AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 28, 1997
Registration No: 2-87775
811-4815
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 19 |X|
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 23 |X|
ULTRA SERIES FUND
(Exact Name of Registrant as Specified in Charter)
2000 Heritage Way, Waverly, Iowa 50677
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (319) 352-4090, ext. 2157
Name and complete address of agent for
service:
Barbara L. Secor, Esq.
CUNA Mutual Life Insurance Company
2000 Heritage Way
Waverly, Iowa 50677
It is proposed that this filing will become effective (check appropriate box):
|_| immediately upon filing pursuant to paragraph (b)
|_| on pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(1)
|X| on May 1, 1997 pursuant to paragraph (a)(1)
|_| 75 days after filing pursuant to paragraph (a)(2)
|_| on pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
|_| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Pursuant to Rule 24f-2, Registrant registered an indefinite amount of securities
under the Securities Act of 1933. The Rule 24f-2 Notice for Registrant's most
recent fiscal year was filed on February 18, 1997.
The index to attached exhibits is found following the signature pages in Part C
after page C-12.
===============================================================================
<PAGE>
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 FEE TABLES
3 FINANCIAL HIGHLIGHTS
4a THE ULTRA SERIES FUND; INVESTMENT OBJECTIVES
AND POLICIES
4b SPECIAL INVESTMENT TECHNIQUES,
4c INVESTMENT OBJECTIVES AND POLICIES
5 MANAGEMENT OF THE ULTRA SERIES FUND
5A See Annual Report
6 GENERAL INFORMATION
6h OFFER, PURCHASE AND REDEMPTION OF SHARES
7 OFFER, PURCHASE AND REDEMPTION OF SHARES
8 OFFER, PURCHASE AND REDEMPTION OF SHARES
9 N/A
Part B Statement of Additional Information Caption
10 Cover Page
11 TABLE OF CONTENTS
12 GENERAL INFORMATION
13 INVESTMENT PRACTICES;INVESTMENT LIMITATIONS;
PORTFOLIO TURNOVER
14 MANAGEMENT OF THE FUND
15 Substantial Shareholders; Beneficial Owners
16 THE INVESTMENT ADVISER
17 DISTRIBUTION PLAN AND AGREEMENT; BROKERAGE
18 See Prospectus
19 HOW SECURITIES ARE OFFERED
20 DIVIDENDS, DISTRIBUTION AND TAXES
21 HOW SECURITIES ARE OFFERED
22 CALCULATION OF YIELDS AND TOTAL RETURNS
23 FINANCIAL STATEMENTS
<PAGE>
Part A
THE PROSPECTUS
Ultra Series Fund PROSPECTUS
2000 Heritage Way, Waverly, Iowa 50677
(319) 352-4090 (800) 798-5500
MAY 1, 1997
The Ultra Series Fund is an investment company consisting of six separate
investment portfolios or funds (each, a "Fund") each of which has a different
investment objective(s). Each Fund is a diversified, open-end management
investment company, commonly known as a mutual fund. The Funds are available to
the public only through: (1) the purchase of certain individual variable life
insurance contracts or variable annuity contracts, (2) the purchase of certain
group variable annuity contracts by qualified pension and retirement plans, or
(3) the purchase of Class C shares of the Ultra Series Fund directly by
qualified pension and retirement plans. The six Funds are: Capital Appreciation
Stock, Growth and Income Stock, Balanced, Bond, Money Market and Treasury 2000.
There can be no assurance that the investment objective of any Fund will be
achieved. Investment experience of each Fund will vary.
When used in connection with individual variable annuity contracts or variable
life insurance contracts, this Prospectus must be accompanied by prospectuses
for those contracts. When distributed to qualified pension and retirement plans
or to participants of such plans, this Prospectus may be accompanied by
disclosure materials relating to such plans which should be read in conjunction
with this Prospectus.
This Prospectus should be read and retained for future reference. It sets forth
concise information that a prospective investor should know before investing.
Additional information about the Ultra Series Fund is contained in a Statement
of Additional Information dated May 1, 1997, as supplemented from time to time,
available without charge from the address shown below. The Statement of
Additional Information is incorporated by reference into this Prospectus and has
been filed with the Securities and Exchange Commission.
UNLIKE CREDIT UNION AND BANK ACCOUNTS, THE VALUE OF AN INVESTMENT IN THE ULTRA
SERIES FUND IS NOT INSURED. SHARES OF THE ULTRA SERIES FUND ARE NOT A DEPOSIT
OF, OR GUARANTEED BY, ANY BANK OR CREDIT UNION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR GOVERNMENT AGENCY. AN INVESTMENT
INVOLVES CERTAIN RISKS INCLUDING A LOSS OF PRINCIPAL.
AN INVESTMENT IN THE MONEY MARKET SERIES IS NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE MONEY MARKET SERIES WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Distributed by:
CUNA BROKERAGE SERVICES, INC.
2000 Heritage Way
Waverly, IA 50677
(319) 352-4090
(800) 798-5500
<PAGE>
TABLE OF CONTENTS
PAGE
FEE TABLES...................................................................1
FINANCIAL HIGHLIGHTS.........................................................2
THE ULTRA SERIES FUND........................................................8
INVESTMENT OBJECTIVES AND POLICIES...........................................8
Capital Appreciation Stock Fund...........................................9
Growth and Income Stock Fund..............................................9
Balanced Fund.............................................................9
Bond Fund................................................................10
Money Market Fund........................................................10
Treasury 2000 Fund.......................................................11
SPECIAL INVESTMENT TECHNIQUES...............................................12
Investment Techniques and Instruments Authorized But Not Used............12
Repurchase Agreements....................................................12
Borrowing................................................................13
Foreign Securities.......................................................13
MANAGEMENT OF THE ULTRA SERIES FUND.........................................13
The Trustees.............................................................13
CUNA Mutual Life Insurance Company.......................................13
The Investment Adviser...................................................14
The Management Agreement.................................................14
OFFER, PURCHASE AND REDEMPTION OF SHARES....................................14
GENERAL INFORMATION.........................................................16
Shareholder Rights.......................................................16
Inquiries................................................................16
Dividends................................................................16
The Ultra Series Fund Performance........................................16
Tax Status...............................................................17
Net Asset Value..........................................................18
APPENDIX A..................................................................19
<PAGE>
<TABLE>
<CAPTION>
FEE TABLES
<S> <C> <C>
Shareholder Transaction Expenses Class C Class Z
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)......................None None
Maximum Deferred Sales Load......................................................................None None
Maximum Sales Load Imposed on Reinvested Dividend (and other Distributions)......................None None
Redemption Fees (as a percentage of amount redeemed, if applicable)..............................None None
Exchange Fee.....................................................................................None None
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees
Capital Appreciation Stock Fund.........................................................0.80% 0.80%
Growth and Income Stock Fund............................................................0.60% 0.60%
Balanced Fund...........................................................................0.70% 0.70%
Bond Fund...............................................................................0.55% 0.55%
Money Market Fund.......................................................................0.45% 0.45%
Treasury 2000 Fund......................................................................0.45% 0.45%
12b-1 Fees.......................................................................................0.25% 0.00%
Other Expenses
Capital Appreciation Stock Fund.........................................................0.01% 0.01%
Growth and Income Stock Fund............................................................0.01% 0.01%
Balanced Fund...........................................................................0.01% 0.01%
Bond Fund...............................................................................0.01% 0.01%
Money Market Fund.......................................................................0.01% 0.01%
Treasury 2000 Fund......................................................................None None
Total Fund Operating Expenses
Capital Appreciation Stock Fund.........................................................0.81% 0.81%
Growth and Income Stock Fund............................................................0.61% 0.61%
Balanced Fund...........................................................................0.71% 0.71%
Bond Fund...............................................................................0.56% 0.56%
Money Market Fund.......................................................................0.46% 0.46%
Treasury 2000 Fund......................................................................0.45% 0.45%
Example
Investors would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each period:
1 year 3 year 5 year 10 year
Class C Class Z Class C Class Z Class C Class Z Class C Class Z
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Appreciation Stock Fund $11 $8 $34 $26 $58 $45 $129 $100
Growth and Income Stock Fund 9 6 27 20 48 34 106 76
Balanced Fund 10 7 31 23 53 40 118 88
Bond Fund 8 6 26 18 45 31 100 70
Money Market Fund 7 5 23 15 40 26 88 58
Treasury 2000 Fund 7 5 22 14 39 25 87 57
Investors would pay the following expenses on the same investment, assuming no
redemption:
1 year 3 year 5 year 10 year
Class C Class Z Class C Class Z Class C Class Z Class C Class Z
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Appreciation Stock Fund $11 $8 $34 $26 $58 $45 $129 $100
Growth and Income Stock Fund 9 6 27 20 48 34 106 76
Balanced Fund 10 7 31 23 53 40 118 88
Bond Fund 8 6 26 18 45 31 100 70
Money Market Fund 7 5 23 15 40 26 88 58
Treasury 2000 Fund 7 5 22 14 39 25 87 57
The Fee Tables provided above are included to assist the investor in
understanding the various costs and expenses that an investor in the Ultra
Series Fund will bear directly or indirectly.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
The highlights for the years 1987 through 1996 have been audited by KPMG Peat
Marwick, LLP, independent auditors. These highlights should be read in
conjunction with the financial statements and related notes and the Auditors'
Report in the Statement of Additional Information.
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
------------------------- CAPITAL APPRECIATION STOCK FUND ---------------------------
(For a share outstanding throughout the period): 1996 1995 1994*
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $12.51 $9.97 $10.00
Income from Investment Operations
Net Investment Income .13 .14 0.16
Net Realized and Unrealized Gain (Loss)
on Investments 2.55 2.91 0.37
Total from Investment Operations 2.68 3.05 0.53
Distributions
Distributions from Net Investment Income (.13) (.14) (0.15)
Distributions from Realized Capital Gains (.46) (.37) (0.41)
Total Distributions (.59) (.51) (0.56)
Net Asset Value, End of Period $14.60 $12.51 $9.97
Total Return** 21.44% 30.75% 5.44%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $98,674 $38,117 $9,449
Ratio of Expenses to Average Net Assets*** 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets*** 0.96% 1.37% 1.55%
Portfolio Turnover Rate 49.77% 61.32% 65.81%
Average Commission Rate $0.06 $0.06
<FN>
*1994 data is for period January 3, 1994 (date of initial activity) through
December 31, 1994.
**These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
***During the periods shown, CUNA Mutual Life Insurance Company and its
affiliates absorbed all expenses in excess of .65% of the average net assets of
the Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond and
Money Market Funds under the terms of an Expense Reimbursement Agreement between
the Ultra Series Fund and CUNA Mutual Life Insurance Company. Annually, the Fund
and CUNA Mutual Life Insurance Company have renewed the Expense Reimbursement
Agreement. If the Expense Reimbursement Agreement had not been in effect and if
the full expenses allowable under the Investment Advisory Agreement between the
Ultra Series Fund and the Investment Adviser had been charged, the amounts that
would have been charged and the ratios that would have resulted are:
Capital Appreciation Stock Fund 1996 1995 1994
---- ---- ----
Amount Charged $440,999 $156,184 $42,519
Ratio of Expenses to
Average Net Assets 0.66% 0.75% 0.85%
Ratio of Net Investment
Income to Average Net Assets 0.95% 1.25% 1.35%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
----------------------- GROWTH AND INCOME STOCK FUND -----------------------
(For a share outstanding throughout
the period): 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $18.20 $15.06 $15.51 $15.49 $15.21 $12.75 $14.13 $12.15 $10.74 $11.97
Income from Investment Operations
Net Investment Income 0.34 .37 0.32 0.29 0.32 0.33 0.44 0.33 0.31 0.38
Net Realized and Unrealized Gain (Loss)
on Investments 3.93 4.37 (0.04) 1.87 0.90 2.95 (0.73) 2.61 1.47 (0.17)
Total from Investment Operations 4.27 4.74 0.28 2.16 1.22 3.29 (0.29) 2.94 1.77 0.21
Distributions
Distributions from Net Investment
Income (0.34) (.37) (0.32) (0.29) (0.32) (0.34) (0.44) (0.38) (0.33) (0.50)
Distributions from Realized Capital
Gains (0.81) (1.23) (0.40) (1.85) (0.62) (0.49) (0.66) (0.58) (0.03) (0.84)
Total Distributions (1.15) (1.60) (0.73) (2.14) (0.94) (0.83) (1.10) (0.96) (0.36) (1.44)
Net Asset Value, End of Period $21.32 $18.20 $15.06 $15.51 $15.49 $15.21 $12.75 $14.13 $12.15 $10.74
Total Return* 22.02% 31.75% 1.42% 13.77% 7.66% 25.66% -1.98% 24.37% 16.62% 1.33%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) $232,841 $102,138 $48,913 $32,468 $24,382 $17,101 $9,258 $7,932 $5,337 $4,342
Ratio of Expenses to Average
Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to
Average Net Assets** 1.78% 2.28% 2.19% 1.84% 2.11% 2.58% 3.33% 2.83% 2.75% 3.34%
Portfolio Turnover Rate 40.55% 57.80% 45.36% 56.79% 29.67% 27.90% 32.02% 35.55% 26.22% 21.95%
Average Commission Rate $0.06 $0.06
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
**During the periods shown, prior to 1996, CUNA Mutual Life Insurance Company
and its affiliates absorbed all expenses in excess of .65% of the average net
assets of the Capital Appreciation Stock, Growth and Income Stock, Balanced,
Bond and Money Market Funds under the terms of an Expense Reimbursement
Agreement between the Ultra Series Fund and CUNA Mutual Life Insurance Company.
Annually, the Fund and CUNA Mutual Life Insurance Company have renewed the
Expense Reimbursement Agreement. If the Expense Reimbursement Agreement had not
been in effect and if the full expenses allowable under the Investment Advisory
Agreement between the Ultra Series Fund and the Investment Adviser had been
charged, the amounts that would have been charged and the ratios that would have
resulted are:
Growth and Income Stock Fund 1995 1994 1993 1992 1991 1990 1989 1988 1987
Amount Charged $491,168 $281,760 $210,141 $151,195 $90,028 $64,759 $54,773 $53,742 $50,913
Ratio of Expenses to
Average Net Assets 0.69% 0.70% 0.73% 0.74% 0.74% 0.77% 0.84% 1.10% 1.10%
Ratio of Net Investment
Income to Average Net Assets 2.23% 2.14% 1.76% 2.02% 2.49% 3.21% 2.64% 2.30% 2.89%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
------------------------------------- BALANCED FUND -------------------------------------
(For a share outstanding throughout
the period): ....................... 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.63 $12.90 $13.70 $13.54 $13.44 $12.11 $12.59 $11.47 $10.98 $11.50
Income from Investment Operations
Net Investment Income ............. 0.58 .55 0.52 0.50 0.55 0.62 0.74 0.61 0.60 0.55
Net Realized and Unrealized Gain
(Loss)on Investments ............. 0.98 2.29 (0.56) 0.95 0.40 1.56 (0.29) 1.42 0.57 0.10
Total from Investment Operations ... 1.56 2.84 (0.04) 1.45 0.95 2.18 .46 2.03 1.18 0.65
Distributions
Distributions from Net Investment
Income ......................... (0.58) (.55) (0.51) (0.50) (0.55) (0.63) (0.74) (0.71) (0.68) (0.74)
Distributions from Realized Capital
Gains .......................... (0.32) (0.56) (0.25) (0.79) (0.30) (0.22) (0.20) (0.20) 0.00 (0.38)
Total Distributions ................ (0.90) (1.11) (0.76) (1.29) (0.85) (0.85) (0.94) (0.91) (0.68) (1.17)
Net Asset Value, End of Period ..... $15.29 $14.63 $12.90 $13.70 $13.54 $13.44 $12.11 $12.59 $11.47 $10.98
Total Return* ...................... 10.79% 22.27% -0.46% 10.47% 6.85% 18.53% 3.75% 18.03% 10.87% 5.58%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) ................... $194,725 $110,969 $67,468 $54,363 $41,604 $29,539 $19,964 $15,416 $10,271 $7,563
Ratio of Expenses to Average Net
Assets** ......................... 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to
Average Net Assets** ............. 3.91% 4.03% 4.00% 3.62% 4.10% 4.98% 6.23% 5.97% 6.02% 5.85%
Portfolio Turnover Rate ............ 33.48% 36.68% 28.53% 28.71% 19.23% 13.26% 27.07% 30.64% 11.35% 20.18%
Average Commission Rate ............ $0.06 $0.06
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to 1996, CUNA Mutual Life Insurance Company
and its affiliates absorbed all expenses in excess of .65% of the average net
assets of the Capital Appreciation Stock, Growth and Income Stock, Balanced,
Bond and Money Market Funds under the terms of an Expense Reimbursement
Agreement between the Ultra Series Fund and CUNA Mutual Life Insurance Company.
Annually, the Fund and CUNA Mutual Life Insurance Company have renewed the
Expense Reimbursement Agreement. If the Expense Reimbursement Agreement had not
been in effect and if the full expenses allowable under the Investment Advisory
Agreement between the Ultra Series Fund and the Investment Adviser had been
charged, the amounts that would have been charged and the ratios that would have
resulted are:
Balanced Fund .............. 1995 1994 1993 1992 1991 1990 1989 1988 1987
Amount Charged ............. $598,507 $417,750 $362,284 $254,326 $172,438 $132,028 $102,858 $81,246 $59,847
Ratio of Expenses to
Average Net Assets ......... 0.68% 0.70% 0.74% 0.72% 0.71% 0.74% 0.82% 0.91% 0.93%
Ratio of Net Investment
Income to Average Net Assets 4.00% 3.95% 3.53% 4.03% 4.92% 6.14% 5.79% 5.77% 5.57%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
----------------------------------------- BOND FUND -----------------------------------------
(For a share outstanding throughout
the period): 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.63 $9.67 $10.58 $10.32 $10.37 $9.75 $9.93 $9.70 $9.79 $10.47
Income from Investment Operations
Net Investment Income 0.65 0.60 0.59 0.64 0.69 0.77 0.89 0.87 0.80 0.76
Net Realized and Unrealized Gain
(Loss)on Investments (0.28) 0.96 (0.90) 0.28 (0.03) 0.62 (0.18) 0.23 (0.03) (0.46)
Total from Investment Operations 0.37 1.56 (0.31) 0.92 0.66 1.39 0.71 1.11 0.77 0.30
Distributions
Distributions from Net Investment
Income (0.64) (0.59) (0.59) (0.65) (0.70) (0.77) (0.89) (0.88) (0.86) (0.98)
Distributions from Realized Capital
Gains (0.03) (0.01) (0.01) (0.01) (0.01) 0.00 0.00 0.00 0.00 (0.00)
Total Distributions (0.67) (0.60) (0.60) (0.66) (0.71) (0.77) (0.89) (0.88) (0.86) (0.98)
Net Asset Value, End of Period $10.33 $10.63 $9.67 $10.58 $10.32 $10.37 $9.75 $9.93 $9.70 $9.79
Total Return* 2.86% 16.37% -3.06% 8.87% 6.47% 14.70% 7.41% 11.74% 8.05% 3.06%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) $26,572 $13,725 $7,867 $6,297 $5,244 $3,975 $3,399 $3,315 $3,401 $3,029
Ratio of Expenses to Average
Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to
Average Net Assets** 6.25% 6.08% 6.03% 5.99% 6.83% 7.74% 8.87% 8.63% 8.50% 8.20%
Portfolio Turnover Rate 25.67% 14.74% 11.97% 12.23% 13.58% 8.74% 46.09% 24.47% 4.31% 26.23%
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to 1996, CUNA Mutual Life Insurance Company
and its affiliates absorbed all expenses in excess of .65% of the average net
assets of the Capital Appreciation Stock, Growth and Income Stock, Balanced,
Bond and Money Market Funds under the terms of an Expense Reimbursement
Agreement between the Ultra Series Fund and CUNA Mutual Life Insurance
Company. Annually, the Fund and CUNA Mutual Life Insurance Company have
renewed the Expense Reimbursement Agreement. If the Expense Reimbursement
Agreement had not been in effect and if the full expenses allowable under the
Investment Advisory Agreement between the Ultra Series Fund and the
Investment Adviser had been charged, the amounts that would have been charged
and the ratios that would have resulted are:
Bond Fund 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Amount Charged $134,222 $70,290 $48,651 $44,293 $33,269 $27,311 $25,651 $28,139 $43,266 $41,968
Ratio of Expenses to
Average Net Assets 0.67% 0.68% 0.70% 0.75% 0.75% 0.75% 0.77% 0.83% 1.31% 1.47%
Ratio of Net Investment
Income to Average Net Assets 6.23% 6.04% 5.98% 5.89% 6.74% 7.65% 8.75% 8.45% 7.84% 7.39%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
-------------------------------- MONEY MARKET FUND --------------------------------
(For a share outstanding throughout
the period): 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations
Net Investment Income 0.05 0.05 0.03 0.03 0.03 0.05 0.08 0.08 0.07 0.06
Net Realized and Unrealized Gain
(Loss)on Investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total from Investment Operations 0.05 0.05 0.03 0.03 0.03 0.05 0.08 0.08 0.07 0.06
Distributions
Distributions from Net Investment
Income (0.05) (0.05) (0.03) (0.03) (0.03) (0.05) (0.08) (0.08) (0.07) (0.06)
Distributions from Realized Capital
Gains (0.00) (0.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Distributions (0.05) (0.05) (0.03) (0.03) (0.03) (0.05) (0.08) (0.08) (0.07) (0.06)
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total Return* 5.17% 5.21% 3.34% 2.86% 3.05% 5.36% 7.53% 8.39% 6.91% 6.14%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) $21,011 $11,374 $7,799 $4,749 $5,097 $5,082 $4,794 $4,420 $2,541 $2,341
Ratio of Expenses to Average
Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to
Average Net Assets** 4.74% 5.17% 3.66% 2.43% 3.05% 5.36% 7.53% 8.39% 6.91% 6.14%
Portfolio Turnover Rate -- -- -- -- -- -- -- -- -- --
For the Money Market Fund, the "seven-day average" yield for the seven days
ended December 31, 1995, was 4.93% and the "effective" yield for that period was
5.05%.
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to 1996, CUNA Mutual Life Insurance Company
and its affiliates absorbed all expenses in excess of .65% of the average net
assets of the Capital Appreciation Stock, Growth and Income Stock, Balanced,
Bond and Money Market Funds under the terms of an Expense Reimbursement
Agreement between the Ultra Series Fund and CUNA Mutual Life Insurance
Company. Annually, the Fund and CUNA Mutual Life Insurance Company have
renewed the Expense Reimbursement Agreement. If the Expense Reimbursement
Agreement had not been in effect and if the full expenses allowable under the
Investment Advisory Agreement between the Ultra Series Fund and the
Investment Adviser had been charged, the amounts that would have been charged
and the ratios that would have resulted are:
Money Market Fund 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
---- ---- ---- ---- ---- ---------------------------------------
Amount Charged $117,520 $70,062 $44,391 $44,836 $39,068 $38,030 $34,514 $28,647 $37,340 $39,358
Ratio of Expenses to
Average Net Assets 0.67% 0.73% 0.78% 0.77% 0.75% 0.73% 0.77% 0.87% 1.49% 1.68%
Ratio of Net Investment
Income to Average Net Assets 4.72% 5.09% 3.53% 2.31% 2.96% 5.29% 7.42% 8.17% 6.07% 5.11%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
---------------------------- TREASURY 2000 FUND ----------------------------
(For a share outstanding throughout the period) 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $8.47 $7.00 $7.53 $6.53 $6.04 $5.02 $4.69 $3.85 $3.62
Income from Investment Operations
Net Investment Income 0.58 0.58 0.53 0.48 0.45 0.41 0.38 0.34 0.14
Net Realized and Unrealized Gain (Loss)
on Investments (0.41) 0.89 (1.06) 0.52 0.04 0.61 (0.05) 0.50 0.09
Total from Investment Operations 0.17 1.47 (0.53) 1.00 0.49 1.02 0.33 0.84 0.23
Distributions
Distributions from Net Investment Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from Realized Capital Gains 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Distributions 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net Asset Value, End of Period $8.64 $8.47 $7.00 $7.53 $6.53 $6.04 $5.02 $4.69 $3.85
Total Return* 2.10% 20.99% -7.12% 15.43% 8.01% 20.37% 7.12% 21.79% 6.28%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,585 $1,545 $1,272 $1,363 $1,176 $1,084 $987 $834 $681
Ratio of Expenses to Average Net Assets 0.45% 0.45% 0.45% 0.45% 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of Net Investment Income to Average
Net Assets 7.03% 7.40% 7.50% 6.69% 7.26% 7.76% 8.25% 8.02% 8.70%
Portfolio Turnover Rate -- -- -- -- -- -- -- -- --
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
</FN>
</TABLE>
<PAGE>
THE ULTRA SERIES FUND
The Ultra Series Fund was established as a Massachusetts Business Trust under a
Declaration of Trust dated September 16, 1983. The Ultra Series Fund is a series
fund with six separate investment portfolios, each of which is a diversified,
open-end management investment company, in effect, a separate mutual fund
("Fund"). The Ultra Series Fund issues a separate series of shares of beneficial
interest for each Fund representing fractional undivided interests in that Fund.
An investor in a Fund is entitled to a pro-rata share of all dividends and
distributions arising from the net income and capital gains on the investments
of that Fund. An investor also shares in any losses of that Fund. The six Funds
are: Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, Money
Market, and Treasury 2000. In the future, the number of Funds may change. The
Declaration of Trust permits the Ultra Series Fund to issue an unlimited number
of shares of each series and to sub-divide the shares of each series into two or
more classes. Currently, each series of shares is divided into Class C and Class
Z shares. Class C and Class Z shares are identical except for the fact that the
net asset value of each Class C share reflects a distribution fee assessed
against the assets of each Fund supporting Class C shares pursuant to a
distribution plan adopted in accordance with Rule 12b-1 under the Investment
Company Act of 1940 (the "Act"). (See FEE TABLES.)
The Ultra Series Fund offers its shares to separate accounts of CUNA Mutual Life
Insurance Company (the "Company") or of its "permanent affiliate," CUNA Mutual
Insurance Society ("CUNA Mutual") and subsidiaries and affiliates of the Company
and CUNA Mutual (together, the "CUNA Mutual Group") as well as to separate
accounts of other unaffiliated life insurance companies as funding vehicles for
certain individual variable annuity contracts, group variable annuity contracts
and individual variable life insurance contracts. Most such separate accounts
are each, like the Ultra Series Fund, registered as investment companies with
the Securities and Exchange Commission ("SEC"), and a separate prospectus, which
accompanies this Prospectus, describes each such separate account and its
related contract. Some insurance company separate accounts supporting group
variable annuity contracts sold solely to qualified pension and retirement
plans, however, are not investment companies and are not registered with the SEC
as investment companies nor are interests in the separate account registered as
securities under the federal securities laws. Although some disclosure documents
relating to such group variable annuity contracts (and/or to the plan purchasing
the contracts) may be provided to the plan purchasing the contracts or to
participants in such a plan, no prospectus exists for the contracts. The Ultra
Series Fund also may offer its shares directly to qualified pension and
retirement plans. The Ultra Series Fund generally offers Class Z shares to
separate accounts of CUNA Mutual Group insurance companies and to qualified
pension and retirement plans of CUNA Mutual Group companies and offers Class C
shares to separate accounts of insurance companies and to qualified pension and
retirements plans that are not affiliated with CUNA Mutual Group. The Ultra
Series Fund does not offer its shares directly to the general public.
Because shares of the Ultra Series Fund are sold to the CUNA Mutual Group
separate accounts, qualified retirement plans sponsored by CUNA Mutual Group,
unaffiliated insurance company separate accounts and qualified retirement plans,
it is possible that material conflicts could arise among and between the
interests of: (1) variable annuity contract owners (or participants under group
variable annuity contracts) and variable life insurance contract owners, or (2)
owners of variable annuity and variable life insurance contracts of affiliated
and unaffiliated insurance companies and (3) participants in affiliated and
unaffiliated qualified retirement plans. Such material conflicts could include,
for example, differences in federal tax treatment of variable annuity contracts
versus variable life insurance contracts. The Ultra Series Fund does not
currently foresee any disadvantage to one category of investors vis-a-vis
another arising from the fact that the Ultra Series Fund's shares support
different types of variable insurance contracts. However, the Ultra Series
Fund's Board of Trustees will continuously monitor events to identify any
potential material conflicts that may arise between the interests of different
categories or classes of investors and to determine what action, if any, should
be taken to resolve such conflicts. Such action may include redeeming shares of
the Ultra Series Fund held by one or more of the separate accounts or qualified
retirement plans involved in any material irreconcilable conflict.
INVESTMENT OBJECTIVES AND POLICIES
Each Fund has one or more investment objectives and related investment policies
and uses various investment techniques to pursue these objectives and policies.
There can be no assurance that any of the Funds will achieve its investment
objective or objectives. Investors should not consider any one Fund alone to be
a complete investment program. All of the Funds are subject to the risk of
changing economic conditions, as well as the risk inherent in the ability of the
Fund's investment adviser to make changes in the portfolio composition of the
Fund in anticipation of changes in economic, business, and financial conditions.
As with any security, a risk of loss is inherent in an investment in the shares
of any of the Funds.
The different types of securities, investments, and investment techniques used
by each Fund all have attendant risks of varying degrees. For example, with
respect to equity securities, there can be no assurance of capital appreciation
and there is a substantial risk of decline. With respect to debt securities,
there exists the risk that the issuer of a security may not be able to meet its
obligations on interest or principal payments at the time required by the
instrument. In addition, the value of debt instruments generally rises and falls
inversely with prevailing interest rates.
Certain types of investments and investment techniques common to one or more
Funds are described in greater detail, including the risks of each, under
SPECIAL INVESTMENT TECHNIQUES in this Prospectus or in INVESTMENT PRACTICES in
the Statement of Additional Information. The Funds are also subject to certain
investment restrictions that are described under the caption INVESTMENT
LIMITATIONS in the Statement of Additional Information.
The investment objective or objectives of each Fund as well as the investment
restrictions of each Fund are fundamental and may not be changed without the
approval of a majority of the votes attributable to the outstanding shares of
that Fund. (See INVESTMENT LIMITATIONS in the Statement of Additional
Information.) Investment policies are not fundamental and may be changed by the
Ultra Series Fund's Board of Trustees without shareholder approval.
Capital Appreciation Stock Fund
The primary investment objective of the Capital Appreciation Stock Fund is
long-term capital growth. Due to its more aggressive focus on capital growth and
lack of emphasis on current income, this Fund will typically experience greater
variability of returns over time than the Growth and Income Stock Fund. A
characteristic common to most stocks owned will be an attractive valuation
relative to the expected level and certainty of the issuing company's future
earnings. Relative to the Growth and Income Stock Fund, the Capital Appreciation
Stock Fund will include some smaller, less developed issuers and some companies
undergoing more significant fundamental changes in their markets or operations.
The Fund will diversify its holdings among various industries and among
companies within those industries but will often be less diversified than the
Growth and Income Stock Fund. The combination of these factors introduces
greater investment risk than the Growth and Income Stock Fund, but can also
provide higher long-term returns than the returns typically available from less
variable investments. When, in the opinion of management, current cash needs or
market or economic conditions warrant, the Fund may maintain a portion of its
assets in cash or cash equivalents of the types permitted for the Money Market
Fund.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities, invest in restricted securities, invest in foreign securities, and
invest in put and call options, stock index futures and related options. The
Fund may invest up to 25% of assets in American Depository Receipts ("ADRs").
These practices are described in SPECIAL INVESTMENT TECHNIQUES or in the
Statement of Additional Information.
Growth and Income Stock Fund
The primary investment objective of the Growth and Income Stock Fund is
long-term capital growth, with income as a secondary consideration. The Fund
will focus on stocks of companies with financial and market strength and a
long-term record of performance. Primarily through ownership of a diversified
portfolio of common stocks and securities convertible into common stocks, the
Fund will seek a rate of return in excess of returns typically available from
less variable investment alternatives. A characteristic common to most stocks
owned will be an attractive valuation relative to the issuing company's apparent
strength and earnings capability. The Fund will diversify its holdings among
various industries and among companies within those industries. When, in the
opinion of management, current cash needs or market or economic conditions
warrant, the Fund may maintain a portion of its assets in cash or cash
equivalents of the types permitted for the Money Market Fund.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities, invest in restricted securities, invest in foreign securities, and
invest in put and call options, stock index futures and related options. The
Fund may invest up to 25% of assets in ADRs. These practices are described in
SPECIAL INVESTMENT TECHNIQUES or in the Statement of Additional Information.
Balanced Fund
The investment objective of the Balanced Fund is to achieve a high total return
through the combination of income and capital appreciation. Total returns are
expected to be less variable than those of the Capital Appreciation Stock Fund
and the Growth and Income Stock Fund but more variable than the Bond Fund. The
Balanced Fund invests in a broadly diversified list of securities including
common stocks, bonds and money market instruments. The percentage of assets
invested in equity securities, fixed income securities and money market
instruments may vary somewhat depending upon management's judgment of the
relative attractiveness of each sector and anticipated cash needs of the Fund.
Generally, however, common stocks will constitute 60% to 40% of Fund's assets,
bonds will constitute 40% to 60% of Fund's assets and money market instruments
may constitute up to 20% of Fund's assets. (See Money Market Fund for
description of money market instruments; see Bond Fund for description of bonds;
see Capital Appreciation Stock Fund and Growth and Income Stock Fund for
description of equity securities.)
Debt securities invested in by the Fund will be affected by general changes in
interest rates, resulting in increases or decreases in the value of these
securities. Market prices of debt securities tend to rise when interest rates
fall, and fall when interest rates rise. Issuers of debt securities may not be
able to meet their interest or principal payment obligations when due. The
ability of the portfolio to realize interest under repurchase agreements and
pursuant to loans of the Fund's securities is dependent on the ability of the
seller or borrower, as the case may be, to perform its obligations to the Fund.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities, invest in restricted securities, invest in foreign securities,
invest in put and call options, financial futures, stock index futures and
related options. The Fund may invest up to 15% of assets in ADRs. These
practices are described in the SPECIAL INVESTMENT TECHNIQUES or in the Statement
of Additional Information.
Bond Fund
The primary investment objective of the Bond Fund is to generate a high level of
current income, consistent with the prudent limitation of investment risk,
through investment in a diversified portfolio of fixed-income securities with
maturities of up to 30 years. To keep current income relatively stable and to
limit share price volatility, the portfolio will emphasize investment grade,
primarily intermediate term securities. Pursuit of these objectives can be
expected to result over time in a lower average return than in the Capital
Appreciation Stock Fund, Growth and Income Stock Fund or Balanced Fund. The
assets of the Fund may also be held in cash or temporarily invested in
short-term investments when, in the opinion of management, current liquidity
needs or market or economic conditions warrant. The Fund may invest in the
following instruments:
Corporate Debt Securities: Issued by domestic and foreign corporations
which have a rating within the four highest categories as determined by
Standard & Poor's Corporation and/or Moody's Investors Service, Inc.
The ratings are described in the Statement of Additional Information.
U.S. Government Debt Securities: Issued or guaranteed by the U.S.
Government or its agencies or instrumentalities (See Money Market Fund
for a description of U.S. Government securities).
Foreign Government Debt Securities: Issued or guaranteed by a foreign
government or its agencies or instrumentalities, payable in U.S.
dollars, which have a rating within the four highest categories as
established by Standard & Poor's Corporation and/or Moody's Investors
Service, Inc.
Other Issuer Debt Securities: Issued or guaranteed by corporations,
banking institutions, and others which, although not rated by a
national rating service, are considered by the Investment Adviser to
have an investment quality equivalent to the four highest categories as
determined by Standard and Poor's Corporation and/or Moody's Investors
Service, Inc.
Cash or Cash Equivalents: Of the types permitted for the Money Market
Fund.
The Bond Fund will be affected by general changes in interest rates resulting in
increases or decreases in the value of the Fund's securities. Market prices of
debt securities tend to rise when interest rates fall and fall when interest
rates rise. Issuers of debt securities may not be able to meet their interest or
principal payment obligations when due. The ability of the Fund to realize
interest under repurchase agreements and pursuant to loans of the Fund's
securities is dependent on the ability of the seller or borrower, as the case
may be, to perform its obligation to the Fund.
The Bond Fund currently invests no more than 5% of its net assets in corporate
or foreign government debt securities which are not in the four highest
categories as rated by Standard & Poor's Corporation or Moody's Investors
Service, Inc.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities, invest in restricted securities, invest in foreign securities,
invest in put and call options, financial futures, and related options. These
practices are described in SPECIAL INVESTMENT TECHNIQUES or in the Statement of
Additional Information.
Money Market Fund
The investment objective of the Money Market Fund is to seek the highest current
income available from money market instruments consistent with the preservation
of capital and liquidity. The Fund will maintain a dollar-weighted average
portfolio maturity which does not exceed 90 days. The Fund will purchase
instruments maturing in twelve months or less from the date of purchase.
The Fund will purchase instruments that meet one of the following quality
standards:
1. Securities that at the time of purchase are rated in the highest rating
category for short-term debt obligations by at least two nationally
recognized statistical rating organizations;
2. Unrated securities that at the time of purchase the Investment Adviser
determines that if they had been rated would have been rated in the
highest rating category for short-term debt obligations by at least two
nationally recognized statistical rating organizations; or
3. Securities that at the time of issuance were long-term securities but
that at the time of purchase have a remaining maturity of less than one
year and whose issuer has received with respect to a class of
short-term debt obligations (or any security within that class) that
now is comparable in priority and security with the security to be
purchased, the highest rating category for short-term debt obligations
from at least two nationally recognized statistical rating
organizations.
The Fund may invest in the following instruments meeting the above maturity and
quality standards:
U.S. Government Obligations: U.S. Government securities include, but
are not limited to: direct obligations of the U.S. Treasury such as
U.S. Treasury bills, notes and bonds, and notes, bonds, and discount
notes of U.S. Government instrumentalities or agencies, such as the
Federal Land Bank, Bank for Cooperatives, Federal Intermediate Credit
Bank, Federal Home Loan Bank, Farmers Home Administration and Federal
National Mortgage Association. The Fund may invest in securities issued
or guaranteed by any of the foregoing entities or by any other agency
or instrumentality established or sponsored by the U.S. Government.
Some obligations issued or guaranteed by government agencies or
instrumentalities of the U.S. Government are backed by the full faith
and credit of the U.S. Government, such as U.S. Treasury bills; others
are backed by the right of the issuer to borrow from the U.S. Treasury
or are backed by the credit of the agency or instrumentality issuing
the obligation. No assurance can be given that the U.S. Government
would provide financial support to U.S. Government-sponsored
instrumentalities because it is not obligated to do so.
Commercial Paper: Corporations issue these unsecured promissory notes
to finance their short-term credit needs.
Corporate Obligations: Corporations issue these bonds and notes to
finance long-term credit needs. The Fund only invests in corporate
obligations which have a maturity when purchased of one year or less.
Bank Obligations: The Fund may invest in the following obligations
issued by banks subject to regulation by the U.S. Government and having
total assets of $1 billion or more: certificates of deposit, time
deposits, bankers' acceptances. The Fund may also invest in
certificates of deposit of savings institutions regulated by the U.S.
Government and having total assets of $1 billion or more. The Fund may
invest in the securities of foreign branches of U.S. banks, such as
negotiable certificates of deposit ("Eurodollar CDs"), and may invest
in foreign securities. All such securities must be payable in U.S.
dollars. U.S. dollar denominated obligations of foreign branches of
U.S. banks and U.S. branches of foreign banks are not insured by the
Federal Deposit Insurance Corporation. (See SPECIAL INVESTMENT
TECHNIQUES.)
Certificates of Deposit of Smaller Banks and Savings Institutions: The
Fund may invest in certificates of deposit issued by banks and savings
institutions with total assets of less than $1 billion provided they
are fully insured in principal amount, but not as to interest, by the
Federal Deposit Insurance Corporation, or the National Credit Union
Share Insurance Fund. In determining whether and to what extent such
securities will be acquired by the Fund, the Investment Adviser will
consider factors such as yield, availability of a resale market for
certificates of deposit of small institutions, and the effect
investments in these securities may have on the Fund's overall
liquidity.
Although the Fund seeks to maintain a Net Asset Value of $1 per share for
purposes of purchases and redemptions, there can be no assurance that the Fund
will be able to maintain a stable Net Asset Value of $1 per share. The Fund will
be affected by general changes in interest rates resulting in increases or
decreases in the value of the obligations held by the Fund. The values of the
securities in the portfolio can be expected to vary inversely to the changes in
prevailing interest rates. Thus, if interest rates have increased from the time
a security was purchased, such security, if sold, might be sold at a price less
than its purchase cost. Similarly, if interest rates have declined from the time
a security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was held to
maturity, no loss or gain would normally be realized as a result of these
fluctuations. Redemptions of shares could require the sale of investments at a
time when such a sale might not otherwise be desirable. The ability of the other
party to the transaction to perform its obligations to the Fund may determine
whether the Fund will receive the principal invested and the interest due.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may invest in foreign
securities. These practices are described in SPECIAL INVESTMENT TECHNIQUES.
Treasury 2000 Fund
The investment objective of the Treasury 2000 Fund is to provide safety of
capital and a relatively predictable payout upon portfolio maturity, primarily
by investing in Stripped Treasury Securities. Stripped Treasury Securities
include U.S. Treasury debt obligations originally issued as bearer bonds which
have been stripped of their unmatured interest coupons, coupons which have been
stripped from U.S. Treasury bearer bonds, and receipts or certificates for
stripped U.S. Treasury debt obligations. Stripped Treasury Securities do not
receive any periodic payments of interest and are not subject to early
redemption. The Stripped Treasury Securities held by this Fund mature on (have a
portfolio maturity date of) November 15, 2000.
Unlike most coupon-bearing bonds, Stripped Treasury Securities are sold at a
substantial discount from face value because the buyer of Stripped Treasury
Securities receives only the right to receive one future fixed payment on the
security and does not receive any rights to periodic interest payments on the
security. While Stripped Treasury Securities insulate shareholders from being
unable to invest interest payments received at a rate as high as the yield on
the original security, they also prevent investing the interest at a higher rate
should interest rates raise.
Because of their substantial discount, Stripped Treasury Securities are
particularly susceptible to wide fluctuations in value as interest rates
increase or decrease. The longer the term to maturity, the more susceptible they
will be to a given change in interest rate levels. Variable rates of inflation
and economic growth, together with the fiscal and monetary policies adopted to
attempt to deal with these and other economic problems, contribute to wide
fluctuations in interest rates (and thus in the value of fixed-rate debt
obligations like these). Although more volatile, Stripped Treasury Securities
avoid reinvestment risk on the increase in value of the security. Avoiding this
risk is an important factor in being able to achieve a relatively predictable
payout upon portfolio maturity.
In addition to Stripped Treasury Securities, the Treasury 2000 Fund may invest
in coupon-bearing Treasury Notes with maturities identical to those of the
Stripped Treasury Securities held in the portfolio. The Treasury Notes may be
purchased to the extent necessary to maintain sufficient cash flow to pay the
Adviser's fees.
On or within 12 months prior to the portfolio maturity date, the securities will
be liquidated. (See MANAGEMENT OF THE ULTRA SERIES FUND and OFFER, PURCHASE AND
REDEMPTION OF SHARES.) Once the Treasury 2000 Fund has liquidated its portfolio,
additional Stripped Treasury Securities with a portfolio maturity date selected
at that time may be purchased and the Fund may continue, with liquidation and
subsequent refunding occurring from time to time. Operation of the new portfolio
would be consistent with the operation of the Treasury 2000 portfolio. If, at
the time of the portfolio maturity date for this Fund, it appears not to be in
the best interest of the Fund to purchase additional Stripped Treasury
Securities, the Fund will distribute its assets and cease operations. (See
MANAGEMENT OF THE ULTRA SERIES FUND and OFFER, PURCHASE AND REDEMPTION OF
SHARES.)
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities and invest in financial futures and related options. These practices
are described in SPECIAL INVESTMENT TECHNIQUES or in the Statement of Additional
Information.
SPECIAL INVESTMENT TECHNIQUES
Investment Techniques and Instruments Authorized But Not Used
As described above, certain of the Funds may lend portfolio securities and
invest in restricted securities, foreign securities, put and call option
contracts, stock index futures contracts, financial futures contracts, and
options on stock index futures contracts and financial futures contracts in
which the Fund can invest. None of the Funds has employed these practices or
invested in these instruments during the past year and has no current intention
of doing so in the foreseeable future. Each is described in INVESTMENT PRACTICES
in the Statement of Additional Information.
Repurchase Agreements
Each Fund may enter into repurchase agreements ("repos") with banks and dealers
in U.S. Government securities. Under a repurchase agreement, a Fund may acquire
an underlying debt instrument for a relatively short period subject to an
obligation of the seller to repurchase and the Fund to resell the instrument at
a fixed price and time, thereby determining the yield during the Fund's holding
period. The yield during the holding period is insulated from market
fluctuations. The yield is not related to the interest rate on the underlying
securities. Under the Act, repurchase agreements are considered loans by the
Fund. The difference between the total amount to be received upon the repurchase
of the securities and the price paid by the Fund upon their acquisition is
accrued daily as interest. If the institution defaults on the repurchase
agreement, the Fund will retain possession of the underlying securities. In the
event of a default by an institution, the Fund may incur certain costs in
liquidating the collateral, and could also incur a loss if the proceeds realized
upon sale of the underlying obligations are less than the original purchase
price. In addition, if bankruptcy proceedings are commenced with respect to the
seller, realization on the collateral may be delayed or limited and the Fund may
incur additional costs. In such a case, the Fund will be subject to risks
associated with changes in the market value of the collateral securities. In
order to limit the risks associated with entry into repurchase agreements, the
Trustees have adopted the following policies with respect to repurchase
agreements. The portfolios will enter into repurchase agreements only (a) with
the Ultra Series Fund's custodian bank, (b) with banks (other than the
custodian) having capital (and surplus) of at least $1 billion or (c) with major
brokerage firms which are among the 10 largest government securities dealers and
which have been approved by the Board of Trustees, upon recommendation by the
Ultra Series Fund's Investment Adviser. The Fund will obtain collateral in
proper form having a market value of not less than 100% of the repurchase price.
Such collateral will be U.S. Government obligations as defined under the section
describing the Money Market Fund.
Borrowing
All of the Funds may borrow money but only from banks and only for temporary or
short-term purposes. Temporary or short-term purposes may include short-term
(i.e., five business days) credits for clearing portfolio transactions and
borrowing in order to meet redemption requests or to finance failed settlements
of portfolio trades. No Fund will borrow for leveraging purposes. Each Fund will
maintain a continuous asset coverage of at least 300% (as defined in the Act)
with respect to all of its borrowings. Should the value of a Fund's assets
decline to below 300% of borrowings, the Fund may be required to sell portfolio
securities within three days to reduce the Fund's debt and restore the 300%
asset coverage. Borrowing involves interest costs. A Fund will not purchase
additional securities while its borrowings exceed 5% of its total assets.
Foreign Securities
Investing in foreign securities involves significant risks not typically
associated with investing in domestic securities. Foreign securities may be
affected by changes in currency exchange rates, changes in foreign or U.S. laws
or restrictions applicable to such investments and in exchange control
regulations. Some foreign stock markets have substantially less volume than, for
example, the New York Stock Exchange and securities of some foreign issuers may
be less liquid than securities of domestic issuers. Commissions and dealer
mark-ups on transactions in foreign securities may be higher than for similar
transactions in the United States. In addition, clearance and settlement
procedures may be different in foreign countries and, in certain markets, on
certain occasions, such procedures have been unable to keep pace with the volume
of securities transactions, thus making it difficult to conduct such
transactions.
Foreign issuers of securities are not generally subject to uniform accounting,
auditing and financial reporting standards comparable to those applicable to
domestic companies. There may be less publicly available information about a
foreign issuer than about a domestic one. In addition, there is generally less
government regulation of stock exchanges, brokers, and listed and unlisted
issuers in foreign countries than in the United States. Furthermore, with
respect to certain foreign countries, there is the possibility of expropriation
or confiscatory taxation, imposition of withholding taxes on dividend or
interest payments, limitations on the removal of funds or other assets of the
Fund, or political or social instability or diplomatic developments which could
affect investments in those countries.
Many foreign securities are represented by ADRs. ADRs represent the right to
receive foreign securities deposited in a domestic bank or a foreign
correspondent bank. Prices of ADRs are quoted in U.S. dollars, and ADRs are
traded in the U.S. on exchanges or over-the-counter and are sponsored by and
issued by domestic banks. In general, there is a large, liquid market in the
United States for ADRs quoted on a national exchange or the NASD's national
market system. The information available for ADRs is subject to the accounting,
auditing and financial reporting standards of the domestic market or exchange on
which the they are traded, which standards are more uniform and exacting than
those to which many issuers of foreign securities are subject. ADRs do not
eliminate all of the risk inherent in investing in foreign securities. To the
extent that a Fund acquires ADRs through a bank that does not have a contractual
relationship with the issuer of a foreign security underlying the receipt to
issue and service the receipt, there may be an increased possibility that the
Fund would not become aware of and be able to respond to corporate actions such
as stock splits or rights offerings involving the foreign issuer in a timely
manner. The market value of ADRs is dependent upon the market value of the
underlying securities and fluctuations in the value of the currencies in which
the underlying security is denominated relative to the U.S. dollar. In addition,
lack of information about an issuer of the underlying security may result in
inefficiencies in the valuation of the related ADR. However, by investing in
ADRs rather than directly in foreign securities, a Fund will avoid currency
risks during the settlement period for both purchases and sales.
MANAGEMENT OF THE ULTRA SERIES FUND
The Trustees
The overall responsibility for the supervision of the affairs of the Ultra
Series Fund vests in the Trustees. CIMCO Inc. (the "Investment Adviser" or
"Adviser") has agreed to handle the day-to-day affairs of the Ultra Series Fund.
The Trustees meet periodically to review the affairs of the Ultra Series Fund
and to establish certain guidelines which the Investment Adviser is expected to
follow in implementing the investment objectives and policies of the Ultra
Series Fund.
CUNA Mutual Life Insurance Company
The Company is a mutual life insurance company organized under the laws of Iowa,
with its home office at 2000 Heritage Way, Waverly, Iowa 50677. The Company is
the transfer agent and the dividend disbursing agent for the Ultra Series Fund.
The Company owns a one-half interest in CIMCO Inc., the Investment Adviser. On
July 1, 1990, the Company entered into a permanent affiliation with the CUNA
Mutual Insurance Society, 5910 Mineral Point Road, Madison, Wisconsin 53705.
CUNA Mutual Investment Corporation, 5910 Mineral Point Road, Madison, Wisconsin
53705, is an investment subsidiary wholly-owned by CUNA Mutual. CUNA Mutual
Investment Corporation owns a one-half interest in the Investment Adviser. CUNA
Mutual Investment Corporation is the sole owner of CUNA Brokerage Services,
Inc., the principal underwriter for the Ultra Series Fund. Both the Company and
CUNA Mutual are mutual insurance companies owned by their policyholders.
The Investment Adviser
Since the inception of the Ultra Series Fund, the Investment Adviser has been
CIMCO Inc. The Investment Adviser was established July 6, 1982. It provides
investment advice to the Ultra Series Fund, pension funds, to the Company and
its subsidiaries and to CUNA Mutual and its subsidiaries. The majority of the
Board of Directors of the Investment Adviser are independent of CUNA Mutual
Group. The principal place of business of the Investment Adviser is 5910 Mineral
Point Road, Madison, WI 53705.
CIMCO employs a team approach in the management of all the Funds. Lawrence R.
Halverson, CFA (Chartered Financial Analyst), is co-manager of the Capital
Appreciation Stock Fund, Growth and Income Stock Fund, Balanced Fund, Bond Fund,
and Treasury 2000 Fund. Since December 1, 1987, he has been employed with the
Investment Adviser and is now Vice President and Secretary of the Ultra Series
Fund, and Senior Vice President and Secretary of the Investment Adviser. Annette
E. Hellmer, CFA is co-manager of the Capital Appreciation Stock Fund, Growth and
Income Stock Fund, and Balanced Fund. She has been employed by the Investment
Adviser since August 1, 1996. Joseph L. Gogola, CFA, is co-manager of the
Balanced Fund, Bond Fund, and Treasury 2000 Fund. He has been employed by the
Investment Adviser since January 1, 1992, and had been employed in the
Investment Department of CUNA Mutual for several years prior to that date. In
addition to work on behalf of the Ultra Series Fund, each manager performs
advisory services for other clients of the Investment Adviser.
The Management Agreement
The Investment Adviser, pursuant to a Management Agreement, provides investment
advice for each Fund and provides or arranges for the provision of substantially
all other services required by the Ultra Series Fund through service agreements
with affiliated and unaffiliated service providers. Such services include all
administrative, accounting and legal services as well as the services of
custodians, transfer agents and dividend disbursing agents. There are, however,
certain expenses that the Ultra Series Fund pays for itself under the Management
Agreement. These are: fees of the independent Trustees, fees of the independent
auditors, interest on borrowings by a Fund, any taxes that a Fund must pay, and
any extraordinary expenses incurred by a Fund or Funds not in the ordinary
course of business. As full compensation for these services, the Ultra Series
Fund pays the Investment Adviser a unitary fee computed at an annualized
percentage rate of the average value of the daily net assets of each series as
set forth in the table below:
Management Fee Table
Series Management Fee
- ------ --------------
Capital Appreciation Stock 0.80 %
Growth & Income Stock 0.60 %
Balanced 0.70 %
Bond 0.55 %
Money Market 0.45 %
Treasury 2000 0.45 %
The Ultra Series Fund anticipates that under the Management Agreement, each Fund
will incur expenses, other than the above management fees, equal to
approximately .01% of its average daily net assets for the remainder of the 1997
fiscal year.
Prior to May 1, 1997, the Company had voluntarily agreed to absorb all ordinary
business expenses of the Capital Appreciation Stock, Growth and Income Stock,
Balanced, Bond and Money Market Funds in excess of .65% of the average daily net
assets of those Funds. Effective May 1, 1997, the Company discontinued absorbing
the Ultra Series Fund expenses in excess of .65% of average daily net assets and
any such expenses will be borne by the Ultra Series Fund.
OFFER, PURCHASE AND REDEMPTION OF SHARES
Pursuant to a Distribution Agreement, CUNA Brokerage Services, Inc. serves as
principal underwriter for the Ultra Series Fund. CUNA Brokerage Services, Inc.
has its principal place of business at 5910 Mineral Point Road, Madison,
Wisconsin 53705.
Currently, each series of shares is divided into Class C and Class Z shares.
Class C and Class Z shares are identical except for the fact that the net asset
value of each Class C share reflects a distribution fee assessed against the
assets of each Fund supporting Class C shares pursuant to a distribution plan
(the "Distribution Plan"), described below, adopted in accordance with Rule
12b-1 under the Act. (See also FEE TABLES.) Both Classes of each series of
shares of the Ultra Series Fund are sold in a continuous offering. The Ultra
Series Fund generally offers Class Z shares to separate accounts of CUNA Mutual
Group insurance companies and to qualified pension and retirement plans of CUNA
Mutual Group companies and offers Class C shares to separate accounts of
insurance companies and to qualified pension and retirement plans that are not
affiliated with CUNA Mutual Group. Where either Class of shares is offered to
insurance company separate accounts, such separate accounts support either
variable annuity contracts or variable life insurance contracts. Net purchase
payments under such contracts are placed in one of the subaccounts of the
separate accounts and assets of each such subaccount are invested in shares of a
Fund of the Ultra Series Fund corresponding to that subaccount.
The CUNA Mutual Group affiliated separate accounts and qualified pension or
retirement plans purchase and redeem Class Z shares of the Ultra Series Fund at
net asset value without sales or redemption charges. Unaffiliated insurance
company separate accounts and qualified pension or retirement plans purchase and
redeem Class C shares of the Ultra Series Fund at net asset value without sales
or redemption charges but may be subject to an additional distribution fee
pursuant to the Distribution Plan.
On each day on which a Fund's net asset value is calculated, the Company
transmits to the Ultra Series Fund any orders to purchase or redeem the various
Classes and series of shares based on purchase payments, redemption (surrender)
requests, and transfer requests from owners of variable annuity or variable life
insurance contracts or, annuitants and beneficiaries under such contracts that
have been processed on that day. The Company purchases and redeems shares of
each Fund at that Fund's net asset value per share calculated as of that same
day although such purchases and redemptions may be executed the next morning.
Other insurance companies having separate accounts making investments in the
Ultra Series Fund follow substantially identical procedures. Qualified pension
and retirement plans may purchase and redeem shares on a similar basis pursuant
to procedures negotiated by the Ultra Series Fund, CUNA Brokerage Services, Inc.
and the plan.
Owners of individual variable annuity contracts and variable life insurance
contracts should refer to the separate prospectuses for such contracts for a
more detailed description of the procedures whereby a contract owner, annuitant,
or beneficiary under such contracts may allocate his or her interest in a
separate account to a subaccount using one of the series of shares of the Ultra
Series Fund as an underlying investment medium. Participants in qualified
pension or retirement plans should refer to appropriate plan documents for a
more detailed description of the procedures whereby they may allocate their
interest in the plan to a subaccount using one of the series of shares of the
Ultra Series Fund as an underlying investment medium.
Treasury 2000 Fund Only: The Ultra Series Fund anticipates demand for shares in
the Treasury 2000 Fund to decrease as the portfolio maturity date approaches.
Also, as the Maturity Date approaches, it may not be possible to purchase
additional Stripped Treasury Securities with a portfolio maturity date which is
the same as the Stripped Treasury Securities in the Fund. Accordingly, the Ultra
Series Fund reserves the right to stop selling shares in the Treasury 2000 Fund
at any time that the Trustees decide further sale of shares in the Treasury 2000
Fund is not in the best interest of the Fund. On or within 12 months prior to
maturity of the portfolio the securities will be liquidated, and the proceeds
(after deductions for accrued but unpaid fees, taxes and governmental and other
charges) will be automatically reinvested at the current Net Asset Value in the
Money Market Fund, unless an owner of a variable contract directs otherwise. No
charge will be made for reinvestment of these proceeds. No later than 45 days
before the portfolio maturity date, the Ultra Series Fund will mail to each
owner of a variable contract with an interest in the Treasury 2000 Fund a Notice
of Impending Maturity. The notice will state that on the date the portfolio
matures, the proceeds allocable to each owner of a variable contract will be
automatically reinvested in the Money Market Fund in accordance with the
procedures set out above. Proceeds will be reinvested in another Fund if the
Ultra Series Fund receives a written request 5 days before portfolio maturity.
The Distribution Plan: The Ultra Series Fund has adopted a Distribution Plan
pursuant to Rule 12b-1 of the Act under which the Ultra Series Fund bears
certain expenses relating to the distribution of Class C shares. The
Distribution Plan provides for the Ultra Series Fund to pay CUNA Brokerage
Services, Inc. a distribution fee equal, on an annual basis, to 0.25% of the
average daily net assets of each Fund attributable to Class C shares. The
distribution fee is calculated and accrued daily and paid quarterly or at such
other intervals as the Ultra Series Fund and CUNA Brokerage Services, Inc.
agree. The distribution fee is paid solely out of each Fund's assets supporting
Class C shares. This means that the net asset value of Class C shares reflects
the daily accrual of the fee but that the net asset value of Class Z shares is
not affected by the distribution fee and no distribution fee is supported by
assets of any Fund representing Class Z shares.
Under the Distribution Plan, CUNA Brokerage Services, Inc. receives the entire
amount of the distribution fee and may spend any amount of the fee that it
considers appropriate to finance any activity that is primarily intended to
result in the sale of Class C shares. CUNA Brokerage Services, Inc. does not
have to spend all of the distribution fee and can spend more than the amount of
the fee to finance activities intended to result in the sale of Class C shares.
If CUNA Brokerage Services, Inc. spends less than the entire amount of the fee
in any period, it may keep the amounts not spent. If CUNA Brokerage Services,
Inc. spends more than the amount of the fee in any period, The Ultra Series Fund
will not reimburse CUNA Brokerage Services, Inc. for the difference.
Activities primarily intended to result in the sale of Class C shares include,
among others: (a) compensation to employees of CUNA Brokerage Services, Inc.;
(b) compensation to and expenses, including overhead and telephone expenses, of
CUNA Brokerage Services, Inc., other selected broker-dealers, and insurance
companies who engage in or support activities primarily intended to result in
the sale of Class C shares; (c) the costs of printing and distributing
prospectuses, statements of additional information and annual and interim
reports of the Ultra Series Fund for prospective Class C shareholders; (d) the
costs of preparing, printing and distributing sales literature and advertising
materials attributable to Class C shares; (e) expenses relating to the
formulation and implementation of marketing strategies and promotional
activities relating to Class C shares such as direct mail promotions and
television, radio, newspaper, magazine and other mass media advertising; and (f)
the costs of obtaining such information, analyses and reports with respect to
marketing and promotional activities and investor accounts as The Ultra Series
Fund may, from time to time, deem advisable.
GENERAL INFORMATION
Shareholder Rights
Pursuant to current interpretations of the Act, the Company will solicit voting
instructions from owners of variable annuity or variable life insurance
contracts issued by it with respect to any matters that are presented to a vote
of shareholders. Insurance companies not affiliated with the CUNA Mutual Group
will generally follow similar procedures. On any matter submitted to a vote of
shareholders, all shares of the Ultra Series Fund then issued and outstanding
and entitled to vote shall be voted in the aggregate and not by series or Class,
except for matters concerning only a series or Class. Certain matters approved
by a vote of the shareholders of the Ultra Series Fund may not be binding on a
series or Class whose shareholders have not approved such matter. This is the
case if the matter affects interests of that series or Class which are not
identical with the interests of all other series and Classes such as a change in
investment policy, approval of the Investment Adviser or a material change in
the Distribution Plan and failure by the holders of a majority of the
outstanding voting securities of the series or Class to approve the matter. The
holder of each share of each series or Class of stock of the Ultra Series Fund
shall be entitled to one vote for each full dollar of net asset value and a
fractional vote for each fractional dollar of net asset value attributed to the
shareholder.
The Ultra Series Fund is not required to hold annual meetings of shareholders
and does not plan to do so. The Trustees may call special meetings of
shareholders for action by shareholder vote as may be required by the Act or the
Declaration of Trust. The Trustees have the power to alter the number and the
terms of office of the Trustees, and may lengthen their own terms or make their
terms of unlimited duration and appoint their successors, provided always at
least a majority of the Trustees have been elected by the shareholders of the
Ultra Series Fund. The Declaration of Trust provides that shareholders can
remove Trustees by a vote of two-thirds of the outstanding shares and the
Declaration of Trust sets out procedures to be followed.
Inquiries
Any inquiries regarding the Ultra Series Fund should be directed to CUNA
Brokerage Services, Inc., 2000 Heritage Way, Waverly, Iowa 50677, (800) 798-5500
or (319) 352-4090.
Dividends
All dividends (except those from the Treasury 2000 Fund) are distributed to the
separate accounts for variable products and qualified pension or retirement
plans and then automatically reinvested in the Ultra Series Fund shares.
Dividends from the Money Market Fund will be declared daily and reinvested
monthly in additional full and fractional shares of the Money Market Fund.
Dividends of ordinary income from the Capital Appreciation Stock, Growth and
Income Stock, Balanced, and Bond Funds, will be declared and reinvested
quarterly in additional full and fractional shares, and dividends of capital
gains from these Funds will be declared and reinvested at least annually in
additional full and fractional shares. In no event will capital gain dividends
be declared and paid more frequently than allowed under SEC rules. Annually, the
Treasury 2000 Fund will declare a consent dividend for income tax purposes.
The Ultra Series Fund Performance
The Ultra Series Fund may distribute sales literature showing total return
performance. Total return calculations are based on historical results and are
not intended to indicate future performance. Total return will vary over time
depending on market conditions, assets owned and operating expenses. Information
about the performance of the Ultra Series Fund is contained in the annual report
to shareholders which may be obtained without charge from the address shown on
the first page of this Prospectus.
Total return figures distributed by the Ultra Series Fund will show the change
in value of an investment in the Ultra Series Fund from the beginning of the
measuring period to the end of the measuring period. All dividends and capital
gains are assumed to be immediately reinvested. Average annual total return is
calculated by determining the growth or decline in value of a $1,000
hypothetical investment over a stated period and then calculating the annually
compounded percentage rate that would have produced the same ending value if the
rate of growth or decline in value had been constant during the entire period.
The actual rate of growth or decline varies over time, rather than being
constant, so actual year-to-year performance will be different from "average"
annual return. The Ultra Series Fund will show average annual total returns for
1, 5 and 10 year periods (or, if shorter, the period since inception) and may
show actual and average total returns for other periods. The Ultra Series Fund
may also show cumulative return, computed by dividing the value at the end of
the period by the value at the beginning of the period. Cumulative total return
may be shown either as a percentage change or as a dollar value. Performance
data may be shown in the form of graphs, charts, tables and numerical examples.
The Ultra Series Fund may also distribute sales literature showing yield figures
for its Money Market Fund. Yield figures are based on historical earnings and
are not intended to indicate future performance. The yield of the Money Market
Fund refers to the income generated by an investment in the Fund over the stated
seven-day period. This income is then annualized, that is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 365-day period and is shown as a percentage of the investment. The
effective yield is calculated similarly but, when annualized, the income earned
is assumed to be reinvested or "compounded." The effective yield will be
slightly higher than the yield because of the effect of assumed reinvestment.
The Ultra Series Fund may distribute sales literature comparing its total
returns to standard industry measures, for example, the Dow Jones Industrial
Average, one or more of the Standard & Poor's or Frank Russell Company stock
indexes, one or more of the Lehman Brothers bond indexes, the consumer price
index, and data published by Lipper Analytical Services, Morningstar, Inc., and
Ibbotson Associates. The Dow Jones Industrial Average (DJIA) is a market
value-weighted, unmanaged index of 30 large industrial stocks traded on the New
York Stock Exchange. The Standard and Poor's and Frank Russell Company stock
indexes are unmanaged, market value weighted indexes of various industrial,
transportation, utility and financial companies, grouped by size of market
capitalization, valuation characteristics (i.e. growth or value) or other
attributes. The Lehman Brothers bond indexes represent unmanaged groups of fixed
income securities of various issuers and terms to maturity which are
representative of bond market performance. The consumer price index is a
statistical measure of changes in the prices of goods and services over time
published by the U.S. Bureau of Labor Statistics. Lipper Analytical Services and
Morningstar, Inc. are independent services that monitor performance of mutual
funds and insurance company separate accounts. Lipper Performance Summary
Averages represent the average annual total return of all the funds (within a
specified investment category) that are covered by the Lipper Analytical
Services Variable Insurance Products Performance Analysis Service. Ibbotson
Associates annually updates "Stocks, Bonds, Bills and Inflation" (SBBI) which
compares historical investment returns and trends over specified periods. To
show how different types of investments have performed over time, a chart has
been included as Appendix A.
The volatility of each Fund may be compared to the volatility of the relevant
market as a whole. "Beta" is a measure of the sensitivity of a particular asset
or a particular Fund relative to the marketplace in which it is traded. The beta
of the market is 1.0 which serves as a benchmark to assess other assets
including the six Funds within the Ultra Series Fund. Beta is a measure of the
degree to which the return on the asset or the Fund moved relative to how the
return of the relevant market moved. A number that is both positive and less
than 1.0 means that the asset or Fund moved in the same direction as the market
but to a smaller degree. In other words, a beta of less than 1.0 indicates less
volatility (less investment risk) than the market.
Standard deviation measures the volatility of actual periodic returns around a
trendline of average returns. For example, a portfolio that grew over a
five-year period at an average annual total return of 10% with a standard
deviation of 15% would be much more volatile (would involve more investment
risk) than a portfolio that grew at an average annual total return of 8% with a
standard deviation of 5%. The latter portfolio might meet the investment needs
of a risk averse investor better than the former portfolio.
Tax Status
The Ultra Series Fund intends to qualify as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). The Ultra Series Fund expects to distribute all of its net investment
income and net realized capital gains to its shareholders (the separate accounts
and qualified plans) to avoid imposition of an Ultra Series Fund-level income or
excise tax. The Ultra Series Fund will inform its shareholders (the separate
accounts and qualified plans) of the amount and nature of all distributions.
Each Fund is treated as a separate entity for federal income tax purposes, and
therefore, the investments and results of the Funds are determined separately
for purposes of determining whether the Ultra Series Fund qualifies as a
"regulated investment company" and for purposes of determining net investment
income or loss and net realized capital gain or loss. Additional tax information
appears in the Statement of Additional Information.
Under the Code, no tax is imposed on an insurance company with respect to income
of a qualifying separate account properly allocable to the value of eligible
variable annuity or variable life insurance contracts. Please refer to the
appropriate tax disclosure in the prospectuses related to a separate account and
to its related variable annuity or variable life insurance contract for more
information on the taxation of life insurance companies, separate accounts, as
well as the tax treatment of variable annuity and variable life insurance
contracts and the holders thereof.
Each Fund intends to comply with the diversification requirements of section
817(h) of the Code and the regulations thereunder. These requirements are in
addition to the diversification requirements imposed on each Fund by Subchapter
M and the Act. These requirements place certain limitations on the assets of
each separate account that may be invested in the securities of a single issuer.
Because section 817(h) and the regulations thereunder treat each Fund's assets
as assets of the related separate account, these limitations apply to each
Fund's assets that may be invested in the securities of a single issuer. Failure
of a Fund to satisfy the section 817(h) requirements would result in taxation of
the separate accounts, the insurance company, the variable annuity contracts and
variable life insurance contracts, and tax consequences to the holders thereof,
other than as described in the respective variable contract prospectuses.
Net Asset Value
Funds' shares are sold and redeemed at a price equal to the shares' Net Asset
Value with no sales or other charges. Net Asset Value is determined by adding
the total current values of each Fund's securities, cash, receivables, and other
assets and then subtracting all liabilities. Net Asset Value per share is
calculated on each Valuation Day at the earlier of 3:00 p.m. Central Standard
Time or the close of the New York Stock Exchange. A Valuation Day is any day the
New York Stock Exchange is open for business, except that the Friday immediately
following Thanksgiving and the final scheduled work day preceding Christmas are
not Valuation Days, and the days immediately preceding or immediately following
New Year's Day and Independence Day when such days fall on Saturday or Sunday,
respectively, are not Valuation Days. Federal securities regulations will be
followed in case of an emergency which makes valuation extremely difficult, for
example, fire, blizzard or tornado.
Funds' shares will be purchased and redeemed at the Net Asset Value next
determined after receipt of a sales order or request for redemption. The Capital
Appreciation Stock, Growth and Income Stock, Balanced, Bond, and Treasury 2000
Funds will value their assets based on market value if such a value can be
established. If not, a good faith determination will be made by or at the
direction of the Trustees. Short-term investments having maturities of 60 days
or less will be valued at amortized cost. The Money Market Fund will value its
portfolio assets using the amortized cost method. This method is designed to
stabilize the Net Asset Value at $1.00 per share. More information about the
calculation of Net Asset Value is in the Statement of Additional Information.
<PAGE>
APPENDIX A
The chart depicts the growth of a dollar invested in common stocks, small
company stocks, long-term government bonds, Treasury bills and an index of
inflation over the period from the end of 1925 to the end of 1996. Results
assume reinvestment of dividends on stocks or coupons on bonds and no taxes.
Transaction costs are not accounted for except in the small stock index starting
in 1982. The chart was prepared to show changes in the market value of
securities, not returns on variable life and annuity contracts. The chart does
not reflect any of the charges made at the separate account level or at the
mutual fund level of a variable contract.
The chart shows how stocks, bonds and bills have performed in the past. The
chart illustrates the basic relationship between risk and return. Treasury bills
had the least investment risk and the lowest investment return. Stocks had the
most investment risk and the highest investment return. The common stock
performance shown is based on the Standard and Poor's 500 stock index, a market
value weighted index of industrial, financial, utility and transportation
stocks. The chart is a historical record of the past. It is not a projection of
future return.
At this place, the document shows a graphic representation of the information
set forth above.
[To be added by amendment]
ce: (C) Stocks, Bonds, Bills and Inflation 1996 YearbookTM, Ibbotson Associates,
Chicago (annually updates work by Roger G. Ibbotson and Rex A. Sinquefield).
Used with permission. All rights reserved.
<PAGE>
Part B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ULTRA SERIES FUND
2000 Heritage Way
Waverly, Iowa 50677
(319) 352-4090
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS FOR THE ULTRA SERIES FUND WHICH IS
REFERRED TO HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR
SHOULD KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS, DATED MAY 1, 1997,
CALL OR WRITE CUNA BROKERAGE SERVICES, INC., 2000 HERITAGE WAY, WAVERLY, IOWA
50677, (319) 352-4090, (800) 798-5500.
MAY 1, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION.....................................................B-1
INVESTMENT PRACTICES....................................................B-1
Lending Portfolio Securities...................................B-1
Restricted Securities..........................................B-1
Foreign Securities.............................................B-2
Put and Call Options...........................................B-2
Financial Futures and Related Options..........................B-3
Stock Index Futures and Related Options........................B-3
Bond Fund Practices............................................B-4
INVESTMENT LIMITATIONS..................................................B-5
PORTFOLIO TURNOVER......................................................B-6
BELOW INVESTMENT GRADE CORPORATE DEBT SECURITIES........................B-6
MANAGEMENT OF THE FUND..................................................B-7
Officers and Trustees..........................................B-7
Trustees Compensation..........................................B-8
Substantial Shareholders.......................................B-8
Beneficial Owners..............................................B-9
THE INVESTMENT ADVISER..................................................B-9
EXPENSES OF THE FUND...................................................B-10
DISTRIBUTION PLAN AND AGREEMENT........................................B-11
CUSTODIAN..............................................................B-11
INDEPENDENT AUDITORS...................................................B-11
BROKERAGE..............................................................B-11
HOW SECURITIES ARE OFFERED.............................................B-12
Distributor...................................................B-12
Transfer Agent................................................B-12
NET ASSET VALUE OF SHARES..............................................B-12
Money Market Fund.............................................B-12
Capital Appreciation Stock, Growth and Income Stock,
Balanced, Bond, and Treasury 2000 Funds.......................B-13
DIVIDENDS, DISTRIBUTIONS AND TAXES.....................................B-14
Options and Futures Transactions..............................B-14
Straddles.....................................................B-15
CALCULATION OF YIELDS AND TOTAL RETURNS................................B-15
Money Market Fund Yields......................................B-15
Other Fund Yields.............................................B-16
Average Annual Total Returns..................................B-17
Other Total Returns...........................................B-17
DESCRIPTION OF BOND RATINGS (AS PUBLISHED BY THE RATING SERVICES)......B-18
DESCRIPTION OF COMMERCIAL PAPER RATINGS
(AS PUBLISHED BY THE RATING SERVICES)................................B-19
FINANCIAL STATEMENTS...................................................B-19
<PAGE>
GENERAL INFORMATION
The Ultra Series Fund is an investment company consisting of six separate
investment portfolios or funds (each, a "Fund") each of which has a different
investment objective(s). Each Fund is a diversified, open-end management
investment company, commonly known as a mutual fund. The six Funds are: Capital
Appreciation Stock, Growth and Income Stock, Balanced, Bond, Money Market, and
Treasury 2000. The Ultra Series Fund was organized under the laws of the
Commonwealth of Massachusetts on September 16, 1983, and is a Massachusetts
Business Trust. Under Massachusetts law, shareholders of a business trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the Ultra Series Fund. The Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Ultra
Series Fund and requires that notice of such disclaimer be given in each
instrument entered into or executed by the Ultra Series Fund. The Declaration of
Trust provides for indemnification out of the Ultra Series Fund property for any
shareholder held personally liable for the obligations of the Ultra Series Fund.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Ultra Series Fund
itself would be unable to meet its obligations.
INVESTMENT PRACTICES
The Ultra Series Fund Prospectus describes the investment objective and policies
of each of the six Funds. The following information is provided for those
investors wishing to have more comprehensive information than that contained in
the Prospectus. Within the past year, no Fund has employed any of the following
practices: lending of portfolio securities, investing in restricted securities,
investing in foreign securities (although it has and may continue to invest up
to 25% of assets in American Depository Receipts traded on U.S. exchanges
representing shares of foreign issues traded on foreign exchanges), investing in
options, financial futures, stock index futures and related options. No Fund has
a current intention of employing these practices in the foreseeable future. If
they are used in the foreseeable future, no more than 5% of a Fund's net assets
will be at risk.
If the Ultra Series Fund enters into futures contracts or call options thereon,
reverse repurchase agreements, firm commitment agreements or standby commitment
agreements, the Ultra Series Fund will obtain approval from the Board of
Trustees to establish a segregated account with the custodian of the Ultra
Series Fund. The segregated account will hold liquid assets such as cash, U.S.
government assets and high grade debt obligations. The cash value of the
segregated account will be not less than the market value of the futures
contracts and call options thereon, reverse repurchase agreements, firm
commitment agreements and standby commitment agreements.
Lending Portfolio Securities
All Funds, except the Money Market Fund, may lend portfolio securities. Such
loans will be made only in accordance with guidelines established by the
Trustees and on the request of broker-dealers or institutional investors deemed
qualified, and only when the borrower agrees to maintain cash or U.S. Treasury
bills as collateral with the Fund equal at all times to at least 100% of the
value of the securities. The Fund will continue to receive interest or dividends
on the securities loaned and will, at the same time, earn an agreed-upon amount
of interest on the collateral which will be invested in readily marketable
short-term obligations of high quality. The Fund will retain the right to call
the loaned securities and intends to call loaned voting securities if important
shareholder meetings are imminent. Such security loans will not be made if, as a
result, the aggregate of such loans exceeds 30% of the value of the Fund's
assets. The Fund may terminate such loans at any time. While there may be delays
in recovery of loaned securities or even a loss of rights in collateral supplied
should the borrower fail financially, loans will be made only to firms deemed by
the Investment Adviser to be in good standing and will not be made unless, in
the judgment of the Investment Adviser, the consideration to be earned from such
loans would justify the risk.
Restricted Securities
Each Fund, except the Money Market and Treasury 2000 Funds, may invest in
restricted securities. Securities regulations limit the sale of restricted
securities which have been acquired through private placement transactions,
directly from the issuer or from security holders, generally at higher yields or
on terms more favorable to investors than comparable publicly traded securities.
Privately placed securities are not readily marketable and ordinarily can be
sold only in privately negotiated transactions to a limited number of purchasers
or in public offerings made pursuant to an effective registration statement
under the Securities Act of 1933 or by obtaining an exemption therefrom. Private
or public sales of such securities by the Fund may involve significant delays
and expense. Private sales require negotiations with one or more purchasers and
generally produce less favorable prices than the sale of comparable unrestricted
securities. Public sales generally involve the time and expense of preparing and
processing a registration statement under the Securities Act of 1933 and may
involve the payment of underwriting commissions; accordingly, the proceeds may
be less than the proceeds from the sale of securities of the same class which
are freely marketable. Restricted securities in each Fund will be valued at fair
value as determined in good faith by or at the direction of the Trustees for
purposes of determining the Fund's Net Asset Value. Such securities, when
possible, will be valued on a comparative basis to securities with similar
characteristics for which market prices are available.
Foreign Securities
All Funds, except the Treasury 2000 Fund, may invest in foreign securities.
Investment in foreign issuers involves investment risks that are different, in
some respects, from an investment in U.S. domestic issuers. Such risks may
include foreign political and economic developments. Publicly available
information concerning issuers located outside the United States may not be
comparable in scope or depth of analysis to that generally available for
publicly held U.S. issuers. Accounting and auditing practices and financial
reporting requirements may vary significantly from country to country and
generally are not comparable to those applicable to publicly held U.S.
corporations. In the event of default, debt obligations of foreign issuers may
be difficult to enforce. The Investment Adviser will make every effort to
analyze potential investments in foreign issuers on the same basis as the rating
services analyze domestic issuers but because public information is not always
comparable to that available on domestic issuers, this may not be possible.
Therefore, while the Investment Adviser will make every effort to select
investments in foreign securities on the same basis relative to quality and risk
as its investments in domestic securities, this may not always be possible. No
Fund will invest more than 10% of the value of its assets in foreign securities.
Put and Call Options
All Funds, except the Money Market Fund, may engage in the purchase, sale and
writing of put and call options that are traded on U.S. exchanges and boards of
trade. A call option is a contract (generally having a duration of nine months
or less) pursuant to which the purchaser of the call option in return for a
premium paid, has the right to buy the security or instrument underlying the
option at a specified exercise price at any time during the term of the option.
The writer of the call option, who receives the premium, has the obligation,
upon exercise of the option, to deliver the underlying security or instrument
against payment of the exercise price during the option period. A put option is
a similar contract which gives the purchaser of the put option, in return for a
premium, the right to sell the underlying security or instrument at a specified
price during the term of the option. The writer of the put, who receives the
premium, has the obligation to buy the underlying security or instrument, upon
exercise, at the exercise price during the option period.
The writing of a call option is "covered" if the Fund owns the underlying
security or instrument covered by the call or has an absolute and immediate
right to acquire that security or instrument without additional cash
consideration (or for additional cash consideration held in a segregated account
by its custodian) upon conversion or exchange of other securities or instruments
held in its portfolio. The writing of a call option is also covered if the Fund
holds a call on an equivalent amount of the same security or instrument as the
call written where the exercise price of the call held is equal to or less than
the exercise price of the call written or greater than the exercise price of the
call written if the difference is maintained by the Fund in cash, U.S. Treasury
bills or other high grade short-term obligations in a segregated account with
its custodian. The writing of a put option is "covered" if the Fund maintains
cash, U.S. Treasury bills or other high grade short-term obligations with a
value equal to the exercise price in a segregated account with its custodian, or
else holds a put on an equivalent amount of the same security or instrument as
the put written where the exercise price of the put held is equal to or greater
than the exercise price of the put written. The premium paid by the purchaser of
an option will reflect, among other things, the relationship of the exercise
price to the market price and volatility of the underlying security or
instrument, the remaining term of the option, supply and demand, and interest
rates.
If the writer of an option wishes to terminate his obligation, he may effect a
"closing purchase transaction." This is accomplished by buying an option of the
same kind as the option previously written. The effect of the purchase is that
the writer's position will be canceled by the clearing corporation. However, a
writer may not effect a closing purchase transaction after it has been notified
of the exercise of an option. Likewise, an investor who is the holder of an
option may liquidate his position by effecting a "closing sale transaction."
This is accomplished by selling an option of the same kind as the option
previously purchased. There is no guarantee that either a closing purchase or a
closing sale transaction can be effected.
Effecting a closing transaction in the case of a written call option will permit
the Fund to write another call option on the underlying security or instrument
with either a different exercise price or expiration date or both, or in the
case of a written put option will permit the Fund to write another put option to
the extent that the exercise price thereof is secured by deposited cash or
short-term securities. Also, effecting a closing transaction will permit the
cash or proceeds from the concurrent sale of any securities or instruments
subject to the option to be used for other Fund investments. If the Fund desires
to sell a particular security or instrument from its portfolio on which it has
written a call option, it will effect a closing transaction prior to or
concurrent with the sale of the security or instrument.
The Fund may write put and call options only if they are covered, and the
options must remain covered so long as a Fund is obligated as a writer.
An option position may be closed out only on an exchange or board of trade which
provides a secondary market for an option of the same kind. Although the Fund
will generally purchase or write only those options for which there appears to
be an active secondary market, there is no assurance that a liquid secondary
market on an exchange or board of trade will exist for any particular option, or
at any particular time, and for some options no secondary market on an exchange
or board of trade may exist. In such event it might not be possible to effect
closing transactions in particular options, with the result that the Fund would
have to exercise its options in order to realize any profit and would incur
brokerage commissions upon the exercise of call options and upon the subsequent
disposition of underlying securities or instruments acquired through the
exercise of call options or upon the purchase of underlying securities or
instruments for the exercise of put options. If the Fund, as a covered call
option writer, is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security or instrument until
the option expires or it delivers the underlying security or instrument upon
exercise.
The use of put and call options is restricted to no more than twenty percent
(20%) of the net assets in the Fund using such option.
Financial Futures and Related Options
The Balanced, Bond, and Treasury 2000 Funds may engage in transactions in
financial futures contracts or related options, but only as a hedge against
changes in the values of securities held in the Fund's portfolio resulting from
market conditions or which it intends to purchase and where the transactions are
economically appropriate to the reduction of risks inherent in the ongoing
management of the Fund. A Fund may not purchase or sell financial futures or
purchase related options if, immediately thereafter, more than one-third of its
net assets would be hedged. In addition, a Fund may not purchase or sell
financial futures or purchase related options if, immediately thereafter, the
sum of the amount of margin deposits on the Fund's existing futures positions
and premiums paid for related options would exceed five percent (5%) of the
market value of the Fund's total assets.
Unlike when a Fund purchases or sells a security, no price is paid or received
by the Fund upon the purchase or sale of a futures contract. Initially, the Fund
will be required to deposit with the custodian under the name of the futures
commission merchant an amount of cash or U.S. Treasury bills, known as initial
margin. The nature of initial margin in futures transactions is different from
that of margin in securities transactions in that a futures contract margin does
not involve the borrowing of funds by a customer to finance the transaction.
Rather, the initial margin is in the nature of a performance bond or a good
faith deposit on a contract which is returned to the Fund upon termination of
the Fund's contract assuming all contractual obligations have been satisfied.
Subsequent payments, called "variation margin," to or from the custodian will be
made on a daily basis as the price of the underlying securities or instruments
fluctuates making the long and short positions in the futures contract more or
less valuable, a process known as "mark to the market." At any time prior to
expiration of the futures contract, the Fund may elect to close the position by
taking an opposite position which will operate to terminate the Fund's position
in the futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to the Fund, and the Fund
realizes a loss or a gain.
There are several risks in connection with the use of financial futures as a
hedging device. One risk arises because of the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
the securities or instruments which are the subject of the hedge. The price of
the futures contract may move more than or less than the price of the securities
or instruments being hedged. If the price of the futures contract moves less
than the price of the securities or instruments which are the subject of the
hedge, the hedge will not be fully effective but, if the price of the securities
or instruments being hedged has moved in an unfavorable direction, the Fund
would be in a better position than if it had not hedged at all. If the price of
the securities being hedged has moved in a favorable direction, this advantage
will be partially offset by the futures. If the price of the futures contract
moves more than the price of the securities or instruments being hedged, the
Fund will experience either a loss or a gain on the futures contract which will
not be completely offset by movements in the price of the securities or
instruments. To compensate for the imperfect correlation of movements in the
price of securities or instruments being hedged and movements in the price of
the futures contracts, the Fund may buy or sell financial futures contracts in a
greater dollar amount than the dollar amount of securities being hedged if the
historical volatility of the prices of such securities has been greater than the
historical volatility of the futures. Conversely, the Fund may buy or sell fewer
financial futures contracts if the historical volatility of the price of the
securities being hedged is less than the historical volatility of the futures.
The financial impact of any use of financial futures is subject to movements in
interest rates. For example, if the Fund is hedged against the possibility of a
rise in interest rates, adversely affecting the value of bonds held in its
portfolio, and bond prices increase instead, the Fund will lose part or all of
the benefit of the increased value of its bonds which it has hedged because it
will have offsetting losses in its futures positions. In addition, in such
situations, if the Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. Such sales of securities may be, but
will not necessarily be, at increased prices which reflect the rising market.
The Fund may have to sell securities at a time when it may be disadvantageous to
do so.
Stock Index Futures and Related Options
The Capital Appreciation Stock, Growth and Income Stock, and Balanced Funds may
engage in transactions in stock index futures contracts or related options, but
only as a hedge against changes resulting from market conditions in the values
of securities held in the Fund's portfolio or which the Fund intends to purchase
and where the transactions are economically appropriate to the reduction of
risks inherent in the ongoing management of the Fund. A Fund may not purchase or
sell stock index futures or purchase related options if, immediately thereafter,
more than one-third of its net assets would be hedged. In addition, a Fund may
not purchase or sell stock index futures or purchase related options if,
immediately thereafter, the sum of the amount of margin deposits on the Fund's
existing futures positions and premiums paid for related options would exceed
five percent (5%) of the market value of total assets.
Unlike when a Fund purchases or sells a security, no price is paid or received
by the Fund upon the purchase or sale of a futures contract. Initially, the Fund
will be required to deposit with the custodian under the name of the futures
commission merchant an amount of cash or U.S. Treasury bills known as initial
margin. The nature of initial margin in futures transactions is different from
that of margin in security transactions in that futures contract margin does not
involve the borrowing of funds by a customer to finance the transactions.
Rather, the initial margin is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of the
futures contract assuming all contractual obligations have been satisfied.
Subsequent payments, called "variation margin," to or from the custodian, will
be made on a daily basis as the price of the underlying stock index fluctuates
making the long and short positions in the futures contract more or less
valuable, a process known as "mark to the market." At any time prior to
expiration of the futures contract, the Fund may elect to close the position by
taking an opposite position which will operate to terminate the Fund's position
in the futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to the Fund, and the Fund
realizes a loss or a gain.
There are several risks in connection with the use of stock index futures as a
hedging device. One risk arises because of the imperfect correlation between
movements in the price of the stock index futures contract and movements in the
price of the securities which are the subject of the hedge. The price of the
stock index future may move more than or less than the price of the securities
being hedged. If the price of the stock index futures contract moves less than
the price of the securities which are the subject of the hedge, the hedge will
not be fully effective but, if the price of the securities being hedged has
moved in an unfavorable direction, the Fund would be in a better position than
if it had not hedged at all. If the price of the securities being hedged has
moved in a favorable direction, this advantage will be partially offset by the
futures contract. If the price of the futures contract moves more than the price
of the stock, the Fund will experience either a loss or a gain on the futures
contract which will not be completely offset by movements in the price of the
securities which are the subject of the hedge. To compensate for the imperfect
correlation of movements in the price of securities being hedged and movements
in the price of the stock index futures, the Fund may buy or sell stock index
futures contracts in a greater dollar amount than the dollar amount of
securities being hedged if the historical volatility of the prices of such
securities has been greater than the historical volatility of the index.
Conversely, the Fund may buy or sell fewer stock index futures contracts if the
historical volatility of the price of the securities being hedged is less than
the historical volatility of the stock index.
The financial impact of any use of stock index futures is subject to movements
in the direction of the market. For example, if the Fund has hedged against the
possibility of a decline in the market adversely affecting stocks held in its
portfolio and stock prices increase instead, the Fund will lose part or all of
the benefit of the increased value of its stocks which it has hedged because it
will have offsetting losses in its futures positions. In addition, in such
situations, if the Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. Such sales of securities may be, but
will not necessarily be, at increased prices which reflect the rising market.
The Fund may have to sell securities at a time when it may be disadvantageous to
do so.
Compared to the use of stock index futures, the purchase of options on stock
index futures involves less potential risk because the maximum amount at risk is
the premium paid for the options (plus transaction costs). However, there may be
circumstances when the use of an option on a stock index future would result in
a loss when the use of a stock index future would not, such as when there is no
movement in the level of the index.
Bond Fund Practices
As stated in the Prospectus, the Bond Fund will emphasize investment grade,
primarily intermediate term securities. If an investment grade security is
downgraded by the rating agencies or otherwise falls below the investment
quality standards stated in the Prospectus, management will retain that
instrument only if management believes it is in the best interest of the Fund.
Management does not currently intend to invest more than five percent (5%) of
the net assets in corporate debt securities which are not in the four highest
ratings by Standard and Poor's Corporation or Moody's Investors Service, Inc.,
but, on occasion, the Fund may do so. The Fund may also invest in debt options,
interest rate futures contracts, and options on interest rate futures contracts.
The Fund may utilize interest rate futures and options to manage the risk of
fluctuating interest rates. These instruments will be used to control risk or
obtain additional income and not with a view toward speculation. The Fund will
invest only in futures and options which are traded on U.S. exchanges or boards
of trade.
In the fixed income securities market, purchases of some issues are occasionally
made under firm (forward) commitment agreements. Purchases of securities under
such agreements can involve risk of loss due to changes in the market rate of
interest between the commitment date and the settlement date. As a matter of
operating policy, the Fund will not commit itself to forward commitment
agreements in an amount in excess of 25% of net assets and will not engage in
such agreements for leveraging purposes. For purposes of this limitation,
forward commitment agreements are defined as those agreements involving more
than five business days between the commitment date and the settlement date.
INVESTMENT LIMITATIONS
The Ultra Series Fund has adopted the following restrictions and policies
relating to the investment of assets and the activities of each Fund. The
policies in this INVESTMENT LIMITATION section are fundamental and may not be
changed for a Fund without the approval of the holders of a majority of the
outstanding votes of that Fund (which for this purpose and under the Investment
Company Act of 1940 (the "Act") means the lesser of (i) sixty-seven percent
(67%) of the outstanding votes attributable to shares represented at a meeting
at which more than fifty percent (50%) of the outstanding votes attributable to
shares are represented or (ii) more than fifty percent (50%) of the outstanding
votes attributable to shares). None of the Funds within the Ultra Series Fund
may:
1. Borrow money in excess of one-third of the value of its total assets
taken at market value (including the amount borrowed) and then only
from banks as a temporary measure for extraordinary or emergency
purposes. This borrowing provision is not for investment leverage, but
solely to facilitate management of a Fund by enabling the Fund to meet
redemption requests where the liquidation of an investment is deemed to
be inconvenient or disadvantageous. Monies used to pay interest on
borrowed funds will not be available for investment. A Fund will not
make additional investments while it has borrowings outstanding.
2. Underwrite securities of other issuers, except that a Fund may acquire
portfolio securities under circumstances where, if the securities are
later publicly offered or sold by the Fund, it may be deemed to be an
underwriter for purposes of the Securities Act of 1933.
3. Invest over twenty-five percent (25%) of assets taken at its market
value in any one industry. Securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, or instruments secured
by these money market instruments, such as repurchase agreements, shall
not be considered investments in any one industry for purposes of these
rules. Telephone, gas, and electric utility industries shall be
considered separate industries.
4. Purchase or sell commodities, commodity contracts (except futures
contracts), foreign exchange or real estate, including interests in
real estate investment trusts whose securities are not readily
marketable or invest in oil, gas or other mineral development or
exploration programs. (This does not prohibit investment in the
securities of corporations which own interests in commodities, foreign
exchange, real estate or oil, gas or other mineral development or
exploration programs.)
5. Invest more than five percent (5%) of the value of the assets of a Fund
in securities of any one issuer, except in the case of the securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
6. Invest in securities of a company for the purpose of exercising control
or management.
7. Invest in securities issued by any other registered investment
companies in excess of five percent (5%) of total assets, nor in excess
of three percent (3%) of the assets of the acquired investment company.
Not more than ten percent (10%) of total assets taken at market value
will be invested in such securities.
8. Purchase or sell real estate, except a Fund may purchase securities
which are issued by companies which invest in real estate or interests
therein.
9. Issue senior securities as defined in the Act, except insofar as a Fund
may be deemed to have issued a senior security by reason of (a)
entering into any repurchase agreement; (b) borrowing money in
accordance with restrictions described above; (c) lending portfolio
securities; (d) purchasing securities on a when-issued or delayed
delivery basis; or (e) accommodating short sales. If the asset coverage
falls below three hundred percent (300%), when taking into account
items (a) through (e), a Fund may be required to liquidate investments
to be in compliance with the Act.
10. Lend portfolio securities in excess of thirty percent (30%) of the
value of its total assets. Any loans of portfolio securities will be
made according to guidelines established by the Trustees, including
maintenance of collateral of the borrower at least equal at all times
to the current market value of the securities loaned.
11. Invest in illiquid assets (which include repurchase agreements that do
not mature within seven (7) days, non-negotiable time deposits maturing
in over seven (7) days, restricted securities, and other securities for
which there is no ready market) in an amount in excess of ten percent
(10%) of the value of its total assets.
12. Make loans (the acquisition of bonds, debentures, notes and other
securities as permitted by the investment objectives of a Fund shall
not be deemed to be the making of loans) except that a Fund may
purchase securities subject to repurchase agreements under policies
established by the Trustees.
13. Invest in foreign securities in excess of ten percent (10%) of the
value of its total assets.
Except for the limitations on borrowing from banks, if the above percentage
restrictions are adhered to at the time of investment, a later increase or
decrease in such percentage resulting from a change in values of securities or
amount of net assets will not be considered a violation of any of the foregoing
restrictions.
The Money Market Fund may not write put or call options, purchase common stock
or other equity securities or purchase securities on margin or sell short. The
Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, and
Treasury 2000 Funds may not purchase securities on margin or sell short.
However, each Fund may obtain such short-term credits as may be necessary for
the clearance of transactions and may make margin payments in connection with
transactions in futures and related options as permitted by its investment
policies.
PORTFOLIO TURNOVER
While the Money Market Fund is not subject to specific restrictions on portfolio
turnover, it generally does not seek profits by short-term trading. However, it
may dispose of a portfolio security prior to its maturity where disposition
seems advisable because of a revised credit evaluation of the issuer or other
considerations. Because money market instruments have short maturities, the Fund
expects to have a high portfolio turnover, but since brokerage commissions are
not customarily charged on money market instruments, a high turnover should not
affect Net Asset Value or net investment income.
The Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, and
Treasury 2000 Funds will trade whenever, in management's view, changes are
appropriate to achieve the stated investment objectives. Management does not
anticipate that unusual portfolio turnover will be required and intends to keep
such turnover to moderate levels consistent with the objectives of each Fund.
Although management makes no assurances, it is expected that the annual
portfolio turnover rate will be generally less than 100%. This would mean that
normally less than 100% of the securities held by the Fund would be replaced in
any one year (excluding turnover of securities having a maturity of one year or
less). The portfolio turnover rate for the fiscal year ended December 31, 1995,
for each Fund was as follows: Capital Appreciation Stock, 61.3%; Growth and
Income Stock, 57.8%; Balanced, 36.7%; Bond, 14.7%; and Treasury 2000, 0.0%. The
portfolio turnover rate for the fiscal year ended December 31, 1996, for each
Fund is as follows: Capital Appreciation Stock, 49.8%; Growth and Income Stock,
40.6%; Balanced, 33.5% (Stocks, 23.2%; Bonds, 10.3%); Bond, 25.7%; and Treasury
2000, 0.0%.
BELOW INVESTMENT GRADE CORPORATE DEBT SECURITIES
Corporate debt securities which are not within the four highest ratings by
Standard & Poor's Corporation or Moody's Investors Service, Inc.
("non-investment grade bonds") may have speculative characteristics and adverse
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than higher grade
corporate debt securities.
Lower rated securities involve higher risks, in that they are especially subject
to adverse changes in general economic conditions and in the industries in which
the issuers are engaged, to changes in the financial condition of the issuers
and to price fluctuations in response to changes in interest rates. Accordingly,
the returns on lower rated debt securities will fluctuate over time. During
periods of economic downturn or rising interest rates, highly leveraged issuers
may experience financial stress which could adversely affect their ability to
make payments of principal and interest and increase the possibility of default.
In addition, noninvestment grade bonds may have a limited secondary market in
which to dispose of or from which to obtain valuations of these securities.
Therefore, any valuation of these securities may be more subjective than valuing
securities for which there is a more established secondary market. Also, adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the value and liquidity of these securities.
Achievement of the investment objective of a Fund that invests in noninvestment
grade bonds may be more dependent on the Investment Adviser's credit analysis
than a Fund which invests exclusively in investment-grade securities. While
ratings are, therefore, important in the securities selection process, the
Investment Adviser does not rely totally on ratings assigned to corporate debt
obligations by commercial rating firms. For more information about the
characteristics of the various bond ratings, see DESCRIPTION OF BOND RATINGS.
Subsequent to its purchase, a rating of an issue of debt securities may be
reduced below the minimum rating required for purchase. The Investment Adviser
will consider such an event when deciding whether a Fund should continue to hold
that security. The Funds are not required to dispose of securities after ratings
have dropped below such minimum rating.
<TABLE>
<CAPTION>
MANAGEMENT OF THE FUND
Officers and Trustees
Name and Address Position(s) Held with Fund Principal Occupation(s) For
the Past 5 Years
<S> <C> <C>
Michael S. Daubs President CIMCO Inc.
5910 Mineral Point Road 1983 - Present President
Madison, WI 53705 1982 - Present
CUNA Mutual Life Insurance Company
Chief Investment Officer
1973 - Present
CUNA Mutual Insurance Society
Chief Investment Officer
1990 - Present
Lawrence R. Halverson Vice President CIMCO Inc.
5910 Mineral Point Road 1987 - Present Senior Vice President
Madison, WI 53705 Secretary 1996 - Present
1992 - Present Vice President
1987 - 1996
Secretary
1992 - Present
CUNA Brokerage Services, Inc.
President
1996 - Present
Donald E. Heltner Vice President CIMCO Inc.
5910 Mineral Point Road 1983 - Present Vice President
Madison, WI 53705 1982 - Present
Treasurer
1992 - Present
Robert M. Buckingham Chief Financial Officer and CUNA Mutual Life Insurance Company
2000 Heritage Way Assistant Secretary Vice President and Valuation Actuary
Waverly, IA 50677 1993-Present 1991-Present
Michael G. Joneson Chief Accounting Officer, CUNA Mutual Life Insurance Company
2000 Heritage Way Treasurer, and Assistant Vice President - Controller, Treasurer
Waverly, IA 50677 Secretary 1986-Present
1992-Present
Gwendolyn M. Boeke Trustee Evangelical Lutheran Church in America
2000 Heritage Way 1988 - Present Area Representative - Iowa
Waverly, IA 50677 1990 - Present
Alfred L. Disrud Trustee Planned Giving Services
2000 Heritage Way 1987 - Present Waverly, Iowa 50677
Waverly, IA 50677 Owner
1986 - Present
Kevin T. Lentz * Trustee CUNA Mutual Life Insurance Company
2000 Heritage Way 1993 - Present Chief Operating Officer
Waverly, IA 50677 1993 - Present
CUNA Mutual Life Insurance Company
Vice President, Individual Life & Health
1992 - 1993
CUNA Mutual Insurance Company
Vice President, Member Services
1992 - Present
Keith S. Noah Trustee Noah & Smith
2000 Heritage Way 1984 - Present Charles City, Iowa 50616
Waverly, IA 50677 Partner
1948 - Present
Thomas C. Watt Trustee MidAmerican Energy Company
2000 Heritage Way 1986 - Present Waterloo, Iowa 50704
Waverly, IA 50677 District Manager
1995 - Present
Midwest Power Systems, Inc.
Waterloo, Iowa 50704
Division Manager
1992 - 1995
Iowa Public Service Company
Waterloo, Iowa 50704
Vice President - East District
1962 - 1992
<FN>
*An interested person within the meaning of the Act.
</FN>
</TABLE>
Trustees Compensation
Aggregate Compensation
Names of Trustees From The Ultra Series Fund 1996
- ----------------- -------------------------------
Gwendolyn M. Boeke $2,500
Alfred L. Disrud $2,500
Kevin T. Lentz* $ 0
Keith S. Noah $2,500
Thomas C. Watt $2,500
* Uncompensated Interested Trustee
Trustees and officers of the Ultra Series Fund do not receive any benefits from
the Ultra Series Fund upon retirement nor does the Ultra Series Fund accrue any
expense for pension or retirement benefits. The Trustees and officers of the
Ultra Series Fund do not currently serve as trustees or officers of any open-end
management investment company that is an affiliated person of the Ultra Series
Fund or that is managed by the Investment Adviser.
Substantial Shareholders
CUNA Mutual Life Insurance Company (the "Company") established the Ultra Series
Fund as an investment vehicle underlying the separate accounts of the Company
which issue variable contracts. As of May 1, 1997 the separate accounts of the
Company were the only shareholders of the Ultra Series Fund. Voting rights are
described in the Ultra Series Fund Prospectus in the GENERAL INFORMATION,
Shareholder Rights section.
Beneficial Owners
As of May 1, 1997, except for the Company's initial capital contribution, the
beneficial owners of the Ultra Series Fund are policyowners and contract owners
of the Company. As of March 31, 1997, the directors and officers as a group own
less than one percent (1%). In addition to its own beneficial interest in each
Fund, the Company holds legal title on behalf of the beneficiaries of employee
benefit plans held within the Company separate accounts not registered pursuant
to an exemption from the registration provisions of the securities acts. As of
March 31, 1997, the following persons had a beneficial interest exceeding five
percent (5%):
Fund Beneficial Owner Holdings Percentage of
Net Assets
[To be added by amendment]
THE INVESTMENT ADVISER
The Management Agreement ("Agreement") requires that the Investment Adviser
provide continuous professional investment management of the investments of the
Ultra Series Fund, including establishing an investment program complying with
the investment objectives, policies and restrictions of each Series. In
addition, the Adviser has agreed to provide, or arrange to have provided, all
services to each Series of the Ultra Series Fund, including but not limited to
legal and accounting services, mailing and printing services, custody and
transfer agent services, etc. The Investment Adviser is CIMCO Inc. The Company,
and CUNA Mutual Investment Corporation each own a one-half interest in the
Investment Adviser. CUNA Mutual Insurance Society is the sole owner of CUNA
Mutual Investment Corporation. CUNA Mutual Investment Corporation is the sole
owner of CUNA Brokerage Services, Inc., the principal underwriter. The
Investment Adviser and the Ultra Series Fund have servicing agreements with the
Company and with CUNA Mutual Insurance Society. The Company and CUNA Mutual
Insurance Society entered into a permanent affiliation July 1, 1990. At the
current time, all of the directors of the Company are also directors of CUNA
Mutual Insurance Society and many of the senior executive officers of the
Company hold similar positions with CUNA Mutual Insurance Society.
The Investment Adviser, pursuant to a Management Agreement, provides investment
advice for each Fund and provides or arranges for the provision of substantially
all other services required by the Ultra Series Fund through services agreements
with affiliated and unaffiliated service providers. Such services include all
administrative, accounting and legal services as well as the services of
custodians, transfer agents and dividend disbursing agents. There are, however,
certain expenses that The Ultra Series Fund pays for itself under the Management
Agreement. These are: fees of the independent Trustees, fees of the independent
auditors, interest on borrowings by a Fund, any taxes that a Fund must pay, and
any extraordinary expenses incurred by a Fund or Funds not in the ordinary
course of business. As full compensation for its services, the Ultra Series Fund
pays the Investment Adviser a unitary fee computed at an annualized percentage
rate of the average value of the daily net assets of each series as set forth in
the table below:
Management Fee Table
Series Management Fee
Capital Appreciation Stock 0.80 %
Growth & Income Stock 0.60 %
Balanced 0.70 %
Bond 0.55 %
Money Market 0.45 %
Treasury 2000 0.45 %
Prior to May 1, 1997, the Company had voluntarily agreed to absorb all ordinary
business expenses of the Capital Appreciation Stock, Growth and Income Stock,
Balanced, Bond and Money Market Funds in excess of .65% of the average daily net
assets of those Funds. Effective May 1, 1997, the Company discontinued absorbing
the Ultra Series Fund expenses in excess of .65% of average daily net assets and
any such expenses will be borne by the Ultra Series Fund.
Under the Investment Advisory Agreement effective prior to May 1, 1997, the
total fee paid to the Investment Adviser during the year ended December 31,
1994, was $594,112. The fees were allocated to the Funds as follows: $24,864 to
Capital Appreciation Stock, $199,911 to Growth and Income Stock, $300,282 to
Balanced, $34,590 to Bond, $28,639 to Money Market, and $5,826 to Treasury 2000.
The total fee paid to the Investment Adviser during the year ended December 31,
1995, was $1,003,650. The fees were allocated to the Funds as follows: $103,513
to Capital Appreciation Stock, $357,783 to Growth and Income Stock, $436,723 to
Balanced, $51,283 to Bond, $48,171 to Money Market, and $6,177 to Treasury 2000.
The total fee paid to the Investment Adviser during the year ended December 31,
1996, was $2,094,152. The fees were allocated to the Funds as follows: $335,246
to Capital Appreciation Stock, $804,430 to Growth and Income Stock, $759,395 to
Balanced, $100,076 to Bond, $87,984 to Money Market, and $7,021 to Treasury
2000.
The Investment Adviser makes the investment decisions and is responsible for the
investment and reinvestment of assets; performs research, statistical analysis,
and continuous supervision of the Fund's investment portfolio; furnishes office
space for the Ultra Series Fund; provides the Ultra Series Fund with such
accounting data concerning the investment activities of the Ultra Series Fund as
is required to be prepared and files all periodic financial reports and returns
required to be filed with the Securities and Exchange Commission ("SEC") and any
other regulatory agency; continuously monitors compliance by the Ultra Series
Fund in its investment activities with the requirements of the Act and the rules
promulgated pursuant thereto; and renders to the Ultra Series Fund such periodic
and special reports as may be reasonably requested with respect to matters
relating to the duties of the Investment Adviser.
Effective January 1, 1992, the Adviser contracted with the Company to perform
some of these services on behalf of the Ultra Series Fund in return for a
portion of the investment advisory fee. In 1994, the Adviser paid $129,311 for
those services. In 1995, the Adviser paid $217,034 for those services. In 1996,
the Adviser paid $447,362 for those services. Effective July 17, 1993, the
Adviser contracted with CUNA Mutual Insurance Society to perform cash management
and investment accounting services on behalf of the Ultra Series Fund in return
for a portion of the investment advisory fee. In 1994, the Adviser paid $5,578
for those services. In 1995, the Adviser paid $9,487 for those services. In
1996, the Adviser paid $19,711 for those services.
On January 16, 1997, the Management Agreement was approved by the beneficial
owners of the Ultra Series Fund after approval and recommendation by the
Trustees of the Ultra Series Fund, including a majority of Trustees who are not
parties to the Management Agreement or interested persons to any such party as
defined in the Act, on October 29, 1996. The Management Agreement, unless sooner
terminated, shall continue until two years from the effective date of the
Management Agreement and thereafter shall continue automatically for periods of
one calendar year so long as such continuance is specifically approved at least
annually (a) by the Trustees or by a vote of a majority of the outstanding votes
attributable to the shares of the Class representing an interest in the Fund;
and (b) by a vote of a majority of those Trustees who are not parties to the
Management Agreement or interested persons of any such party, cast in person at
a meeting called for the purpose of voting on such approval, provided the
Management Agreement may be terminated as to any Fund or to all Funds by the
Ultra Series Fund at any time, without the payment of any penalty, by vote of a
majority of the Trustees or by a majority vote of the outstanding votes
attributable to the shares of the applicable Fund or by the Investment Adviser
on sixty (60) days written notice to the other party. The Management Agreement
will terminate automatically in the event of its assignment.
The Management Agreement provides that the Investment Adviser shall not be
liable to the Ultra Series Fund or any shareholder for anything done or omitted
by it, or for any losses that may be sustained in the purchase, holding or sale
of any security, except for an act or omission involving willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties imposed upon it
by the Management Agreement.
The directors and principal officers of the Investment Adviser are as follows:
Joyce A. Harris Director and Chair
James C. Hickman Director
Michael B. Kitchen Director
Michael S. Daubs Director and President
George A. Nelson Director and Vice Chair
Lawrence R. Halverson Senior Vice President and Secretary
Donald E. Heltner Vice President and Treasurer
Charles A. Knudsen Vice President
Daniel J. Larson Vice President
Thomas J. Merfeld Vice President
James M. Greaney Vice President
Lois A. O'Rourke Assistant Vice President
EXPENSES OF THE FUND
The Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, and
Money Market Funds are currently obligated to pay to the Investment Adviser the
Management Fee set forth in Management Fee Table above. As part of its services,
the Investment Adviser has agreed to provide or arrange to have provided,
administrative services to each Fund. Currently, the Company is providing some
of these services on behalf of the Investment Adviser.
Prior to May 1, 1997, expenses which exceeded .65% of the average value of daily
net assets of such Fund were being absorbed by the Company pursuant to an
Expense Reimbursement Agreement between the Company and the Ultra Series Fund.
For the year ended December 31, 1995, the Company absorbed $96,817 of ordinary
business expense. This expense was allocated among the Funds as follows: $22,806
was allocated to Capital Appreciation Stock, $28,817 to the Growth and Income
Stock, $33,518 to Balanced, $3,971 to Bond, and $7,705 to Money Market. For the
year ended December 31, 1996, no expenses were absorbed by the Company.
DISTRIBUTION PLAN AND AGREEMENT
As described in the Prospectus, the Board of Trustees has adopted a Distribution
Plan for the Fund under Rule 12b-1 of the Act to compensate CUNA Brokerage
Services, Inc. for certain services and to pay expenses of the Ultra Series Fund
incurred in connection with the offering of Class C Fund shares.
The Distribution Plan was initially approved on October 29, 1996, by the Board
of Trustees of the Ultra Series Fund, including all disinterested Trustees. The
Plan takes effect May 1, 1997, and continues in effect from year to year only so
long as such continuance is approved at least annually by the Trustees,
including a majority of the Trustees who are not interested, as defined by the
Act, and who have no direct or indirect financial interest in the operation of
the Plan or agreements related to it.
Any amendment which would materially increase the amount which the Ultra Series
Fund may expend under the Plan requires approval by holders of a majority of the
outstanding shares of the Ultra Series Fund. Any agreement related to the Plan
may be terminated at any time, upon sixty (60) days written notice to the other
party, by a vote of a majority of the disinterested Trustees, or by vote of a
majority of the Trust's outstanding voting securities. In the event of an
assignment, the Plan terminates automatically. As long as the Plan is in effect,
the selection and nomination of the disinterested Trustees of the Ultra Series
Fund are committed to the discretion of the disinterested Trustees.
CUSTODIAN
State Street Bank and Trust Company is the custodian for the securities and cash
of the Ultra Series Fund. The custodian holds for the Ultra Series Fund all
securities and cash owned by the Ultra Series Fund, and receives for the Ultra
Series Fund all payments of income, payments of principal or capital
distributions with respect to securities owned by the Ultra Series Fund. Also,
the custodian receives payment for the shares issued by the Ultra Series Fund.
The custodian releases and delivers securities and cash upon proper instructions
from the Ultra Series Fund. Pursuant to and in furtherance of the Custody
Agreement, the Ultra Series Fund uses automated instructions and a cash data
entry system to transfer monies to and from the Ultra Series Fund's account at
State Street Bank and Trust Company.
INDEPENDENT AUDITORS
The financial statements have been included herein and elsewhere in the
Registration Statement in reliance upon the reports of KPMG Peat Marwick, LLP,
Des Moines, Iowa, independent auditors, and upon the authority of said firm as
experts in accounting and auditing.
BROKERAGE
It is the policy of the Ultra Series Fund, in effecting transactions in
portfolio securities, to seek best execution of orders at the most favorable
prices. The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations, including without limitation, the overall direct net economic
result (involving both price paid or received and any commissions and other
costs paid), the efficiency with which the transaction is effected, the ability
to effect the transaction at all where a large block is involved, the
availability of the broker to stand ready to execute potentially difficult
transactions in the future and the financial strength and stability of the
broker. Such considerations are judgmental and are weighed by management in
determining the overall reasonableness of brokerage commissions paid.
Subject to the foregoing, a factor in the selection of brokers is the receipt of
research services, analyses and reports concerning issuers, industries,
securities, economic factors and trends and other statistical and factual
information. Any such research and other statistical and factual information
provided by brokers to the Ultra Series Fund or the Investment Adviser is
considered to be in addition to and not in lieu of services required to be
performed by the Investment Adviser under its contract with the Ultra Series
Fund. Research obtained on behalf of the Ultra Series Fund may be used by the
Investment Adviser in connection with other clients of the Investment Adviser.
Conversely, research received from placement of brokerage for other accounts may
be used by the Investment Adviser in managing investments of the Ultra Series
Fund. Therefore, the correlation of the cost of research to individual clients
of the Adviser, including the Ultra Series Fund, is indeterminable and cannot
practically be allocated among the Ultra Series Fund and the Investment
Adviser's other clients. Consistent with the above, the Ultra Series Fund may
effect principal transactions with a broker-dealer that furnishes brokerage
and/or research services, or designate any such broker-dealer to receive selling
commissions, discounts or other allowances, or otherwise deal with any
broker-dealer, in connection with the acquisition of securities in
underwritings. Accordingly, the net prices or commission rates charged by any
such broker-dealer may be greater than the amount another firm might charge if
the management of the Ultra Series Fund determines in good faith that the amount
of such net prices and commissions is reasonable in relation to the value of the
services and research information provided by such broker-dealer to the Ultra
Series Fund. For the year ended December 31, 1994, Capital Appreciation Fund
paid $22,779, Growth and Income Stock Fund paid $85,572 and Balanced Fund paid
$61,279 in brokerage fees. There were no brokerage fees paid by Bond, Money
Market, or Treasury 2000 Funds in 1994. For the year ended December 31, 1995,
Capital Appreciation Stock Fund paid $76,931, Growth and Income Stock Fund paid
$169,671, and Balanced Fund paid $100,693 in brokerage fees. There were no
brokerage fees paid by Bond, Money Market, or Treasury 2000 Funds in 1995. For
the year ended December 31, 1996, Capital Appreciation Stock Fund paid $171,251,
Growth and Income Fund paid $336,331 and Balanced Fund paid $150,550 in
brokerage fees. There were no brokerage fees paid by Bond, Money Market, or
Treasury 2000 Funds in 1996.
The Ultra Series Fund expects that purchases and sales of money market
instruments usually will be principal transactions. Money market instruments are
normally purchased directly from the issuer or from an underwriter or market
maker for the securities. There usually will be no brokerage commissions paid
for such purchases. Purchases from underwriters will include the underwriting
commission or concession and purchases from dealers serving as market makers
will include the spread between the bid and asked price. Where transactions are
made in the over-the-counter market, the Ultra Series Fund will deal with the
primary market makers unless equal or more favorable prices are otherwise
obtainable.
Where advantageous, the Ultra Series Fund may participate with other clients of
the Investment Adviser in "bunching of trades" wherein one purchase or sale
transaction representing several different client accounts is placed with a
broker. The Investment Adviser has established various policies and procedures
that assure equitable treatment of all accounts.
The policy with respect to brokerage is and will be reviewed by the Trustees
from time to time. Because of the possibility of further regulatory developments
affecting the securities exchanges and brokerage practices generally, the
foregoing practices may be changed, modified or eliminated.
HOW SECURITIES ARE OFFERED
Distributor
As described in the Prospectus, the Ultra Series Fund does not deal directly
with the public. Shares of the Ultra Series Fund are currently issued and
redeemed through the distributor, pursuant to a Distribution Agreement between
the Ultra Series Fund and the distributor. The principal place of business of
CUNA Brokerage Services, Inc. is 5910 Mineral Point Road, Madison, Wisconsin
53705. The distributor is owned by CUNA Mutual Investment Corporation which in
turn is owned by CUNA Mutual Insurance Society. The Company and CUNA Mutual
Insurance Society entered into an agreement of permanent affiliation on July 1,
1990. Shares of the Ultra Series Fund are purchased and redeemed at Net Asset
Value. The Distribution Agreement provides that the distributor will use its
best efforts to render services to the Ultra Series Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations, it will not be liable to the Ultra Series Fund or any shareholder
for any error of judgment or mistake of law or any act or omission or for any
losses sustained by the Ultra Series Fund or its shareholders.
Transfer Agent
The Company, an affiliated person, acts as transfer agent and dividend
disbursing agent for the Ultra Series Fund.
NET ASSET VALUE OF SHARES
Net Asset Value per share is calculated each Valuation Day. Net Asset Value is
determined by dividing each Fund's total net assets by the number of shares
outstanding at the time of calculation. Total net assets are determined by
adding the total current value of portfolio securities, cash, receivables, and
other assets and subtracting liabilities. Shares will be sold and redeemed at
the Net Asset Value next determined after receipt of the purchase order or
request for redemption.
The Net Asset Value of a share issued by the Capital Appreciation Stock, Growth
and Income Stock, Balanced, and Bond Funds was initially set at $10.00 per
share. The Net Asset Value of a share issued by the Money Market Fund was
initially set at $1.00 per share. (See Money Market Fund below.) The Net Asset
Value of a share of the Treasury 2000 Fund was initially set at $3.62 per share.
Money Market Fund
The Trustees have determined that the best method currently available for
determining the Net Asset Value is the amortized cost method. The Trustees will
utilize this method pursuant to Rule 2a-7 of the Act. The use of this valuation
method will be continuously reviewed and the Trustees will make such changes as
may be necessary to assure that assets are valued fairly as determined by the
Trustees in good faith. Rule 2a-7 obligates the Trustees, as part of their
responsibility within the overall duty of care owed to the shareholders, to
establish procedures reasonably designed, taking into account current market
conditions and the investment objectives, to stabilize the Net Asset Value per
share as computed for the purpose of distribution and redemption at $1.00 per
share. The Trustees' procedures include periodically monitoring, as they deem
appropriate and at such intervals as are reasonable in light of current market
conditions, the relationship between the amortized cost value per share and the
Net Asset Value per share based upon available market quotations. The Trustees
will consider what steps should be taken, if any, in the event of a difference
of more than 1/2 of one percent (1%) between the two. The Trustees will take
such steps as they consider appropriate, (e.g., redemption in kind or shortening
the average portfolio maturity) to minimize any material dilution or other
unfair results which might arise from differences between the two. The Rule
requires that the Fund limit its investments to instruments which the Trustees
determine will present minimal credit risks and which are of high quality as
determined by a major rating agency, or, in the case of any instrument that is
not so rated, of comparable quality as determined by the Trustees. It also calls
for the Fund to maintain a dollar weighted average portfolio maturity (not more
than 90 days) appropriate to its objective of maintaining a stable Net Asset
Value of $1.00 per share and precludes the purchase of any instrument with a
remaining maturity of more than 397 days. Should the disposition of a portfolio
security result in a dollar weighted average portfolio maturity of more than 90
days, the Fund will invest its available cash in such manner as to reduce such
maturity to 90 days or less as soon as reasonably practicable.
It is the normal practice of the Fund to hold portfolio securities to maturity.
Therefore, unless a sale or other disposition of a security is mandated by
redemption requirements or other extraordinary circumstances, the Fund will
realize the par value of the security. Under the amortized cost method of
valuation traditionally employed by institutions for valuation of money market
instruments, neither the amount of daily income nor the Net Asset Value is
affected by any unrealized appreciation or depreciation. In periods of declining
interest rates, the indicated daily yield on shares the Fund has computed by
dividing the annualized daily income by the Net Asset Value will tend to be
higher than if the valuation were based upon market prices and estimates. In
periods of rising interest rates, the indicated daily yield on shares the Fund
has computed by dividing the annualized daily income by the Net Asset Value will
tend to be lower than if the valuation were based upon market prices and
estimates.
Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, and
Treasury 2000 Funds
Common stocks that are traded on an established exchange or over-the-counter are
valued on the basis of market price as of the end of the Valuation Period,
provided that a market quotation is readily available. Otherwise, they are
valued at fair value as determined in good faith by or at the direction of the
Trustees.
Stripped Treasury Securities, long-term straight debt obligations, and
non-convertible preferred stocks are valued using readily available market
quotations, if available. When exchange quotations are used, the latest quoted
sale price is used. If an over-the-counter quotation is used, the last bid price
will normally be used. If readily available market quotations are not available,
these securities are valued at market value as determined in good faith by or at
the direction of the Trustees. Readily available market quotations will not be
deemed available if an exchange quotation exists for a debt security, preferred
stock, or security convertible into common stock, but it does not reflect the
true value of the Fund's holdings because sales have occurred infrequently, the
market for the security is thin, or the size of the reported trade is considered
not comparable to the Fund's institutional size holdings. When readily available
market quotations are not available, the Fund will use an independent pricing
service which provides valuations for normal institutional size trading units of
such securities. Such a service may utilize a matrix system which takes into
account appropriate factors such as institutional size trading in similar groups
of securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data in determining valuations. These
valuations are reviewed by the Investment Adviser. If the Investment Adviser
believes that evaluation still does not represent a fair value, it will present
for approval of the Trustees such other valuation as the Investment Adviser
considers to represent a fair value. The specific pricing service or services to
be used will be presented for approval of the Trustees.
Short-term instruments having maturities of sixty (60) days or less will be
valued at amortized cost. Short-term instruments having maturities of more than
sixty (60) days will be valued at market values or values based on current
interest rates.
Options, stock index futures, interest rate futures, and related options which
are traded on U.S. exchanges or boards of trade are valued at the closing price
as of the close of the New York Stock Exchange.
The Investment Adviser, at the direction of the Trustees, values the following
at prices it deems in good faith to be fair:
1. Securities (including restricted securities) for which complete
quotations are not readily available, and
2. Listed securities if, in the opinion of the Investment Adviser, the
last sale price does not reflect the current market value or if no sale
occurred, and
3. Other assets.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Ultra Series Fund has qualified and intends to continue to qualify as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"). Each Fund will be treated as a separate entity
for federal income tax purposes, and, therefore, the investments and results of
each Fund is determined separately for purposes of determining whether the Fund
qualifies as a "regulated investment company" and for purposes of determining
the Fund's net ordinary income (or loss) and net realized capital gains (or
losses). To qualify for treatment as a "regulated investment company," a Fund
must, among other things, meet the diversification requirements of Subchapter M
of the Code, derive in each taxable year at least ninety percent (90%) of its
gross income from dividends, interest and gains from the sale or other
disposition of securities and derive less than thirty percent (30%) of its gross
income in each taxable year from the gains (without deduction for losses) from
the sale or other disposition of securities held for less than three months. It
is the intention of the Ultra Series Fund to meet these requirements with
respect to each Fund in order to qualify as a regulated investment company.
In order for a Fund to be treated as a conduit and avoid the imposition of any
Fund-level income or excise tax, the Fund must distribute at least ninety
percent (90%) of its net investment income. Net investment income of each Fund,
other than the Money Market Fund, will consist of all payments of dividends or
interest received by such Fund less the estimated expenses of such Fund
(including fees payable to the Investment Adviser). Net investment income of the
Money Market Fund (from the last determination thereof) consists of interest
accrued and/or discount earned less the estimated expenses of that Fund
applicable to that dividend period. Net investment income of the Treasury 2000
Fund includes accrued original issue discount.
It is the intention of the Ultra Series Fund to distribute substantially all of
the net investment income, if any, of each Fund thereby avoiding the imposition
of any Fund-level income or excise tax as follows:
(i) Dividends on the Money Market Fund will be declared daily and
reinvested monthly in additional full and fractional shares of the
Money Market Fund.
(ii) Dividends of ordinary income from the Capital Appreciation Stock,
Growth and Income Stock, Balanced, and Bond Funds will be declared and
reinvested quarterly in additional full and fractional shares of the
respective Fund.
(iii) All net realized short-term and long-term capital gains of the
Ultra Series Fund, if any, will be declared and distributed at least
annually, but in any event, no more frequently than allowed under SEC
rules, to the shareholders of each Fund to which such gains are
attributable.
(iv) Dividends on the Treasury 2000 Fund cannot be paid to its
shareholders (the Separate Accounts) during the taxable year since no
cash will be available for distribution until the securities are sold
or mature. The Fund is treated as if it paid a dividend of a certain
amount without actually paying the dividend if the shareholder consents
to the treatment ("consent dividend"). The Separate Accounts will file
a consent on Form 972 each year to include in gross income, as a
taxable dividend for that year, an amount computed to be sufficient to
enable the Fund to meet the distribution requirements necessary for the
Fund to be treated as a conduit and taxed as a regulated investment
company.
Because there will be no periodic payment of interest on the Stripped
Treasury Securities held by the Treasury 2000 Fund, shareholders (i.e.,
the separate accounts or qualified plans) will be requested
periodically to sign consents to have a certain portion of the accrued
amount of discount treated as dividends. Currently the separate
accounts are the only shareholders of the Treasury 2000 Fund; it is
anticipated that any taxable income will be offset by a corresponding
deduction for an increase in reserves.
Options and Futures Transactions
The tax consequences of options transactions entered into by a Fund will vary
depending on the nature of the underlying security, whether the option is
written or purchased and finally, whether the "straddle" rules, discussed
separately below, apply to the transaction. When a Fund writes a call or a put
option on an equity or convertible debt security, the treatment for federal
income tax purposes of the premium that it receives will, subject to the
straddle rules, depend on whether the option is exercised. If the option expires
unexercised, or if the Fund enters into a closing purchase transaction, the Fund
will realize a gain (or loss if the cost of the closing purchase transaction
exceeds the amount of the premium) without regard to any unrealized gain or loss
on the underlying security. Any such gain or loss will be short-term capital
gain or loss, except that any loss on a "qualified" covered call stock option
that is not treated as part of a straddle may be treated as long-term capital
loss. If a call option written by a Fund is exercised, the Fund will recognize a
capital gain or loss from the sale of the underlying security, and will treat
the premium as additional sales proceeds. Whether the gain or loss will be
long-term or short-term will depend on the holding period of the underlying
security. If a put option written by a Fund is exercised, the amount of the
premium will reduce the tax basis of the security that the Fund then purchases.
If a put or call option that a Fund has purchased on an equity or convertible
debt security expires unexercised, the Fund will realize a capital loss equal to
the cost of the option. If the Fund enters into a closing sale transaction with
respect to the option, it will realize a capital gain or loss (depending on
whether the proceeds from the closing transaction are greater or less than the
cost of the option). The gain or loss will be short-term or long-term depending
on the Fund's holding period in the option. If the Fund exercises such a put
option, it will realize a short-term gain or loss (long-term if the Fund holds
the underlying security for more than one year before it purchases the put) from
the sale of the underlying security measured by the sales proceeds decreased by
the premium paid. If the Fund exercises such a call option, the premium paid for
the option will be added to the tax basis of the security purchased.
One or more Funds may invest in Section 1256 contracts. Section 1256 contracts
generally include options on nonconvertible debt securities (including
securities of U.S. Government agencies or instrumentalities), options on stock
indexes, futures contracts, options on futures contracts and certain foreign
currency contracts. Options on foreign currency, futures contracts on foreign
currency, and options on foreign currency futures will qualify as Section 1256
contracts if the options or futures are traded on or subject to the rules of a
qualified board or exchange. In general, gain or loss on Section 1256 contracts
will be treated as 60% long-term and 40% short-term capital gain or loss
("60/40"), regardless of the period of time particular positions are actually
held by a Fund. In addition, any Section 1256 contracts held at the end of each
taxable year (and on October 31 of each year for purposes of determining the
amount of capital gain net income that a Fund must distribute to avoid liability
for the 4% excise tax) are "marked to market" with the result that unrealized
gains or losses are treated as though they were realized and the resulting gain
or loss is treated as 60/40 gain or loss. This deemed realization does not cause
a disposition for purposes of the "short-short" rule.
Straddles
Hedging transactions undertaken by a Fund may result in "straddles" for federal
income tax purposes. Straddles are defined to include "offsetting positions" in
actively-traded personal property. Under current law, it is not clear under what
circumstances one investment made by a Fund, such as an option or futures
contract, would be treated as "offsetting" another investment also held by the
Fund, such as the underlying security (or vice versa) and, therefore, whether
the Fund would be treated as having entered into a straddle. In general,
investment positions may be "offsetting" if there is a substantial diminution in
the risk of loss from holding one position by reason of holding one or more
other positions (although certain "qualified" covered call stock options written
by a Fund may be treated as not creating a straddle).
To the extent that the straddle rules apply to positions established by a Fund,
losses realized by the Fund may be either deferred or recharacterized as
long-term losses, and long-term gains realized by the Fund may be converted to
short-term gains.
Each Fund may make one or more of the elections available under the Code which
are applicable to straddles. If a Fund makes any of the elections, the amount,
character, and timing of the recognition of gains or losses from the affected
straddle positions will be determined under rules that vary according to the
election(s) made. The rules applicable under certain of the elections operate to
accelerate the recognition of gains or losses from the affected straddle
positions.
Because application of the straddle rules may affect the character of gains or
losses, defer losses and/or accelerate the recognition of gains or losses from
the affected straddle positions, the amount which must be distributed to
shareholders, and which will be taxed to shareholders as ordinary income or
long-term capital gain, may be increased or decreased substantially as compared
to a Fund that did not engage in such hedging transactions.
CALCULATION OF YIELDS AND TOTAL RETURNS
From time to time, the Ultra Series Fund may disclose yields, total returns, and
other performance data. Such performance data will be computed, or accompanied
by performance data computed in accordance with the standards defined by the
SEC. The Ultra Series Fund will not disclose performance of the Ultra Series
Fund in separate account sales literature or advertising without also showing
performance at the separate account level.
Money Market Fund Yields
From time to time, sales literature may quote the current annualized yield of
the Money Market Fund for a seven-day period in a manner which does not take
into consideration any realized or unrealized gains or losses on portfolio
securities.
This current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) at the end of the seven-day period in the value
of a hypothetical account having a balance of 1 share at the beginning of the
period, dividing such net change in account value by the value of the
hypothetical account at the beginning of the period to determine the base period
return, and annualizing this quotient on a 365-day basis. The net change in
value reflects net income from the Fund attributable to the hypothetical
account. Current yield is calculated according to the following formula:
Current Yield = ((NCS - ES)/UV) X (365/7)
Where:
NCS = the net change in the value of the Money Market
Fund (exclusive of realized gains or losses on the
sale of securities and unrealized appreciation and
depreciation) for the seven-day period attributable
to a hypothetical account having a balance of 1
share.
ES = per share expenses attributable to the hypothetical
account for the seven-day period.
UV = the share value for the first day of the seven-day
period.
365/7
Effective yield = (1 + ((NCS-ES)/UV)) - 1
Where:
NCS = the net change in the value of the Money Market
Fund (exclusive of realized gains or losses on the
sale of securities and unrealized appreciation and
depreciation) for the seven-day period attributable
to a hypothetical account having a balance of 1
share.
ES = per share expenses attributable to the hypothetical
account for the seven-day period.
UV = the share value for the first day of the seven-day
period.
The current and effective yields on amounts held in the Money Market Fund
normally fluctuate on a daily basis. Therefore, the disclosed yield for any
given past period is not an indication or representation of future yields or
rates of return. The Money Market Fund's actual yield is affected by changes in
interest rates on money market securities, average portfolio maturity, the types
and quality of portfolio securities held and operating expenses. Yields on
amounts held in the Money Market Fund may also be presented for periods other
than a seven-day period.
Other Fund Yields
From time to time, sales literature may quote the current annualized yield of
one or more of the Funds (except the Money Market Fund) for 30-day or one-month
periods. The annualized yield of a Fund refers to income generated by the Fund
during a 30-day or one-month period and is assumed to be generated each period
over a 12-month period.
The yield is computed by: 1) dividing the net investment income of the Fund for
the period; by 2) the maximum offering price per share on the last day of the
period times the daily average number of shares outstanding for the period; by
3) compounding that yield for a six-month period; and by 4) multiplying that
result by 2. The 30-day or one-month yield is calculated according to the
following formula:
Yield = 2 X (((NI - ES)/(U X UV)) + 1)6 - 1)
Where:
NI = net income of the Fund for the 30-day or one-month
period attributable to the Fund's shares.
ES = expenses of the Fund for the 30-day or one-month
period.
U = the average number of shares outstanding.
UV = the share value at the close (highest) of the last
day in the 30-day or one-month period.
The yield normally fluctuates over time. Therefore, the disclosed yield for any
given past period is not an indication or representation of future yields or
rates of return. A Fund's actual yield is affected by the types and quality of
portfolio securities held and operating expenses.
Average Annual Total Returns
From time to time, sales literature may also quote average annual total returns
for one or more of the Funds for various periods of time.
When a Fund has been in operation for 1, 5, and 10 years, respectively, the
average annual total return for these periods will be provided. Average annual
total returns for other periods of time may, from time to time, also be
disclosed.
Standard average annual total returns represent the average annual compounded
rates of return that would equate an initial investment of $1,000 to the
redemption value of that investment as of the last day of each of the periods.
The ending date for each period for which total return quotations are provided
will be for the most recent month or calendar quarter-end practicable,
considering the type of the communication and the media through which it is
communicated.
The total return is calculated according to the following formula:
TR = ((ERV/P)1/N) - 1
Where:
TR = the average annual total return net of any Fund
recurring charges.
ERV = the ending redeemable value of the hypothetical
account at the end of the period.
P = a hypothetical initial payment of $1,000.
N = the number of years in the period.
Such average annual total return information for the Funds is as follows:
For the For the For the
1-year 5-year 10-year
period period period
ended ended ended
Fund 12/31/96 12/31/96 12/31/96
Capital Appreciation 21.44% N/A 18.74%*
Growth and Income 22.02% 14.84% 13.72%
Balanced 10.79% 9.74% 10.46%
Bond 2.86% 6.11% 7.51%
Treasury 2000 2.10% 7.42% 10.78%
* Capital Appreciation Fund returns are from inception, January 3, 1994.
Other Total Returns
From time to time, sales literature may also disclose cumulative total returns
in conjunction with the standard formats described above. The cumulative total
returns will be calculated using the following formula:
CTR = (ERV/P) - 1
Where:
CTR = The cumulative total return net of any Fund recurring
charges for the period.
ERV = The ending redeemable value of the hypothetical
investment at the end of the period.
P = A hypothetical single payment of $1,000.
DESCRIPTION OF BOND RATINGS (AS PUBLISHED BY THE RATING SERVICES)
Moody's Investors Service, Inc.
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa--Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics, and in
fact, have speculative characteristics as well.
Ba--Bonds which are rated Ba and below are judged to have speculative elements;
their future cannot be considered as well secured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa--Bonds which are rated Caa are a poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca--Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of this generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
Standard & Poor's Corporation
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA--Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the highest rated issues only in small degree.
A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.
BB--B--CCC--CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
Note: Standard & Poor's applies the modifiers of (+) or (-) in each generic
rating classification from "AA" through "B" in its corporate bond rating system.
The plus sign indicates that the security ranks in the higher end of this
generic rating category; the lack of a modifier indicates a mid-range ranking;
and the minus sign indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
DESCRIPTION OF COMMERCIAL PAPER RATINGS (AS PUBLISHED BY THE RATING SERVICES)
Moody's Investors Service, Inc.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment capacity of rated issuers:
Prime-1 Highest Quality
Prime-2 Higher Quality
Prime-3 High Quality
If an issuer represents to Moody's that its commercial paper obligations are
supported by the credit of another entity or entities, Moody's, in assigning
ratings to such issuers, evaluates the financial strength of the indicated
affiliated corporations, commercial banks, insurance companies, foreign
governments or other entities, but only as one factor in the total rating
assessment.
Standard & Poor's Corporation
A brief description of the applicable Standard & Poor's rating symbols for
investment grade commercial paper and their meanings follows:
A. Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1. This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety
characteristics will be denoted with a plus (+) sign
designation.
A-2. Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high
as for issues designated "A-1."
A-3. Issues carrying this designation have a satisfactory capacity
for timely payment. They are, however, somewhat more
vulnerable to the adverse effects of changes in circumstances
than obligations carrying the higher designations.
FINANCIAL STATEMENTS
Data from the most recent annual report begins on the next page.
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Assets and Liabilities
December 31, 1996
Capital Growth and Money Treasury
Appreciation Income Stock Balanced Bond Market 2000
Assets: Stock Fund Fund Fund Fund Fund Fund
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Investments in securities, at value,
(note 2)-see accompanying schedule
(cost $86,149,857) $99,257,406 $ -- $ -- $ -- $ -- $ --
(cost $195,704,851) -- 234,433,573 -- -- -- --
(cost $177,868,978) -- -- 193,469,283 -- -- --
(cost $26,049,732) -- -- -- 26,144,779 -- --
(cost $21,019,331) -- -- -- -- 21,019,331 --
(cost $1,388,086) -- -- -- -- -- 1,585,290
Receivable for securities sold 556,544 453,046 267,730 -- -- --
Accrued interest receivable 18,614 9,180 1,378,366 441,478 5,668 --
Accrued dividends receivable 128,297 447,009 153,501 -- -- --
----------- ----------- ----------- ---------- ---------- ----------
Total assets 99,960,861 235,342,808 195,268,880 26,586,257 21,024,999 1,585,290
----------- ----------- ----------- ---------- ---------- ----------
Liabilities:
Payable for securities purchased 1,234,318 2,376,550 437,598 -- -- --
Dividends payable -- -- -- -- 2,750 --
Accrued expenses 52,710 125,485 106,408 14,334 11,262 549
----------- ----------- ----------- ---------- ---------- ----------
Total liabilities 1,287,028 2,502,035 544,006 14,334 14,012 549
----------- ----------- ----------- ---------- ---------- ----------
Net assets applicable to outstanding
capital stock $98,673,833 $232,840,773 $194,724,874 $26,571,923 $21,010,987 $1,584,741
=========== =========== =========== ========== ========== ==========
Represented by:
Capital stock, par value $.01 $67,593 $109,196 $127,374 $25,731 $210,110 $1,834
Additional paid-in capital 85,416,504 193,792,032 178,833,180 26,433,111 20,800,877 1,385,703
Undistributed net investment income 14,253 69,558 94,881 18,034 -- --
Undistributed net realized gain(loss)
on investments 67,934 141,265 69,134 -- -- --
Unrealized appreciation (depreciation)
on investments 13,107,549 38,728,722 15,600,305 95,047 -- 197,204
----------- ----------- ----------- ---------- ---------- ----------
Total net assets - representing
net assets applicable to outstanding
capital stock $98,673,833 $232,840,773 $194,724,874 $26,571,923 $21,010,987 $1,584,741
=========== =========== =========== ========== ========== ==========
Number of shares issued and
outstanding (note 5) 6,759,264 10,919,647 12,737,422 2,573,070 21,010,987 183,351
=========== =========== =========== ========== ========== ==========
Net asset value per share of
outstanding capital stock(note 2) $14.60 $21.32 $15.29 $10.33 $1.00 $8.64
=========== =========== =========== ========== ========== ==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Investments in Securities
December 31, 1996
CAPITAL APPRECIATION STOCK % Net Quality Annualized Maturity Par
FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Short-Term Investments:
Commercial Paper/Savings: 4.7%
Coca-Cola Co. A-1+/P-1 5.69% Jan 09, 1997 $1,000,000 $998,756
Merrill Lynch Capital Markets A-1+/P-1 5.72% Jan 21, 1997 1,500,000 1,495,316
Chase Manhattan - Cash Account 4.65% 2,140,155 2,140,155
---------
TOTAL SHORT-TERM INVESTMENTS $4,634,227
---------
% Net
Long-Term Investments: Assets Shares Value
Common Stocks: 95.9%
Forest Products/Paper: 2.1%
Champion International Corp. 22,150 $957,987
Georgia Pacific Corp. 4,800 345,600
Potlatch Corporation 9,700 417,100
Union Camp Corp. 7,500 358,125
--------
Forest Products/Paper total 2,078,812
--------
Insurance: 4.5%
Aetna, Inc. 35,800 2,864,000
Allstate Corporation 26,402 1,528,015
--------
Insurance total 4,392,015
--------
Banks: 1.3%
Bankers Trust New York Corp. 14,400 1,242,000
--------
Investment Banking/Brokerage: 9.0%
A. G. Edwards, Inc. 47,700 1,603,912
Dean Witter Discover & Company 11,200 742,000
Everest Reinsurance Holdings, Inc. 42,900 1,233,375
Mutual Risk Management Ltd. 78,833 2,916,820
Salomon Inc. 51,100 2,408,088
--------
Investment Banking/Brokerage total 8,904,195
--------
Drugs/Health Care: 9.7%
Bristol-Myers Squibb Co. 16,700 1,816,125
Centocor Inc.*** 42,300 1,512,225
Glaxo Wellcome PLC - ADR 92,900 2,949,575
Healthsource, Inc.*** 46,000 603,750
MedPartners, Inc.*** 59,252 1,244,292
Pharmacia & Upjohn, Inc. 35,700 1,414,613
--------
Drugs/Health Care total 9,540,580
--------
Hospital Management/Supplies: 2.2%
Biomet, Inc. 45,800 692,725
Columbia/HCA Healthcare Corp. 37,100 1,511,825
--------
Hospital Management/Supplies total 2,204,550
--------
Retail-Discount: 2.9%
Price/Costco, Inc.*** 72,200 1,814,025
Wal-Mart Stores, Inc. 47,600 1,088,850
--------
Retail-Discount total 2,902,875
--------
Media: 4.3%
Banta Corporation 43,600 997,350
Cognizant Corp. 15,700 518,100
Dun & Bradstreet Corp. 15,700 372,875
K-III Communications, Inc.*** 222,100 2,387,575
--------
Media total 4,275,900
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
CAPITAL APPRECIATION STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Foods - Products & Service: 6.5%
General Mills Inc. 21,500 $1,362,563
Hudson Foods, Inc. 39,900 758,100
Nabisco Holdings Corp. - Class A 38,200 1,485,025
Sara Lee Corp. 34,100 1,270,225
Tyson Foods, Inc. - Class A 44,700 1,530,975
--------
Foods - Products & Service total 6,406,888
--------
Auto-Related: 2.4%
General Motors Corporation 16,500 919,875
Jason, Inc.*** 87,400 568,100
Strattec Security Corp.*** 50,250 917,063
--------
Auto-Related total 2,405,038
--------
Apparel/Textile: 0.7%
Nine West Group, Inc.*** 14,500 672,438
--------
Office Equipment/Computers: 12.9%
Alphanet Solutions, Inc.*** 36,900 590,400
Amdahl Corp.*** 116,200 1,408,925
EMC Corp.*** 125,500 4,157,188
International Business Machines Corp. 12,050 1,819,550
Seagate Technology, Inc.*** 25,400 1,003,300
Wang Laboratories, Inc.*** 182,500 3,695,625
---------
Office Equipment/Computers total 12,674,988
---------
Electronics-Semiconductors: 1.5%
Dallas Semiconductor Corporation 33,000 759,000
Micron Technology, Inc.*** 23,700 690,262
--------
Electronics-Semiconductors total 1,449,262
--------
Electronics: 1.2%
Texas Instruments, Inc. 18,100 1,153,875
--------
Pollution Control: 2.7%
WMX Technologies, Inc. 81,900 2,671,988
--------
Oil/Oil Service: 6.2%
Exxon Corp. 8,400 823,200
Occidental Petroleum Corp. 82,500 1,928,437
Schlumberger, Ltd. 5,800 579,275
Unocal Corp. 22,700 922,188
USX-Marathon Group 78,400 1,871,800
--------
Oil/Oil Service total 6,124,900
--------
Natural Gas-Diversified: 1.1%
Belden & Blake Corp.*** 43,900 1,119,450
--------
Containers: 3.3%
Owens Illinois, Inc.*** 143,500 3,264,625
--------
Chemicals: 1.1%
Dow Chemical Company 4,600 360,525
Lyondell Petrochemcial Company 32,500 715,000
--------
Chemicals total 1,075,525
--------
Transportation: 1.2%
Delta Air Lines, Inc. 6,400 453,600
Hunt (JB) Transport Services, Inc. 29,300 410,200
Midwest Express Holdings, Inc.*** 9,700 349,200
--------
Transportation total 1,213,000
</TABLE>
<TABLE>
<CAPTION>
--------
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
CAPITAL APPRECIATION STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Telecommunications: 12.4%
Aerial Communications, Inc.*** 66,000 $536,250
Airtouch Communications, Inc.*** 146,600 3,701,650
Cox Communications, Inc.*** 73,100 1,690,438
Telefonos deMexico SP ADR - Cl L 82,900 2,735,700
U.S. West Media Group*** 192,000 3,552,000
---------
Telecommunications total 12,216,038
---------
Utilities-Telephone: 2.6%
Ameritech Corporation 18,800 1,139,750
Bell Atlantic Corporation 22,150 1,434,212
--------
Utilities-Telephone total 2,573,962
--------
Utilities-Electric: 0.7%
Pacific Gas & Electric Company 30,900 648,900
--------
Diversified Companies: 1.2%
Rockwell International Corporation 18,600 1,132,275
--------
Miscellaneous: 2.3%
Interim Services, Inc.*** 64,200 2,279,100
--------
TOTAL COMMON STOCKS
(COST: $81,515,630) $94,623,179
----------
TOTAL INVESTMENTS, CAPITAL APPRECIATION
STOCK FUND (COST: $86,149,857) $99,257,406
==========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At December 31, 1996, the cost of securities for federal income tax
purposes was $86,149,857. The aggregate unrealized appreciation and depreciation
of investments in securities based on this cost were:
Gross unrealized appreciation...............$15,471,798
Gross unrealized depreciation...............(2,364,249)
---------
Net unrealized appreciation.................$13,107,549
=========
***This Security is not income producing.
</FN>
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
GROWTH AND INCOME STOCK % Net Quality Annualized Maturity Par
FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
Short-Term Investments:
<S> <C> <C> <C> <C> <C> <C>
Commercial Paper/Savings: 5.8%
Associates Corp of North America A-1+/P-1 5.32% Feb 18, 1997 $3,000,000 $2,984,928
CIT Group Holdings A-1/P-1 5.48% Mar 11, 1997 1,000,000 989,784
Ford Motor Credit Company A-1/P-1 5.42% Feb 10, 1997 2,000,000 1,988,244
General Electric Capital Corporation A-1+/P-1 5.43% Feb 04, 1997 2,900,000 2,888,415
Interstate Power Co. A-1/P-1 5.45% Jan 09, 1997 800,000 799,052
Madison Gas & Electric A-1+/P-1 5.57% Jan 15, 1997 1,000,000 997,874
Chase Manhattan - Cash Account 4.65% 2,908,315 2,908,315
--------
TOTAL COMMERCIAL PAPER,
SAVINGS, AT COST $13,556,612
----------
% Net
Long-Term Investments: Assets Shares Value
Common Stocks: 94.9%
Forest Products/Paper: 1.6%
Champion International Corp. 44,800 $1,937,600
Georgia Pacific Corp. 11,600 835,200
Louisiana - Pacific Corporation 43,500 918,938
Union Camp Corp. 18,000 859,500
--------
Forest Products/Paper total 4,551,238
--------
Insurance: 6.9%
Aetna Inc. 98,500 7,880,000
Allstate Corporation 107,219 6,205,300
Everest Reinsurance Holdings, Inc. 68,800 1,978,000
---------
Insurance total 16,063,300
---------
Banks: 1.4%
Bankers Trust New York Corp. 36,800 3,174,000
--------
Investment Banking/Brokerage: 4.2%
A. G. Edwards, Inc. 74,100 2,491,612
Dean Witter Discover & Company 38,500 2,550,625
Salomon Inc. 98,500 4,641,813
--------
Investment Banking/Brokerage total 9,684,050
--------
Drugs/Health Care: 11.1%
Bristol-Myers Squibb Co. 66,750 7,259,062
Glaxo Wellcome PLC - ADR 289,800 9,201,150
MedPartners, Inc.*** 78,185 1,641,885
Pharmacia & Upjohn, Inc. 115,365 4,571,338
United Healthcare Corp. 70,000 3,150,000
---------
Drugs/Health Care total 25,823,435
---------
Hospital Management/Supplies: 3.5%
Columbia/HCA Healthcare Corp. 198,406 8,085,045
--------
Retail - Discount: 3.5%
Price/Costco, Inc.*** 113,500 2,851,687
Wal-Mart Stores, Inc. 229,400 5,247,525
--------
Retail - Discount total 8,099,212
--------
Retail - Drug: 1.6%
Revco D. S., Inc.*** 97,700 3,614,900
--------
Real Estate: 0.8%
Highwood Properties, Inc. 57,500 1,940,625
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
GROWTH AND INCOME STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Media 3.7%
Banta Corporation 99,900 $2,285,212
Cognizant Corp 37,900 1,250,700
Cox Communications, Inc.*** 119,900 2,772,688
Dun & Bradstreet Corp. 92,900 2,206,375
--------
Media total 8,514,975
--------
Foods - Products & Service: 9.7%
General Mills Inc. 83,600 5,298,150
Nabisco Holdings Corp. - Class A 150,300 5,842,912
Sara Lee Corp. 153,000 5,699,250
Tyson Foods Inc., - Class A 168,800 5,781,400
---------
Foods - Products & Service total 22,621,712
---------
Auto-Related: 2.9%
Echlin, Inc. 99,400 3,143,525
General Motors Corporation 64,000 3,568,000
--------
Auto-Related total 6,711,525
--------
Office Equipment/Computers: 9.4%
Amdahl Corp.*** 181,900 2,205,537
EMC Corp.*** 229,900 7,615,438
International Business Machines Corp. 70,950 10,713,450
Seagate Technology, Inc.*** 35,400 1,398,300
---------
Office Equipment/Computers total 21,932,725
---------
Electronics: 2.0%
Texas Instruments, Inc. 74,000 4,717,500
--------
Electrical Equipment: 0.5%
Grainger, (W.W.) Inc. 15,000 1,203,750
--------
Pollution Control: 3.7%
WMX Technologies, Inc. 262,700 8,570,588
--------
Oil/Oil Service: 7.8%
Amoco Corporation 36,850 2,966,425
Exxon Corp. 42,100 4,125,800
Occidental Petroleum Corp. 127,600 2,982,650
Schlumberger, Ltd. 10,650 1,063,668
Texaco Inc. 13,700 1,344,312
Unocal Corp. 53,800 2,185,625
USX-Marathon Group 149,600 3,571,700
---------
Oil/Oil Service total 18,240,180
---------
Containers: 2.0%
Owens-Illinois, Inc.*** 200,300 4,556,825
--------
Chemicals: 0.8%
Dow Chemical Company 24,000 1,881,000
--------
Transportation: 1.0%
Delta Air Lines, Inc. 24,100 1,708,088
Hunt (JB) Transport Services, Inc. 45,800 641,200
--------
Transportation total 2,349,288
--------
Telecommunications: 4.7%
Airtouch Communications, Inc. 156,800 3,959,200
U.S. West Media Group*** 372,700 6,894,950
---------
Telecommunications total 10,854,150
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
GROWTH AND INCOME STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Utilities-Telephone: 6.1%
Ameritech Corporation 76,200 $4,619,625
Bell Atlantic Corporation 87,150 5,642,963
GTE Corp. 87,300 3,972,150
---------
Utilities-Telephone total 14,234,738
---------
Utilities-Electric: 2.7%
Duke Power Company 35,300 1,632,625
Northern States Power Company 40,000 1,835,000
Pacific Gas & Electric Company 130,100 2,732,100
--------
Utilities-Electric total 6,199,725
--------
Diversified Companies: 3.1%
Alexander & Baldwin, Inc. 57,800 1,445,000
Rockwell International Corp. 95,400 5,807,475
--------
Diversified Companies total 7,252,475
--------
TOTAL COMMON STOCKS
(COST: $182,148,240) $220,876,961
-----------
TOTAL INVESTMENTS, GROWTH AND
INCOME STOCK FUND (COST: $195,074,851)** $234,433,573
===========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At December 31, 1996, the cost of securities for federal income tax
purposes was $195,074,851. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation.........................$41,217,593
Gross unrealized depreciation.........................(2,488,871)
----------
Net unrealized appreciation...........................$38,728,722
==========
***This Security is not income producing.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
% Net Quality Annualized Maturity Par
BALANCED FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Short-Term Investments:
Commercial Paper/Savings: 7.5%
CIT Group Holdings A-1/P-1 5.48% Mar 11, 1997 $4,000,000 $3,946,947
Ford Motor Credit Corporation A-1/P-1 5.42% Jan 21, 1997 2,000,000 1,994,111
General Electric Capital Corporation A-1+/P-1 5.41% Jan 07, 1997 2,000,000 1,998,240
Interstate Power Company A-1/P-1 5.45% Jan 09, 1997 2,000,000 1,997,631
John Deere Capital A-1/P-1 5.44% Feb 25, 1997 2,000,000 1,983,897
Merrill Lynch Capital Markets A-1+/P-1 5.48% Mar 05, 1997 2,000,000 1,981,415
Chase Manhattan - Cash Account 4.65% 747,560 747,560
--------
TOTAL COMMERCIAL PAPER/SAVINGS $14,649,801
----------
Government Guaranteed - U.S.: 0.5%
U.S. Treasury Bill 5.29% Feb 06, 1997 1,000,000 994,910
--------
Quasi-Government/Government Sponsored: 2.1%
Federal Home Loan Bank Discount Notes 5.35% Jan 23, 1997 2,000,000 1,993,632
Federal Home Loan Bank Discount Notes 5.43% Jan 03, 1997 2,000,000 1,999,417
--------
TOTAL QUASI-GOVERNMENT/
GOVERNMENT SPONSORED 3,993,049
--------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $19,637,760
----------
% Net Quality Coupon Maturity Par
Long-Term Investments: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
Government Guaranteed - U.S.: 8.0%
U.S. Treasury Notes AAA 8.500 Feb 15, 2000 $500,000 $534,063
U.S. Treasury Notes AAA 7.875 Nov 15, 1999 500,000 524,063
U.S. Treasury Notes AAA 7.125 Oct 15, 1998 1,000,000 1,020,313
U.S. Treasury Notes AAA 7.500 Nov 15, 2001 1,000,000 1,053,126
U.S. Treasury Notes AAA 7.875 Apr 15, 1998 1,000,000 1,023,751
U.S. Treasury Notes AAA 5.500 Apr 15, 2000 500,000 491,719
U.S. Treasury Notes AAA 7.125 Sep 30, 1999 1,000,000 1,027,501
U.S. Treasury Notes AAA 5.875 Feb 15, 2004 850,000 827,954
U.S. Treasury Notes AAA 5.750 Aug 15, 2003 700,000 679,219
U.S. Treasury Notes AAA 6.500 May 15, 2005 1,100,000 1,108,251
U.S. Treasury Notes AAA 6.500 Aug 15, 2005 700,000 705,032
U.S. Treasury Notes AAA 5.875 Nov 15, 2005 1,350,000 1,302,751
U.S. Treasury Notes AAA 6.875 May 15, 2006 1,000,000 1,031,251
U.S. Treasury Notes AAA 6.625 Jul 31, 2001 1,400,000 1,422,751
U.S. Treasury Notes AAA 6.375 May 15, 1999 2,000,000 2,018,126
U.S. Treasury Notes AAA 8.500 May 15, 1997 700,000 707,219
--------
TOTAL GOVERNMENT GUARANTEED- U.S.
(COST: $15,443,355) $15,477,090
----------
Quasi-Government/Government Sponsored: 7.1%
Federal Home Loan Bank AAA 5.440 Oct 15, 2003 620,000 583,363
Federal Home Loan Bank AAA 6.440 Jan 28, 2000 250,000 251,939
FHLMC 1455 HA AAA 7.900 Jun 15, 2021 3,344,000 3,503,445
FHLMC 1378 H AAA 10.000 Jan 15, 2021 2,250,000 2,534,328
FNMA Pass Through Certificate AAA 8.000 Feb 01, 2002 102,447 105,281
FNMA Pass Through Certificate AAA 8.400 Nov 25, 2019 1,600,000 1,660,696
FNMA 1996 - M6 G AAA 7.750 Sep 17, 1923 4,000,000 4,122,500
Private Export Funding AAA 5.500 Mar 15, 2001 1,000,000 970,211
--------
TOTAL QUASI-GOVERNMENT/GOVERNMENT
SPONSORED (COST: $13,697,208) $13,731,763
----------
Nonconvertible Corporate Bonds: 29.4%
Building Materials: 0.2%
Stanley Works A-2/A 7.375 Dec 15, 2002 $250,000 $258,962
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Drug/Health Care: 1.1%
Abbott Laboratories, Inc. AA-1/AAA 6.800 May 15, 2005 $500,000 $502,033
American Home Products, Corp. A-2/A- 7.700 Feb 15, 2000 1,000,000 1,037,567
Bergen Brunswig BAA-1/A- 7.250 Jun 01, 2005 500,000 499,986
--------
Drug/Health Care total 2,039,586
--------
Electronics: 0.5%
Raytheon Co. A-1/A+ 6.500 Jul 15, 2005 500,000 485,306
Texas Instruments, Inc. A-3 9.000 Mar 15, 2001 500,000 544,014
--------
Electronics total 1,029,320
--------
Forest Products/Paper: 2.1%
Champion International Corp. BAA-1/BBB 9.875 Jun 01, 2000 250,000 274,874
Champion International Corp. BAA-1/BBB 7.100 Sep 01, 2005 1,550,000 1,547,580
International Paper A-3/A- 7.875 Aug 01, 2006 500,000 529,075
Kimberly Clark Corp. AA-2/AA 9.000 Aug 01, 2000 750,000 810,952
Weyerhaeuser Company A-2/A 8.375 Feb 02, 2007 800,000 883,468
--------
Forest Products/Paper total 4,045,949
--------
Hospital Supplies: 0.5
Baxter International, Inc. A-3/A 7.625 Nov 15, 2002 250,000 259,984
Columbia/HCA Healthcare Corporation A-2/A- 6.910 Jun 15, 2005 700,000 700,323
--------
Hospital Supplies total 960,307
--------
Insurance/Casualty: 0.3%
Lincoln National Corp. A-2/A 7.250 May 15, 2005 500,000 501,678
--------
Investment Banking/Brokerage: 3.0%
Dean Witter Discover & Company A-2/A 6.250 Mar 15, 2000 200,000 198,847
Donaldson, Lufkin Jenrette, Inc. BAA-1/A- 6.875 Nov 01, 2005 300,000 292,808
Donaldson, Lufkin Jenrette, Inc. BAA-1/A- 5.625 Feb 15, 2016 500,000 479,550
Merrill Lynch AA-3/AA- 6.250 Jan 15, 2006 650,000 617,070
Merrill Lynch AA-3/AA- 7.000 Mar 15, 2006 1,000,000 997,580
Paine Webber Group BAA-1/BBB+ 6.750 Feb 01, 2006 1,000,000 956,406
Salomon Inc. BAA-1/BBB 6.700 Dec 01, 1998 650,000 653,322
Salomon Inc. BAA-1/BBB 7.125 Aug 01, 1999 1,000,000 1,012,165
Salomon Inc. BAA-1/BBB 6.875 Dec 15, 2003 600,000 587,030
--------
Investment Banking/Brokerage total 5,794,778
--------
Finance Co. - Consumer Loan: 0.8%
American General Finance A-1/A+ 7.125 Dec 01, 1999 500,000 510,056
Household Finance Co. A-2/A 7.125 Sep 01, 2005 500,000 505,046
Norwest Financial Inc. AA-3/AA- 7.875 Feb 15, 2002 500,000 526,512
--------
Finance Co. - Consumer Loan total 1,541,614
--------
Mortgage Related Securities: 0.7%
Prudential Home Funding AAA 6.050 Apr 25, 2024 1,500,000 1,305,720
--------
Cosmetics/Personal Care: 0.1%
Gillette Co. AA-3/AA- 5.750 Oct 15, 2005 300,000 280,557
--------
Leisure Time 0.5%
Walt Disney Company A-2/A 6.750 Mar 30, 2006 1,000,000 992,867
--------
Media: 0.1%
McGraw-Hill, Inc. A-1 9.430 Sep 01, 2000 250,000 272,311
--------
Publishing-News: 0.3%
Knight Ridder, Inc. A-1/AA- 8.500 Sep 01, 2001 500,000 529,373
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Retail-Department: 1.1%
Dayton Hudson Corp. BAA-1/BBB+ 9.750 Nov 01, 1998 $500,000 $ 528,868
Dayton Hudson Corp. BAA-1/BBB+ 7.500 Jul 15, 2006 1,000,000 1,022,370
J. C. Penney Co. A-1/A+ 6.875 Jun 15, 1999 500,000 505,420
--------
Retail-Department total 2,056,658
--------
Foods-Products & Services: 0.5%
Archer Daniels Midland AA-2/AA- 6.250 May 15, 2003 500,000 487,752
Sysco Corporation A-1/AA- 6.500 Jun 15, 2005 585,000 572,034
--------
Foods-Products & Services total 1,059,786
--------
Beverage/Confect/Tobacco: 0.4%
Coca-Cola Co. AA-3/AA 6.000 Jul 15, 2003 500,000 485,840
Pepsico Inc. A-1/A 6.125 Jan 15, 1998 250,000 251,062
--------
Beverage/Confect/Tobacco total 736,902
--------
Auto-Related: 2.5%
Borg-Warner Automotive BAA-2/BBB+ 7.000 Nov 01, 2006 1,150,000 1,140,339
Ford Motor Company A-1/A+ 7.500 Nov 15, 1999 500,000 513,770
Ford Motor Company A-1/A+ 6.125 Jan 09, 2006 1,000,000 937,336
Ford Motor Company A-1/A+ 7.250 Oct 01, 2008 2,000,000 2,021,004
General Motors Corporation A-3/A- 7.000 Jun 15, 2003 300,000 302,693
--------
Auto-Related total 4,915,142
--------
Hotel & Motel 0.5%
Marriott International, Inc. BAA-1/A- 7.125 Jun 01, 2007 1,000,000 982,090
--------
Electrical Equipment: 0.3%
Emerson Electric Co. AA-1/AA+ 6.300 Nov 01, 2005 500,000 484,350
--------
Electric Household Appliances: 0.1%
Maytag Corporation BAA-1/BBB+ 9.750 May 15, 2002 250,000 282,283
--------
Finance-Diversified: 0.3%
Dow Capital B.V. A-1/A 7.125 Jan 15, 2003 250,000 254,666
Dow Capital B.V. A-1/A 7.375 Jul 15, 2002 250,000 257,987
--------
Finance-Diversified total 512,653
--------
Engineering/Construction Services: 0.5%
Foster Wheeler Corp. BAA-2/BBB 6.750 Nov 15, 2005 1,000,000 971,071
--------
Machinery/Tools: 0.6%
Giddings & Lewis BA-1/BBB 7.500 Oct 01, 2005 500,000 496,229
Ingersoll Rand Company A-2/A 6.480 Jun 01, 2025 700,000 689,728
--------
Machinery/Tools total 1,185,957
--------
Office Equipment/Computers: 0.4%
International Business Machines A-1/A 6.375 Jun 15, 2000 500,000 503,125
Xerox Corporation A-2/A 7.150 Aug 01, 2004 300,000 305,172
--------
Office Equipment/Computers total 808,297
--------
Telecommunications: 0.3%
Cox Communications BAA-2/A- 6.875 Jun 15, 2005 500,000 493,592
--------
Oil/Oil Service: 1.2%
Enron Corp. BAA-2/BBB+ 7.625 Sep 10, 2004 500,000 518,831
Mobil Corporation AA-2/AA 8.375 Feb 12, 2001 500,000 534,283
Shell Oil Company AA-1/AAA 6.625 Jul 01, 1999 300,000 302,731
Shell Canada, Ltd. A-1/AA 8.875 Jan 14, 2001 500,000 543,510
Union Oil California BAA-2/BBB 7.200 May 15, 2005 500,000 505,833
--------
Oil/Oil Service total 2,405,188
</TABLE>
<TABLE>
<CAPTION>
--------
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Pollution Control: 0.8%
Waste Management A-1/A+ 7.700 Oct 01, 2002 $350,000 $367,788
WMX Technologies A-1/A+ 6.700 May 01, 2001 1,250,000 1,251,900
--------
Pollution Control total 1,619,688
--------
Chemicals: 0.6%
PPG Industries, Inc. A-1/A 6.875 Aug 01, 2005 500,000 502,296
Union Carbide Corporation BBA-2/BBB 6.790 Jun 01, 2025 700,000 698,170
--------
Chemicals total 1,200,466
--------
Specialty Chemicals: 0.3%
Praxair, Inc. A-3/BBB+ 6.850 Jun 15, 2005 500,000 495,477
--------
Transportation: 4.0%
American Airlines A-3/BBB 8.040 Sep 16, 2011 1,000,000 1,042,830
Burlington Northern Inc. BAA-2/BBB 7.400 May 15, 1999 500,000 511,377
Delta Air Lines BAA-1/BBB 8.540 Jan 02, 2007 1,542,601 1,636,850
Federal Express A-3/BBB+ 7.890 Sep 28, 2008 500,000 521,680
Federal Express - Series A-2 A-3/BBB+ 7.850 Jan 30, 2015 1,000,000 1,032,210
Golden State Petroluem Transport Corp. BAA-2/BBB 8.040 Feb 01, 2019 2,000,000 1,987,420
Union Pacific Co. BAA-2/BBB 6.250 Mar 15, 1999 500,000 499,195
United Airlines BAA-1/BBB- 9.020 Apr 19, 2012 472,313 510,675
--------
Transportation total 7,742,237
--------
Aerospace/Defense: 0.9%
Lockheed Martin A-3/BBB+ 6.850 May 15, 2001 1,250,000 1,262,832
Rockwell International Corp. A-1/AA 7.625 Feb 17, 1998 500,000 508,772
--------
Aerospace/Defense total 1,771,604
--------
Utilities-Natural Gas Distribution: 0.4%
Laclede Gas Co. AA-3/AA- 6.250 May 01, 2003 700,000 685,017
--------
Utilities-Telephone: 1.9%
Alltel Corporation A2/A+ 7.250 Apr 01, 2004 500,000 508,852
Bell South Telecommunications, Inc. AAA/AAA 6.500 Feb 01, 2000 250,000 251,875
Bell South Telecommunications, Inc. AAA/AAA 6.500 Jun 15, 2005 350,000 344,658
Bell Tel of Penn AA-1/AA 6.125 Mar 15, 2003 500,000 487,678
GTE-California AA-3/AA- 6.250 Jan 15, 1998 250,000 250,922
GTE Corporation A-3/A- 9.100 Jun 01, 2003 500,000 560,810
New England Telephone & Telegraph AA-2/AA- 4.625 Jul 01, 2005 572,000 489,454
New York Telephone A-2/A 6.500 Mar 01, 2005 500,000 490,460
Northwestern Bell Telephone Co. AA-3/A+ 9.500 May 01, 2000 250,000 272,446
--------
Utilities-Telephone total 3,657,155
--------
Utilities-Electric: 1.3%
Central Power & Light, Inc. A-2/A 6.000 Oct 01, 1997 250,000 250,141
Consolidated Edison of New York, Inc. A-1/A+ 6.250 Apr 01, 1998 300,000 300,626
Florida Power Corp. AA-3/AA- 6.000 Jul 01, 2003 400,000 384,169
Midwest Power Systems A-2/A+ 7.125 Feb 01, 2003 250,000 254,112
Pacific Gas & Electric Co. A-2/A 6.250 Aug 01, 2003 300,000 291,620
Pacificorp A-2/A 6.750 Apr 01, 2005 500,000 493,169
Wisconsin Public Service, Inc. AA-2/AA+ 7.300 Oct 01, 2002 500,000 514,272
--------
Utilities-Electric total 2,488,109
--------
Utilities-Natural Gas Pipeline: 0.1%
Burlington Resources Inc. A-3/A- 9.625 Jun 15, 2000 250,000 273,298
--------
Diversified Companies 0.2%
Whitman Corporation BAA-2/BBB+ 7.500 Feb 01, 2003 300,000 309,122
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Miscellaneous: 0.1%
Chrysler Buildings of New York A-1/A- 9.125 May 01, 1999 $250,000 $263,111
--------
TOTAL NONCONVERTIBLE CORPORATE
BONDS (COST: $56,333,928) $56,952,275
----------
% Net
Assets Shares Value
Common Stocks: 45.2%
Forest Products/Paper: 0.9%
Champion International Corp. 18,300 $791,475
Georgia Pacific Corp. 4,700 338,400
Potlatch Corp 7,000 301,000
Union Camp Corp. 7,300 348,575
--------
Forest Products/Paper total 1,779,450
--------
Insurance: 3.2%
Aetna Inc. 38,700 3,096,000
Allstate Corporation 37,457 2,167,824
Everest Reinsurance Holdings, Inc. 36,200 1,040,750
--------
Insurance total 6,304,574
--------
Banks: 0.7%
Bankers Trust New York Corp. 14,700 1,267,875
--------
Investment Banking/Brokerage: 2.0%
A. G. Edwards, Inc. 35,800 1,203,775
Dean Witter Discover & Company 11,200 742,000
Salomon Inc. 40,100 1,889,713
--------
Investment Banking/Brokerage total 3,835,488
--------
Drugs/Health Care: 5.5%
Bristol-Myers Squibb Co. 23,400 2,544,750
Centocor Inc.*** 24,600 879,450
Glaxo Wellcome PLC - ADR 106,000 3,365,500
Healthsource, Inc.*** 30,900 405,562
MedPartners, Inc.*** 39,404 827,484
Pharmacia & Upjohn, Inc. 43,335 1,717,149
United Healthcare Corp. 20,800 936,000
---------
Drugs/Health Care total 10,675,895
---------
Hospital Management/Supplies: 1.5%
Biomet, Inc. 36,300 549,037
Columbia/HCA Healthcare Corp. 56,100 2,286,075
--------
Hospital Management/Supplies total 2,835,112
--------
Retail-Discount: 1.3%
Price/Costco, Inc.*** 37,700 947,212
Wal-Mart Stores, Inc. 67,700 1,548,638
--------
Retail-Discount total 2,495,850
--------
Retail-Drug: 0.7%
Revco D.S. Inc*** 36,400 1,346,800
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Media: 2.2%
Banta Corporation 38,000 $869,250
Cognizant Corp 12,800 422,400
Cox Communications, Inc.*** 65,900 1,523,938
Dun & Bradstreet Corp 12,800 304,000
K-III Communications Corp 113,600 1,221,200
--------
Media total 4,340,788
--------
Foods-Food Products: 3.8%
General Mills, Inc. 30,800 1,951,950
Nabisco Holdings Corp. - Class A 54,500 2,118,688
Sara Lee Corp. 34,300 1,277,675
Tyson Foods, Inc. - Class A 59,500 2,037,875
--------
Foods-Food Products total 7,386,188
--------
Auto-Related: 0.6%
General Motors Corporation 21,200 1,181,900
--------
Office Equipment/Computers: 5.5%
Amdahl Corp.*** 89,300 1,082,762
EMC Corp.*** 103,900 3,441,688
International Business Machines Corp. 22,050 3,329,550
Seagate Technology, Inc.*** 18,800 742,600
Wang Laboratories, Inc. *** 104,800 2,122,200
---------
Office Equipment/Computers total 10,718,800
---------
Electronics: 0.9%
Micron Technology Inc.*** 14,200 413,575
Texas Instruments, Inc. 19,700 1,255,875
--------
Electronics total 1,669,450
--------
Electrical Equipment: 0.3%
Grainger, (W. W.) Inc. 7,000 561,750
--------
Pollution Control: 1.6%
WMX Technologies, Inc. 98,050 3,198,880
--------
Oil/Oil Service: 3.7%
Amoco Corporation 10,900 877,450
Belden & Blake Corp.*** 32,000 816,000
Exxon Corp. 13,300 1,303,400
Occidental Petroleum Corp. 55,600 1,299,650
Schlumberger, Ltd. 5,050 504,369
Unocal Corp 21,300 865,312
USX-Marathon Group 65,600 1,566,200
--------
Oil/Oil Service total 7,232,381
--------
Containers: 1.3%
Owens-Illinois, Inc.*** 106,900 2,431,975
--------
Chemicals: 0.3%
Dow Chemical Company 7,100 556,463
--------
Specialty Chemicals: 0.2%
Lyondell Petrochemical Company 18,550 408,100
--------
Transportation: 0.6%
Delta Air Lines, Inc. 10,300 730,013
Hunt (JB) Transport Services, Inc. 27,200 380,800
--------
Transportation total 1,110,813
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Telecommunications: 2.1%
Telefonos deMexico SP ADR Cl L 38,400 $1,267,200
US West Media Group*** 153,800 2,845,300
--------
Telecommunications total 4,112,500
--------
Utilities-Telephone: 3.8%
Airtouch Communications, Inc.*** 109,850 2,773,712
Ameritech Corporation 24,700 1,497,438
Bell Atlantic Corporation 31,400 2,033,150
GTE Corp. 24,100 1,096,550
--------
Utilities-Telephone total 7,400,850
--------
Utilities-Electric: 0.9%
Northern States Power Company 18,400 844,100
Pacific Gas & Electric Company 39,200 823,200
--------
Utilities-Electric total 1,667,300
--------
Diversified Companies: 1.1%
Alexander & Baldwin, Inc. 21,700 542,500
Rockwell International Corporation 26,700 1,625,363
--------
Diversified Companies total 2,167,863
--------
Miscellaneous: 0.5%
Interim Services, Inc.*** 27,700 983,350
--------
TOTAL COMMON STOCKS,
(COST: $72,756,728) $87,670,395
----------
TOTAL INVESTMENTS, BALANCED FUND
(COST: $177,868,978) $193,469,283
===========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At December 31, 1996, the cost of securities for federal income tax
purposes was $177,868,978. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation...........................$17,755,361
Gross unrealized depreciation...........................(2,155,056)
---------
Net unrealized appreciation.............................$15,600,305
=========
***This Security is not income producing.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
% Net Quality Annualized Maturity Par
BOND FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
Short-Term Investments:
<S> <C> <C> <C> <C> <C> <C>
Commercial Paper/Savings: 1.3%
Interstate Power Co. A-1/P-1 5.94% Jan 09, 1997 $200,000 $199,740
J. C. Penney Funding A-1/P-1 5.92% Jan 13, 1997 100,000 99,806
Chase Manhattan - Cash Account 6.45% 47,419 47,418
--------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $346,964
--------
<FN>
* For Short-term Investments, Market Value is assumed to equal Book Value.
</FN>
% Net Quality Coupon Maturity Par
Government & Agency Bonds: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
Government Guaranteed - U.S.: 12.0%
U.S. Treasury Note AAA 8.500 May 15, 1997 $300,000 $303,095
U.S. Treasury Note AAA 7.125 Oct 15, 1998 250,000 255,078
U.S. Treasury Note AAA 7.500 Nov 15, 2001 200,000 210,625
U.S. Treasury Note AAA 7.125 Sep 30, 1999 250,000 256,875
U.S. Treasury Note AAA 5.875 Feb 15, 2004 150,000 146,110
U.S. Treasury Note AAA 5.750 Aug 15, 2003 200,000 194,063
U.S. Treasury Note AAA 6.500 May 15, 2005 400,000 403,000
U.S. Treasury Note AAA 6.500 Aug 15, 2005 300,000 302,156
U.S. Treasury Note AAA 5.875 Nov 15, 2005 100,000 96,500
U.S. Treasury Note AAA 6.625 Jul 31, 2001 1,000,000 1,016,251
--------
Government Guaranteed - U.S.
(COST: $3,196,968) $3,183,753
---------
Quasi-Government/Government Sponsored: 14.4%
Federal Home Loan Mortgage Corp. AAA 6.440 Jan 28, 2000 150,000 151,163
Federal Home Loan Mortgage Corp. AAA 7.900 Jun 15, 2021 836,000 875,861
Federal Home Loan Mortgage Corp. AAA 10.000 Jan 15, 2021 750,000 844,776
FHLMC Pass Through Certificate AAA 8.500 Apr 01, 2001 7,871 8,128
FHLMC Pass Through Certificate AAA 8.500 May 01, 2001 19,359 19,991
Federal National Mortgage Association AAA 8.400 Nov 25, 2019 400,000 415,174
Federal National Mortgage Association AAA 7.750 Sep 17, 2023 1,000,000 1,030,625
Private Export Funding AAA 5.500 Mar 15, 2001 500,000 485,106
--------
Quasi-Government/Government Sponsored
(COST: $3,830,953) $3,830,824
---------
Nonconvertible Corporate Bonds: 70.5%
Forest Products/Paper: 3.6%
Champion International Corp. BAA-1/BBB 9.875 Jun 01, 2000 $100,000 $109,950
Champion International Corp. BAA-1/BBB 7.100 Sep 01, 2005 750,000 748,829
Kimberly-Clark Corp. AA-2/AA 9.000 Aug 01, 2000 100,000 108,127
--------
Forest Products/Paper total 966,906
--------
Financing & Leasing: 3.7%
International Lease Finance A-1/A+ 5.625 Mar 01, 1998 1,000,000 996,260
--------
Investment Banking/Brokerage: 9.6%
Donaldson, Lufkin, Jenrette, Inc. BAA-1/A- 6.875 Nov 01, 2005 200,000 195,205
Donaldson, Lufkin, Jenrette, Inc. BAA-1/A- 5.625 Feb 15, 2016 200,000 191,820
Lehman Brothers Holdings BAA-1/A 5.750 Feb 15, 1998 500,000 497,818
Merrill Lynch AA-3/AA- 6.250 Jan 15, 2006 350,000 332,268
Paine Webber Group BAA-1/BBB+ 6.750 May 01, 2006 700,000 669,484
Salomon Inc. BAA-1/BBB 6.700 Dec 01, 1998 150,000 150,767
Salomon Inc. BAA-1/BBB 7.125 Aug 01, 1999 500,000 506,083
--------
Investment Banking/Brokerage total 2,543,445
--------
Finance Co. - Consumer Loans: 1.2%
Household Finance Co. A-2/A 7.125 Sep 01, 2005 325,000 328,280
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BOND FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Mortgage Related Securities: 1.6%
Prudential Home Funding AAA 6.050 Apr 25, 2024 $500,000 $435,240
--------
Drugs/Health Care: 2.7%
Abbott Labs AA-1/AAA 5.600 Oct 01, 2003 200,000 189,336
American Home Products A-2/A- 7.700 Feb 15, 2000 500,000 518,784
--------
Drugs/Health Care total 708,120
--------
Hospital Management/Supplies 1.1%
Columbia/HCA Healthcare Corporation A-2/A- 6.910 Jun 15, 2005 300,000 300,139
--------
Leisure Time 1.9%
Walt Disney Company A-2/A 6.750 Mar 30, 2006 500,000 496,434
--------
Media: 0.4%
McGraw-Hill, Inc. A-1 9.430 Sep 1, 2000 100,000 108,924
--------
Retail-Department: 2.9%
Dayton Hudson Corp. BAA-1/BBB+ 9.750 Nov 01, 1998 250,000 264,434
Dayton Hudson Corp. BAA-1/BBB+ 7.500 Jul 15, 2006 500,000 511,185
--------
Retail-Department total 775,619
--------
Foods-Products & Services: 0.4%
Dean Foods Co. A-3/A 6.750 Jun 15, 2005 100,000 98,466
--------
Beverages/Confect/Tobacco: 0.9%
Coca-Cola Co. AA-3/AA 6.000 Jul 15, 2003 250,000 242,920
--------
Auto-Related: 1.1%
Ford Motor Co. A-1/A+ 7.500 Nov 15, 1999 200,000 205,508
General Motors Acceptance Corporation A-3/A- 6.625 Oct 01, 2002 100,000 99,155
--------
Auto-Related total 304,663
--------
Hotel & Motel: 1.8%
Marriott International, Inc. BAA-1/A- 7.125 Jun 01, 2007 500,000 491,045
--------
Electronics: 3.0%
Motorola Inc. AA-3/AA 6.500 Sep 01, 2025 500,000 497,012
Raytheon Co. A-1/A+ 6.500 Jul 15, 2005 300,000 291,184
--------
Electronics total 788,196
--------
Electrical Equipment: 1.1%
Emerson Electric Co. AA-1/AA+ 6.300 Nov 01, 2005 300,000 290,610
--------
Aerospace/Defense: 3.4%
Lockheed Martin A-3/BBB+ 6.850 May 15, 2001 750,000 757,700
Rockwell International Corp. A-1/AA 6.750 Sep 15, 2002 150,000 150,763
--------
Aerospace/Defense total 908,463
--------
Electric Household Appliance: 0.4%
Maytag Corporation BAA-1/BBB+ 9.750 May 15, 2002 100,000 112,913
--------
Engineering/Construction Services: 0.7%
Foster Wheeler Corp. BAA-2/BBB 6.750 Nov 15, 2005 200,000 194,214
--------
Machine Tools: 2.0%
Giddings & Lewis BA1/BBB 7.500 Oct 01, 2005 250,000 248,114
Ingersoll Rand Company A-2/A 6.480 Jun 01, 2025 300,000 295,598
--------
Machine Tools total 543,712
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BOND FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Finance-Diversified: 1.0%
Dow Capital B.V. A-1/A 7.375 Jul 15, 2002 $250,000 $257,987
--------
Pollution Control: 3.4%
Waste Management A-1/A+ 7.700 Oct 01, 2002 150,000 157,623
WMX Technologies, Inc. A-1/A+ 6.700 May 01,2001 750,000 751,140
--------
Pollution Control total 908,763
--------
Oil/Oil Service: 2.9%
Enron Corp. BAA-2/BBB+ 7.625 Sep 10, 2004 300,000 311,298
Shell Oil Company AA-1/AAA 6.625 Jul 01, 1999 150,000 151,366
Union Oil Co. of California BAA-2/BBB 7.200 May 15, 2005 300,000 303,500
--------
Oil/Oil Service total 766,164
--------
Chemicals: 1.1%
Union Carbide Corporation BAA-2/BBB 6.790 Jun 01, 2025 300,000 299,216
--------
Transportation: 11.6%
American Airlines A-3/BBB 8.040 Sep 16, 2011 500,000 521,415
Burlington Northern, Inc. BAA-2/BBB 7.400 May 15, 1999 200,000 204,551
Delta Air Lines BAA-1/BBB 8.540 Jan 02, 2007 305,438 324,217
Federal Express A-3/BBB+ 7.850 Jan 30, 2015 500,000 516,105
Golden State Petroleum Transport BAA-2/BBB 8.040 Feb 01, 2019 1,000,000 993,710
United Airlines BAA-1/BBB- 9.020 Apr 19, 2012 472,313 510,674
--------
Transportation total 3,070,672
--------
Metals-Fabrication & Manufacturing: 0.5%
Cyprus Minerals BAA-2/BBB- 6.625 Oct 15, 2005 130,000 125,250
--------
Utilities-Telephone: 2.5%
Bell South Telecommunications, Inc. AAA/AAA 6.500 Feb 01, 2000 150,000 151,125
Bell South Telecommunications, Inc. AAA/AAA 6.500 Jun 15, 2005 150,000 147,710
Bell Tel of Penn AA-1/AA 6.125 Mar 15, 2003 250,000 243,839
Northwestern Bell Telephone Co. AA-3/A+ 9.500 May 01, 2000 100,000 108,978
--------
Utilities-Telephone total 651,652
--------
Utilities-Electric: 3.2%
Consolidated Edison of New York A-1/A+ 6.250 Apr 01, 1998 200,000 200,418
Midwest Power Systems A-2/A+ 7.125 Feb 01, 2003 150,000 152,467
Pacificorp A-2/A 6.750 Apr 01, 2005 250,000 246,584
Wisconsin Public Service, Inc. AA-2/AA+ 7.300 Oct 01, 2002 250,000 257,136
--------
Utilities-Electric total 856,605
--------
Utilities-Natural Gas Pipeline: 0.4%
Burlington Resources, Inc. A-3/A- 9.625 Jun 15, 2000 100,000 109,319
--------
Diversified Companies: 0.4%
Whitman Corporation BAA-2/BBB+ 7.500 Feb 01, 2003 100,000 103,041
--------
TOTAL NONCONVERTIBLE CORPORATE
BONDS (COST: $18,674,846) $18,783,238
----------
TOTAL INVESTMENTS, BOND FUND
(COST: $26,049,732)** $26,144,779
==========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At December 31, 1996, the cost of securities for federal income tax
purposes was $26,049,732. The aggregate unrealized appreciation and depreciation
of investments in securities based on this cost were:
Gross unrealized appreciation......................... $288,316
Gross unrealized depreciation.........................(193,269)
--------
Net unrealized depreciation........................... $95,047
========
</FN>
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
% Net Quality Annualized Maturity Par
MONEY MARKET FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Short-Term Investments:
Commercial Paper/Savings: 46.6%
American Information Technologies A-1+/P-1 5.42% Feb 04, 1997 $900,000 $895,495
Anheuser Busch Companies A-1+/P-1 6.34% Jan 02, 1997 1,000,000 999,826
Associates Corp of North America A-1+/P-1 5.44% Jan 31, 1997 950,000 945,804
CIT Group Holdings A-1/P-1 5.48% Apr 22, 1997 950,000 934,505
Coca-Cola Co. A-1+/P-1 5.37% Feb 14, 1997 975,000 968,768
Ford Motor Credit Company A-1/P-1 5.42% Jan 07, 1997 800,000 799,297
General Electric Capital Corporation A-1+/P-1 5.90% Feb 10, 1997 911,000 905,331
Interstate Power Co. A-1/P-1 5.53% Jan 15, 1997 765,000 763,385
Interstate Power Co. A-1/P-1 5.94% Jan 09, 1997 100,000 99,870
John Deere Capital Corporation A-1/P-1 5.44% Feb 25, 1997 950,000 942,351
Merrill Lynch Capital Market A-1+/P-1 5.46% Feb 18, 1997 950,000 943,262
Pepsico, Inc. A-1/P-1 5.60% Jan 31, 1997 303,000 301,611
Chase Manhattan - Cash Account 4.65% 290,670 290,670
-------
TOTAL COMMERCIAL PAPER,
SAVINGS, AT COST $9,790,175
---------
Quasi-Government/Government Sponsored: 27.8%
Federal Home Loan Bank 5.58% Mar 26, 1997 $3,885,000 $3,854,999
FNMA Discount Notes 5.41% Mar 24, 1997 2,000,000 1,977,071
--------
TOTAL QUASI-GOVERNMENT
GOVERNMENT SPONSORED, AT COST $5,832,070
---------
Government Guaranteed: 25.7%
U. S. Treasury Bill 5.29% Feb 06, 1997 $1,000,000 $994,910
U. S. Treasury Bill 5.30% Feb 06, 1997 1,500,000 1,492,350
U. S. Treasury Bill 5.30% May 29, 1997 1,000,000 979,116
U. S. Treasury Bill 5.32% Jul 24, 1997 1,000,000 971,270
U. S. Treasury Bill 5.37% Oct 16, 1997 1,000,000 959,440
--------
TOTAL GOVERNMENT GUARANTEED,
AT COST $5,397,086
---------
TOTAL INVESTMENTS, MONEY MARKET
FUND, AT COST $21,019,331
==========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
% of Interest Maturity Principal
TREASURY 2000 FUND INVESTMENTS: Net Assets Rate Date Amount Value
---------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
Government Guaranteed - U.S.:
U.S. Treasury Strip (Cost $1,388,086)* 100.0% 9.69% Nov 15, 2000 $2,000,000 $1,585,290
=========
</TABLE>
See accompanying notes to investments in securities.
Notes to investments in securities:
Interest rates on and stripped Treasury Securities represent annualized yield to
maturity at date of purchase. Values of investment securities are determined as
described in Note 2 of the financial statements.
*At December 31, 1996, the cost of securities for federal income tax purposes
was $1,388,086. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation................................$197,204
Gross unrealized depreciation................................ --
--------
Net unrealized appreciation..................................$197,204
========
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Operations
Year Ended December 31, 1996
Capital Growth and Money Treasury
Appreciation Income Stock Balanced Bond Market 2000
Stock Fund Fund Fund Fund Fund Fund
Investment income (note 2):
<S> <C> <C> <C> <C> <C> <C>
Interest income $164,944 $525,661 $5,678,732 $1,382,079 $951,281 $114,864
Dividend income 917,123 3,383,433 1,230,690 -- -- --
---------- ---------- ---------- -------- -------- --------
Total income 1,082,067 3,909,094 6,909,422 1,382,079 951,281 114,864
---------- ---------- ---------- -------- -------- --------
Expenses (note 4):
Advisory fees 336,290 807,229 762,436 100,452 88,296 --
Advisory/Administrative fees -- -- -- -- -- 6,936
Accounting and custodian fees 47,251 91,306 87,538 16,623 14,112 --
Trustees' fees 1,602 3,845 3,616 478 422 --
Legal fees 18,473 44,325 41,680 5,513 4,858 --
Audit fees 3,043 7,302 6,866 908 800 --
Printing and mailing fees 19,735 47,355 44,530 5,890 5,190 --
Other expenses 14,605 44,421 40,663 4,358 3,842 --
---------- ---------- ---------- -------- -------- --------
Expenses before reimbursement 440,999 1,045,783 987,329 134,222 117,520 6,936
Reimbursable expenses from
CUNA Mutual Life Insurance Company (5,211) -- -- (4,119) (3,169) --
---------- ---------- ---------- -------- -------- --------
Total net expenses 435,788 1,045,783 987,329 130,103 114,351 6,936
---------- ---------- ---------- -------- -------- --------
Net investment income 646,279 2,863,311 5,922,093 1,251,976 836,930 107,928
---------- ---------- ---------- -------- -------- --------
Realized and unrealized gain (loss)
on investments (notes 2 and 3):
Realized gain (loss) on security
transactions:
Proceeds from sale of securities
and principal pay downs 33,783,726 67,526,667 52,832,225 5,207,141 4,478,141 --
Cost of securities sold (30,630,977) (61,869,710) (48,563,422) (5,157,425) (4,478,141) --
---------- ---------- ---------- --------- -------- --------
Net realized gain (loss) on
security transactions 3,152,749 5,656,957 4,268,803 49,716 -- --
Net change in unrealized appreciation
or depreciation on investments 9,688,795 26,520,015 6,612,755 (477,126) -- (75,534)
---------- ---------- ---------- --------- -------- --------
Net gain (loss) on investments 12,841,544 32,176,972 10,881,558 (427,410) -- (75,534)
---------- ---------- ---------- --------- -------- --------
Net increase in net assets
resulting from operations $13,487,823 $35,040,283 $16,803,651 $824,566 $836,930 $32,394
========== ========== ========== ========= ======== ========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Changes in Net Assets
Years Ended December 31, 1996 and 1995
CAPITAL APPRECIATION GROWTH AND INCOME
STOCK FUND STOCK FUND BALANCED FUND
Operations: 1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net investment income $646,279 $283,910 $2,863,311 $1,631,967 $5,922,093 $3,527,057
Net realized gain (loss) on security
transaction 3,152,749 1,078,662 5,656,957 6,556,318 4,268,803 4,247,861
Net change in unrealized appreciation
or depreciation on investments 9,688,795 3,744,217 26,520,015 11,134,096 6,612,755 9,430,371
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets from
operations 13,487,823 5,106,789 35,040,283 19,322,381 16,803,651 17,205,289
----------- ---------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income (639,086) (280,255) (2,804,744) (1,628,238) (5,850,662) (3,519,859)
From realized gains on investments (3,084,815) (1,089,798) (5,675,210) (6,422,927) (4,393,033) (4,072,590)
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets from
distributions (3,723,901) (1,370,053) (8,479,954) (8,051,165) (10,243,695) (7,592,449)
----------- ---------- ----------- ----------- ----------- -----------
Capital share transactions (note 5):
Proceeds from sale of shares 48,543,686 25,682,821 99,870,808 35,770,514 70,374,669 28,498,420
Net asset value of shares issued
in reinvestment of distributions 3,723,901 1,370,053 8,479,954 8,051,165 10,243,695 7,592,449
----------- ---------- ----------- ----------- ----------- -----------
52,267,587 27,052,874 108,350,762 43,821,679 80,618,364 36,090,869
Cost of shares repurchased (1,475,008) (2,121,172) (4,208,480) (1,868,194) (3,422,404) (2,203,087)
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets derived
from capital share transactions 50,792,579 24,931,702 104,142,282 41,953,485 77,195,960 33,887,782
----------- ---------- ----------- ----------- ----------- -----------
Increase in net assets 60,556,501 28,668,438 130,702,611 53,224,701 83,755,916 43,500,622
Net assets:
Beginning of year 38,117,332 9,448,894 102,138,162 48,913,461 110,968,958 67,468,336
----------- ---------- ----------- ----------- ----------- -----------
End of year $98,673,833 $38,117,332 $232,840,773 $102,138,162 $194,724,874 $110,968,958
=========== ========== =========== =========== =========== ===========
Undistributed net investment
income included in net assets $14,253 $7,061 $69,558 $10,991 $94,881 $23,449
=========== ========== =========== =========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Changes in Net Assets (Continued)
Years Ended December 31, 1996 and 1995
BOND FUND MONEY MARKET FUND TREASURY 2000 FUND
Operations: 1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net investment income $1,251,976 $624,100 $836,930 $499,998 $107,928 $105,279
Net realized gain (loss) on
security transactions 49,716 29,840 -- -- -- --
Net change in unrealized appreciation
or depreciation on investments (477,126) 883,542 -- -- (75,534) 161,762
---------- ---------- ---------- ---------- ---------- ----------
Change in net assets from
operations 824,566 1,537,482 836,930 499,998 32,394 267,041
----------- ---------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income (1,238,292) (622,541) (836,930) (499,998) -- --
From realized gains on investments (49,716) (29,840) -- -- -- --
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets from
distributions (1,288,008) (652,381) (836,930) (499,998) -- --
----------- ---------- ----------- ----------- ----------- -----------
Capital share transactions (note5):
Proceeds from sale of shares 13,819,369 5,496,387 32,934,173 16,248,249 7,020 6,176
Net asset value of shares issued in
reinvestment of distributions 1,288,008 652,380 835,642 499,536 -- --
----------- ---------- ----------- ----------- ----------- -----------
15,107,377 6,148,767 33,769,815 16,747,785 7,020 6,176
Cost of shares repurchased (1,796,780) (1,176,460) (24,132,957) (13,173,017) -- --
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets derived from
capital share transactions 13,310,597 4,972,307 9,636,858 3,574,768 7,020 6,176
----------- ---------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets 12,847,155 5,857,408 9,636,858 3,574,768 39,414 273,217
Net assets:
Beginning of year 13,724,768 7,867,360 11,374,129 7,799,361 1,545,327 1,272,110
----------- ---------- ----------- ----------- ----------- -----------
End of year $26,571,923 $13,724,768 $21,010,987 $11,374,129 $1,584,741 $1,545,327
=========== ========== =========== =========== =========== ===========
Undistributed net investment
income included in net assets $18,034 $4,349 -- -- -- --
=========== ========== =========== =========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
------------------------------------ CAPITAL APPRECIATION STOCK FUND ----------------------
(For a share outstanding throughout the period): 1996 1995 1994
------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $12.51 $9.97 $10.00
------ ------ ------
Income from Investment Operations
Net Investment Income .13 .14 0.16
Net Realized and Unrealized Gain (Loss)
on Investments 2.55 2.91 0.37
------ ------ ------
Total from Investment Operations 2.68 3.05 0.53
-------------------------------------------
Distributions
Distributions from Net Investment Income (.13) (.14) (0.15)
Distributions from Realized Capital Gains (.46) (.37) (0.41)
------ ------ ------
Total Distributions (.59) (.51) (0.56)
-------------------------------------------
Net Asset Value, End of Period $14.60 $12.51 $9.97
====================================================================================================================================
Total Return* 21.44% 30.75% 5.44%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $98,674 $38,117 $9,449
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 0.96% 1.37% 1.55%
Portfolio Turnover Rate 49.77% 61.32% 65.81%
Average Commission Rate $0.06 $0.06
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, CUNA Mutual Life Insurance Company and its
affiliates absorbed all expenses in excess of .65% of the average net assets
of the Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond
and Money Market Funds under the terms of an Expense Reimbursement Agreement
between the Ultra Series Fund and CUNA Mutual Life Insurance Company.
Annually, the Fund and CUNA Mutual Life Insurance Company have renewed the
Expense Reimbursement Agreement. If the Expense Reimbursement Agreement had
not been in effect and if the full expenses allowable under the Investment
Advisory Agreement between the Ultra Series Fund and the Investment Adviser
had been charged, the amounts that would have been charged and the ratios
that would have resulted are:
Capital Appreciation Stock Fund 1996 1995 1994
---- ---- ----
Amount Charged $440,999 $156,184 $42,519
Ratio of Expenses to
Average Net Assets 0.66% 0.75% 0.85%
Ratio of Net Investment
Income to Average Net Assets 0.95% 1.25% 1.35%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
---------------------------------- GROWTH AND INCOME STOCK FUND ----------------------------
(For a share outstanding throughout the period): 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $18.20 $15.06 $15.51 $15.49 $15.21
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.34 0.37 0.32 0.29 0.32
Net Realized and Unrealized Gain (Loss)
on Investments 3.93 4.37 (0.04) 1.87 0.90
----- ----- ----- ----- -----
Total from Investment Operations 4.27 4.74 0.28 2.16 1.22
-------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.34) (0.37) (0.32) (0.29) (0.32)
Distributions from Realized Capital Gains (0.81) (1.23) (0.40) (1.85) (0.62)
----- ----- ----- ----- -----
Total Distributions (1.15) (1.60) (0.73) (2.14) (0.94)
-------------------------------------------------------------------------------------
Net Asset Value, End of Period $21.32 $18.20 $15.06 $15.51 $15.49
====================================================================================================================================
Total Return* 22.02% 31.75% 1.42% 13.77% 7.66%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $232,841 $102,138 $48,913 $32,468 $24,382
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 1.78% 2.28% 2.19% 1.84% 2.11%
Portfolio Turnover Rate 40.55% 57.80% 45.36% 56.79% 29.67%
Average Commission Rate $0.06 $0.06
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to 1996, CUNA Mutual Life Insurance Company
and its affiliates absorbed all expenses in excess of .65% of the average net
assets of the Capital Appreciation Stock, Growth and Income Stock, Balanced,
Bond and Money Market Funds under the terms of an Expense Reimbursement
Agreement between the Ultra Series Fund and CUNA Mutual Life Insurance
Company. Annually, the Fund and CUNA Mutual Life Insurance Company have
renewed the Expense Reimbursement Agreement. If the Expense Reimbursement
Agreement had not been in effect and if the full expenses allowable under the
Investment Advisory Agreement between the Ultra Series Fund and the
Investment Adviser had been charged, the amounts that would have been charged
and the ratios that would have resulted are:
Growth and Income Stock Fund 1995 1994 1993 1992
---- ---- ---- ----
Amount Charged $491,168 $281,760 $210,141 $151,195
Ratio of Expenses to
Average Net Assets 0.69% 0.70% 0.73% 0.74%
Ratio of Net Investment
Income to Average Net Assets 2.23% 2.14% 1.76% 2.02%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
---------------------------------------------------- BALANCED FUND -----------------------------------
(For a share outstanding throughout the period): 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.63 $12.90 $13.70 $13.54 $13.44
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.58 0.55 0.52 0.50 0.55
Net Realized and Unrealized Gain (Loss)
on Investments 0.98 2.29 (0.56) 0.95 0.40
----- ----- ----- ----- -----
Total from Investment Operations 1.56 2.84 (0.04) 1.45 0.95
-------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.58) (0.55) (0.51) (0.50) (0.55)
Distributions from Realized Capital Gains (0.32) (0.56) (0.25) (0.79) (0.30)
----- ----- ----- ----- -----
Total Distributions (0.90) (1.11) (0.76) (1.29) (0.85)
-------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.29 $14.63 $12.90 $13.70 $13.54
====================================================================================================================================
Total Return* 10.79% 22.27% -0.46% 10.47% 6.85%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $194,725 $110,969 $67,468 $54,363 $41,604
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 3.91% 4.03% 4.00% 3.62% 4.10%
Portfolio Turnover Rate 33.48% 36.68% 28.53% 28.71% 19.23%
Average Commission Rate $0.06 $0.06
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to 1996, CUNA Mutual Life Insurance Company
and its affiliates absorbed all expenses in excess of .65% of the average net
assets of the Capital Appreciation Stock, Growth and Income Stock, Balanced,
Bond and Money Market Funds under the terms of an Expense Reimbursement
Agreement between the Ultra Series Fund and CUNA Mutual Life Insurance
Company. Annually, the Fund and CUNA Mutual Life Insurance Company have
renewed the Expense Reimbursement Agreement. If the Expense Reimbursement
Agreement had not been in effect and if the full expenses allowable under the
Investment Advisory Agreement between the Ultra Series Fund and the
Investment Adviser had been charged, the amounts that would have been charged
and the ratios that would have resulted are:
Balanced Fund 1995 1994 1993 1992
---- ---- ---- ----
Amount Charged $598,507 $417,750 $362,284 $254,326
Ratio of Expenses to
Average Net Assets 0.68% 0.70% 0.74% 0.72%
Ratio of Net Investment
Income to Average Net Assets 4.00% 3.95% 3.53% 4.03%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
------------------------------------------------------- BOND FUND ------------------------------------
(For a share outstanding throughout the period): 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.63 $9.67 $10.58 $10.32 $10.37
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.65 0.60 0.59 0.64 0.69
Net Realized and Unrealized Gain (Loss)
on Investments (0.28) 0.96 (0.90) 0.28 (0.03)
----- ----- ----- ----- -----
Total from Investment Operations 0.37 1.56 (0.31) 0.92 0.66
-------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.64) (0.59) (0.59) (0.65) (0.70)
Distributions from Realized Capital Gains (0.03) (0.01) (0.01) (0.01) (0.01)
----- ----- ----- ----- -----
Total Distributions (0.67) (0.60) (0.60) (0.66) (0.71)
-------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.33 $10.63 $9.67 $10.58 $10.32
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 2.86% 16.37% -3.06% 8.87% 6.47%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $26,572 $13,725 $7,867 $6,297 $5,244
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 6.25% 6.08% 6.03% 5.99% 6.83%
Portfolio Turnover Rate 25.67% 14.74% 11.97% 12.23% 13.58%
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, CUNA Mutual Life Insurance Company and its
affiliates absorbed all expenses in excess of .65% of the average net assets
of the Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond
and Money Market Funds under the terms of an Expense Reimbursement Agreement
between the Ultra Series Fund and CUNA Mutual Life Insurance Company.
Annually, the Fund and CUNA Mutual Life Insurance Company have renewed the
Expense Reimbursement Agreement. If the Expense Reimbursement Agreement had
not been in effect and if the full expenses allowable under the Investment
Advisory Agreement between the Ultra Series Fund and the Investment Adviser
had been charged, the amounts that would have been charged and the ratios
that would have resulted are:
Bond Fund 1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Amount Charged $134,222 $70,290 $48,651 $44,293 $33,269
Ratio of Expenses to
Average Net Assets 0.67% 0.68% 0.70% 0.75% 0.75%
Ratio of Net Investment
Income to Average Net Assets 6.23% 6.04% 5.98% 5.89% 6.74%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
---------------------------------------------- MONEY MARKET FUND -----------------------------
(For a share outstanding throughout the period): 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Income from Investment Operations
Net Investment Income 0.05 0.05 0.03 0.03 0.03
Net Realized and Unrealized Gain (Loss)
on Investments 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- -----
Total from Investment Operations 0.05 0.05 0.03 0.03 0.03
--------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.05) (0.05) (0.03) (0.03) (0.03)
Distributions from Realized Capital Gains (0.00) (0.00) 0.00 0.00 0.00
----- ----- ----- ----- -----
Total Distributions (0.05) (0.05) (0.03) (0.03) (0.03)
--------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
====================================================================================================================================
Total Return* 5.17% 5.21% 3.34% 2.86% 3.05%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $21,011 $11,374 $7,799 $4,749 $5,097
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 4.74% 5.17% 3.66% 2.43% 3.05%
Portfolio Turnover Rate -- -- -- -- --
====================================================================================================================================
For the Money Market Fund, the "seven-day average" yield for the seven days
ended December 31, 1996, was 4.70% and the "effective" yield for that period was
4.81%.
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, CUNA Mutual Life Insurance Company and its
affiliates absorbed all expenses in excess of .65% of the average net assets
of the Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond
and Money Market Funds under the terms of an Expense Reimbursement Agreement
between the Ultra Series Fund and CUNA Mutual Life Insurance Company.
Annually, the Fund and CUNA Mutual Life Insurance Company have renewed the
Expense Reimbursement Agreement. If the Expense Reimbursement Agreement had
not been in effect and if the full expenses allowable under the Investment
Advisory Agreement between the Ultra Series Fund and the Investment Adviser
had been charged, the amounts that would have been charged and the ratios
that would have resulted are:
Money Market Fund 1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Amount Charged $117,520 $70,062 $44,391 $44,836 $39,068
Ratio of Expenses to
Average Net Assets 0.67% 0.73% 0.78% 0.77% 0.75%
Ratio of Net Investment
Income to Average Net Assets 4.72% 5.09% 3.53% 2.31% 2.96%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
------------------------------------------------- TREASURY 2000 FUND --------------------------------
(For a share outstanding throughout the period) 1996 1995 1994 1993 1992
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $8.47 $7.00 $7.53 $6.53 $6.04
----- ----- ----- ----- -----
Income from Investment Operations
Net Investment Income 0.58 0.58 0.53 0.48 0.45
Net Realized and Unrealized Gain (Loss)
on Investments (0.41) 0.89 (1.06) 0.52 0.04
----- ----- ----- ----- -----
Total from Investment Operations 0.17 1.47 (0.53) 1.00 0.49
---------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income 0.00 0.00 0.00 0.00 0.00
Distributions from Realized Capital Gains 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- -----
Total Distributions 0.00 0.00 0.00 0.00 0.00
---------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.64 $8.47 $7.00 $7.53 $6.53
====================================================================================================================================
Total Return* 2.10% 20.99% -7.12% 15.43% 8.01%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,585 $1,545 $1,272 $1,363 $1,176
Ratio of Expenses to Average Net Assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of Net Investment Income to Average
Net Assets 7.03% 7.40% 7.50% 6.69% 7.26%
Portfolio Turnover Rate -- -- -- -- --
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
</FN>
</TABLE>
<PAGE>
ULTRA SERIES FUND
Notes to Financial Statements
(1) Description of the Fund
The Ultra Series Fund, a Massachusetts Business Trust, is registered as a
diversified, open-end management investment company under the Investment
Company Act of 1940. The Ultra Series Fund is a series fund with six
investment portfolios (funds), each with different investment objectives
and policies and each issuing a separate class of common stock with a par
value of $.01 per share. Fund shares are sold and redeemed at a price equal
to the shares' net asset value (note 2(b)). The assets of each fund are
held separate from the assets of the other funds.
Shares in each fund are currently offered only to separate accounts of CUNA
Mutual Life Insurance Company (formerly known as Century Life of America)
at a price equal to their respective net asset values per share, without
sales charge.
(2) Significant Accounting Policies
(a) Valuation of Investment Securities
Value of Securities, including call options, which are traded on
exchanges are valued at the last sales price on the principal exchange
as of the close of the New York Stock Exchange or 3:00 p.m. Central
Standard Time, whichever is earlier, on the day the securities are
being valued. Securities not traded on a stock exchange on a given day
or traded over-the-counter are valued using a procedure determined in
good faith to represent a fair value and which is authorized by the
Board of Trustees. Pursuant to Rule 2A-7 of the Investment Company Act
of 1940 (as amended), all money market instruments in the Money Market
Fund are valued on an amortized cost basis. Money Market instruments in
the other funds are valued on an amortized cost basis if there are less
than 60 days to maturity.
(b) Share Valuation and Dividends to Shareholders
The net asset value of the shares of each fund is determined on a daily
basis based on the valuation of the net assets of the funds divided by
the number of shares of the fund outstanding. Expenses, including the
investment advisory and advisory/ administrative fees (note 4), are
accrued daily and reduce the net asset value per share.
Dividends on the Money Market Fund will be declared and reinvested
daily in additional full and fractional shares of the Money Market
Fund. Dividends of ordinary income from the Capital Appreciation Stock
Fund, Growth and Income Stock Fund, Bond Fund, and Balanced Fund will
be declared and reinvested quarterly in additional full and fractional
shares of the respective funds. All net realized capital gains of these
funds, if any, will be declared and reinvested at least annually. The
Treasury 2000 Fund will utilize an annual consent dividend procedure
which provides the Fund with the deduction for dividends constructively
paid to shareholders. As a result of permanent book-to-tax differences
from the consent dividends, $107,339 for Treasury 2000 Fund has been
reclassified from undistributed net investment income to additional
paid-in capital.
(c) Federal Income and Excise Taxes
The Ultra Series Fund intends to distribute all of its taxable income
and to comply with the other requirements of the Internal Revenue Code
applicable to regulated investment companies. Accordingly, no provision
for income or excise taxes is required.
(d) Other
Security transactions are recorded on the trade date basis. Realized
gains and losses from security transactions are reported on the
identified cost basis. Interest, including amortization of premium and
discount, is accrued daily and dividend income is recorded on the
ex-dividend date.
(e) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of increase
and decrease in net assets from operations during the period. Actual
results could differ from those estimates.
<PAGE>
(3) Purchase and Sales of Investment Securities
The cost of securities purchased and the proceeds from securities sold
(including maturities, excluding short-term securities for all funds except
Money Market) for each fund during the year ended December 31, 1996, were
as follows:
<TABLE>
<CAPTION>
Capital Growth and Money Treasury
Appreciation Income Stock Balanced Bond Market 2000
Stock Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Total costs of securities purchased $79,151,948 $159,709,031 $114,633,013 $18,376,441 $154,317,312$ --
========== =========== =========== ========== =========== ========
Total proceeds received on security
sales and principal paydowns $33,783,726 $67,526,667 $52,832,225 $5,207,141 $145,584,378 $ --
========== =========== =========== ========== =========== ========
</TABLE>
(4) Transactions with Affiliates
The Ultra Series Fund has entered into an investment advisory agreement
with CIMCO Inc. (the Investment Adviser), an affiliated company. During
1996, the Investment Adviser received monthly advisory or
advisory/administrative fees, based on average daily net assets, at an
annual rate of .5 percent of the Capital Appreciation Stock, Growth and
Income Stock, Balanced, Bond and Money Market Funds and .45 percent of the
Treasury 2000 Fund.
Expenses of the Ultra Series Fund are accrued daily. Each fund bears the
expenses directly attributable to its own investments. Such expenses
include, but are not limited to, brokerage and other commission costs,
legal fees relating to the enforcement of rights under a specific
investment owned by the fund and expenses related to defense of claims made
solely against the fund. However, certain expenses from shared resources
are allocated to the various funds on the basis of the net assets of the
respective funds as determined each day. These expenses include trustees,
accountants, legal, investment management and other general and
administrative expenses. As a result of sharing these resources, the funds
are expected to experience cost savings over the aggregate amount that
would be payable if each fund were a separate mutual fund. There can be no
assurance, however, that such savings will be realized.
The Investment Adviser is required to reimburse the funds for the amount,
if any, by which the aggregate expenses of any fund (including the
Investment Adviser's fee, but excluding brokerage commissions, interest,
taxes, and extraordinary expenses) in any calendar year exceed 2.0 percent
of the average daily net assets of the funds. In addition, CUNA Mutual Life
Insurance Company has voluntarily agreed to reimburse the Capital
Appreciation Stock, Growth and Income Stock, Balanced, Bond and Money
Market Funds for ordinary business expenses in excess of .65 percent (of
which .5 percent is the advisory fee and .15 percent is general and
administrative expenses) of the average daily net assets of these funds.
Also, the Investment Adviser has agreed to assume responsibility for
providing all administrative services and paying all ordinary business
expenses of the Treasury 2000 Fund which exceed .45 percent (all of which
is the advisory/administrative fee) of average daily net assets. Currently,
CUNA Mutual Life Insurance Company and CUNA Mutual Insurance Society,
affiliated companies, are providing administrative services on behalf of
the Adviser.
During the year ended December 31, 1996, CUNA Mutual Life Insurance Company
voluntarily reimbursed expenses for each of the funds in the following
amounts:
Capital Appreciation Stock Fund ...$5,211 Money Market Fund....... $3,169
Bond Fund..........................$4,119
All capital shares outstanding at December 31, 1996, are owned by separate
investment accounts of CUNA Mutual Life Insurance Company.
Certain officers and directors of the Ultra Series Fund are also officers
of CUNA Mutual Life Insurance Company or CIMCO Inc. During the twelve-month
period ended December 31, 1996, the Ultra Series Fund made no direct
payments to its officers and paid trustees' fees of approximately $10,000
to its unaffiliated trustees.
<PAGE>
(5) Share Activity
Transactions in shares of each fund for the years ended December 31, 1996
and 1995, were as follows:
<TABLE>
<CAPTION>
Capital Growth and Money Treasury
Appreciation Income Stock Balanced Bond Market 2000
Stock Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Shares outstanding at December 31,1994 947,425 3,248,703 5,230,875 813,520 7,799,361 181,807
Share sold, including reinvestment
of dividends 2,337,211 2,621,441 2,823,694 657,600 16,747,785 43,617
Shares repurchased (238,086) (259,097) (469,326) (179,841) (13,173,017) (42,878)
--------- --------- --------- -------- ---------- -------
Shares outstanding at December 31, 1995 3,046,550 5,611,047 7,585,243 1,291,279 11,374,129 182,546
--------- --------- --------- -------- ---------- -------
Share sold, including reinvestment
of dividends 3,818,030 5,524,047 5,380,713 1,453,110 33,769,815 805
Shares repurchased (105,316) (215,447) (228,534) (171,319) (24,132,957) --
--------- --------- --------- -------- ---------- -------
Shares outstanding at December 31, 1996 6,759,264 10,919,647 12,737,422 2,573,070 21,010,987 183,351
--------- --------- --------- -------- ---------- -------
</TABLE>
<PAGE>
ULTRA SERIES FUND
INDEPENDENT AUDITORS' REPORT
The Trustees and Shareholders
Ultra Series Fund:
We have audited the statements of assets and liabilities, including the
schedules of investments in securities, of the Capital Appreciation Stock Fund,
Growth and Income Stock Fund, Balanced Fund, Bond Fund, Money Market Fund, and
Treasury 2000 Fund of the Ultra Series Fund as of December 31, 1996, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year period then ended,
and financial highlights for each of the years in the five-year (three years for
Capital Appreciation Stock Fund) period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with 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. Investment securities held in custody were confirmed to us by the
custodian. As to securities purchased or sold, but not received or delivered, we
request confirmation from brokers, and where replies are not received, we
carried out other appropriate audit procedures. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Capital Appreciation Stock Fund, Growth and Income Stock Fund, Balanced Fund,
Bond Fund, Money Market Fund, and Treasury 2000 Fund of Ultra Series Fund as of
December 31, 1996, the results of their operations for the year then ended, the
changes in their nets assets for each of the years in the two-year period then
ended, and the financial highlights for each of the years in the five-year
(three years for Capital Appreciation Stock Fund) period then ended, in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Des Moines, Iowa
February 7, 1997
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (1) Financial statements included in Part A:
Financial Highlights
(2) Financial Statements included in Part B:
Audited financial statements as of and for the year ended
December 31, 1996:
Statements of Assets and Liabilities*
Investments in Securities* Statements of Operations*
Statements of Changes in Net Assets (for the two-year
period ended December 31, 1996)*
Notes to Financial Statements Independent Auditors' Report
*Separate statements are prepared for each Fund of the Ultra
Series Fund.
There are no financial statements included in Part C.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust.
(2) Amended and Restated Bylaws.
(3) Not Applicable
(4) Not Applicable
(5) A. Management Agreement effective May 1, 1997.
B. Servicing Agreement between Century Life of America
(now known as CUNA Mutual Life Insurance Company) and
Century Investment Management Co. (now known as CIMCO
Inc.) effective October 1, 1994.
C. Servicing Agreement between Century Investment
Management Co. (now known as CIMCO Inc.) and CUNA
Mutual Insurance Society effective July 17, 1993.
(6) Distribution Agreement between Ultra Series Fund and CUNA
Brokerage Services, Inc. effective December 29, 1993
(7) Not Applicable
(8) A. Custodian Agreement with United States Trust Company
of New York dated June 24, 1993. Assumed by Chase
Manhattan on September 2, 1995.
B. Cash Data Entry Agreement with United States Trust
Company dated June 24, 1993. Assumed by Chase
Manhattan on September 2, 1995.
C. Custodian Agreement with State Street Bank and Trust
Company. [To be filed by amendment]
D. Cash Data Entry Agreement with State Street Bank and
Trust Company. [To be filed by amendment]
(9) Not Applicable
(10) Opinion of Counsel
(11) A. Consent of KPMG Peat Marwick LLP [To be filed by
amendment]
(12) Not Applicable
(13) A. Termination Agreement dated December 31, 1993
concerning Agreement Governing Contribution dated
September 30, 1983.
Agreement Governing Contribution.
B. Termination Agreement dated December 31, 1993
concerning Agreement Governing Contribution dated May
31, 1988.
Agreement Governing Contribution.
C. Termination of Expense Reimbursement Agreement dated
January 16, 1997, effective May 1, 1997.
Expense Reimbursement Agreement.
(14) Not Applicable
(15) Plan of Distribution dated May 1, 1997.
(16) Schedule for Computation.
(17) Financial Data Schedules.
(18) Multi-Class Plans.
(19) Powers of Attorney.
Item 25. Persons Controlled by or Under Common Control with Registrant
The shares of the Ultra Series Fund are currently sold to separate accounts of
CUNA Mutual Life Insurance Company. See Part A MANAGEMENT OF THE ULTRA SERIES
FUND, CUNA Mutual Life Insurance Company and Part B THE INVESTMENT ADVISER for a
description of related parties.
CUNA Mutual Life Insurance Company is a mutual life insurance company and
therefore is controlled by its contractowners. Various companies and other
entities are controlled by CUNA Mutual Life Insurance Company and various
companies may be considered to be under common control with CUNA Mutual Life
Insurance Company. Such other companies and entities, together with the identity
of their controlling persons (where applicable), are set forth in the following
organization charts. In addition, by virtue of an Agreement of Permanent
Affiliation with CUNA Mutual Insurance Society ("CUNA Mutual"), the Ultra Series
Fund could be considered to be an affiliated person or an affiliated person of
an affiliated person of CUNA Mutual. Likewise, CUNA Mutual and its affiliates,
together with the identity of their controlling persons (where applicable), are
set forth on the following organization charts.
See organization charts on the following pages.
<PAGE>
CUNA Mutual Life Insurance Company
ORGANIZATIONAL CHART AS OF DECEMBER 31, 1996
CUNA Mutual Life Insurance Company
An Iowa mutual life insurance company
Fiscal Year End: December 31
CUNA Mutual Life Insurance Company is the controlling company for the
following subsidiaries:
1. Red Fox Motor Hotel Corporation
An Iowa Business Act Corporation.
100% ownership by CUNA Mutual Life Insurance Company
Business: Operation of Red Fox Inn, a motel
Classes of Stock: Common only
Authorized Shares: 1,000 nonpar
Issued Shares: 242.7821
Capital Structure:
Stated capital: $242,782
Add. paid-in: $0
Ret. earn: ($14,447)
Total Equity: $257,229
Sole Shareholder: CUNA Mutual Life Insurance Company
Fiscal Year End: December 31
2. CIMCO Inc.
An Iowa Business Act Corporation
50% ownership by CUNA Mutual Life Insurance Company
50% ownership by CUNA Mutual Investment Corporation
Business: Registered Investment Advisor
Classes of Stock: Non-assessable
Authorized Shares: 500,000 nonpar
Issued Shares: 100
Capital Structure:
Stated capital: $10,000
Add. paid-in: $520,000
Ret. earn.: $435,660
Total Equity: $965,660
Equal Shareholders: CUNA Mutual Life Insurance Company & CUNA
Mutual Investment Corporation
Fiscal Year End: December 31
CIMCO Inc. is the investment adviser of:
The Ultra Series Fund
A Massachusetts Business Trust
Domiciled in Iowa
Business: Open-end diversified management investment
company offered through insurance contracts
Shareholders: Three separate accounts of CUNA Mutual
Life Insurance Company hold legal title for the
benefit of policyowners.
Principal Underwriter: CUNA Brokerage Services, Inc.
Fiscal Year End: December 31
3. Plan America Program, Inc.
A Maine Business Act Corporation
100% ownership by CUNA Mutual Life Insurance Company
Business: Quasi-public corporation, operating an insurance
business
Classes of Stock: Voting common only
Authorized Shares: 5,000 of $1.00 par
Issued Shares: 100
Capital Structure:
Stated capital: $500
Sole Shareholder: CUNA Mutual Life Insurance Company
Fiscal Year End: December 31
CUNA Mutual Insruance Society
ORGANIZATIONAL CHART
AS OF DECEMBER 31, 1996
CUNA Mutual Insurance Society
Business: Life, Health & Disability Insurance
May 20, 1935*
State of domicile: Wisconsin
CUNA Mutual Insurance Society, either directly or indirectly is the
controlling company of the following wholly-owned subsidiaries:
1. CUNA Mutual Investment Corporation
Business: Holding Company
September 15, 1972*
State of domicile: Wisconsin
CUNA Mutual Investment Corporation is the owner of the
following subsidiaries:
a. CUMIS Insurance Society, Inc.
Business: Corporate Property/Casualty Insurance
May 23, 1960*
State of domicile: Wisconsin
CUMIS Insurance Society, Inc. is the 100% owner of
the following subsidiary:
(1) Credit Union Mutual Insurance Society New
Zealand Ltd.
Business: Fidelity Bond Coverages
November 1, 1990*
State of domicile: Wisconsin
b. League General Insurance Company
Business: Individual Property/Casualty
January 1, 1983*
State of domicile: Michigan
c. CUNA Brokerage Services, Inc.
Business: Brokerage
July 19, 1985*
State of domicile: Wisconsin
d. CUNA Mutual Financial Services Corporation
Business: Individual Marketing
November 21, 1983*
State of domicile: Wisconsin
e. CUNA Mutual General Agency of Texas, Inc.
Business: Managing General Agent
August 14, 1991*
State of domicile: Texas
f. MEMBERS Life Insurance Company
Business: Credit Disability/Life/Health
February 27, 1976*
State of domicile: Wisconsin
Formerly CUMIS Life & CUDIS
g. International Commons, Inc.
Business: Special Events
January 13, 1981*
State of domicile: Wisconsin
h. CUNA Mortgage Corporation
Business: Mortgage Servicing
November 20, 1978*
State of domicile: Wisconsin
i. Investors Equity Insurance Company, Inc.
Business: Private Mortgage Insurance
April 14, 1994*
State of Domicile: California
j. CUNA Mutual Insurance Agency, Inc.
Business: Leasing/Brokerage
March 1, 1974*
State of domicile: Wisconsin
Formerly CMCI Corporation
CUNA Mutual Insurance Agency, Inc. is the 100% owner
of the following subsidiaries:
(1) CM Field Services, Inc.
Business: Serves Agency Field Staff
January 26, 1994*
State of domicile: Wisconsin
(2) CUNA Mutual Insurance Agency of Alabama, Inc.
Business: Property & Casualty Agency
May 27, 1993*
State of domicile: Alabama
(3) CUNA Mutual Insurance Agency of New Mexico,Inc.
Business: Brokerage of Corporate & Personal
Lines
June 10, 1993*
State of domicile: New Mexico
(4) CUNA Mutual Insurance Agency of Hawaii, Inc.
Business: Property & Casualty Agency
June 10, 1993*
State of domicile: Hawaii
(5) CUNA Mutual Casualty Insurance Agency of
Mississippi, Inc.
Business: Property & Casualty Agency
June 24, 1993*
State of domicile: Mississippi
(6) CUNA Mutual Insurance Agency of Kentucky, Inc.
Business: Brokerage of Corporate & Personal
Lines
October 5, 1994*
State of domicile: Kentucky
(7) CUNA Mutual Insurance Agency of Massachusetts,
Inc.
Business: Brokerage of Corporate & Personal
Lines
January 27, 1995*
State of domicile: Massachusetts
2. C.U.I.B.S. Pty. Ltd.
Business: Brokerage
February 18, 1981*
Country of domicile: Australia
*Dates shown are dates of acquisition, control or organization.
CUNA Mutual Insurance Society, either directly or through a wholly-owned
subsidiary, has a partial ownership interest in the following:
1. C. U. Family Insurance Services, Inc./Colorado
50% ownership by CUNA Mutual Insurance Agency, Inc.
50% ownership by Colleague Services Corporation
September 1, 1981
2. C. U. Insurance Services, Inc./Oregon
50% ownership by CUNA Mutual Insurance Agency, Inc.
50% ownership by Oregon Credit Union League
December 27, 1989
3. CUFIS of Illinois, Inc.
50% ownership by CUNA Mutual Insurance Agency, Inc.
50% ownership by Illinois Credit Union League Service Corporation
April 10, 1990
4. CUFIS of New York, Inc.
50% ownership by CUNA Mutual Insurance Agency, Inc.
50% ownership by CUC Services, Inc.
March 28, 1991
5. The CUMIS Group Limited
63.4% ownership by CUNA Mutual Insurance Society (as of 12-31-96)
6. CIMCO Inc. (CIMCO)
50% ownership by CUNA Mutual Investment Corporation
50% ownership by CUNA Mutual Life Insurance Company
January 1, 1992
7. Cooperative Savings and Credit Unions Insurance Society "Benefit" SA
(Poland)
70.9% ownership by CUNA Mutual Insurance Society
15.3% ownership by CUMIS Insurance Society, Inc.
13.8% ownership by Foundation for Polish Credit Unions
September 1, 1992
8. GWARANT, Ltd.
50% ownership by CUNA Mutual Insurance Society
50% ownership by Foundation for Polish Credit Unions
February 18, 1994
9. CUNA Mutual Insurance Agency of Ohio, Inc.
1% of value owned by Michael Corcoran (CUNA Mutual Employee) subject to a
voting trust agreement, Michael B. Kitchen as Voting Trustee.
99% of value owned by CUNA Mutual Insurance Agency, Inc. Due to Ohio
regulations, CUNA Mutual Insurance Agency, Inc. holds no voting stock in
this corporation.
June 14, 1993
12. SECURITY Management Company, Ltd. (Hungary)
90% ownership by CUNA Mutual Insurance Society
10% ownership by: Federation of Savings Cooperatives
Savings Cooperative of Szoreg
Savings Cooperative of Szekkutas
(collectively called Hungarian Associates)
September 5, 1992
13. CMG Mortgage Insurance Company
55% ownership by CUNA Mutual Investment Corporation 45% ownership by PMI
Mortgage Insurance Co.
April 14, 1994
Limited Liability Companies
1. "Sofia LTD." (Ukraine)
99.96% CUNA Mutual Insurance Society
.04% CUMIS Insurance Society, Inc.
March 6, 1996
a. `FORTRESS' (Ukraine)
80% "Sofia LTD."
19% The Ukrainian National Association of Savings and Credit
Unions
1% Service Center by UNASCU
September 25, 1996
2. CUNA Mortgage Assistance, L.L.C.
50% interest by CUNA Mortgage Corporation
50% interest by CUNA Service Group, Inc.
November 7, 1995
Stock Corporation - CUNA Mutual Group owns less than 50%
1. Cooperators Life Assurance Society Limited (Jamaica)
CUNA Mutual Insurance Society owns 122,500 shares
Jamaica Co-op Credit Union League owns 127,500 shares
(NOTE: Awaiting authority to write business)
May 10, 1990
2. CUNA Caribbean Insurance Society Limited (Trinidad and Tobago, W.I.)
47.96% ownership by CUNA Mutual Insurance Society
July 4, 1985
3. CU Interchange Group, Inc.
Owned by CUNA Mutual Investment Corporation, CUNA Service Group and
various state league organizations December 15, 1993 - CUNA Mutual
Investment Corporation purchased 100 shares stock
4. CUNA Service Group, Inc.
April 22, 1974 - CUNA Mutual Insurance Society purchased 200.71 shares
5. "Benevita LKS" (Russia)
49% CUNA Mutual Insurance Society
51% League of Credit Unions
December 7, 1995
6. Credit Union Service Corporation
Owned by CUNA Mutual Investment Corporation, Credit Union National
Association, Inc. and 18 state league organizations March 29, 1996 - CUNA
Mutual Investment Corporation purchased 1,300,000 shares of stock
Partnerships
1. PLAN AMERICA(R) Financial Services, a Wisconsin partnership
CUNA Mutual Insurance Society - 50% Partner
CUNA Mutual Life Insurance Company - 50% Partner
December 17, 1987
2. LeaSo Partners, a California partnership
CUNA Mutual Insurance Society - 50% Partner
California Credit Union League - 50% Partner
December 29, 1981
3. CM CUSO Limited Partnership, a Washington Partnership
CUMIS Insurance Society, Inc. - General Partner
Credit Unions in Washington - Limited Partners
June 14, 1993
Affiliated (Nonstock)
1. NARCUP, Inc.
August 8, 1978
2. CUNA Mutual Group Foundation, Inc.
July 5, 1967
3. CUNA Mutual Life Insurance Company
July 1, 1990
4. Aseguradora Solidaria de Colombia (formerly Seguros UCONAL Limitada)
17.2% membership by CUNA Mutual Insurance Society
July 2, 1985
Item 26. Number of Holders of Securities
Number of Shareholders
Fund as of March 31, 1997
Capital Appreciation Stock 3
Growth and Income Stock 3
Balanced 3
Bond 3
Money Market 3
Treasury 2000 3
Item 27. Indemnification
Each officer, Trustee or agent of the Ultra Series Fund shall be indemnified by
the Ultra Series Fund to the full extent permitted under the General Laws of the
State of Massachusetts and the Investment Company Act of 1940, as amended,
except that such indemnity shall not protect any such person against any
liability to the Ultra Series Fund or any shareholder thereof to which such
person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office ("disabling conduct"). Indemnification shall be made when (1) a final
decision on the merits is made by a court or other body before whom the
proceeding was brought, that the person to be indemnified was not liable by
reason of disabling conduct or, (2) in the absence of such a decision, a
reasonable determination, based upon a review of the facts, that the person to
be indemnified was not liable by reason of disabling conduct, by (a) the vote of
a majority of the quorum of Trustees who are not "interested persons" of the
Ultra Series Fund as defined in Section 2(a)(19) of the Investment Company Act
of 1940, or (b) an independent legal counsel in a written opinion. The Ultra
Series Fund may, by vote of a majority of a quorum of Trustees who are not
interested persons, advance attorneys' fees or other expenses incurred by
officers, Trustees, Investment Advisers or principal underwriters, in defending
a proceeding upon the undertaking by or on behalf of the person to be
indemnified to repay the advance unless it is ultimately determined that he is
entitled to indemnification. Such advance shall be subject to at least one of
the following: (1) the person to be indemnified shall provide a security for his
undertaking, (2) the Ultra Series Fund shall be insured against losses arising
by reason of any lawful advances, or (3) a majority of a quorum of the
disinterested non-party Trustees of the Ultra Series Fund, or an independent
legal counsel in a written opinion, shall determine, based on a review of
readily available facts, that there is reason to believe that the person to be
indemnified ultimately will be found entitled to indemnification.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, 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 Securities Act
of 1933 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 director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
The Investment Adviser for the Ultra Series Fund is CIMCO Inc. See Part A
MANAGEMENT OF THE ULTRA SERIES FUND, The Investment Adviser for a more complete
description.
NAME POSITION HELD
Michael S. Daubs CIMCO Inc.
President
1982 - Present
Director
1995-Present
CUNA Mutual Life Insurance Company
Chief Investment Officer
1989 - Present
CUNA Mutual Insurance Society
Chief Investment Officer
1990 - Present
Lawrence R. Halverson CIMCO Inc.
Senior Vice President and Secretary
1996 - Present
Vice President and Secretary
1992 - 1996
CUNA Brokerage Services, Inc.
President
1996 - Present
Joyce A. Harris CIMCO Inc.
Director and Chair
1992 - Present
Telco Community Credit Union
President, Chief Executive Officer
1978 - Present
James C. Hickman CIMCO Inc.
Director
1992 - Present
University of Wisconsin
Professor
1972 - Present
Michael B. Kitchen CIMCO Inc.
Director
1995 - Present
CUNA Mutual Life Insurance Company
President and Chief Executive Officer
1995 - Present
CUNA Mutual Insurance Society
President and Chief Executive Officer
1995 - Present
George A. Nelson CIMCO Inc.
Director and Vice Chair
1992 - Present
Evening Telegram Co. - WISC-TV
Vice President
1982 - Present
Item 29. Distributor
a. CUNA Brokerage Services, Inc., a registered broker-dealer, is the
principal Distributor of the shares of the Ultra Series Fund. CUNA
Brokerage Services, Inc. does not act as principal underwriter,
depositor or investment adviser for any investment company other
than the Registrant, CUNA Mutual Life Variable Account, and CUNA
Mutual Life Variable Annuity Account.
b. The officers and directors of CUNA Brokerage Services, Inc. are as
follows:
Name and Principal Position with Distributor Positions and Offices
Business Address with Registrant
Steven A. Goldberg Director None
5910 Mineral Point Road Secretary
Madison, WI 53705
Michael G. Joneson Director Chief Accounting
2000 Heritage Way Treasurer Officer, Treasurer,&
Waverly, IA 50677 Assistant Secretary
Gary L. Cutler Director None
2000 Heritage Way
Waverly, IA 50677
John M. Waggoner Chief Legal Officer None
5910 Mineral Point Road
Madison, WI 53705
Campbell D. McHugh Compliance Officer None
5910 Mineral Point Road
Madison, WI 53705
Brian Lasko Managing Principal None
2000 Heritage Way
Waverly, IA 50677
Lawrence R. Halverson Director Vice President
5910 Mineral Point Road President and Secretary
Madison, WI 53705
Marc A. Krasnick Director None
5910 Mineral Point Road Vice President
Madison, WI 53705
Sandra K. Steffeney Vice President None
33320 9th Avenue South
Suite 250
Federal Way, WA 98063-3919
c. There have been no commissions or other compensation paid by
Registrant to the Distributor.
Item 30. Location of Accounts and Records
The accounts, books and other documents required to be maintained by Registrant
pursuant to Section 31(a) of the Investment Company Act of 1940 and the rules
promulgated thereunder are maintained by the CUNA Mutual Life Insurance Company
at 2000 Heritage Way, Waverly, Iowa 50677 or at CIMCO Inc., 5910 Mineral Point
Road, Madison, Wisconsin 53705 or at CUNA Mutual Insurance Society, 5910 Mineral
Point Road, Madison, Wisconsin 53705.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered a copy of the registrant's annual report to shareholders,
upon request and without charge.
(d) The registrant undertakes, if requested to do so by the holders of at
least 10% of the votes represented by its outstanding shares, to call a
meeting of shareholders for the purpose of voting upon any question of
removal of any Trustee or Trustees, and to assist in communications
with shareholders as required by Section 16(c) of the Investment
Company Act of 1940, as amended.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485 for effectiveness of this Registration Statement and has caused this
Registration Statement to be signed on its behalf, in the City of Madison, State
of Wisconsin, on the 24th day of February, 1997.
ULTRA SERIES FUND
By: /s/ Michael S. Daubs
Michael S. Daubs, President
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
SIGNATURES AND TITLE DATE
Gwendolyn M. Boeke* 02/24/97
Gwendolyn M. Boeke, Trustee
Alfred L. Disrud* 02/24/97
Alfred L. Disrud, Trustee
/s/ Kevin T. Lentz 02/24/97
Kevin T. Lentz, Trustee
Keith S. Noah* 02/24/97
Keith S. Noah, Trustee
Thomas C. Watt* 02/24/97
Thomas C. Watt, Trustee
/s/ Linda L. Lilledahl 02/24/97
Linda L. Lilledahl, Attorney-In-Fact
* Pursuant to Powers of Attorney filed herewith
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
SIGNATURES AND TITLE DATE
/s/ Michael S. Daubs February 24, 1997
- -------------------------------------------- -------------------
Michael S. Daubs, President
/s/ Robert M. Buckingham February 24, 1997
- -------------------------------------------- -------------------
Robert M. Buckingham, Chief Financial
Officer and Assistant Secretary
/s/ Michael G. Joneson February 24, 1997
- -------------------------------------------- -------------------
Michael G. Joneson, Chief Accounting
Officer, Treasurer and Assistant Secretary
<PAGE>
INDEX TO EXHIBITS TO
FORM N-1A FOR
ULTRA SERIES FUND
1. Amended and Restated Declaration of Trust
2. Amended and Restated Bylaws
5. A. Management Agreement
B. Servicing Agreement between Century Life of America
(Now known as CUNA Mutual Life Insurance Company) and
Century Investment Management Co. (Now known as CIMCO
Inc.) effective October 1, 1994.
C. Servicing Agreement between Century Investment
Management Co. (Now known as CIMCO Inc.) and CUNA
Mutual Insurance Society effective July 17, 1993.
6. Distribution Agreement between Ultra Series Fund and CUNA
Brokerage Services, Inc. effective December 29, 1993.
8. A. Custodian Agreement with United States Trust Company
of New York dated June 24, 1993. Assumed by Chase
Manhattan on September 2, 1995.
B. Cash Data Entry Agreement with United States Trust
Company dated June 24, 1993. Assumed by Chase
Manhattan on September 2, 1995.
C. Custodian Agreement with State Street Bank and Trust
Company. [To be filed by amendment]
D. Cash Data Entry Agreement with State Street Bank and
Trust Company. [To be filed by amendment]
10. Opinion of Counsel
11. A. Consent of KPMG Peat Marwick [To be filed by
amendment]
13. A. Termination Agreement dated December 31, 1993
concerning Agreement Governing Contribution dated
September 30, 1983.
Agreement Governing Contribution
B. Termination Agreement dated December 31, 1993
concerning Agreement Governing Contribution dated May
31, 1988.
Agreement Governing Contribution
C. Termination of Expense Reimbursement Agreement dated
January 16, 1997, effective May 1, 1997.
Expense Reimbursement Agreement
15. Plan of Distribution dated May 1, 1997
16. Schedule of Computation
17. Financial Data Schedules
18. Multi-Class Plans.
19. Powers of Attorney
<PAGE>
EXHIBIT 1
ULTRA SERIES FUND
(A Massachusetts Business Trust)
Amended and Restated
DECLARATION OF TRUST
<PAGE>
TABLE OF CONTENTS
PAGE
RECITALS 1
ARTICLE I...................................................................1
THE TRUST...................................................................1
SECTION 1.1 Name...................................................1
SECTION 1.2 Location...............................................1
SECTION 1.3 Nature of Trust........................................1
SECTION 1.4 Definitions............................................2
ARTICLE II..................................................................2
POWERS OF TRUSTEES..........................................................3
SECTION 2.1 General................................................3
SECTION 2.2 Investments............................................3
SECTION 2.3 Legal Title............................................3
SECTION 2.4 Disposition of Assets..................................4
SECTION 2.5 Taxes..................................................4
SECTION 2.6 Rights as Holder of Securities.........................4
SECTION 2.7 Delegation; Committees.................................4
SECTION 2.8 Collection.............................................4
SECTION 2.9 Expenses...............................................5
SECTION 2.10 Borrowing.............................................5
SECTION 2.11 Deposits..............................................5
SECTION 2.12 Allocation............................................5
SECTION 2.13 Valuation.............................................5
SECTION 2.14 Fiscal Year...........................................5
SECTION 2.15 Concerning the Trust and Certain Affiliates...........5
SECTION 2.16 Power to Contract.....................................6
SECTION 2.17 Insurance.............................................7
SECTION 2.18 Pension and Other Plans...............................7
SECTION 2.19 Seal..................................................7
SECTION 2.20 Charitable Contributions..............................7
SECTION 2.21 Indemnification.......................................7
SECTION 2.22 Remedies..............................................7
SECTION 2.23 Separate Accounting...................................7
SECTION 2.24 Further Powers........................................7
ARTICLE III.................................................................8
ADVISER AND DISTRIBUTOR.....................................................8
SECTION 3.1 Appointment............................................8
SECTION 3.2 Provisions of Agreement................................8
SECTION 3.3 Independence of Trustees...............................8
ARTICLE IV..................................................................8
INVESTMENTS.................................................................8
SECTION 4.1 Statement of Investment Objectives and Policies........8
SECTION 4.2 Restrictions...........................................8
SECTION 4.3 Percentage Restrictions................................8
SECTION 4.4 Amendment of Investment Objectives and Policies
and of Investment Limitations..........................8
ARTICLE V...................................................................9
LIMITATIONS OF LIABILITY....................................................9
SECTION 5.1 Liability to Third Persons.............................9
SECTION 5.2 Liability to Trust or to Shareholders..................9
SECTION 5.3 Indemnification........................................9
SECTION 5.4 Surety Bonds..........................................10
SECTION 5.5 Apparent Authority....................................10
SECTION 5.6 Recitals..............................................10
SECTION 5.7 Reliance on Experts, Etc..............................10
SECTION 5.8 Liability Insurance...................................10
ARTICLE VI.................................................................10
CHARACTERISTICS OF SHARES..................................................10
SECTION 6.1 Shares of Beneficial Interest.........................10
SECTION 6.2 Establishment of Series and Classes...................11
SECTION 6.3 Evidence of Share Ownership...........................12
SECTION 6.4 Death of Shareholders.................................12
SECTION 6.5 Repurchase of Shares..................................12
SECTION 6.6 Trustees as Shareholders..............................12
SECTION 6.7 Redemption and Stop Transfers for Tax Purposes;
Redemption to Maintain Constant Net Asset Value.......12
SECTION 6.8 Information from Shareholders..........................13
SECTION 6.9 Redemptions............................................13
SECTION 6.10 Suspension of Redemption; Postponement of Payment.....13
ARTICLE VII.................................................................13
RECORD AND TRANSFER OF SHARES...............................................13
SECTION 7.1 Share Register.........................................13
SECTION 7.2 Transfer Agent.........................................13
SECTION 7.3 Owner of Record........................................14
SECTION 7.4 Transfers of Shares....................................14
SECTION 7.5 Limitation of Fiduciary Responsibility.................14
SECTION 7.6 Notices................................................14
ARTICLE VIII................................................................14
SHAREHOLDERS................................................................14
SECTION 8.1 Meetings of Shareholders...............................14
SECTION 8.2 Quorums................................................14
SECTION 8.3 Notice of Meetings.....................................15
SECTION 8.4 Record Date for Meetings...............................15
SECTION 8.5 Proxies, Etc...........................................15
SECTION 8.6 Reports................................................15
SECTION 8.7 Inspection of Records..................................16
SECTION 8.8 Shareholder Action By Written Consent..................16
SECTION 8.9 Voting Rights of Shareholders..........................16
ARTICLE IX..................................................................16
TRUSTEES 16
SECTION 9.1 Number and Qualification...............................16
SECTION 9.2 Term and Election......................................16
SECTION 9.3 Resignation and Removal................................16
SECTION 9.4 Vacancies..............................................17
SECTION 9.5 Meetings...............................................18
SECTION 9.6 Officers...............................................18
SECTION 9.7 Bylaws.................................................18
ARTICLE X...................................................................18
DISTRIBUTIONS TO SHAREHOLDERS AND DETERMINATION OF NET ASSET VALUE AND
NET INCOME.........................................................18
SECTION 10.1 General...............................................18
SECTION 10.2 Retained Earnings.....................................19
SECTION 10.3 Source of Distributions...............................19
SECTION 10.4 Net Asset Value.......................................19
SECTION 10.5 Power to Modify Valuation Procedures..................19
ARTICLE XI..................................................................19
CUSTODIAN...................................................................19
SECTION 11.1 Appointment and Duties................................19
SECTION 11.2 Central Certificate System............................20
ARTICLE XII.................................................................20
RECORDING OF DECLARATION OF TRUST...........................................20
SECTION 12.1 Recording.............................................20
ARTICLE XIII................................................................20
AMENDMENT OR TERMINATION OF TRUST..........................................20
SECTION 13.1 Amendment or Termination..............................20
SECTION 13.2 Power to Effect Reorganization........................21
ARTICLE XIV.................................................................21
MISCELLANEOUS...............................................................21
SECTION 14.1 Governing Law.........................................21
SECTION 14.2 Counterparts..........................................22
SECTION 14.3 Reliance by Third Parties.............................22
SECTION 14.4 Provisions in Conflict with Law or Regulations........22
SECTION 14.5 Section Headings......................................22
ARTICLE XV..................................................................22
DURATION OF TRUST...........................................................22
SECTION 15.1 Duration..............................................22
<PAGE>
Amended and Restated
Declaration of Trust
May 1, 1997
of
RECITALSRIES FUND
This Declaration of Trust made the 16th day of September, 1983 by Arthur J.
Hessburg, Michael S. Daubs, and Frederic L. Broers, the undersigned Trustees of
Ultra Series Fund.
WITNESSETH:
WHEREAS, the Trustees desire to establish an unincorporated voluntary
association commonly known as a business trust, as described in the provisions
of Chapter 182 of the General Laws of Massachusetts, for the principal purpose
of the investment and reinvestment of funds contributed thereto; and
WHEREAS, the Trustees desire that such trust be a registered open-end investment
company under the Investment Company Act of 1940; and
WHEREAS, the Trustees have acknowledged the receipt of and investment of One
Hundred Thousand Dollars ($100,000) by means of an Agreement Governing
Contribution and have agreed to hold, invest, and dispose of the same and any
property acquired or otherwise added thereto as such Trustees as hereinafter
stated; and
WHEREAS, it is proposed that the beneficial interest in the Trust's assets shall
be divided into transferable shares of beneficial interest, which shall be
evidenced by the Share Register maintained by the Trust or its agent, or, in the
discretion of the Trustees, be evidenced by certificates therefor, as
hereinafter provided;
NOW, THEREFORE, the Trustees hereby declare that they will hold all property of
every type and description which they are acquiring or may hereafter acquire as
such Trustees, together with the proceeds thereof, in trust, to manage and
dispose of the same for the benefit of the holders of record from time to time
of the Shares being issued and to be issued hereunder and in the manner and
subject to the provisions hereof.
ARTICLE I
THE TRUST
SECTION 1.1 Name. The name of the trust created by this Declaration of Trust
shall be Ultra Series Fund (hereinafter called the "Trust") and so far as may be
practicable the Trustees shall conduct the Trust's activities, execute all
documents and sue or be sued under that name, which name (and the word "Trust"
wherever used in this Declaration of Trust, except where the context otherwise
requires) shall refer to the Trustees in their capacity as Trustees, and not
individually or personally and shall not refer to the officers, agents,
employees or Shareholders of the Trust or of such Trustees. Should the Trustees
determine that the use of such name is not practicable, legal or convenient,
they may use such other designation or they may adopt such other name for the
Trust as they deem proper and the Trust may hold property and conduct its
activities under such designation or name.
1.2 Location. The Trust shall maintain a registered office at 84 State Street,
care of Prentice-Hall Corporation System, Inc., Boston, Massachusetts, 02109,
and may maintain such other offices or places of business as the Trustees may
from time to time determine.
1.3 Nature of Trust. The Trust shall be of the type commonly termed a "business"
trust. The Trust is not intended to be, shall not be deemed to be, and shall not
be treated as, a general partnership, limited partnership, joint venture,
corporation or joint stock company. The Shareholders shall be beneficiaries and
their relationship to the Trustees shall be solely in that capacity in
accordance with the rights conferred upon them hereunder. The Trust is intended
to have the status of a registered open-end investment company under the
Investment Company Act of 1940 and of a "regulated investment company" as that
term is defined in Section 851 of the Internal Revenue Code of 1986, as amended
(the "Code") and this Declaration of Trust and all actions of the Trustees
hereunder shall be construed in accordance with such intent.
SECTION 1.4 Definitions. As used in this Declaration of Trust, the following
terms shall have the following meanings unless the context hereof otherwise
requires:
"1940 Act" shall mean the Investment Company Act of 1940, as amended
from time to time.
"Adviser" and "Distributor" shall mean any Person or Persons appointed,
employed or contracted with by the Trustee under the applicable
provisions of Section 3.1 hereof.
"Affiliate" shall have the same meaning as the term Affiliated Person
under the 1940 Act.
"Assignment," "Commission," and "Prospectus" shall have the meanings
given them in the 1940 Act.
"Declaration of Trust" shall mean this Declaration of Trust as amended,
restated, or modified from time to time. References in this Declaration
of Trust to "Declaration," "hereof," "herein," "hereby" and "hereunder"
shall be deemed to refer to the Declaration of Trust and shall not be
limited to the particular text, article, or section in which such words
appear.
"General Assets" shall mean any assets, income, earnings, profits of
proceeds thereof, funds, or payments that are not readily identifiable
as belonging to any particular Series of the Trust or any corresponding
investment portfolio of the Trust.
"General Liabilities" shall mean any liabilities, expenses, costs,
charges, or reserves of the Trust that are not readily identifiable as
belonging to any particular Series of the Trust or any corresponding
investment portfolio of the Trust.
"Person" shall mean and include individuals, corporations, limited
partnerships, general partnerships, joint stock companies or
associations, joint ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other entities whether
or not legal entities and governments and agencies and political
subdivisions thereof.
"Portfolio" shall mean any separate investment portfolio coming to
exist as a result of the establishment by the Trustees of one or more
series of Shares pursuant to Article VI hereof."
"Securities" shall mean any stock, shares, voting trust certificates,
bonds, debentures, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for, guarantees of, or any right to subscribe to, purchase or acquire
any of the foregoing.
"Shareholders" shall mean as of any particular time all holders of
record of outstanding Shares at such time.
"Shares" shall mean the shares of beneficial interest of the Trust as
described in Article VI.
"Trust Property" shall mean as of any particular time any and all
property, real, personal, or otherwise, tangible or intangible, which
is transferred, conveyed or paid to the Trust or Trustees and all
income, profits and gains therefrom and which at such time is owned or
held by, or for the account of, the Trust or the Trustees.
ARTICLE II
POWERS OF TRUSTEES
SECTION 2.1 General. The Trustees shall have, without other or further
authorization, full, exclusive and absolute power, control and authority over
the Trust Property and over the business of the Trust to the same extent as if
the Trustees were the sole and absolute owners of the Trust Property and
business in their own right, and with such powers of delegation as may be
permitted by this Declaration of Trust. The Trustees may do and perform such
acts and things as in their sole judgment and discretion are necessary and
proper for conducting the business and affairs of the Trust or promoting the
interests of the Trust and the Shareholders. The enumeration of any specific
power or authority herein shall not be construed as limiting the aforesaid power
or authority or any specific power or authority. The Trustees shall have the
power to enter into commitments to make any investment, purchase or acquisition,
or to exercise any power authorized by this Declaration of Trust. Such powers of
the Trustees may be exercised without order of or resort to any court.
SECTION 2.2 Investments. The Trustees shall have power, subject in all respects
to Article IV hereof,
(a) to conduct, operate and carry on the business of an investment
company; and
(b) for such consideration as they may deem proper, to subscribe
for, invest in, reinvest in, purchase or otherwise acquire,
hold, pledge, sell, assign, transfer, lend, exchange,
distribute or otherwise deal in or dispose of negotiable or
nonnegotiable instruments, obligations, evidences of
indebtedness, bankers' acceptances, certificates of deposit or
indebtedness, commercial paper, securities subject to
repurchase agreements, and other money market securities,
including, without limitation, those issued, guaranteed or
sponsored by the United States Government or its agencies or
instrumentalities, or international instrumentalities, or by
any of the several states of the United States of America or
their political subdivisions or agencies or instrumentalities,
or by any bank or savings institution, or by any corporation
organized under the laws of the United States or of any state,
territory or possession thereof, or by corporations organized
under foreign laws; marketable straight debt securities;
securities (payable in U.S. dollars) of, or guaranteed by,
foreign governments, the government of Canada or of a Province
of Canada; restricted securities; preferred or common stock,
securities convertible into common stock, purchase rights,
warrants and options issued by corporations organized under
the laws of the United States or any state, territory or
possession thereof, or by corporations organized under foreign
laws or American depository receipts; shares of investment
companies; interest in real estate; financial futures
contracts; stock index futures; and nothing herein shall be
construed to mean the Trustees shall not have the foregoing
powers with respect to any Securities in which the Trust may
invest in accordance with Article IV hereof.
In the exercise of their powers, the Trustees shall not be
limited, except as otherwise provided hereunder, to investing
in Securities maturing before the possible termination of the
Trust, nor shall the Trustees be limited by any law now or
hereafter in effect limiting the investments which may be held
or retained by trustees or other fiduciaries, but they shall
have full authority and power to make any and all investments
within the limitations of this Declaration of Trust, that
they, in their absolute discretion, shall determine, and
without liability for loss, even though such investments shall
be of a character or in amount not considered proper for the
investment of Trust funds.
SECTION 2.3 Legal Title. Legal title to all the Trust Property shall be vested
in the Trustees as joint tenants and held by and transferred to the Trustees,
except that the Trustees shall have power to cause legal title to any Trust
Property to be held by or in the name of one or more of the Trustees with
suitable reference to their Trustee status, or in the name of the Trust, or in
the name of any other Person as nominee, on such terms, in such manner, and with
such powers as the Trustees may determine, so long as in their judgment the
interest of the Trust is adequately protected.
The right, title and interest of the Trustees in and to the Trust Property shall
vest automatically in all persons who may hereafter become Trustees upon their
due election and qualification without any further act. Upon the resignation,
removal or death of a Trustee, the Trustee (and in the event of his death, his
estate) shall automatically cease to have any right, title or interest in or to
any of the Trust Property, and the right, title and interest of such Trustee in
and to the Trust Property shall vest automatically in the remaining Trustees
without any further act. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
SECTION 2.4 Disposition of Assets. Subject in all respects to Article IV hereof,
the Trustees shall have power to sell, lease, exchange or otherwise dispose of
or grant options with respect to any and all Trust Property free and clear of
any and all trusts, at public or private sale, for cash or on terms, without
advertisement, and subject to such restrictions, stipulations, agreements and
reservations as they shall deem proper, and to execute and deliver any deed or
other instrument in connection with the foregoing. The Trustees shall also have
the power, subject in all respects to Article IV hereof, to:
(a) rent, lease or hire from others or to others for terms which
may extend beyond the termination of this Declaration of Trust
any property or rights to property, real, personal or mixed,
tangible or intangible, and, except for real property, to own,
manage, use and hold such property and such rights;
(b) give consents and make contracts relating to Trust Property or
its use;
(c) grant security interests in or otherwise encumber Trust
Property in connection with borrowings; and
(d) release any Trust Property.
SECTION 2.5 Taxes. The Trustees shall have power to pay all taxes or
assessments, of whatever kind or nature, imposed upon or against the Trust or
the Trustees in connection with the Trust Property or upon or against the Trust
Property or income or any part thereof, to settle and compromise disputed tax
liabilities, and for the foregoing purposes to make such returns and do all such
other acts and things as may be deemed by the Trustees to be necessary or
desirable.
SECTION 2.6 Rights as Holder of Securities. The Trustees shall have the power to
exercise all the rights, powers and privileges appertaining to the ownership of
all or any Securities or other property forming part of the Trust Property to
the same extent that any individual might, and, without limiting the generality
of the foregoing, to vote or give any consent, request or notice or waive any
notice either in person or by proxy or power of attorney with or without power
of substitution, to one or more Persons, which proxies and powers of attorney
may be for meetings or action generally or for any particular meetings or
action, and may include the exercise of discretionary powers.
SECTION 2.7 Delegation; Committees. The Trustees shall have power, consistent
with their continuing exclusive authority over the management of the Trust, the
conduct of its affairs, and the management and disposition of Trust Property, to
delegate from time to time to such one or more of their number (who may be
designated as constituting a Committee of the Trustees) or to officers,
employees or agents of the Trust the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the Trustees or
as their attorney or attorneys or otherwise as the Trustees may from time to
time deem expedient.
SECTION 2.8 Collection. The Trustees shall have power to collect, sue for,
receive and receipt for all sums of money or other property due to the Trust, to
consent to extensions of the time for payment, or to the renewal of any
Securities or obligations; to engage or intervene in, prosecute, defend,
compound, compromise, abandon or adjust by arbitration or otherwise any actions,
suits, proceedings, disputes, claims, demands or things relating to the Trust
Property; to foreclose any Security or other instrument securing any notes,
debentures, bonds, obligations or contracts, by virtue of which any sums of
money are owed to the Trust; to exercise any power of sale held by them, and to
convey good title thereunder free of any and all trusts, and in connection with
any such foreclosure or sale, to purchase or otherwise acquire title to any
property; to be parties to reorganization and to transfer to and deposit with
any corporation, committee, voting trustee or other Person any Securities or
obligations of any corporation, trust, association or other organization, the
Securities of which form a part of the Trust Property, for the purpose of any
reorganization of any such corporation, trust, association or other
organization, or otherwise, to participate in any arrangement for enforcing or
protecting the interests of the Trustees as the owners or holders of such
Securities or obligations and to pay any assessment levied in connection with
such reorganization or arrangement; to extend the time (with or without
security) for the payment or delivery of any debts or property and to execute
and enter into releases, agreements and other instruments; and to pay or satisfy
any debts or claims upon any evidence that the Trustees shall think sufficient.
SECTION 2.9 Expenses. The Trustees shall have power to incur and pay any charges
or expenses which in the opinion of the Trustees are necessary or incidental to
or proper for carrying out any of the purposes of this Declaration of Trust, and
to reimburse others for the payment therefor, and to pay appropriate
compensation or fees from the funds of the Trust to themselves as Trustees and
to Persons with whom the Trust has contracted or transacted business. The
Trustees shall fix the compensation of all officers, employees and Trustees. The
Trustees may be paid reasonable compensation for their general services as
Trustees and officers hereunder, and the Trustees may pay themselves or any one
or more of themselves such compensation for special services, including legal
services, as they in good faith may deem reasonable and reimbursement for
expenses reasonably incurred by themselves or any one or more of themselves on
behalf of the Trust.
SECTION 2.10 Borrowing. The Trustees shall have power to borrow money only to
the extent, for the purposes, and in the manner authorized by Article IV hereof.
SECTION 2.11 Deposits. The Trustees shall have power to deposit any monies or
Securities included in the Trust Property with one or more banks, trust
companies or other banking institutions whether or not such deposits will draw
interest. Such deposits are to be subject to withdrawal in such manner as the
Trustees may determine, and the Trustees shall have no responsibility for any
loss which may occur by reason of the failure of the bank, trust company or
other banking institution with whom the monies or Securities have been
deposited.
SECTION 2.12 Allocation. The Trustees shall have power to determine whether
monies or other assets received by the Trust shall be charged or credited to
income or capital or allocated between income and capital, including the power
to amortize or fail to amortize any part or all of any premium or discount, to
treat any part or all the profit resulting from the maturity or sale of any
asset, whether purchased at a premium or at a discount, as income or capital or
apportion the same between income and capital, to apportion the sale price of
any asset between income and capital, and to determine in what manner any
expenses or disbursements are to be borne as between income and capital, whether
or not in the absence of the power and authority conferred by this Section 2.12,
such assets would be regarded as income or as capital or such expense or
disbursement would be charged to income or to capital; to treat any dividend or
other distribution on any investment as income or capital or apportion the same
between income and capital; to provide or fail to provide reserves for
depreciation, amortization or obsolescence in respect of any Trust Property in
such amounts and by such methods and for such purposes as they shall determine,
and to allocate to the share of beneficial interest account less than all of the
consideration received for Shares (but not less than the par value thereof) and
to allocate the balance thereof to paid-in capital, all as the Trustees may
reasonably deem proper.
SECTION 2.13 Valuation. The Trustees shall have power to determine in good faith
conclusively the value of any of the Trust Property and of any services,
Securities, assets or other consideration hereafter to be acquired or disposed
of by the Trust, and to revalue the Trust Property.
SECTION 2.14 Fiscal Year. The Trustees shall have power to determine the fiscal
year of the Trust and the method or form in which its accounts shall be kept and
from time to time to change the fiscal year or method or form of accounts.
SECTION 2.15 Concerning the Trust and Certain Affiliates.
(a) The Trust may enter into transactions with any Affiliate of
the Trust or of the Adviser or any Affiliate of any Trustee,
director, officer or employee of the Trust or of the Adviser
if (i) each such transaction has, after disclosure of such
affiliation, been approved or ratified by the affirmative vote
of a majority of the Trustees, including a majority of the
Trustees who are not Affiliates of any Person (other than the
Trust) who is a party to the transaction with the Trust, (ii)
such transaction is, in the opinion of the Trustees, on terms
fair and reasonable to the Trust and the Shareholders and at
least as favorable to them as similar arrangements for
comparable transactions (of which the Trustees have knowledge)
with organizations unaffiliated with the Trust or with the
Person who is a party to the transaction with the Trust, and
(iii) such transaction is in accordance with the 1940 Act or
an exemption granted thereunder.
(b) Except as otherwise provided by this Declaration of Trust and
in the absence of fraud, a contract, act or other transaction,
between the Trust and any other Person, or in which the Trust
is interested, is valid and no Trustee, officer, employee or
agent of the Trust has any liability as a result of entering
into any such contract, act or transaction even though (i) one
or more of the Trustees, officers, employees or agents of the
Trust is directly or indirectly interested in or Affiliated
with, or are trustees, partners, directors, employees,
officers or agents of such other Person, or (ii) one or more
of the Trustees, officers, employees, or agents of the Trust,
individually or jointly with others, is a party or are parties
to or directly interested in, or Affiliated with, such
contract, act or transaction, provided that (a) such interest
or Affiliation is disclosed to the Trustees and the Trustees
authorized such contract, act or other transaction by a vote
of a majority of the unaffiliated Trustees, or (b) such
interest or Affiliation is disclosed to the Shareholders, and
such contract, act or transaction is approved by the
Shareholders.
(c) Any Trustee or officer, employee or agent of the Trust may
acquire, own, hold and dispose of Shares for his individual
account, and may exercise all rights of a holder of such
Shares to the same extent and in the same manner as if he were
not such a Trustee or officer, employee or agent. The Trustees
shall use their best efforts to obtain through the Adviser or
other Persons a continuing and suitable investment program,
consistent with the investment policies and objectives of the
Trust, and the Trustees shall be responsible for reviewing and
approving or rejecting investment opportunities presented by
the Adviser or such other Persons. Any Trustee or officer,
employee, or agent of the Trust may, in his personal capacity,
or in a capacity of trustee, officer, director, stockholder,
partner, member, adviser or employee of any Person, have
business interests and engage in business activities in
addition to those relating to the Trust, which interests and
activities may be similar to those of the Trust and include
the acquisition, syndication, holding, management, operation
or disposition, for his own account or for the account of such
Person, and each Trustee, officer, employee and agent of the
Trust shall be free of any obligation to present to the Trust
any investment opportunity which comes to him in any capacity
other than solely as Trustee, officer, employee or agent of
the Trust, even if such opportunity is of a character which,
if presented to the Trust, could be taken by the Trust.
Subject to the provisions of Article III hereof, any Trustee
or officer, employee or agent of the Trust may be interested
as Trustee, officer, director, stockholder, partner, member,
adviser or employee of, or otherwise have a direct or indirect
interest in, any Person who may be engaged to render advice or
services to the Trust, and may receive compensation from such
Person as well as compensation as Trustee, officer, employee
or agent of the Trust or otherwise hereunder. None of the
activities referred to in this paragraph shall be deemed to
conflict with his duties and powers as Trustee, officer,
employee or agent of the Trust. To the extent that any other
provision of this Declaration of Trust conflicts or is
otherwise contrary to the provisions of this Section 2.15 the
provisions of this Section shall be deemed controlling.
SECTION 2.16 Power to Contract. Subject to the provisions of Sections 2.7 and
3.1 hereof with respect to delegation of authority by the Trustees, the Trustees
shall have power to appoint, employ, or contract with any Person (including one
or more of themselves and any corporation, partnership or trust of which one or
more of them may be an Affiliate, subject to the applicable requirements of
Section 2.15 hereof) as the Trustees may deem necessary, or desirable for the
transaction of the business of the Trust including any Person who, under the
supervision of the Trustees, may, among other things: serve as the Trust's
investment adviser and consultant in connection with policy decisions made by
the Trustees; furnish reports to the Trustees and provide research, economic and
statistical data in connection with the Trust's investments; act as consultants,
accountants, technical advisers, attorneys, brokers, underwriters, corporate
fiduciaries, escrow agents, depositories, custodians or agents for collection,
insurers or insurance agents, transfer agents or registrars for Shares or in any
other capacity deemed by the Trustees necessary or desirable; investigate,
select, and, on behalf of the Trust, conduct relations with Persons acting in
such capacities and pay appropriate fees to, and enter into appropriate
contracts with, or employ, or retain services performed or to be performed by,
any of them in connection with the investments acquired, sold, or otherwise
disposed of, or committed, negotiated, or contemplated to be acquired, sold or
otherwise disposed of; substitute any other Person for any such Person; act as
attorney-in-fact or agent in the purchase or sale or other disposition of
investments, and in the handling, prosecuting or settling of any claims of the
Trust, including the foreclosure or other enforcement of any lien or security
securing investments; and assist in the performance of such ministerial
functions necessary in the management of the Trust as may be agreed upon with
the Trustees or officers of the Trust.
SECTION 2.17 Insurance. The Trustees shall have the power to purchase and pay
for entirely out of Trust Property insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, including the
Adviser, or independent contractors of the Trust individually against all claims
and liabilities of every nature arising by reason of holding, being or having
held any such office or position, or by reason of any action alleged to have
been taken or omitted by any such Person as Shareholder, Trustee, officer,
employee, agent, investment adviser, or independent contractor, including any
action taken or omitted that may be determined to constitute negligence.
However, such policies shall not pay or reimburse any director, officer,
investment adviser or principal underwriter for any liability arising by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of
duties. Such policies are to set forth a reasonable and fair means for
determining whether payment or reimbursement shall be made.
SECTION 2.18 Pension and Other Plans. The Trustees shall have the power to pay
pensions for faithful service, as deemed appropriate by the Trustees, and to
adopt, establish and carry out pension, profit-sharing, savings, thrift and
other retirement, incentive and benefit plans, trusts and provisions, including,
without limitation, the purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust.
SECTION 2.19 Seal. The Trustees shall have the power to adopt and use a seal for
the Trust, but, unless otherwise required by the Trustees, it shall not be
necessary for the seal to be placed on, and its absence shall not impair the
validity of, any document, instrument or other paper executed and delivered by
or on behalf of the Trust.
SECTION 2.20 Charitable Contributions. The Trustees shall have the power to make
donations, irrespective of benefit to the Trust, for the public welfare or for
community fund, hospital, charitable, religious, educational, scientific,
literary, civic or similar purpose, and in time of war or other national
emergency in aid thereof.
SECTION 2.21 Indemnification. In addition to the mandatory indemnification
provided for in Section 5.3 hereof, the Trustees shall have power to the extent
permitted by law to indemnify or enter into agreements with respect to
indemnification with any Person with whom the Trust has dealings, including,
without limitation, any investment adviser, including the Adviser, or
independent contractor, to such extent as the Trustees shall determine.
SECTION 2.22 Remedies. Notwithstanding any provision in this Declaration of
Trust, when the Trustees deem that there is a significant risk that an obligor
to the Trust may default or is in default under the terms of any obligation to
the Trust, the Trustees shall have power to pursue any remedies permitted by law
which, in their sole judgment, are in the interests of the Trust, and the
Trustees shall have the power to enter into any investment, commitment or
obligation of the Trust resulting from the pursuit of such remedies as are
necessary or desirable to dispose of property acquired in the pursuit of such
remedies.
SECTION 2.23 Separate Accounting. The Trustees shall establish the books and
records for each Portfolio and maintain such records separately as if each
Portfolio were a separate legal entity.
SECTION 2.24 Further Powers. The Trustees shall have power to do all such other
matters and things and execute all such instruments as they deem necessary,
proper or desirable in order to carry out, promote or advance the interests of
the Trust although such matters or things are not herein specifically mentioned.
Any determination as to what is in the best interests of the Trust made by the
Trustees in good faith shall be conclusive. In construing the provisions of this
Declaration of Trust the presumption shall be in favor of a grant of power to
the Trustees. The Trustees will not be required to obtain any court order to
deal with the Trust Property.
ARTICLE III
ADVISER AND DISTRIBUTOR
3.1 Appointment. The Trustees are responsible for the general investment policy
of the Trust, the distribution of its Shares, and for the general supervision of
the business of the Trust conducted by officers, agents, employees, investment
advisers, distributors, or independent contractors of the Trust. However, the
Trustees are not required personally to conduct all of the business of the Trust
and, consistent with their ultimate responsibility as stated herein, the
Trustees may appoint, employ or contract with an investment adviser (the
"Adviser") and/or a distributor and underwriter for the Trust's Shares (the
"Distributor"), and may grant or delegate such authority to the Adviser and/or
Distributor (pursuant to the terms of Section 2.16 hereof) or to any other
Person the services of whom are obtained by the Adviser or Distributor, as the
Trustees may, in their sole discretion, deem to be necessary or desirable,
without regard to whether such authority is normally granted or delegated by
Trustees.
3.2 Provisions of Agreement. The Trustees shall not enter into any agreement
with the Adviser or Distributor pursuant to the provisions of Section 3.1 hereof
unless such agreement is consistent with the provisions of Section 15 of the
1940 Act.
3.3 Independence of Trustees. After such time as a registration statement under
the Securities Act of 1933, as amended, covering the first public offering of
shares shall have become effective, not more than 49% of the total number of
Trustees shall be Affiliates of the Adviser; provided, however, that if at any
time more than 49% of the total number of Trustees shall be Affiliates of the
Adviser because of the death, resignation, removal or change in affiliation of a
Trustee who is not such an Affiliate, such requirement shall not be applicable
for a period of 60 days, during which time a majority of all the Trustees then
in office shall appoint as Trustee such number of persons who are not Affiliates
of the Adviser as shall be sufficient to bring about compliance with the above
requirement. The Trustees shall at all times endeavor to comply with such
requirement, but failure so to comply shall not affect the validity or
effectiveness of any action of the Trustees.
ARTICLE IV
INVESTMENTS
SECTION 4.1 Statement of Investment Objectives and Policies. The Trustees shall
be guided in their actions by the Investment Objectives and Policies as set
forth in the most current effective registration statement for the Trust as
filed with the Securities and Exchange Commission. Because the Trust is divided
into separate Portfolios, the Trustees shall supervise the investments and the
recordkeeping for each Portfolio within the Trust as if it was a separate legal
entity. In addition to any other power granted to the Trustees, the Trustees
may, as they deem appropriate, provide for additional Portfolios in a manner
consistent with the 1940 Act.
SECTION 4.2 Restrictions. Notwithstanding anything in this Declaration of Trust
which may be deemed to authorize the contrary, the Trust, with respect to each
Portfolio, shall conduct its affairs in accordance with the Investment
Limitations (Restrictions) as set forth in the most current, effective
registration statement for the Trust as filed with the Securities and Exchange
Commission.
SECTION 4.3 Percentage Restrictions. If the percentage restrictions as set forth
in the Investment Limitations described in Section 4.2 above are adhered to at
the time of each investment, a later increase or decrease in percentage
resulting from a change in the value of the Trust's assets is not a violation of
such investment restrictions.
SECTION 4.4 Amendment of Investment Objectives and Policies and of Investment
Limitations. The Investment Objectives and Policies and the Investment
Limitations are deemed to be fundamental policies and may not be changed without
the approval of the holders of a majority of the outstanding voting Shares of
each Portfolio affected which, for purpose herein, shall mean the lesser of (i)
67% of the Shares represented at a meeting which more than 50% of the
outstanding Shares are represented or (ii) more than 50% of the outstanding
Shares. A change in policy affecting only one Portfolio may be effected only
with the approval of a majority of the outstanding Shares of such Portfolio.
ARTICLE V
LIMITATIONS OF LIABILITY
SECTION 5.1 Liability to Third Persons. No Shareholder shall be subject to any
personal liability whatsoever, in tort, contract or otherwise, to any other
Person or Persons in connection with Trust Property or the affairs of the Trust;
and no Trustee, officer, employee or agent of the Trust shall be subject to any
personal liability whatsoever, in tort, contract or otherwise; to any other
Person or Persons in connection with Trust Property or the affairs of the Trust,
except for that arising from his bad faith, willful misconduct, gross negligence
or reckless disregard of his duties or for his failure to act in good faith in
the reasonable belief that his action was in the best interest of the Trust; and
all such other Persons shall look solely to the Trust Property for satisfaction
of claims of any nature arising in connection with the affairs of the Trust. If
any Shareholder, Trustee, officer, employee or agent, as such, of the Trust is
made a party to any suit or proceedings to enforce any such liability, he shall
not on account thereof be held to any personal liability.
SECTION 5.2 Liability to Trust or to Shareholders. No Trustee, officer, employee
or agent of the Trust shall be liable to the Trust or to any Shareholder,
Trustee, officer, employee or agent of the Trust for any action or failure to
act (including, without limitation, the failure to compel in any way any former
or acting Trustee to redress any breach of trust) except for his own bad faith,
willful misfeasance, gross negligence or reckless disregard for his duties.
SECTION 5.3 Indemnification. The Trust shall indemnify and hold each Shareholder
harmless from and against all claims and liabilities, whether they proceed to
judgment or are settled or otherwise brought to a conclusion, to which such
Shareholder may become subject by reason of his being or having been a
Shareholder, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection with any such claim or
liability. The rights accruing to a Shareholder under this Section 5.3 shall not
exclude any other right to which such Shareholder may be lawfully entitled, nor
shall anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein; provided, however, that the Trust shall have no
liability to reimburse Shareholders for taxes assessed against them by reason of
their ownership of Shares, nor for any losses suffered by reason of changes in
the market value of Shares.
Each officer, Trustee or agent of the Trust shall be indemnified by the Trust to
the full extent permitted under the General Laws of the State of Massachusetts
and the 1940 Act, except that such indemnity shall not protect any such Person
against any liability to the Trust or any Shareholder thereof to which such
Person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office ("disabling conduct"). Indemnification shall be made when (i) a final
decision on the merits, by a court or other body before whom the proceeding was
brought, that the Person to be indemnified was not liable by reason of disabling
conduct or, (ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the Person to be indemnified was not
liable by reason of disabling conduct, by (a) the vote of a majority of a quorum
of Trustees who are not "interested persons" of the company as defined in
Section 2(a)(19) of the 1940 Act, or (b) an independent legal counsel in a
written opinion. The Trust may, by vote of a majority of a quorum of Trustees
who are not interested persons, advance attorneys' fees or other expenses
incurred by officers, Trustees, investment advisers or principal underwriting,
in defending a proceeding upon the undertaking by or on behalf of the Person to
be indemnified to repay the advance unless it is ultimately determined that he
is entitled to indemnification. Such advance shall be subject to at least one of
the following: (1) the Person to be indemnified shall provide a security for his
undertaking, (2) the Trust shall be insured against losses arising by reason of
any lawful advances, or (3) a majority of a quorum of the disinterested,
nonparty Trustees of the Trust, or an independent legal counsel in a written
opinion, shall determine, based on a review of readily available facts, that
there is reason to believe that the Person to be indemnified ultimately will be
found entitled to indemnification.
SECTION 5.4 Surety Bonds. No Trustee shall, as such, be obligated to give any
bond or surety or other security for the performance of any of the Trustees
duties.
SECTION 5.5 Apparent Authority. No purchaser, lender, transfer agent or other
Person dealing with the Trustees or any officer, employee or agent of the Trust
shall be bound to make any inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by such officer, employee or agent or
make inquiry concerning or be liable for the application of money or property
paid, loaned or delivered to or on the order of the Trustees or of such officer,
employee or agent.
SECTION 5.6 Recitals. Any written instrument creating an obligation of the Trust
shall be conclusively taken to have been executed or done by a Trustee or
Trustees or an officer, employee or agent of the Trust only in their or his
capacity as Trustees or Trustee under this Declaration of Trust or in the
capacity of officer, employee or agent of the Trust. Any written instrument
creating an obligation of the Trust shall refer to this Declaration of Trust and
contain a recital to the effect that the obligations thereunder are not
personally binding upon, nor shall resort be had to the private property of, any
of the Trustees, Shareholders, officers, employees or agents of the Trust, but
the Trust Property or a specific portion thereof only shall be bound, and may
contain any further recital which they or he may deem appropriate, but the
omission of such recital shall not operate to impose personal liability on any
of the Trustees, Shareholders, officers. employees or agents of the Trust.
SECTION 5.7 Reliance on Experts, Etc. Each Trustee and each officer of the Trust
shall, in the performance of his duties, be fully and completely justified and
protected with regard to any act or any failure to act resulting from reliance
in good faith upon the books of account or other records of the Trust, upon an
opinion of counsel or upon reports made to the Trust by any of its officers or
employees or by the Adviser, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees or officers of the
Trust, regardless of whether such counsel or expert may also be a Trustee.
SECTION 5.8 Liability Insurance. The Trustees shall, at all times, maintain
insurance for the protection of the Trust Property, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover all foreseeable tort liability to the extent available at
reasonable rates.
ARTICLE VI
CHARACTERISTICS OF SHARES
SECTION 6.1 Shares of Beneficial Interest. The beneficial interests of
Shareholders in the Trust shall be divided into transferable Shares of one or
more separate and distinct series, or classes of a series, as the Trustees shall
from time to time create and establish. The number of Shares of each series, and
class of a series, is unlimited and each Share shall have a par value of $0.01.
All Shares issued hereunder shall be fully paid and nonassessable. Shareholders
shall have no preemptive or other right to subscribe to any additional shares or
other securities issued by the Trust or to any appraisal, conversion or exchange
rights of any kind. The Trustees shall have full power and authority, in their
sole discretion and without Shareholder approval: (i) to issue original or
additional Shares at such times and on such terms and conditions as they
consider appropriate; (ii) to issue fractional Shares and Shares held in
Treasury; (iii) to establish and to change in any manner Shares of any series or
class of any series with such preferences, terms of conversion, voting powers,
rights and privileges as the Trustees may determine (but the Trustees may not
change the foregoing with respect to outstanding Shares in a manner materially
adverse to the Shareholders of such Shares); (iv) to divide or combine the
Shares of any series or class of a series into a greater or fewer number of
Shares; (v) to classify or reclassify any unissued Shares of any series or class
of a series into one or more series of classes; (vi) to abolish any one or more
series or classes of a series of Shares; (vii) to issue Shares to acquire other
assets (including assets subject to, and in connection with, the assumption of
liabilities) and businesses; and (viii) to take such other action with respect
to the Shares as the Trustee may consider desirable. The ownership of the Trust
Property of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
Shares, and they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can they be called
upon to share or assume any losses of the Trust or suffer an assessment of any
kind by virtue of their ownership of Shares, except as provided in Section 10.5
hereof. The Shares shall be personal property giving only the rights
specifically set forth in this Declaration of Trust.
6.2 Establishment of Series and ClassesSECTION6.2EstablishmentofSeriesandClasses
2 . The Trust shall consist of one or more series. The Trustees hereby establish
the series listed in Schedule A attached hereto and made a part hereof. Each
additional series shall be established by the adoption of a resolution by the
Trustees. The Trustees may divide the Shares of any series into one or more
classes. Each class of a series shall represent interests in the assets of that
series. The Trustee may designate the relative rights and preferences of the
Shares of each series or class. The Trust shall maintain separate and distinct
records for each series and hold and account for the assets thereof separately
from the other assets of the Trust or of any other series. The Trust may issue
any number of Shares of any established class of any series and need not issue
Shares of a particular series or class. Each Share of a series shall represent
an equal beneficial interest in the net assets of such series. Each holder of
Shares of a series or class of a series, shall be entitled to receive his or her
pro-rata share of all distributions made with respect to such series or class.
Upon redemption of his or her Shares, such Shareholder shall be paid solely out
of the funds and property of such series. The Trustees may change the name of
any series or class thereof. At any time when there are no Shares of a
previously established and designated series or class outstanding, the Trustees
may, by a majority vote, abolish that series or class.
Except as the Trustees may provide when classifying or reclassifying the Shares
of any unissued series, each series of Shares shall have the following powers,
preferences or other special rights and shall have the following qualifications,
restrictions and limitations:
(a) Except as otherwise provided herein, all consideration
received by the Trust for the issue or sale of Shares of a
particular series, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, any
funds or payments derived from any reinvestment of such
proceeds, and any General Assets allocated to a series, shall
constitute assets of that series, in contrast to other series
(subject only to the rights of creditors) and are herein
referred to as assets "belonging to" that series. The assets
belonging to a series shall be held and accounted for
separately from the other assets of the Trust and from every
other series and shall be held by the Trustees in trust for
the benefit of the holders of Shares and that series. The
Trustees shall determine allocation of the assets belonging to
the Trust to a given series. Any General Assets shall be
allocated by or under the supervision of the Trustees to and
among any one or more of the series established and designated
from time to time, in such manner and on such basis as the
Trustees, in their sole discretion, considers fair and
equitable. Such decisions by the Trustees shall be final and
conclusive.
(b) The assets belonging to each series shall be charged with the
liabilities of the Trust in respect of that series and with
all expenses, costs, charges, and reserves attributable to
that series. Such liabilities, expenses, costs, charges, and
reserves, together with any General Liabilities allocated to
that series, shall constitute the liabilities of that series,
in contrast to other series, and are herein referred to as
"belonging to" that series. Any General Liabilities shall be
allocated by or under the supervision of the Trustees to and
among any one or more of the series established and designated
from time to time, in such manner and on such basis as the
Trustees, in their sole discretion, considers fair and
equitable. Such decisions by the Trustees shall be final and
conclusive. Without limiting the foregoing and subject to the
right of the Trustees in their discretion to allocate General
Liabilities, expenses, costs, charges or reserves as herein
provided, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to
a particular series shall be enforceable against the assets of
that series only, and not against the assets of the Trust
generally. Any person extending credit to, contracting with or
having any claim against any series may look only to the
assets of that series to satisfy or enforce any debt,
liability, obligation or expense incurred, contracted for or
otherwise existing with respect to that series. No Shareholder
or former Shareholder of any series of Shares shall have a
claim on or have any right to any assets allocated to or
belonging to any other series.
(c) The Trustees may declare and pay dividends or distributions,
in Shares or in cash, on Shares of any series or class thereof
to the holders of such Shares, in such manner and from such
income and capital gains, accrued and realized, from the
assets belonging to that series, after providing for actual
and accrued liabilities belonging to that series, as they, in
their sole discretion determine.
(d) On any matter submitted to a vote of the Shareholders, each
holder of a Share shall be entitled to one vote for each
dollar of net asset value of the Trust standing in his or her
name on the books of the Trust, on the date fixed in
accordance with the Article VIII herein for determination of
Shareholders entitled to vote. Any matter submitted to a vote
of the Shareholders, all Shares of the Trust then outstanding
and entitled to vote shall be voted in the aggregate and not
by series or class ("single class voting"); provided, however,
that: (i) as to any matter that the 1940 Act or Massachusetts
Law requires a separate vote of any series or class, the
requirement as to a separate vote by that series or Class
shall apply in lieu of single class voting, (ii) in the event
that the separate vote requirement referred to in (i) above
applies to one or more series or class, then, subject to (iii)
below, the shares of all other series or classes shall vote as
a single class and (iii) as to any matter that does not affect
the interests of a particular series or class, only the
holders of Shares of the one or more affected series or
classes shall be entitled to vote. The Board of Trustees, in
its sole discretion, shall determine whether any matter
affects any particular series or class of Shares.
6.3EvidenceofShareOwnership. Evidence of Share ownership shall be reflected in
the Share Register maintained by or on behalf of the Trust pursuant to Section
7.1 hereof, and the Trust shall not be required to issue certificates as
evidence of Share ownership; provided, however, that the Trustees may, in their
discretion, authorize the use of certificates as a means of evidencing the
ownership of Shares by setting forth in the Trust's Bylaws or in a resolution
provisions for the form of certificates and regulations governing their
execution, issuance and transfer. Subject to Section 6.7 hereof, such
certificates shall be treated as negotiable and title thereto and to the Shares
represented thereby shall be transferred by delivery thereof to the same extent
in all respects as a stock certificate, and the Shares represented thereby, of a
Massachusetts business corporation.
6.4DeathofShareholders. The death of a Shareholder during the continuance of the
Trust shall not terminate this Declaration of Trust nor give such Shareholder's
legal representatives a right to an accounting or to take any action in the
courts or otherwise against other Shareholders or the Trustees or the Trust
Property, but shall simply entitle the legal representatives of the deceased
Shareholder to require the recordation of such legal representative's ownership
of or rights in the deceased Shareholder's Shares, and upon the acceptance
thereof such legal representative shall succeed to all the rights of the
deceased Shareholder under this Declaration of Trust.
6.5RepurchaseofShares. The Trustees may, on behalf of the Trust, purchase or
otherwise acquire outstanding Shares from time to time for such consideration
and on such terms as they may deem proper. Shares so purchased or acquired by
the Trustees for the account of the Trust shall not, so long as they belong to
the Trust, receive distributions (other than, at the option of the Trustees,
distributions in Shares) or be entitled to any voting rights. Such Shares may in
the discretion of the Trustees be cancelled and the number of Shares issued
thereby reduced, or such Shares may in the discretion of the Trustees be held in
the treasury and may be disposed of by the Trustees at such time or times, to
such party or parties and for such considerations as the Trustees may determine.
6.6TrusteesasShareholders. Any Trustee in his individual capacity may purchase
and otherwise acquire or sell and otherside dispose of Shares or other
Securities issued by the Trust, and may exercise all the rights of a Shareholder
to the same extent as though the Shareholder were not a Trustee.
6.7Redemption and Stop Transfers for Tax Purposes; Redemption to Maintain
Constant Net Asset Value. If the Trustees shall, at any time and in good faith,
be of the opinion that direct or indirect ownership of Shares or other
Securities of the Trust has or may become concentrated in any person to an
extent which would disqualify the Trust as a regulated investment company under
the Code, then the Trustees shall have the power by lot or other means deemed
equitable by them (i) to call for redemption a number, or principal amount, of
Shares or other Securities of the Trust sufficient, in the opinion of the
Trustees, to maintain or bring the direct or indirect ownership of Shares or
other Securities of the Trust into conformity with the requirements for such
qualification and (ii) to refuse to transfer or issue Shares or other Securities
of the Trust to any Person whose acquisition of the Shares or other Securities
of the Trust in question would in the opinion of the Trustees result in such
disqualification. The redemption shall be effected at a redemption price
determined in accordance with Section 6.9.
The Shares of the Trust shall also be subject to redemption pursuant to the
procedure for reduction of outstanding Shares set forth in Section 10.5 hereof
in order to maintain the constant net asset value per Share.
6.8 Information from Shareholders. The holders of Shares or other securities of
the Trust shall, upon demand, disclose to the Trustees in writing such
information with respect to direct and indirect ownership of Shares or other
Securities of the Trust as the Trustees reasonably deem necessary to comply with
the provisions of the Code, or to comply with the requirements of any other
taxing authority.
6.9 Redemptions. All outstanding Shares may be redeemed at the option of the
holders thereof, upon and subject to the terms and conditions provided in this
Declaration of Trust. The Trust shall, upon application of any Shareholder,
redeem or repurchase from such Shareholder outstanding Shares for an amount per
Share determined by the application of a formula adopted for such purpose by the
Trustees (which formula shall be consistent with the 1940 Act and the rules and
regulations promulgated thereunder); provided that such amount per Share shall
not exceed the cash equivalent of the proportionate interest of each Share in
the assets of the Trust at the time of the purchase or redemption. The
procedures for effecting redemption shall be as adopted by the Trustees and set
forth in the Prospectus from time to time.
6.10 Suspension of Redemption; Postponement of Payment. The Trustees may suspend
the right of redemption or postpone the date of payment for the whole or any
part of any period (i) during which the New York Stock Exchange is closed other
than customary weekend and holiday closings, (ii) during which trading on the
New York Stock Exchange is restricted, (iii) during which an emergency exists as
a result of which disposal by the Trust of Securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or (iv) during any other period when
the Securities and Exchange Commission (or any succeeding governmental
authority) may for the protection of Security holders of the Trust by order
permit suspension of the right of redemption or postponement of the date of
payment on redemption; provided that applicable rules and regulations of the
Commission (or any succeeding governmental authority) shall govern as to whether
the conditions prescribed in (ii), (iii) or (iv) exist. Such suspension shall
take effect at such time as the Trustees shall specify but not later than the
close of business on the business day next following the declaration of
suspension, and thereafter there shall be no right of redemption or payment
until the Trustees shall declare the suspension at an end, except that the
suspension shall terminate in any event on the first day on which said stock
exchange shall have reopened or the period specified in (ii), (iii) or (iv)
shall have expired (as to which in the absence of an official ruling by said
Commission or succeeding authority, the determination of the Trustees shall be
conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or receive payment
based on the net asset value existing after the termination of the suspension.
ARTICLE VII
RECORD AND TRANSFER OF SHARES
7.1 Share Register. A register shall be kept by or on behalf of the Trustees,
under the direction of the Trustees, which shall contain the names and addresses
of the Shareholders and the number of Shares held by them respectively and a
record of all transfers thereof. Such register shall be conclusive as to who are
the holders of the Shares. Only Shareholders whose ownership of Shares is
recorded on such register shall be entitled to vote or to receive distributions
or otherwise to exercise or enjoy the rights of Shareholders. No Shareholder
shall be entitled to receive any distribution, nor to have notice given to him
as herein provided, until he has given his address to a transfer agent or such
other officer or agent of the Trust as shall keep the register for entry
thereon.
7.2 Transfer Agent. The Trustees shall have power to employ, within or without
the Commonwealth of Massachusetts, a transfer agent or transfer agents and, if
they so determine, a registrar or registrars. The transfer agent or transfer
agents may keep the register and record therein the original issues and
transfers of Shares. Any such transfer agents and registrars shall perform the
duties usually performed by transfer agents and registrars of certificates and
shares of stock in a corporation, except as modified by the Trustees.
7.3 Owner of Record. Any Person becoming entitled to any Share in consequence of
the death, bankruptcy or insolvency of any Shareholder, or otherwise, by
operation of law, shall be recorded as holder of such Shares. But until such
record is made, the Shareholder of record shall be deemed to the be the holder
of such Shares for all purposes hereof and neither the Trustees nor any transfer
agent or registrar nor any officer or agent of the Trust shall be affected by
any notice of such death, bankruptcy, insolvency or other event.
7.4TransfersofShares. Shares shall be transferable on the records of the Trust
(other than by operation of law) only by the record holder thereof or by his
agent "hereunto duly authorized in writing upon delivery to the Trust or a
transfer agent of the Trust of a duly executed instrument of transfer, together
with such evidence of the genuineness of execution and authorization and of
other matters as may reasonably be required by the Trust or the transfer agent.
Upon such delivery, the transfer shall be recorded on the register of the Trust.
But until such record is made, the Shareholder of record shall be deemed to be
the holder of such Shares for all purposes hereof and neither the Trustees nor
the Trust nor any transfer agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of the proposed transfer. This Section 7.4
and Section 7.3 hereof are subject in all respects to the provisions of Section
6.7 hereof.
7.5LimitationofFiduciaryResponsibility. The Trustees shall not, nor shall the
Shareholders or any officer, transfer agent or other agent of the Trust, be
bound to see to the execution of any trust, express, implied or constructive, or
of any charge, pledge or equity to which any of the Shares or any interest
therein are subject, or to ascertain or inquire whether any sale or transfer of
any such Shares or interest therein by any such Shareholder or his personal
representatives is authorized by such trust, charge, pledge or equity, or to
recognize any Person as having any interest therein except the Persons recorded
as such Shareholders. The receipt of the Person in whose name any Share is
recorded, or, if such Share is recorded in the names of more than one Person,
the receipt of any one of such Persons or of the duly authorized agent of any
such Person shall be a sufficient discharge for all money, Securities and other
property payable, issuable or deliverable in respect of such Share and from all
liability to see to the proper application thereof.
7.6 Notices. Any and all notices to which Shareholders hereunder may be entitled
and any and all communications shall be deemed duly served or given if mailed,
postage prepaid, addressed to Shareholders of record at their last known post
office addresses as recorded on the Share register provided for in Section 7.1
hereof.
ARTICLE VIII
SHAREHOLDERS
8.1MeetingsofShareholders. Meetings of the Shareholders may be called at any
time by a majority of the Trustees and shall be called by any Trustee upon
written request of Shareholders holding in the aggregate not less than 10% of
the outstanding Shares having voting rights, such request specifying the purpose
or purposes for which such meeting is to be called. Any such meeting shall be
held within or without the Commonwealth of Massachusetts on such day and at such
time as the Trustees shall designate. In the event that the number of Trustees
elected by vote of the Shareholders shall, at any time, fall below a majority a
Special Meeting shall be called at the earliest practicable time for the
election of Trustees; provided however, that such meeting shall, in any event be
held within sixty days of the date the number of Trustees elected by vote of the
Shareholders falls below a majority.
8.2 Quorums. The presence in person or by proxy of the holders of a majority of
the votes entitled to be cast at any meeting of Shareholders shall constitute a
quorum for the transaction of any business at all such meetings except as
otherwise provided by law or herein. Notwithstanding the foregoing, except as
otherwise required by law or provided herein, where the holders of any series or
class of Shares are entitled or required to vote as a separate series or class
(a "separate group") or where the holders of any two or more (but not all)
series or classes of stock are entitled or required to vote as a single group (a
"combined group"), the presence in person or by proxy of the holders of a
majority of the votes of such separate group or combined group, as the case may
be, entitled to be cast at any meeting shall constitute a quorum for the
transaction of any business via such vote. If a quorum with respect to all
series or class, a separate group or a combined group, as the case may be, is
not present or represented at any meeting of the Shareholders, the holders of a
majority of the votes of all series or classes, such separate group or such
combined group, as the case may be, present in person or by proxy and entitled
to vote at such meeting may, without further notice, adjourn the same from time
to time as to all series or classes, such separate group or combined group, as
the case may be, until a requisite quorum for such meeting shall be present. The
absence from any meeting of holders of the number of votes in excess of a
majority of all series or classes, any separate group or combined group, as the
case may be, that may be required by applicable law or this Declaration of Trust
for action upon any given matter shall not prevent action at such meeting upon
any other matter or matters that may properly come before the meeting if there
shall be present thereat, in person or by proxy, holders of the number of votes
required for action in respect of such other matter or matters.
8.3 Notice of Meetings. Notice of all meetings of the Shareholders, entitled to
vote at such a meeting, stating the time, place and purposes of the meeting,
shall be given by the Trustees by mail to each Shareholder at his registered
address, mailed at least 10 days and not more than 60 days before the meeting.
Only the business stated in the notice of the meeting shall be considered at
such meeting. Any adjourned meeting may be held as adjourned without further
notice.
8.4RecordDateforMeetings. For the purpose of determining the Shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to participate in any dividend or distribution, or for the purpose
of any other action, the Trustees may from time to time close the transfer books
for such period, not exceeding 30 days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than 60
days prior to the date of any meeting of Shareholders or other action as a
record date for the determination of Shareholders entitled to vote at such
meeting or any adjournment thereof or to be treated as Shareholders of record
for purposes of such other action, except for dividend payments which shall be
governed by Section 10.1, and any Shareholder who was a Shareholder at the time
so fixed shall be entitled to vote at such meeting or any adjournment thereof,
even though he has since that date disposed of his Shares, and no Shareholder
becoming such after that date shall be so entitled to vote at such meeting or
any adjournment thereof or to be treated as a Shareholder of record for purposes
of such other action.
8.5Proxies,Etc. At any meeting of Shareholders, any holder of Shares entitled to
vote thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Secretary, or with
such other officer or agent of the Trust as the Secretary may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of a majority of the Trustees, proxies may be solicited in the name
of one or more Trustees or one or more of the officers of the Trust. Only
Shareholders of record shall be entitled to vote and each full share shall be
entitled to one vote and fractional shares shall be entitled to fractional
votes. When any Share is held jointly by several persons, any one of them may
vote at any meeting in person or by proxy in respect of such Share, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Share. A proxy
purporting to be executed by or in behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. If the holder of any such Share is a
minor or a person of unsound mind, and subject to guardianship or to the legal
control of any other person as regards the charge or management of such Share,
he may vote by his guardian or such other person appointed or having such
control, and such vote may be given in person or by proxy.
8.6 Reports. The Trustees shall cause to be prepared at least annually a report
of operations containing a balance sheet and statements of income and
undistributed income of the Trust prepared in conformity with generally accepted
accounting principles and an opinion of an independent certified public
accountant on such financial statements based on an examination or the books and
records of the Trust, and made in accordance with generally accepted auditing
standards. A signed copy of such report and opinion shall be filed with the
Trustee within 60 days after the close of the period covered thereby. Copies of
such reports shall be mailed to all Shareholders of record within the time
required by the 1940 Act and in any event within a reasonable period preceding
the annual meeting of Shareholders. The Trustees shall, in addition, furnish to
the Shareholders, at least semi-annually, an interim report containing an
unaudited balance sheet of the Trust as at the end of such semi-annual period
and a statement of income and surplus for the period from the beginning of the
current fiscal year to the end of such semi-annual period.
8.7InspectionofRecords. The records of the Trust shall be open to inspection by
Shareholders to the same extent as is permitted shareholders of a Massachusetts
business corporation.
8.8ShareholderActionByWrittenConsent. Any action taken by Shareholders may be
taken without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger proportion thereof as shall be required by any express
provision of this Declaration of Trust) consent to the action in writing and the
written consents are filed with the records of the meetings of Shareholders.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
8.9VotingRightsofShareholders. The Shareholders shall be entitled to vote only
upon the following matters: (i) election of Trustees as provided in Section 9.2
and Section 9.4 hereof; (ii) amendment of the Declaration of Trust or
termination of this Trust as provided in Section 4.4 and Section 13.1 hereof;
(iii) reorganization of this Trust as provided in Section 13.2 hereof; (iv)
removal of Trustees as provided in Section 9.3; and (v) all matters for which
the approval of the Shareholders of the Trust is required by the 1940 Act.
Except with respect to the foregoing matters specified in this Section 8.9, no
action taken by the Shareholders at any meeting shall in any way bind the
Trustees.
ARTICLE IX
TRUSTEES
9.1NumberandQualification. The number of Trustees shall be fixed from time to
time by resolution of a majority of the Trustees then in office, provided,
however, that the number of Trustees shall in no event be less than three or
more than fifteen. Any vacancy created by an increase in Trustees may be filled
by the appointment of an individual having the qualifications described in this
Section 9.1 made by a resolution of a majority of the Trustees then in office.
Any such appointment shall not become effective, however, until the individual
named in the resolution of appointment shall have accepted in writing such
appointment and agreed in writing to be bound by the terms of this Declaration
of Trust. No reduction in the number of Trustees shall have the effect of
removing any Trustee from office prior to the expiration of his term. Whenever a
vacancy in the number of Trustees shall occur, until such vacancy is filled as
provided in Section 9.4 hereof, the Trustees or Trustee continuing in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by this Declaration
of Trust. A Trustee shall be an individual at least 21 years of age who is not
under legal disability. The Trustees, in their capacity as Trustees, shall not
be required to devote their entire time to the business and affairs of the
Trust.
9.2TermandElection. Each Trustee named herein, or elected or appointed as
provided in Section 9.1 and 9.4 hereof shall (except in the event of
resignations or removals or vacancies pursuant to Sections 9.3 or 9.4 hereof)
hold office until his successor has been elected and has qualified to serve as
Trustee. Election of Trustees shall be by the affirmative vote of the holders of
at least a majority of the Shares entitled to vote present in person or by proxy
at such meeting. The election of any Trustee (other than an individual who was
serving as a Trustee immediately prior to such election) pursuant to this
Section 9.2 shall not become effective unless and until such Person shall have
in writing accepted the election and agreed to be bound by the terms of this
Declaration of Trust. Trustees may, but need not, own Shares.
9.3ResignationandRemoval 2 . Any Trustee may resign (without need for
prior or subsequent accounting) by an instrument in writing signed by him and
delivered or mailed to the Chairman, the President or the Secretary (referred to
in Section 9.6 hereof) and such resignation shall be effective upon such
delivery, or at a later date according to the terms of the notice. Any of the
Trustees may be removed (provided the aggregate number of Trustees after such
removal shall not be less than the number required by Section 9.1 hereof) with
cause, by the action of two-thirds of the remaining Trustees.
No natural person shall serve as Trustee after the holders of record of not less
than two-thirds of the outstanding Shares of beneficial interest in the Trust
have declared that he be removed from that office either by declaration in
writing filed with the custodian of the securities of the Trust or by votes cast
in person or by proxy at a meeting called for the purpose.
The Trustees shall promptly call a meeting of Shareholders for the purpose of
voting upon the question of removal if any such Trustee or Trustees are
requested in writing so to do by the recordholders of not less than ten (10) per
centum of the outstanding Shares.
Whenever ten or more Shareholders of record, who have been such for at least six
months preceding the date of application, and who hold in the aggregate either
Shares having a net asset value of at least $25,000 or at least one (1) per
centum of the outstanding Shares, whichever is less, shall apply to the Trustees
in writing, stating that they wish to communicate with other Shareholders with a
view to obtaining signatures to a request for a meeting for the purposes of
removing Trustee(s) and accompanied by a form of communication and request which
they wish to transmit, the Trustees shall within five (5) business days after
receipt of such application either--
(i) afford to such applicants access to a list of the names and
addresses of all Shareholders as recorded on the books of the
Trust; or
(ii) inform such applicants as to the approximate number of
Shareholders of record, and the approximate cost of mailing to
them the proposed communication and form of request.
If the Trustees elect to follow the course specified in (ii) above, upon the
written request of such applicants, accompanied by a tender of the material to
be mailed and of the reasonable expenses of mailing, shall, with reasonable
promptness, mail such material to all Shareholders of record at their addresses
as recorded on the books, unless within five (5) business days after such tender
the Trustees shall mail to such applicants and file with the Securities and
Exchange Commission, together with a copy of the material to be mailed, a
written statement signed by at least a majority of the Trustees to the effect
that in their opinion either such material contains untrue statements of fact or
omits to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the basis
of such opinion.
Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the remaining
Trustees any Trust Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining Trustees
shall require as provided in the preceding sentence.
9.4Vacancies. The term of office of a Trustee shall terminate and a vacancy
shall occur in the event of the death, resignation, bankruptcy, adjudicated
incompetence or other incapacity to exercise the duties of the office, or
removal of a Trustee. No such vacancy shall operate to annul this Declaration of
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust, and title to any Trust Property held in the name of any
Trustee alone, jointly with one or more of the other Trustees or otherwise,
shall, in the event of the death, resignation, removal, bankruptcy, adjudicated
incompetence or other incapacity to exercise the duties of the office of such
Trustee, vest in the continuing or surviving Trustees without necessity of any
further act or conveyance. In the case of an existing vacancy (other than by
reason of increase in the number of Trustees) the holders of at least a majority
of the Shares entitled to vote, acting at any meeting of Shareholders called for
the purpose, or a majority of the Trustees continuing in office acting by
resolution, may fill such vacancy, and any Trustee so elected by the Trustees
shall hold office until his successor has been elected and has qualified to
serve as Trustee. Upon the effectiveness of any such appointment as provided in
this Section, the Trust Property shall vest in such new Trustee jointly with the
continuing or surviving Trustees without the necessity of any further act or
conveyance; provided however, that no such election or appointment as provided
in this Section 9.4 shall become effective unless or until the new Trustee shall
have accepted in writing his appointment and agreed to be bound by the terms of
this Declaration of Trust.
9.5Meetings. Meetings of the Trustees shall be held from time to time upon the
call of the Chairman, the President, the Secretary or any two Trustees. Regular
meetings of the Trustees may be held without call or notice at a time and place
fixed by the bylaws or by resolution of the Trustees. Notice of any other
meeting shall be mailed or otherwise given not less than 48 hours before the
meeting but may be waived in writing by any Trustee either before or after such
meeting. The attendance of a Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Trustee attends a meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting has not been lawfully called or convened. The Trustees may act with or
without a meeting. A quorum for all meetings of the Trustees shall be a majority
of the Trustees. Subject to Section 2.15 hereof and unless specifically provided
otherwise in this Declaration of Trust, any action of the Trustees may be taken
at a meeting by vote of a majority of the Trustees present (a quorum being
present) or, without a meeting, by written consents of a majority of the
Trustees. Any agreement, or other instrument or writing executed by one or more
of the Trustees or by any authorized Person shall be valid and binding upon the
Trustees and upon the Trust when authorized or ratified by action of the
Trustees as provided in this Declaration of Trust.
Any committee of the Trustees, including an Executive Committee, if any, may act
with or without a meeting. A quorum for all meetings of any such committee shall
be a majority of the members thereof. Unless otherwise specifically provided in
this Declaration of Trust, any action of any such committee may be taken at a
meeting by vote of a majority of the members present (a quorum being present)
or, without a meeting, by written consent of a majority of the members.
With respect to actions of the Trustees and any committee thereof, Trustees who
are Affiliated within the meaning of Section 2.15 hereof or otherwise interested
in any action to be taken may be counted for quorum purposes under this Section
9.5 and shall be entitled to vote to the extent permitted by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the Trustees or
any committee thereof by utilizing conference, telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and participation in a meeting pursuant to such
communications shall constitute presence in person at such meeting. The minutes
of any meeting of Trustees held by utilizing such communications equipment shall
be prepared in the same manner as those of a meeting of Trustees held in person.
9.6Officers. The Trustees shall elect a Chairman from among their number and
shall appoint a President, Secretary, and Treasurer and such other officers as
they deem necessary or appropriate to carry out the business of the Trust. Such
officers shall be appointed and hold office in accordance with bylaw provisions.
9.7Bylaws. The Trustees may adopt and, from time to time, amend or repeal bylaws
for the conduct of the business of the Trust, and in such bylaws may define the
duties of the respective officers, agents, employees and representatives.
ARTICLE X
DISTRIBUTIONS TO SHAREHOLDERS AND DETERMINATION OF NET ASSET VALUE
AND NET INCOMEDISTRIBUTIONS TO SHAREHOLDERS AND DETERMINATION OF
NET ASSET VALUE AND NET INCOME
10.1General. The Trustees may from time to time declare and pay to the
Shareholders, in proportion to their respective ownership of Shares, out of the
earnings, net profits or surplus (including paid-in capital), capital or assets
in the hands of the Trustees, such dividends or other distributions as they may
determine. The declaration and payment of such dividends or other distributions
and the determination of earnings, profits, surplus (including paid-in capital)
and capital available for dividends and other purposes shall lie wholly in the
discretion of the Trustees and no Shareholder shall be entitled to receive or be
paid any dividends or to receive any distribution except as determined by the
Trustees in the exercise of said discretion. The Trustees may, in addition, from
time to time in their discretion, declare and pay as dividends or other
distributions such additional amounts, whether or not out of earnings, profits
and surplus available therefor, sufficient to enable the Trust to avoid or
reduce its liability for Federal income taxes, inasmuch as the computations of
net income and gains for Federal income tax purposes may vary from the
computations thereof on the books of the Trust. Any or all such dividends or
other distributions may be made, in whole or in part, in cash, property, or
other assets or obligations of the Trust, as the Trustees may in their sole
discretion from time to time determine. The Trustees may also distribute to the
Shareholders, in proportion to their respective ownership of Shares, additional
Shares issuable hereunder in such manner and on such terms as they may deem
proper. Any or all such dividends or distributions may be made among the
Shareholders of record at the time of declaring a distribution or among the
Shareholders of record at such later date as the Trustees shall determine.
10.2RetainedEarnings. The Trustees, except as provided in Section 10.1 hereof,
may always retain from the net profits such amount as they may deem necessary to
pay the debts or expenses of the Trust, to meet obligations of the Trust, to
establish reserves or as they may deem desirable to use in the conduct of its
affairs or to retain for future requirements or extensions of the business of
the Trust.
10.3SourceofDistributions. Shareholders shall receive annually a statement in
writing advising the Shareholders of the source of the funds so distributed so
that distributions of ordinary income, return of capital, and capital gains
income will be clearly distinguished.
10.4NetAssetValue. The net asset value of each outstanding Share of the Trust
shall be determined once on each business day, as of the close of trading on the
New York Stock Exchange or at any other time as the Trustees by resolution may
determine and which is in compliance with the 1940 Act. The method of
determination of net asset value shall be determined by the Trustees and shall
be set forth in the prospectus. The power and duty to make the daily
calculations may be delegated by the Trustees to the Adviser, the custodian, the
transfer agent, the distributor or such other person as the Trustees by
resolution may determine. The Trustees may suspend the daily determination of
net asset value to the extent permitted by the 1940 Act.
10.5PowertoModifyValuationProcedures. Notwithstanding any of the foregoing
provisions of this Article X, the Trustees may prescribe, in their absolute
discretion, such other bases and times for determining the per Share net asset
value of the Trust's Shares or net income, or the declaration and payment of
dividends and distributions as they may deem necessary or desirable to enable
the Trust to comply with any provision of the 1940 Act, or any rule or
regulation thereunder, including any rule or regulation adopted pursuant to
Section 22 of the 1940 Act by the Commission or any securities association
registered under the Securities Exchange Act of 1934, or any order of exemption
issued by said Commission, all as in effect now or as hereafter amended or
modified.
ARTICLE XI
CUSTODIAN
11.1AppointmentandDuties 2 . The Trustees shall at all times employ a
bank or trust company organized under the laws of the United States of America
or one of the several states thereof having a capital, surplus and undivided
profits of at least two million dollars ($2,000,000) as custodian with authority
as its agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the bylaws of the Trust and the
1940 Act:
(i) to hold the securities owned by the Trust and deliver the same
upon written order;
(ii) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as
the Trustees may direct;
(iii) to disburse such funds upon orders or vouchers;
(iv) if authorized by the Trustees, to keep the books and accounts
of the Trust and furnish clerical and accounting services;
(v) if authorized to do so by the Trustees, to compute the net
income of the Trust;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian.
The Trust may also employ the custodian as its agent for other purposes.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that, in
every case, such sub-custodian shall be a bank or trust company organized under
the laws of the United States of America or one of the several states thereof
and having capital, surplus and undivided profits of at least two million
dollars ($2,000,000).
11.2CentralCertificateSystem. Subject to such rules, regulations and orders as
the Securities and Exchange Commission may adopt, the Trustees may direct the
Custodian to deposit all or any part of the Securities owned by the Trust in a
system for the central handling of Securities established by a national
securities exchange or a national securities association registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, or
such other person as may be permitted by the Securities and Exchange Commission,
or otherwise in accordance with the 1940 Act, pursuant to which system all
securities of any particular class or series of any issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of such securities, provided that all such
deposits shall be subject to withdrawal only upon the order of the Trust.
ARTICLE XII
RECORDING OF DECLARATION OF TRUST
12.1Recording. This Declaration of Trust and any amendment hereto shall be filed
in the office of the Secretary of the Commonwealth of Massachusetts and may also
be filed or recorded in such other places as the Trustees deem appropriate. Each
amendment so filed shall be accompanied by a certificate signed and acknowledged
by a Trustee stating that such action was duly taken in a manner provided
herein; and unless such amendment or such certificate filed with the Secretary
of the Commonwealth of Massachusetts sets forth some earlier or later time for
the effectiveness of such amendment, such amendment shall be effective upon its
filing with the Secretary of said Commonwealth. An amended Declaration,
containing the original Declaration and all amendments theretofore made, may be
executed any time or from time to time by a majority of the Trustees and shall,
upon filing with the Secretary of the Commonwealth of Massachusetts, be
conclusive evidence of all amendments contained therein and may thereafter be
referred to in lieu of the original Declaration and the various amendments
thereto.
ARTICLE XIII
AMENDMENT OR TERMINATION OF TRUST
13.1AmendmentorTermination. The provisions of this Declaration of Trust may be
amended or altered (except as to the limitations on personal liability of the
Shareholders and Trustees and the prohibition of assessments upon Shareholders),
or the Trust may be terminated, at any meeting of Shareholders called for the
purpose, by the affirmative vote of the holders of a majority of the Shares then
outstanding and entitled to vote, or by an instrument or instruments in writing,
without a meeting, signed by a majority of the Trustees and the holders of a
majority of such Shares; provided, however, that the Trustees may, from time to
time by a two-thirds vote of the Trustees, and after 15 days prior written
notice to the Shareholders, amend or alter the provisions of this Declaration of
Trust, without the vote or assent of the Shareholders, to the extent deemed by
the Trustees in good faith to be necessary to conform this Declaration to the
requirements of the regulated investment company provisions of the Code or the
requirements of applicable federal laws or regulations or any interpretation
thereof by a court or other governmental agency of competent jurisdiction but
the Trustees shall not be liable for failing so to do. Notwithstanding the
foregoing, (i) no amendment may be made pursuant to this Section 13.1 which
would change any rights with respect to any outstanding Shares of the Trust by
reducing the amount payable thereon upon liquidation of the Trust or by
diminishing or eliminating any voting rights pertaining thereto, except with the
vote or written consent of the holders of two-thirds (2/3) of the outstanding
Shares entitled to vote thereon; and (ii) no amendment may be made with respect
to the investment restrictions contained in Section 4.2 hereof without the
affirmative vote of the holders of a majority (as defined in the 1940 Act) of
the Shares of the Class of stock affected by such change. Upon the termination
of the Trust pursuant to this Section 13.1:
(i) The Trust shall carry on no business except for the purpose of
winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust
and all of the powers of the Trustees under this Declaration
of Trust shall continue until the affairs of the Trust shall
have been wound up, including the power to fulfill or
discharge the contracts of the Trust, collect its assets,
sell, convey, assign, exchange, transfer or otherwise dispose
of all or any part of the remaining Trust Property to one or
more persons at public or private sale for consideration which
may consist in whole or in part of cash, securities or other
property of any kind, discharge or pay its liabilities, and do
all other acts appropriate to liquidate its business; provided
that any sale, conveyance, assignment, exchange, transfer or
other disposition of all or substantially all of the Trust
Property shall require approval of the principal terms of the
transaction and the nature and amount of the consideration by
affirmative vote of not less than a majority of all
outstanding Shares entitled to vote.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities
and refunding agreements, as they deem necessary for their
protection, the Trustees may distribute the remaining Trust
Property, in cash or in kind or partly of each, among the
Shareholders according to their respective rights.
Upon termination of the Trust and distribution to the Shareholders as herein
provided, a majority of the Trustees shall execute and lodge among the records
of the Trust an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all further
liabilities and duties hereunder, and the right, title and interest of all
Shareholders shall cease and be canceled and discharged.
A certification in recordable form signed by a majority of the Trustees setting
forth an amendment and reciting that it was duly adopted by the Shareholders or
by the Trustees as aforesaid or a copy of the Declaration, as amended, in
recordable form, and executed by a majority of the Trustees, shall be conclusive
evidence of such amendment when lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time as a registration
statement under the Securities Act of 1933, as amended, covering the first
public offering of Shares shall have become effective, this Declaration of Trust
may be terminated or amended in any respect by the affirmative vote of a
majority of the Trustees or by an instrument signed by a majority of the
Trustees.
13.2PowertoEffectReorganization. The Trustees, by vote or written approval of a
majority of the Trustees, may select or direct the organization of a
corporation, association, trust or other organization with which the Trust may
merge, or which shall take over the Trust Property and carry on the affairs of
the Trust, and after receiving an affirmative vote of not less than a majority
of the outstanding Shares entitled to vote at any meeting of Shareholders, the
notice for which included a statement of such proposed action, the Trustees may
effect such merger or may sell, convey and transfer the Trust Property to any
such corporation, association, trust or organization in exchange for cash or
shares or securities thereof, or beneficial interest therein with the assumption
by such transferee of the liabilities of the Trust; and thereupon the Trustees
shall terminate the Trust and deliver such cash, shares, securities or
beneficial interest ratably among the Shareholders of this Trust in redemption
of their Shares.
ARTICLE XIV
MISCELLANEOUS
14.1GoverningLaw. This Declaration Trust is executed by the Trustees and
delivered in the Commonwealth of Massachusetts and with reference to the laws
thereof, and the rights of all parties and the validity, construction and effect
of every provision hereof shall be subject to and construed according to the
laws of said Commonwealth and reference shall be specifically made to the
Business Corporation Law of the Commonwealth of Massachusetts as to the
construction of matters not specifically covered herein or as to which an
ambiguity exists.
14.2Counterparts. This Declaration of Trust may be simultaneously executed in
several counterparts, each of which so executed shall be deemed to be an
original, and such counterparts, together, shall constitute but one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
14.3ReliancebyThirdParties. Any certificate executed by an individual who,
according to the records of the Trust, or of any recording office in which this
Declaration may be recorded, appears to be a Trustee hereunder, certifying to:
(i) the number or identity of Trustees or Shareholders, (ii) the due
authorization of the execution of any instrument or writing, (iii) the form of
any vote passed at a meeting of Trustees or Shareholders, (iv) the fact that the
number of Trustees or Shareholders present at any meeting or executing any
written instrument satisfies the requirements of this Declaration of Trust, (v)
the form of any Bylaw adopted by or the identity of any officers elected by the
Trustees, or (vi) the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any person dealing with the Trustees or any of them and
the successors of such person.
14.4ProvisionsinConflictwithLaworRegulations.
(i) The provisions of this Declaration of Trust are severable, and
if the Trustees shall determine, with the advice of counsel,
that any one or more of such provisions (the "Conflicting
Provisions") are in conflict with the regulated investment
company provisions of the Code or with other applicable
federal or state laws and regulations, the Conflicting
Provisions shall be deemed never to have constituted a part of
this Declaration of Trust; provided however, that such
determination by the Trustees shall not affect or impair any
of the remaining provisions of this Declaration of Trust or
render invalid or improper any action taken or omitted
(including, but not limited to, the election of Trustees)
prior to such determination.
(ii) If any provisions of this Declaration of Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall attach only to such provision in
such jurisdiction and shall not in any manner affect or render
invalid or unenforceable such provision in any other
jurisdiction or any other provision of this Declaration of
Trust in any jurisdiction.
14.5SectionHeadings. Section headings have been inserted for convenience only
and are not a part of this Declaration of Trust.
ARTICLE XV
DURATION OF TRUST
15.1Duration. Subject to possible termination in accordance with the provisions
of Article XIII, hereof, the Trust shall be of unlimited duration.
<PAGE>
Schedule A
Growth and Income Stock Series
Balanced Series
Bond Series
Money Market Series
Treasury 2000 Series
Capital Appreciation Stock Series
<PAGE>
EXHIBIT 2
AMENDED AND RESTATED
BYLAWS
January 16, 1997
These Bylaws are made and adopted pursuant to the Declaration of Trust
establishing the Ultra Series Fund (the "Trust"), as from time to time amended,
restated or modified (the "Declaration"). All words and terms capitalized in
these Bylaws shall have the meaning or meanings set forth for such words or
terms in the Declaration. If any term or provision of these Bylaws shall be in
conflict with any term or provision of the Declaration, the terms and provisions
of the Declaration shall be controlling.
ARTICLE I
Shareholders' Meetings and Record Dates
1.1 General. All meetings of the Shareholders shall be held, pursuant to written
notice, within or without the Commonwealth of Massachusetts and on such day and
at such time as the Trustees shall designate. Notice shall be given by mail not
less than ten (10) nor more than sixty (60) days prior to the day named for the
meeting, and shall be deemed to have been properly given to a Shareholder when
deposited in the United States mail with first class postage prepaid or in a
telegraph office with charges prepaid, directed to the Shareholder's address as
given to a transfer agent or such other officer or agent of the Trust as shall
keep the register for entry thereon. A certificate or affidavit by the Secretary
or an Assistant Secretary or a transfer agent shall be prima facie evidence of
the giving of any notice required by the Declaration.
1.2 Notice of Adjournments. Upon adjournment of any meeting of Shareholders, it
shall not be necessary to give any notice of the adjourned meeting or of the
business to be transacted thereat, other than by announcement at the meeting at
which such adjournment is taken. At any adjourned meeting at which a quorum
shall be present or represented, only such business may be transacted which
might have been transacted at the meeting originally called. If after the
adjournment, the Trustees fix a new record date for the adjourned meeting, a
notice of the adjourned meeting shall be given to each Shareholder of record on
the new record date entitled by law to receive such notice.
1.3 Chairman. The Chairman shall act as chairman at all meetings of the
Shareholders; in his absence, the President shall act as chairman; and in the
absence of the Chairman and President, the Trustee or Trustees present at each
meeting may elect a temporary chairman for the meeting, who may be one of
themselves.
1.4 Proxies Voting. Shareholders may vote at any meeting, or by consent in
writing without a meeting pursuant to the Declaration, either in person or by
proxy. Every proxy shall be executed in writing by the Shareholder, or by his
duly authorized attorney-in-fact. A proxy, unless coupled with an interest,
shall be revocable at will, notwithstanding any other agreement or any provision
in the proxy to the contrary, but the revocation of a proxy shall not be
effective until notice thereof has been given to the Secretary, or such other
officer or agent of the Trust as the Secretary may direct. No proxy shall be
valid after eleven (11) months from the date of its execution, unless a longer
time is expressly stated in such proxy, but in no event shall a proxy, unless
coupled with an interest, be voted on after three (3) years from the date of its
execution. A proxy shall not be revoked by the death or incapacity of the maker
unless, before the vote is counted or the authority is exercised, written notice
of such death or incapacity is given to the Secretary or to such other officer
or agent of the Trust as the Secretary may direct.
1.5 Closing of Transfer Books and fixing Record Dates. For the purpose of
determining the Shareholders who are entitled to notice of or to vote or act at
any meeting, including any adjournment thereof, or who are entitled to
participate in any dividend or distribution, or for any other proper purpose,
the Trustees may from time to time close the transfer books or fix a record date
in the manner provided in the Declaration. If the Trustees do not, prior to any
meeting of Shareholders, so fix a record date or close the transfer books, then
the record date shall be the close of business of the day next preceding the
date of mailing of notice of the meeting, or in the case of a dividend or other
distribution, the close of business on the day upon which the dividend or
distribution resolution is adopted, or on such later day as the Trustees may
determine.
1.6 Inspectors of Election. In advance of any meeting of Shareholders, the
Trustees may appoint Inspectors of Election, who may but need not be
Shareholders, to act at such meeting or any adjournment thereof. If Inspectors
of Election are not so appointed, the chairman of any such meeting may, and upon
the request of any Shareholder or his proxy shall, make such appointment at the
meeting. The number of Inspectors shall be either one (1) or three (3). If
appointed at the meeting on the request of one or more Shareholders or proxies,
a majority of Shares present shall determine whether one or three Inspectors are
to be appointed, but failure to allow such determination by the Shareholders or
proxies shall not affect the validity of the appointment of Inspectors of
Election. In case any person appointed as Inspector fails to appear or fails or
refuses to act, the vacancy must be filled by appointment made by the Trustees
in advance of the convening of the meeting, or at the meeting by the person
acting as chairman. The Inspectors of Election shall determine the number of
Shares outstanding, the Shares represented at the meeting, the existence of a
quorum, the authenticity, validity and effect of proxies; shall receive votes,
ballots or consents; shall hear and determine all challenges and questions in
any way arising in connection with the right to vote; shall count and tabulate
all votes or consents, determine the results, and do such other acts as may be
proper to conduct the election or vote with impartiality and fairness to all
Shareholders. If there are three Inspectors of Election, the decision, act or
certificate of a majority shall be effective in all respects as the decision,
act or certificate of all. On request of the chairman of the meeting, or of any
Shareholder or his proxy, the Inspectors of Election shall make a written report
of any challenge or question or matter determined by them and execute a
certificate of any fact found by them.
ARTICLE II
Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be held at such time
and place as the Trustees may by resolution from time to time determine without
call or notice. If any day fixed for a regular meeting shall be a legal holiday
in the commonwealth of Massachusetts or the place designated for regular
meetings, then the meeting shall be held at the same hour and place on the next
succeeding business day.
2.2 Special Meetings. Special Meetings of the Trustees shall be held upon the
call of the Chairman, the President, or the Secretary, or any two Trustees, at
such time, on such day, and at such place, as shall be designated in the notice
of the meeting.
2.3 Notice of Special Meetings. Notice of any special meeting, specifying the
place, day and hour of the meeting shall be given to a Trustee either personally
or by sending a copy thereof through the mail, with first class postage prepaid,
or by telegram, charges prepaid, to his address appearing on the books of the
Trust or supplied by him to the Trust for the purpose of notice, at least
forty-eight (48) hours, prior to the time named for such meeting. If the notice
is sent by mail or by telegraph, it shall be deemed to have been given to the
person entitled thereto when deposited in the United States mail, postage
prepaid, or with a telegraph office, charges prepaid, for transmission to such
person. Notice by telephone shall constitute personal delivery for these
purposes. Neither the business to be transacted at, nor the purpose of, any
meeting of the Board of Trustees need be stated in the notice or waiver of
notice of such meeting, and no notice need be given of action proposed to be
taken by unanimous consent.
2.4 Waiver of Notice. Whenever any notice is required by the Declaration or
these Bylaws to be given to a Trustee, a waiver thereof in writing, whether
signed by the Trustee before or after the meeting, shall be deemed equivalent to
the giving of due notice. Attendance of any Trustee at any meeting shall
constitute a waiver of notice of such meeting except where such Trustee attends
the meeting for the express purpose of objecting to the transaction of any
business because the meeting was not lawfully called or convened.
2.5 Adjournment. Adjournment or adjournments of any meeting may be taken, and it
shall not be necessary to give any notice of the adjourned meeting or of the
business to be transacted thereat other than by announcement at the meeting at
which such adjournment is taken. At any adjourned meeting at which a quorum
shall be present, any business may be transacted which might have been
transacted at the meeting originally called.
2.6 Executive Committee. Subject to the provisions of Section 3.4 hereof, the
Trustees may, by resolution adopted by a majority thereof, designate one or more
of their number to constitute an Executive Committee, and may designate one or
more of their number as alternate members of the Executive Committee, who may
replace any absent or disqualified member at any meeting of the Committee. The
President shall be notified in advance of all Executive Committee meetings, and
whenever feasible or convenient for him, the President shall attend meetings of
the Executive Committee and serve ex officio, as a non-voting advisory member.
Any such Committee, to the extent provided in such resolution and the
Declaration, shall have and exercise the authority of the Trustees in the
management of the business and affairs of the Trust and the management and
disposition of Trust Property. Vacancies in the membership of the Committee
shall be filled by the Trustees. In the absence or disqualification of any
member of such Committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another Trustee to act at the meeting in the place of
any such absent or disqualified member. The Executive Committee shall keep
regular minutes of its proceedings and report the same to the Trustees.
2.7 Chairman: Records. The Chairman shall act as chairman at all meetings of the
Trustees; in his absence the Trustees present may elect one of their number to
act as temporary chairman. The results of all actions taken at a meeting of the
Trustees, or by written consents of the Trustees without a meeting, shall be
recorded by the Secretary.
2.8 Meeting of Shareholders. Meetings of Shareholders shall be held at such
times and in such places as the Trustees shall, by resolution, direct.
ARTICLE III
Officers Agents and Employees
3.1 Officers of the Trust. The officers of the Trust shall be a Chairman chosen
from among the Trustees and a President, a Secretary and a Treasurer or persons
who shall act as such regardless of the name or title by which they may be
designated, elected or appointed. One or more Vice-Presidents, one or more
Assistant Secretaries and Assistant Treasurers, and such other officers or
agents as the Trustees shall deem necessary or appropriate to carry out the
business of the Trust also may be elected or appointed. Any two or more offices
may be held by the same person, except those of President and Secretary and
provided that no officer shall execute, acknowledge or verify any instrument in
more than one capacity if such instrument is required to be executed,
acknowledged or verified by two or more officers. In addition to the powers and
duties prescribed by the Declaration and these Bylaws, the officers and
assistant officers shall have such authority and shall perform such duties as
from time to time shall be prescribed by the Trustees. The officers and
assistant officers of the Trust shall hold office until their successors are
chosen and have qualified, unless their term of office is sooner terminated, by
death, resignation or removal. The Trustees may amend the title of any officer
or assistant officer or create a new office, by utilizing a word or words
descriptive of his powers or the general character of his duties. If the office
of any officer or assistant officer becomes vacant for any reason, the vacancy
may be filled by the Trustees at any time.
3.2 Removal of Officers, Agents or Employees. Any officer, assistant officer,
agent or employee may be removed or have his authority revoked at any time, with
or without cause, by a majority of the Trustees, whenever in their judgment the
best interests of the Trust will be served thereby, but such removal or
revocation shall be without prejudice to the rights, if any, of the person so
removed to receive compensation or other benefits in accordance with the terms
of existing contracts. Any agent or employee likewise may be removed by the
President or Chairman or, subject to the supervision of the President or
Chairman, by the person having authority with respect to the appointment of such
agent or employee. Any officer may resign at any time by written notice signed
by such officer and delivered or mailed to the Chairman, President, or
Secretary, and such resignation shall take effect upon receipt by the Chairman,
President, or Secretary, or at a later date according to the terms of such
notice.
3.3 Bonds and Surety. Any officer may be required by the Trustees to be bonded
for the faithful performance of his duties in such amount and with such sureties
as the Trustees may determine.
3.4 Chairman of the Board of Trustees: Powers and Duties. The Chairman shall, if
present, preside at all meetings of the Shareholders and of the Trustees. The
Chairman shall perform such other powers and duties as may from time to time be
assigned to him by the Trustees.
3.5 The President. Subject to such supervisory powers, if any, as may be given
by the Trustees, the President shall be the chief operating officer of the Trust
and, subject to the control of the Trustees, shall have general supervision,
direction and control of the business of the Trust and of its employees and
shall exercise such general powers of management as are usually vested in the
office of president of a Massachusetts business corporation. In the absence of
the Chairman, the President shall preside at all meetings of the Shareholders
and of the Trustees. Subject to direction of the Trustees, the President shall
have power in the name and on behalf of the Trust to execute any and all loan
documents, contracts, agreements, deeds, mortgages, and other instruments in
writing, and to employ and discharge employees and agents of the Trust. Unless
otherwise directed by the Trustees, the President shall have full authority and
power, on behalf of all of the Trustees, to attend and to act and to vote, on
behalf of the Trust at any meetings of business organizations in which the Trust
holds an interest, or to confer such powers upon any other persons, by executing
any proxies duly authorizing such persons. The President shall have such further
authorities and duties as the Trustees shall from time to time determine and
shall be an ex officio member of the Executive Committee and of all standing
committees (if any) appointed by the Trustees.
3.6 Vice-President: Powers and Duties. The Vice-President, if any, shall, in the
absence or disability of the President, perform all the duties of the President,
and when so acting shall have all the powers and be subject to all of the
restrictions upon the President. If there be more than one Vice-President, their
seniority in performing such duties and exercising such powers shall be in order
of their rank as fixed by the Trustees, or, if more than one and not ranked,
then by determination of the Trustees, or, in the absence of such determination,
by the order in which they were first elected. Subject to the direction of the
Trustees, and the President, each Vice-President shall have the power in the
name and on behalf of the Trust to execute any and all loan documents,
contracts, agreements, deeds, mortgages and other instruments in writing, and,
in addition, shall have such other duties and powers as shall be designated from
time to time by the Trustees or the President and as by general usage appertain
to the office.
3.7 Secretary: Powers and Duties. The Secretary shall keep the minutes of all
meetings of, and record all votes of, Shareholders, Trustees and the executive
or other committees, if any. The Secretary shall give, or cause to be given, as
required by the Declaration or these Bylaws, notice of meetings of the
Shareholders and of the Trustees, and shall perform such other duties as may be
prescribed by the Trustees, or the President. The Secretary shall keep in safe
custody the seal of the Trust, and may affix the same, or, if permitted, a
facsimile thereof, to any instrument executed by the Trust and attest the seal
and the signature or signatures of the officer or officers executing such
instrument on behalf of the Trust. The Secretary shall also perform any other
duties commonly incident to such office in a Massachusetts business corporation,
and shall have such other authorities and duties as the Trustees or the
President shall from time to time determine.
3.8 Treasurer: Powers and Duties. Except as otherwise directed by the Trustees,
the Treasurer shall have the general supervision of the monies, funds,
securities, notes receivable and other valuable papers and documents of the
Trust, and shall have and exercise under the supervision of the Trustees and
President all powers and duties normally incident to his office. The Treasurer
may endorse for deposit or collection all notes, checks and other instruments
payable to the Trust or to its order. The Treasurer shall deposit all funds of
the Trust in such depositories as the Trustees shall designate. The Treasurer
shall be responsible for such disbursement of the funds of the Trust as may be
ordered by the Trustees, or the Chairman or the President. The Treasurer shall
keep accurate account of the books of the Trust's transactions which shall be
the property of the Trust, and which, together with all other property of the
Trust in his possession, shall be subject at all times to the inspection and
control of the Trustees. Unless the Trustees shall otherwise determine, the
Treasurer shall be the principal financial and accounting officer of the Trust.
The Treasurer shall have such other duties and authorities as the Trustees or
the President shall from time to time determine. Notwithstanding anything to the
contrary herein contained, the Trustees may authorize the Investment Adviser,
the Custodian, or the Transfer agent to maintain bank accounts and deposit and
disburse funds of the Trust on behalf of the Trust.
3.9 Delegation of Officers' Duties. The Trustee may appoint such other officers
and assistant officers as they shall from time to time determine to be necessary
or desirable in order to conduct the business of the Trust. Assistant officers
shall act generally in the absence of the officer whom they assist, shall assist
that officer in the duties of his office and shall have such other duties and
authority as may be conferred upon them by the Trustees or delegated to them by
the President. In case of the absence or disability of any officer or assistant
officer of the Trust or for any other reason that the Trustees may deem
sufficient, the Trustees may delegate or authorize the delegation of his powers
or duties, for the time being, to any person.
ARTICLE IV
Shares
4.1 Evidence of Share Ownership. Certificates representing the Trust's Shares
shall not be physically issued. Shares in the Trust shall be recorded on a
register maintained for the Trust by the Transfer Agent appointed by the
Trustees. The holders of Shares shall have the same rights of ownership with
respect to such shares as if certificates had been issued. The Trustees shall,
from time to time, be appropriate resolution, establish such rules for
authentication of Shareholders for purposes of purchase and redemption as they
shall deem necessary.
ARTICLE V
Miscellaneous
5.1 Depositories. The funds of the Trust shall be deposited in such depositories
as the Trustees shall designate in accordance with the provisions of the
Declaration, and shall be drawn out on checks, drafts or other orders signed by
such officer, officers, agent or agents (including the Adviser), as the Trustees
may from time to time authorize.
5.2 Signatures. All contracts and other instruments shall be executed on behalf
of the Trust by such officer, officers, agent or agents, as provided in the
Declaration or these Bylaws or as the Trustees may from time to time by
resolution provide.
5.3 Seal. The seal of the Trust shall have inscribed thereon the words "Ultra
Series Fund, a Massachusetts Voluntary Association, Common Seal, 1983." Such
seal may be used by causing it or a facsimile thereof, to be impressed or
affixed or in any manner reproduced and attested as if it had been impressed and
attested manually.
ARTICLE VI
Amendment of Bylaws
6.1 Amendment and Repeal of Bylaws. In accordance with the Declaration, the
Trustees have the power to alter, amend or repeal the Bylaws or adopt new Bylaws
at any time. Action by the Trustees with respect to the Bylaws shall be taken by
an affirmative vote of a majority of the Trustees. The Trustees shall in no
event adopt Bylaws which are in conflict with the Declaration, and any apparent
inconsistency shall be construed in favor of the related provisions in the
Declaration.
* * * * *
The Declaration of Trust establishing Ultra Series Fund, dated September 16,
1983, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Ultra Series Fund" refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, Shareholder, officer, employee or agent of Ultra Series Fund shall
be held to any personal liability, nor shall resort be had to their private
property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of said Ultra Series Fund but the Trust Property
only shall be liable.
<PAGE>
EXHIBIT 5
ULTRA SERIES FUND
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is made this 5th day of February, 1997
and will be effective as of May 1, 1997, by and between Ultra Series Fund, a
business trust organized and existing under the laws of the Commonwealth of
Massachusetts (the "Fund"), and CIMCO Inc. (the "Manager"), a corporation
organized and existing under the laws of the state of Iowa.
RECITALS
1. The Fund is a series-type, open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), that
currently consists of six investment portfolios (each, a "Series") designated as
Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, Money
Market, and Treasury 2000, each such Series having its own investment objective;
2. The Fund issues a separate series of shares of beneficial interest for each
Series, which shares represent fractional undivided interests in the Series;
3. The Manager is engaged principally in rendering investment advisory services
and is registered as an investment adviser under the Investment Advisers Act of
1940, as amended (the "Advisers Act");
4. The Fund desires to retain the Manager to provide or to arrange to provide
overall management of the Fund and each Series, including, but not limited to,
investment advisory, custody, transfer agency, dividend disbursing, legal,
accounting, and administrative services, in the manner and on the terms and
conditions set forth in this Agreement;
5. The Manager is willing to provide or to arrange to provide, investment
advisory, custody, transfer agency, dividend disbursing, legal, accounting, and
administrative services to the Fund and each Series on the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained, the Fund and the Manager hereby agree as follows:
ARTICLE I
Duties of the Manager
The Fund hereby engages the Manager to act as the Fund's general manager to
provide or to arrange to provide directly or through third parties, investment
advisory, custody, transfer agency, dividend disbursing, legal, accounting, and
administrative services to each existing Series of the Fund and to any
additional investment portfolios that the Fund may establish in the future; and
to provide or to arrange to provide the above services subject to the
supervision of the board of trustees of the Fund (the "Board"), for the period
and on the terms and conditions set forth in this Agreement. The Manager hereby
accepts such engagement and agrees during such period, at its own expense, to
provide or to arrange to provide, such investment advisory and general
management services, and to assume the obligations set forth in this Agreement
for the compensation provided for herein. Subject to the provisions of the 1940
Act and the Advisers Act, the Manager may retain any affiliated or unaffiliated
parties including, but not limited to, investment adviser(s) and/or investment
sub-adviser(s), custodian(s), transfer agent(s), dividend-disbursing agent(s),
attorney(s), and accountant(s) to perform any or all of the services set forth
in this Agreement.
The Manager, its affiliates and any investment adviser(s), sub-adviser(s),
custodian(s), transfer agent(s), dividend-disbursing agent(s), attorney(s),
accountant(s), or other parties performing services for the Manager shall for
all purposes herein be deemed to be independent contractors and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Fund or a Series in any way or otherwise be deemed agents of the
Fund or a Series.
The Manager shall, for purposes of this Agreement, have and exercise full
investment discretion and authority to act as agent for the Fund in buying,
selling or otherwise disposing of or managing the Fund's investments, directly
or through sub-advisers, subject to supervision by the Board.
The Manager and any other party performing services covered by this Agreement
(each such party is hereafter referred to as a "Service Provider") shall be
subject to: (1) the restrictions of the Declaration of Trust and Bylaws of the
Fund, as amended from time to time; (2) the provisions of the 1940 Act and the
Advisers Act; (3) the statements relating to the Series' investment objectives,
investment policies and investment restrictions as set forth in the currently
effective (and as amended from time to time) registration statement of the Fund
(the "registration statement") under the Securities Act of 1933, as amended (the
"1933 Act"); (4) appropriate state insurance laws; and (5) any applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code").
(a) Investment Advisory Services. The Manager shall provide the Fund directly or
through sub-advisers with such investment research, advice and supervision as
the Fund may from time to time consider necessary for the proper management of
the assets of each Series, shall furnish continuously an investment program for
each Series, shall determine from time to time which securities or other
investments shall be purchased, sold or exchanged and what portions of each
Series shall be held in the various securities or other investments or cash, and
shall take such steps as are necessary to implement an overall investment plan
for each Series, including providing or obtaining such services as may be
necessary in managing, acquiring or disposing of securities, cash or other
investments.
The Fund has furnished or will furnish the Manager (who is authorized to furnish
any Service Provider) with copies of the Fund's registration statement,
Declaration of Trust, and Bylaws as currently in effect and agrees during the
continuance of this Agreement to furnish the Manager with copies of any
amendments or supplements thereto before or at the time the amendments or
supplements become effective. The Manager and any Service Providers will be
entitled to rely on all documents furnished by the Fund.
The Manager represents that in performing investment advisory services for each
Series, the Manager shall make every effort to ensure that: (1) each Series
shall comply with Section 817(h) of the Code and the regulations issued
thereunder, specifically Regulation Section 1.817-5, relating to the
diversification requirements for variable annuity, endowment, and life insurance
contracts, and any amendments or other modifications to such Section or
regulations; (2) each Series continuously qualifies as a regulated investment
company under Subchapter M of the Code or any successor provision; and (3) any
and all applicable state insurance law restrictions on investments that operate
to limit or restrict the investments that a Series may otherwise make are
complied with as well as any changes thereto. Except as instructed by the Board,
the Manager shall also make decisions for the Fund as to the manner in which
voting rights, rights to consent to corporate action, and any other rights
pertaining to the Fund's securities shall be exercised. If the Board at any time
makes any determination as to investment policy and notifies the Manager of such
determination, the Manager shall be bound by such determination for the period,
if any, specified in the notice or until similarly notified that such
determination has been revoked.
The Manager shall take, on behalf of each Series, all actions which it deems
necessary to implement the investment policies of such Series, and in
particular, to place all orders for the purchase or sale of portfolio
investments for the account of each Series with brokers, dealers, futures
commission merchants or banks selected by the Manager. The Manager also is
authorized as the agent of the Fund to give instructions to any Service Provider
serving as custodian of the Fund as to deliveries of securities and payments of
cash for the account of each Series. In selecting brokers or dealers and placing
purchase and sale orders with respect to assets of the Series, the Manager is
directed at all times to seek to obtain best execution and price within the
policy guidelines determined by the Board and set forth in the current
registration statement. Subject to this requirement and the provisions of the
Act, the Advisers Act, the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and other applicable provisions of law, the Manager may select
brokers or dealers that are affiliated with the Manager or the Fund.
In addition to seeking the best price and execution, the Manager may also take
into consideration research and statistical information, wire, quotation and
other services provided by brokers and dealers to the Manager. The Manager is
also authorized to effect individual securities transactions at commission rates
in excess of the minimum commission rates available, if the Manager determines
in good faith that such amount of commission is reasonable in relation to the
value of the brokerage, research and other services provided by such broker or
dealer, viewed in terms of either that particular transaction or the Manager's
overall responsibilities with respect to each Series. The policies with respect
to brokerage allocation, determined from time to time by the Board are those
disclosed in the currently effective registration statement. The execution of
such transactions shall not be deemed to represent an unlawful act or breach of
any duty created by this Agreement or otherwise. The Manager will periodically
evaluate the statistical data, research and other investment services provided
to it by brokers and dealers. Such services may be used by the Manager in
connection with the performance of its obligations under this Agreement or in
connection with other advisory or investment operations including using such
information in managing its own accounts.
As part of carrying out its obligations to manage the investment and
reinvestment of the assets of each Series consistent with the requirements under
the 1940 Act, the Manager shall:
(1) Perform research and obtain and analyze pertinent economic,
statistical, and financial data relevant to the investment
policies of each Series as set forth in the Fund's
registration statement;
(2) Consult with the Board and furnish to the Board
recommendations with respect to an overall investment strategy
for each Series for approval, modification, or rejection by
the Board;
(3) Seek out and implement specific investment opportunities,
consistent with any investment strategies approved by the
Board;
(4) Take such steps as are necessary to implement any overall
investment strategies approved by the Board for each Series,
including making and carrying out day-to-day decisions to
acquire or dispose of permissible investments, managing
investments and any other property of the Series, and
providing or obtaining such services as may be necessary in
managing, acquiring or disposing of investments;
(5) Regularly report to the Board with respect to the
implementation of any approved overall investment strategy and
any other activities in connection with management of the
assets of each Series including furnishing, within 60 days
after the end of each calendar quarter, a statement of
investment performance for the period since the last report
and a schedule of investments and other assets of each Series
as of the end of the quarter;
(6) Maintain all required accounts, records, memoranda,
instructions or authorizations relating to the acquisition or
disposition of investments for each Series and the Fund;
(7) Furnish any personnel, office space, equipment and other
facilities necessary for the operation of each Series as
contemplated in this Agreement;
(8) Provide the Fund with such accounting or other data concerning
the Fund's investment activities as shall be necessary or
required to prepare and to file all periodic financial reports
or other documents required to be filed with the Securities
and Exchange Commission and any other regulatory entity;
(9) Assist in determining each business day the net asset value of
the shares of each Series in accordance with applicable law;
and
(10) Enter into any written investment advisory or investment
sub-advisory contract with another affiliated or unaffiliated
party, subject to any approvals required by Section 15 of the
1940 Act, pursuant to which such party will carry out some or
all of the Manager's responsibilities (as specified in such
investment advisory or investment sub-advisory contract)
listed above.
(b) General Management Services. The Manager shall provide or arrange to provide
all custody, transfer agency, dividend disbursing, legal, accounting, and
administrative services necessary for the operation of the Fund, including,
without limitation, the following services:
(1) Custody services including, but not limited to:
(i) placing and maintaining each Series' securities, cash
or other investments pursuant to the requirements of
Section 17(f) of the 1940 Act and the rules
thereunder;
(ii) holding and physically segregating for the Fund's
account, all of the Fund's assets, including
securities that the Fund desires to be held in places
within the United States ("domestic securities") or
in places outside the United States ("foreign
securities");
(iii) releasing and delivering domestic securities owned by
the Fund only upon receipt of instructions from
persons and by means authorized by the Board;
(iv) assuring that all domestic securities held are
registered in the name of the Fund or in the name of
any nominee of the Fund or of any nominee of the
Manager or any Service Provider acting as custodian
which nominee shall be assigned exclusively to the
Fund, unless the Fund has provided written
authorization to use a nominee not meeting the above
requirement;
(v) maintaining a separate bank account(s) in the United
States in the name of the Fund, and holding all cash
received by it from or for the account of the Fund in
such account;
(vi) collecting on a timely basis all income and other
payments with respect to securities to which the Fund
shall be entitled either by law or pursuant to custom
in the securities business;
(vii) paying out monies of the Fund upon receipt of
instructions from persons and by means authorized by
the Board;
(viii) appointing or removing, in its discretion, any other
entity qualified under the 1940 Act to act as a
custodian, as its agent to carry out any custody
duties;
(ix) employing, in the discretion of the Manager or a
Service Provider employed by the Manager, other
parties as sub-custodians for the Fund's domestic
securities or foreign securities. With respect to the
Fund's foreign securities, such employment shall be
effected and such foreign securities shall be
maintained in accordance with the provisions of Rule
17f-5 under the 1940 Act, as such provisions may be
amended from time to time, provided that the Manager
or a Service Provider employed by the Manager shall
furnish annually to the Fund, information concerning
the Service Provider or sub-custodians employed by
the Manager or other Service Provider;
(x) creating and maintaining all records relating to its
activities and obligations under any contract
relating to the Fund or a Series thereof in
accordance with the provisions of Section 31 of the
1940 Act and Rules 31a-1 and 31a-2 under the 1940
Act. Such records shall be the property of the Fund
and shall at all times during the regular business
hours of the Manager (or separate Service Provider
acting as custodian) be open for inspection by duly
authorized officers, employees or agents of the Fund
and employees and agents of the Securities and
Exchange Commission; and
(xi) performing or arranging for the performance of any
other usual duties and functions of a custodian for a
registered investment company;
(2) Transfer agency services, including, but not limited to:
(i) receiving for acceptance, orders for the purchase of
Fund shares, and promptly delivering payment and
appropriate documentation thereof to any Service
Provider acting as custodian;
(ii) issuing, pursuant to purchase orders, the appropriate
number of the Fund's shares and holding such shares
in the appropriate account;
(iii) receiving for acceptance redemption requests and
redemption directions and delivering the appropriate
documentation to any Service Provider acting as
custodian;
(iv) effecting transfers of Fund shares by the registered
owners thereof upon receipt of appropriate
instructions;
(v) preparing and transmitting payments for dividends and
distributions declared by the Fund;
(vi) maintaining records of accounts for shareholders and
advising the Fund and its shareholders as to the
foregoing;
(vii) handling shareholder relations, and providing reports
and other information and services related to the
maintenance of shareholder accounts;
(viii) recording the issuance of shares of the Fund and
maintaining pursuant to Rule 17Ad-10(e) under the
1934 Act a record of the total number of shares of
the Fund that are authorized, based upon data
provided by the Fund, and issued and outstanding; and
(ix) performing or arranging for the performance of any
other customary services of a transfer agent or
dividend-disbursing agent for a registered investment
company;
(3) The calculation of the net asset value of each Series and the
net asset value per share of each class of shares at such
times and in such manner as specified in the Fund's current
registration statement and at such other times upon which the
parties hereto may from time to time agree; and
(4) The creation and maintenance of such records relating to the
business of the Fund as the Fund may from time to time
reasonably request.
The Manager may contract with qualified Service Providers for the provision of
any of the services necessary for the operation of the Fund as described in this
Section (b). Where the Manager engages separate Service Providers, the Manager
shall also, on behalf of the Fund, coordinate the activities of such Service
Providers, as well as other agents, attorneys, brokers and dealers, insurers,
sub-advisers and such other persons in any such other capacity deemed to be
necessary or desirable. The Manager shall make reports to the Board of its
performance hereunder and shall furnish advice and recommendations with respect
to such other aspects of the business and affairs of the Fund as the Board or
the Manager shall consider desirable.
ARTICLE II
Allocation of Charges and Expenses
(a) The Manager. The Manager assumes the expense of and shall pay for
maintaining the staff and personnel necessary to perform its obligations under
this Agreement, and shall at its own expense provide the office space, equipment
and facilities that it is obligated to provide under this Agreement, and shall
pay all compensation of officers of the Fund and all trustees of the Fund who
are affiliated persons of the Manager, except as otherwise specified in this
Agreement.
Except for those expenses assumed by the Fund as provided in section (b) below,
the Manager shall bear all of the Fund's expenses including, but not limited to:
custodian fees; transfer agent fees; pricing costs (including the daily
calculation of net asset value); accounting fees; legal fees (except
extraordinary litigation expenses); expenses of shareholders' and/or trustees'
meetings; bookkeeping expenses related to shareholder accounts; insurance
charges; cost of printing and mailing shareholder reports and proxy statements;
costs of printing and mailing registration statements and updated prospectuses
to current shareholders; and the fees of any trade association of which the Fund
is a member.
The Manager agrees that neither it nor any Service Provider will make any
separate charge to any shareholder or his individual account for any services
rendered to said shareholder or the Fund unless such charge for special services
is specifically approved by the Board including a majority of the trustees who
are not "interested persons" (as such term is defined in the 1940 Act) of the
Manager (the "disinterested trustees"). No special charge will be levied
retroactively or without appropriate notice to affected shareholders.
(b) The Fund. The Fund assumes and shall pay or cause to be paid the following
expenses of the Fund, including, without limitation: compensation of the
Manager; fees of disinterested trustees; brokerage commissions, dealer markups
and other expenses incurred in the acquisition or disposition of any securities
or other investments; costs, including the interest expense, of borrowing money;
expenses for independent audits; taxes; and extraordinary expenses (including
extraordinary litigation expenses and extraordinary consulting expenses) as
approved by a majority of the disinterested trustees.
ARTICLE III
Compensation of the Manager
For the services rendered, the facilities furnished and expenses assumed by the
Manager, the Fund shall pay to the Manager at the end of each calendar month a
unitary fee calculated as a percentage of the average value of the net assets
each day for each Series during that month at the following annual rates:
Capital Appreciation Stock 0.80%
Balanced 0.70%
Growth and Income Stock 0.60%
Bond 0.55%
Money Market 0.45%
Treasury 2000 0.45%
The Manager's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of each Series shall be determined in the manner and on the dates set forth in
the Declaration of Trust or the current registration statement of the Fund and,
on days on which the net assets are not so determined, the net asset value
computation to be used shall be as determined on the immediately preceding day
on which the net assets were determined.
In the event of termination of this Agreement, all compensation due through the
date of termination will be calculated on a pro-rated basis through the date of
termination and paid within fifteen business days of the date of termination.
During any period when the determination of net asset value is suspended, the
net asset value of a Series as of the last business day prior to such suspension
shall for this purpose be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
ARTICLE IV
Limitation of Liability of the Manager
The Manager shall not be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any act or omission in the
management of the Fund, except for (i) willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties hereunder, and (ii) to the extent specified in
section 36(b) of the 1940 Act concerning loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation.
ARTICLE V
Activities of the Manager
The services of the Manager are not deemed to be exclusive, and the Manager is
free to render services to others, so long as the Manager's services under this
Agreement are not impaired. It is understood that trustees, officers, employees
and shareholders of the Fund are or may become interested persons of the
Manager, as directors, officers, employees and shareholders or otherwise, and
that directors, officers, employees and shareholders of the Manager are or may
become similarly interested persons of the Fund, and that the Manager may become
interested in the Fund as a shareholder or otherwise.
It is agreed that the Manager may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Manager or its affiliates may use such
information in managing their own accounts. Conversely, such supplemental
information obtained by the placement of business for the Manager or other
entities advised by the Manager will be considered by and may be useful to the
Manager in carrying out its obligations to the Fund.
Securities or other investments held by a Series of the Fund may also be held by
separate investment accounts or other mutual funds for which the Manager may act
as an investment adviser or by the Manager or its affiliates. Because of
different investment objectives or other factors, a particular security may be
bought by the Manager or its affiliates for one or more clients when one or more
clients are selling the same security. If purchases or sales of securities for a
Series or other entities for which the Manager or its affiliates act as
investment adviser or for their advisory clients arise for consideration at or
about the same time, the Fund agrees that the Manager may make transactions in
such securities, insofar as feasible, for the respective entities and clients in
a manner deemed equitable to all. To the extent that transactions on behalf of
more than one client of the Manager during the same period may increase the
demand for securities being purchased or the supply of securities being sold,
the Fund recognizes that there may be an adverse effect on price.
It is agreed that, on occasions when the Manager deems the purchase or sale of a
security to be in the best interest of a Series as well as other accounts or
companies, it may, to the extent permitted by applicable laws or regulations,
but will not be obligated to, aggregate the securities to be sold or purchased
for other accounts or companies in order to obtain favorable execution and lower
brokerage commissions or prices. In that event, allocation of the securities
purchased or sold, as well as the expenses incurred in the transaction, will be
made by the Manager in accordance with any written procedures maintained by the
Manager or, if there are no such written procedures, in the manner it considers
to be most equitable and consistent with its fiduciary obligations to the Fund
and to such other accounts or companies. The Fund recognizes that in some cases
this procedure may adversely affect the size of the position obtainable for a
Series.
ARTICLE VI
Books and Records
The Manager hereby undertakes and agrees to maintain, in the form and for the
period required by Rule 31a-2 and Rule 2a-7 under the 1940 Act, all records
relating to the Fund's investments that are required to be maintained by the
Fund pursuant to the requirements of Rule 31a-1 and Rule 2a-7 of the 1940 Act.
The Manager agrees that all books and records which it or any other Service
Provider maintains for the Fund are the property of the Fund and further agrees
to surrender promptly to the Fund any such books, records or information upon
the Fund's request. All such books and records shall be made available, within
five business days of a written request, to the Fund's accountants or auditors
during regular business hours at the Manager's offices. The Fund or its
authorized representative shall have the right to copy any records in the
possession of the Manager or a Service Provider that pertain to the Fund. Such
books, records, information or reports shall be made available to properly
authorized government representatives consistent with state and federal law
and/or regulations. In the event of the termination of this Agreement, all such
books, records or other information shall be returned to the Fund free from any
claim or assertion of rights by the Manager.
The Manager further agrees that it will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if the Fund has authorized such disclosure, or if such disclosure is
required by federal or state regulatory authorities.
ARTICLE VII
Duration and Termination of this Agreement
This Agreement shall not become effective unless and until it is approved by the
Board, including a majority of trustees who are not parties to this Agreement or
interested persons of any such party, and by the vote of a majority of the
outstanding voting shares of each Series of the Fund. This Agreement shall come
into full force and effect on the date which it is so approved, provided that it
shall not become effective as to any subsequently created investment portfolio
until it has been approved by the Board specifically for such portfolio. As to
each Series of the Fund, the Agreement shall continue in effect for two years
and shall thereafter continue in effect from year to year so long as such
continuance is specifically approved for each Series at least annually by (i)
the Board, or by the vote of a majority of the outstanding votes attributable to
the shares of the class representing an interest in the Series; and (ii) a
majority of those trustees who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the purpose of
voting on such approval.
This Agreement may be terminated at any time as to any Series or to all Series,
without the payment of any penalty, by the Board, or by vote of a majority of
the outstanding votes attributable to the shares of the applicable Series, or by
the Manager, on 60 days written notice to the other party. If this Agreement is
terminated only with respect to one or more, but less than all, of the Series,
or if a different adviser is appointed with respect to a new portfolio, the
Agreement shall remain in effect with respect to the remaining Series. This
Agreement shall automatically terminate in the event of its assignment.
ARTICLE VIII
Amendments of this Agreement
This Agreement may be amended as to each Series by the parties only if such
amendment is specifically approved by (i) the vote of a majority of outstanding
votes attributable to the shares of the Series, and (ii) a majority of those
trustees who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
approval.
ARTICLE IX
Definitions of Certain Terms
The terms "assignment," "affiliated person," and "interested person," when used
in this Agreement, shall have the respective meanings specified in the 1940 Act.
The term "majority of the outstanding votes" attributable to the shares of a
Series means the lesser of (a) 67% or more of the votes attributable to such
Series present at a meeting if the holders of more than 50% of such votes are
present or represented by proxy, or (b) more than 50% of the votes attributable
to shares of the Series.
ARTICLE X
Governing Law
This Agreement shall be construed in accordance with laws of the Commonwealth of
Massachusetts, and applicable provisions of the 1940 Act, the Advisers Act, and
the 1934 Act.
ARTICLE XI
Severability
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
ULTRA SERIES FUND
By: /s/ Michael S. Daubs
Title: President
ATTEST:
/s/ Jeanne Mraz
CIMCO INC.
By: /s/ Michael S. Daubs
Title: President
ATTEST:
/s/ Jeanne Mraz
<PAGE>
SERVICING AGREEMENT BETWEEN
CENTURY LIFE OF AMERICA
AND
CENTURY INVESTMENT MANAGEMENT CO.
THIS AGREEMENT is made by and between Century Life of America (Century Life), a
mutual life insurance company domiciled in the state of Iowa with its principal
office located in Waverly, Iowa, and Century Investment Management Co. (CIMCO),
a duly licensed registered investment adviser domiciled in the state of Iowa
with its principal office located in Madison, Wisconsin.
WHEREAS, CIMCO is an independent registered investment adviser, engaged
primarily in the business of providing investment advice and investment
management services on a fee for service basis, and currently acts as investment
adviser to the Ultra Series Fund and other clients, and
WHEREAS, CIMCO alone will have control over its investment advisory business,
and
WHEREAS, CIMCO wishes to purchase from Century Life various services required by
CIMCO in the ordinary course of administering its business,
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
1. CIMCO shall purchase from Century Life certain accounting,
administrative, clerical, legal, tax and other services necessary to
fulfill CIMCO's obligation under the Investment Advisory Agreement
between CIMCO and the Ultra Series Fund.
2. As full compensation for the above-described services, CIMCO will pay
to Century Life a monthly fee based on the net assets at the close of
business on the last business day of the preceding month multiplied by
a specified factor. For the Money Market Series and the Treasury 2000
Series, the factor is .02083% (.0002083). This fee is approximately
equal to an annualized rate of .25% (.0025) of net assets. For the
Balanced Series, the Bond Series, the Growth & Income Stock Series, and
the Capital Appreciation Stock Series, the factor is .0083% (.000083).
This amounts to an annualized rate of approximately .10% (.0010) of net
assets.
3. This agreement shall be nonassignable and shall remain in effect until
terminated and may be terminated by any party as of the first day of
any month by giving the other party at least 30 days prior written
notice.
4. This agreement shall be applied, interpreted, construed and enforced in
accordance with the laws of the state of Iowa.
IN WITNESS WHEREOF, this agreement is executed by Century Life and CIMCO by
their respective duly authorized officers to become effective on the 1st day of
October, 1994.
CENTURY LIFE OF AMERICA
By: /s/ Daniel E. Meylink, Sr.
Daniel E. Meylink, Sr.
President
CENTURY INVESTMENT MANAGEMENT CO.
By: /s/ Michael S. Daubs
Michael S. Daubs
President
<PAGE>
SERVICING AGREEMENT BETWEEN
CENTURY INVESTMENT MANAGEMENT CO.
AND
CUNA MUTUAL INSURANCE SOCIETY
THIS AGREEMENT is made effective July 17, 1993 by and between Century Investment
Management Co. (CIMCO), a registered investment adviser domiciled in the state
of Iowa with its principal office located in Madison, Wisconsin, and CUNA Mutual
Insurance Society (CUNA Mutual), a mutual life insurance company domiciled in
the state of Wisconsin with its principal office located in Madison, Wisconsin.
WHEREAS, CIMCO is an independent registered investment adviser, engaged
primarily in the business of providing investment advice and investment
management services on a fee for service basis and CIMCO alone has control over
its investment advisory business; and
WHEREAS, CUNA Mutual and Century Life of America (Century Life), a mutual life
insurance company domiciled in the state of Iowa with its principal office
located in Waverly, Iowa, have entered into an agreement of permanent
affiliation to increase efficiencies and to share certain resources and
facilities between Century Life and CUNA Mutual while each company remains a
separate corporate entity and continues to be separately owned by its
policyowner group, and CUNA Mutual and Century Life each own fifty percent (50%)
of CIMCO, and
WHEREAS, CIMCO currently acts as investment adviser to CUNA Mutual, Century
Life, and two registered investment companies sponsored by Century Life, namely
CIMCO Money Market Trust and Ultra Series Fund (the "mutual funds"); and
WHEREAS, CIMCO wishes to purchase from CUNA Mutual various services required by
CIMCO in the ordinary course of administering its business,
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
1. CIMCO shall purchase from CUNA Mutual certain cash management and
investment administration services necessary to fulfill CIMCO's
obligation under the Investment Advisory Agreements between CIMCO and
each of the mutual funds approved by the shareholders on December 5,
1991, and subsequently approved by the Trust's Board of Trustees.
2. CUNA Mutual shall conduct cash management and investment administration
services in accord with the requirements of securities laws and
regulations. Further, CUNA Mutual shall interact with the custodian for
the mutual funds only as expressly permitted by (1) the Custody
Agreements between each mutual fund and the custodian (U.S. Trust
Company of New York) signed in July 1993, (2) the Cash Data Entry Funds
Transfer System Service Agreement between each mutual fund and U.S.
Trust company of New York signed in July 1993, and (3) resolutions of
the Board of Trustees of each mutual fund.
3. CUNA Mutual shall maintain cash management and investment
administration records as required by Section 31 under the Investment
Company Act. Such records shall be the property of each mutual fund and
CUNA Mutual shall surrender them promptly upon the request of either
mutual fund.
4. The services CIMCO purchases from CUNA Mutual hereunder are exclusive
of the services CUNA Mutual performs under a Servicing Agreement
between CUNA Mutual and CIMCO effective January 1, 1992.
5. CIMCO shall pay CUNA Mutual the fees calculated in accordance with the
attached Exhibit A which may be amended from time to time by written
endorsement executed by both parties.
6. This agreement shall be nonassignable and shall remain in effect until
terminated and may be terminated by any party as of the first day of
any month by giving the other party at least 30 days prior written
notice.
<PAGE>
IN WITNESS WHEREOF, this agreement is executed by CUNA Mutual and CIMCO by their
respective duly authorized officers.
CUNA MUTUAL INSURANCE SOCIETY
By: /s/ Richard M. Heins
Richard M. Heins
President and Chief Executive Officer
CENTURY INVESTMENT MANAGEMENT CO.
By: /s/ Michael S. Daubs
Michael S. Daubs
President
<PAGE>
Exhibit A - Schedule of Fees to Servicing
Agreement Between CUNA Mutual Insurance Society and
Century Investment Management Co.
1. Fees for cash management services.
As full compensation for cash management services, CIMCO will pay a monthly fee
based on the net assets at the close of business on the last business day of the
preceding month multiplied by a specified factor. For the Treasury 2000 Series,
the factor is .000000833, which is approximately equal to an annualized rate of
.001% of net assets. For the Bond Series, the factor is .000001667, which is
approximately equal to an annualized rate of .002% of net assets. For the Money
Market Series and for CIMCO Money Market Trust, the fact is .000002500, which is
approximately equal to an annualized rate of .003%. For the Balanced and Common
Stock Series, the factor is .000004167, which is approximately equal to an
annualized rate of .005% of net assets.
2. Fees for investment administration.
CUNA Mutual has not begun performing investment administration services. Fees
will be established at a later time.
CUNA MUTUAL INSURANCE SOCIETY
By: /s/ Richard M. Heins Date: 8/18/93
Richard M. Heins
President and Chief Executive Officer
CENTURY INVESTMENT MANAGEMENT CO.
By: /s/ Michael S. Daubs Date: 8/11/93
Michael S. Daubs
President
<PAGE>
EXHIBIT 6
DISTRIBUTION AGREEMENT
IT IS HEREBY AGREED by and between ULTRA SERIES FUND (the "Fund") and CUNA
BROKERAGE SERVICES, INC. ("CUNA Brokerage) as follows:
I.
The Fund proposes to issue and sell shares of the Fund through CUNA Brokerage.
CUNA Brokerage agrees to provide sales and services subject to the terms and
conditions hereof. The shares to be sold are more fully described in the
registration statement and the prospectus of the Fund.
II.
The Fund grants CUNA Brokerage the exclusive right, during the term of this
Agreement, subject to registration requirements of the Securities Act of 1933
and the Investment Company Act of 1940 and the provisions of the Securities
Exchange Act of 1934, to be the distributor of the shares. CUNA Brokerage will
sell the shares under such terms as set by the Fund.
III.
CUNA Brokerage agrees that it shall undertake at its own expense, to perform all
duties and functions which are necessary and proper for the distribution of the
shares.
IV.
CUNA Brokerage shall be compensated for its distribution service pursuant to the
Distribution Plan adopted by the Fund. CUNA Brokerage may from time to time
waive the compensation provided for herein.
V.
The Fund shall furnish CUNA Brokerage with copies of all prospectuses, financial
statements, and other documents which CUNA Brokerage reasonably requests for use
in connection with the distribution of the shares. The Fund shall provide to
CUNA Brokerage such number of copies of the current effective prospectuses as
CUNA Brokerage shall request.
VI.
CUNA Brokerage is not authorized to give any information, or to make any
representations concerning the Fund other than those contained in the current
registration statement or prospectus filed with the Securities and Exchange
Commission or such sales literature as may be authorized by the Fund.
VII.
Both parties to this Agreement agree to keep the necessary records as indicated
by applicable state and federal law and to render the necessary assistance to
one another for the accurate and timely preparation of such records.
VIII.
CUNA Brokerage will use its best efforts in rendering services to the Fund, but
in the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations, CUNA Brokerage will not be liable to the Fund or
any of its shareholders for any error of judgement or mistake of law or for any
act of omission or for any losses sustained by the Fund or its shareholders.
IX.
CUNA Brokerage shall provide the Fund, for review by the Trustees, and the
Trustees shall review, at least quarterly, a written report of the amounts
expended under this Agreement and the purpose for which such expenditures were
made.
X.
This Agreement has been approved by the Fund's initial shareholder and by the
Trustees, including a majority of the Trustees who are not interested persons of
the Fund and who have no direct or indirect financial interest in the operation
of the Agreement, cast in person at a meeting called for the purpose of voting
on such Agreement.
XI.
Under its terms, this Agreement remains in effect from December 29, 1993 to
December 29, 1994, and from year to year thereafter, provided such continuance
is approved annually by a vote of the Trustees in the manner described above.
This Agreement may not be amended to increase materially the amount to be spent
for the services described therein without approval of the shareholders of the
Fund, and all material amendments to this Agreement must also be approved by the
Trustees in the manner described above. The Agreement may be terminated at any
time, without payment of any penalty, by vote of a majority of the Trustees who
are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Agreement, or by a vote of a majority
of the outstanding voting securities of the Fund (as defined in the Investment
Company Act of 1940) on not more than sixty (60) days written notice to any
other party to the Agreement. This Agreement will automatically terminate in the
event of its assignment (as defined in the Investment Company Act of 1940). So
long as the Agreement is in effect, the selection and nomination of Trustees who
are not interested persons of the Fund shall be committed to the discretion of
the Trustees who are not interested persons. The Trustees have determined that
in their judgement, there is a reasonable likelihood that the Agreement will
benefit the Fund and its shareholders. In the Trustee's quarterly review of the
Agreement, they will consider its continued appropriateness and the level of
compensation provided therein.
XII.
The terms of this Agreement are subject to the Plan of Distribution duly adopted
by the Board of Trustees of the Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940. This Agreement shall be automatically amended where
applicable to conform with any changes made to said Plan.
XIII.
All notices, requests, demands, and other communications under this Agreement
shall be in writing and shall be deemed to have been given on the date of
service if served personally on the party to whom notice is to be given, or on
the date of mailing if sent by First Class Mail, Registered or Certified,
postage prepaid and properly addressed.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
on their behalf by their respective officers thereunto duly authorized.
EXECUTED this 15th day of November, 1993.
THE FUND
ULTRA SERIES FUND
BY: /s/ Michael S. Daubs
Michael S. Daubs, President
ATTEST: Judith Hunter
DISTRIBUTOR
CUNA BROKERAGE SERVICES, INC.
BY: /s/ Robert W. Bush
Robert W. Bush, President
ATTEST: Judith Hunter
<PAGE>
EXHIBIT 8
MUTUAL FUND CUSTODY AGREEMENT
Ultra Series Fund
UNITED STATES TRUST COMPANY OF NEW YORK
June 24, 1993
<PAGE>
MUTUAL FUND CUSTODY AGREEMENT
Ultra Series Fund
Table of Contents
Section/Paragraph Page
1. Appointment.......................................................1
2. Delivery of Documents.............................................1
3. Definitions.......................................................2
4. Delivery and Registration of the Property.........................3
5. Voting Rights.....................................................4
6. Receipt and Disbursement of Money.................................4
7. Receipt of Securities.............................................5
8. Use of Securities Depository or the Book-Entry System.............6
9. Instructions Consistent With The Articles, etc....................6
10. Transactions Not Requiring Instructions............................8
11. Transactions Requiring Instructions...............................11
12. Purchase of Securities............................................12
13. Sales of Securities...............................................12
14. Authorized Shares.................................................13
15. Records...........................................................13
16. Cooperation with Accountants......................................13
17. Confidentiality...................................................13
18. Equipment Failures................................................14
19. Right to Receive Advice...........................................14
20. Compliance with Governmental Rules and Regulations................15
21. Compensation......................................................15
22. Indemnification...................................................15
23. Responsibility of U.S. Trust......................................16
24. Collection........................................................17
25. Duration and Termination..........................................18
26. Notices...........................................................18
27. Insurance.........................................................19
28. Further Actions...................................................19
29. Amendments........................................................19
30. Miscellaneous.....................................................19
Signatures............................................................20
Attachment A -- Fees
Attachment B -- Investment Portfolios of the Fund
<PAGE>
MUTUAL FUND CUSTODY AGREEMENT
THIS AGREEMENT is made as of 6/24/93, by and between the Ultra
Series Fund, a Massachusetts Business Trust (the "Fund"), and UNITED STATES
TRUST COMPANY OF NEW YORK, a New York State chartered bank trust company ("U.S.
Trust").
WITNESSETH:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund desires to retain U.S. Trust to serve as the
Fund's custodian and U.S. Trust is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints U.S. Trust to act as
custodian of its portfolio securities, cash and other property on the terms set
forth in this Agreement. U.S. Trust accepts such appointment and agrees to
furnish the services herein set forth in return for the compensation as provided
in Paragraph 21 of this Agreement.
2. Delivery of Documents. The Fund will promptly furnish to U.S.
Trust such copies, properly certified or authenticated, of contracts, documents
and other related information that U.S. Trust may request or requires to
properly discharge its duties. Such documents may include but are not limited to
the following:
(a) Resolutions of the Fund's Trustees authorizing the appointment
of U.S. Trust as Custodian of the portfolio securities, cash and other property
of the Fund and approving this Agreement;
(b) Incumbency and signature certificates identifying and
containing the signatures of the Fund's officers and/or the persons authorized
to sign Written Instructions, as hereinafter defined, on behalf of the Fund;
(c) The Fund's Declaration of Trust filed with the Office of the
Secretary of the Commonwealth of Massachusetts and all amendments thereto (such
Declaration of Trust, as currently in effect and as they shall from time to time
be amended, are herein called the "Declaration");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws, as
currently in effect and as they shall from time to time be amended, are herein
called the "By-Laws");
(e) Resolutions of the Fund's Trustees and/or the Fund's
stockholders approving the Investment Advisory Agreement between the Fund and
the Fund's investment adviser (the "Advisory Agreement");
(f) The Advisory Agreement;
(g) The Fund's current Registration Statement on Form N-1A under
the 1940 Act and the Securities Act of 1933, as amended ("the 1933 Act") as
filed with the Securities and Exchange Commission (the "SEC"); and
(h) The Fund's most recent prospectus including all amendments and
supplements thereto (the "Prospectus").
The Fund will furnish U.S. Trust from time to time with copies of
all amendments of or supplements to the foregoing, if any. The Fund will also
furnish U.S. Trust with a copy of the opinion of counsel for the Fund with
respect to the validity of the shares of common stock, par value $.01 per share
(the "Shares"), of the Fund and the status of such Shares under the 1933 Act as
registered with the SEC, and under any other applicable federal law or
regulation.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means the Fund's President, Vice-President, Treasurer and
any other person, whether or not any such person is an officer or employee of
the Fund, duly authorized by the Trustees of the Fund to give Written
Instructions on behalf of the Fund.
(b) "Book-Entry System". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees.
(c) "Property". The term "Property", as used in this Agreement,
means:
(i) any and all securities, cash, and other property of the Fund
which the Fund may from time to time deposit, or cause to be
deposited, with U.S. Trust or which U.S. Trust may from time to
time hold for the Fund;
(ii) all income in respect of any such securities or other
property;
(iii) all proceeds of the sales of any of such securities or other
property;
and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by U.S. Trust from time to time from or on
behalf of the Fund.
(d) "Securities Depository". As used in this Agreement, the term
"Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC, or its successor or successors and its nominee
or nominees; and shall also mean any other registered clearing agency, its
successor or successors, specifically identified in a certified copy of a
resolution of the Fund's Trustees approving deposits by U.S.
Trust therein.
(e) "Written Instructions". Means instructions
(i) delivered by mail, tested telegram, cable, telex, facsimile
sending device, and received by U.S. Trust, signed by one Authorized
Person if the transaction is valued at less than $1,000,000 and by two
Authorized Persons if the transaction is valued at equal to or greater
than $1,000,000 or by persons reasonably believed by U.S. Trust to be
Authorized Persons; or
(ii) transmitted electronically through the U.S. Trust Asset
Management System or any similar electronic instruction system
acceptable to U.S. Trust.
4. Delivery and Registration of the Property. The Fund will deliver or
cause to be delivered to U.S. Trust all Property owned by it, including cash
received for the issuance of its Shares, at any time during the period of this
Agreement, except for securities and monies to be delivered to any subcustodian
appointed pursuant to Paragraph 7 hereof. U.S. Trust will not be responsible for
such securities and such monies until actually received by U.S. Trust or by any
subcustodian. All securities delivered to U.S. Trust or to any such subcustodian
(other than in bearer form) shall be registered in the name of the Fund or in
the name of a nominee of the Fund or in the name of U.S. Trust or any nominee of
U.S. Trust (with or without indication of fiduciary status) or in the name of
any subcustodian or any nominee of such subcustodian appointed pursuant to
Paragraph 7 hereof or shall be properly endorsed and in form for transfer
satisfactory to U.S. Trust.
5. Voting Rights. With respect to all securities, however
registered, it is understood that the voting and other rights and powers shall
be exercised by the Fund. U.S. Trust's only duty shall be to mail to the Fund
any documents received, including proxy statements and offering circulars, with
any proxies for securities registered in a nominee name executed by such
nominee. Where warrants, options, tenders or other securities have fixed
expiration dates, the Fund understands that in order for U.S. Trust to act, U.S.
Trust must receive the Fund's instructions at its offices in New York City,
addressed as U.S. Trust may from time to time request, by no later than noon
(New York City time) at least one business day prior to the last scheduled date
to act with respect thereto (or such earlier date or time as permits the Fund a
reasonable period of time in which to respond after U.S. Trust notifies the Fund
of such date or time). Absent U.S. Trust's timely receipt of such instructions,
such instruments will expire without liability to U.S. Trust.
6. Receipt and Disbursement of Money.
(a) U.S. Trust shall open and maintain a custody account for the Fund
(the "Account") subject only to draft or order by U.S. Trust acting pursuant to
the terms of this Agreement, and shall hold in such Account, subject to the
provisions hereof, all cash received by it from or for the Fund. U.S. Trust
shall make payments of cash to, or for the account of, the Fund from such cash
only (i) for the purchase of securities for the Fund as provided in paragraph 12
hereof; (ii) upon receipt of Written Instructions, for the payment of dividends
or other distributions of shares, or for the payment of interest, taxes,
administration, distribution or advisory fees or expenses which are to be borne
by the Fund under the terms of this Agreement, any Advisory Agreement, or any
administration agreement of the Fund; (iii) upon receipt of Written Instructions
for payments in connection with the conversion, exchange or surrender of
securities owned or subscribed to by the Fund and held by or to be delivered to
U. S. Trust; (iv) to a subcustodian pursuant to Paragraph 7 hereof; or (v) upon
receipt of Written Instructions for other corporate purposes.
(b) U.S. Trust is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian for the
Fund.
7. Receipt of Securities.
(a) Except as provided by Paragraph 8 hereof, U.S. Trust shall hold all
securities and non-cash Property received by it for the Fund. All such
securities and non-cash Property are to be held or disposed of by U.S. Trust for
the Fund pursuant to the terms of this Agreement. In the absence of Written
Instructions accompanied by a certified resolution authorizing the specific
transaction by the Fund's Trustees, U.S. Trust shall have no power or authority
to withdraw, deliver, assign, hypothecate, pledge or otherwise dispose of any
such securities and non-cash Property, except in accordance with the express
terms provided for in this Agreement. In connection with its duties under this
Paragraph 7, U.S. Trust may, at its own expense, enter into subcustodian
agreements with other banks or trust companies for the receipt of certain
securities and cash to be held by U.S. Trust for the account of the Fund
pursuant to this Agreement; provided that each such bank or trust company has an
aggregate capital, surplus and undivided profits, as shown by its last published
report, of not less than twenty million dollars ($20,000,000) and that such bank
or trust company agrees with U.S. Trust to comply with all relevant provisions
of the 1940 Act and applicable rules and regulations thereunder. U.S. Trust will
be liable for acts or omissions of any such subcustodian.
(b) Promptly after the close of business on each day, U.S. Trust shall
furnish the Fund with confirmations and a summary of all transfers to or from
the account of the Fund during said day. Where securities are transferred to the
account of the Fund established at a Securities Depository or the Book Entry
System pursuant to Paragraph 8 hereof, U.S. Trust shall also by book-entry or
otherwise identify as belonging to the Fund the quantity of securities that
belongs to the Fund that are part of a fungible bulk of securities registered in
the name of U.S. Trust (or its nominee) or shown in U.S. Trust's account on the
books of a Securities Depository or the Book-Entry System. At least monthly and
from time to time, U.S. Trust shall furnish the Fund with a detailed statement
of the Property held for the Fund under this Agreement.
8. Use of Securities Depository or the Book-Entry System. The Fund
shall deliver to U.S. Trust a certified resolution of the Trustees of the Fund
approving, authorizing and instructing U.S. Trust on a continuous and ongoing
basis until instructed to the contrary by Written Instructions actually received
by U.S. Trust (i) to deposit in a Securities Depository or the Book-Entry System
all securities of the Fund eligible for deposit therein and (ii) to utilize a
Securities Depository or the Book-Entry System to the extent possible in
connection with the performance of its duties hereunder, including without
limitation, settlements of purchases and sales of securities by the Fund, and
deliveries and returns of securities collateral in connection with borrowings.
Without limiting the generality of such use, it is agreed that the following
provisions shall apply thereto:
(a) Securities and any cash of the Fund deposited in a Securities
Depository or the Book-Entry System will at all times be segregated from any
assets and cash controlled by U.S. Trust in other than a fiduciary or custodian
capacity but may be commingled with other assets held in such capacities. U.S.
Trust will effect payment for securities and receive and deliver securities in
accordance with accepted industry practices in the place where the transaction
is settled, unless the Fund has given U.S. Trust Written Instructions to the
contrary.
(b) All Books and records maintained by U.S. Trust which relate to
the Fund's participation in a Securities Depository or the Book-Entry System
will at all times during U.S. Trust's regular business hours be open to the
inspection of the Fund's duly authorized employees or agents, and the Fund will
be furnished with all information in respect of the services rendered to it as
it may require.
(c) U.S. Trust is liable to the Fund with respect to securities and
cash to which the Fund is entitled, held or received by the Securities
Depository and in the Federal Reserve Book Entry System as agent for U.S. Trust,
as if the same were held or received by U.S. Trust at its own offices.
9. Instructions Consistent With The Declaration. etc. Unless otherwise
provided in this Agreement, U.S. Trust shall act only upon Written Instructions.
U.S. Trust may assume that any Written Instructions received hereunder are not
in any way inconsistent with any provision of the Articles or By-Laws of the
Fund or any vote or resolution of the Fund's Trustees, or any committee thereof.
U S. Trust shall be entitled to rely upon any Written Instructions actually
received by U.S. Trust pursuant to this Agreement. The Fund agrees that U.S.
Trust shall incur no liability in acting upon Written Instructions given to U.S.
Trust. In accord with instructions from the Fund, as required by accepted
industry practice or as U.S. Trust may elect in effecting the execution of Fund
instructions, advances of cash or other Property made by U.S. Trust, arising
from the purchase, sale, redemption, transfer or other disposition of Property
of the Fund, or in connection with the disbursement of funds to any party, or in
payment of fees, expenses, claims or liabilities owed to. U.S. Trust by the
Fund, or to any other party which has secured judgment in a court of law against
the Fund which creates an overdraft in the accounts or over-delivery of Property
shall be deemed a loan by U.S. Trust to the Fund, payable on demand, bearing
interest at such rate customarily charged by U.S. Trust for similar loans. The
Fund agrees that test arrangements, authentication methods or other security
devices to be used with respect to instructions which the Fund may give by
telephone, telex, TWX facsimile transmission, bank wire or through an electronic
instruction system, shall be processed in accordance with terms and conditions
for the use of such arrangements, methods or devices as U.S. Trust may put into
effect and modify from time to time. The Fund shall safeguard any test keys,
identification codes or other security devices which U.S. Trust makes available
to the Fund and agrees that the Fund shall be responsible for any loss,
liability or damage incurred by U.S. Trust or by the Fund as a result of U.S.
Trust's acting in accordance with instructions from any unauthorized person
using the proper security device unless such loss, liability or damage was
incurred as a result of U.S. Trust's negligence or willful misconduct. U.S.
Trust may electronically record, but shall not be obligated to so record, any
instructions given by telephone and any other telephone discussions with respect
to the Account. In the event that the Fund uses U.S. Trust's Asset Management
System ("AMS"), the Fund agrees that U.S. Trust is not responsible for the
consequences of the failure of the AMS to perform for any reason, beyond the
reasonable control of U.S. Trust, or the failure of any communications carrier,
utility, or communications network. In the event the AMS is inoperable, the Fund
agrees that it will accept the communication of transaction instructions by
telephone, facsimile transmission on equipment compatible to U.S. Trust's
facsimile receiving equipment or by letter, at no additional charge to the Fund.
10. Transactions Not Requiring Instructions. U.S. Trust is authorized
to take the following action without Written Instructions:
(a) Collection of Income and Other Payments. U.S. Trust shall:
(i) collect and receive for the account of the Fund, all
income and other payments and distributions, including (without
limitation) stock dividends, rights, warrants and similar items,
included or to be included in the Property of the Fund, and promptly
advise the Fund of such receipt and shall credit such income, as
collected, to the Fund. From time to time, U.S. Trust may elect, but
shall not be so obligated, to credit the Account with interest,
dividends or principal payments on payable or contractual settlement
date, in anticipation of receiving same from a payor, central
depository, broker or other agent employed by the Fund or U.S. Trust.
Any such crediting and posting shall be at the Fund's sole risk, and
U.S. Trust shall be authorized to reverse any such advance posting in
the event U.S. Trust does not receive good funds from any such payor,
central depository, broker or agent of the Fund.
(ii) with respect to securities of foreign issuers, effect
collection of dividends, interest and other income, and to notify the
Fund of any call for redemption, offer of exchange, right of
subscription, reorganization, or other proceedings affecting such
securities, or any default in payments due thereon. It is understood,
however, that U.S. Trust shall be under no responsibility for any
failure or delay in effecting such collections or giving such notice
with respect to securities of foreign issuers, regardless of whether or
not the relevant information is published in any financial service
available to U.S. Trust unless such failure or delay is due to its
negligence or willful misconduct; provided that this sub-paragraph (ii)
shall not be construed as creating any such responsibility with respect
to securities of non-foreign issuers. Collections of income in foreign
currency are, to the extent possible, to be converted into United
States Dollars unless otherwise instructed in writing, and in effecting
such conversion U.S. Trust may use such methods or agencies as it may
see fit, including the facilities of its own foreign division at
customary rates. All risk and expenses incident to such collection and
conversion is for the account of the Fund and U.S. Trust shall have no
responsibility for fluctuations in exchange rates affecting any such
conversion.
(iii) endorse and deposit for collection in the name of the
Fund, checks, drafts, or other orders for the payment of money on the
same day as received;
(iv) receive and hold for the account of the Fund all
securities received by the Fund as a result of a stock dividend, share
split-up or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued
with respect to any portfolio securities of the Fund held by U.S. Trust
hereunder;
(v) present for payment and collect the amount payable upon
all securities which may mature or be called, redeemed or retired, or
otherwise become payable on the date such securities become payable;
(vi) take any action which may be necessary and proper in
connection with the collection and receipt of such income and other
payments and the endorsement for collection of checks, drafts and other
negotiable instruments;
(vii) with respect to domestic securities, to exchange
securities in temporary form for securities in definitive form, to
effect an exchange of the shares where the par value of stock is
changed, and to surrender securities at maturity or when advised of
earlier call for redemption, against payment therefor in accordance
with accepted industry practice. The Fund understands that U.S. Trust
subscribes to one or more nationally recognized services that provide
information with respect to calls for redemption of bonds or other
corporate actions. U.S. Trust shall not be liable for failure to redeem
any called bond or to take other action if notice of such call or
action was not provided by any service to which it subscribes provided
that U.S. Trust shall have acted in good faith without negligence and
in accordance with "Street Practice" (as is customary in industry).
U.S. Trust shall have no duty to notify the Fund of any rights, duties,
limitations, conditions or other information set forth in any security
(including mandatory or optional put, call and similar provisions), but
U.S. Trust shall forward to the Fund any notices or other documents
subsequently received in regard to any such security. When fractional
shares of stock of a declaring corporation are received as a stock
distribution, unless specifically instructed to the contrary in
writing, U.S. Trust is authorized to sell the fraction received and
credit the Fund's account. Unless specifically instructed to the
contrary in writing, U.S. Trust is authorized to exchange securities in
bearer form for securities in registered form. If any Property
registered in the name of a nominee of U.S. Trust is called for partial
redemption by the issuer of such Property, U.S. Trust is authorized to
allot the called portion to the respective beneficial holders of the
Property in such manner deemed to be fair and equitable by U.S. Trust
in its sole discretion.
(b) Miscellaneous Transactions. U.S. Trust is authorized to deliver or
cause to be delivered Property against payment or other consideration or written
receipt therefor in the following cases:
(i) for examination by a broker selling for the account of the Fund in
accordance with street delivery custom;
(ii) for the exchange of interim receipts or temporary securities for
definitive securities;
(iii) for transfer of securities into the name of the Fund or U.S.
Trust or a nominee of either, or for exchange of securities for a
different number of bonds, certificates, or other evidence,
representing the same aggregate face amount or number of units bearing
the same interest rate, maturity date and call provisions, if any;
provided that, in any such case, the new securities are to be delivered
to U.S. Trust.
If to the Fund: Ultra Series Fund
2000 Heritage Way
Waverly, IA 50677-0061
(301) 352-1000
If to U.S. Trust: Mr. Peter Arrighetti
Senior Vice President
U. S. Trust Company of New York
114 West 47th Street
New York, NY 10036
11. Transactions Requiring Instructions. Upon receipt of Written
Instructions and not otherwise, U.S. Trust, directly or through the use of a
Securities Depository or the Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated in
such Written Instructions, proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any securities may be
exercised,
(b) Deliver any securities held for the Fund against receipt of
other securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(c) Deliver any securities held for the Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, against receipt of such certificates of deposit,
interim receipts or other instruments or documents as may be issued to it to
evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Fund and
take such other steps as shall be stated in said instructions to be for the
purpose of effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund;
(e) Release securities belonging to the Fund to any bank or trust
company for the purpose of pledge or hypothecation to secure any loan incurred
by the Fund; provided, however, that securities shall be released only upon
payment to U.S. Trust of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing already made, subject to
proper prior authorization, further securities may be released for that purpose;
and pay such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes evidencing the
loan;
(f) Deliver any securities held for the Fund upon the exercise of
a covered call option written by the Fund on such securities; and
(g) Deliver securities held for the Fund pursuant to separate
security lending agreements concerning the lending of the Fund's securities into
which the Fund may enter, from time to time.
(h) Without specific authorization of the Fund, U.S. Trust shall
not accept due bills in place of Property or securities or accept partial
delivery or settlement. U.S. Trust is authorized to deliver Property in the
Funds, against a receipt therefor, for examination in accordance with "street
delivery" custom and to accept, in lieu of Property, documents, including trust
and collateral receipts and letters of undertaking, as long as such documents
contain the agreement of the issuer thereof to hold such Property subject to
U.S. Trust's sole order.
12. Purchase of Securities. Promptly after each purchase of
securities by the Investment Adviser (or any sub-adviser), the Fund shall
deliver to U.S. Trust (as Custodian) Written Instructions specifying with
respect to each such purchase: (a) the name of the issuer and the title of the
securities, (b) the number of shares of the principal amount purchased and
accrued interest, if any, (c) the dates of purchase and settlement, (d) the
purchase price per unit, (e) the total amount payable upon such purchase, (f)
the name of the person from whom or the broker through whom the purchase was
made and (g) the series of the Fund for which the purchase was made. U.S. Trust
shall upon receipt of securities purchased by or for the series of the Fund pay
out of the moneys held for the account of such series of the Fund the total
amount payable to the person from whom or the broker through whom the purchase
was made, provided that the same conforms to the total amount payable as set
forth in such Written Instructions.
13. Sales of Securities. Promptly after each sale of securities by
the Investment Adviser, the Fund shall deliver to U.S. Trust (as Custodian)
Written Instructions, specifying with respect to each such sale: (a) the name of
the issuer and the title of the security, (b) the number of shares or principal
amount sold, and accrued interest' if any, (c) the date of sale, (d) the sale
price per unit, (e) the total amount payable to the Fund upon such sale, (f) the
name of the broker through whom or the person to whom the sale was made and (g)
the series of the Fund for which the sale was made. U.S. Trust shall deliver the
securities upon receipt of the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable as set forth in such
Written Instructions. Subject to the foregoing, U.S. Trust may accept payment in
such form as shall be satisfactory to it, and may deliver securities and arrange
for payment in accordance with the customs prevailing among dealers in
securities.
14. Authorized Shares. The Fund has one class of shares.
15. Records. The books and records pertaining to the Fund which
are in the possession of U.S. Trust shall be the property of the Fund. Such
books and records shall be prepared and maintained as required by the 1940 Act;
other applicable federal and state securities laws and rules and regulations;
and, any state or federal regulatory body having appropriate jurisdiction. The
Fund, or the Fund's authorized representatives, shall have access to such books
and records at all times during U.S. Trust's normal business hours, and such
books and records shall be surrendered to the Fund promptly upon request. Upon
reasonable request of the Fund, copies of any such books and records shall be
provided by U.S. Trust to the Fund or the Fund's authorized representative at
the Fund's expense.
16. Cooperation with Accountants. U.S. Trust shall cooperate with
the Fund's independent certified public accountants and shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their unqualified opinion, including but not limited to the
opinion included in the Fund's semiannual report on Form N-SAR.
17. Confidentiality. U.S. Trust agrees on behalf of itself and its
employees to treat confidentially and as the proprietary information of the Fund
all records and other information relative to the Fund and its prior, present or
potential Shareholders and relative to the investment advisers and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Fund, which
approval shall not be unreasonably withheld and may not be withheld where U.S.
Trust may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Fund. Nothing contained herein,
however, shall prohibit U.S. Trust from advertising or soliciting the public
generally with respect to other products or services, regardless of whether such
advertisement or solicitation may include prior, present or potential
Shareholders of the Fund.
18. Equipment Failures. In the event of equipment failures beyond
U.S. Trust's control, U.S. Trust shall, at no additional expense to the Fund,
take reasonable steps to minimize service interruptions but shall not have
liability with respect thereto. U.S. Trust shall enter into and shall maintain
in effect with appropriate parties one or more agreements making reasonable
provision for back up emergency use of electronic data processing equipment to
the extent appropriate equipment is available.
19. Right to Receive Advice.
(a) Advice of Fund. If U.S. Trust shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall receive, from the
Fund clarification or advice.
(b) Advice of Counsel. If U.S. Trust shall be in doubt as to any
question of law involved in any action to be taken or omitted by U.S. Trust, it
may request advice at its own cost from counsel of its own choosing (who may be
counsel for the Fund or U.S. Trust, at the option of U.S. Trust).
(c) Conflicting Advice. In case of conflict between directions or
advice received by U.S. Trust pursuant to subparagraph (a) of this paragraph and
advice received by U.S. Trust pursuant to subparagraph (b) of this paragraph,
U.S. Trust shall be entitled to rely on and follow the advice received pursuant
to the latter provision alone.
(d) Protection of U.S. Trust. U.S. Trust shall be protected in any
action or inaction which it takes or omits to take in reliance on any directions
or advice received pursuant to subparagraph (a) of this section which U.S.
Trust, after receipt of any such directions or advice, in good faith believes to
be consistent with such directions or advice. However, nothing in this paragraph
shall be construed as imposing upon U.S. Trust any obligation (i) to seek such
directions or advice, or (ii) to act in accordance with such directions or
advice when received, unless, under the terms or another provision of this
Agreement, the same is a condition to U.S. Trust's properly taking or omitting
to take such action. Nothing in this subparagraph shall excuse U.S. Trust when
an action or omission on the part of U.S. Trust constitutes willful misfeasance,
bad faith, gross negligence or reckless disregard by U.S. Trust of its duties
under this Agreement.
20. Compliance with Governmental Rules and Regulations. The Fund
assumes full responsibility for insuring that the contents of each Prospectus of
the Fund complies with all applicable requirements of the 1933 Act, the 1940
Act, and any laws, rules and regulations of governmental authorities having
jurisdiction.
21. Compensation. As compensation for the services described
within this Agreement and rendered by U.S. Trust during the term of this
Agreement, the Fund will pay to U.S. Trust, in addition to reimbursement of its
out-of-pocket expenses, monthly fees as outlined in Attachment A.
22. Indemnification. The Fund, as sole owner of the Property,
agrees to indemnify and hold harmless U.S. Trust and its nominees from all
taxes, charges, expenses, assessments, claims, and liabilities (including,
without limitation, liabilities arising under the 1933 Act, the Securities
Exchange Act of 1934 as amended, the 1940 Act, and any state and foreign
securities and blue sky laws, all as or to be amended from time to time) and
expenses, including (without limitation) attorney's fees and disbursements,
arising directly or indirectly (a) from the fact that securities included in the
Property are registered in the name of any such nominee or (b) without limiting
the generality of the foregoing clause (a) from any action or thing which U.S.
Trust takes or does or omits to take or do (i) at the request or on the
direction of or in reliance on the advice of the Fund given in accordance with
the terms of this Agreement, or (ii) upon Written Instructions; provided, that
neither U.S. Trust nor any of its nominees or subcustodian shall be indemnified
against any liability to the Fund or to its Shareholders (or any expenses
incident to such liability) arising out of (x) U.S. Trust's or such nominee's or
subcustodian's own willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties under this Agreement or any agreement between U.S. Trust
and any nominee or subcustodian or (y) U.S. Trust's own or its subcustodian's
negligent failure to perform its duties under this Agreement. In the event of
any advance of cash for any purpose made by U.S. Trust resulting from orders or
Written Instructions of the Fund, or in the event that U.S. Trust or its nominee
or subcustodian shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Agreement, except such as may arise from its or its nominee's or subcustodian's
own negligent action, negligent failure to act, willful misconduct, or reckless
disregard of its duties under this Agreement or any agreement between U.S. Trust
and any nominee or subcustodian, the Fund shall promptly reimburse U.S. Trust
for such advance of cash or such taxes, charges, expenses, assessments, claims
or liabilities.
U.S. Trust will indemnify the Fund for loss of Property in its
care, provided such loss is due to the gross negligence or dishonesty of U.S.
Trust's officers or employees, or to burglary, robbery, holdup, theft,
extortion, mysterious disappearance or loss due to damage or destruction. In the
event of such loss, U.S. Trust agrees that it shall promptly replace such
Property or the value of same (by, among other means, posting appropriate bond
with the issuer to obtain reissue of such Property), together with the value of
any loss of rights or privileges resulting from such loss. U.S. Trust shall make
available to the Fund for inspection any such Property or value amounts so
replaced.
23. Responsibility of U.S. Trust. U.S. Trust shall be under no duty
to take any action on behalf of the Fund except as specifically set forth herein
or as may be specifically agreed to by U.S. Trust in writing. In the performance
of its duties hereunder, U.S. Trust shall be obligated to exercise care and
diligence and to act in good faith and to use its best efforts within reasonable
limits to insure the accuracy of all services performed under this Agreement.
U.S. Trust shall be responsible for its own negligent failure or that of any
subcustodian it shall appoint to perform its duties under this Agreement but to
the extent that duties, obligations and responsibilities are not expressly set
forth in this Agreement, U.S. Trust shall not be liable for any act or omission
which does not constitute willful misfeasance, bad faith, or gross negligence on
the part of U.S. Trust or reckless disregard of such duties, obligations and
responsibilities. Without limiting the generality of the foregoing or of any
other provision of this Agreement, U.S. Trust in connection with its duties
under this Agreement shall not be under any duty or obligation to inquire into
and shall not be liable for or in respect of (a) the validity or invalidity or
authority or lack thereof of any advice, direction, notice or other instrument
which conforms to the applicable requirements of this Agreement, if any, and
which U.S. Trust believes to be genuine, (b) the validity of the issue of any
securities purchased or sold by the Fund, the legality of the purchase or sale
thereof or the propriety of the amount paid or received therefor, (c) the
legality of the issue or sale of any Shares, or the sufficiency of the amount to
be received therefor, (d) the legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor, (e) the legality of the declaration
or payment of any dividend or distribution on Shares, or (f) delays or errors or
loss of data occurring by reason of circumstances beyond U.S. Trust's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in Paragraph 18),
flood or catastrophe, acts of God, insurrection, war, riots, or failure of the
mail, transportation systems, communication systems or power supply.
24. Collection. All collections of monies or other property in
respect, or which are to become part, of the Property (but not the safekeeping
thereof upon receipt by U.S. Trust) shall be at the sole risk of the Fund. In
any case in which U.S. Trust does not receive any payment due the Fund within a
reasonable time after U.S. Trust has made proper demands for the same, it shall
so notify the Fund in writing, including copies of all demand letters, any
written responses thereto, and memoranda of all oral responses thereto, and to
telephonic demands, and await instructions from the Fund. U.S. Trust shall not
be obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. U.S. Trust shall also notify the Fund as soon
as reasonably practicable whenever income due on securities is not collected in
due course.
25. Duration and Termination. This Agreement shall be effective as
of the date hereof and shall continue until termination by the Fund or by U.S.
Trust on 90 day's written notice. Upon any termination of this Agreement,
pending appointment of a successor to U.S. Trust or a vote of the Shareholders
of the Fund to dissolve or to function without a custodian of its cash,
securities or other property, U.S. Trust shall not deliver cash, securities or
other property of the Fund to the Fund, but may deliver them to a bank or trust
company of its own selection, having aggregate capital, surplus and undivided
profits, as shown by its last published report of not less than twenty million
dollars ($20,000,000) as a successor custodian for the Fund to be held under
terms similar to those of this Agreement, provided, however, that U.S. Trust
shall not be required to make any such delivery or payment until full payment
shall have been made by the Fund of all liabilities constituting a charge on or
against the properties then held by U.S. Trust or on or against U.S. Trust and
until full payment shall have been made to U.S. Trust of all of its fees,
compensation, costs and expenses, subject to the provisions of Paragraph 21 of
this Agreement.
26. Notices. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirming telegram, cable, telex, or facsimile sending device.
Notices shall be addressed (a) if to U.S. Trust, at U.S. Trust's address, 114 W.
47th Street, New York, New York, 10036; (b) if to the. Fund, at the address of
the Fund; or (c) if to neither of the foregoing, at such other address as shall
have been notified to the sender of any such Notice or other communication. If
the location of the sender of a Notice and the address of the addressee thereof
are, at the time of sending, more than 100 miles apart, the Notice may be sent
by first-class mail, in which case it shall be deemed to have been given three
days after it is sent, or if sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately,
and, if the location of the sender of a Notice and the address of the addressee
thereof are, at the time of sending, not more than 100 miles apart, the Notice
may be sent by first-class mail, in which case it shall be deemed to have been
given two days after it is sent, of if sent by messenger, it shall be deemed to
have been given on the day it is delivered, or if sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been given
immediately. All postage, cable, telegram, telex and facsimile sending device
charges arising from the sending of a Notice hereunder shall be paid by the
sender.
27. Insurance. U.S. Trust shall at all times carry insurance with
insurers acceptable to the Fund and in amounts sufficient to cover losses,
errors, omissions, or fraud for which U.S. Trust in this custody agreement has
agreed to indemnify the Fund. From time to time the types and amounts of these
policies will be reviewed with the Fund by U.S. Trust.
28. Further Actions. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
29. Amendments. This Agreement or any part hereof may be changed
or waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
30. Miscellaneous. This Agreement embodies the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the parties hereto. The captions in
this Agreement are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement shall be deemed to be a contract made in
New York and governed by New York law. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers designated below as of the day and year first above written.
ULTRA SERIES FUND
Attest: Judith Hunter By: /s/ Michael S. Daubs
Name: Michael S. Daubs
Title: President
UNITED STATES TRUST COMPANY
OF NEW YORK
Attest: Thomas V. D'Bullan By: /s/ Anne J. Marino
Name: Anne J. Marino
Title: Vice President
<PAGE>
ATTACHMENT A
Fees
For the services described in the Agreement, the Fund shall pay a custody
safekeeping fee and custody transaction fees as follows:
Domestic Custody Safekeeping Fees
.03% (3 basis points) on the first $50 million in assets per Fund, plus
.02% (2 basis points) on the second $50 million in assets per fund,
plus
.01% (1 basis point) on assets in excess of $100 million in eachFund.
There is no minimum fee for a Fund.
Domestic Custody Transaction Fees
$15.00 per DTC, PTC or Fed Book Entry transaction
$25.00 per physical transaction
$35.00 per future or option wire $8.00 per outgoing wire transfer
All out-of-pocket expenses related to the provision of services under the terms
of this Agreement will be billed to the Fund monthly.
<PAGE>
ATTACHMENT B
Portfolios of the Ultra Series Fund
Money Market Series
Common Stock Series
Bond Series
Balanced Series
Treasury 2000 Series
<PAGE>
CASH DATA ENTRY
FUNDS TRANSFER SYSTEM
SERVICE AGREEMENT
(AGREEMENT)
Pursuant to and in furtherance of a Custody Agreement (the "Custody Agreement")
between U.S. Trust Company of New York ("U.S. Trust") and the undersigned ("the
Customer"), the Customer has requested that U.S. Trust provide it with a system
through which the Customer may, pursuant to the procedures set forth herein in
Paragraph Second, by automated instructions to U.S. Trust have funds transferred
from the Customer's Accounts (the "Account(s)") at U.S. Trust to other Accounts
of the Customer or to accounts of third parties, either with U.S. Trust or with
other members of the Federal Reserve System. U.S. Trust makes available to its
customers, at their option, such a system which is called the Cash Data Entry
System ("CDE").
The Customer hereby requests that U.S. Trust provide it with the CDE Service.
U.S. Trust and Customer therefore agree:
FIRST: Transfer of Funds
U.S. Trust is authorized and agrees to:
A) Process and transmit requests for the transfer of funds from the
Customer's Account(s) with U.S. Trust to other Account(s) of the
Customer or to its own accounts or the accounts of third parties with
other members of the Federal Reserve Bank System (the "Transfer Request
(s)") issued by two separate representatives of customer expressly
authorized by Customer to utilize the CDE system (the "Authorized
Representatives"). Transfer requests shall be issued in accordance with
the Cash Data Entry System Service Procedures as set forth herein in
Paragraph Second;
B) Effect the appropriate debits to Customer's account(s) and credits to
1) other Account(s) of the Customer with U.S. Trust, or; 2) to the
appropriate Federal Reserve Member Bank, as specified in the applicable
CDE Transfer Requests.
SECOND: CDE Authorization Procedures
A) Transfers Between Customer's Accounts with U.S. Trust
U.S. Trust will assign to each Authorized Representative so designated by
Customer a system User Identification Number ("User ID.) enabling the Authorized
Representative to initiate Transfer Requests to move funds between the
Customer's Accounts maintained at U.S. Trust. A list of such Authorized
Representatives and their signatures in a format acceptable to U.S. Trust, shall
be provided to U.S. Trust by the Customer.
Each Transfer Request so initiated shall require the approval and
co-authorization, via the CDE system, of a second Authorized Representative of
the Customer before it may be processed by U.S.
Trust. All Authorized Representatives designated by Customer shall be empowered
to effect such approval and co-authorization, provided, however, that the
individual initiating a Transfer Request shall not be empowered to co-authorize
that particular Transfer Request. U.S. Trust shall incur no liability for
Customer's failure to input or co-sign any CDE authorization. The CDE function
allowing for transfer of funds between Accounts of the Customer with U.S. Trust
shall normally be available for the Customer's use between the hours of 8:30
a.m. to 7:00 p.m. New York City time on banking business days. U.S. Trust may
extend such hours in its sole discretion, but shall not be obligated to do so.
B) Transfers to Other Federal Reserve Bank Members
U.S. Trust will assign to the User ID of each Authorized Representative so
designated by the Customer the capability to initiate Federal Wire Transfer
Authorizations (requests for funds transfer to other members of the Federal
Reserve Bank System).
For approval, co-authorization and release of requests so initiated, Customer
shall designate dollar limits to be assigned by U.S. Trust to each Authorized
Representative's User ID in accordance with the following parameters:
1) Less than 100,000.00 $ U.S.;
2) Up to 5,000,000.00 $ U.S.;
3) Up to 50,000,000.00 $ U.S.;
4) Over 50,000,000.00 $ U.S..
A list of Authorized Representatives and their signatures who shall be empowered
to initiate and co-authorize Transfer Requests to other members of the Federal
Reserve Bank System, together with co-authorization dollar limits to be assigned
to those Authorized Representatives, shall be provided to U.S. Trust by the
Customer. The list shall be in a format acceptable to U.S. Trust. The CDE
function allowing for transfer of funds to other members of the Federal Reserve
Bank System shall normally be available for the Customer's use between the hours
of 9:00 a.m. to 5:00 p.m. New York City time on banking business days. U.S.
Trust may extend such hours in its sole discretion, but shall not be so
obligated.
C) New York Uniform Commercial Code (Article 4A)
The New York Uniform Commercial Code ("Article 4A"-Funds Transfers) effective
January 1, 1991, provides a comprehensive body of law defining rights and
obligations arising from funds transfer. Article 4A requires that U.S. Trust and
the Customer agree to commercially reasonable security procedures for verifying
the authenticity of payment orders to transfer funds. All Transfer Requests
issued by Customer are subject to verification by U.S. Trust pursuant to
security procedures as mutually agreed and described in this Agreement and in
Exhibit A hereto.
THIRD: Authorized Representatives
Customer shall provide to U.S. Trust a certified copy of resolutions duly
adopted by it, its Board of Directors or other duly constituted authority
authorizing the execution of this agreement. U.S. Trust shall be absolutely
entitled to rely on any Transfer Request, order, instruction or other
communication which it believes to have been signed or transmitted by any two
Authorized Representatives of Customer. Any such request shall be deemed for the
purposes of this agreement to have been duly authorized by Customer. Unless and
until the Customer has delivered to U.S. Trust written notification revoking the
authority of any Authorized Representative to give CDE instructions, and U.S.
Trust has had a reasonable time to comply (which shall be at least one banking
business day) with the written revocation of authority, U.S. Trust is authorized
and shall incur no liability in continuing to accept and rely upon instructions
of such Authorized Representatives. Upon receipt of written instruction of the
Customer in a format acceptable to U.S. Trust, User ID's for additional
authorized representatives shall be issued to the Customer by U.S. Trust.
FOURTH: Transfer Limits
The Customer understands that U.S. Trust will not be obligated to release for
transfer. to any other member of the Federal Reserve Bank System amounts in
excess of collected funds in the account to be debited (the "Collected
Balance"). However, in its sole and absolute discretion, U.S. Trust is entitled
to and may regularly allow the Customer to remit funds in excess of any
Collected Balance in anticipation of receiving counter value in the day-to-day
management of Customer's Account(s) or from other sources. U.S. Trust may
process such requests in anticipation of receiving for the Customer's Account(s)
proceeds from maturing securities, proceeds from sale of securities, or for any
other reason. U.S. Trust may notify the Customer that it has elected to process
Transfer Requests in excess of the Customer's Collected Balance, but shall not
under any circumstances be obligated to do so. The Customer agrees that U.S.
Trust shall be fully protected in acting upon any Transfer Request authorized by
the Customer, including Transfer Requests which exceed its Collected Balance.
Such remittances in excess of the Collected Balance in the Customer's Account(s)
are not intended to constitute a loan by U.S. Trust to the Customers. Customer
shall remain solely responsible for management of its cash flows.
In the event Customer fails to receive an expected payment, mismanages its cash,
or for any other reason not due to U.S. Trust's negligence becomes short of
funds, thus causing any of Customer's Accounts to close in an overdraft
position, such overdraft shall be deemed a loan by U.S. Trust and shall bear
interest on the amount of the loan plus U.S. Trust's required reserves at the
daily average Federal Funds rate as reported by the Federal Reserve Bank of New
York. Customer hereby grants U.S. Trust a security interest and continuing lien
on any and all securities and other property held by U S. Trust on Customer's
behalf (hereinafter called the "Property"), to secure such loans. In the event
Customer fails to repay in good and collected funds on demand by U.S. Trust any
such Loan, it is agreed that U.S. Trust is authorized to sell Property
sufficient to pay in full principal and interest on such loan.
FIFTH: Revocation
Customer shall have absolutely no right to reverse, adjust, revoke, amend or in
any way change a Transfer Request after it is transmitted and fully authorized
by the Customer via CDE.
SIXTH: Notice of Discrepancies
U.S. Trust will retain all instruction for sending wire transfers via the Cash
Data Entry system for a minimum period of eighteen months. Customer agrees to
report any discrepancies between its records of such transactions and the
records of U.S. Trust promptly in writing. Failure to notify the U.S. Trust of
any discrepancies promptly will relieve U.S. Trust of any liability whatsoever.
SEVENTH: Indemnification
Customer agrees that U.S. Trust shall be conclusively deemed to have discharged
its duties under this Agreement and to have acted in good faith and to have
exercised ordinary care in connection herewith if U.S. Trust has followed the
procedures set forth in this Agreement.
U.S. Trust shall not be liable for any act or failure to act on the part of any
other person, or for loss or damage resulting from the failure to transmit any
Transfer Request or from any error or delay in the transmission of any Transfer
Request caused by 1) the unavailability, interruption of or malfunction of
communication facilities; 2) war or emergency conditions; or 3) other
circumstances beyond the control of U.S. Trust.
The Customer agrees that test arrangements, authentication methods or other
security devices to be used with respect to instructions which the Customer may
give via the CDE Funds Transfer System shall be utilized in accordance with
terms and conditions for the use of such arrangements, methods or devices as
U.S. Trust may put into effect and modify from time to time. The Customer shall
safeguard any test keys, identification codes, User ID's, or other security
devices which U.S. Trust makes available to the Customer and agrees that the
Customer shall be responsible for any loss, liability or damage incurred by U.S.
Trust or by the Customer as a result of U.S. Trust's acting in accordance with
instructions from any unauthorized person using the proper security device,
provided that such person did not obtain such security device solely as a result
of U.S. Trust's negligence or willful misconduct.
In the event that CDE is inoperable, the Customer agrees to notify U.S. Trust
immediately, and U.S. Trust agrees that it will accept the communication of
Transfer Requests by telephone, facsimile transmission or by letter, at no
additional charge to the Customer.
Customer will indemnify and hold harmless U.S. Trust against any and all claims,
demands, losses, liabilities, or damages including reasonable attorney's fees
and other expenses, howsoever resulting from or in connection with this
Agreement or the performance of its duties hereunder. However, nothing contained
herein shall require that U.S. Trust be indemnified for negligence or willful
misconduct. The Customer further agrees that no legal action shall be instituted
against U.S. Trust after one year of the event which provides a basis for such
claim. The services provided by U.S. Trust under this Agreement shall not
include any recommendation or any guaranty, representation or warranty
whatsoever.
EIGHTH: Change in Transfer Procedures
Customer agrees that U.S. Trust may change the CDE transfer procedures set forth
in this Agreement upon written notice to Customer.
NINTH: Customer Information
Customer agrees to supply to U.S. Trust, in addition to its list of Authorized
Representatives and their authorized dollar limits, any other information that
U.S. Trust may request regarding Transfer Requests.
TENTH: Notice
Any notice required or permitted to be given to U.S. Trust or the customer under
this Agreement, except as otherwise specifically provided herein, shall be in
writing, and shall be delivered return receipt requested to the addresses noted
on the signature page of this agreement. Any change in the address to which or
the person to whom notice is to be directed will be effective only after the
receiving party actually receives such notification of such change.
ELEVENTH: Termination
Either party may terminate this Agreement upon ten (10) days' prior written
notice to the other party.
TWELFTH: Entire Agreement
The Customer represents that this Agreement has been duly authorized, executed
and delivered on behalf of the Customer and constitutes the legal, valid and
binding obligation of the Customer. U.S. Trust represents that this Agreement
has been duly authorized and executed and constitutes the legal, valid and
binding obligation of U.S. Trust. This Agreement constitutes the entire
agreement of the parties with respect to the matters referred to herein and
supersedes all prior agreements or understandings.
This Agreement shall be construed and interpreted according to the laws of the
State of New York. This Agreement may be amended only by an instrument in
writing duly executed by both parties hereto.
Dated: June 24, 1993
UNITED STATE TRUST COMPANY
OF NEW YORK
Ultra Series Fund /s/ Lauren M. Dustin
By /s/ Michael S. Daubs By: Lauren M. Dustin
Michael S. Daubs
Title President Title Vice President
Address 2000 Heritage Way Address 770 Broadway
Waverly, IA 50677 13th Floor
New York, NY 10003
<PAGE>
EXHIBIT A
Attached to Cash Data Entry
Funds Transfer System Service Agreement
The security procedures at U.S. Trust provide the following controls:
System Security Controls
Access controls are established at the operating system level and are extended
throughout the application systems. The controls consist of the use of
authorized user codes, passwords and specific access restrictions.
Application Program Controls
All application systems perform edit and verification checks on account and bank
codes. In addition, checks are performed at the account level to verify that
sufficient funds or controls exist to perform the transaction.
Administrative Controls
Administration and internal controls to prevent unauthorized access to systems
and applications software are in place. These provide for the segregation of
duties and functions as applied to system and application software and hardware
maintenance.
Physical Controls
Data Center administrative and operational procedures are established to assure
protection of physical assets and continued operations.
Contingency Procedures
Contingency Procedures are maintained and tested to ensure a timely restoration
of business functions following a disaster. Manual and telephone controls will
be initiated in severe situations .
Transmission and Authentication Techniques
The transmission of the direct input of funds transfer transactions by customers
is protected by the implementation of data encryption methodologies. The methods
chosen are based on the equipment type and application. In all cases, the
transmission encryption method ensures that the data records received by U.S.
Trust Company are those that were transmitted by the customer. For interactive
dial up communications, the customer is required to perform an additional level
of user authentication prior to entry into the host computer.
Dated: 1/18/91
<PAGE>
EXHIBIT 10
Blazzard, Grodd & Hasenauer, P.C.
943 POST ROAD EAST - WESTPORT, CONNECTICUT 06880 - (203) 226-7866
ATTORNEYS AT LAW
NORSE N. BLAZZARD
LESLIE E. GRODD
JUDITH A. HASENAUER
WILLIAM E. HASENAUER
RAYMOND A. O'HARA III
MICHAEL P. FOLEY, JR.
April 25, 1985
Board of Trustees
Ultra Series Fund
Heritage Way
Waverly, Iowa 50677 CN-755
Re: Opinion of Counsel - Ultra Series Trust
Gentlemen:
You have requested our Opinion of Counsel in connection with the filing
with the Securities and Exchange Commission of Pre-Effective Amendment No. 1 to
Registration Statement on Form N-1A with respect to Ultra Series Fund.
We have made such examination of the law and have examined such records
and documents as in our judgment are necessary or appropriate to enable us to
render the opinions expressed below.
We are of the following opinions:
1. Ultra Series Fund ("Fund") is a valid and existing
unincorporated voluntary association, commonly known as a
business trust.
2. The Fund is a business trust created and validly existing
pursuant to the Massachusetts Laws.
3. All of the prescribed Fund procedures for the issuance of the
shares have been followed, and, when such shares are issued in
accordance with the Prospectus contained in the Registration
Statement for such shares, all state requirements relating to
such Fund shares will have been complied with.
4. Upon the acceptance of purchase payments made by purchasers in
accordance with the Prospectus contained in the Registration
Statement and upon compliance with applicable law, such
purchasers will have legally-issued, fully paid,
non-assessable shares of the Fund.
You may use this opinion letter, or a copy thereof, as an exhibit to
your Notice pursuant to Rule 24f-2.
We consent to the reference to our Firm under the caption "Description
of the Fund - Legal Counsel" contained in the Prospectus which forms a part of
the Registration Statement.
Sincerely,
BLAZZARD, GRODD & HASENAUER, P.C.
By: /s/ Judith A. Hasenauer
Judith A. Hasenauer
<PAGE>
EXHIBIT 13
TERMINATION AGREEMENT
THIS AGREEMENT is made and entered into as of the 31st day of December, 1993
(the "Effective Date"), by and between Century Variable Account ("CVA") and
Ultra Series Fund ("USF").
The parties acknowledge that this Agreement is based on the following:
A. USF and CVA (previously known as LML Ultra Variable Account) entered
into an Agreement Governing Contribution dated September 30, 1983, pursuant to
which CVA agreed to make certain contributions to USF (the "Agreement").
B. The Agreement is no longer required under applicable laws and the
parties desire to terminate the Agreement.
NOW, THEREFORE, for good and valuable consideration, including the
mutual covenants contained in this Termination Agreement, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
1. The Agreement is terminated effective as of the Effective Date and
all rights and obligations of the parties under the Agreement terminated as of
that date.
2. Any amounts that CVA contributed to USF pursuant to the Agreement
and which are held by USF after the Effective Date shall be treated as an
investment by CVA in USF with the same rights and restrictions that apply to
other seed money investments by insurance company sponsors of registered
investment companies.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first written above.
Ultra Series Fund
By: /s/ Michael S. Daubs
Michael S. Daubs
President
Century Variable Account
By: Century Life of America
By: /s/ Kevin T. Lentz
Kevin T. Lentz
Chief Operating Officer
<PAGE>
AGREEMENT GOVERNING CONTRIBUTION
TO
ULTRA SERIES FUND
BY
LML ULTRA VARIABLE ACCOUNT
THIS AGREEMENT is made by and between ULTRA SERIES FUND ("Trust"), a
Massachusetts business trust, and LML ULTRA VARIABLE ACCOUNT (the "Variable
Account"), a separate account of Lutheran Mutual Life Insurance Company duly
organized under the laws of the State of Iowa.
WHEREAS, Lutheran Mutual Life Insurance Company has established the Variable
Account and proposes to contribute to it the sum of $100,000; and
WHEREAS, the Variable Account proposes to contribute $100,000 ("Contribution ")
to the Trust in the manner hereinafter described; and
WHEREAS, it is necessary and desirable that the terms under which said
Contribution is made and the respective rights of the Variable Account and the
Trust with respect thereto be determined; and
NOW, THEREFORE, it is hereby agreed between the Variable Account and the Trust
as follows:
I.
This Variable Account hereby commits itself to contribute to the Trust the sum
of $100,000 prior to the effective date of the Registration Statement to be
filed by the Trust. The Variable Account hereby represents and agrees that it is
making such Contribution for investment purposes and not with a view to
redeeming or disposing of any interest in the Trust resulting from such
Contribution.
II.
In consideration for such Contribution and without deduction of any sales
charges, the Trust shall credit the Variable Account with accumulation units of
which the Variable Account shall be the owner. Such accumulation units shall
share pro rata in the investment performance of the Trust and shall be subject
to the same valuation procedures and the same periodic charges as are other
accumulation units and annuity units in the Trust. The Variable Account shall
have and may exercise voting rights on the same basis as owners of variable
annuity contracts issued or to be issued with respect to the Trust.
III.
The Variable Account hereby acknowledges that by making such Contribution it is
not and shall not be regarded as a creditor of the Trust and that the
relationship of debtor-creditor between the Trust and the Variable Account does
not exist with respect to the amount so contributed. The Variable Account agrees
that by making such Contribution it is not now and shall not in the future be,
or be deemed to be, the holder of any interest other than as provided in
paragraph 2 of this Agreement. The Variable Account agrees that its interest in
the trust as a result of such Contribution shall be neither senior to or
subordinate to the interests of owners of variable annuity contracts issued with
respect to the Trust and that, in the event of liquidation of the Trust or the
Variable Account, however occurring, the Variable Account shall have no
preferential rights of any kind over such contract owner's but shall share
ratably with them.
IV.
All commitments of the Variable Account hereunder shall be forever binding upon
its successor or successors.
V.
The Trust hereby accepts such Contribution subject to the terms of the
Agreement.
Executed this 30th day of September, 1983.
LML ULTRA VARIABLE ACCOUNT
By: LUTHERAN MUTUAL LIFE INSURANCE COMPANY
By: /s/ Donald Heltner
Title: Vice President
ATTEST: /s/ Arthur J. Hessburg
ULTRA SERIES FUND
By: /s/ Michael S. Daubs
ATTEST: /s/ Arthur J. Hessburg
<PAGE>
TERMINATION AGREEMENT
THIS AGREEMENT is made and entered into as of the 31st day of December, 1993
(the "Effective Date"), by and between Century Variable Account ("CVA") and
Ultra Series Fund ("USF").
The parties acknowledge that this Agreement is based on the following:
A. The parties entered into an Agreement Governing Contribution dated
May 31, 1988, pursuant to which CVA agreed to make certain contributions to USF
(the "Agreement").
B. The Agreement is no longer required under applicable laws and the
parties desire to terminate the Agreement.
NOW, THEREFORE, for good and valuable consideration, including the
mutual covenants contained in this Termination Agreement, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
1. The Agreement is terminated effective as of the Effective Date and
all rights and obligations of the parties under the Agreement terminated as of
that date.
2. Any amounts that CVA contributed to USF pursuant to the Agreement
and which are held by USF after the Effective Date shall be treated as an
investment by CVA in USF with the same rights and restrictions that apply to
other seed money investments by insurance company sponsors of registered
investment companies.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first written above.
Ultra Series Fund
By: /s/ Michael S. Daubs
Michael S. Daubs
President
Century Variable Account
By: Century Life of America
By: /s/ Kevin T. Lentz
Kevin T. Lentz
Chief Operating Officer
<PAGE>
AGREEMENT GOVERNING CONTRIBUTION
TO
ULTRA SERIES FUND
BY
CENTURY VARIABLE ACCOUNT
THIS AGREEMENT is made by and between ULTRA SERIES FUND ("Fund"), a
Massachusetts business trust, and CENTURY VARIABLE ACCOUNT (the "Variable
Account"), a separate account of Century Life of America duly organized under
the laws of the State of Iowa.
WHEREAS, Century Life of America has established the Variable Account and
proposes to contribute an additional sum of $100,000 to such Variable Account;
and
WHEREAS, the Variable Account proposes to contribute an additional $100,000
("Contribution ") to the Fund in the manner hereinafter described; and
WHEREAS, it is necessary and desirable that the terms under which said
Contribution is made and the respective rights of the Variable Account and the
Fund with respect thereto be determined; and
NOW, THEREFORE, it is hereby agreed between the Variable Account and the Fund as
follows:
I.
This Variable Account hereby commits itself to contribute to the Fund the
additional sum of $100,000 and such other amounts from time to time as the
Variable Account deems appropriate for the proper operation of the Fund. The
Variable Account hereby represents and agrees that it is making such
Contribution for investment purposes and not with a view to redeeming or
disposing of any interest in the Fund resulting from such Contribution.
II.
In consideration for such Contribution and without deduction of any sales
charges, the Fund shall credit the Variable Account with accumulation units of
which the Variable Account shall be the owner. Such accumulation units shall
share pro rata in the investment performance of the Fund and shall be subject to
the same valuation procedures and the same periodic charges as are other
accumulation units and annuity units in the Fund. The Variable Account shall
have and may exercise voting rights on the same basis as owners of variable
annuity contracts issued or to be issued with respect to the Fund.
III.
The Variable Account hereby acknowledges that by making such Contribution it is
not and shall not be regarded as a creditor of the Fund and that the
relationship of debtor-creditor between the Fund and the Variable Account does
not exist with respect to the amount so contributed. The Variable Account agrees
that by making such Contribution it is not now and shall not in the future be,
or be deemed to be, the holder of any interest other than as provided in
paragraph 2 of this Agreement. The Variable Account agrees that its interest in
the Fund as a result of such Contribution shall be neither senior to or
subordinate to the interests of owners of variable annuity contracts issued with
respect to the Fund and that, in the event of liquidation of the Fund or the
Variable Account, however occurring, the Variable Account shall have no
preferential rights of any kind over such contract owner's but shall share
ratably with them.
IV.
All commitments of the Variable Account hereunder shall be forever binding upon
its successor or successors.
V.
The Fund hereby accepts such Contribution subject to the terms of the Agreement.
Executed this 31st day of May, 1988.
CENTURY VARIABLE ACCOUNT
By: CENTURY LIFE OF AMERICA
By: /s/ I. R. Burling
Title: I.R. Burling, President
and Chief Executive Officer
ATTEST: /s/ Arthur J. Hessburg
Secretary
ULTRA SERIES FUND
By: /s/ Michael S. Daubs
Title: Michael S. Daubs, President
ATTEST: /s/ Richard A. Hegwood
Secretary - Treasurer
<PAGE>
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT is made and entered into as of the 16th day of
January, 1997, by and between CUNA Mutual Life Insurance Company (formerly known
as Century Life of America) and the Ultra Series Fund.
RECITALS
The parties acknowledge that this Agreement is based on the following:
A. The parties entered into an Expense Reimbursement Agreement dated
December 31, 1986, (the "Expense Reimbursement Agreement") to formalize the
understanding between CUNA Mutual Life Insurance Company and the Ultra Series
Fund with respect to the manner in which expenses incurred on behalf of the
Ultra Series Fund were to be handled.
B. CUNA Mutual Life Insurance Company has determined to discontinue the
Expense Reimbursement Agreement.
NOW, THEREFORE, for good and valuable consideration, including the
mutual covenants contained in this Termination Agreement, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
The Expense Reimbursement Agreement is hereby terminated effective as
of April 30, 1997 and all rights and obligations of the parties under the
Agreement are terminated as of that date.
IN WITNESS WHEREOF, the parties have executed this Termination
Agreement on the day first above written.
CUNA Mutual Life Insurance Company
By: /s/ Michael B. Kitchen
Michael B. Kitchen, President and
Chief Executive Officer MD
By: /s/ Kevin T. Lentz
Kevin T. Lentz
Chief Operating Officer
Ultra Series Fund
By: /s/ Michael S. Daubs
Michael S. Daubs
President
<PAGE>
EXPENSE REIMBURSEMENT AGREEMENT BETWEEN
CENTURY LIFE OF AMERICA
AND
ULTRA SERIES FUND
AGREEMENT BY AND BETWEEN CENTURY LIFE OF AMERICA (the "Company"), an Iowa
corporation, organized and doing business as a mutual life insurance company and
ULTRA SERIES FUND (the "Fund"), a Massachusetts business trust, registered and
doing business under the Investment Company Act of 1940.
WHEREAS, the Company is authorized in a number of states to issue variable life
insurance contracts funded either principally or in part by separate accounts
which hold the underlying investments for such contracts separate and apart from
the Company's general account assets, and
WHEREAS, the Fund was organized by the Company for the purpose of providing
suitable investments for its separate accounts which fund its group and
individual life and annuity contracts, and
WHEREAS, within the context of the continuing business relationship between
them, both the Company and the Fund deem it to be in their best interest and in
the best interests of their respective constituencies to control, in the manner
hereinafter provided, the amount of expense incurred on behalf of and chargeable
to the Fund.
NOW THEREFORE, IN CONSIDERATION OF their mutual promises, and for other good and
valuable consideration, the parties agree as follows:
1. Purpose. The purpose of this Agreement is to formalize the
understanding between the Company and the Fund with respect to
the manner in which expenses incurred on behalf of the Fund
are to be handled generally, to establish a specific
limitation with respect to the amount of expense chargeable to
the Fund, and to formalize the Company's commitment to absorb
all business expenses incurred by the Fund and coming within
the scope of agreement which exceed maximum amounts determined
by application of the "Allowable Expense Factor" as provided
herein.
2. Expenses Incurred by the Fund. The expenses of the Fund to
come within the scope of this Agreement shall include all or
substantially all business expenses incurred by the Money
Market Series, Common Stock Series, Bond Series, and Balanced
Series of the Fund in the course of business, except that
unless the parties expressly agree to the contrary in writing,
interest, taxes, or brokerage commissions payable by the Fund,
or expenses as a result of litigation by or against the Fund,
or indemnification payable by the Fund to its officers,
directors or investment advisor in accordance with its
Declaration of Trust, Bylaws, and any applicable state and
federal law as a result of litigation or claims against them,
shall be deemed to be incurred directly by the Fund outside of
the scope of this Agreement.
All expensed of the Fund, except those paid directly by the
Fund's custodian in connection with the acquisition or
disposition of securities are advanced by the Company subject
to either daily or periodic reimbursement by the Fund in
accordance with processes and procedures agreed to by the
parties from time to time, as well as limitations such as "the
allowable expense factor" as described herein. Costs included
in the daily calculations of net asset value for the Fund are
cleared on behalf of the Fund as of each valuation date to the
extent that they represent adjustments to any amounts payable
to the Company by way of expense reimbursement from time to
time.
Some expenses are directly attributable to and chargeable to a
particular Series of the Fund. These include, but are not
necessarily limited to, brokerage commissions, dealer markups,
and other expenses incurred in the acquisition or disposition
of securities, pricing costs, interest, and certain taxes.
Most other expenses will be allocated among accounts for each
of the various Series on the basis of the respective size of
the Series as determined on each valuation date. These
include, but are not necessarily limited to, legal and
accounting fees, the investment advisor's fees, expenses of
shareholders' and directors' meetings, independent directors'
fees, administrative expenses, insurance charges, cost of
mailing and printing of shareholder reports and proxy
statements, the cost of printing and mailing registration
statements and updated prospectuses to current shareholders.
3. The Allowable Expense Factor. The parties hereby agree that
notwithstanding the actual amount of business expense incurred
by the Money Market Series, Common Stock Series, Bond Series,
and Balance Series, the Fund shall not be charge nor shall it
be obligated to pay directly or reimburse the Company for any
amount for business expenses incurred by it and coming within
the scope of this Agreement which exceed, in the aggregate, an
amount equal to .65% of the average daily value of net assets
as monitored and adjusted on a month-to-month basis, or on a
more or less frequent basis as may be agreed to by the
parties. This limitation expressed herein as a .65% asset
charge shall be known as the Allowable Expense Factor and
shall not be modified unless agreed to in a written
endorsement or amendment to this Agreement executed on behalf
of both the Company and the Fund.
4. Obligation to Absorb Incurred Expense in Excess of the
Allowable Expense Factor. Independently of any contractual
commitment which may be in effect on the part of the Fund's
investment advisor to reduce its compensation from the Fund to
the extent that the Fund's ordinary business expenses exceed a
certain predetermined maximum level, if any, as may be
provided in the Fund's Agreement with its Investment Advisor,
the Company hereby covenants that it shall, and it hereby
does, accept and assume the legal obligation to pay, on behalf
of the Fund as though incurred on its own behalf, all such
business expenses incurred by the fund which exceed the amount
calculated from time to time by applying the Allowable Expense
Factor as prescribed herein.
5. Terms. Unless sooner terminated by agreement of the parties,
this Agreement shall continue for one (1) year from the
effective date of the Agreement, and automatically thereafter
for periods of one (1) year so long as such continuity is
specifically approved or ratified at least annually by the
Board of Trustees for the Fund and at least two executive
officers for the Company.
6. Retroactive Effect. The Effective Date of this Agreement shall
be December 31, 1986. Notwithstanding the Effective Date as
herein provided, the parties acknowledge that the Company has
been absorbing, without a written agreement and without claim
for reimbursement, all business expenses of the Fund which
have exceeded an amount equal to .65% of the average daily net
asset value of the Fund since the Fund commenced to operate in
1985.
IN WITNESS WHEREOF, the respective parties have caused this Agreement
to be executed on their behalf by the undersigned on this 31st day of
May, 1988, to become effective retroactively as aforesaid.
CENTURY LIFE OF AMERICA
By: /s/ Daniel E. Meylink
Daniel E. Meylink, Sr.
Senior Vice President - Finance
& Information Services
ATTEST: /s/ Arthur J. Hessburg
Arthur J. Hessburg
Secretary
ULTRA SERIES FUND
By: /s/ Michael S. Daubs
Michael S. Daubs, President
ATTEST: /s/ Arthur J. Hessburg
Arthur J. Hessburg
Secretary
AMENDMENT TO EXPENSE REIMBURSEMENT AGREEMENT BETWEEN
CENTURY LIFE OF AMERICA AND
ULTRA SERIES FUND
This Amendment is made, effective the first day of May 1994, by and between
Century Life of America (the "Company"), and Iowa corporation, organized and
doing business as a mutual life insurance company, and the Ultra Series Fund
(the "Fund"), a Massachusetts business trust, registered and doing business
under the Investment Company Act of 1940.
The parties acknowledge that:
(a) The parties entered into an Expense Reimbursement Agreement
("Agreement") dated May 31, 1988.
(b) At the time of the Agreement, the Company offered a variable
life insurance contract. The Company now intends to offer a
variable annuity contract also.
(c) At the time of the Agreement, the Fund included the following
series: Money Market Series, Common Stock Series, Bond Series
and Balanced Series. Since that time, the name of the Common
Stock Series has been changed to the Growth & Income Stock
Series and a Capital Appreciation Stock Series has been added
to the Fund.
NOW, THEREFORE, the parties agree as follows:
1. The parties agree that the Expense Reimbursement Agreement shall cover
dollars flowing into the Fund from the separate accounts established
for the variable universal life policy, the variable annuity contract,
the annuity offered exclusively to qualified plans, and to any other
separate account established by the Company which is eligible to, and
does, invest in the Fund.
2. The Agreement covers all series of the Funds, those now existing and
those which may be added later, except the Treasury 2000 Series.
This Amendment shall become a part of the 1988 Expense Reimbursement Agreement.
Except as specifically amended herein, all provisions of that Agreement remain
in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment on the date first
above written.
CENTURY LIFE OF AMERICA
By: /s/ Kevin T. Lentz
Kevin T. Lentz, Chief Operation Officer
ULTRA SERIES FUND
By: /s/ Michael S. Daubs
Michael S. Daubs, President
<PAGE>
EXHIBIT 15
ULTRA SERIES FUND
Distribution Plan
May 1, 1997
A. Ultra Series Fund (the "Fund") is a diversified, open-end management
investment company registered with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended (the "1940 Act").
B. The Fund intends to distribute its Class C shares of beneficial interest (the
"Shares") in accordance with Rule 12b-1 under the 1940 Act and desires to adopt
this distribution plan (the "Plan"). The Plan will pertain to Shares of each of
the following series of the Fund: Capital Appreciation Stock; Growth and Income
Stock; Balanced; Bond; Money Market; and Treasury 2000. The Plan shall also
apply to the Shares of any other series of the Fund as shall be designated from
time to time by the board of trustees of the Fund (the "Board") in any
supplement to the Plan.
C. The Fund recognizes and agrees that (a) the principal underwriter may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, "dealers") of the Shares in connection with the offering of
Shares, (b) the principal underwriter may compensate any dealer that sells
Shares in the manner and at the rate or rates to be set forth in an agreement
between the principal underwriter and such dealer, and (c) the principal
underwriter may make such payments to the dealers or insurance companies for
distribution services out of the fee paid to the principal underwriter
hereunder, its profits or any other source available to it.
D. The Board, in considering whether the Fund should adopt and implement this
Plan, has evaluated such information as it deemed necessary to an informed
determination of whether this Plan should be adopted and implemented and has
considered such pertinent factors as it deemed necessary to form the basis for a
decision to use assets attributable to the Shares for such purposes, and has
determined that there is a reasonable likelihood that the adoption and
implementation of this Plan will benefit the holders of the Shares (including,
for this purpose, the individual variable contract owners) and the Fund.
NOW, THEREFORE, the Fund has adopted the Plan in accordance with Rule 12b-1
under the 1940 Act on the following terms and conditions:
1. The Fund may pay the principal underwriter a distribution fee to
compensate the principal underwriter for any efforts undertaken or expenses
incurred (as described in paragraph 2) for activities relating to the
distribution of the Shares. The distribution fee will not exceed 0.25%, on an
annual basis, of the average value of the daily net assets of each series of the
Fund attributable to the Shares. The value of the net assets of the Shares in
each series of the Fund shall be determined in accordance with the Declaration
of Trust of the Fund, as the same may be amended from time to time. The fee
shall be calculated and accrued daily and paid quarterly.
2. The principal underwriter may spend the amount of the distribution
fee as it deems appropriate to finance any activity that is primarily intended
to result in the sale of Shares or the provision of services to holders of the
Shares, including, but not limited to, commissions or other payments to dealers,
payments to insurance companies who engage in or support activities primarily
intended to result in the sale of Shares, and salaries and other expenses
relating to selling or servicing efforts. Without limiting the generality of the
foregoing, the initial categories of such expenses, as they relate to the
offering of the Shares, shall include:
(a) salaries and expenses of sales force, home office management
and marketing personnel;
(b) expenses incurred by the principal underwriter for office
space, office equipment and supplies;
(c) expenses incurred by the principal underwriter for the
preparation, printing and distribution of sales literature
used in connection with the offering of the Shares;
(d) expenses incurred by the principal underwriter for
advertising, promoting and selling the Shares;
(e) the cost of printing or distributing the Fund's prospectus or
statement of additional information (or supplements thereto)
used in connection with the offering of the Shares;
(f) the cost of printing and distributing additional copies, for
use as sales literature for the Shares, of annual reports and
other communications prepared by the Fund for distribution to
existing shareholders;
(g) the cost of holding seminars and sales meetings designed to
promote the sale of the Shares;
(h) the cost of training sales personnel regarding sale of the
Shares;
(i) the cost of providing services to variable contract owners
relating to the Shares; and
(j) the cost of any other activity that the Board determines is
primarily intended to result in the sale of Shares.
3. The Fund understands that agreements between the principal
underwriter and selected broker-dealers or insurance companies may provide for
payment of fees to such broker-dealers or insurance companies in connection with
the sale of Shares and the provision of services to holders of Shares. This Plan
shall not be construed as requiring the Fund to make any payment to any party or
to have any obligations to any party in connection with services relating to the
Shares. The principal underwriter shall agree and undertake that any agreement
entered into between the principal underwriter and any other party relating to
sales of the Shares shall provide that such other party shall look solely to the
principal underwriter for compensation for its services thereunder and that in
no event shall such party seek any payment from the Fund.
4. Nothing contained in this Plan shall be deemed to require the Fund
to take any action contrary to its Declaration of Trust or Bylaws or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Board of the responsibility for
and control of the conduct of the affairs of the Fund.
5. This Plan shall become effective upon approval by (a) a vote of the
Board and a vote of a majority of the trustees who are not "interested persons"
of the Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan (the "qualified
disinterested trustees"), such votes to be cast in person at a meeting called
for the purpose of voting on this Plan, and (b) upon the effectiveness of an
amendment to the Fund's registration statement under the Securities Act of 1933
reflecting this Plan. The effective date of the Plan is the latter between May
1, 1997 and the date on which the last of (a) and (b) occurs.
6. This Plan will remain in effect beyond the first anniversary of its
effective date only if its continuance is specifically approved at least
annually by a vote of both a majority of the trustees of the Fund and a majority
of the qualified disinterested trustees. In connection with the annual review
and approval of this Plan, the principal underwriter shall furnish the Board
with such information as the Board may reasonably request in order to enable the
Board to make an informed determination of whether the Plan should be continued.
This Plan shall expire on the last day of the Fund's fiscal year (December 31)
in any year in which such approval is not obtained.
7. The Fund and the principal underwriter shall provide the Board, and
the Board shall review, at least quarterly, a written report of the amounts
expended under this Plan and the purposes for which such expenditures were made.
In the event that amounts of expenses are not specifically attributable to the
distribution of Shares of any particular series, the principal underwriter may
allocate such expenses to the Shares of each series deemed to be reasonably
likely to benefit therefrom based upon the ratio of the average daily net assets
of Shares in each series during the previous period to the aggregate average
daily net assets of Shares in all series for such period. Any such allocation
may be subject to such adjustments as the principal underwriter, with approval
from the Board, shall deem appropriate to render the allocation fair and
equitable under the circumstances.
8. This Plan may be amended at any time by the Board, provided that it
may not be amended to increase materially the amount that may be spent for
distribution of the Shares without the approval of holders of a majority of the
outstanding Shares (for this purpose, the holders of the Shares include the
individual variable contract owners) and may not be materially amended in any
case without a vote of a majority of both the trustees and the qualified
disinterested trustees. This Plan may be terminated at any time by a vote of a
majority of the qualified disinterested trustees or by a vote of the holders of
a majority of the outstanding Shares (including, for this purpose, the vote of
individual variable contract owners).
9. In the event of termination or expiration of the Plan, the Fund may
nevertheless, within three months of such termination or expiration pay any
distribution fee accrued prior to such termination or expiration, provided that
payments are specifically approved by the Board, including a majority of the
qualified disinterested trustees.
10. While this Plan is in effect, the selection and nomination of
qualified disinterested trustees shall be committed to the discretion of the
trustees who are not interested persons of the Fund. For the purposes of this
Plan, the term "interested persons" is used as defined in the 1940 Act.
11. Any agreement related to this Plan shall be in writing and shall
provide in substance that: (a) such agreement, with respect to any series of the
Fund, may be terminated at any time, without the payment of any penalty, by vote
of a majority of the qualified disinterested trustees or by vote of a majority
of the outstanding Shares of that series, on not more than 60 days written
notice to any other party to the agreement; and (b) such agreement shall
terminate automatically in the event of its assignment.
12. The Fund shall preserve copies of this Plan, and each agreement
related hereto and each report referred to in paragraph 7 hereof, for a period
of not less than six (6) years from the end of the fiscal year in which such
records or documents were made. For a period of two (2) years, each such record
or document shall be kept in an easily accessible place.
13. This Plan shall be construed in accordance with the laws of the
State of Iowa and the applicable provisions of the 1940 Act.
14. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
15. Neither this Plan nor any other transaction between the parties
hereto pursuant to this Plan shall be invalidated or in any way affected by the
fact that any or all of the trustees, officers, shareholders, or other
representatives of the Fund are or may be interested persons of the principal
underwriter, or any successor or assignee thereof, or that any or all of the
directors, officers, or other representatives of the principal underwriter are
or may be interested persons of the Fund, except as otherwise may be provided in
the 1940 Act.
IN WITNESS WHEREOF, Ultra Series Fund has adopted this Distribution
Plan as of the effective date indicated in paragraph 5 above.
ULTRA SERIES FUND
By: /s/ Michael S. Daubs
Title: President
<PAGE>
EXHIBIT 16
Schedule of Computation
USF--MONEY MARKET FUND
12/31/96 02/12/97
AB
USF SEVEN-DAY AVERAGE YIELD:
DAILY
DIVIDEND
FACTOR, PER
DATE DISPLAY RATE TABLE
Dec 31, 1996 0.000129029 0.000129029
Dec 30, 1996 0.000129452 0.000129452
Dec 29, 1996 0.000128625 0.000128625
Dec 28, 1996 0.000132974 0.000132974
Dec 27, 1996 0.000125723 0.000125723
Dec 26, 1996 0.000125723 0.000125723
Dec 25, 1996 0.000125723 0.000125723
-----------
SUM 0.000897249 BASE PERIOD RETURN
DIV BY # DAYS 7
---------------
AVERAGE 0.000128178
TIMES # DAYS IN YR 365
---------------
SEVEN DAY YIELD 4.68%
===============
USF SEVEN-DAY EFFECTIVE YIELD:
BASE PERIOD
RETURN (ABOVE) 0.000897249
PLUS 1 1
1.000897249
COMPOUNDED:
TO 365/7 POWER: 1.0478748386746
LESS 1 -1
EFFECTIVE YIELD 4.79%
<PAGE>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Net Asset Value, Beginning of Period (1) $12.51
Income from Investment Operations
Net Investment Income (2) 0.13
Net Realized and Unrealized Gain (Loss) (3) 2.55
on Investments
Total from Investment Operations (4) 2.68
Distributions
Distributions from Net Investment Income (5) (0.13)
Distributions from Realized Capital Gains (6) (0.46)
Total Distributions (7) (0.59)
Net Asset Value, End of Period (8) $14.60
Total Return (9) 21.44%
FORMULAS FOR CALCULATIONS IN THE TABLE ABOVE
(1) 12-31-95 Share Price
(2) Distributions from investment income/avg. outstanding shares +
undistributed net investment income at EOY/# of shares issued
outstanding at EOY
(3) -(1)-(2)-(5)-(6)+(8)
(4) (2)+(3)
(5) -(distributions from investment income / average outstanding shares)
(6) -(1996 Dividends Paid Per Share-distributions from net investment income)
(or item #5)
(7) (5) + (6)
(8) (1) + (4) + (7)
(9) (ending investment value-beginning investment value)
/beginning investment value
SOURCES FOR NUMBERS USED IN FORMULAS
share price == Unit Price Worksheet
distributions from investment income == Dividend History
average outstanding shares == (#of shares BOY+# of shares EOY)/2
undistributed net investment income at EOY == Phoenix system M fund screen
# of shares issued and outstanding at EOY == Unit Price Worksheet
dividends paid per share == Monthly Yield
ending and beginning investment value == Monthly Yield
<PAGE>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Net Asset Value, Beginning of Period (1) $18.20
Income from Investment Operations
Net Investment Income (2) 0.34
Net Realized and Unrealized Gain (Loss) (3) 3.93
on Investments
Total from Investment Operations (4) 4.27
Distributions
Distributions from Net Investment Income (5) (0.34)
Distributions from Realized Capital Gains (6) (0.81)
Total Distributions (7) (1.15)
Net Asset Value, End of Period (8) $21.32
Total Return (9) 22.02%
FORMULAS FOR CALCULATIONS IN THE TABLE ABOVE
(1) 12-31-95 Share Price
(2) Distributions from investment income/avg. outstanding shares +
undistributed net investment income at EOY/# of shares issued
outstanding at EOY
(3) -(1)-(2)-(5)-(6)+(8)
(4) (2)+(3)
(5) -(distributions from investment income / average outstanding shares)
(6) -(1996 Dividends Paid Per Share - distributions from net investment income)
(or item #5)
(7) (5) + (6)
(8) (1) + (4) + (7)
(9) (ending investment value-beginning investment value)
/beginning investment value
SOURCES FOR NUMBERS USED IN FORMULAS
share price ==Unit Price Worksheet
distributions from investment income ==Dividend History
average outstanding shares ==(#of shares BOY+# of shares EOY)/2
undistributed net investment income at EOY ==Phoenix system M fund screen
# of shares issued and outstanding at EOY ==Unit Price Worksheet
dividends paid per share ==Monthly Yield
ending and beginning investment value ==Monthly Yield
<PAGE>
BALANCED FUND OF ULTRA SERIES FUND
Net Asset Value, Beginning of Period (1) $14.63
Income from Investment Operations
Net Investment Income (2) 0.58
Net Realized and Unrealized Gain (Loss) (3) 0.98
on Investments
Total from Investment Operations (4) 1.56
Distributions
Distributions from Net Investment Income (5) (0.58)
Distributions from Realized Capital Gains (6) (0.32)
Total Distributions (7) (0.90)
Net Asset Value, End of Period (8) $15.29
Total Return (9) 10.79%
FORMULAS FOR CALCULATIONS IN THE TABLE ABOVE
(1) 12-31-95 Share Price
(2) Distributions from investment income/avg. outstanding shares +
undistributed net investment income at EOY/# of shares issued
outstanding at EOY
(3) -(1)-(2)-(5)-(6)+(8)
(4) (2)+(3)
(5) -(distributions from investment income / average outstanding shares)
(6) -(1996 Dividends Paid Per Share - distributions from net investment income)
(or item #5)
(7) (5) + (6)
(8) (1) + (4) + (7)
(9) (ending investment value-beginning investment value)/
beginning investment value
SOURCES FOR NUMBERS USED IN FORMULAS
share price == Unit Price Worksheet
distributions from investment income == Dividend History
average outstanding shares == (#of shares BOY+# of shares EOY)/2
undistributed net investment income at EOY == Phoenix system M fund screen
# of shares issued and outstanding at EOY == Unit Price Worksheet
dividends paid per share == Monthly Yield
ending and beginning investment value == Monthly Yield
<PAGE>
BOND FUND OF ULTRA SERIES FUND
Net Asset Value, Beginning of Period (1) $10.63
Income from Investment Operations
Net Investment Income (2) 0.65
Net Realized and Unrealized Gain (Loss) (3) (0.28)
on Investments
Total from Investment Operations (4) 0.37
Distributions
Distributions from Net Investment Income (5) (0.64)
Distributions from Realized Capital Gains (6) (0.03)
Total Distributions (7) (0.67)
Net Asset Value, End of Period (8) $10.33
Total Return (9) 2.86%
FORMULAS FOR CALCULATIONS IN THE TABLE ABOVE
(1) 12-31-95 Share Price
(2) Distributions from investment income/avg. outstanding shares +
undistributed net investment income at EOY/# of shares issued
outstanding at EOY
(3) -(1)-(2)-(5)-(6)+(8)
(4) (2)+(3)
(5) -(distributions from investment income / average outstanding shares)
(6) -(1996 Dividends Paid Per Share - distributions from net investment income)
(or item #5)
(7) (5) + (6)
(8) (1) + (4) + (7)
(9) (ending investment value-beginning investment value)
/beginning investment value
SOURCES FOR NUMBERS USED IN FORMULAS
share price == Unit Price Worksheet
distributions from investment income == Dividend History
average outstanding shares == (#of shares BOY+# of shares EOY)/2
undistributed net investment income at EOY == Phoenix system M fund screen
# of shares issued and outstanding at EOY == Unit Price Worksheet
dividends paid per share == Monthly Yield
ending and beginning investment value == Monthly Yield
<PAGE>
TREASURY 2000 FUND OF ULTRA SERIES FUND
Net Asset Value, Beginning of Period (1) $8.47
Income from Investment Operations
Net Investment Income (2) 0.58
Net Realized and Unrealized Gain (Loss) (3) (0.41)
on Investments
Total from Investment Operations (4) 0.17
Distributions
Distributions from Net Investment Income (5) 0.00
Distributions from Realized Capital Gains (6) 0.00
Total Distributions (7) 0.00
Net Asset Value, End of Period (8) $8.64
Total Return (9) 2.10%
FORMULAS FOR CALCULATIONS IN THE TABLE ABOVE
(1) 12-31-95 Share Price
(2) Distributions from investment income/avg. outstanding shares +
undistributed net investment income at EOY/# of shares issued
outstanding at EOY
(3) -(1)-(2)-(5)-(6)+(8)
(4) (2)+(3)
(5) -(distributions from investment income / average outstanding shares)
(6) -(1996 Dividends Paid Per Share - distributions from net investment income)
(or item #5)
(7) (5) + (6)
(8) (1) + (4) + (7)
(9) (ending investment value-beginning investment value)
/beginning investment value
SOURCES FOR NUMBERS USED IN FORMULAS
share price == Unit Price Worksheet
distributions from investment income == Dividend History
average outstanding shares == (#of shares BOY+# of shares EOY)/2
undistributed net investment income at EOY == Phoenix system M fund screen
# of shares issued and outstanding at EOY == Unit Price Worksheet
dividends paid per share == Monthly Yield
ending and beginning investment value == Monthly Yield
<PAGE>
EXHIBIT 18
ULTRA SERIES FUND
Plan for Multiple Classes of Shares
A. Ultra Series Fund (the "Fund") is a diversified, open-end management
investment company registered with the Securities and Exchange Commission (the
"SEC") under the Investment Company Act of 1940, as amended (the "Act"). The
Fund is organized as a business trust pursuant to the laws of the Commonwealth
of Massachusetts.
B. Effective May 1, 1997, the Fund's Declaration of Trust authorizes the Fund to
issue several classes of shares of beneficial interest, each of which represents
interests in the same series of investment securities. Effective May 1, 1997,
the Board of Trustees of the Fund has determined to designate all existing
shares of the Fund as Class Z shares; and to create and issue a new class of
shares designated as Class C shares. As described in more detail below: Class C
shares will be offered to separate accounts of insurance companies other than
Century Life of America or CUNA Mutual Insurance Society ("CUNA Mutual") or
their affiliates, and to qualified retirement plans of companies not affiliated
with the Fund, Century Life of America or CUNA Mutual; and Class Z shares will
be offered to all insurance company separate accounts issued by, and all
qualified retirement plans sponsored by, Century Life of America and CUNA Mutual
or their affiliates.
C. This Plan for Multiple Classes of Shares (the "Plan") is a plan as
contemplated by Rule 18f-3(d) under the Act.
D. At a meeting held on October 29, 1996, the Board of Trustees of the Fund,
including a majority of the Trustees who are not interested persons of the Fund
(as defined in Section 2(a)(19) of the Act), approved and adopted the Plan and
determined that the Plan is or will be: (i) in the best interests of the holders
of Class C shares; (ii) in the best interests of holders of Class Z shares; and
(iii) in the best interests of the Fund as a whole.
E. The Plan will remain in effect until such time as the Board of Trustees
terminates the Plan or makes a material change to the Plan. Any material change
to the Plan must be approved by the Board of Trustees, including a majority of
the Trustees who are not interested persons of the Fund, as being in the best
interests of each class of shares and the fund as a whole.
SECTION I
Class Distribution Fees and Shareholder Services
1.1 Class C Shares. Class C shares are sold through CUNA Brokerage
Services, Inc. ("CBS"), or other registered broker-dealers authorized by CBS, at
their net asset value without the imposition of a sales or other charges at the
time of purchase. Class C shares also may be subject to an asset-based
distribution fee (as provided for by a distribution plan adopted by the Board of
Trustees pursuant to Rule 12b-1 under the Act) equal to not more than 0.25%, on
an annual basis, of the average value of the daily net assets of each series of
the Fund attributable to Class C Shares on an annual basis. Such distribution
fee will be calculated and accrued daily and paid quarterly. The aggregate
amount of the asset-based distribution fee must, however, remain consistent with
the requirements of Section 26(d) of the National Association of Securities
Dealers, Inc.'s (the "NASD") Rules of Fair Practice, and any other rules or
regulations promulgated by the NASD or the SEC applicable to mutual fund
distribution and service fees.
1.2 Class Z Shares. Class Z shares are sold and redeemed through CBS at
a price equal to the shares net asset value with no sales or other distribution
charges.
SECTION II
Allocation of Expenses
2.1 Class Distinctions. Class C shares and Class Z shares each
represent interests in the same series of the Fund. Both classes of shares are
identical in all respects except that: (1) Class C shares may be subject to a
distinct distribution fee (as described above); (2) each class will bear
different class expenses (as defined below); (3) each class will have exclusive
voting rights with respect to matters that exclusively affect that class (such
as approval of any distribution plan for Class C shares); and (4) each class
will bear a different name or designation.
2.2 Class Expenses. The Fund's Board of Trustees, acting in its sole
discretion, has determined that those expenses attributable to the shares of a
particular class ("Class Expenses") will be borne solely by the class to which
they are attributable. Class Expenses include the following as they each relate
to a particular class of shares: (1) asset-based distribution fees; and (2)
extraordinary expenses such as litigation expenses.
SECTION III
Allocation of Fund Income and Expenses
3.1 Allocation of Income and Expenses. All income earned and expenses
incurred by the Fund are borne on a pro-rata basis by each outstanding share of
each class based on the value of the net assets of the Fund attributable to that
class as represented by the daily net asset value of shares of that class. On a
daily basis, the total interest, dividends or other income accrued and common
expenses incurred are multiplied by the ratio of the Fund's net assets
attributable to each class to determine the income and expenses attributable to
that class for the day. Expenses properly attributable to each class are
recorded separately and charges to that class. Net income for each class is then
determined for the day and segregated on the Fund's general ledger. Because of
the distribution fee and other Class Expenses borne by Class C shares, the net
income attributable to and the dividends payable on Class C shares are
anticipated to be lower (although it may be higher) than that of the Class Z
shares. Dividends, however, are declared and paid on both classes of shares on
the same days and at the same times.
SECTION IV
Redemptions
4.1 Redemptions. Redemption requests placed by holders of shares of
both Class C and Class Z shares are satisfied first by redeeming the holder's
Class Z shares, unless the holder has made a specific election to redeem Class C
shares.
SECTION V
Amendments
5.1 Amendments. This Plan may not be amended to change any material
provision unless such amendment is approved by the vote of the majority of the
Board of Trustees, including a majority of the Trustees who are not interested
persons of the Fund, based on their finding that the amendment is in the best
interests of each class individually and the Fund as a whole.
SECTION 6
Recordkeeping
6.1 Recordkeeping. The Fund shall preserve copies of this Plan and any
related agreements for a period of not less than six years from the date of this
Plan or agreement, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this Plan for Multiple
Classes of Shares on the day and year set forth below.
Dated: November 20, 1996
Attest: Ultra Series Fund
/s/ Jeanne M. Mraz By: /s/ Michael S. Daubs
Michael S. Daubs
President
<PAGE>
EXHIBIT 19
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
Ultra Series Fund (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 16th day of January , 1997.
/s/ Gwendolyn M. Boeke
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
Ultra Series Fund (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 16th day of January , 1997.
/s/ Thomas C. Watt
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
Ultra Series Fund (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 16th day of January , 1997.
/s/ Keith S. Noah
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
Ultra Series Fund (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 16th day of January , 1997.
/s/ Alfred L. Disrud
<PAGE>
LIMITED POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned, a Trustee of the
Ultra Series Fund (the "Fund"), a business trust duly organized under the laws
of the State of Massachusetts, do hereby appoint, authorize, and empower Linda
L. Lilledahl and Gerald T. Conklin, severally, as my attorney and agent, for me
and in my name as a Trustee of the Fund on behalf of the Fund or otherwise with
full power to review, execute, deliver and file with the Securities and Exchange
Commission all necessary post-effective amendments to Form N-1A filed by the
Fund, Registration No. 2-87775, as may be required under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, and to do
and perform each and every act that said attorney may deem necessary or
advisable to comply with the intent of the aforesaid Acts.
WITNESS my hand and seal this 16th day of January , 1997.
/s/ Kevin T. Lentz
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> GROWTH AND INCOME
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 195,704,852
<INVESTMENTS-AT-VALUE> 234,433,573
<RECEIVABLES> 909,235
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 235,342,808
<PAYABLE-FOR-SECURITIES> 2,376,550
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 125,485
<TOTAL-LIABILITIES> 2,502,035
<SENIOR-EQUITY> 109,196
<PAID-IN-CAPITAL-COMMON> 193,792,032
<SHARES-COMMON-STOCK> 10,919,647
<SHARES-COMMON-PRIOR> 8,246,972
<ACCUMULATED-NII-CURRENT> 69,558
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 141,265
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 38,728,722
<NET-ASSETS> 232,840,773
<DIVIDEND-INCOME> 3,383,433
<INTEREST-INCOME> 525,661
<OTHER-INCOME> 0
<EXPENSES-NET> 1,045,783
<NET-INVESTMENT-INCOME> 2,863,311
<REALIZED-GAINS-CURRENT> 32,176,972
<APPREC-INCREASE-CURRENT> 26,520,015
<NET-CHANGE-FROM-OPS> 35,040,283
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,804,744
<DISTRIBUTIONS-OF-GAINS> 5,675,210
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,323,654
<NUMBER-OF-SHARES-REDEEMED> 420,513
<SHARES-REINVESTED> 405,459
<NET-CHANGE-IN-ASSETS> 5,308,600
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 807,229
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,045,783
<AVERAGE-NET-ASSETS> 161,183,627
<PER-SHARE-NAV-BEGIN> 18.20
<PER-SHARE-NII> .34
<PER-SHARE-GAIN-APPREC> 3.93
<PER-SHARE-DIVIDEND> (.34)
<PER-SHARE-DISTRIBUTIONS> (.81)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.32
<EXPENSE-RATIO> .64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> BALANCED
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 177,868,979
<INVESTMENTS-AT-VALUE> 193,469,283
<RECEIVABLES> 1,799,597
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 195,268,880
<PAYABLE-FOR-SECURITIES> 437,598
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 106,408
<TOTAL-LIABILITIES> 544,006
<SENIOR-EQUITY> 127,374
<PAID-IN-CAPITAL-COMMON> 178,833,180
<SHARES-COMMON-STOCK> 12,737,422
<SHARES-COMMON-PRIOR> 10,161,857
<ACCUMULATED-NII-CURRENT> 94,881
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 69,134
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15,600,305
<NET-ASSETS> 194,724,874
<DIVIDEND-INCOME> 1,230,690
<INTEREST-INCOME> 5,678,732
<OTHER-INCOME> 0
<EXPENSES-NET> 987,329
<NET-INVESTMENT-INCOME> 5,922,093
<REALIZED-GAINS-CURRENT> 10,881,558
<APPREC-INCREASE-CURRENT> 6,612,755
<NET-CHANGE-FROM-OPS> 16,803,651
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,850,662
<DISTRIBUTIONS-OF-GAINS> 4,393,033
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,158,268
<NUMBER-OF-SHARES-REDEEMED> 681,458
<SHARES-REINVESTED> 675,369
<NET-CHANGE-IN-ASSETS> 5,152,179
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 762,436
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 987,329
<AVERAGE-NET-ASSETS> 151,567,626
<PER-SHARE-NAV-BEGIN> 14.63
<PER-SHARE-NII> .58
<PER-SHARE-GAIN-APPREC> .98
<PER-SHARE-DIVIDEND> (.58)
<PER-SHARE-DISTRIBUTIONS> (.32)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.29
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> BOND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 26,049,731
<INVESTMENTS-AT-VALUE> 26,144,779
<RECEIVABLES> 441,478
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 26,586,257
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,334
<TOTAL-LIABILITIES> 14,334
<SENIOR-EQUITY> 25,731
<PAID-IN-CAPITAL-COMMON> 26,433,111
<SHARES-COMMON-STOCK> 2,573,070
<SHARES-COMMON-PRIOR> 1,959,490
<ACCUMULATED-NII-CURRENT> 18,034
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 95,047
<NET-ASSETS> 26,571,923
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,382,079
<OTHER-INCOME> 0
<EXPENSES-NET> 130,103
<NET-INVESTMENT-INCOME> 1,251,976
<REALIZED-GAINS-CURRENT> (427,410)
<APPREC-INCREASE-CURRENT> (477,126)
<NET-CHANGE-FROM-OPS> 824,566
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,238,292
<DISTRIBUTIONS-OF-GAINS> 49,716
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,473,941
<NUMBER-OF-SHARES-REDEEMED> 316,839
<SHARES-REINVESTED> 124,689
<NET-CHANGE-IN-ASSETS> 1,281,791
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 100,452
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 134,222
<AVERAGE-NET-ASSETS> 20,046,372
<PER-SHARE-NAV-BEGIN> 10.63
<PER-SHARE-NII> .65
<PER-SHARE-GAIN-APPREC> (.36)
<PER-SHARE-DIVIDEND> (.64)
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.33
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> MONEY MARKET
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 21,019,331
<INVESTMENTS-AT-VALUE> 21,019,331
<RECEIVABLES> 5,668
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,024,999
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,012
<TOTAL-LIABILITIES> 14,012
<SENIOR-EQUITY> 210,110
<PAID-IN-CAPITAL-COMMON> 20,800,877
<SHARES-COMMON-STOCK> 21,010,987
<SHARES-COMMON-PRIOR> 19,541,720
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 21,010,987
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 951,281
<OTHER-INCOME> 0
<EXPENSES-NET> 114,351
<NET-INVESTMENT-INCOME> 836,930
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 836,930
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 836,930
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 32,932,884
<NUMBER-OF-SHARES-REDEEMED> 24,132,956
<SHARES-REINVESTED> 836,930
<NET-CHANGE-IN-ASSETS> 9,636,858
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 88,296
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 117,520
<AVERAGE-NET-ASSETS> 17,666,978
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> TREASURY 2000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1,388,086
<INVESTMENTS-AT-VALUE> 1,585,290
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,585,290
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 549
<TOTAL-LIABILITIES> 549
<SENIOR-EQUITY> 1,834
<PAID-IN-CAPITAL-COMMON> 1,278,364
<SHARES-COMMON-STOCK> 183,351
<SHARES-COMMON-PRIOR> 182,546
<ACCUMULATED-NII-CURRENT> 107,339
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 197,204
<NET-ASSETS> 1,584,741
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 114,864
<OTHER-INCOME> 0
<EXPENSES-NET> 6,936
<NET-INVESTMENT-INCOME> 107,928
<REALIZED-GAINS-CURRENT> (75,534)
<APPREC-INCREASE-CURRENT> (75,534)
<NET-CHANGE-FROM-OPS> 32,394
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 69,986
<NUMBER-OF-SHARES-REDEEMED> 69,181
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 805
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,936
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,936
<AVERAGE-NET-ASSETS> 1,532,738
<PER-SHARE-NAV-BEGIN> 8.47
<PER-SHARE-NII> .58
<PER-SHARE-GAIN-APPREC> (.41)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.64
<EXPENSE-RATIO> .45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> CAPITAL APPRECIATION
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 86,149,857
<INVESTMENTS-AT-VALUE> 99,257,406
<RECEIVABLES> 703,455
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 99,960,861
<PAYABLE-FOR-SECURITIES> 1,234,318
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,710
<TOTAL-LIABILITIES> 1,287,028
<SENIOR-EQUITY> 67,593
<PAID-IN-CAPITAL-COMMON> 85,416,504
<SHARES-COMMON-STOCK> 6,759,264
<SHARES-COMMON-PRIOR> 4,869,643
<ACCUMULATED-NII-CURRENT> 14,253
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 67,934
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,107,549
<NET-ASSETS> 98,673,833
<DIVIDEND-INCOME> 917,123
<INTEREST-INCOME> 164,944
<OTHER-INCOME> 0
<EXPENSES-NET> 435,788
<NET-INVESTMENT-INCOME> 646,279
<REALIZED-GAINS-CURRENT> 12,841,544
<APPREC-INCREASE-CURRENT> 9,688,795
<NET-CHANGE-FROM-OPS> 13,487,823
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 639,086
<DISTRIBUTIONS-OF-GAINS> 3,084,815
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,646,073
<NUMBER-OF-SHARES-REDEEMED> 189,580
<SHARES-REINVESTED> 256,221
<NET-CHANGE-IN-ASSETS> 3,712,714
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 336,290
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 440,999
<AVERAGE-NET-ASSETS> 67,173,306
<PER-SHARE-NAV-BEGIN> 12.51
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 2.55
<PER-SHARE-DIVIDEND> (.13)
<PER-SHARE-DISTRIBUTIONS> (.46)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.60
<EXPENSE-RATIO> .66
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
