND SHARE VALUATION AND DISTRIBUTIONS TO SHAREHOLDERS -- The net asset value
per share is computed by dividing the net asset value of the Fund (total
assets less total liabilities) by the number of shares outstanding. The
redemption price per share is equal to the net asset value per share.
Distributions to shareholders are recorded on the ex-dividend date. During the
period ended March 31, 1995, the Fund made no distributions.
EXPENSES -- Common expenses incurred by the Trust are allocated to the Fund
based on the ratio of the net assets of the Fund to the combined net assets of
the Trust. In all other respects, expenses are charged to the Fund as incurred
on a specific identification basis.
ORGANIZATION EXPENSES -- Expenses of organization have been capitalized and are
being amortized on a straight-line basis over 60 months commencing upon the
public offering of the Fund's shares.
NOTE 2 -- TRANSACTIONS WITH AFFILIATES
The Trust's investments are managed, subject to the general supervision and
control of the Trust's Board of Trustees, by McDonald & Company Securities, Inc.
("McDonald"), a registered investment adviser and securities dealer, pursuant to
the terms of an Investment Advisory Agreement ("Agreement"). Under the terms of
the Agreement, the Fund pays McDonald a fee computed and accrued daily and paid
monthly based upon the Fund's daily net assets at the annual rate of .65% on the
first $100 million, .55% on the next $100 million and .45% on any amounts in
excess of $200 million. McDonald is to reimburse the Fund for the amount by
which the Fund's aggregate expenses for a fiscal year, including the advisory
fee but excluding interest, taxes and extraordinary expenses, exceed limits set
by state securities regulations.
The Agreement provides that McDonald bear the costs of salaries and related
expenses of executive officers of the Fund who are necessary for the management
and operations of the Fund. In addition, McDonald bears the costs of preparing,
printing and mailing sales literature and other advertising materials and
compensates the Trust's trustees who are affiliated with McDonald. All expenses
not specifically assumed by McDonald are borne by the Fund.
Under the terms of a Transfer Agency, Accounting Services and Administrative
Services Agreement, McDonald provides transfer agent, dividend disbursing,
accounting services and administrative services to the Fund. The Fund pays
McDonald a monthly fee for transfer agency and administrative services at an
annual rate of $18.25 per shareholder non-zero balance account, plus
out-of-pocket costs for statement paper, statement and reply envelopes and reply
postage. The Fund pays McDonald a monthly fee for accounting services based on
the Fund's average daily net assets at an annual rate of .03% on the first $100
million, .02% on the next $100 million and .01% on any amount in excess of $200
million, with a minimum annual fee of $40,000.
Financial Statement Page 6
<PAGE> 41
NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995
Under the terms of an Expense Reimbursement Agreement, McDonald has agreed to
forego fees owed to it under the Advisory Agreement or any other agreement with
the Trust and to reimburse the Fund if, and to the extent that, expenses
(excluding brokerage commissions, taxes, interest and extraordinary items) borne
by the Fund in any fiscal year exceed 2.00% of the average net assets of the
Fund. This agreement is in effect until August 1, 1995 and is subject to
termination by either party upon written notice subsequent to that date. In
addition, McDonald may, at its discretion, agree to waive fees and/or reimburse
the Fund for other expenses in order to limit the Fund's expenses to a specified
percentage of average net assets lower than 2.00%. For the period ended March
31, 1995, McDonald waived advisory fees of $382, transfer agency and accounting
services fees of $3,558, distribution expenses of $294, and reimbursed the Fund
$3,923 for other operating expenses.
In accordance with the terms of a Distribution Service Plan adopted under Rule
12b-1 of the Investment Company Act of 1940, the Fund pays McDonald a service
fee for personal services to shareholders including shareholder liaison services
such as responding to shareholder inquiries and providing information to
customers about their Fund accounts. This fee is computed and paid at an annual
rate of .25% of the Fund's average daily net assets. The Fund also pays McDonald
a fee for its assistance in selling shares of the Fund including advising
shareholders regarding purchase, sale and retention of Fund shares. This fee is
computed and paid at an annual rate of .25% of the Fund's average daily net
assets.
The officers of the Trust are also officers of McDonald.
Each trustee of the Trust who is not affiliated with McDonald receives fees from
the Trust for services as a trustee. The amounts of such fees for each trustee
are as follows: (a) an annual fee of $5,000 payable in quarterly installments
and (b) $500 for each Board of Trustees or committee meeting attended.
NOTE 3 -- SUMMARY OF PURCHASES AND SALES OF INVESTMENTS
For the period ended March 31, 1995, purchases and sales of securities,
excluding short-term securities, amounted to $755,932 and $13,520, respectively.
Financial Statement Page 7
<PAGE> 42
ARTHUR
ANDERSEN
ARTHUR ANDERSEN & CO. SC
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of the
Gradison-McDonald Growth and Income Fund
of the Gradison Growth Trust:
We have audited the accompanying statement of assets and liabilities of the
Gradison-McDonald Growth and Income Fund of the Gradison Growth Trust (an Ohio
business trust), including the portfolio of investments, as of March 31, 1995,
and the related statement of operations, the statement of changes in net assets
and the financial highlights for the period indicated thereon. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of March 31, 1995, by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Gradison-McDonald Growth and Income Fund of the Gradison Growth Trust as of
March 31, 1995, the results of its operations, the changes in its net assets and
the financial highlights for the period indicated thereon, in conformity with
generally accepted accounting principles.
Cincinnati, Ohio,
May 25, 1995
Financial Statement Page 8
<PAGE> 43
GROWTH & INCOME
FUND
GRADISON-MCDONALD
[Picture of wood table with fishing reel, eyeglasses, thimble, two rolls of
heavy thread or yarn, ivy, and tape measure with "Your Future Starts Today" on
reverse]
A COMMON STOCK FUND SEEKING LONG-TERM GROWTH OF CAPITAL, CURRENT INCOME, AND
GROWTH OF INCOME
<PAGE> 44
FAMILY OF MUTUAL FUNDS
GROWTH & INCOME
INTERNATIONAL ESTABLISHED
VALUE
OPPORTUNITY OHIO TAX-FREE
VALUE INCOME
GOVERNMENT INTERMEDIATE
INCOME MUNICIPAL
MONEY
MARKET
<PAGE> 45
[Picture of wood table with eyeglasses, thimble, two rolls of heavy thread or
yarn, and tape measure with "Your Future Starts Today" on reverse]
Whatever your goals or ASPIRATIONS.
Whatever your objective. One thing is certain.
An INVESTMENT made today brings
you that much closer to meeting that OBJECTIVE
and reaching that GOAL...
Whether it's buying a house, starting a family,
SAVING for a college education,
or planning for retirement. Hesitate and
time will pass you by.
Increasingly, MUTUAL FUNDS are the
PREFERRED VEHICLE for starting and building
an investment program.
And today, GRADISON-MCDONALD is a
preferred name in mutual funds
for a GROWING number of investors.
1-800-869-5999
<PAGE> 46
GROWTH & INCOME
FUND
GRADISON-McDONALD GROWTH & INCOME FUND SEEKS TO PROVIDE LONG-TERM CAPITAL
APPRECIATION, CURRENT INCOME AND GROWTH OF INCOME PRIMARILY THROUGH INVESTMENTS
IN THE STOCK OF COMPANIES WHICH GRADISON-McDONALD CONSIDERS TO BE UNDERVALUED
BY THE MARKET. THE FUND IS PROFESSIONALLY MANAGED BY EXPERIENCED
GRADISON-McDONALD PORTFOLIO MANAGERS.
INFLATION
- ---------
The importance of maximizing the return on your investments becomes clear when
you consider the erosive effect that inflation has on your assets. An annual
inflation rate of just 4% cuts purchasing power in half in just 15 years.
THE CASE FOR COMMON STOCKS
--------------------------
[Chart showing a comparison of $10,000 investment in S&P 500 stocks, Long Term
Government Bonds, Treasury Bills and inflation from 1925 through 1993; S&P 500
stock valuation is approximately $8 million; other indices are approximately
$100,000]
This chart is for illustrative purposes only and is not indicative of past or
future performance of the Gradison-McDonald Growth & Income Fund. The S&P 500
is an unmanaged index of common stocks in various industries. Its past
performance does not predict future performance. While stocks have a greater
potential for growth than bonds or Treasury bills, they involve a high degree of
risk: Treasury bills and government bonds, unlike corporate bonds or stocks are
guaranteed by the U.S. government.
<PAGE> 47
[Picture of fishing reel, eyeglasses, handwritten letter, on wooden table]
Historically, common stocks have offered the greatest potential for long-term
growth. Over the long-term they have outperformed fixed income investments and
provided a rate of return well above the rate of inflation. It is important to
understand that common stock investments generally involve greater risk than
fixed income investments. But as a long-term investment, stocks have
historically been an effective way to help maintain your standard of living.
HIGH QUALITY PORTFOLIO
- ----------------------
The Gradison-McDonald Growth & Income Fund invests primarily in the common
stock of high quality, well-known companies with histories of growing profits
and rising dividends.
VALUE INVESTING
- ---------------
The Gradison-McDonald Growth & Income Fund portfolio managers employ an
investment strategy known as value investing. Value investing identifies a stock
as undervalued when its earnings record is judged to justify a higher stock
price than the market has settled on. The technique has been fundamental to the
success of many well-known mutual fund managers.
DIVIDEND INCOME
- ---------------
From the universe of stocks judged to be undervalued, the Gradison-McDonald
Growth & Income Fund managers select stocks that have demonstrated the ability
1-800-869-5999
<PAGE> 48
to pay above-average dividends on a
consistent basis. Gradison-McDonald believes that
dividends are a good indicator of the overall health
And future prospects of a company. Therefore
these stocks offer opportunities for both capital
appreciation and for income growth.
STANDARD & POOR'S 500
<TABLE>
<CAPTION>
ANNUAL
ANNUALIZED RETURN FROM
RETURN FROM CAPITAL
DECADE INCOME APPRECIATION
<S> <C> <C>
1926-1929 4.7% 13.9%
1930's 5.5% - 5.3%
1940's 6.0% 3.0%
1950's 5.1% 13.6%
1960's 3.3% 4.4%
1970's 4.2% 1.6%
1980's 4.4% 12.6%
1990-1994 3.4% 5.4%
- --------------------------------------------------
1926-1994 4.9% 5.3%
</TABLE>
Source: Ibbotson Associates. Performance from the Standard
& Poor's 500 is not intended to represent past or future perfor-
mance of the Gradison-McDonald Growth & Income Fund.
There is no assurance that the historical pattern depicted in the
chart will be repeated.
LOW MINIMUM INVESTMENT
- ----------------------
The Gradison-McDonald Growth & Income Fund has a low minimum initial investment
of $1,000. Additional investments can be made for as little as $50.
QUARTERLY PAYMENT & REINVESTMENT
- --------------------------------
Dividends are paid quarterly. You may choose to receive dividends or elect to
have them automatically reinvested in the Fund.
EXCHANGES
- ---------
You can move money from one Gradison-McDonald fund to another at any time. The
Gradison-McDonald funds currently include:
Opportunity Value Fund
Government Income Fund
U.S. Government Reserves [Picture of Eyeglasses]
Ohio Tax-Free Income Fund
Established Value Fund
Intermediate Municipal Income Fund
<PAGE> 49
Gradison-McDonald fund planned for 1995 by prospectus only:
International Fund
ACCESS
- ------
You can redeem shares on any business day at the closing net asset value.
<PAGE> 50
A TRUSTED NAME
Gradison-McDonald
is headquartered in Cincinnati and has
managed mutual funds since 1976.
The parent company, McDonald & Company
Investments, was founded in 1924
and has been listed on the
New York Stock Exchange since 1983.
It operates a leading regional
investment advisory, investment banking,
and investment brokerage firm
with offices throughout
Ohio, Michigan and Indiana,
and in Atlanta, Boston, Dallas, Chicago,
Los Angeles, the New York City area
and Naples, Florida.
1-800-869-5999
<PAGE> 51
[Picture of Cellular Telephone and two envelopes]
To find out more about the
GRADISON-McDONALD
GROWTH & INCOME FUND
or other funds in the family
CALL
1-800-869-5999
OR WRITE
Gradison-McDonald Mutual Funds
580 Walnut Street
Cincinnati, Ohio 45202
GRADISON - McDONALD
You many obtain a prospectus containing complete information about the Fund from
a Gradison-McDonald Mutual Funds representative or your Investment Consultant.
Read it carefully before investing. Upon redemption, the value of an investment
in the Fund may be worth more or less than its cost.
McDonald & Company Securities, Inc. --Distributor
<PAGE> 52
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a)(1) Financial Highlights of Gradison-McDonald Growth and Income Fund (the
"Fund") for period ending March 31, 1995 included in the prospectus of the Fund.
The following Financial Statements are included in the Prospectus of
the Gradison-McDonald Established Value Fund and the Gradison-McDonald
Opportunity Value Fund, (collectively GM-E/O) which are not affected by this
Amendment:
Financial Highlights for 1985-1994
(a)(2) Financial Statements of the Fund included in the Statement of
Additional Information for the Fund:
Report of Independent Accountant
Statement of Net Assets at March 31, 1995
Statement of Operations for the fiscal period ended March 31,
1995 Statement of Change in Net Assets for the fiscal period
ended March 31, 1995 Notes to Financial Statements
The following Financial Statements are included in the Statement of Additional
Information of GM-E/O which are not affected by this Amendment:
Report of Independent Accountants
Statement of Net Assets at April 30, 1994
Statement of Operations for the fiscal year ended April 30,
1994 Statements of Changes in Net Assets for the fiscal years
ended April 30, 1993 and April 30, 1994
Notes to Financial Statements
(b) Exhibits
(1)(a) First Amended Declaration of Trust.*
(1)(b) Amendment dated October 4, 1991 to Registrant's
Declaration of Trust (Amending Paragraph 2.6. +
(1)(c) Amendments dated May 25, 1995, to First
Amended Declaration of Trust (Included herein).
(2)(a) Registrant's By-Laws.**
(2)(b) Amendment to Registrant's By-Laws dated July 16,
1991 (Amending Section 3.1). +
(3) None.
(4)(a) Form of certificate of share of beneficial interest
of GM-E/O. *
(5)(a) Investment Advisory Agreement (GM-E/O) dated
October 4, 1991. +
(5)(b) Amendments to Investment Advisory Agreements of
GM-E/O dated June 1, 1995 (Included herein).
(5)(c) Investment Advisory Agreement of Fund dated May 25,
1995 Included herein).
(5)(d) Investment Advisory Agreement of GM-Int dated
June 1, 1995 (Included herein).
(5)(e) Sub-Advisory Agreement of GM-Int dated May 25, 1995
(Included herein).
(6) None.
(7) None.
(8) Custodian Agreement (GM-E/O). *
C-1
<PAGE> 53
(8)(a) Custodian Agreement of Fund (Included herein).
(8)(b) Custodian Agreement of GM-Int with Chase Manhattan
Bank (Included herein).
(8)(c) Account Agreement with Star Bank (Included herein).
(9)(a) Transfer Agency Accounting Services Agreement
(GM-E/O)dated June 1, 1995 (Included herein).
(9)(b) Transfer Agency Accounting Services Agreement (the
Fund) dated February 28, 1995 (Included herein).
(9)(c) Transfer Agency Accounting Services Agreement (Int)
dated June 1, 1995 (Included herein).
(10) Opinion of Counsel is filed yearly with
Registrant's Rule 24f-2 Notice and was most
recently filed on May 25, 1995.
(11) Consent of Independent Public Accountants (Included
herein).
(12) None.
(14) Documents used in establishment of individual
retirement accounts in conjunction with shares of
Registrant. ****
(15)(a) Distribution Plan of GM-E/O, as amended October 31,
1994. ***
(15)(b) Distribution Agreements dated June 1, 1995 of
GM-E/O (Included herein).
(15)(c) Distribution Agreement of Fund dated February 28,
1995 (Included herein).
(15)(d) Distribution Agreement of GM-Int dated June 1, 1995
(Included herein).
(16)(a) Schedule of Total Return Computations.+
(18) Powers of Attorney of Jacob Kamm, Bradley Turner,
Gordon Price, Daniel Castellini, W.G. Alpaugh,
George Reiveschl, and Donald E. Weston.***
(18)(a) Powers of Attorney of Patricia Jamieson, Theodore
Emmerich, Jerome Schnee, Richard Rankin, and Julian
Ball (Included herein).
- ------------------------------------------------------------
* Incorporated by reference to Exhibits 1,4, and 8 to Registrant's Form N-1
Registration Statement No. 2-84169 previously filed with the Securities and
Exchange Commission on August 9, 1983.
+ Incorporated by reference to Exhibits 1(b),2(b) 5, 15(b) and 16(a)to
Registrant's Form N-1A Registration Statement No. 2-84169 previously filed with
the Securities and Exchange Commission on June 1, 1992.
** Incorporated by reference to Exhibit 2(b) to Registrant's Form N-1
Registration Statement No. 2-84169 previously filed with the Securities and
Exchange Commission on June 2, 1983
****Incorporated by reference to Exhibit 14 to Registrant's Form N-1A
Registration Statement No. 2-84169 previously filed with the Securities and
Exchange Commission on June 20, 1986.
***Incorporated by reference to Exhibits 15(a) and 18 to Registrant's Form N-1A
Registration Statement No. 2-84169 previously filed with the Securities and
Exchange Commission on November 23, 1994.
C-2
<PAGE> 54
Item 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
Number of
Record Holders
as of
Title of Class July 10, l995
-------------- --------------
<S> <C>
Shares of beneficial interest, without par value of:
Gradison-McDonald Established Value Fund 13,264
Gradison-McDonald Opportunity Value Fund 5,998
Gradison-McDonald Growth and Income Fund 451
Gradison-McDonald International Fund 224
</TABLE>
Item 28. I- BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the captions "Management of the Fund" on page 6 of
the Prospectus of GM-E/O that is part of Part A of this Registration Statement,
"Trustees and Officers of the Trust" on page 17 of the Statement of Additional
Information of GM-E/O that is part of Part B of this Registration Statement and
to Item 29(b) of this Part C of the Registration Statement.
II- BUSINESS AND OTHER CONNECTIONS OF INVESTMENT SUB-ADVISER OF
GRADISON-MCDONALD INTERNATIONAL FUND
The address of Blairlogie Capital Management, Limited is 4th Floor, 125
Princes Street, Edinburgh EH2 4AD, Scotland.
<TABLE>
<CAPTION>
Name Position with Other Affiliations
Investment Sub-Adviser
<S> <C> <C>
Gavin R. Dobson Chief Executive Officer Director, Blairlogie Holdings Limited
(U.K.)
James G.S. Smith Chief Investment Officer Director, Blairlogie Holdings Limited
(U.K.)
John R.W. Stevens Chief Financial Officer Director, Blairlogie Holdings Limited
(U.K.)
</TABLE>
Item 29. PRINCIPAL UNDERWRITERS
(a) The principal underwriter of the Registrant is McDonald & Company
Securities, Inc., which also serves as the principal underwriter and
investment adviser for Gradison-McDonald Cash Reserves Trust,
Gradison-McDonald Municipal Trust and Gradison Custodian Trust.
(b) Information pertaining to its directors and officers is contained in
the following table.
C-3
<PAGE> 55
<TABLE>
<CAPTION>
Principal
Positions and Offices Business Positions and Offices
Name With Underwriter Address With Registrant
- ---- --------------------- --------- ---------------------
<S> <C> <C> <C>
Daniel F. Austin Director, Senior 800 Superior Avenue None
Managing Director Cleveland Ohio 44114
Jack N. Aydin Director, Managing One Evertrust Plaza None
Director Jersey City, NJ 07302
Eugene H. Bosart, III Director, Managing 260 East Brown Street None
Director Birmingham, MI 48009
Thomas G. Clevidence Director, Managing 800 Superior Avenue None
Director Cleveland, OH 44114
Robert T. Clutterbuck Director, Executive 800 Superior Avenue None
Managing Director, Cleveland, OH 44114
Chief Financial Officer
Dennis J. Donnelly Director, Senior 800 Superior Avenue None
Managing Director Cleveland, OH 44114
David W. Ellis, III Director, and Senior 580 Walnut Street None
Vice President Cincinnati, OH 45202
(Gradison Division)
David W. Knall Director, Managing One American Square None
Director Indianapolis, IN 46282
John F. O'Brien Director, Senior 800 Superior Avenue None
Managing Director Cleveland, OH 44114
Thomas M. O'Donnell Director, Chairman 800 Superior Avenue None
Cleveland, OH 44114
Lawrence T. Oakar Director and 800 Superior Avenue None
Senior Vice President Cleveland, OH 44114
Gordon A. Price Director, Managing 800 Superior Avenue Treasurer
Director, Treasurer, Cleveland, OH 44114
Secretary
James C. Redinger Director, Senior 800 Superior Avenue None
Director Cleveland, OH 44114
William B. Summers, Jr. Director, President, 800 Superior Avenue None
and Chief Executive Cleveland, OH 44114
Officer
</TABLE>
C-4
<PAGE> 56
<TABLE>
<CAPTION>
Principal
Positions and Offices Business Positions and Offices
Name With Underwriter Address With Registrant
- ---- --------------------- --------- ---------------------
<S> <C> <C> <C>
David D. Sutcliffe Director, Senior Vice 800 Superior Avenue None
President Cleveland, OH 44114
Francis S. Tobias Director, Managing 800 Superior Avenue None
Director Cleveland, OH 44114
Donald E. Weston Chairman 580 Walnut Street Trustee and Chairman
(Gradison Division) Cincinnati, OH 45202 of the Board
Thomas McDonald Managing Director 800 Superior Avenue None
Cleveland, OH 44114
</TABLE>
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and documents required to be maintained by the
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
Rules 31a-1 through 31(a) thereunder are maintained at the offices of the
Registrant, 580 Walnut Street, Cincinnati, Ohio 45202, except as indicated below
opposite the applicable reference to the aforesaid Rules.
<TABLE>
<CAPTION>
Rule In Possession of:
---- -----------------
<S> <C>
31a-1(b)(1), 31a-1(b)(2)(i)(a)-(f), Star Bank, N.A., Star Bank Center
31a-1(b)(2)(ii), 31a-1(b)(5) and Cincinnati, Ohio 45202 for GM-E/O
31a-1(b)(8) and the Fund and Chase Manhattan
Bank, N.A. Chase Metro Tech
Center, Brooklyn New York, 11245,
for the Gradison-McDonald
International Fund.
</TABLE>
Item 31. MANAGEMENT SERVICES
Not applicable.
Item 32. UNDERTAKINGS
The Registrant hereby undertakes to file a post-effective amendment
with respect to the Gradison-McDonald International Fund series, using
reasonable current financial statements, which need not be audited, within four
to six months from the effective dated of this Amendment.
The Registrant hereby undertakes to provide, without cost, a copy of
its most recent annual report upon request.
Insofar as indemnification for liability arising under the Securities
Act of l933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee,
C-5
<PAGE> 57
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction, the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
C-6
<PAGE> 58
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cincinnati and State of Ohio on the 27th day of
July 1995.
GRADISON GROWTH TRUST
(Registrant)
By /S/ BRADLEY E. TURNER.*
---------------------------
Bradley E. Turner President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
Registrant hereby certifies that this Amendment to Registration
Statement meets all of the requirements for effectiveness pursuant to paragraph
(b) of Rule 485.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C>
*/S/ DONALD E. WESTON Chairman of the Board July 27, l995
(Principal Executive Officer)
*/S/ BRADLEY E. TURNER President "
*/S/ PATRICIA JAMIESON Treasurer "
(Principal Financial and
Accounting Officer)
*/S/ THEODORE EMMERICH Trustee "
*/S/ JEROME SCHNEE Trustee "
*/S/ DANIEL J. CASTELLINI Trustee "
*/S/ RICHARD RANKIN Trustee "
</TABLE>
*By: /s/ Richard M. Wachterman
Richard M. Wachterman, Attorney-in-fact
S-1
<PAGE> 59
<TABLE>
<CAPTION>
Exhibit Index
-------------
Exhibit No. Description
----------- -----------
<S> <C>
(1)(c) Amendments dated May 25, 1995, to
First Amended Declaration of Trust
(5)(b) Amendments to Investment Advisory
Agreements of GM-E/O dated
June 1, 1995
(5)(c) Investment Advisory Agreement of
Fund dated May 25, 1995
(5)(d) Investment Advisory Agreement of
GM-Int dated June 1, 1995
(5)(e) Sub-Advisory Agreement of GM-Int
dated May 25, 1995
(8)(a) Custodian Agreement of Fund
(8)(b) Custodian Agreement of GM-Int with
Chase Manhattan Bank
(8)(c) Account Agreement with Star Bank
(9)(a) Transfer Agency Accounting Services
Agreement (GM-E/O)dated June 1, 1995
(9)(b) Transfer Agency Accounting Services
Agreement (the Fund) dated
February 28, 1995
(9)(c) Transfer Agency Accounting
Services Agreement (Int) dated
June 1, 1995
(11) Consent of Independent Public
Accountants).
(15)(b) Distribution Agreements dated
June 1, 1995 of GM-E/O
(15)(c) Distribution Agreement of Fund
dated February 28, 1995
(15)(d) Distribution Agreement of GM-Int
dated June 1, 1995
(18)(a) Powers of Attorney of
Jamieson, Theodore Emmerich, Jerome
Schnee, Richard Rankin, and Julian Ball
(27) Financial Data Schedule
</TABLE>
<PAGE> 1
Exhibit 1(c)
AMENDMENTS TO FIRST AMENDED DECLARATION OF TRUST OF GRADISON GROWTH TRUST
EFFECTIVE MAY 25, L995
(ALL Caps Language is added; bracket language is deleted)
ARTICLE I
1.3 DEFINITIONS. As used in this Declaration, the following terms shall
have the following meanings:
"SHARES" shall mean one [class] OR MORE CLASSES of transferable units
ofinterest into which the beneficial interest in the Trust shall be divided from
time to time and shall include fractions of Shares as well as whole Shares and
Shares issued in series ("Series") OR CLASSES OF SERIES ("CLASSES") as EACH MAY
BE authorized by the Trustees.
ARTICLE V
5.1 NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, ETC. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust. . . . ANY CREDITOR OF ANY SERIES MAY LOOK ONLY TO THE ASSETS OF THAT
SERIES TO SATISFY SUCH CREDITOR'S DEBT.
ARTICLE VI
6.1 BENEFICIAL INTEREST. The interest of the beneficiaries hereunder
shall be divided into transferable shares of beneficial interest without par
value. The Shares may be issued from time to time, in one or more SERIES AND IN
ONE OR MORE CLASSES OF SUCH Series, each such Series OR CLASS to differ from
every other Series OR CLASS then outstanding as may be determined from time to
time by the Trustees WITHOUT SHAREHOLDER APPROVAL prior to the issuance of any
Shares thereof, in any or all of the following RESPECTS THAT ARE NOT OTHERWISE
PROHIBITED BY LAW, but in no other respects; provided that the Trustees shall
not issue any Series OR CLASS that would constitute a "senior security"
prohibited under the 1940 Act or would otherwise violate any provision of the
1940 Act:
(a) The designation of such Series OR CLASS, by a distinguishing number, letter
or title as the Trustees may deem appropriate;
(b) The assets and liabilities, if any, to be specifically allocated to such
Series OR CLASS;
(c) The method of calculating net investment income and expenses attributable to
such Series OR CLASS;
(d) The right, if any, of the Shareholders of any Series OR CLASS to convert the
same into shares of any other Series OR CLASS and the terms and conditions of
such conversion;
(e) The rights of Shareholders of a Series OR CLASS to receive dividends and
other distributions; and
(f) The separate voting rights, if any, of shareholders of such Series OR CLASS
with respect to matters that affect such Series or Class only and do not affect
the rights of Shareholders of any other Series OR CLASS then outstanding.
[All Shares shall be of equal rank, shall together constitute a single class of
shares of beneficial interest in the Trust and shall be identical in all
respects except as may be fixed by the Trustees as herein provided .] The number
of such shares of beneficial interest of any Series OR CLASS authorized
hereunder is unlimited. . . .
6.2 RIGHTS OF SHAREHOLDERS. . . . The Shares shall be personal property
giving only the rights in this Declaration specifically set forth. [Voting
rights shall be exercised by the holders of Shares of all Series, as a single
class, or by the holders of Shares of one or more specific Series, as a single
class, voting separately, as required by the 1940 Act or
<PAGE> 2
otherwise contemplated by this Declaration, so that Shareholders shall exercise
their voting rights only as to matters that affect the Trust generally or their
Series specifically ON ANY MATTER SUBMITTED TO A VOTE OF THE SHAREHOLDERS, ALL
SHARES SHALL BE VOTED IN THE AGGREGATE; EXCEPT THAT (A) WHEN REQUIRED BY THE
1940 ACT OR (B) WHEN THE TRUSTEES HAVE DETERMINED THAT THE MATTER AFFECTS ONLY
THE INTEREST OF ONE OR MORE SERIES OR CLASSES, THEN ONLY THE SHAREHOLDERS OF
SUCH SERIES OR CLASS(ES) SHALL BE ENTITLED TO VOTE THEREON. The term "entitled
to vote" as used in this Declaration shall be construed to apply to all
Shareholders or to holders of Shares of one or more particular Series OR CLASS,
as is appropriate in each particular instance. . . .
ARTICLE IX
9.1 NET ASSET VALUE. . . . Separate determinations of net asset value
shall be made for Shares of each Series, if any, with respect to which specific
assets of the Trust have been allocated AND NET ASSET VALUE SHALL BE DETERMINED
SEPARATELY FOR EACH CLASS OF A SERIES. . . .
The undersigned, Secretary of the Trust, certifies that the foregoing amendments
to the First Amended Declaration of Trust were duly adopted by the Board of
Trustees and approved by the shareholders of the Trust and became effective on
May 25, 1995.
/s/ Richard M. Wachterman
Richard M. Wachterman
Secretary
<PAGE> 1
Exhibit 5(b)
AMENDMENT TO INVESTMENT ADVISORY AGREEMENT DATED OCTOBER 4, 1991 BETWEEN
MCDONALD & COMPANY SECURITIES, INC. AND THE GRADISON GROWTH TRUST, AS TO THE
ESTABLISHED VALUE FUND AND THE OPPORTUNITY VALUE FUND
Effective the 1st day of June 1995, Paragraph 11 of the Agreement is amended as
follows:
... .65% of the Fund's average daily net assets up to $100 million, .55% of that
Fund's average daily net assets exceeding $100 million up to $200 million, and
.45% of that Fund's average daily net assets exceeding $200 million. ...
Gradison Growth Trust
by:
/s/ Donald E. Weston
McDonald & Company Securities, Inc.
by:
/s/ Bradley Turner
<PAGE> 1
Exhibit 5(c)
INVESTMENT ADVISORY AGREEMENT
BETWEEN
MCDONALD & COMPANY SECURITIES, INC.
AND
GRADISON GROWTH TRUST
GRADISON-MCDONALD GROWTH AND INCOME FUND
THIS AGREEMENT is made as of the 28th day of February, 1995, between McDonald &
Company Securities, Inc., an Ohio corporation (the "Adviser"), and Gradison
Growth Trust, an Ohio business trust (the "Trust").
In consideration of the mutual covenants hereinafter contained, the parties
hereto agree as follows:
1. A. The Trust hereby employs the Adviser to manage the investment
and reinvestment of the assets of the Gradison-McDonald
Growth and Income Fund (the "Fund") of the Trust in
accordance with the Fund's investment objective and policies,
and to perform certain other services herein set forth and
administer the Trust's affairs to the extent requested
subject to the supervision of the board of trustees of the
Trust, for the period and on the terms herein set forth.
b. The Trust also hereby employs the Adviser to distribute
shares of the Fund in states in which it is qualified to do
so and no sales commission or distributor's fee will be paid
to the Adviser for this service pursuant to this Agreement,
provided, however, that such a fee may be paid to the Adviser
pursuant to another agreement.
c. The Adviser hereby accepts such employment, and agrees to
render such services and to assume the obligations herein set
forth.
2. Should the Trust establish any additional series subsequent to the
date hereof and wish to retain the Adviser to serve as such series'
investment adviser under the terms of this
<PAGE> 2
Agreement, the Trust shall provide the Adviser with a written notice
to such effect which shall include the advisory fee payable with
respect to each such series. If the Adviser is willing to render such
services, it shall provide the Trust with a written notice to such
effect, whereupon each such series shall be included with
Gradison-McDonald Growth and Income Fund in the term "Fund" hereunder.
3. The Adviser shall:
A. Manage the investment of the Fund's assets including the
placing of orders for purchases and sales and other
investment transactions;
B. Report periodically to the Trust with respect to the Trust's
investment programs and with respect to the Adviser's
activities in connection with the administration of the
Trust;
C. In all matters relating to the performance of this Agreement,
act in conformity with the Declaration of Trust, By-Laws, and
Registration Statement of the Trust and with the instructions
and directions of the Board of Trustees and will comply with
the requirements of the 1940 Act, the rules thereunder, and
all other applicable federal and state laws and regulations;
and
D. Provide persons satisfactory to the Board of Trustees of the
Trust to act as officers of the Trust.
4. Any investment program undertaken by the Adviser pursuant to this
Agreement, and any other activities undertaken by the Adviser on
behalf of the Trust, shall at all times be subject to any directives
of the Board of Trustees of the Trust, or of any duly constituted
committee of the Board, or of any officer of the Trust acting pursuant
to authority granted by the Board or by any such committee.
5. In addition to performing the obligations set forth in Paragraph 3
hereof, the Adviser shall assume and bear expenses incurred with
respect to the following:
A. Trustees who are affiliated with the Adviser;
<PAGE> 3
B. Officers who are necessary for the management, operations,
administration and investments of the Trust; and
The payment or assumption by the Adviser of any expense of the Trust
or the Fund that the Adviser is not required by this Agreement to pay
or assume shall not obligate the Adviser to pay or assume the same or
any similar expense of the Trust or Fund on any subsequent occasion.
6. All expenses not specifically assumed by the Adviser under this
Agreement or by another party pursuant to any other agreement which
may be incurred in the operation of the Trust will be borne by the
Trust. These include:
A. Expenses incurred by the Trust for office space, office
facilities, business equipment and utilities (including
communications expenses);
B. Costs of preparing, printing and mailing, and expenses
incurred in connection with furnishing of information and
administrative assistance with respect to the preparation of;
registration statements and prospectuses, including
amendments and revisions thereto, and annual, semiannual and
other periodic reports furnished to shareholders of the
Trust's Fund or to regulatory authorities; and other
documents required by regulatory authorities; and notices and
proxy solicitation materials furnished to shareholders of the
Trust's Fund;
C. Such distribution expenses or service fees as may be
contemplated by an effective plan pursuant to Rule 12b-1
under the 1940 Act, provided, however, that any such payment
by the Trust of distribution expenses shall be in the
amounts, and in accordance with the procedures, set forth in
such plan;
D. Registration, filing and other fees in connection with
requirements of regulatory authorities;
E. Expenses of issue, sale, redemption and repurchase of shares
of the Trust's Fund;
<PAGE> 4
F. Compensation of trustees of the Trust who are not affiliated
with the Adviser;
G. Compensation and expenses of any transfer agent, dividend
disbursing agent, registrar, custodian or depository
appointed by the Trust;
H. Any costs, expenses or other relief asserted against the
Trust or Fund for violation of any law;
I. Charges and expenses of independent accountants retained by
the Trust;
J. Brokers' commissions and issue or transfer taxes chargeable
to the Trust in connection with securities transactions to
which the Trust or a Fund of the Trust is a party;
K. Any extraordinary expenses (including fees and disbursements
of counsel, costs of actions, suits or proceedings to which
the Trust is a party and the expenses the Trust may incur as
a result of its legal obligation to provide indemnification
to its officers, trustees, agents and shareholders) incurred
by the Trust or Fund;
L. Taxes and other fees payable by the Trust to federal, state,
or other governmental agencies;
M. Costs of share certificates representing shares of the
Trust's Fund, if provided for;
N. Legal and accounting fees and expenses in connection with the
operations of the Trust, including its organization and the
registration or qualification of its shares with federal or
state regulatory authorities;
O. Expenses incurred in connection with shareholders' or
trustees' meetings;
P. Fees and other expenses incurred by the Trust in connection
with its membership in any organization, and;
<PAGE> 5
Q. Costs of liability, errors and omissions and other insurance
and fidelity bond.
7. Expenses borne by the Trust pursuant to Paragraph 6 hereof and
attributable to a specific Fund of the Trust shall be allocated to
that Fund. Expenses borne by the Trust pursuant to Paragraph 6 hereof
that are not specifically attributable to a Fund shall be allocated to
each Fund in a manner and on a basis determined in good faith by the
Adviser to be fair and equitable, subject to review by the Board of
Trustees of the Trust.
8. The Trust shall reimburse the Adviser for all costs (direct and
indirect) which are fairly allocable to services performed by the
Adviser's employees on behalf of the Trust, for which the Adviser is
not otherwise compensated, for which the Trust is responsible
including, without limitation, appropriate portions of employee
salaries, office space, benefits, and expenses. Such expenses include
but are not limited to legal services. In the event of disagreement
between the Trust and the Adviser as to a fair basis for allocating
such costs, such basis shall be fixed by the independent public
accountants for the Trust, and the parties shall be bound thereby.
9. The services of the Adviser to the Trust are not to be deemed
exclusive, and the Adviser shall be free to render similar services to
other persons so long as the services to be rendered hereunder are not
impaired thereby. Nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of the Adviser to
engage in any other business or to devote his time and attention in
part to any other business.
10. The Adviser assumes no responsibility or obligation under this
Agreement other than to render in good faith the services provided for
herein; provided that nothing herein shall be deemed to protect or
purport to protect the Adviser against any liability to the Trust or
its shareholders to which the Adviser would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of reckless
disregard of its obligations and duties hereunder. The Adviser shall
not be responsible or liable for any action or inaction of the Board
of Trustees of the Trust or any committee thereof.
<PAGE> 6
11. In addition to all other charges and expenses to be paid hereunder,
the Trust shall pay to the Adviser compensation for its services and
facilities furnished hereunder, at an annual rate computed in
accordance with the appropriate portion of Schedule A attached hereto.
The fee shall be computed and accrued daily. The fee so computed and
accrued during each calendar month shall be paid to the Adviser on the
first day of the next month. If this Agreement becomes effective or
terminates before the end of any month, the fee for the period from
the effective date to the end of the month or from the beginning of
such month to the date of termination, as the case may be, shall be
prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
12. The Adviser shall reimburse the Trust if and to the extent that
expenses borne by the Trust in any fiscal year exceed any expense
limitation applicable to a Fund of the Trust imposed by any regulatory
authority (as such limitations may be established from time to time).
During any fiscal year, the Adviser shall be bound, in calculating the
amount of any such excess, by the most stringent applicable
requirements of any state in which the shares of the Trust's Funds are
qualified for sale. Such excess expenses, if any, shall be determined
and paid on a monthly basis, subject to annual adjustment so that the
aggregate of reimbursements, if any, by the Adviser to the Trust for
the fiscal year are in the amount necessary to limit such expenses to
the applicable expense limitation.
13. Subject to compliance with the provisions of the 1940 Act and the
duties and conditions to which the Adviser is bound by Paragraph 3 of
this Agreement, the Trust hereby agrees that the Adviser may
subcontract for the performance of any of the services contemplated to
be rendered by the Adviser hereunder.
14. It is mutually understood that trustees, officers, shareholders,
employees and agents of the Trust are or may be interested in the
Adviser as directors, officers, stockholders, employees, agents or in
other capacities; that directors, officers, stockholders, employees
and agents of the Adviser are or may be interested in the Trust as
trustees, officers, shareholders, employees, agents or in other
capacities; that the Adviser may be interested in the Trust as a
shareholder or otherwise; and that the existence of any such dual
interest shall not affect the validity of this Agreement
<PAGE> 7
or of any transactions made hereunder, except as may otherwise be
provided in the Declaration of Trust of the Trust or the Articles of
Incorporation of the Adviser, or by any specific provision of any
applicable statute, rule or regulation.
15. This Agreement shall become effective as of the date first set forth
above and shall continue in effect until February 28, 1997.
Thereafter, it shall continue in effect from year to year, provided
such continuance is specifically approved at least annually, at
meetings called for the purpose of voting upon such approvals, by the
vote of a majority of the outstanding voting securities of that Fund
or by the vote of a majority of the Board of Trustees of the Trust,
and in either event by the vote cast in person of a majority of the
trustees of the Trust who are not interested persons (as defined in
the 1940 Act) of either party to this Agreement.
16. The Trust may at any time and without the payment of any penalty
terminate this Agreement as to a Fund upon 60 days' written notice to
the Adviser, either by action of the Board of Trustees of the Trust or
by the vote of a majority of the outstanding voting securities of that
Fund, and the Adviser may at any time and without the payment of any
penalty terminate this Agreement upon 60 days' written notice to the
Trust. This Agreement shall automatically terminate in the event of
its assignment (within the meaning of the 1940 Act) by the Adviser,
unless such automatic termination shall be prevented by an order of
exemption from the Securities and Exchange Commission. Termination of
this Agreement with respect to any given Fund shall in no way affect
the continued validity of this Agreement or the performance thereunder
with respect to any other Fund.
17. This Agreement may be amended at any time by the mutual consent of the
parties, provided that such consent on the part of Trust shall have
been approved, at meetings called for the purpose of voting upon such
consent, by the vote of a majority of the outstanding voting
securities of the affected Fund, and by the vote of a majority of the
Board of Trustees of the Trust, including the vote cast in person by a
majority of the trustees of the Trust who are not interested persons
(as defined in the 1940 Act) of either party to this Agreement.
18. The parties to this Agreement acknowledge that the
<PAGE> 8
Adviser has an exclusive proprietary interest in the use of the names
"Gradison" and "McDonald" and further acknowledge that the Adviser has
consented to the use of such names by the Trust subject to withdrawal
of such consent upon 30 days' written notice to the Trust. The Trust
agrees that the names "Gradison" and "McDonald" will be used by it
only in connection with the business of any open-end management
investment company; that such names will be used only in such forms,
styles and contexts as may be approved by the Adviser; and that the
Trust will not do or cause to be done any act or undertaking which has
the effect of contesting, challenging or in any way impairing the
Adviser's right, title or interest in or to such names. The Trust
agrees that it will not represent that it has any right, title or
interest in such names, and that the Trust's use of such names shall
not create any right, title or interest in its favor therein. Within
30 days after the termination of this Agreement for any reason, or
after the written withdrawal of such consent of the Adviser (with or
without cause and within the Adviser' sole discretion) the Trust
A. will cease and desist from every use of the names "Gradison"
and "McDonald" and will deliver to the Adviser all
prospectuses, sales literature and other advertising
materials bearing such names;
B. will cause its name to be changed so as to eliminate the word
"Gradison" or "McDonald" therefrom; and
C. will not at any time thereafter adopt or use any name, mark
or other trade designation which is confusingly similar to
the names "Gradison" or "McDonald" or likely to mislead the
public.
19. Any notice required by or permitted to be given in connection with
this Agreement shall be in writing, addressed and delivered in person,
or mailed postage prepaid, to the addresses designated by the
respective parties for the receipt of such notice. Until further
written notice, it is agreed that the addresses of the Adviser and of
the Trust, respectively, shall be:
McDonald & Company Securities, Inc.
Attention: Gordon Price
800 Superior Avenue1
<PAGE> 9
Cleveland, Ohio 44114
Gradison Growth Trust
Attention: Richard Wachterman
580 Walnut Street
Cincinnati, Ohio 45202
20. The shareholders, trustees, officers, employees and agents of the
Trust shall not personally be bound by or liable under this Agreement,
nor shall resort be had to their private property for the satisfaction
of any obligation or claim hereunder, as more fully provided under the
terms of the Declaration of Trust.
21. This Agreement shall be construed in accordance with the laws of the
State of Ohio. To the extent that the applicable laws of the State of
Ohio conflict with the applicable provisions of the 1940 Act, the
latter shall control.
22. The Trust and the Adviser may be parties to other investment advisory
agreements relating to other series ("funds") of the trust. To the
extent that this Agreement applies to matters exclusively relating to
the Fund, it shall govern such matters. To the extent that this
Agreement and other investment advisory agreements apply to matters
relating to other funds, or to the Trust in general, such agreements
and this Agreement shall govern such matters and any discrepancies or
ambiguities resulting therefrom shall be resolved based on the
provisions of all such agreements being accorded equal weight.
IN WITNESS WHEREOF, the parties have executed this Investment Advisory Agreement
as of the date first written above.
MCDONALD & COMPANY SECURITIES, INC.
By: /s/ Bradley E. Turner
GRADISON GROWTH TRUST
By: /s/ Donald E. Weston
<PAGE> 10
Schedule A
Investment Advisory Fee
Series
Gradison-McDonald Growth and Income Fund
Fee
.65% of first $100 million of average daily net assets
.55% of next $100 million of average daily net assets
.45% of average daily net assets in excess of $200 million
<PAGE> 1
Exhibit 5(d)
Investment Advisory Agreement
Between
McDonald & Company Securities, Inc.
and
Gradison Growth Trust
Addition of Gradison-McDonald International Fund to Agreement
Dated February 28, 1995
By the executions below, the Trust and McDonald & Company Securities, Inc. agree
to the designation of McDonald as the Investment Adviser to the International
Fund series of the Trust pursuant to Section 2 of the Investment Advisory
Agreement between McDonald and the Trust (Gradison-McDonald Growth and Income
Fund).
Investment Advisory Fee
1.00% of first $100 million of average daily net assets
.90% of next $150 million of average daily net assets
.80% of next $250 million of average daily net assets
.75% of assets in excess of $500 million
Gradison Growth Trust
by: /s/ Donald E. Weston 6/1/95
McDonald & Company Securities Inc.
by: /s/ Bradley E. Turner 6/1/95
<PAGE> 1
Exhibit 5(e)
SUB-ADVISER AGREEMENT
(Gradison-McDonald International Fund)
Sub-Adviser Agreement executed as of May 25, 1995 between McDonald &
Company Securities, Inc. (the "Manager"), and Blairlogie Capital Management, a
United Kingdom limited partnership (the "Sub-Adviser").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is agreed
as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST.
(a) Subject always to the control of the Trustees of Gradison Growth
Trust (the "Trust"), an Ohio business trust, the Sub-Adviser will furnish
continuously an investment program for the Gradison-McDonald International
series of the Trust (the "Fund") and will make investment decisions on behalf of
the Fund and place all orders for the purchase and sale of portfolio securities
and all other investments. In the performance of its duties, the Sub-Adviser (1)
will comply with the provisions of the Trust's Amended and Restated Agreement
and Declaration of Trust and By-laws, including any amendments thereto, (upon
receipt of such amendments by the Sub-Adviser), and the investment objectives,
policies and restrictions of the Fund as set forth in its current Prospectus and
Statement of Additional Information, (copies of which will be supplied to the
Sub-Adviser upon filing with the Securities and Exchange Commission ("SEC"), (2)
will use its best efforts to safeguard and promote the welfare of the Fund, (3)
will comply with other policies which the Trustees or the Manager, as the case
may be, may from time to time determine as promptly as practicable after such
policies have been communicated to the Sub-Adviser in writing, and (4) shall
exercise the same care and diligence expected of the Trustees. The Sub-Adviser
and the Manager shall each make its officers and employees available to the
other from time to time at reasonable times to review investment policies of the
Fund and to consult with each other regarding the investment affairs of the
Fund.
(b) The Sub-Adviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel, required
for it to execute its duties hereunder; faithfully and (ii) administrative
facilities, including bookkeeping, clerical personnel and equipment necessary
for the efficient conduct of the investment affairs of the Fund. Pricing of
securities in the Fund's portfolio will be provided from sources which the
Sub-Adviser believes to be reliable, but the responsibility for pricing
accurately, the determination of net asset value and for shareholder accounting
services will lie with the Trust.
(c) In the selection of brokers or dealers and the placing of orders for
the purchase and sale of portfolio investments for the Fund, the Sub-Adviser
shall use its best efforts to obtain for the Fund the most favorable price and
execution available, except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as described below. In
using its best efforts to obtain for the Fund the most favorable price and
execution available, the Sub-Adviser, bearing in mind the Fund's best interests
at all times, shall consider all factors it deems relevant, including, by way of
illustration, price, the size of the transaction, the nature of the market for
the security, the amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation, experience and financial
stability of the broker or dealer involved and the quality of service rendered
by the broker or dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine and communicate to the Sub-Adviser in
writing, the Sub-Adviser shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of its
having caused the Fund to pay a broker that provides brokerage and research
services to the Sub-Adviser or its affiliates an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker would have charged for effecting that transaction, if
the Sub-Adviser determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker, viewed in terms of either that particular
<PAGE> 2
transaction or the Sub-Adviser's overall responsibilities with respect to the
Fund and to other clients of the Sub-Adviser as to which the Sub-Adviser
exercises investment discretion. The Trust agrees that any entity or person
associated with the Sub-Adviser or its affiliates which is a member of a
national securities exchange is authorized to effect any transaction on such
exchange for the account of the Trust and any Fund thereof which is permitted by
Section 11(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the Trust has consented to the retention of compensation for such
transactions.
(d) The Sub-Adviser shall not be obligated to pay any expenses of or
for the Fund not expressly assumed by the Sub-Adviser pursuant to this Section
1.
(e) Nothing herein shall be considered as constituting the Sub-Adviser
as an agent for the Manager of the Fund or the Trust or as anything other than
an independent contractor with respect to the Manager of the Fund or the Trust.
2. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses borne by the Sub-Adviser
pursuant to Section 1, a fee computed and paid monthly at the annual rate of
.80% of the average daily net asset value of the Fund up to $25,000,000, .70% of
the average daily net assets of the Fund from $25,000,001 to $50,000,000, .60%
of the average daily net assets from $50,000,001 to $100,000,000, .50% of the
average daily net assets of the Fund from $100,000,001 to $250,000,000, .40% of
the average daily net assets of the Fund in excess of $250,000,000. Such fee
shall be payable for each month within 10 business days after the end of such
month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
3. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the management
contract between the Manager and the Trust shall have terminated for any reason;
and this Agreement shall not be amended unless such amendment be approved at a
meeting by the affirmative vote of a majority of the outstanding shares of the
Fund, and by the vote, cast in person at a meeting called for the purpose of
voting on such approval, of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or of the Sub-Adviser.
4. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution (provided,
however, that the Sub-Adviser shall have no responsibilities or duties and shall
receive no compensation during the initial period of the Fund's operations
during which its investments shall be limited to money market investments
managed by the Manager) and shall remain in full force and effect as to the Fund
continuously thereafter (unless terminated automatically as set forth in Section
3) until terminated as follows:
(a) The Trust may at any time terminate this Agreement by
written notice delivered or mailed by registered mail, postage prepaid, to the
Manager and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of the Fund, and (ii) a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager or of the Sub-Adviser, by vote cast in person at a
meeting called for the purpose of voting on such approval, do not specifically
approve at least annually the continuance of this Agreement, then this Agreement
shall automatically terminate at the close of business on the second anniversary
of its execution, or upon the expiration of one year from the effective date of
the last such continuance, whichever is later; that if the continuance of this
Agreement is submitted to the shareholders of the Fund for their approval and
such shareholders fail to approve such continuance of this
<PAGE> 3
Agreement as provided herein, the Sub-Adviser may continue to serve hereunder in
a manner consistent with the Investment Company Act of 1940 and the rules and
regulations thereunder, or
(c) The Manager may at any time terminate this Agreement by not
less than 60 days' written notice delivered or mailed by registered mail,
postage prepaid, to the Sub-Adviser, and the Sub-Adviser may at any time
terminate this Agreement by not less than 180 days' written notice delivered or
mailed by registered mail, postage prepaid, to the Manager.
Action by the Trust under (a) may be taken either (i) by vote of a
majority of the Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 4 shall be
without the payment of any penalty.
5. CERTAIN INFORMATION.
The Sub-Adviser shall promptly, within a reasonable time before an
anticipated event and/or within a reasonable time after an event, notify the
Manager in writing of the occurrence or anticipated occurrence of any of the
following events: (a) the Sub-Adviser shall fail to be registered as an
investment adviser under the Investment Advisers Act of 1940, as amended from
time to time, and under the laws of any jurisdiction in which the Sub-Adviser is
required to be registered as an investment adviser in order to perform its
obligations under this Agreement or any other agreement concerning the provision
of investment advisory services to the Trust, (b) the Sub-Adviser shall have
been served or otherwise have notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board or
body, involving the affairs of the Trust, (c) there is a change in control of
the Sub-Adviser or any parent of the Sub-Adviser within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"), (d) there is a
material adverse change in the business or financial position of the
Sub-Adviser, (e) the Chairman of the Sub-Adviser or the portfolio manager of the
Fund shall have changed; (f) the Sub-Adviser's ineligibility to act as an
investment adviser for a registered investment company; or (g) the change in
membership of the Sub-Adviser.
6. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund, as the case may be, present (in person or by proxy) and entitled to vote
at such meeting, if the holders of more than 50% of the outstanding shares of
the Fund, as the case may be, entitled to vote at such meeting are present in
person or by proxy, or (b) of the holders of more than 50% of the outstanding
shares of the Fund, as the case may be, entitled to vote at such meeting,
whichever is less.
For the purposes of this Agreement, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the 1940 Act and the rules and regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under the 1940 Act; the term "specifically approve at least
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the 1934 Act and the rules and regulations
thereunder.
7. NON-LIABILITY OF SUB-ADVISER.
Notwithstanding any other provision of this Agreement, in the absence
of willful misfeasance, bad faith or gross negligence on the part of the
Sub-Adviser, or reckless disregard of its obligations and duties hereunder, the
Sub-Adviser, including its officers, directors and shareholders, shall not be
subject to any liability to the Manager, to the Trust, to the Fund, or to any
shareholder, officer, director or Trustee thereof, for any act or omission in
the course of, or connected with, rendering services hereunder.
8. EXERCISE VOTING RIGHTS.
<PAGE> 4
The Sub-Adviser shall exercise or procure the exercise of voting rights
attaching to investments of the Fund.
9. REPORTS.
During the term of this Agreement, the Manager agrees to use its best
efforts (a) to furnish to the Sub-Adviser a reasonable time prior to the use
thereof all prospectuses (as described in Section 10(a) of the Securities Act of
1933), proxy statements and reports to stockholders which describe the
Sub-Adviser or its ownership, business or investment processes in any way that
is materially different from the "Agreed Disclosure" (which for this purpose
means either (i) the prospectus (including any prospectus supplement) or (ii)
the most recent amendment to the Trust's registration statement under the
Securities Act of 1933 depending on whether, on the relevant date, the
prospectus or the amendment was more recently filed with the SEC) and (b) not to
use any such material (to the extent it relates to the Sub-Adviser) if the
Sub-Adviser objects promptly in writing and the Manager reasonably concludes
that the description of the sub-Adviser or its ownership, business or investment
process is materially misleading or inaccurate.
10. BOOKS AND RECORDS.
Pursuant to Rule 31-a3 under the 1940 Act, the Sub-Adviser agrees that:
(a) all records it maintains for the Trust are the property of the Trust; (b) it
will surrender promptly to the Trust or the Manager any such records upon the
Trust's or Manager's request; (c) it will maintain for the Trust the records
that the Trust is required to maintain pursuant to Rule 31a-1 insofar as such
records relate to the investment affairs of the Portfolios for which the
Sub-Adviser has responsibility under this Agreement; and (d) it will preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act the records it
maintains for the Trust.
IN WITNESS WHEREOF, McDonald & Company Securities, Inc. and Blairlogie
Capital Management have each caused this instrument to be signed in duplicate on
its behalf by its duly authorized representative, all as of the day and year
first above written.
Blairlogie Capital Management
By: Blairlogie Holdings Limited, its General Partner
Name: /s/ J. Robert Stephens
Title: Director
Accepted and agreed to
as of the day and year
first above written:
McDONALD & COMPANY SECURITIES, INC.
By: /s/ Bradley E. Turner
Name: Bradley E. Turner
Title: Managing Director
A copy of the Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of the State of Ohio, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding upon the assets and property of the Fund.
<PAGE> 1
Exhibit 8(a)
AMENDMENT TO AGREEMENT
This Amendment is made effective the 28th day of February ,
1995 to the Custody Agreement made as of August 5, 1983 by and
between Gradison Growth Trust, (the "Trust"), and Star Bank,
N.A. (the "Custodian") to provide custodian services to the
Trust.
The Trust and the Custodian agree to amend the Agreement as
follows:
The first paragraph of the Agreement shall be amended and
restated in its entirety to read as follows:
Agreement made as of the 5th day of August, 1983 and as amended
February 28, 1995, between Gradison Growth Trust, (the
"Trust"), a Registered Investment Company organized under the
laws of Ohio and having its office at 580 Walnut Street,
Cincinnati, Ohio 45202 acting for and on behalf of
Gradison-McDonald Opportunity Value Fund, Gradison-McDonald
Established Value Fund and Gradison-McDonald Growth and Income
Fund, (collectively, the "Fund") which are operated and
maintained by the Trust for the benefit of the holders of
shares of the Fund, and Star Bank, N.A., (the "Custodian"), a
national banking association having its principal office and
place of business at Star Bank Center, 425 Walnut Street,
Cincinnati, Ohio 45202, which Agreement Provides for the
furnishing of custodian services to the Fund.
IN WITNESS WHEREOF, the parties hereby ratify and affirm the
Agreement in its entirety as amended by this Agreement.
Attest: Gradison Growth Trust
/s/ Richard M. Wachterman By: /s/ Bradley E. Turner
President
Attest: Star Bank, N.A.
__________________________ By: _____________________
<PAGE> 1
Exhibit 8(b)
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective June 1, 1995, and is between THE CHASE
MANHATTAN BANK, N.A. (the "Bank") and GRADISON GROWTH TRUST (the "Customer"), on
behalf of the GRADISON-MCDONALD INTERNATIONAL FUND ("Fund").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer ("Custody Account")
for any and all stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same or evidencing or representing any other rights or
interests therein and other similar property whether certificated or
uncertificated as may be received by the Bank or its Subcustodian (as defined in
Section 3) for the account of the Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit Account")
for any and all cash in any currency received by the Bank or its Subcustodian
for the account of the Customer, which cash shall not be subject to withdrawal
by draft or check.
The Customer warrants its authority to: 1) deposit the cash and
Securities ("Assets") received in the Accounts and 2) give Instructions (as
defined in Section 11) concerning the Accounts. The Bank may deliver securities
of the same class in place of those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to
the Bank:
(a) Securities will be held in the country or other jurisdiction in
which the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash will be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of
an institution other than the established Subcustodians as defined in Section 3
(or their securities depositories), such arrangement must be authorized by a
written agreement, signed by the Bank and the Customer.
<PAGE> 2
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed
in Schedule A of this Agreement with which the Bank has entered into
subcustodial agreements ("Subcustodians"). The Customer authorizes the Bank to
hold Assets in the Accounts in accounts which the Bank has established with one
or more of its branches or Subcustodians. The Bank and Subcustodians are
authorized to hold any of the Securities in their account with any securities
depository in which they participate.
The Bank reserves the right to add new, replace or remove
Subcustodians. The Customer will be given reasonable notice by the Bank of any
amendment to Schedule A. Upon request by the Customer, the Bank will identify
the name, address and principal place of business of any Subcustodian of the
Customer's Assets and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify such Assets on its books as belonging to the
Customer.
(b) A Subcustodian will hold such Assets together with assets belonging
to other customers of the Bank in accounts identified on such Subcustodian's
books as special custody accounts for the exclusive benefit of customers of the
Bank.
(c) Any Assets in the Accounts held by a Subcustodian will be subject
only to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding
its customer's assets shall provide that such assets will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets will be freely transferable without the payment of
money or value other than for safe custody or administration. The foregoing
shall not apply to the extent of any special agreement or arrangement made by
the Customer with any particular Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) The Bank or its Subcustodians will make payments from the Deposit
Account upon receipt of Instructions which include all information required by
the Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, the Bank, in its discretion,
may advance the Customer such excess amount which shall be deemed a loan payable
on demand, bearing interest at the rate customarily charged by the Bank on
similar loans.
(c) If the Bank credits the Deposit Account on a payable date, or at
any time prior to actual collection and reconciliation to the Deposit Account,
with interest, dividends, redemptions or any other amount due, the Customer will
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If the Customer does not promptly return
any amount upon such notification, the Bank shall be entitled, upon oral or
written notification to the Customer, to reverse such credit by debiting the
Deposit Account for the amount previously credited. The Bank or its Subcustodian
shall have no duty or obligation to institute legal proceedings, file a claim or
a proof of claim in any insolvency proceeding or take any other action with
respect to the collection of such amount, but may act for the Customer upon
Instructions after consultation with the Customer.
<PAGE> 3
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank
or its Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities received
for, and delivery of Securities out of, the Custody Account may be made in
accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the expectation of
receiving later payment and free delivery. Delivery of Securities out of the
Custody Account may also be made in any manner specifically required by
Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions will be
credited or debited to the Accounts on the date cash or Securities are actually
received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a
reasonable period, determined by the Bank in its discretion, after the
contractual settlement date for the related transaction.
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, the Bank may reverse the credits and
debits of the particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in
the Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or Subcustodian
is actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any
transfers of Assets to or from the Accounts. Such statements, advices or
notifications shall indicate the identity of the entity having custody of the
Assets. Unless the Customer sends the Bank a written exception or objection to
any Bank statement within sixty (60) days of receipt, the Customer shall be
deemed to have approved such statement. In such event, or where the Customer has
otherwise approved any such statement, the Bank shall, to the extent permitted
by law, be released, relieved and discharged with respect to all matters set
forth in such statement or reasonably implied therefrom as though it had been
settled by the decree of a court of competent jurisdiction in an action where
the Customer and all persons having or claiming an interest in the Customer or
the Customer's Accounts were parties.
All collections of funds or other property paid or distributed in
respect of Securities in the Custody Account shall be made at the risk of the
Customer. The Bank shall have no liability for any loss occasioned by delay in
the actual receipt
<PAGE> 4
of notice by the Bank or by its Subcustodians of any payment, redemption or
other transaction regarding Securities in the Custody Account in respect of
which the Bank has agreed to take any action under this Agreement.
8. CORPORATE ACTIONS; PROXIES.
Whenever the Bank receives information concerning the Securities which
requires discretionary action by the beneficial owner of the Securities (other
than a proxy), such as subscription rights, bonus issues, stock repurchase plans
and rights offerings, or legal notices or other material intended to be
transmitted to securities holders ("Corporate Actions"), the Bank will give the
Customer prompt notice of such Corporate Actions to the extent that the Bank's
central corporate actions department has actual knowledge of a Corporate Action
in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions from the Customer or its Authorized Person, but if Instructions are
not received in time for the Bank to take timely action, or actual notice of
such Corporate Action was received too late to seek Instructions, the Bank is
authorized to sell such rights entitlement or fractional interest and to credit
the Deposit Account with the proceeds or take any other action it deems, in good
faith, to be appropriate in which case it shall be held harmless for any such
action.
The Bank will deliver proxies to the Customer or its designated agent
pursuant to special arrangements which may have been agreed to in writing. Such
proxies shall be executed in the appropriate nominee name relating to Securities
in the Custody Account registered in the name of such nominee but without
indicating the manner in which such proxies are to be voted; and where bearer
Securities are involved, proxies will be delivered in accordance with
Instructions.
9. NOMINEES.
Securities which are ordinarily held in registered form may be
registered in a nominee name of the Bank, Subcustodian or securities depository,
as the case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees
or agents including investment managers as have been designated by written
notice from the Customer or its designated agent to act on behalf of the
Customer under this Agreement. Such persons shall continue to be Authorized
Persons until such time as the Bank receives Instructions from the Customer or
its designated agent that any such employee or agent is no longer an Authorized
Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold the
<PAGE> 5
Bank harmless for the failure of an Authorized Person to send such confirmation
in writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such
duties as are set forth in this Agreement or expressly contained in Instructions
which are consistent with the provisions of this Agreement as follows:
(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets. The Bank shall be
liable to the Customer for any loss which shall occur as the result of
the failure of a Subcustodian to exercise reasonable care with respect
to the safekeeping of such Assets to the same extent that the Bank
would be liable to the Customer if the Bank were holding such Assets in
New York. In the event of any loss to the Customer by reason of the
failure of the Bank or its Subcustodian to utilize reasonable care, the
Bank shall be liable to the Customer only to the extent of the
Customer's direct damages, to be determined based on the market value
of the property which is the subject of the loss at the date of
discovery of such loss and without reference to any special conditions
or circumstances.
(ii) The Bank will not be responsible for any act, omission, default or
the solvency of any broker or agent which it or a Subcustodian appoints
unless such appointment was made negligently or in bad faith.
(iii) The Bank shall be indemnified by, and without liability to the
Customer for any action taken or omitted by the Bank whether pursuant
to Instructions or otherwise within the scope of this Agreement if such
act or omission was in good faith, without negligence. In performing
its obligations under this Agreement, the Bank may rely on the
genuineness of any document which it believes in good faith to have
been validly executed.
(iv) The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any
taxes or other governmental charges, and any related expenses with
respect to income from or Assets in the Accounts.
(v) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all matters and shall
be without liability for any action reasonably taken or omitted
pursuant to such advice.
(vi) The Bank need not maintain any insurance for the benefit of the
Customer.
(vii) Without limiting the foregoing, the Bank shall not be liable for
any loss which results from: 1) the general risk of investing, or 2)
investing or holding Assets in a particular country including, but not
limited to, losses resulting from nationalization, expropriation or
other governmental actions; regulation of the banking or securities
industry; currency restrictions, devaluations or fluctuations; and
market conditions which prevent the orderly execution of securities
transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or
work stoppages, acts of war or terrorism, insurrection, revolution,
nuclear fusion, fission or radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:
<PAGE> 6
(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or
the retention of Securities;
(iii) advise the Customer or an Authorized Person regarding any default
in the payment of principal or income of any security other than as
provided in Section 5(c) of this Agreement; provided that, Bank shall
use its reasonable efforts to advise Customer or an Authorized Person
of such defaults but in that connection it is expressly understood and
agreed that Bank shall have no liability for failing to do so in any
given case;
(iv) evaluate or report to the Customer or an Authorized Person
regarding the financial condition of any broker, agent or other party
to which Securities are delivered or payments are made pursuant to this
Agreement;
(v) review or reconcile trade confirmations received from brokers. The
Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to other customers, act
as financial advisor to the issuer of Securities, act as a lender to the issuer
of Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any of
the activities listed herein.
13. FEES AND EXPENSES.
The Customer agrees to pay the Bank for its services under this
Agreement such amount as may be agreed upon in writing, together with the Bank's
reasonable out-of-pocket or incidental expenses, including, but not limited to,
legal fees. The Bank shall have a lien on and is authorized to charge any
Accounts of the Customer for any amount owing to the Bank under any provision of
this Agreement.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the
administration of the Customer's trading and investment activity, the Bank is
authorized to enter into spot or forward foreign exchange contracts with the
Customer or an Authorized Person for the Customer and may also provide foreign
exchange through its subsidiaries, affiliates or Subcustodians. Instructions,
including standing instructions, may be issued with respect to such contracts
but the Bank may establish rules or limitations concerning any foreign exchange
facility made available. In all cases where the Bank, its subsidiaries,
affiliates or Subcustodians enter into a foreign exchange contract related to
Accounts, the terms and conditions of the then current foreign exchange contract
of the Bank, its subsidiary, affiliate or Subcustodian and, to the extent not
inconsistent, this Agreement shall apply to such transaction.
(b) Certification of Residency, etc. The Customer certifies
that it is a resident of the United States and agrees to notify the Bank of any
changes in residency. The Bank may rely upon this certification or the
certification of such other facts as may be required to administer the Bank's
obligations under this Agreement. The Customer will indemnify the Bank against
all losses, liability, claims or demands arising directly or indirectly from any
such certifications.
(c) Access to Records. The Bank shall allow the Customer's
independent public accountant reasonable access to the records of the Bank
relating to the Assets as is required in connection with their examination of
books and records pertaining to the Customer's affairs. Subject to restrictions
under applicable law, the Bank shall also obtain an
<PAGE> 7
undertaking to permit the Customer's independent public accountants reasonable
access to the records of any Subcustodian which has physical possession of any
Assets as may be required in connection with the examination of the Customer's
books and records.
(d) Governing Law; Successors and Assigns. This Agreement shall
be governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.
(e) Entire Agreement; Applicable Riders. Customer represents that the
Assets deposited in the Accounts are (Check one):
X Mutual Fund assets subject to certain Securities and
--- Exchange Commission ("SEC") rules and regulations;
--- Neither of the above.
This Agreement consists exclusively of this document together with
Schedule A, Exhibits I - _______ and the following Rider(s) [Check
applicable rider(s)]:
X MUTUAL FUND
---
X SPECIAL TERMS AND CONDITIONS
---
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions of
this Agreement are held invalid, illegal or enforceable in any respect on the
basis of any particular circumstances or in any jurisdiction, the validity,
legality and enforceability of such provision or provisions under other
circumstances or in other jurisdictions and of the remaining provisions will not
in any way be affected or impaired.
(g) Waiver. Except as otherwise provided in this Agreement, no
failure or delay on the part of either party in exercising any power or right
under this Agreement operates as a waiver, nor does any single or partial
exercise of any power or right preclude any other or further exercise, or the
exercise of any other power or right. No waiver by a party of any provision of
this Agreement, or waiver of any breach or default, is effective unless in
writing and signed by the party against whom the waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be
effective when actually received. Any notices or other communications which may
be required under this Agreement are to be sent to the parties at the following
addresses or such other addresses as may subsequently be given to the other
party in writing:
Bank: The Chase Manhattan Bank, N.A.
Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Custody Division
Customer: GRADISON GROWTH TRUST
580 Walnut St.
Cincinnati Ohio 45202
<PAGE> 8
telefax: (513) 579-5982
(i) Termination. This Agreement may be terminated by the
Customer or the Bank by giving sixty (60) days written notice to the other,
provided that such notice to the Bank shall specify the names of the persons to
whom the Bank shall deliver the Assets in the Accounts. If notice of termination
is given by the Bank, the Customer shall, within sixty (60) days following
receipt of the notice, deliver to the Bank Instructions specifying the names of
the persons to whom the Bank shall deliver the Assets. In either case the Bank
will deliver the Assets to the persons so specified, after deducting any amounts
which the Bank reasonably determines in good faith to be owed to it under
Section 13. If within sixty (60) days following receipt of a notice of
termination by the Bank, the Bank does not receive Instructions from the
Customer specifying the names of the persons to whom the Bank shall deliver the
Assets, the Bank, at its election, may deliver the Assets to a bank or trust
company doing business in the State of New York to be held and disposed of
pursuant to the provisions of this Agreement, or to Authorized Persons, or may
continue to hold the Assets until Instructions are provided to the Bank.
GRADISON GROWTH TRUST, on behalf of the
GRADISON-MCDONALD INTERNATIONAL FUND
By: /s/ Donald E. Weston
Chairman
THE CHASE MANHATTAN BANK, N.A.
By: /s/ J.M. Casey
Vice President
<PAGE> 9
STATE OF OHIO )
: ss.
COUNTY OF HAMILTON )
On this 2nd day of June , 1995 , before me personally came Donald E. Weston,
me known, who being by me duly sworn, did depose and say that he resides in
Cincinnati, Ohio at 679 Totten Way; that he is Chairman of THE GRADISON GROWTH
TRUST , the entity described in and which executed the foregoing
instrument; that he/she knows the seal of said entity, that the seal affixed to
said instrument is such seal, that it was so affixed by order of said entity,
and that he/she signed his/her name thereto by like order.
Sworn to before me this 2nd day
day of June, 1995.
Notary : Mary Ann Plunkett
Notary Public State of Ohio
My commission expires May 30, 1999
<PAGE> 10
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this 30th day of May ,1995, before me personally came James Casey,
to me known, who being by me duly sworn, did depose and say that he/she resides
in New York City at 119 W 88th street apartment 3B ; that he is
a Vice President of THE CHASE MANHATTAN BANK, (National Association), the
corporation described in and which executed the foregoing instrument; that
he/she knows the seal of said corporation, that the seal affixed to said
instrument is such corporate seal, that it was so affixed by order of the Board
of Directors of said corporation, and that he/she signed his/her name thereto by
like order.
Sworn to before me this 30th
day of May, 1995.
Laiyee Ng
Notary Public State of New York
No. 01NG-5012928
Qualified in Queens County
Cert. Filed in Kings & N.Y. Counties
Commission Expires June 15, 1997
<PAGE> 11
Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank, N.A. and
GRADISON GROWTH TRUST, on behalf of the GRADISON-MCDONALD INTERNATIONAL FUND,
effective June 1, 1995
Customer represents that the Assets being placed in the Bank's custody
are subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply
with a condition of a rule, regulation, interpretation promulgated by or under
the authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible
foreign custodian or an eligible foreign securities depository, which
are further defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined
in Rule 17f-5 under the Investment Company Act of 1940;
(b) "eligible foreign custodian" shall mean (i) a banking institution
or trust company incorporated or organized under the laws of a country
other than the United States that is regulated as such by that
country's government or an agency thereof and that has shareholders'
equity in excess of $200 million in U.S. currency (or a foreign
currency equivalent thereof), (ii) a majority owned direct or indirect
subsidiary of a qualified U.S. bank or bank holding company that is
incorporated or organized under the laws of a country other than the
United States and that has shareholders' equity in excess of $100
million in U.S. currency (or a foreign currency equivalent
thereof)(iii) a
<PAGE> 12
banking institution or trust company incorporated or organized under
the laws of a country other than the United States or a majority owned
direct or indirect subsidiary of a qualified U.S. bank or bank holding
company that is incorporated or organized under the laws of a country
other than the United States which has such other qualifications as
shall be specified in Instructions and approved by the Bank; or (iv)
any other entity that shall have been so qualified by exemptive order,
rule or other appropriate action of the SEC; and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws
of a country other than the United States, which operates (i) the
central system for handling securities or equivalent book-entries in
that country, or (ii) a transnational system for the central handling
of securities or equivalent book-entries.
The Customer represents that its Board of Directors has approved each
of the Subcustodians listed in Schedule A to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as Exhibits I through of Schedule A, and further represents that its
Board has determined that the use of each Subcustodian and the terms of each
subcustody agreement are consistent with the best interests of the Fund(s) and
its (their) shareholders. The Bank will supply the Customer with any amendment
to Schedule A for approval. The Customer has supplied or will supply the Bank
with certified copies of its Board of Directors resolution(s) with respect to
the foregoing prior to placing Assets with any Subcustodian so approved.
Section 11. Instructions.
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant
to Section 5 and 6 of this Agreement may be made only for the purposes
listed below. Instructions must specify the purpose for which any
transaction is to be made and Customer shall be solely responsible to
assure that Instructions are in accord with any limitations or
restrictions applicable to the Customer by law or as may be set forth
in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise
become payable;
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger,
consolidation, reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
<PAGE> 13
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the
Bank, its Subcustodian or the Customer's transfer agent, such shares to
be purchased or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer agent
of such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement
among the Customer, the Bank and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and a member of
The National Association of Securities Dealers, Inc. ("NASD"), relating
to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other arrangements
in connection with transactions by the Customer;
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only
upon payment to the Bank of monies for the premium due and a receipt
for the Securities which are to be held in escrow. Upon exercise of the
option, or at expiration, the Bank will receive from brokers the
Securities previously deposited. The Bank will act strictly in
accordance with Instructions in the delivery of Securities to be held
in escrow and will have no responsibility or liability for any such
Securities which are not returned promptly when due other than to make
proper request for such return;
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(n) For other proper purposes as may be specified in Instructions
issued by an officer of the Customer which shall include a statement of
the purpose for which the delivery or payment is to be made, the amount
of the payment or
<PAGE> 14
specific Securities to be delivered, the name of the person or persons
to whom delivery or payment is to be made, and a certification that the
purpose is a proper purpose under the instruments governing the
Customer; and
(o) Upon the termination of this Agreement as set forth in Section
14(i).
Section 12. Standard of Care; Liabilities.
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer that in its opinion, after
due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign
custodian and each eligible foreign securities depository holding the
Customer's Securities pursuant to this Agreement afford protection for
such Securities at least equal to that afforded by the Bank's
established procedures with respect to similar securities held by the
Bank and its securities depositories in New York.
Section 14. Access to Records.
Add the following language to the end of Section 14(c):
Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of
internal accounting controls applicable to the Bank's duties under this
Agreement. The Bank shall endeavor to obtain and furnish the Customer
with such similar reports as it may reasonably request with respect to
each Subcustodian and securities depository holding the Customer's
assets.
<PAGE> 15
GLOBAL CUSTODY AGREEMENT
WITH:
GRADISON GROWTH TRUST, on behalf of the
GRADISON-MCDONALD INTERNATIONAL FUND
DATE: June 1, 1995
SPECIAL TERMS AND CONDITIONS RIDER
These Special Terms and Conditions amend and supplement the Agreement between
Chase Manhattan Bank, N.A. (the "Bank") and Gradison Growth Trust ("Customer"),
on behalf of Gradison-McDonald International Fund ("Fund") effective June 1,
l995 as amended by the Mutual Fund Rider ("Agreement"). To the extent that any
term or provision of the Agreement is inconsistent with these Special Terms and
Conditions, the Special Terms and Conditions shall control.
1. In order to properly allocate the responsibilities of the parties, the term
"Customer" shall have the meanings designated below.
(a) In the following sections of the Agreement, the term "Customer" shall mean
"the Fund"; Section 13 and Section 14 (c)
(b) In the following sections of the Agreement, the term "Customer" shall refer
to the Customer on behalf of the Fund.
Section 1
Section 2
Section 3
Section 4
Section 5(c)
Section 7(b) & (e)
Section 7; the last paragraph
Section 8
Section 10
Section 11, and
Section 14(a) & (I)
(c) In sections 9 and 12 of the Agreement, the term "Customer" shall mean the
Customer or the Fund.
<PAGE> 16
2. Section 9. Nominees:
In the last sentence of this section, following the words "any liability arising
directly or indirectly," insert the word "solely".
3. Section 12(b) (iv):
Following the words "agent or other party" insert the phrase: "(except for
brokers, agents or other parties selected by the Bank)".
4. Section 13. Fees and Expenses:
Add the following phrase to the end of this section: ", so long as such lien
does not contravene the provisions of S.E.C. Release #40-12053, as amended from
time to time".
5. Section 14 (j) Ohio Business Trust:
The following additional provision is added: Ac copy of the Declaration of Trust
of the Customer is on file with the Secretary of State of Ohio and notice is
hereby given that the Agreement is not binding upon any of the trustees,
officers, or shareholders of the Customer individually, but are binding only
upon the assets and property of the Fund. The Bank agrees that no shareholder,
trustee, or officer of the Customer or the Fund may be held personally liable or
responsible for any obligations of the Fund arising out of the Agreement. With
respect to the obligations of the Fund arising out of the Agreement, the Bank
shall look for payment or satisfaction or any claim solely to the assets and
property of the Fund, and not to the assets of any other series of the Customer.
<PAGE> 17
GLOBAL CUSTODY AGREEMENT
With: GRADISON GROWTH TRUST, on behalf of the GRADISON-MCDONALD INTERNATIONAL
FUND
DATE: June 1, 1995
DOMESTIC
SPECIAL TERMS AND CONDITIONS RIDER
Domestic Corporate Actions and Proxies
With respect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions will apply rather than the provisions of Section
8 of the Agreement:
The Bank will send to the Customer or the Authorized Person for a
Custody Account, such proxies (signed in blank, if issued in the name
of the Bank's nominee or the nominee of a central depository) and
communications with respect to Securities in the Custody Account as
call for voting or relate to legal proceedings within a reasonable time
after sufficient copies are received by the Bank for forwarding to its
customers. In addition, the Bank will follow coupon payments,
redemptions, exchanges or similar matters with respect to Securities in
the Custody Account and advise the Customer or the Authorized Person
for such Account of rights issued, tender offers or any other
discretionary rights with respect to such Securities, in each case, of
which the Bank has received notice from the issuer of the Securities,
or as to which notice is published in publications routinely utilized
by the Bank for this purpose.
<PAGE> 1
Exhibit 8(c)
AGREEMENT
AGREEMENT made this 2nd day of June, 1995 between The Gradison Growth
Trust (the "Trust") and Star Bank, N.A. (the "Bank").
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. DEFINITIONS. In this Agreement, the following words and
expressions shall have the following meanings:
1.1 "Account" shall mean that term as defined in paragraph
2 below.
1.2 "Act" shall mean the Investment Company Act of 1940,
as amended.
1.3 "Authorized Persons" shall mean the individuals named
in Appendix A hereto (as amended from time to time by the Trust in accordance
with paragraph 10 hereof).
1.4 "Business Day" shall mean any day recognized as a
settlement day by The New York Stock Exchange, Inc.
1.5 "Fund" shall mean the Gradison-McDonald International
Fund, a diversified series of the Trust.
1.6 "Oral Instructions" shall mean communications orally
transmitted to and received by the Mutual Fund Custody Department of the Bank
during business hours on any Business Day from any person reasonably believed by
the Bank to be an Authorized Person.
1.7 "Proper Instructions" shall mean Oral Instructions
and Written Instructions.
1.8 "Written Instructions" shall mean written communications
transmitted to and received by the Mutual Fund Custody Department of the Bank
from any person reasonably believed by the Bank to be an Authorized Person.
2. DEMAND DEPOSIT ACCOUNTS.
<PAGE> 2
(a) The Bank has established a separate account in the name of
the Trust for the purpose of receiving funds from, and disbursing funds to, the
shareholders of the Fund ( the "Account"). The Trust hereby agrees to provide
the Bank with prior Proper Instructions indicating all actions to be taken with
respect to all funds to be deposited into or disbursed from the Account. Proper
Instructions concerning the Account may relate to specific transactions or to
types or classes of transactions, and may be in the form of standing
instructions.
(b) In the case of disbursements from the Account, such Proper
Instructions shall set forth the name, address and account details of the person
to whom such payment is to be made, the amount of such payment and the purpose
for which payment is to be made. Upon receipt of such Proper Instructions, the
Bank shall disburse such funds as so directed, but only to the extent sufficient
funds are available in the Account. Such funds may be disbursed by check or
automatic clearing house electronic transfer, wire transfer or intrabank
transfer as specified by the Trust in the Proper Instructions.
(c) The Bank shall be entitled to reverse any deposits made to
the Account if such deposits have been entered and funds have not been collected
by the Bank within 15 days of the making of such entry or if the check for such
deposit has been returned unpaid to the Bank.
3. ACCOUNT MANAGEMENT FEES. The Bank shall be entitled to receive and
the Trust agrees to pay to the Bank such compensation as shall be determined
pursuant to Appendix B attached hereto. The Bank shall be entitled to charge
against any money held by it for the account of the Trust or the Fund the amount
of any of its fees, together with the amount of any loss, damage, liability or
expense incurred by the Bank, including reasonable attorneys' fees, for which
the Trust is responsible pursuant hereto.
4. LIMITATIONS ON LIABILITY OF THE BANK. The Bank shall not be liable
for any loss or damage resulting from or arising out of any action or omission
on its part relating to or otherwise in connection with this Agreement, except
for any such loss or damage resulting from its own gross negligence or willful
misconduct. The Trust shall defend,
<PAGE> 3
indemnify and hold harmless the Bank and its directors, officers, employees and
agents with respect to any loss, claim, liability or cost (including reasonable
attorneys' fees) arising or alleged to arise from or relating to (i) any breach
of any representation, warranty or obligation of the Trust hereunder and/or (ii)
any actions or omissions on the part of the Bank made pursuant to Proper
Instructions and any other actions or omissions on the part of the Bank relating
to or otherwise in connection with this Agreement not constituting gross
negligence or willful misconduct. The Bank shall be entitled to obtain and rely
upon the advice of counsel on all matters, at the expense of the Trust, and
shall not be liable for any action reasonably taken pursuant to such advice. The
provisions of this paragraph 4 shall survive the termination of this Agreement.
5. COMPLIANCE WITH APPLICABLE LAW. The Trust hereby represents
and warrants to the Bank that it is authorized pursuant to Section 17(f) of the
Act to enter into this Agreement and that it shall operate the Account and
discharge its obligations hereunder in accordance with the Act and all other
applicable law. Without limiting the generality of the foregoing, the Bank shall
have no obligation to inquire into, and shall not be liable for, (i) the
operation, management or administration of the Fund, including the purchase and
sale of any securities or other investments by or for the account of the Fund or
(ii) the compliance of the Trust, the Fund and any of their affiliates with the
Act, the regulations thereunder, other applicable law, the charter documents and
by-laws of the Trust or the investment objectives or other policies adopted by
the Trust.
6. ALL RECORDS CONFIDENTIAL. The Bank shall treat all records and other
information relating to the Trust and the assets of the Fund as confidential and
shall not disclose any such records or information to any other person unless
(i) the Trust shall have consented thereto in writing or (ii) such disclosure is
required by law.
7. RELIANCE UPON PROPER INSTRUCTIONS.
(a) The Bank shall be entitled to rely upon any Proper
Instructions and shall have no obligation to inquire as to the propriety
thereof. The Bank shall not, under
<PAGE> 4
any circumstances, be required to comply with any Proper Instructions which it
believes in good faith is contrary to any applicable law, rule, or regulation.
(b) The Trust agrees to forward to the Bank Written
Instructions confirming Oral Instructions in such a manner so that such Written
Instructions are received by the Bank, whether by hand delivery, telex,
facsimile or otherwise, during business hours on the same Business Day on which
such Oral Instructions were given. The Trust agrees that the failure of the Bank
to receive such confirming instructions shall in no way affect the validity of
the transactions or enforceability of the transactions hereby authorized by the
Trust. The Trust agrees that the Bank shall incur no liability to the Trust for
acting upon Oral Instructions given to the Bank hereunder concerning such
transactions.
8. BOOKS AND RECORDS. The Bank will set up and maintain proper books of
account and records of all transactions undertaken by it relating to the
Account. Such books and records shall be available, upon request, for inspection
by duly authorized officers, employees and agents of the Trust.
9. TERMINATION. Either party hereto may terminate this Agreement for
any reason by giving to the other party notice in writing specifying the date of
such termination, which shall be not less than sixty (60) days after the date of
giving of such notice. Termination of this Agreement shall not affect any rights
or remedies of either party that may have accrued prior to the effective date of
termination, nor shall termination affect any of the Bank's rights or remedies
under paragraph 4 of this Agreement. Upon termination of this Agreement, the
Trust shall pay to the Bank such compensation as may be due to the Bank as of
the date of such termination. In the event notice is given by the Bank and the
Trust fails to specify a successor bank or trust company, having not less than
$2,000,000. aggregate capital, surplus and undivided profits, then Bank,
provided it has received notice of acceptance from such bank or trust company
may deliver the Trust's assets held pursuant to this Agreement to such bank or
trust company.
<PAGE> 5
10. DESIGNATION OF AUTHORIZED PERSONS. Appendix A sets forth the names
and the signatures of those individuals who the Board of Trustees of the Trust
has authorized to give Proper Instructions on behalf of the Trust and the Fund
pursuant to this Agreement, as certified by the Secretary of the Trust. The
Trust agrees to furnish to the Bank a new Appendix A in form similar to the
attached Appendix A if any such individual ceases to have such authority or if
any other or additional individuals are duly authorized to give Proper
Instructions hereunder. Until such new Appendix A shall be received, the Bank
shall be fully protected in acting under the provisions of this Agreement upon
Proper Instructions of the then current Authorized Persons as set forth in the
last delivered Appendix A.
11. MISCELLANEOUS.
(a) Notices. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Bank, shall be sent
by mail, postage prepaid, or by nationally recognized courier or by hand or by
facsimile to the Bank at its offices at Star Bank Center, 425 Walnut Street, M.
L. 6118, Cincinnati, Ohio 45202, attention, Mutual Fund Custody Department, Fax
No.: (513) 632-4448 or at such other place as the Bank may from time to time
designate in writing. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Trust shall be sent by mail,
postage prepaid, or by nationally recognized courier or by hand or by facsimile
to the Trust at its office at 580 Walnut Street, Cincinnati, Ohio 45202-3198,
Fax No. (513) 579-5883 or at such other place as the Trust may from time to time
designate in writing.
(b) Amendments In Writing. This Agreement, with the exception
of the Appendix A, may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement, and authorized and approved by a resolution of the Board of Trustees
of the Trust.
(c) Successors and Assigns. This Agreement shall extend to and
shall be binding upon the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable by the
Trust or by the Bank, and no
<PAGE> 6
attempted assignment by the Trust or the Bank shall be effective without the
written consent of the other party hereto.
(d) Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Ohio.
(e) Jurisdiction. Any legal action, suit or proceeding to be
instituted by either party with respect to this Agreement shall be brought by
such party exclusively in the courts of the State of Ohio or in the courts of
the United States for the Southern District of Ohio, and each party, by its
execution of this Agreement, irrevocably (i) submits to such jurisdiction and
(ii) consents to the service of any process or pleadings by first class U.S.
mail, postage prepaid and return receipt requested, or by any other means from
time to time authorized by the laws of such jurisdiction.
(f) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
(g) Headings. The headings of paragraphs in this Agreement are
for convenience of reference only and shall not affect the meaning or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, thereunto duly authorized as of the day
and year first above written.
ATTEST: TRUST:
The Gradison Growth Trust
By: /s/ Donald E. Weston
Title: Chairman
ATTEST: BANK:
<PAGE> 7
Star Bank, N.A.
By: /s/ Nancy V. Kelly
Title: Vice President & Trust Officer
<PAGE> 8
APPENDIX A
Authorized Persons Specimen Signatures
------------------ -------------------
Mark A. Frietch /s/ Mark A. Frietch
John J. Discepoli /s/ John J. Discepoli
Mary P. Kessler /s/ Mary P. Kessler
C. John Ollier /s/ C. John Ollier
Lynn R. Mohl /s/ Lynn R. Mohl
Linda A. Ackerman /s/ Linda A. Ackerman
Melissa M. Gilmore /s/ Melissa M. Gilmore
Mary E. Goldschmidt /s/ Mary E. Goldschmidt
Judy L. Sawyer /s/ Judy L. Sawyer
James R. Newsom /s/ James R. Newsom
I, Richard M. Wachterman, the duly authorized Secretary of the Trust,
hereby certify that the foregoing individuals have been duly authorized and
appointed by the Board
<PAGE> 9
of Trustees of the Trust to give Oral Instructions and Written Instructions on
behalf of the Trust and the Fund pursuant to this Agreement.
ATTEST:
/s/ Mary Ann Plunkett
/s/ Richard M. Wachterman
Name
<PAGE> 10
APPENDIX B
ACCOUNT MANAGEMENT FEES
<TABLE>
<CAPTION>
Service Fee
<S> <C> <C>
Monthly Account Maintenance $10.00
Deposit .25
Deposited Item
Government .03
Local City .03
Local RCPC .041
Other Federal City .066
Other Federal RCPC .068
Columbus RCPC .08
Louisville RCPC .08
Indianapolis RCPC .08
Cleveland RCPC .08
Direct Sends .155
Deposited Item Returned 2.00
Return Item Notification 1.50
Photocopy of Item 2.00
Cash Handling
Incoming
Deposit .25
Envelope .20
Discrepancy 2.25
Full Strap (100 bills/Same Denom) .35
</TABLE>
<PAGE> 11
<TABLE>
<S> <C> <C>
Half Strap ( 50 bills/Same Denom) .45
Unstrapped - loose bill .009
Sorted bag Coin 3.00
Mixed Bag Coin 4.00
Hand Wrapped Coin Roll .07
Outgoing
Currency or coin order 3.75
Per Bundle (10-100 bill straps/Same Denom)2.25
Per Strap (100 bills/Same Denom) .35
Less than Full Strap .08/bill
Full Box Coin (Single Denom) 1.85
Less than Full Box .10/roll
Full Bag Coin 3.00
Canvas Currency Bag .10
Miscellaneous Supplies At Cost
Lockbox Processing
Lockbox Monthly Maintenance 37.00
Additional Location Monthly 23.00
Lockbox item processed .186
Photocopy of lockbox item .06
Data Capture per investment ticket .08
Monthly Transmission of detail 110.00
Check Paid .12
Stop Payment 20.00
Monthly Controlled Disbursement
First Account 110.00
Additional Accounts 25.00
Draft cleared .10
Draft returned 2.00
</TABLE>
<PAGE> 12
<TABLE>
<S> <C> <C>
Monthly Transmission of draft detail 110.00
Signature verification .07
Wire
Outgoing - Nonrepetitive 7.50
Repetitive 6.00
Incoming with notification 5.50
Intrabank transfer 1.00
ACH Origination
Monthly Maintenance 40.00
Per debit/credit .08
ACH Received
Per debit .12
Monthly data transmission detail 110.00
Cash Concentration
Monthly Maintenance 50.00
Per ACH debit .156
Per paper draft .23
Accumulated transaction report 50.00
Location Maintenance 3.50
Automated Balance Reporting Monthly Maintenance
First account/module 50.00
Additional accounts/module 35.00
Fine sorting of draft ($25.00/mo min.) .025
Zero Balance Monthly Maintenance 20.00
Cashier's check 6.00
Certified check 6.00
Special statement 6.00
FDIC .16/1000 average
monthly ledger
Invoicing of Service charge 15.00
</TABLE>
<PAGE> 1
Exhibit 9(a)
TRANSFER AGENCY, ACCOUNTING SERVICES
AND ADMINISTRATIVE SERVICES AGREEMENT
Agreement made as of the 1st day of June, 1995 between GRADISON GROWTH
TRUST, a business trust organized and existing under the laws of the State of
Ohio, having its principal office and place of business at 580 Walnut Street,
Cincinnati, Ohio 45202 (hereinafter referred to as the "Fund"), with respect to
its Gradison-McDonald Established and Opportunity series, each separately, and
McDONALD & COMPANY SECURITIES, INC., a registered transfer agent, having its
principal office and place of business at 800 Superior Avenue, Cleveland, Ohio
44114 (hereinafter referred to as the "Transfer Agent").
W I T N E S S E T H:
That for and in connection of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the following meanings:
1. "Approved Institution" shall mean an entity so named in a
Certificate. From time to time the Fund may amend a previously delivered
Certificate by delivering to the Transfer Agent a Certificate naming an
additional entity or deleting any entity named in a previously delivered
Certificate.
2. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Transfer Agent by the Fund which is signed by any Officer, as hereinafter
defined, and actually received by the Transfer Agent.
3. "Custodian" shall mean the Fund's custodian under the terms
and conditions of the Custody Agreement between the Custodian and the Fund, or
its successor(s).
4. "Fund Business Day" shall be deemed to be each day on which
The New York Stock Exchange, Inc. is open for trading.
5. "Officer" shall be deemed to be the Fund's Chairman of the
Board, the Fund's President, Executive Vice President, any Vice President of the
Fund, the Fund's Secretary, the Fund's Treasurer, any Controller of the Fund,
any Assistant Controller of the Fund, any Assistant Treasurer of the Fund, any
Assistant Secretary of the Fund, and any other person duly authorized by the
Board of Trustees of the Fund to execute any Certificate, instruction, notice or
other instrument on behalf of the Fund.
6. "Shares" shall mean all or any part of each class of shares
of beneficial interest in the Fund.
7. "Prospectus" shall mean the last Fund prospectus and
statement of additional information actually received by the Transfer Agent from
the Fund with respect to which the Fund has indicated a registration statement
under the Federal Securities Act of 1933, as amended ("1933 Act"), has become
effective.
<PAGE> 2
8. "Transfer Agent" shall mean McDonald & Company Securities,
Inc., as transfer agent, dividend disbursing agent, and accounting services
provider under the terms and conditions of this Agreement, its successor(s) or
assign(s).
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. The Fund hereby constitutes and appoints the Transfer Agent
as transfer agent of all of the Shares of the Fund and as dividend disbursing
agent during the period of this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer
agent and dividend disbursing agent and agrees to perform the duties thereof as
hereinafter set forth.
3. In connection with such appointment, the Fund shall deliver
the following documents to the Transfer Agent:
(a) A certified copy of the Declaration of Trust of the Fund
and all amendments thereto;
(b) A certified copy of the By-Laws of the Fund;
(c) A certified copy of a resolution of the Board of
Trustees of the Fund appointing the Transfer Agent and authorizing the execution
of this Transfer Agency Agreement;
(d) A Certificate signed by the Secretary of the Fund
specifying with respect to each class of Shares: the number of authorized
Shares, the number of such authorized Shares issued, and the number of such
authorized Shares issued and currently outstanding, the names and specimen
signatures of the Officers of the Fund, and the name and address of the legal
counsel for the Fund;
(e) Specimen Share certificates for each class of Shares, if
any, in the form approved by the Board of Trustees of the Fund, together with a
certificate signed by the Secretary of the Fund as to such approval; and
(f) Copies of the Fund's Registration Statement, as amended
to date, and the most recently filed Post-Effective Amendment thereto, filed by
the Fund with the Securities and Exchange Commission ("SEC") under the 1933 Act,
as amended, and under the Investment Company Act of 1940, as amended ("1940
Act"), together with any applications filed in connection therewith.
4. If Share certificates are issued, the Fund shall furnish the
Transfer Agent with a sufficient supply of blank Share certificates and from
time to time will renew such supply upon request of the Transfer Agent. Such
blank Share certificates shall be properly signed, by facsimile or otherwise, by
Officers of the Fund authorized by law or by the by-laws to sign Share
certificates, and, if required, shall bear the corporate seal or facsimile
thereof.
ARTICLE III
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or
other capital adjustment requiring a change in the form of Share certificates,
the Transfer Agent will issue Share certificates in the new form in exchange
for, or upon transfer of, outstanding Share certificates in the old form, upon
receiving:
<PAGE> 3
(a) A Certificate authorizing the issuance of Share
certificates in the new form;
(b) Specimen Share certificates for each class of Shares in
the new form approved by the Board of Trustees of the Fund, with a Certificate
signed by the Secretary of the Fund as to such approval; and
(c) An opinion of counsel for the Fund with respect to the
validity of the Shares in the new form and the status of such Shares under the
1933 Act and any other applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the Registration
Statement has become effective or, if exempt, the specific grounds therefor).
2. The Fund shall furnish the Transfer Agent with a sufficient
supply of blank Share certificates in the new form, and from time to time will
replenish such supply upon the request of the Transfer Agent. Such blank Share
certificates shall be properly signed by Officers of the Fund authorized by law
or by the by-laws to sign Share certificates and, if required, shall bear the
corporate seal or facsimile thereof. The Fund agrees to indemnify and exonerate,
save and hold harmless the Transfer Agent from and against any and all claims or
demands that may be asserted against the Transfer Agent with respect to the
genuineness of any Share certificate supplied to the Transfer Agent pursuant to
this section.
ARTICLE IV
ISSUANCE, REDEMPTION, AND TRANSFER OF SHARES
1. (a) The Transfer Agent shall accept with respect to each
Fund Business Day, at such times as are agreed upon from time to time by the
Transfer Agent and the Fund, each (i) purchase order received from a purchaser,
or shareholder, whether or not an Approved Institution, and (ii) redemption
request either received from a shareholder, whether or not an Approved
Institution, or contained in a Certificate, provided that (A) such purchase
order or redemption request, as the case may be, is reasonably believed by the
Transfer Agent to be in conformity with the Fund's purchase and redemption
procedures described in the Prospectus, and (B) the Transfer Agent has agreed to
accept and act in accordance with such type of purchase order or redemption
request, as the case may be.
(b) The Transfer Agent also shall accept with respect to
each Fund Business Day, at such times as are agreed upon from time to time by
the Transfer Agent and the Fund, a computer tape consistent in all respects with
the Transfer Agent's tape layout package, as amended from time to time, which is
believed by the Transfer Agent to be furnished by or on behalf of any Approved
Institution.
2. On each Fund Business Day the Transfer Agent shall, as of
the time at which the Fund computes its net asset value, issue to, and redeem
from, the accounts specified in a purchase order, redemption request, or
computer tape which in accordance with the Prospectus is effective on such Fund
Business Day the appropriate number of full and fractional Shares based on the
net asset value per Share of such class specified in an advice received on such
Fund Business Day from the Fund. Notwithstanding the foregoing, if a redemption
specified in a computer tape is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account, the Transfer
Agent shall not effect such redemption in whole or part, and promptly shall
orally advise both the Fund and the Approved Institution which supplied such
tape of such discrepancy.
3. The Transfer Agent shall, as of each Fund Business Day
specified in a Certificate or resolution described in paragraph 1 of succeeding
Article V, issue Shares of a class, based on the net asset value per Share of
such class specified in an advice received from the Fund on such Fund Business
Day, in connection with a reinvestment of a dividend or distribution on Shares
of such class.
<PAGE> 4
4. On each Fund Business Day, the Transfer Agent shall supply
the Fund with a statement specifying with respect to the immediately preceding
Fund Business Day: the total number of Shares of each class (including
fractional Shares) issued and outstanding at the opening of business on such
day; the total number of Shares of each Class sold to the Custodian, on such day
pursuant to preceding paragraph 2 of this Article; the total number of Shares of
each class redeemed by the Custodian on such day; the total number of Shares of
each class, if any, sold to the Custodian on such day pursuant to preceding
paragraph 3 of this Article, and the total number of Shares of each class issued
and outstanding. On the same day such statement is received by the Fund, the
Fund shall confirm the information contained therein by delivering to the
Transfer Agent a Certificate with respect to the same.
5. In connection with each purchase and each redemption of
Shares, the Transfer Agent shall send such statements as are described in the
Prospectus. If the Prospectus indicates that certificates for Shares are
available, and if specifically requested in writing by any shareholder, the
Transfer Agent will countersign, issue and mail to such shareholder at the
address set forth in the records of the Transfer Agent, a Share certificate for
any full Shares requested. In addition, the Transfer Agent shall issue and mail
Share certificates for full Shares requested otherwise than in writing provided
(i) such request is in accordance with the Prospectus and (ii) the Transfer
Agent has expressly agreed with the Fund to act in accordance with such
requests.
6. As of each Fund Business Day the Transfer Agent shall
furnish the Custodian with an advice setting forth the number and dollar amount
of Shares to be redeemed or purchased on such Fund Business Day in accordance
with paragraph 2 of this Article.
7. Upon receipt of moneys paid to it by the Custodian in
connection with a redemption of Shares, the Transfer Agent shall cancel the
redeemed Shares and after making appropriate deduction for any withholding of
taxes required of it by applicable law (a) in the case of a redemption of Shares
pursuant to a redemption described in preceding paragraph 1(a) of this Article,
make payment in accordance with the Fund's redemption and payment procedures
described in the Prospectus, and (b) in the case of a redemption of Shares
pursuant to a computer tape described in preceding paragraph 1(b) of this
Article, make payment by directing a federal funds wire order to the account
previously designated by the Approved Institution specified in said computer
tape.
8. The Transfer Agent shall not be required to issue any Shares
after it has received from an Officer of the Fund or from an appropriate federal
or state authority written notification that the sale of Shares has been
suspended or discontinued, and the Transfer Agent shall be entitled to rely upon
such written notification.
9. Upon the issuance of any Shares in accordance with this
Agreement the Transfer Agent shall not be responsible for the payment of any
original issue or other taxes required to be paid by the Fund in connection with
such issuance of any Shares.
10. Shares which are subject to restriction on transfer or
redemption (including, without limitation, Shares acquired pursuant to a
restrictive investment representation, Shares held by controlling persons,
Shares subject to shareholder's agreements, etc.) other than the general
restrictions on the transferability of the Shares described in the Prospectus,
may not be transferred or redeemed except upon receipt by the Transfer Agent of
an opinion of counsel for the Fund stating that such transfer or redemption is
in accordance with applicable law, and may be properly effected. The Transfer
Agent shall be entitled to rely upon such opinion and shall be indemnified by
the Fund for any transfer or redemption made in reliance upon any such opinion.
<PAGE> 5
11. The Transfer Agent shall accept a computer tape consistent
with the Transfer Agent's tape layout package, as amended from time to time,
which is reasonably believed by the Transfer Agent to be furnished by or on
behalf of any Approved Institution and is represented to be instructions with
respect to the transfer of Shares from one account of such Approved Institution
to another such account, and shall effect the transfers specified in said
computer tape.
12. (a) Except as otherwise provided in sub-paragraph (b) of
this paragraph and in paragraph 13 of this Article, Shares will be transferred
or redeemed upon presentation to the Transfer Agent of Share certificates or
instructions properly endorsed for transfer or redemption, accompanied by such
documents as the Transfer Agent deems necessary to evidence the authority of the
person making such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes. In the case of small estates, where no
administration is contemplated, the Transfer Agent may, when furnished with an
appropriate surety bond, and without further approval of the Fund, transfer or
redeem Shares registered in the name of a decedent where the current market
value of the Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent reserves the
right to refuse to transfer or redeem Shares until it is satisfied that the
endorsement on the share certificate or instructions is valid and genuine, and
for that purpose it will require, unless otherwise instructed by an authorized
Officer of the Fund, a guarantee of signature by a member firm of a National
Securities Exchange, by a bank or trust company acceptable to the Transfer
Agent, or as otherwise provided by regulation of the SEC. The Transfer Agent
also reserves the right to refuse to transfer or redeem Shares until it is
satisfied that the requested transfer or redemption is legally authorized, and
it shall incur no liability for the refusal, in good faith, to make transfers to
redemptions which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to any claims
adverse to such transfer or redemption. The Transfer Agent may, in effecting
transfers and redemptions of Shares, rely upon those provisions of the Uniform
Act for the Simplification of Fiduciary Security Transfers or the Uniform
Commercial Code, as the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in good faith in reliance upon such laws.
(b) Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, the Transfer Agent shall be fully
protected by the Fund in not requiring any instruments, documents, assurances,
endorsements or guarantees, including without limitation, any signature
guarantees, in connection with a redemption, or transfer, of Shares whenever the
Transfer Agent reasonably believes that requiring the same would be inconsistent
with the transfer and redemption procedures as described in the Prospectus.
13. Notwithstanding any provision contained in this Agreement to the
contrary, the Transfer Agent shall not be required or expected to require, as a
condition to any transfer of any Shares pursuant to paragraph 11 of this Article
or any redemption of any Shares pursuant to a computer tape described in this
Article, any documents, including, without limitation, any documents, of the
kind described in sub-paragraph (a) of paragraph 12 of this Article, to evidence
the authority of the person requesting the transfer or redemption and/or the
payment of any stock transfer taxes, and shall be fully protected in acting in
accordance with the applicable provisions of this Article.
14. (a) As used in this Agreement, the terms "computer tape" and
"computer tape believed by the Transfer Agent to be furnished by an Approved
Institution" shall include any tapes generated by the Transfer Agent to reflect
information believed by the Transfer Agent to have been input by an Approved
Institution, via a remote terminal or other similar link, into a data
processing, storage, or collection system, or similar system (the "System"),
located on the Transfer Agent's premises. For purposes of paragraph 1 of this
Article, such a computer tape shall be deemed to have been furnished at such
times as are agreed upon from time to time by the Transfer Agent and Fund only
if the information reflected thereon was input into the System at such times as
are agreed upon from time to time by the Transfer Agent and Fund.
<PAGE> 6
(b) Nothing contained in this Agreement shall constitute any
agreement or representation by the Transfer Agent to permit, or to agree to
permit, any Approved Institution to input information into a System.
15. The Fund hereby retains the Transfer Agent to provide all necessary
services to the Fund with respect to maintaining the books and accounting
records of the Fund, coordinating the transfer agent activities with the Fund,
pricing the securities of the Fund, calculating its net asset value,
coordinating the audit function with the Fund's independent accountant, and such
other activities as may be agreed to from time to time. The Fund shall pay to
the Transfer Agent a fee for providing such services as set forth in Appendix A
to this Agreement.
ARTICLE V
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a resolution
of its Board of Trustees, certified by the Secretary or any Assistant Secretary,
either (i) setting forth with respect to a class of Shares the date of the
declaration of a dividend or distribution, the date of accrual or payment, as
the case may be, thereof, the record date as of which Shareholders entitled to
payment, or accrual, as the case may be, shall be determined, the amount per
Share of such dividend or distribution, the payment date on which all previously
accrued and unpaid dividends are to be paid, and the total amount, if any,
payable to the Transfer Agent on such payment date, or (ii) authorizing the
declaration of dividends and distributions on a daily or other periodic basis
and authorizing the Transfer Agent to rely on a Certificate setting forth the
information described in subsection (i) of this paragraph.
2. Upon the payment date specified in such Certificate or resolution,
as the case may be, the Fund shall, in the case of a cash dividend or
distribution, cause the Custodian to make available to the Transfer Agent an
amount of cash, if any, sufficient for the Transfer Agent to make the payment,
if any, specified in such Certificate or resolution, as the case may be, to the
Shareholders of record as of such payment date. The Transfer Agent will, upon
receipt of any such cash, make payment of such cash dividends or distributions
to the Shareholders of record as of the record date by: (i) mailing a check,
payable to the registered shareholder, to the address of record or dividend
mailing address, or (ii) wiring such amounts to the accounts previously
designated by an Approved Institution, as the case may be. The Transfer Agent
shall not be liable for any improper payments made in accordance with a
Certificate or resolution described in the preceding paragraph. If the Transfer
Agent shall not receive from the Custodian sufficient cash to make payments of
any cash dividend or distribution on the payable date to all shareholders of
record of the Fund as of the record date, the Transfer Agent shall, upon
notifying the Fund, withhold payment to all shareholders of record as of the
record date until sufficient cash is provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or capital
gain distributions due to the shareholders.
4. It is understood that the Transfer Agent shall file such appropriate
information returns concerning the payment of dividends and capital gain
distributions with the proper federal, state and local authorities as are
required by law to be filed by the Fund but shall in no way be responsible for
the collection or withholding of taxes due on such dividends or distributions
due to shareholders, except and only to the extent required of it by applicable
law or agreed between the Transfer Agent and the Fund.
<PAGE> 7
ARTICLE VI
CONCERNING THE FUND
1. The Fund shall promptly deliver to the Transfer Agent written notice
of any change in the Officers authorized to sign Share certificates,
Certificates, notifications or requests, together with a specimen signature of
each new Officer. In the event any Officer who shall have signed manually or
whose facsimile signature shall have been affixed to blank Share certificates
shall die, resign or be removed prior to issuance of such Share certificates,
the Transfer Agent may issue such Share certificates of the Fund notwithstanding
such death, resignation or removal, and the Fund shall promptly deliver to the
Transfer Agent such approval, adoption or ratification as may be required by
law.
2. Each copy of the Declaration of Trust of the Fund and copies of all
amendments thereto shall be certified by the Secretary of the Fund. Each copy of
the By-Laws and copies of all amendments thereto, and copies of resolutions of
the Board of Trustees of the Fund, shall be certified by the Secretary of the
Fund.
3. It shall be the sole responsibility of the Fund to deliver to the
Transfer Agent the Fund's currently effective Prospectus and, for purposes of
this Agreement, the Transfer Agent shall not be deemed to have notice of any
information contained in such Prospectus until it is actually received by the
Transfer Agent.
ARTICLE VII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents that it is currently registered with
the appropriate federal agency for the registration of transfer agents, or is
otherwise permitted to conduct lawfully its activities without such registration
and that it will remain so registered for the duration of this Agreement. The
Transfer Agent agrees that it will promptly notify the Fund in the event of any
material change in its status as a registered transfer agent. Should the
Transfer Agent fail to be registered with the SEC as a transfer agent at any
time during this Agreement, and such failure to register does not permit the
Transfer Agent to conduct lawfully its activities, the Fund may terminate this
Agreement upon five days' written notice to the Transfer Agent.
2. The Transfer Agent shall not be liable and shall be fully protected
in acting upon any computer tape, writing or document reasonably believed by it
to be genuine and to have been signed or made by the proper person or persons
and shall not be held to have any notice of any change of authority of any
person until receipt of written notice thereof from the Fund or such person. It
shall also be protected in processing Share certificates which it reasonably
believes to bear the proper manual or facsimile signatures of the Officers of
the Fund and the proper countersignature of the Transfer Agent.
3. The Transfer Agent may establish such additional procedures, rules
and regulations governing the transfer or registration of certificates of stock
as it may deem advisable and consistent with such rules and regulations
generally adopted by transfer agents.
4. The Transfer Agent shall keep such records in complete and accurate
form as are required by law or otherwise as required by the Fund's Prospectus or
Statement of Additional Information or good business practice in the form and
manner, and for such period, as it may deem advisable but not inconsistent with
the rules and regulations of appropriate government authorities, in particular
Rules 31a-2 and 31a-3 under the 1940 Act, as amended from time to time. The
Transfer Agent may deliver to the Fund from time to time as mutually agreed with
the Fund, for safekeeping or disposition by the Fund in accordance with law,
such records, papers, Share certificates which have been canceled in transfer,
exchange or redemption, or other
<PAGE> 8
documents accumulated in the execution of its duties as such Transfer Agent,
other than those which the Transfer Agent is itself required to maintain
pursuant to applicable laws and regulations, and the Fund shall assume all
responsibility for any failure thereafter to produce any record, paper, canceled
Share certificate, or other document so returned, if and when required. The
records hereto maintained by the Transfer Agent pursuant to this paragraph 4,
which have not been previously delivered to the Fund pursuant to the foregoing
provisions of this paragraph 4, shall be considered to be the property of the
Fund, shall be made available promptly upon request for inspection by the
officers, employees and auditors of the Fund, and such records shall be
delivered to the Fund upon request and in any event upon the date of termination
of this Agreement, as specified in Article VIII of this Agreement, in the form
and manner kept by the Transfer Agent on such date of termination or such
earlier date as may be requested by the Fund.
5. The Transfer Agent agrees on its own behalf and that of its
employees to keep confidential all records of the Fund and information relating
to the Fund and its shareholders (past, present and future), its investment
adviser and its principal underwriter, unless the release of such records or
information is otherwise consented to, in writing, by the Fund prior to its
release. The Fund agrees that such consent shall not be unreasonably withheld,
and may not be withheld where the Transfer Agent may be exposed to civil or
criminal contempt proceedings or when required to divulge such information or
records to duly constituted authorities.
6. Subject to approval by the Fund, the Transfer Agent may employ
agents or attorneys-in-fact at the expense of the Fund. If the selection of any
such agent or attorney-in-fact is approved by the Fund in a Certificate, the
Transfer Agent shall not be liable for any loss or expense arising out of, or in
connection with, the actions or omissions to act of such agent or
attorney-in-fact so long as the Transfer Agent acts in good faith and without
negligence or willful misconduct in the selection of such agent or
attorney-in-fact. In the event the selection of an agent or attorney-in-fact is
not approved by the Fund, the Transfer Agent shall have with respect to the
actions or omissions to act of such agent or attorney-in-fact the same rights,
duties, and responsibilities as the Transfer Agent would have if any such
actions or omissions to act were the action or omission to act of the Transfer
Agent or any officer or employee of the Transfer Agent. Notwithstanding the
foregoing, nothing contained in this paragraph shall obligate the Fund to
approve the selection of any agent or attorney-in-fact, and the Fund shall at
all times be free to withhold any such approval.
7. Except to the extent set forth in paragraph 6 of this Article, the
Transfer Agent shall not be liable for any loss or damage, including counsel
fees, resulting from its actions or omissions to act or otherwise, except for
any loss or damage arising out of its own failure to act in good faith,
negligence or willful misconduct.
8. The Transfer Agent shall maintain insurance of the types and in the
amounts deemed by it to be appropriate. To the extent that policies of insurance
may provide for coverage of claims for liability or indemnity by the parties set
forth in this Agreement, the contracts of insurance shall take precedence, and
no provision of this Agreement shall be construed to relieve an insurer of any
obligation to pay claims to the Fund, the Transfer Agent or other insured party
which would otherwise be a covered claim in the absence of any provision of this
Agreement.
9. The Transfer Agent represents and warrants that, to the best of its
knowledge, the various procedures and systems which the Transfer Agent has
implemented with regard to the safeguarding form loss or damage attributable by
fire, theft or any other cause (including provision for twenty-four hours a day
restricted access) of the Fund's blank checks, certificates, records and other
data and the Transfer Agent's equipment, facilities and other property used in
the performance of its obligations hereunder are adequate, and that it will make
such changes therein from time to time as in its judgment are required for the
secure performance of its obligation hereunder. The Transfer Agent shall review
such systems and procedures on a periodic basis and the Fund shall have access
to review these systems and procedures.
<PAGE> 9
10. The Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including attorney's fees) and
liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by the
Transfer Agent in good faith and without negligence or willful misconduct or in
reliance upon (i) any provision of this Agreement; (ii) the Prospectus; (iii)
any instruction or order including, without limitation, any computer tape
reasonably believed by the Transfer Agent to have been received from an Approved
Institution; (iv) any instrument, order or Share certificate reasonably believed
by it to be genuine and to be signed, countersigned or executed by any duly
authorized Officer of the Fund; (v) any Certificate or other instructions of an
Officer; or (vi) any opinion of legal counsel for the Fund or the Transfer
Agent. The Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including attorney's fees) and
liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by the
Transfer Agent in good faith in connection with its appointment or in reliance
upon any law, act, regulation or any interpretation of the same even though such
law, act or regulation may thereafter have been altered, changed, amended or
repealed.
11. Specifically, but not by way of limitation, the Fund shall
indemnify and exonerate, save and hold harmless the Transfer Agent from and
against any and all claims (whether with or without basis in fact or law),
demands, expenses (including attorney's fees) and liabilities of any and every
nature which the Transfer Agent may sustain or incur or which may be asserted
against the Transfer Agent to any person in connection with the genuineness of a
Share certificate, the Transfer Agent's capacity and authorization to issue
Shares and the form and amount of authorized Shares.
12. At any time, the Transfer Agent may apply to an Officer of the Fund
for written instructions with respect to any matter arising in connection with
the Transfer Agent's duties and obligations under this Agreement, and the
Transfer Agent shall not be liable for any action taken or permitted by it in
good faith in accordance with such written instructions. Such application by the
Transfer Agent for written instructions from an Officer of the Fund may, at the
option of the Transfer Agent, set forth in writing any action proposed to be
taken or omitted by the Transfer Agent with respect to its duties or obligations
under this Agreement and the date on and/or after which such action shall be
taken, and the Transfer Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein unless, prior to taking or omitting any such
action, the Transfer Agent has received written instructions in response to such
application specifying the action to be taken or omitted. The Transfer Agent may
consult counsel to the Fund, or its own counsel, at the expense of the Fund, and
shall be fully protected with respect to anything done or omitted by it in good
faith in accordance with the advice or opinion of counsel to the Fund or its own
counsel.
13. The Transfer Agent agrees to indemnify and hold harmless the Fund
from all taxes, charges expenses, assessments, claims and liabilities arising
from the Transfer Agent's obligations pursuant to this Agreement (including,
without limitation, liabilities arising under the federal securities laws, and
any state and foreign securities and blue sky laws, and amendments thereto) and
expenses, including (without limitation) reasonable attorneys' fees and
disbursements arising directly or indirectly out of the Transfer Agent's own
willful misfeasance, bad faith, negligence or reckless disregard of its duties
and obligations under this Agreement.
14. In order that the indemnification provisions contained in this
Article shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claims. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
<PAGE> 10
15. When mail is used for delivery of non-negotiable Share
certificates, the value of which does not exceed the limits of the Transfer
Agent's Blanket Bond, the Transfer Agent shall send such non-negotiable Share
certificates by first class mail, and such deliveries will be covered while in
transit by the Transfer Agent's Blanket Bond. Non-negotiable Share certificates,
the value of which exceed the limits of the Transfer Agent's Blanket Bond, will
be sent by insured registered mail. Negotiable Share certificates will be sent
by insured registered mail. The Transfer Agent shall advise the Fund of any
Share certificates returned as undelivered after being mailed as herein
provided.
16. The Transfer Agent may issue new Share certificates in place of
Share certificates represented to have been lost, stolen or destroyed upon
receiving instructions in writing from an Officer and indemnity satisfactory to
the Transfer Agent. Such instructions from the Fund shall be in such form as
approved by the Board of Trustees of the Fund in accordance with the provisions
of law or of the By-Laws of the Fund governing such matters. If the Transfer
Agent receives written notification from the owner of the lost, destroyed or
stolen Share certificate within a reasonable time after he has notice of it, the
Transfer Agent shall promptly notify the Fund and shall act pursuant to written
instructions signed by an Officer. If the Fund receives such written
notification from the owner of the lost, destroyed or stolen Share certificate
within a reasonable time after he has notice of it, the Fund shall promptly
notify the Transfer Agent and the Transfer Agent shall act pursuant to written
instructions signed by an Officer. The Transfer Agent shall not be liable for
any act done or omitted by it pursuant to the written instructions described
herein. The Transfer Agent may issue new Share certificates in exchange for, and
upon surrender of, mutilated Share certificates.
17. The Transfer Agent will issue and mail subscription warrants for
Shares of beneficial interest, Shares representing stock dividends, exchanges or
splits, or act as conversion agent upon receiving written instructions from an
Officer and such other documents as the Transfer Agent may deem necessary.
18. The Transfer Agent will supply shareholder lists to the Fund from
time to time upon receiving a request therefor from an Officer of the Fund.
19. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund and to secure instructions from an Officer prior to such inspection.
Notwithstanding the foregoing, the Transfer Agent shall have the right to
exhibit such records to any Federal or State authority with whom the Fund or its
Shares are registered, and the Transfer Agent shall further have the right to
exhibit any such records to any person whenever it receives an opinion from its
counsel that there is reasonable likelihood that the Transfer Agent will be held
liable for the failure to exhibit such records, provided, however, that in
connection with any such exhibiting the Transfer Agent shall promptly notify the
Fund upon receipt of any such request or demand for inspection, indicating
whether such exhibiting has been made or is to be made.
20. At the request of an Officer, the Transfer Agent will address and
mail such appropriate notices to shareholders as the Fund may direct.
21. Notwithstanding any of the foregoing provisions of this Agreement,
the Transfer Agent shall be under no duty or obligation to inquire into, and
shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the authority of
the Approved Institution or of the Fund, as the case may be, to request
such sale or issuance;
(b) The legality of a transfer of Shares, or of a redemption of
any Shares, the propriety of the amount to be paid therefor, or the
authority of the Approved Institution or of the Fund, as the case may
be, to request such transfer or redemption;
<PAGE> 11
(c) The legality of the declaration of any dividend by the
Fund, or the legality of the issue of any Shares in payment of any
stock dividend; or
(d) The legality of any recapitalization or readjustment of the
Shares.
22. The Transfer Agent shall be entitled to receive and the Fund hereby
agrees to pay to the Transfer Agent for its performance hereunder, the
compensation set forth in Appendix C hereto as it may be amended.
23. The Transfer Agent undertakes to comply with all applicable
requirements of the 1933 Act, Securities Exchange Act of 1934, as amended, and
the 1940 Act, and any laws, rules and regulations of governmental authorities
having jurisdiction with respect to the duties to be performed by the Transfer
Agent hereunder.
24. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against the Transfer Agent.
ARTICLE VIII
ACCOUNTING AND ADMINISTRATIVE SERVICES
The Transfer Agent shall maintain the Fund's books and accounting
records, prepare and file registration statements and other reports with the
Securities and Exchange Commission and state regulatory authorities (other than
legal services with respect to such statements, reports, and filings), tax
returns, Trust filings, and similar statements, reports and filings.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than 180 days after the date of receipt of such notice.
In the event such notice is given by the Fund, it shall be accompanied by a copy
of a resolution of the Board of Trustees of the Fund, certified by the Secretary
or any Assistant Secretary, electing to terminate this Agreement and designating
a successor transfer agent or transfer agents. In the event such notice is given
by the Transfer Agent, the Fund shall, on or before the termination date,
deliver to the Transfer Agent a copy of a resolution of its Board of Trustees
certified by the Secretary or any Assistant Secretary designating a successor
transfer agent or transfer agents. In the absence of such designation by the
Fund, the Transfer Agent may designate a successor transfer agent. If the Fund
fails to designate a successor transfer agent and if the Transfer Agent is
unable to find a successor transfer agent, the Fund shall, upon the date
specified in the notice of termination of this Agreement and delivery of the
records maintained hereunder, be deemed to be its own transfer agent and the
Transfer Agent shall thereby be relieved of all duties and responsibilities
pursuant to this Agreement. Upon the termination hereof, the Fund shall pay to
the Transfer Agent such compensation as may be due for the period prior to the
date of such termination. Any termination affected hereunder shall not affect
the rights and obligations of the parties under Article VII hereof.
<PAGE> 12
ARTICLE X
MISCELLANEOUS
1. The Fund agrees that prior to effecting any change in the Prospectus
which would increase or alter the duties and obligations of the Transfer Agent
hereunder, it shall advise the Transfer Agent of such proposed change at least
30 days prior to the intended date of the same, and shall proceed with such
change only if it shall have received the written consent of the Transfer Agent
thereto, and the Transfer Agent shall not unreasonably withhold such consent.
2. Any notice or other instrument in writing authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at 580 Walnut Street,
Cincinnati, Ohio 45202 or at such other place as the Fund may from time to time
designate in writing.
3. Any notice or other instrument in writing authorized or required by
this Agreement to be given to the Transfer Agent shall be sufficiently given if
addressed to the Transfer Agent and mailed or delivered to it at its office at
800 Superior Avenue, Cleveland, Ohio 44114 or at such other place as the
Transfer Agent may from time to time designate in writing.
4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the formality of this
Agreement and authorized or approved by a resolution of the Board of Trustees of
the Fund.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Transfer Agent.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio.
7. This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
8. The provisions of this Agreement are intended to benefit only the
Transfer Agent and the Fund, and no rights shall be granted to any other person
by virtue of this Agreement.
9. A copy of the Declaration of Trust, as amended, establishing the
Trust is on file with the Secretary of the State of Ohio, and notice is hereby
given that this Agreement is executed on behalf of the Trust by the officers of
the Trust as officers, and not individually, and that the shareholders,
trustees, officers, employees, representatives or agents of the Trust shall not
personally be bound by or liable under this Agreement, not shall resort be had
to their private property for the satisfaction of any obligation or claim
thereunder, as more fully provided under the terms of the Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as of the day and year first
above written.
GRADISON GROWTH TRUST
By: /s/ Donald E. Weston
<PAGE> 13
McDONALD & COMPANY SECURITIES, INC.
By: /s/ Bradley E. Turner
<PAGE> 14
TRANSFER AGENCY, ACCOUNTING SERVICES AND
ADMINISTRATIVE SERVICES AGREEMENT
APPENDIX A
The Fund shall pay to the Transfer Agent for transfer agency and
administrative duties a fee in the amount of $18.25 per non-zero balance
shareholder account per year based on the number of each series' accounts on the
master file at month-end, plus out-of-pocket costs for statement paper,
statement envelopes, reply envelopes, and reply postage.
The Fund shall also pay to the Transfer Agent, for accounting services
an annual fee in the amount of .03% of the first $100 million of average daily
Fund net assets, .02% of the next $100 million of average daily Fund net assets,
.01% of assets in excess of $200 million, with a minimum annual fee of $40,000
per series. These calculations shall be done separately for each series.
All fees shall be paid within ten days after the end of each month. The
Fund shall be responsible for paying any applicable taxes with respect to the
services provided by this Agreement
<PAGE> 1
Exhibit 9(b)
TRANSFER AGENCY, ACCOUNTING SERVICES
AND ADMINISTRATIVE SERVICES AGREEMENT
Agreement made as of the 28th day of February, 1995 between GRADISON
GROWTH TRUST, a business trust organized and existing under the laws of the
State of Ohio, having its principal office and place of business at 580 Walnut
Street, Cincinnati, Ohio 45202 (hereinafter referred to as the "Fund"), with
respect to its Growth and Income series, and MCDONALD & COMPANY SECURITIES,
INC., a registered transfer agent, having its principal office and place of
business at 800 Superior Avenue, Cleveland, Ohio 44114 (hereinafter referred to
as the "Transfer Agent").
W I T N E S S E T H:
That for and in connection of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the following meanings:
1. "Approved Institution" shall mean an entity so named in a
Certificate. From time to time the Fund may amend a previously delivered
Certificate by delivering to the Transfer Agent a Certificate naming an
additional entity or deleting any entity named in a previously delivered
Certificate.
2. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Transfer Agent by the Fund which is signed by any Officer, as hereinafter
defined, and actually received by the Transfer Agent.
3. "Custodian" shall mean the Fund's custodian under the terms
and conditions of the Custody Agreement between the Custodian and the Fund, or
its successor(s).
4. "Fund Business Day" shall be deemed to be each day on which
The New York Stock Exchange, Inc. is open for trading.
5. "Officer" shall be deemed to be the Fund's Chairman of the
Board, the Fund's President, Executive Vice President,any Vice President of the
Fund, the Fund's Secretary, the Fund's Treasurer, any Controller of the Fund,
any Assistant Controller of the Fund, any Assistant Treasurer of the Fund, any
Assistant Secretary of the Fund, and any other person duly authorized by the
Board of Trustees of the Fund to execute any Certificate, instruction, notice or
other instrument on behalf of the Fund and named in the Certificate annexed
hereto as Appendix A, as such Certificate may be amended from time to time, and
any person reasonably believed by the Transfer Agent to be such a person.
6. "Shares" shall mean all or any part of each class of shares
of beneficial interest in the Fund listed in the Certificate annexed hereto as
Appendix B, as may be amended from time to time, which from time to time are
authorized and/or issued by the Fund.
7. "Prospectus" shall mean the last Fund prospectus and
statement of additional information actually received by the Transfer Agent from
the Fund with respect to which the Fund has
<PAGE> 2
indicated a registration statement under the Federal Securities Act of 1933, as
amended ("1933 Act"), has become effective.
8. "Transfer Agent" shall mean McDonald & Company Securities,
Inc., as transfer agent, dividend disbursing agent, and accounting services
provider under the terms and conditions of this Agreement, its successor(s) or
assign(s).
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. The Fund hereby constitutes and appoints the Transfer Agent
as transfer agent of all of the Shares of the Fund and as dividend disbursing
agent during the period of this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer
agent and dividend disbursing agent and agrees to perform the duties thereof as
hereinafter set forth.
3. In connection with such appointment, the Fund shall deliver
the following documents to the Transfer Agent:
(a) A certified copy of the Declaration of Trust of the Fund
and all amendments thereto;
(b) A certified copy of the By-Laws of the Fund;
(c) A certified copy of a resolution of the Board of
Trustees of the Fund appointing the Transfer Agent and authorizing the execution
of this Transfer Agency Agreement;
(d) A Certificate signed by the Secretary of the Fund
specifying with respect to each class of Shares: the number of authorized
Shares, the number of such authorized Shares issued, and the number of such
authorized Shares issued and currently outstanding, the names and specimen
signatures of the Officers of the Fund, and the name and address of the legal
counsel for the Fund;
(e) Specimen Share certificates for each class of Shares, if
any, in the form approved by the Board of Trustees of the Fund, together with a
certificate signed by the Secretary of the Fund as to such approval; and
(f) Copies of the Fund's Registration Statement, as amended
to date, and the most recently filed Post-Effective Amendment thereto, filed by
the Fund with the Securities and Exchange Commission ("SEC") under the 1933 Act,
as amended, and under the Investment Company Act of 1940, as amended ("1940
Act"), together with any applications filed in connection therewith.
4. If Share certificates are issued, the Fund shall furnish the
Transfer Agent with a sufficient supply of blank Share certificates and from
time to time will renew such supply upon request of the Transfer Agent. Such
blank Share certificates shall be properly signed, by facsimile or otherwise, by
Officers of the Fund authorized by law or by the by-laws to sign Share
certificates, and, if required, shall bear the corporate seal or facsimile
thereof.
<PAGE> 3
ARTICLE III
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or
other capital adjustment requiring a change in the form of Share certificates,
the Transfer Agent will issue Share certificates in the new form in exchange
for, or upon transfer of, outstanding Share certificates in the old form, upon
receiving:
(a) A Certificate authorizing the issuance of Share
certificates in the new form;
(b) Specimen Share certificates for each class of Shares in
the new form approved by the Board of Trustees of the Fund, with a Certificate
signed by the Secretary of the Fund as to such approval; and
(c) An opinion of counsel for the Fund with respect to the
validity of the Shares in the new form and the status of such Shares under the
1933 Act and any other applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the Registration
Statement has become effective or, if exempt, the specific grounds therefor).
2. The Fund shall furnish the Transfer Agent with a sufficient
supply of blank Share certificates in the new form, and from time to time will
replenish such supply upon the request of the Transfer Agent. Such blank Share
certificates shall be properly signed by Officers of the Fund authorized by law
or by the by-laws to sign Share certificates and, if required, shall bear the
corporate seal or facsimile thereof. The Fund agrees to indemnify and exonerate,
save and hold harmless the Transfer Agent from and against any and all claims or
demands that may be asserted against the Transfer Agent with respect to the
genuineness of any Share certificate supplied to the Transfer Agent pursuant to
this section.
ARTICLE IV
ISSUANCE, REDEMPTION, AND TRANSFER OF SHARES
1. (a) The Transfer Agent shall accept with respect to each
Fund Business Day, at such times as are agreed upon from time to time by the
Transfer Agent and the Fund, each (i) purchase order received from a purchaser,
or shareholder, whether or not an Approved Institution, and (ii) redemption
request either received from a shareholder, whether or not an Approved
Institution, or contained in a Certificate, provided that (A) such purchase
order or redemption request, as the case may be, is reasonably believed by the
Transfer Agent to be in conformity with the Fund's purchase and redemption
procedures described in the Prospectus, and (B) the Transfer Agent has agreed to
accept and act in accordance with such type of purchase order or redemption
request, as the case may be.
(b) The Transfer Agent also shall accept with respect to
each Fund Business Day, at such times as are agreed upon from time to time by
the Transfer Agent and the Fund, a computer tape consistent in all respects with
the Transfer Agent's tape layout package, as amended from time to time, which is
believed by the Transfer Agent to be furnished by or on behalf of any Approved
Institution.
2. On each Fund Business Day the Transfer Agent shall, as of
the time at which the Fund computes its net asset value, issue to, and redeem
from, the accounts specified in a purchase order, redemption request, or
computer tape which in accordance with the Prospectus is effective on such Fund
Business Day the appropriate number of full and fractional Shares based on the
net asset value per Share of
<PAGE> 4
such class specified in an advice received on such Fund Business Day from the
Fund. Notwithstanding the foregoing, if a redemption specified in a computer
tape is for a dollar value of Shares in excess of the dollar value of
uncertificated Shares in the specified account, the Transfer Agent shall not
effect such redemption in whole or part, and promptly shall orally advise both
the Fund and the Approved Institution which supplied such tape of such
discrepancy.
3. The Transfer Agent shall, as of each Fund Business Day
specified in a Certificate or resolution described in paragraph 1 of succeeding
Article V, issue Shares of a class, based on the net asset value per Share of
such class specified in an advice received from the Fund on such Fund Business
Day, in connection with a reinvestment of a dividend or distribution on Shares
of such class.
4. On each Fund Business Day, the Transfer Agent shall supply
the Fund with a statement specifying with respect to the immediately preceding
Fund Business Day: the total number of Shares of each class (including
fractional Shares) issued and outstanding at the opening of business on such
day; the total number of Shares of each Class sold to the Custodian, on such day
pursuant to preceding paragraph 2 of this Article; the total number of Shares of
each class redeemed by the Custodian on such day; the total number of Shares of
each class, if any, sold to the Custodian on such day pursuant to preceding
paragraph 3 of this Article, and the total number of Shares of each class issued
and outstanding. On the same day such statement is received by the Fund, the
Fund shall confirm the information contained therein by delivering to the
Transfer Agent a Certificate with respect to the same.
5. In connection with each purchase and each redemption of
Shares, the Transfer Agent shall send such statements as are described in the
Prospectus. If the Prospectus indicates that certificates for Shares are
available, and if specifically requested in writing by any shareholder, the
Transfer Agent will countersign, issue and mail to such shareholder at the
address set forth in the records of the Transfer Agent, a Share certificate for
any full Shares requested. In addition, the Transfer Agent shall issue and mail
Share certificates for full Shares requested otherwise than in writing provided
(i) such request is in accordance with the Prospectus and (ii) the Transfer
Agent has expressly agreed with the Fund to act in accordance with such
requests.
6. As of each Fund Business Day the Transfer Agent shall
furnish the Custodian with an advice setting forth the number and dollar amount
of Shares to be redeemed or purchased on such Fund Business Day in accordance
with paragraph 2 of this Article.
7. Upon receipt of moneys paid to it by the Custodian in
connection with a redemption of Shares, the Transfer Agent shall cancel the
redeemed Shares and after making appropriate deduction for any withholding of
taxes required of it by applicable law (a) in the case of a redemption of Shares
pursuant to a redemption described in preceding paragraph 1(a) of this Article,
make payment in accordance with the Fund's redemption and payment procedures
described in the Prospectus, and (b) in the case of a redemption of Shares
pursuant to a computer tape described in preceding paragraph 1(b) of this
Article, make payment by directing a federal funds wire order to the account
previously designated by the Approved Institution specified in said computer
tape.
8. The Transfer Agent shall not be required to issue any Shares
after it has received from an Officer of the Fund or from an appropriate federal
or state authority written notification that the sale of Shares has been
suspended or discontinued, and the Transfer Agent shall be entitled to rely upon
such written notification.
9. Upon the issuance of any Shares in accordance with this
Agreement the Transfer Agent shall not be responsible for the payment of any
original issue or other taxes required to be paid by the Fund in connection with
such issuance of any Shares.
10. Shares which are subject to restriction on transfer or
redemption (including, without limitation, Shares acquired pursuant to a
restrictive investment representation, Shares held by
<PAGE> 5
controlling persons, Shares subject to shareholder's agreements, etc.) other
than the general restrictions on the transferability of the Shares described in
the Prospectus, may not be transferred or redeemed except upon receipt by the
Transfer Agent of an opinion of counsel for the Fund stating that such transfer
or redemption is in accordance with applicable law, and may be properly
effected. The Transfer Agent shall be entitled to rely upon such opinion and
shall be indemnified by the Fund for any transfer or redemption made in reliance
upon any such opinion.
11. The Transfer Agent shall accept a computer tape consistent with the
Transfer Agent's tape layout package, as amended from time to time, which is
reasonably believed by the Transfer Agent to be furnished by or on behalf of any
Approved Institution and is represented to be instructions with respect to the
transfer of Shares from one account of such Approved Institution to another such
account, and shall effect the transfers specified in said computer tape.
12. (a) Except as otherwise provided in sub-paragraph (b) of this
paragraph and in paragraph 13 of this Article, Shares will be transferred or
redeemed upon presentation to the Transfer Agent of Share certificates or
instructions properly endorsed for transfer or redemption, accompanied by such
documents as the Transfer Agent deems necessary to evidence the authority of the
person making such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes. In the case of small estates, where no
administration is contemplated, the Transfer Agent may, when furnished with an
appropriate surety bond, and without further approval of the Fund, transfer or
redeem Shares registered in the name of a decedent where the current market
value of the Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent reserves the
right to refuse to transfer or redeem Shares until it is satisfied that the
endorsement on the share certificate or instructions is valid and genuine, and
for that purpose it will require, unless otherwise instructed by an authorized
Officer of the Fund, a guarantee of signature by a member firm of a National
Securities Exchange, by a bank or trust company acceptable to the Transfer
Agent, or as otherwise provided by regulation of the SEC. The Transfer Agent
also reserves the right to refuse to transfer or redeem Shares until it is
satisfied that the requested transfer or redemption is legally authorized, and
it shall incur no liability for the refusal, in good faith, to make transfers to
redemptions which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to any claims
adverse to such transfer or redemption. The Transfer Agent may, in effecting
transfers and redemptions of Shares, rely upon those provisions of the Uniform
Act for the Simplification of Fiduciary Security Transfers or the Uniform
Commercial Code, as the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in good faith in reliance upon such laws.
(b) Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, the Transfer Agent shall be fully
protected by the Fund in not requiring any instruments, documents, assurances,
endorsements or guarantees, including without limitation, any signature
guarantees, in connection with a redemption, or transfer, of Shares whenever the
Transfer Agent reasonably believes that requiring the same would be inconsistent
with the transfer and redemption procedures as described in the Prospectus.
13. Notwithstanding any provision contained in this Agreement to the
contrary, the Transfer Agent shall not be required or expected to require, as a
condition to any transfer of any Shares pursuant to paragraph 11 of this Article
or any redemption of any Shares pursuant to a computer tape described in this
Article, any documents, including, without limitation, any documents, of the
kind described in sub-paragraph (a) of paragraph 12 of this Article, to evidence
the authority of the person requesting the transfer or redemption and/or the
payment of any stock transfer taxes, and shall be fully protected in acting in
accordance with the applicable provisions of this Article.
14. (a) As used in this Agreement, the terms "computer tape" and
"computer tape believed by the Transfer Agent to be furnished by an Approved
Institution" shall include any tapes generated by the
<PAGE> 6
Transfer Agent to reflect information believed by the Transfer Agent to have
been input by an Approved Institution, via a remote terminal or other similar
link, into a data processing, storage, or collection system, or similar system
(the "System"), located on the Transfer Agent's premises. For purposes of
paragraph 1 of this Article, such a computer tape shall be deemed to have been
furnished at such times as are agreed upon from time to time by the Transfer
Agent and Fund only if the information reflected thereon was input into the
System at such times as are agreed upon from time to time by the Transfer Agent
and Fund.
(b) Nothing contained in this Agreement shall constitute any
agreement or representation by the Transfer Agent to permit, or to agree to
permit, any Approved Institution to input information into a System.
15. The Fund hereby retains the Transfer Agent to provide all necessary
services to the Fund with respect to maintaining the books and accounting
records of the Fund, coordinating the transfer agent activities with the Fund,
pricing the securities of the Fund, calculating its net asset value,
coordinating the audit function with the Fund's independent accountant, and such
other activities as may be agreed to from time to time. The Fund shall pay to
the Transfer Agent a fee for providing such services as set forth in Appendix A
to this Agreement.
ARTICLE V
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a resolution
of its Board of Trustees, certified by the Secretary or any Assistant Secretary,
either (i) setting forth with respect to a class of Shares the date of the
declaration of a dividend or distribution, the date of accrual or payment, as
the case may be, thereof, the record date as of which Shareholders entitled to
payment, or accrual, as the case may be, shall be determined, the amount per
Share of such dividend or distribution, the payment date on which all previously
accrued and unpaid dividends are to be paid, and the total amount, if any,
payable to the Transfer Agent on such payment date, or (ii) authorizing the
declaration of dividends and distributions on a daily or other periodic basis
and authorizing the Transfer Agent to rely on a Certificate setting forth the
information described in subsection (i) of this paragraph.
2. Upon the payment date specified in such Certificate or resolution,
as the case may be, the Fund shall, in the case of a cash dividend or
distribution, cause the Custodian to make available to the Transfer Agent an
amount of cash, if any, sufficient for the Transfer Agent to make the payment,
if any, specified in such Certificate or resolution, as the case may be, to the
Shareholders of record as of such payment date. The Transfer Agent will, upon
receipt of any such cash, make payment of such cash dividends or distributions
to the Shareholders of record as of the record date by: (i) mailing a check,
payable to the registered shareholder, to the address of record or dividend
mailing address, or (ii) wiring such amounts to the accounts previously
designated by an Approved Institution, as the case may be. The Transfer Agent
shall not be liable for any improper payments made in accordance with a
Certificate or resolution described in the preceding paragraph. If the Transfer
Agent shall not receive from the Custodian sufficient cash to make payments of
any cash dividend or distribution on the payable date to all shareholders of
record of the Fund as of the record date, the Transfer Agent shall, upon
notifying the Fund, withhold payment to all shareholders of record as of the
record date until sufficient cash is provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or capital
gain distributions due to the shareholders.
4. It is understood that the Transfer Agent shall file such appropriate
information returns concerning the payment of dividends and capital gain
distributions with the proper federal, state and local authorities as are
required by law to be filed by the Fund but shall in no way be responsible for
the collection
<PAGE> 7
or withholding of taxes due on such dividends or distributions due to
shareholders, except and only to the extent required of it by applicable law or
agreed between the Transfer Agent and the Fund.
ARTICLE VI
CONCERNING THE FUND
1. The Fund shall promptly deliver to the Transfer Agent written notice
of any change in the Officers authorized to sign Share certificates,
Certificates, notifications or requests, together with a specimen signature of
each new Officer. In the event any Officer who shall have signed manually or
whose facsimile signature shall have been affixed to blank Share certificates
shall die, resign or be removed prior to issuance of such Share certificates,
the Transfer Agent may issue such Share certificates of the Fund notwithstanding
such death, resignation or removal, and the Fund shall promptly deliver to the
Transfer Agent such approval, adoption or ratification as may be required by
law.
2. Each copy of the Declaration of Trust of the Fund and copies of all
amendments thereto shall be certified by the Secretary of the Fund. Each copy of
the By-Laws and copies of all amendments thereto, and copies of resolutions of
the Board of Trustees of the Fund, shall be certified by the Secretary of the
Fund.
3. It shall be the sole responsibility of the Fund to deliver to the
Transfer Agent the Fund's currently effective Prospectus and, for purposes of
this Agreement, the Transfer Agent shall not be deemed to have notice of any
information contained in such Prospectus until it is actually received by the
Transfer Agent.
ARTICLE VII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents that it is currently registered with
the appropriate federal agency for the registration of transfer agents, or is
otherwise permitted to conduct lawfully its activities without such registration
and that it will remain so registered for the duration of this Agreement. The
Transfer Agent agrees that it will promptly notify the Fund in the event of any
material change in its status as a registered transfer agent. Should the
Transfer Agent fail to be registered with the SEC as a transfer agent at any
time during this Agreement, and such failure to register does not permit the
Transfer Agent to conduct lawfully its activities, the Fund may terminate this
Agreement upon five days' written notice to the Transfer Agent.
2. The Transfer Agent shall not be liable and shall be fully protected
in acting upon any computer tape, writing or document reasonably believed by it
to be genuine and to have been signed or made by the proper person or persons
and shall not be held to have any notice of any change of authority of any
person until receipt of written notice thereof from the Fund or such person. It
shall also be protected in processing Share certificates which it reasonably
believes to bear the proper manual or facsimile signatures of the Officers of
the Fund and the proper countersignature of the Transfer Agent.
3. The Transfer Agent may establish such additional procedures, rules
and regulations governing the transfer or registration of certificates of stock
as it may deem advisable and consistent with such rules and regulations
generally adopted by transfer agents.
4. The Transfer Agent shall keep such records in complete and accurate
form as are required by law or otherwise as required by the Fund's Prospectus or
Statement of Additional Information or good business practice in the form and
manner, and for such period, as it may deem advisable but not inconsistent with
the rules and regulations of appropriate government authorities, in particular
Rules 31a-2 and 31a-3 under
<PAGE> 8
the 1940 Act, as amended from time to time. The Transfer Agent may deliver
to the Fund from time to time as mutually agreed with the Fund, for safekeeping
or disposition by the Fund in accordance with law, such records, papers, Share
certificates which have been canceled in transfer, exchange or redemption, or
other documents accumulated in the execution of its duties as such Transfer
Agent, other than those which the Transfer Agent is itself required to maintain
pursuant to applicable laws and regulations, and the Fund shall assume all
responsibility for any failure thereafter to produce any record, paper, canceled
Share certificate, or other document so returned, if and when required. The
records hereto maintained by the Transfer Agent pursuant to this paragraph 4,
which have not been previously delivered to the Fund pursuant to the foregoing
provisions of this paragraph 4, shall be considered to be the property of the
Fund, shall be made available promptly upon request for inspection by the
officers, employees and auditors of the Fund, and such records shall be
delivered to the Fund upon request and in any event upon the date of termination
of this Agreement, as specified in Article VIII of this Agreement, in the form
and manner kept by the Transfer Agent on such date of termination or such
earlier date as may be requested by the Fund.
5. The Transfer Agent agrees on its own behalf and that of its
employees to keep confidential all records of the Fund and information relating
to the Fund and its shareholders (past, present and future), its investment
adviser and its principal underwriter, unless the release of such records or
information is otherwise consented to, in writing, by the Fund prior to its
release. The Fund agrees that such consent shall not be unreasonably withheld,
and may not be withheld where the Transfer Agent may be exposed to civil or
criminal contempt proceedings or when required to divulge such information or
records to duly constituted authorities.
6. Subject to approval by the Fund, the Transfer Agent may employ
agents or attorneys-in-fact at the expense of the Fund. If the selection of any
such agent or attorney-in-fact is approved by the Fund in a Certificate, the
Transfer Agent shall not be liable for any loss or expense arising out of, or in
connection with, the actions or omissions to act of such agent or
attorney-in-fact so long as the Transfer Agent acts in good faith and without
negligence or willful misconduct in the selection of such agent or
attorney-in-fact. In the event the selection of an agent or attorney-in-fact is
not approved by the Fund, the Transfer Agent shall have with respect to the
actions or omissions to act of such agent or attorney-in-fact the same rights,
duties, and responsibilities as the Transfer Agent would have if any such
actions or omissions to act were the action or omission to act of the Transfer
Agent or any officer or employee of the Transfer Agent. Notwithstanding the
foregoing, nothing contained in this paragraph shall obligate the Fund to
approve the selection of any agent or attorney-in-fact, and the Fund shall at
all times be free to withhold any such approval.
7. Except to the extent set forth in paragraph 6 of this Article, the
Transfer Agent shall not be liable for any loss or damage, including counsel
fees, resulting from its actions or omissions to act or otherwise, except for
any loss or damage arising out of its own failure to act in good faith,
negligence or willful misconduct.
8. The Transfer Agent shall maintain insurance of the types and in the
amounts deemed by it to be appropriate. To the extent that policies of insurance
may provide for coverage of claims for liability or indemnity by the parties set
forth in this Agreement, the contracts of insurance shall take precedence, and
no provision of this Agreement shall be construed to relieve an insurer of any
obligation to pay claims to the Fund, the Transfer Agent or other insured party
which would otherwise be a covered claim in the absence of any provision of this
Agreement.
9. The Transfer Agent represents and warrants that, to the best of its
knowledge, the various procedures and systems which the Transfer Agent has
implemented with regard to the safeguarding form loss or damage attributable by
fire, theft or any other cause (including provision for twenty-four hours a day
restricted access) of the Fund's blank checks, certificates, records and other
data and the Transfer Agent's equipment, facilities and other property used in
the performance of its obligations hereunder are adequate, and that it will make
such changes therein from time to time as in its judgment are required for the
secure
<PAGE> 9
performance of its obligation hereunder. The Transfer Agent shall review such
systems and procedures on a periodic basis and the Fund shall have access to
review these systems and procedures.
10. The Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including attorney's fees) and
liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by the
Transfer Agent in good faith and without negligence or willful misconduct or in
reliance upon (i) any provision of this Agreement; (ii) the Prospectus; (iii)
any instruction or order including, without limitation, any computer tape
reasonably believed by the Transfer Agent to have been received from an Approved
Institution; (iv) any instrument, order or Share certificate reasonably believed
by it to be genuine and to be signed, countersigned or executed by any duly
authorized Officer of the Fund; (v) any Certificate or other instructions of an
Officer; or (vi) any opinion of legal counsel for the Fund or the Transfer
Agent. The Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including attorney's fees) and
liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by the
Transfer Agent in good faith in connection with its appointment or in reliance
upon any law, act, regulation or any interpretation of the same even though such
law, act or regulation may thereafter have been altered, changed, amended or
repealed.
11. Specifically, but not by way of limitation, the Fund shall
indemnify and exonerate, save and hold harmless the Transfer Agent from and
against any and all claims (whether with or without basis in fact or law),
demands, expenses (including attorney's fees) and liabilities of any and every
nature which the Transfer Agent may sustain or incur or which may be asserted
against the Transfer Agent to any person in connection with the genuineness of a
Share certificate, the Transfer Agent's capacity and authorization to issue
Shares and the form and amount of authorized Shares.
12. At any time, the Transfer Agent may apply to an Officer of the Fund
for written instructions with respect to any matter arising in connection with
the Transfer Agent's duties and obligations under this Agreement, and the
Transfer Agent shall not be liable for any action taken or permitted by it in
good faith in accordance with such written instructions. Such application by the
Transfer Agent for written instructions from an Officer of the Fund may, at the
option of the Transfer Agent, set forth in writing any action proposed to be
taken or omitted by the Transfer Agent with respect to its duties or obligations
under this Agreement and the date on and/or after which such action shall be
taken, and the Transfer Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein unless, prior to taking or omitting any such
action, the Transfer Agent has received written instructions in response to such
application specifying the action to be taken or omitted. The Transfer Agent may
consult counsel to the Fund, or its own counsel, at the expense of the Fund, and
shall be fully protected with respect to anything done or omitted by it in good
faith in accordance with the advice or opinion of counsel to the Fund or its own
counsel.
13. The Transfer Agent agrees to indemnify and hold harmless the Fund
from all taxes, charges expenses, assessments, claims and liabilities arising
from the Transfer Agent's obligations pursuant to this Agreement (including,
without limitation, liabilities arising under the federal securities laws, and
any state and foreign securities and blue sky laws, and amendments thereto) and
expenses, including (without limitation) reasonable attorneys' fees and
disbursements arising directly or indirectly out of the Transfer Agent's own
willful misfeasance, bad faith, negligence or reckless disregard of its duties
and obligations under this Agreement.
14. In order that the indemnification provisions contained in this
Article shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claims. The party
who may be required to indemnify shall
<PAGE> 10
have the option to participate with the party seeking indemnification shall in
no case confess any claim or make any compromise in any case in which the other
party may be required to indemnify it except with the other party's prior
written consent.
15. When mail is used for delivery of non-negotiable Share
certificates, the value of which does not exceed the limits of the Transfer
Agent's Blanket Bond, the Transfer Agent shall send such non-negotiable Share
certificates by first class mail, and such deliveries will be covered while in
transit by the Transfer Agent's Blanket Bond. Non-negotiable Share certificates,
the value of which exceed the limits of the Transfer Agent's Blanket Bond, will
be sent by insured registered mail. Negotiable Share certificates will be sent
by insured registered mail. The Transfer Agent shall advise the Fund of any
Share certificates returned as undelivered after being mailed as herein
provided.
16. The Transfer Agent may issue new Share certificates in place of
Share certificates represented to have been lost, stolen or destroyed upon
receiving instructions in writing from an Officer and indemnity satisfactory to
the Transfer Agent. Such instructions from the Fund shall be in such form as
approved by the Board of Trustees of the Fund in accordance with the provisions
of law or of the By-Laws of the Fund governing such matters. If the Transfer
Agent receives written notification from the owner of the lost, destroyed or
stolen Share certificate within a reasonable time after he has notice of it, the
Transfer Agent shall promptly notify the Fund and shall act pursuant to written
instructions signed by an Officer. If the Fund receives such written
notification from the owner of the lost, destroyed or stolen Share certificate
within a reasonable time after he has notice of it, the Fund shall promptly
notify the Transfer Agent and the Transfer Agent shall act pursuant to written
instructions signed by an Officer. The Transfer Agent shall not be liable for
any act done or omitted by it pursuant to the written instructions described
herein. The Transfer Agent may issue new Share certificates in exchange for, and
upon surrender of, mutilated Share certificates.
17. The Transfer Agent will issue and mail subscription warrants for
Shares of beneficial interest, Shares representing stock dividends, exchanges or
splits, or act as conversion agent upon receiving written instructions from an
Officer and such other documents as the Transfer Agent may deem necessary.
18. The Transfer Agent will supply shareholder lists to the Fund from
time to time upon receiving a request therefor from an Officer of the Fund.
19. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund and to secure instructions from an Officer prior to such inspection.
Notwithstanding the foregoing, the Transfer Agent shall have the right to
exhibit such records to any Federal or State authority with whom the Fund or its
Shares are registered, and the Transfer Agent shall further have the right to
exhibit any such records to any person whenever it receives an opinion from its
counsel that there is reasonable likelihood that the Transfer Agent will be held
liable for the failure to exhibit such records, provided, however, that in
connection with any such exhibiting the Transfer Agent shall promptly notify the
Fund upon receipt of any such request or demand for inspection, indicating
whether such exhibiting has been made or is to be made.
20. At the request of an Officer, the Transfer Agent will address and
mail such appropriate notices to shareholders as the Fund may direct.
21. Notwithstanding any of the foregoing provisions of this Agreement,
the Transfer Agent shall be under no duty or obligation to inquire into, and
shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the authority of
the Approved Institution or of the Fund, as the case may be, to request
such sale or issuance;
<PAGE> 11
(b) The legality of a transfer of Shares, or of a redemption of any
Shares, the propriety of the amount to be paid therefor, or the
authority of the Approved Institution or of the Fund, as the case may
be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend by the Fund, or
the legality of the issue of any Shares in payment of any stock
dividend; or
(d) The legality of any recapitalization or readjustment of the
Shares.
22. The Transfer Agent shall be entitled to receive and the Fund hereby
agrees to pay to the Transfer Agent for its performance hereunder, the
compensation set forth in Appendix C hereto as it may be amended.
23. The Transfer Agent undertakes to comply with all applicable
requirements of the 1933 Act, Securities Exchange Act of 1934, as amended, and
the 1940 Act, and any laws, rules and regulations of governmental authorities
having jurisdiction with respect to the duties to be performed by the Transfer
Agent hereunder.
24. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against the Transfer Agent.
ARTICLE VIII
ACCOUNTING AND ADMINISTRATIVE SERVICES
The Transfer Agent shall maintain the Fund's books and accounting
records, prepare and file registration statements and other reports with the
Securities and Exchange Commission and state regulatory authorities (other than
legal services with respect to such statements, reports, and filings), tax
returns, Trust filings, and similar statements, reports and filings.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than 180 days after the date of receipt of such notice.
In the event such notice is given by the Fund, it shall be accompanied by a copy
of a resolution of the Board of Trustees of the Fund, certified by the Secretary
or any Assistant Secretary, electing to terminate this Agreement and designating
a successor transfer agent or transfer agents. In the event such notice is given
by the Transfer Agent, the Fund shall, on or before the termination date,
deliver to the Transfer Agent a copy of a resolution of its Board of Trustees
certified by the Secretary or any Assistant Secretary designating a successor
transfer agent or transfer agents. In the absence of such designation by the
Fund, the Transfer Agent may designate a successor transfer agent. If the Fund
fails to designate a successor transfer agent and if the Transfer Agent is
unable to find a successor transfer agent, the Fund shall, upon the date
specified in the notice of termination of this Agreement and delivery of the
records maintained hereunder, be deemed to be its own transfer agent and the
Transfer Agent shall thereby be relieved of all duties and responsibilities
pursuant to this Agreement. Upon the termination hereof, the Fund shall pay to
the Transfer Agent such compensation as may be due for the period prior to the
date of such termination. Any termination affected hereunder shall not affect
the rights and obligations of the parties under Article VII hereof.
<PAGE> 12
ARTICLE X
MISCELLANEOUS
1. The Fund agrees that prior to effecting any change in the Prospectus
which would increase or alter the duties and obligations of the Transfer Agent
hereunder, it shall advise the Transfer Agent of such proposed change at least
30 days prior to the intended date of the same, and shall proceed with such
change only if it shall have received the written consent of the Transfer Agent
thereto, and the Transfer Agent shall not unreasonably withhold such consent.
2. Any notice or other instrument in writing authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at 580 Walnut Street,
Cincinnati, Ohio 45202 or at such other place as the Fund may from time to time
designate in writing.
3. Any notice or other instrument in writing authorized or required by
this Agreement to be given to the Transfer Agent shall be sufficiently given if
addressed to the Transfer Agent and mailed or delivered to it at its office at
800 Superior Avenue, Cleveland, Ohio 44114 or at such other place as the
Transfer Agent may from time to time designate in writing.
4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the formality of this
Agreement and authorized or approved by a resolution of the Board of Trustees of
the Fund.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Transfer Agent.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio.
7. This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
8. The provisions of this Agreement are intended to benefit only the
Transfer Agent and the Fund, and no rights shall be granted to any other person
by virtue of this Agreement.
9. A copy of the Declaration of Trust, as amended, establishing the
Trust is on file with the Secretary of the State of Ohio, and notice is hereby
given that this Agreement is executed on behalf of the Trust by the officers of
the Trust as officers, and not individually, and that the shareholders,
trustees, officers, employees, representatives or agents of the Trust shall not
personally be bound by or liable under this Agreement, not shall resort be had
to their private property for the satisfaction of any obligation or claim
thereunder, as more fully provided under the terms of the Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as of the day and year first
above written.
GRADISON GROWTH TRUST
By: /s/ Donald E. Weston
<PAGE> 13
McDONALD & COMPANY SECURITIES, INC.
By: /s/ Bradley E. Turner
<PAGE> 14
TRANSFER AGENCY, ACCOUNTING SERVICES AND
ADMINISTRATIVE SERVICES AGREEMENT
APPENDIX A
The Fund shall pay to the Transfer Agent for transfer agency and
administrative duties a fee in the amount of $18.25 per non-zero balance
shareholder account per year based on the number of accounts on the master file
at month-end, plus out-of-pocket costs for statement paper, statement envelopes,
reply envelopes, and reply postage.
The Fund shall also pay to the Transfer Agent, for accounting services
an annual fee in the amount of .03% of the first $100 million of average daily
Fund net assets, .02% of the next $100 million of average daily Fund net assets,
.01% of assets in excess of $200 million, with a minimum annual fee of $40,000.
All fees shall be paid within ten days after the end of each month. The
Fund shall be responsible for paying any applicable taxes with respect to the
services provided by this Agreement.
<PAGE> 1
Exhibit 9(c)
TRANSFER AGENCY, ACCOUNTING SERVICES
AND ADMINISTRATIVE SERVICES AGREEMENT
(International Fund)
Agreement made as of the 1st day of June, 1995 between GRADISON GROWTH
TRUST, a business trust organized and existing under the laws of the State of
Ohio, having its principal office and place of business at 580 Walnut Street,
Cincinnati, Ohio 45202 (hereinafter referred to as the "Fund"), with respect to
its Gradison-McDonald International series, and McDONALD & COMPANY SECURITIES,
INC., a registered transfer agent, having its principal office and place of
business at 800 Superior Avenue, Cleveland, Ohio 44114 (hereinafter referred to
as the "Transfer Agent").
W I T N E S S E T H:
That for and in connection of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall
have the following meanings:
1. "Approved Institution" shall mean an entity so named in a
Certificate. From time to time the Fund may amend a previously delivered
Certificate by delivering to the Transfer Agent a Certificate naming an
additional entity or deleting any entity named in a previously delivered
Certificate.
2. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Transfer Agent by the Fund which is signed by any Officer, as hereinafter
defined, and actually received by the Transfer Agent.
3. "Custodian" shall mean the Fund's custodian under the terms
and conditions of the Custody Agreement between the Custodian and the Fund, or
its successor(s).
4. "Fund Business Day" shall be deemed to be each day on which
The New York Stock Exchange, Inc. is open for trading.
5. "Officer" shall be deemed to be the Fund's Chairman of the
Board, the Fund's President, Executive Vice President, any Vice President of the
Fund, the Fund's Secretary, the Fund's Treasurer, any Controller of the Fund,
any Assistant Controller of the Fund, any Assistant Treasurer of the Fund, any
Assistant Secretary of the Fund, and any other person duly authorized by the
Board of Trustees of the Fund to execute any Certificate, instruction, notice or
other instrument on behalf of the Fund.
6. "Shares" shall mean all or any part of each class of shares
of beneficial interest in the Fund.
7. "Prospectus" shall mean the last Fund prospectus and
statement of additional information actually received by the Transfer Agent from
the Fund with respect to which the Fund has indicated a registration statement
under the Federal Securities Act of 1933, as amended ("1933 Act"), has become
effective.
<PAGE> 2
8. "Transfer Agent" shall mean McDonald & Company Securities,
Inc., as transfer agent, dividend disbursing agent, and accounting services
provider under the terms and conditions of this Agreement, its successor(s) or
assign(s).
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. The Fund hereby constitutes and appoints the Transfer Agent
as transfer agent of all of the Shares of the Fund and as dividend disbursing
agent during the period of this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer
agent and dividend disbursing agent and agrees to perform the duties thereof as
hereinafter set forth.
3. In connection with such appointment, the Fund shall deliver
the following documents to the Transfer Agent:
(a) A certified copy of the Declaration of Trust of the Fund
and all amendments thereto;
(b) A certified copy of the By-Laws of the Fund;
(c) A certified copy of a resolution of the Board of
Trustees of the Fund appointing the Transfer Agent and authorizing the execution
of this Transfer Agency Agreement;
(d) A Certificate signed by the Secretary of the Fund
specifying with respect to each class of Shares: the number of authorized
Shares, the number of such authorized Shares issued, and the number of such
authorized Shares issued and currently outstanding, the names and specimen
signatures of the Officers of the Fund, and the name and address of the legal
counsel for the Fund;
(e) Specimen Share certificates for each class of Shares, if
any, in the form approved by the Board of Trustees of the Fund, together with a
certificate signed by the Secretary of the Fund as to such approval; and
(f) Copies of the Fund's Registration Statement, as amended
to date, and the most recently filed Post-Effective Amendment thereto, filed by
the Fund with the Securities and Exchange Commission ("SEC") under the 1933 Act,
as amended, and under the Investment Company Act of 1940, as amended ("1940
Act"), together with any applications filed in connection therewith.
4. If Share certificates are issued, the Fund shall furnish the
Transfer Agent with a sufficient supply of blank Share certificates and from
time to time will renew such supply upon request of the Transfer Agent. Such
blank Share certificates shall be properly signed, by facsimile or otherwise, by
Officers of the Fund authorized by law or by the by-laws to sign Share
certificates, and, if required, shall bear the corporate seal or facsimile
thereof.
<PAGE> 3
ARTICLE III
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or
other capital adjustment requiring a change in the form of Share certificates,
the Transfer Agent will issue Share certificates in the new form in exchange
for, or upon transfer of, outstanding Share certificates in the old form, upon
receiving:
(a) A Certificate authorizing the issuance of Share
certificates in the new form;
(b) Specimen Share certificates for each class of Shares in
the new form approved by the Board of Trustees of the Fund, with a Certificate
signed by the Secretary of the Fund as to such approval; and
(c) An opinion of counsel for the Fund with respect to the
validity of the Shares in the new form and the status of such Shares under the
1933 Act and any other applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the Registration
Statement has become effective or, if exempt, the specific grounds therefor).
2. The Fund shall furnish the Transfer Agent with a sufficient
supply of blank Share certificates in the new form, and from time to time will
replenish such supply upon the request of the Transfer Agent. Such blank Share
certificates shall be properly signed by Officers of the Fund authorized by law
or by the by-laws to sign Share certificates and, if required, shall bear the
corporate seal or facsimile thereof. The Fund agrees to indemnify and exonerate,
save and hold harmless the Transfer Agent from and against any and all claims or
demands that may be asserted against the Transfer Agent with respect to the
genuineness of any Share certificate supplied to the Transfer Agent pursuant to
this section.
ARTICLE IV
ISSUANCE, REDEMPTION, AND TRANSFER OF SHARES
1. (a) The Transfer Agent shall accept with respect to each
Fund Business Day, at such times as are agreed upon from time to time by the
Transfer Agent and the Fund, each (i) purchase order received from a purchaser,
or shareholder, whether or not an Approved Institution, and (ii) redemption
request either received from a shareholder, whether or not an Approved
Institution, or contained in a Certificate, provided that (A) such purchase
order or redemption request, as the case may be, is reasonably believed by the
Transfer Agent to be in conformity with the Fund's purchase and redemption
procedures described in the Prospectus, and (B) the Transfer Agent has agreed to
accept and act in accordance with such type of purchase order or redemption
request, as the case may be.
(b) The Transfer Agent also shall accept with respect to
each Fund Business Day, at such times as are agreed upon from time to time by
the Transfer Agent and the Fund, a computer tape consistent in all respects
with the Transfer Agent's tape layout package, as amended from time to time,
which is believed by the Transfer Agent to be furnished by or on behalf of any
Approved Institution.
2. On each Fund Business Day the Transfer Agent shall, as of
the time at which the Fund computes its net asset value, issue to, and redeem
from, the accounts specified in a purchase order, redemption request, or
computer tape which in accordance with the Prospectus is effective on such Fund
Business Day the appropriate number of full and fractional Shares based on the
net asset value per Share of
<PAGE> 4
such class specified in an advice received on such Fund Business Day from the
Fund. Notwithstanding the foregoing, if a redemption specified in a computer
tape is for a dollar value of Shares in excess of the dollar value of
uncertificated Shares in the specified account, the Transfer Agent shall not
effect such redemption in whole or part, and promptly shall orally advise both
the Fund and the Approved Institution which supplied such tape of such
discrepancy.
3. The Transfer Agent shall, as of each Fund Business Day
specified in a Certificate or resolution described in paragraph 1 of succeeding
Article V, issue Shares of a class, based on the net asset value per Share of
such class specified in an advice received from the Fund on such Fund Business
Day, in connection with a reinvestment of a dividend or distribution on Shares
of such class.
4. On each Fund Business Day, the Transfer Agent shall supply
the Fund with a statement specifying with respect to the immediately preceding
Fund Business Day: the total number of Shares of each class (including
fractional Shares) issued and outstanding at the opening of business on such
day; the total number of Shares of each Class sold to the Custodian, on such day
pursuant to preceding paragraph 2 of this Article; the total number of Shares of
each class redeemed by the Custodian on such day; the total number of Shares of
each class, if any, sold to the Custodian on such day pursuant to preceding
paragraph 3 of this Article, and the total number of Shares of each class issued
and outstanding. On the same day such statement is received by the Fund, the
Fund shall confirm the information contained therein by delivering to the
Transfer Agent a Certificate with respect to the same.
5. In connection with each purchase and each redemption of
Shares, the Transfer Agent shall send such statements as are described in the
Prospectus. If the Prospectus indicates that certificates for Shares are
available, and if specifically requested in writing by any shareholder, the
Transfer Agent will countersign, issue and mail to such shareholder at the
address set forth in the records of the Transfer Agent, a Share certificate for
any full Shares requested. In addition, the Transfer Agent shall issue and mail
Share certificates for full Shares requested otherwise than in writing provided
(i) such request is in accordance with the Prospectus and (ii) the Transfer
Agent has expressly agreed with the Fund to act in accordance with such
requests.
6. As of each Fund Business Day the Transfer Agent shall
furnish the Custodian with an advice setting forth the number and dollar amount
of Shares to be redeemed or purchased on such Fund Business Day in accordance
with paragraph 2 of this Article.
7. Upon receipt of moneys paid to it by the Custodian in
connection with a redemption of Shares, the Transfer Agent shall cancel the
redeemed Shares and after making appropriate deduction for any withholding of
taxes required of it by applicable law (a) in the case of a redemption of Shares
pursuant to a redemption described in preceding paragraph 1(a) of this Article,
make payment in accordance with the Fund's redemption and payment procedures
described in the Prospectus, and (b) in the case of a redemption of Shares
pursuant to a computer tape described in preceding paragraph 1(b) of this
Article, make payment by directing a federal funds wire order to the account
previously designated by the Approved Institution specified in said computer
tape.
8. The Transfer Agent shall not be required to issue any Shares
after it has received from an Officer of the Fund or from an appropriate federal
or state authority written notification that the sale of Shares has been
suspended or discontinued, and the Transfer Agent shall be entitled to rely upon
such written notification.
9. Upon the issuance of any Shares in accordance with this
Agreement the Transfer Agent shall not be responsible for the payment of any
original issue or other taxes required to be paid by the Fund in connection with
such issuance of any Shares.
10. Shares which are subject to restriction on transfer or
redemption (including, without limitation, Shares acquired pursuant to a
restrictive investment representation, Shares held by
<PAGE> 5
controlling persons, Shares subject to shareholder's agreements, etc.) other
than the general restrictions on the transferability of the Shares described in
the Prospectus, may not be transferred or redeemed except upon receipt by the
Transfer Agent of an opinion of counsel for the Fund stating that such transfer
or redemption is in accordance with applicable law, and may be properly
effected. The Transfer Agent shall be entitled to rely upon such opinion and
shall be indemnified by the Fund for any transfer or redemption made in reliance
upon any such opinion.
11. The Transfer Agent shall accept a computer tape consistent with the
Transfer Agent's tape layout package, as amended from time to time, which is
reasonably believed by the Transfer Agent to be furnished by or on behalf of any
Approved Institution and is represented to be instructions with respect to the
transfer of Shares from one account of such Approved Institution to another such
account, and shall effect the transfers specified in said computer tape.
12. (a) Except as otherwise provided in sub-paragraph (b) of this
paragraph and in paragraph 13 of this Article, Shares will be transferred or
redeemed upon presentation to the Transfer Agent of Share certificates or
instructions properly endorsed for transfer or redemption, accompanied by such
documents as the Transfer Agent deems necessary to evidence the authority of the
person making such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes. In the case of small estates, where no
administration is contemplated, the Transfer Agent may, when furnished with an
appropriate surety bond, and without further approval of the Fund, transfer or
redeem Shares registered in the name of a decedent where the current market
value of the Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent reserves the
right to refuse to transfer or redeem Shares until it is satisfied that the
endorsement on the share certificate or instructions is valid and genuine, and
for that purpose it will require, unless otherwise instructed by an authorized
Officer of the Fund, a guarantee of signature by a member firm of a National
Securities Exchange, by a bank or trust company acceptable to the Transfer
Agent, or as otherwise provided by regulation of the SEC. The Transfer Agent
also reserves the right to refuse to transfer or redeem Shares until it is
satisfied that the requested transfer or redemption is legally authorized, and
it shall incur no liability for the refusal, in good faith, to make transfers to
redemptions which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to any claims
adverse to such transfer or redemption. The Transfer Agent may, in effecting
transfers and redemptions of Shares, rely upon those provisions of the Uniform
Act for the Simplification of Fiduciary Security Transfers or the Uniform
Commercial Code, as the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in good faith in reliance upon such laws.
(b) Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, the Transfer Agent shall be fully
protected by the Fund in not requiring any instruments, documents, assurances,
endorsements or guarantees, including without limitation, any signature
guarantees, in connection with a redemption, or transfer, of Shares whenever the
Transfer Agent reasonably believes that requiring the same would be inconsistent
with the transfer and redemption procedures as described in the Prospectus.
13. Notwithstanding any provision contained in this Agreement to the
contrary, the Transfer Agent shall not be required or expected to require, as a
condition to any transfer of any Shares pursuant to paragraph 11 of this Article
or any redemption of any Shares pursuant to a computer tape described in this
Article, any documents, including, without limitation, any documents, of the
kind described in sub-paragraph (a) of paragraph 12 of this Article, to evidence
the authority of the person requesting the transfer or redemption and/or the
payment of any stock transfer taxes, and shall be fully protected in acting in
accordance with the applicable provisions of this Article.
14. (a) As used in this Agreement, the terms "computer tape" and
"computer tape believed by the Transfer Agent to be furnished by an Approved
Institution" shall include any tapes generated by the
<PAGE> 6
Transfer Agent to reflect information believed by the Transfer Agent to have
been input by an Approved Institution, via a remote terminal or other similar
link, into a data processing, storage, or collection system, or similar system
(the "System"), located on the Transfer Agent's premises. For purposes of
paragraph 1 of this Article, such a computer tape shall be deemed to have been
furnished at such times as are agreed upon from time to time by the Transfer
Agent and Fund only if the information reflected thereon was input into the
System at such times as are agreed upon from time to time by the Transfer Agent
and Fund.
(b) Nothing contained in this Agreement shall constitute any
agreement or representation by the Transfer Agent to permit, or to agree to
permit, any Approved Institution to input information into a System.
15. The Fund hereby retains the Transfer Agent to provide all necessary
services to the Fund with respect to maintaining the books and accounting
records of the Fund, coordinating the transfer agent activities with the Fund,
pricing the securities of the Fund, calculating its net asset value,
coordinating the audit function with the Fund's independent accountant, and such
other activities as may be agreed to from time to time. The Fund shall pay to
the Transfer Agent a fee for providing such services as set forth in Appendix A
to this Agreement.
ARTICLE V
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a resolution
of its Board of Trustees, certified by the Secretary or any Assistant Secretary,
either (i) setting forth with respect to a class of Shares the date of the
declaration of a dividend or distribution, the date of accrual or payment, as
the case may be, thereof, the record date as of which Shareholders entitled to
payment, or accrual, as the case may be, shall be determined, the amount per
Share of such dividend or distribution, the payment date on which all previously
accrued and unpaid dividends are to be paid, and the total amount, if any,
payable to the Transfer Agent on such payment date, or (ii) authorizing the
declaration of dividends and distributions on a daily or other periodic basis
and authorizing the Transfer Agent to rely on a Certificate setting forth the
information described in subsection (i) of this paragraph.
2. Upon the payment date specified in such Certificate or resolution,
as the case may be, the Fund shall, in the case of a cash dividend or
distribution, cause the Custodian to make available to the Transfer Agent an
amount of cash, if any, sufficient for the Transfer Agent to make the payment,
if any, specified in such Certificate or resolution, as the case may be, to the
Shareholders of record as of such payment date. The Transfer Agent will, upon
receipt of any such cash, make payment of such cash dividends or distributions
to the Shareholders of record as of the record date by: (i) mailing a check,
payable to the registered shareholder, to the address of record or dividend
mailing address, or (ii) wiring such amounts to the accounts previously
designated by an Approved Institution, as the case may be. The Transfer Agent
shall not be liable for any improper payments made in accordance with a
Certificate or resolution described in the preceding paragraph. If the Transfer
Agent shall not receive from the Custodian sufficient cash to make payments of
any cash dividend or distribution on the payable date to all shareholders of
record of the Fund as of the record date, the Transfer Agent shall, upon
notifying the Fund, withhold payment to all shareholders of record as of the
record date until sufficient cash is provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or capital
gain distributions due to the shareholders.
4. It is understood that the Transfer Agent shall file such appropriate
information returns concerning the payment of dividends and capital gain
distributions with the proper federal, state and local authorities as are
required by law to be filed by the Fund but shall in no way be responsible for
the collection
<PAGE> 7
or withholding of taxes due on such dividends or distributions due to
shareholders, except and only to the extent required of it by applicable law or
agreed between the Transfer Agent and the Fund.
ARTICLE VI
CONCERNING THE FUND
1. The Fund shall promptly deliver to the Transfer Agent written notice
of any change in the Officers authorized to sign Share certificates,
Certificates, notifications or requests, together with a specimen signature of
each new Officer. In the event any Officer who shall have signed manually or
whose facsimile signature shall have been affixed to blank Share certificates
shall die, resign or be removed prior to issuance of such Share certificates,
the Transfer Agent may issue such Share certificates of the Fund notwithstanding
such death, resignation or removal, and the Fund shall promptly deliver to the
Transfer Agent such approval, adoption or ratification as may be required by
law.
2. Each copy of the Declaration of Trust of the Fund and copies of all
amendments thereto shall be certified by the Secretary of the Fund. Each copy of
the By-Laws and copies of all amendments thereto, and copies of resolutions of
the Board of Trustees of the Fund, shall be certified by the Secretary of the
Fund.
3. It shall be the sole responsibility of the Fund to deliver to the
Transfer Agent the Fund's currently effective Prospectus and, for purposes of
this Agreement, the Transfer Agent shall not be deemed to have notice of any
information contained in such Prospectus until it is actually received by the
Transfer Agent.
ARTICLE VII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents that it is currently registered with
the appropriate federal agency for the registration of transfer agents, or is
otherwise permitted to conduct lawfully its activities without such registration
and that it will remain so registered for the duration of this Agreement. The
Transfer Agent agrees that it will promptly notify the Fund in the event of any
material change in its status as a registered transfer agent. Should the
Transfer Agent fail to be registered with the SEC as a transfer agent at any
time during this Agreement, and such failure to register does not permit the
Transfer Agent to conduct lawfully its activities, the Fund may terminate this
Agreement upon five days' written notice to the Transfer Agent.
2. The Transfer Agent shall not be liable and shall be fully protected
in acting upon any computer tape, writing or document reasonably believed by it
to be genuine and to have been signed or made by the proper person or persons
and shall not be held to have any notice of any change of authority of any
person until receipt of written notice thereof from the Fund or such person. It
shall also be protected in processing Share certificates which it reasonably
believes to bear the proper manual or facsimile signatures of the Officers of
the Fund and the proper countersignature of the Transfer Agent.
3. The Transfer Agent may establish such additional procedures, rules
and regulations governing the transfer or registration of certificates of stock
as it may deem advisable and consistent with such rules and regulations
generally adopted by transfer agents.
4. The Transfer Agent shall keep such records in complete and accurate
form as are required by law or otherwise as required by the Fund's Prospectus or
Statement of Additional Information or good business practice in the form and
manner, and for such period, as it may deem advisable but not inconsistent with
the rules and regulations of appropriate government authorities, in particular
Rules 31a-2 and 31a-3 under
<PAGE> 8
the 1940 Act, as amended from time to time. The Transfer Agent may deliver to
the Fund from time to time as mutually agreed with the Fund, for safekeeping or
disposition by the Fund in accordance with law, such records, papers, Share
certificates which have been canceled in transfer, exchange or redemption, or
other documents accumulated in the execution of its duties as such Transfer
Agent, other than those which the Transfer Agent is itself required to maintain
pursuant to applicable laws and regulations, and the Fund shall assume all
responsibility for any failure thereafter to produce any record, paper, canceled
Share certificate, or other document so returned, if and when required. The
records hereto maintained by the Transfer Agent pursuant to this paragraph 4,
which have not been previously delivered to the Fund pursuant to the foregoing
provisions of this paragraph 4, shall be considered to be the property of the
Fund, shall be made available promptly upon request for inspection by the
officers, employees and auditors of the Fund, and such records shall be
delivered to the Fund upon request and in any event upon the date of termination
of this Agreement, as specified in Article VIII of this Agreement, in the form
and manner kept by the Transfer Agent on such date of termination or such
earlier date as may be requested by the Fund.
5. The Transfer Agent agrees on its own behalf and that of its
employees to keep confidential all records of the Fund and information relating
to the Fund and its shareholders (past, present and future), its investment
adviser and its principal underwriter, unless the release of such records or
information is otherwise consented to, in writing, by the Fund prior to its
release. The Fund agrees that such consent shall not be unreasonably withheld,
and may not be withheld where the Transfer Agent may be exposed to civil or
criminal contempt proceedings or when required to divulge such information or
records to duly constituted authorities.
6. Subject to approval by the Fund, the Transfer Agent may employ
agents or attorneys-in-fact at the expense of the Fund. If the selection of any
such agent or attorney-in-fact is approved by the Fund in a Certificate, the
Transfer Agent shall not be liable for any loss or expense arising out of, or in
connection with, the actions or omissions to act of such agent or
attorney-in-fact so long as the Transfer Agent acts in good faith and without
negligence or willful misconduct in the selection of such agent or
attorney-in-fact. In the event the selection of an agent or attorney-in-fact is
not approved by the Fund, the Transfer Agent shall have with respect to the
actions or omissions to act of such agent or attorney-in-fact the same rights,
duties, and responsibilities as the Transfer Agent would have if any such
actions or omissions to act were the action or omission to act of the Transfer
Agent or any officer or employee of the Transfer Agent. Notwithstanding the
foregoing, nothing contained in this paragraph shall obligate the Fund to
approve the selection of any agent or attorney-in-fact, and the Fund shall at
all times be free to withhold any such approval.
7. Except to the extent set forth in paragraph 6 of this Article, the
Transfer Agent shall not be liable for any loss or damage, including counsel
fees, resulting from its actions or omissions to act or otherwise, except for
any loss or damage arising out of its own failure to act in good faith,
negligence or willful misconduct.
8. The Transfer Agent shall maintain insurance of the types and in the
amounts deemed by it to be appropriate. To the extent that policies of insurance
may provide for coverage of claims for liability or indemnity by the parties set
forth in this Agreement, the contracts of insurance shall take precedence, and
no provision of this Agreement shall be construed to relieve an insurer of any
obligation to pay claims to the Fund, the Transfer Agent or other insured party
which would otherwise be a covered claim in the absence of any provision of this
Agreement.
9. The Transfer Agent represents and warrants that, to the best of its
knowledge, the various procedures and systems which the Transfer Agent has
implemented with regard to the safeguarding form loss or damage attributable by
fire, theft or any other cause (including provision for twenty-four hours a day
restricted access) of the Fund's blank checks, certificates, records and other
data and the Transfer Agent's equipment, facilities and other property used in
the performance of its obligations hereunder are adequate, and that it will make
such changes therein from time to time as in its judgment are required for the
secure
<PAGE> 9
performance of its obligation hereunder. The Transfer Agent shall review such
systems and procedures on a periodic basis and the Fund shall have access to
review these systems and procedures.
10. The Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including attorney's fees) and
liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by the
Transfer Agent in good faith and without negligence or willful misconduct or in
reliance upon (i) any provision of this Agreement; (ii) the Prospectus; (iii)
any instruction or order including, without limitation, any computer tape
reasonably believed by the Transfer Agent to have been received from an Approved
Institution; (iv) any instrument, order or Share certificate reasonably believed
by it to be genuine and to be signed, countersigned or executed by any duly
authorized Officer of the Fund; (v) any Certificate or other instructions of an
Officer; or (vi) any opinion of legal counsel for the Fund or the Transfer
Agent. The Fund shall indemnify and exonerate, save and hold harmless the
Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including attorney's fees) and
liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by the
Transfer Agent in good faith in connection with its appointment or in reliance
upon any law, act, regulation or any interpretation of the same even though such
law, act or regulation may thereafter have been altered, changed, amended or
repealed.
11. Specifically, but not by way of limitation, the Fund shall
indemnify and exonerate, save and hold harmless the Transfer Agent from and
against any and all claims (whether with or without basis in fact or law),
demands, expenses (including attorney's fees) and liabilities of any and every
nature which the Transfer Agent may sustain or incur or which may be asserted
against the Transfer Agent to any person in connection with the genuineness of a
Share certificate, the Transfer Agent's capacity and authorization to issue
Shares and the form and amount of authorized Shares.
12. At any time, the Transfer Agent may apply to an Officer of the Fund
for written instructions with respect to any matter arising in connection with
the Transfer Agent's duties and obligations under this Agreement, and the
Transfer Agent shall not be liable for any action taken or permitted by it in
good faith in accordance with such written instructions. Such application by the
Transfer Agent for written instructions from an Officer of the Fund may, at the
option of the Transfer Agent, set forth in writing any action proposed to be
taken or omitted by the Transfer Agent with respect to its duties or obligations
under this Agreement and the date on and/or after which such action shall be
taken, and the Transfer Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein unless, prior to taking or omitting any such
action, the Transfer Agent has received written instructions in response to such
application specifying the action to be taken or omitted. The Transfer Agent may
consult counsel to the Fund, or its own counsel, at the expense of the Fund, and
shall be fully protected with respect to anything done or omitted by it in good
faith in accordance with the advice or opinion of counsel to the Fund or its own
counsel.
13. The Transfer Agent agrees to indemnify and hold harmless the Fund
from all taxes, charges expenses, assessments, claims and liabilities arising
from the Transfer Agent's obligations pursuant to this Agreement (including,
without limitation, liabilities arising under the federal securities laws, and
any state and foreign securities and blue sky laws, and amendments thereto) and
expenses, including (without limitation) reasonable attorneys' fees and
disbursements arising directly or indirectly out of the Transfer Agent's own
willful misfeasance, bad faith, negligence or reckless disregard of its duties
and obligations under this Agreement.
14. In order that the indemnification provisions contained in this
Article shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claims. The party
who may be required to indemnify shall
<PAGE> 10
have the option to participate with the party seeking indemnification shall in
no case confess any claim or make any compromise in any case in which the other
party may be required to indemnify it except with the other party's prior
written consent.
15. When mail is used for delivery of non-negotiable Share
certificates, the value of which does not exceed the limits of the Transfer
Agent's Blanket Bond, the Transfer Agent shall send such non-negotiable Share
certificates by first class mail, and such deliveries will be covered while in
transit by the Transfer Agent's Blanket Bond. Non-negotiable Share certificates,
the value of which exceed the limits of the Transfer Agent's Blanket Bond, will
be sent by insured registered mail. Negotiable Share certificates will be sent
by insured registered mail. The Transfer Agent shall advise the Fund of any
Share certificates returned as undelivered after being mailed as herein
provided.
16. The Transfer Agent may issue new Share certificates in place of
Share certificates represented to have been lost, stolen or destroyed upon
receiving instructions in writing from an Officer and indemnity satisfactory to
the Transfer Agent. Such instructions from the Fund shall be in such form as
approved by the Board of Trustees of the Fund in accordance with the provisions
of law or of the By-Laws of the Fund governing such matters. If the Transfer
Agent receives written notification from the owner of the lost, destroyed or
stolen Share certificate within a reasonable time after he has notice of it, the
Transfer Agent shall promptly notify the Fund and shall act pursuant to written
instructions signed by an Officer. If the Fund receives such written
notification from the owner of the lost, destroyed or stolen Share certificate
within a reasonable time after he has notice of it, the Fund shall promptly
notify the Transfer Agent and the Transfer Agent shall act pursuant to written
instructions signed by an Officer. The Transfer Agent shall not be liable for
any act done or omitted by it pursuant to the written instructions described
herein. The Transfer Agent may issue new Share certificates in exchange for, and
upon surrender of, mutilated Share certificates.
17. The Transfer Agent will issue and mail subscription warrants for
Shares of beneficial interest, Shares representing stock dividends, exchanges or
splits, or act as conversion agent upon receiving written instructions from an
Officer and such other documents as the Transfer Agent may deem necessary.
18. The Transfer Agent will supply shareholder lists to the Fund from
time to time upon receiving a request therefor from an Officer of the Fund.
19. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund and to secure instructions from an Officer prior to such inspection.
Notwithstanding the foregoing, the Transfer Agent shall have the right to
exhibit such records to any Federal or State authority with whom the Fund or its
Shares are registered, and the Transfer Agent shall further have the right to
exhibit any such records to any person whenever it receives an opinion from its
counsel that there is reasonable likelihood that the Transfer Agent will be held
liable for the failure to exhibit such records, provided, however, that in
connection with any such exhibiting the Transfer Agent shall promptly notify the
Fund upon receipt of any such request or demand for inspection, indicating
whether such exhibiting has been made or is to be made.
20. At the request of an Officer, the Transfer Agent will address
and mail such appropriate notices to shareholders as the Fund may direct.
21. Notwithstanding any of the foregoing provisions of this Agreement,
the Transfer Agent shall be under no duty or obligation to inquire into, and
shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the authority of
the Approved Institution or of the Fund, as the case may be, to request
such sale or issuance;
<PAGE> 11
(b) The legality of a transfer of Shares, or of a redemption of any
Shares, the propriety of the amount to be paid therefor, or the
authority of the Approved Institution or of the Fund, as the case may
be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend by the Fund, or
the legality of the issue of any Shares in payment of any stock
dividend; or
(d) The legality of any recapitalization or readjustment of the
Shares.
22. The Transfer Agent shall be entitled to receive and the Fund hereby
agrees to pay to the Transfer Agent for its performance hereunder, the
compensation set forth in Appendix C hereto as it may be amended.
23. The Transfer Agent undertakes to comply with all applicable
requirements of the 1933 Act, Securities Exchange Act of 1934, as amended, and
the 1940 Act, and any laws, rules and regulations of governmental authorities
having jurisdiction with respect to the duties to be performed by the Transfer
Agent hereunder.
24. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against the Transfer Agent.
ARTICLE VIII
ACCOUNTING AND ADMINISTRATIVE SERVICES
The Transfer Agent shall maintain the Fund's books and accounting
records, prepare and file registration statements and other reports with the
Securities and Exchange Commission and state regulatory authorities (other than
legal services with respect to such statements, reports, and filings), tax
returns, Trust filings, and similar statements, reports and filings.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than 180 days after the date of receipt of such notice.
In the event such notice is given by the Fund, it shall be accompanied by a copy
of a resolution of the Board of Trustees of the Fund, certified by the Secretary
or any Assistant Secretary, electing to terminate this Agreement and designating
a successor transfer agent or transfer agents. In the event such notice is given
by the Transfer Agent, the Fund shall, on or before the termination date,
deliver to the Transfer Agent a copy of a resolution of its Board of Trustees
certified by the Secretary or any Assistant Secretary designating a successor
transfer agent or transfer agents. In the absence of such designation by the
Fund, the Transfer Agent may designate a successor transfer agent. If the Fund
fails to designate a successor transfer agent and if the Transfer Agent is
unable to find a successor transfer agent, the Fund shall, upon the date
specified in the notice of termination of this Agreement and delivery of the
records maintained hereunder, be deemed to be its own transfer agent and the
Transfer Agent shall thereby be relieved of all duties and responsibilities
pursuant to this Agreement. Upon the termination hereof, the Fund shall pay to
the Transfer Agent such compensation as may be due for the period prior to the
date of such termination. Any termination affected hereunder shall not affect
the rights and obligations of the parties under Article VII hereof.
<PAGE> 12
ARTICLE X
MISCELLANEOUS
1. The Fund agrees that prior to effecting any change in the Prospectus
which would increase or alter the duties and obligations of the Transfer Agent
hereunder, it shall advise the Transfer Agent of such proposed change at least
30 days prior to the intended date of the same, and shall proceed with such
change only if it shall have received the written consent of the Transfer Agent
thereto, and the Transfer Agent shall not unreasonably withhold such consent.
2. Any notice or other instrument in writing authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at 580 Walnut Street,
Cincinnati, Ohio 45202 or at such other place as the Fund may from time to time
designate in writing.
3. Any notice or other instrument in writing authorized or required by
this Agreement to be given to the Transfer Agent shall be sufficiently given if
addressed to the Transfer Agent and mailed or delivered to it at its office at
800 Superior Avenue, Cleveland, Ohio 44114 or at such other place as the
Transfer Agent may from time to time designate in writing.
4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the formality of this
Agreement and authorized or approved by a resolution of the Board of Trustees of
the Fund.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Transfer Agent.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio.
7. This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
8. The provisions of this Agreement are intended to benefit only the
Transfer Agent and the Fund, and no rights shall be granted to any other person
by virtue of this Agreement.
9. A copy of the Declaration of Trust, as amended, establishing the
Trust is on file with the Secretary of the State of Ohio, and notice is hereby
given that this Agreement is executed on behalf of the Trust by the officers of
the Trust as officers, and not individually, and that the shareholders,
trustees, officers, employees, representatives or agents of the Trust shall not
personally be bound by or liable under this Agreement, not shall resort be had
to their private property for the satisfaction of any obligation or claim
thereunder, as more fully provided under the terms of the Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as of the day and year first
above written.
GRADISON GROWTH TRUST
By: /s/ Donald E. Weston
<PAGE> 13
McDONALD & COMPANY SECURITIES, INC.
By: /s/ Bradley E. Turner
<PAGE> 14
TRANSFER AGENCY, ACCOUNTING SERVICES AND
ADMINISTRATIVE SERVICES AGREEMENT
APPENDIX A
The Fund shall pay to the Transfer Agent for transfer agency and
administrative duties a fee in the amount of $19.25 per non-zero balance
shareholder account per year based on the number of each series' accounts on the
master file at month-end, plus out-of-pocket costs for statement paper,
statement envelopes, reply envelopes, and reply postage.
The Fund shall also pay to the Transfer Agent, for accounting services
an annual fee in the amount of .045% of the first $100 million of average daily
Fund net assets, .030% of the next $100 million of average daily Fund net
assets, .015% of assets in excess of $200 million, with a minimum annual fee of
$60,000.
All fees shall be paid within ten days after the end of each month. The
Fund shall be responsible for paying any applicable taxes with respect to the
services provided by this Agreement.
<PAGE> 1
Exhibit 11
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our report
dated May 25, l995 and to all references to our Firm included in or made a part
of this registration statement, post-effective amendment no. 15.
/s/ Arthur Andersen LLP
Cincinnati, Ohio,
July 26, 1995
<PAGE> 1
Exhibit 15(b)
GRADISON GROWTH TRUST
ESTABLISHED VALUE FUND
DISTRIBUTION AGREEMENT
This Agreement, entered into as of the day and date first written below, by and
between Gradison Growth Trust ("GGT") and McDonald & Company Securities, Inc.
("McDonald").
WITNESSETH
WHEREAS, GGT is an open-end diversified management investment company registered
under the Investment Company Act of 1940; and
WHEREAS, GGT has adopted a Distribution Expense Plan pursuant to which it may
pay fees for assistance rendered in the distribution of shares of the
Established Value Fund of GGT ("Fund"), and
WHEREAS, McDonald wishes to provide assistance in connection with the
distribution of shares of the Fund and receive payment as described below;
NOW THEREFORE, GGT and McDonald agree as follows:
1. McDonald shall render such assistance in the distribution of shares
of the Fund as GGT may from time to time request and shall render
personal services to shareholders of the Fund.
2. GGT shall make payment at the end of each calendar month to McDonald
for services rendered based on the assets of the Fund during the
preceding month at an annual rate of .25% for personal services to
shareholders of the Fund and an additional .25% for other
distribution services.
3. GGT's obligation to make payments hereunder is contingent upon the
continuance of GGT's Distribution
<PAGE> 2
Expense Plan, and in that connection it is understood that:
(a) such Plan shall remain in effect for one year from its
adoption date and may be continued from year to year thereafter only
if the Plan and any related agreements are approved at least
annually by a majority vote of the Trustees of GGT, including a
majority of the Trustees who are not "interested persons" of GGT and
who have no direct or indirect financial interest in the operation
of the Plan or in any related agreement ("Independent Trustees"),
cast in person at a meeting called for the purpose of voting on such
Plan and agreements; and
(b) the Plan may be terminated at any time by a majority
vote of the Independent Trustees or by vote of a majority of the
outstanding voting securities of the Fund. In the event the Plan is
not continued or is terminated, this Agreement shall automatically
terminate.
4. This Agreement may be terminated by GGT at any time, without payment
of any penalty, by vote of a majority of the Independent Trustees of
GGT or by vote of a majority of the outstanding voting securities of
the Fund on not more than sixty days' written notice to McDonald.
This Agreement may also be terminated by McDonald upon not more than
twenty-four hours' written notice to GGT. Any such notices shall be
by delivery in person or by registered or certified mail to the
addresses of the parties as specified below.
5. In the event of termination, any sums due McDonald for accounts
serviced prior to termination will be paid within ten days after the
end of the month of such termination.
6. This Agreement shall terminate automatically in the event of its
assignment (within the meaning of the Investment Company Act of
1940, as amended) unless such automatic termination shall be
prevented by an order of exemption from the Securities and Exchange
Commission. This Agreement shall be construed in accordance with the
laws of the State of Ohio.
<PAGE> 3
7. The obligations set forth in this Agreement as having been made by
GGT have been made by the Trustees of GGT, acting as such Trustees
pursuant to the authority vested in them under the laws of the State
of Ohio and The First Amended Declaration of Trust dated July 27,
1983. This Agreement has been executed by officers of GGT as
officers under the First Amended Declaration of Trust, not
individually, and the Trustees, officers, employees, agents and
shareholders of GGT shall not be personally bound or liable
hereunder, but only the trust estate of GGT, as provided in the
First Amended Declaration of Trust, shall be bound or liable
hereunder. No resort shall be had to the private property of any
Trustee, officer, employee, agent or shareholder of GGT for
satisfaction of any obligation or claim relating to this Agreement.
IN WITNESS WHEREOF, GGT and McDonald have each caused this Agreement to be
executed on its behalf as of the 1st day of June, 1995.
MCDONALD & COMPANY SECURITIES, INC. GRADISON GROWTH TRUST
BY: /s/ Bradley E. Turner BY: /s/ Donald E. Weston
<PAGE> 4
Exhibit 15(b)
GRADISON GROWTH TRUST
OPPORTUNITY VALUE FUND
DISTRIBUTION AGREEMENT
This Agreement, entered into as of the day and date first written below, by and
between Gradison Growth Trust ("GGT") and McDonald & Company Securities, Inc.
("McDonald").
WITNESSETH
WHEREAS, GGT is an open-end diversified management investment company registered
under the Investment Company Act of 1940; and
WHEREAS, GGT has adopted a Distribution Expense Plan pursuant to which it may
pay fees for assistance rendered in the distribution of shares of the
Opportunity Value Fund of GGT ("Fund"), and
WHEREAS, McDonald wishes to provide assistance in connection with the
distribution of shares of the Fund and receive payment as described below;
NOW THEREFORE, GGT and McDonald agree as follows:
1. McDonald shall render such assistance in the distribution of shares
of the Fund as GGT may from time to time request and shall render
personal services to shareholders of the Fund.
2. GGT shall make payment at the end of each calendar month to McDonald
for services rendered based on the assets of the Fund during the
preceding month at an annual rate of .25% for personal services to
shareholders of the Fund and an additional .25% for other
distribution services.
3. GGT's obligation to make payments hereunder is contingent upon the
continuance of GGT's Distribution
<PAGE> 5
Expense Plan, and in that connection it is understood that:
(a) such Plan shall remain in effect for one year from its
adoption date and may be continued from year to year thereafter only
if the Plan and any related agreements are approved at least
annually by a majority vote of the Trustees of GGT, including a
majority of the Trustees who are not "interested persons" of GGT and
who have no direct or indirect financial interest in the operation
of the Plan or in any related agreement ("Independent Trustees"),
cast in person at a meeting called for the purpose of voting on such
Plan and agreements; and
(b) the Plan may be terminated at any time by a majority
vote of the Independent Trustees or by vote of a majority of the
outstanding voting securities of the Fund. In the event the Plan is
not continued or is terminated, this Agreement shall automatically
terminate.
4. This Agreement may be terminated by GGT at any time, without payment
of any penalty, by vote of a majority of the Independent Trustees of
GGT or by vote of a majority of the outstanding voting securities of
the Fund on not more than sixty days' written notice to McDonald.
This Agreement may also be terminated by McDonald upon not more than
twenty-four hours' written notice to GGT. Any such notices shall be
by delivery in person or by registered or certified mail to the
addresses of the parties as specified below.
5. In the event of termination, any sums due McDonald for accounts
serviced prior to termination will be paid within ten days after the
end of the month of such termination.
6. This Agreement shall terminate automatically in the event of its
assignment (within the meaning of the Investment Company Act of
1940, as amended) unless such automatic termination shall be
prevented by an order of exemption from the Securities and Exchange
Commission. This Agreement shall be construed in accordance with the
laws of the State of Ohio.
<PAGE> 6
7. The obligations set forth in this Agreement as having been made by
GGT have been made by the Trustees of GGT, acting as such Trustees
pursuant to the authority vested in them under the laws of the State
of Ohio and The First Amended Declaration of Trust dated July 27,
1983. This Agreement has been executed by officers of GGT as
officers under the First Amended Declaration of Trust, not
individually, and the Trustees, officers, employees, agents and
shareholders of GGT shall not be personally bound or liable
hereunder, but only the trust estate of GGT, as provided in the
First Amended Declaration of Trust, shall be bound or liable
hereunder. No resort shall be had to the private property of any
Trustee, officer, employee, agent or shareholder of GGT for
satisfaction of any obligation or claim relating to this Agreement.
IN WITNESS WHEREOF, GGT and McDonald have each caused this Agreement to be
executed on its behalf as of the 1st day of June, 1995.
MCDONALD & COMPANY SECURITIES, INC. GRADISON GROWTH TRUST
BY: /s/ Bradley E. Turner BY: /s/ Donald E. Weston
<PAGE> 1
Exhibit 15(c)
GRADISON GROWTH TRUST
GROWTH AND INCOME FUND
DISTRIBUTION AGREEMENT
This Agreement, entered into as of the day and date first written below, by and
between Gradison Growth Trust ("GGT") and McDonald & Company Securities, Inc.
("McDonald").
WITNESSETH
WHEREAS, GGT is an open-end diversified management investment company registered
under the Investment Company Act of 1940; and
WHEREAS, GGT has adopted a Distribution Expense Plan pursuant to which it may
pay fees for assistance rendered in the distribution of shares of the Growth and
Income Fund of GGT ("Fund"), and
WHEREAS, McDonald wishes to provide assistance in connection with the
distribution of shares of the Fund and receive payment as described below;
NOW THEREFORE, GGT and McDonald agree as follows:
1. McDonald shall render such assistance in the distribution of shares
of the Fund as GGT may from time to time request and shall render
personal services to shareholders of the Fund.
2. GGT shall make payment at the end of each calendar month to McDonald
for services rendered based on the assets of the Fund during the
preceding month at an annual rate of .25% for personal services to
shareholders of the Fund and an additional .25% for other
distribution services.
3. GGT's obligation to make payments hereunder is contingent upon the
continuance of GGT's Distribution
<PAGE> 2
Expense Plan, and in that connection it is understood that:
(a) such Plan shall remain in effect for one year from its
adoption date and may be continued from year to year thereafter only
if the Plan and any related agreements are approved at least
annually by a majority vote of the Trustees of GGT, including a
majority of the Trustees who are not "interested persons" of GGT and
who have no direct or indirect financial interest in the operation
of the Plan or in any related agreement ("Independent Trustees"),
cast in person at a meeting called for the purpose of voting on such
Plan and agreements; and
(b) the Plan may be terminated at any time by a majority
vote of the Independent Trustees or by vote of a majority of the
outstanding voting securities of the Fund. In the event the Plan is
not continued or is terminated, this Agreement shall automatically
terminate.
4. This Agreement may be terminated by GGT at any time, without payment
of any penalty, by vote of a majority of the Independent Trustees of
GGT or by vote of a majority of the outstanding voting securities of
the Fund on not more than sixty days' written notice to McDonald.
This Agreement may also be terminated by McDonald upon not more than
twenty-four hours' written notice to GGT. Any such notices shall be
by delivery in person or by registered or certified mail to the
addresses of the parties as specified below.
5. In the event of termination, any sums due McDonald for accounts
serviced prior to termination will be paid within ten days after the
end of the month of such termination.
6. This Agreement shall terminate automatically in the event of its
assignment (within the meaning of the Investment Company Act of
1940, as amended) unless such automatic termination shall be
prevented by an order of exemption from the Securities and Exchange
Commission. This Agreement shall be construed in accordance with the
laws of the State of Ohio.
<PAGE> 3
7. The obligations set forth in this Agreement as having been made by
GGT have been made by the Trustees of GGT, acting as such Trustees
pursuant to the authority vested in them under the laws of the State
of Ohio and The First Amended Declaration of Trust dated July 27,
1983. This Agreement has been executed by officers of GGT as
officers under the First Amended Declaration of Trust, not
individually, and the Trustees, officers, employees, agents and
shareholders of GGT shall not be personally bound or liable
hereunder, but only the trust estate of GGT, as provided in the
First Amended Declaration of Trust, shall be bound or liable
hereunder. No resort shall be had to the private property of any
Trustee, officer, employee, agent or shareholder of GGT for
satisfaction of any obligation or claim relating to this Agreement.
IN WITNESS WHEREOF, GGT and McDonald have each caused this Agreement to be
executed on its behalf as of the 28th day of February, 1995.
MCDONALD & COMPANY SECURITIES, INC. GRADISON GROWTH TRUST
BY: /s/ Bradley E. Turner BY: /s/ Donald E. Weston
<PAGE> 1
Exhibit 15(d)
GRADISON GROWTH TRUST
INTERNATIONAL FUND
DISTRIBUTION AGREEMENT
This Agreement, entered into as of the day and date first written below, by and
between Gradison Growth Trust ("GGT") and McDonald & Company Securities, Inc.
("McDonald").
WITNESSETH
WHEREAS, GGT is an open-end diversified management investment company registered
under the Investment Company Act of 1940; and
WHEREAS, GGT has adopted a Distribution Expense Plan pursuant to which it may
pay fees for assistance rendered in the distribution of shares of the
International Fund of GGT ("Fund"), and
WHEREAS, McDonald wishes to provide assistance in connection with the
distribution of shares of the Fund and receive payment as described below;
NOW THEREFORE, GGT and McDonald agree as follows:
1. McDonald shall render such assistance in the distribution of shares
of the Fund as GGT may from time to time request and shall render
personal services to shareholders of the Fund.
2. GGT shall make payment at the end of each calendar month to McDonald
for services rendered based on the assets of the Fund during the
preceding month at an annual rate of .25% for personal services to
shareholders of the Fund and an additional .25% for other
distribution services.
<PAGE> 2
3. GGT's obligation to make payments hereunder is contingent upon the
continuance of GGT's Distribution Expense Plan, and in that
connection it is understood that:
(a) such Plan shall remain in effect for one year from its
adoption date and may be continued from year to year thereafter only
if the Plan and any related agreements are approved at least
annually by a majority vote of the Trustees of GGT, including a
majority of the Trustees who are not "interested persons" of GGT and
who have no direct or indirect financial interest in the operation
of the Plan or in any related agreement ("Independent Trustees"),
cast in person at a meeting called for the purpose of voting on such
Plan and agreements; and
(b) the Plan may be terminated at any time by a majority
vote of the Independent Trustees or by vote of a majority of the
outstanding voting securities of the Fund. In the event the Plan is
not continued or is terminated, this Agreement shall automatically
terminate.
4. This Agreement may be terminated by GGT at any time, without payment
of any penalty, by vote of a majority of the Independent Trustees of
GGT or by vote of a majority of the outstanding voting securities of
the Fund on not more than sixty days' written notice to McDonald.
This Agreement may also be terminated by McDonald upon not more than
twenty-four hours' written notice to GGT. Any such notices shall be
by delivery in person or by registered or certified mail to the
addresses of the parties as specified below.
5. In the event of termination, any sums due McDonald for accounts
serviced prior to termination will be paid within ten days after the
end of the month of such termination.
6. This Agreement shall terminate automatically in the event of its
assignment (within the meaning of the Investment Company Act of
1940, as amended) unless such automatic termination shall be
prevented by an order of exemption from the Securities and Exchange
<PAGE> 3
Commission. This Agreement shall be construed in accordance with the
laws of the State of Ohio.
7. The obligations set forth in this Agreement as having been made by
GGT have been made by the Trustees of GGT, acting as such Trustees
pursuant to the authority vested in them under the laws of the State
of Ohio and The First Amended Declaration of Trust dated July 27,
1983. This Agreement has been executed by officers of GGT as
officers under the First Amended Declaration of Trust, not
individually, and the Trustees, officers, employees, agents and
shareholders of GGT shall not be personally bound or liable
hereunder, but only the trust estate of GGT, as provided in the
First Amended Declaration of Trust, shall be bound or liable
hereunder. No resort shall be had to the private property of any
Trustee, officer, employee, agent or shareholder of GGT for
satisfaction of any obligation or claim relating to this Agreement.
IN WITNESS WHEREOF, GGT and McDonald have each caused this Agreement to be
executed on its behalf as of the 1st day of June, 1995.
MCDONALD & COMPANY SECURITIES, INC. GRADISON GROWTH TRUST
BY: /s/ Bradley E. Turner BY: /s/ Donald E. Weston
<PAGE> 1
(Exhibit 18(a))
GRADISON GROWTH TRUST
Power of Attorney of Trustees and Officers
The undersigned, an officer or Trustee, or both an officer and Trustee, of
Gradison Growth Trust, an Ohio business trust (the "Trust"), which has filed
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and the provisions of the Investment Company
Act of 1940, as amended, a Registration Statement on Form N-1 or N-1A (which
together with any and all subsequent amendments, including post-effective
amendments, thereto is hereinafter called the "Registration Statement") for the
principal purpose of registering the public offering by the Trust of shares of
beneficial interest without par value of its series, hereby constitutes and
appoints Paul J. Weston, Donald E. Weston, Bradley E. Turner, Richard M.
Wachterman and Robert Zutz, and each of them, with full power of substitution or
resubstitution, the attorney or attorneys to execute and file on behalf of the
undersigned in his capacity as an officer and/or trustee of the Trust, the
Registration Statement as aforesaid, and any and all exhibits, applications and
other documents to be filed with the Securities and Exchange Commission
pertaining thereto, with full power and authority to do and perform any and all
acts and things whatsoever required or necessary to be done in the premises, as
fully to all intents and purposes as he could do if personally present, hereby
ratifying and approving the acts of said attorneys or any of them and any such
substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 23rd day of
May, l995.
/S/ Theordore H. Emmerich
<PAGE> 2
(Exhibit 18(a))
GRADISON GROWTH TRUST
Power of Attorney of Trustees and Officers
The undersigned, an officer or Trustee, or both an officer and Trustee, of
Gradison Growth Trust, an Ohio business trust (the "Trust"), which has filed
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and the provisions of the Investment Company
Act of 1940, as amended, a Registration Statement on Form N-1 or N-1A (which
together with any and all subsequent amendments, including post-effective
amendments, thereto is hereinafter called the "Registration Statement") for the
principal purpose of registering the public offering by the Trust of shares of
beneficial interest without par value of its series, hereby constitutes and
appoints Paul J. Weston, Donald E. Weston, Bradley E. Turner, Richard M.
Wachterman and Robert Zutz, and each of them, with full power of substitution or
resubstitution, the attorney or attorneys to execute and file on behalf of the
undersigned in his capacity as an officer and/or trustee of the Trust, the
Registration Statement as aforesaid, and any and all exhibits, applications and
other documents to be filed with the Securities and Exchange Commission
pertaining thereto, with full power and authority to do and perform any and all
acts and things whatsoever required or necessary to be done in the premises, as
fully to all intents and purposes as he could do if personally present, hereby
ratifying and approving the acts of said attorneys or any of them and any such
substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 22nd day of
May, l995.
/s/ Jerome E. Schnee
<PAGE> 3
(Exhibit 18(a))
GRADISON GROWTH TRUST
Power of Attorney of Trustees and Officers
The undersigned, an officer or Trustee, or both an officer and Trustee, of
Gradison Growth Trust, an Ohio business trust (the "Trust"), which has filed
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and the provisions of the Investment Company
Act of 1940, as amended, a Registration Statement on Form N-1 or N-1A (which
together with any and all subsequent amendments, including post-effective
amendments, thereto is hereinafter called the "Registration Statement") for the
principal purpose of registering the public offering by the Trust of shares of
beneficial interest without par value of its series, hereby constitutes and
appoints Paul J. Weston, Donald E. Weston, Bradley E. Turner, Richard M.
Wachterman and Robert Zutz, and each of them, with full power of substitution or
resubstitution, the attorney or attorneys to execute and file on behalf of the
undersigned in his capacity as an officer and/or trustee of the Trust, the
Registration Statement as aforesaid, and any and all exhibits, applications and
other documents to be filed with the Securities and Exchange Commission
pertaining thereto, with full power and authority to do and perform any and all
acts and things whatsoever required or necessary to be done in the premises, as
fully to all intents and purposes as he could do if personally present, hereby
ratifying and approving the acts of said attorneys or any of them and any such
substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 23rd day of
May, l995.
/S/ Patricia Jamieson
<PAGE> 4
(Exhibit 18(a))
GRADISON GROWTH TRUST
Power of Attorney of Trustees and Officers
The undersigned, an officer or Trustee, or both an officer and Trustee, of
Gradison Growth Trust, an Ohio business trust (the "Trust"), which has filed
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and the provisions of the Investment Company
Act of 1940, as amended, a Registration Statement on Form N-1 or N-1A (which
together with any and all subsequent amendments, including post-effective
amendments, thereto is hereinafter called the "Registration Statement") for the
principal purpose of registering the public offering by the Trust of shares of
beneficial interest without par value of its series, hereby constitutes and
appoints Paul J. Weston, Donald E. Weston, Bradley E. Turner, Richard M.
Wachterman and Robert Zutz, and each of them, with full power of substitution or
resubstitution, the attorney or attorneys to execute and file on behalf of the
undersigned in his capacity as an officer and/or trustee of the Trust, the
Registration Statement as aforesaid, and any and all exhibits, applications and
other documents to be filed with the Securities and Exchange Commission
pertaining thereto, with full power and authority to do and perform any and all
acts and things whatsoever required or necessary to be done in the premises, as
fully to all intents and purposes as he could do if personally present, hereby
ratifying and approving the acts of said attorneys or any of them and any such
substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 12th day of
July, l995.
/S/ Richard Rankin
<PAGE> 5
(Exhibit 18(a))
GRADISON GROWTH TRUST
Power of Attorney of Trustees and Officers
The undersigned, an officer or Trustee, or both an officer and Trustee, of
Gradison Growth Trust, an Ohio business trust (the "Trust"), which has filed
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, as amended, and the provisions of the Investment Company
Act of 1940, as amended, a Registration Statement on Form N-1 or N-1A (which
together with any and all subsequent amendments, including post-effective
amendments, thereto is hereinafter called the "Registration Statement") for the
principal purpose of registering the public offering by the Trust of shares of
beneficial interest without par value of its series, hereby constitutes and
appoints Paul J. Weston, Donald E. Weston, Bradley E. Turner, Richard M.
Wachterman and Robert Zutz, and each of them, with full power of substitution or
resubstitution, the attorney or attorneys to execute and file on behalf of the
undersigned in his capacity as an officer and/or trustee of the Trust, the
Registration Statement as aforesaid, and any and all exhibits, applications and
other documents to be filed with the Securities and Exchange Commission
pertaining thereto, with full power and authority to do and perform any and all
acts and things whatsoever required or necessary to be done in the premises, as
fully to all intents and purposes as he could do if personally present, hereby
ratifying and approving the acts of said attorneys or any of them and any such
substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 11th day of
July, l995.
/S/ Julian Ball
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000720492
<NAME> GRADISON GROWTH TRUST
<SERIES>
<NUMBER> 3
<NAME> GRADISON-MCDONALD GROWTH & INCOME FUND
<MULTIPLIER> 1
<CURRENCY> U.S.DOLLARS
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> FEB-28-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 1,292,149
<INVESTMENTS-AT-VALUE> 1,299,361
<RECEIVABLES> 54,291
<ASSETS-OTHER> 67,018
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,420,670
<PAYABLE-FOR-SECURITIES> 189,530
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23,134
<TOTAL-LIABILITIES> 212,664
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,197,980
<SHARES-COMMON-STOCK> 79,531
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2,404
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 410
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,212
<NET-ASSETS> 1,208,006
<DIVIDEND-INCOME> 682
<INTEREST-INCOME> 1,722
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 2,404
<REALIZED-GAINS-CURRENT> 410
<APPREC-INCREASE-CURRENT> 7,212
<NET-CHANGE-FROM-OPS> 10,026
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 79,564
<NUMBER-OF-SHARES-REDEEMED> 33
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,208,006
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 382
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,157
<AVERAGE-NET-ASSETS> 670,389
<PER-SHARE-NAV-BEGIN> 15.00
<PER-SHARE-NII> 0.030
<PER-SHARE-GAIN-APPREC> 0.159
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.189
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
