REGISTRATION NO.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No.......[ ]
Post-Effective Amendment No.....[ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. ....[ ]
Lindbergh Funds
(Exact Name Of Registrant As Specified In Charter)
5520 Telegraph Road, Suite 204, Saint Louis, Missouri 63129
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (314) 416-0055
Dewayne L. Wiggins, 5520 Telegraph Road, Suite 204, Saint Louis, Missouri 63129
(Name and Address of Agent for Service)
With copy to:
Charles W. Lutter, Jr., Attorney
103 Canyon Oaks, San Antonio, TX 78232-1305
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Approximate Date of Proposed Offering: September 1, 1999
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant
hereby declares that an indefinite number or amount of shares are being
registered under the Securities Act of 1933.
Registrant hereby amends this Registration Statement under the Securities Act of
1933 on such date or dates as may be necessary to delay its effective date until
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
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PART A
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(Logo)
Lindbergh
Funds
Lindbergh Signature Fund
An actively managed asset allocation fund.
PROSPECTUS
, 1999
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities nor has any
Commission determined that this prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.
This offering is limited to residents of the states of California, Illinois,
Missouri and Texas.
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TABLE OF CONTENTS
INVESTMENT OBJECTIVE.......................................................3
INVESTMENT STRATEGIES......................................................3
PRINCIPAL RISKS............................................................3
PERFORMANCE INFORMATION....................................................3
FEES AND EXPENSES..........................................................3
Shareholder Fees........................................................4
Annual Fund Operating Expenses..........................................4
Comparison Cost.........................................................4
WHO IS RESPONSIBLE FOR YOUR FUND ACCOUNT...................................5
HOW WE MANAGE THE FUND.....................................................6
Investment Objective....................................................6
The Fund's Principal Investment Strategies..............................6
EXPANDED DISCUSSION OF RISKS...............................................9
DISTRIBUTION FEES.........................................................12
HOW YOUR SHARES ARE VALUED................................................12
HOW SECURITIES IN THE PORTFOLIO ARE VALUED................................12
DIVIDENDS.................................................................13
TAXES.....................................................................13
HOW TO BUY SHARES.........................................................14
HOW TO REDEEM SHARES......................................................16
SHAREHOLDER SERVICES......................................................18
OTHER FUND INFORMATION....................................................18
Types of Information...................................................18
Where You Can Get This Information.....................................18
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Investment Objective
The Fund's primary objective is to increase the value of your investment over
the long-term through capital appreciation and earned income. Capital
preservation is an important but secondary objective.
Investment Strategies
The Fund invests in common stocks, bonds and money market instruments in
proportions consistent with their expected returns and risk as assessed by the
Fund's adviser, Lindbergh Capital Management, Inc. (the "Adviser"). These
proportions are adjusted from time to time as financial market conditions
change. The Fund is permitted to be 100% invested in any one of the three asset
classes - stocks, bonds, or cash.
Principal Risks
The Fund's total return, like stock and bond prices generally, will fluctuate
within a wide range, so you could lose money over short or even long periods of
time. This section describes what we think are the most significant factors that
can cause the Fund's performance to suffer.
* Market Risk. Stocks. The market value of shares of common stock can change
rapidly and unpredictably which could result from political or economic
events having little or nothing to do with the issuer.
* Market Risk. Bonds. The market value of bonds decline over short or even
long periods due to rising interest rates.
* Manager Risk. This is the chance that the Adviser's security selection or
strategy execution will cause the Fund to underperform other funds with
similar objectives.
Performance Information
Lindbergh Signature Fund commenced operations on September , 1999. As a
consequence, the Fund does not have a performance history.
Fees and Expenses
All mutual funds have operating expenses. These expenses, which are deducted
from a fund's gross income, are expressed as a percentage of the net assets of
the fund. The Fund is no load. There are no fees or charges to buy or sell
shares, or to reinvest dividends. The following table describes the fees and
expenses that you may pay if you buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
Sales Charge (Load) Imposed on Purchases: None
Sales Charge (Load) Imposed on Reinvested Dividends: None
Redemption Fees: None
Exchange Fees: None
Annual Fund Operating Expenses (expenses deducted from fund assets)
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Management Fees*: 0.75%
Distribution (12b-1) Fees*: 0.25%
Other Expenses*: 0.75%
Total Annual Fund Operating Expenses: 1.75 %
* Actual total expenses will not exceed 0.75% because the Adviser's agreement
with the Fund requires it to pay fund expenses to maintain total annual fund
operating expenses at 0.75% through August 31, 2000, and to inform the Fund
prior to that date, if the commitment is to continue.
Comparison Cost
The following example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all your shares at the end of those periods. This
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Expenses used in the example are
those identified in the table, not adjusted for the Adviser's commitment to cap
expenses. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
1 Year 3 Years
$ 179 $ 555
Who is Responsible for Your Fund Account
A number of entities provide services to the Fund. This section shows how the
Fund is organized, the entities that perform these services, and how these
entities are compensated. Additional information on the organization of the Fund
is provided in the Fund's Statement of Additional Information. For information
on how to receive this document, see the back cover of this prospectus.
Investment Adviser & Portfolio Manager
Lindbergh Capital Management, Inc., 5520 Telegraph Road, Suite 204, St. Louis,
Missouri 63129, is the investment adviser for the Fund. It manages the Fund's
portfolio and provides administrative services to the extent not supplied by
other service providers. It has been an investment adviser for the past 11 years
managing portfolios for individuals and retirement plans. This is the first
mutual fund to be managed by the Adviser. The annual advisory fee to be paid to
Lindbergh Capital, based on average net assets, is 0.75%. In connection with
establishing the Fund, the Adviser has planned to keep total fund operating
expenses low. To this end, the Adviser has agreed to pay all Fund expenses
necessary to keep total fund operating expenses at 0.75% through August 31,
2000, and to advise the Fund prior to fiscal year end whether it will continue
to cap expenses.
Dewayne L. Wiggins, President and a controlling shareholder of the Adviser since
1988, is the Fund's portfolio manager.
Transfer Agent, Fund Accounting and Administrator
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania, Indianapolis,
Indiana 46204, acts as the Fund's transfer agent and, in capacity, maintains the
records of each shareholder's account, answers shareholders'
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inquiries concerning their accounts, processes purchases and redemptions of the
Fund's shares, acts as dividend and distribution disbursing agent and performs
other shareholder service functions.
In its capacity as fund administrator, Unified provides the Fund with certain
monthly reports, record-keeping and other management related services.
Unified also provides fund accounting services to the Fund including maintaining
the Fund's accounts, books and records and calculating the daily net asset
value. For these administrative and fund accounting services, Unified will
receive a set amount for the first fiscal year, 35% of which is for
administrative services.
Distributor
Unified Management Corporation, an affiliate of Unified Fund Services, is the
distributor for shares of the Fund. It is based in Indianapolis, Indiana and is
the distributor for a number of investment companies around the country. It acts
as agent for sale of Fund shares in the various states and coordinates marketing
materials.
Custodian
Assets of the Fund are held by UMB Bank, N.A., 928 Grand Boulevard, 10th Floor,
Kansas City, Missouri 64106, as the custodian.
Board of Directors
Lindbergh Funds Board of Directors has general supervisory responsibilities of
the Lindbergh Signature Fund. The Board monitors and supervises the performance
of the investment adviser and other service providers, monitors the Lindbergh
Funds business and investment activities, and determines whether or not to renew
agreements with service providers.
How We Manage the Fund
This section takes a closer look at the Fund's investment objectives and the
strategies to help achieve them. In addition, it provides further detail on the
important risks faced by investors in the Fund.
Investment Objective
The Fund's primary objective is to increase the value of your investment over
the long-term through capital appreciation and earned income. As a secondary
objective, the Fund strives to reduce risk so long as such efforts remain
compatible with the Fund's primary objective of long-term growth of principal.
The foregoing investment objectives may not be changed without shareholder
approval. The other policies described under this caption are not fundamental
policies and thus may be changed by a majority vote of the Board of Trustees of
the Lindbergh Funds. Such a change will not require a vote of Fund shareholders.
The Fund's Principal Investment Strategies
To help achieve the Fund's investment objectives, the Fund's Adviser, Lindbergh
Capital Management, Inc., employs an investment strategy known as asset
allocation. With this approach, the Adviser strives to improve returns by
participating in rising stock markets and limiting losses in stock market
declines. To the extent that the Adviser successfully executes this strategy,
the Fund will also realize its secondary objective of risk reduction.
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The Adviser allocates fund assets among three broad classes of investments:
common stocks, bonds and other debt obligations, and cash. The stock class
includes equity securities of all types. The bond class includes all varieties
of fixed-income securities maturing in more than one year. The Fund may purchase
corporate debentures or notes (without limitation to rating) and preferred
stocks, and convertible preferred stock and bonds. The cash class includes all
types of short-term and money market instruments. The Fund may also invest
without limit in cash reserves, including obligations of the U.S. government and
its agencies, commercial paper, bank certificates of deposit, banker's
acceptances, and repurchase agreements collateralized by these securities.
The Adviser has broad latitude in determining the amount of Fund assets invested
in each class and in specific market sectors. There are no limitations on the
amount of the Fund's assets that may be allocated to stocks, bonds, or cash
investments; the Fund can be 100% invested in any of the three asset classes.
The Fund, for example, may be primarily invested in equity securities when
corporate profitability and growth appear to be strong. If, though, economic
conditions make bonds a more attractive alternative to stocks, the Adviser may
increase the Fund's bond allocation.
To measure the potential risk and reward tradeoffs in the financial markets, the
Adviser uses various analytical models and indicators. One of these models is
Lindbergh's Market MeterSM. This model receives its input from various economic
and stock market statistics.
The Adviser uses these models to help determine the proportion of fund assets to
invest in each asset class and specific market sectors. For example, when the
Market MeterSM and other indicators suggest that conditions favor stock
investments, the Fund will usually be fully invested in common stocks. When
these measures signal a less favorable environment for stock investors, the
Adviser will normally reduce its equity investments to around 60% of fund
assets. Finally, if the level of stock market risk appears excessive, the Fund
equity holdings may be reduced to 30% or less of Fund assets.
In executing asset allocation, the Adviser expects to closely adhere to the
recommendations of its various models, particularly its Market MeterSM system.
On the other hand, the Adviser will not blindly implement the recommendations.
It will deviate from these equity allocation targets whenever, in its own
judgment, it is appropriate to do so.
While it is permissible to invest in bonds and other debt securities, the Fund
expects to be fully invested in equities for extended periods. It is, therefore,
not appropriate to characterize the Fund as a balanced fund.
In addition, the Fund makes no attempt to capitalize on short-term stock market
swings by moving from a 100% equity position into cash and shortly thereafter,
back again into equities. For this reason, it is likewise not appropriate to
characterize this Fund's operating strategy as market timing. On occasion,
though, the Fund may be required to reverse course shortly after implementing a
change in asset allocation. Such short-term reversals should prove to be more
the exception than the rule.
The Fund will invest in those sectors of the stock and bond markets that the
Adviser perceives to offer the best potential returns relative to risk. As a
result, the Fund may concentrate its investments in certain financial market
sectors or specific industries. For example, relative to the major stock market
indices, an above-average portion of fund assets may be invested in the stock
market's financial sector or in the banking industry in particular. Also, the
Fund may invest all or a share of fund assets in certain classes of stocks such
as large company growth stocks or small company value stocks.
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In its search for investment oppurtunities, the Adviser focuses on domestic
markets. However, if economic or financial market conditions particularly favor
foreign markets, the Adviser will consider investing fund assets in foreign
markets.
Use of Derivatives
The Fund may invest in, or enter into, derivatives ("Derivatives"). These are
financial instruments which derive their performance, at least in part, from the
performance of an underlying asset, index, or interest rate. The Derivatives the
Fund may use include options, futures, asset-backed securities and interest-rate
swaps.
Under normal circumstances, the market value of future contracts and options may
represent up to 50% of the Fund's assets. Under unusual circumstances, the Fund
may hold futures equal in value to 100% of its net assets.
Losses (or gains) involving futures can sometimes be substantial - in part,
because a relatively small price movement in a futures contract may result in an
immediate and substantial loss (or gain). This Fund will not use futures for
speculative purposes and, therefore, does not intend to leverage its net assets.
The Fund will invest in futures and options for the following reasons:
To keep cash on hand to meet shareholder redemptions or other needs while
simulating full investment in stocks or bonds.
To reduce the Fund's transaction costs or add value when the instruments
are favorably priced.
To use as an investment tool when reallocating assets among stocks, bonds,
and cash investments. The Adviser, for instance, may wish to reallocate 10%
of the Fund's assets from stocks to bonds. To implement this change rapidly
and with low transaction costs, the Adviser may sell stock index futures
and purchase bond index futures.
Use of Other Mutual Funds
The Fund may invest in the securities of other investment companies ("underlying
funds"). Except for federal regulations limiting the amount that can be invested
in any single investment company, the Fund itself is under no restriction as to
size or kind of investments it can make in underlying funds. The Adviser,
however, expects to generally limit investments in underlying funds to those
that invest primarily in fixed income securities. With such investments,
shareholders pay not only for the operational costs of the Fund, but they also
indirectly pay a portion of the operational costs of the other fund. Such
double-tiered costs would not be incurred if shareholders owned the underlying
fund directly.
Net Tax Managed
While the Fund's primary objective is to seek long-term capital appreciation,
the Fund does not necessarily purchase or hold individual securities to qualify
for long-term capital gains treatment. In determining when to sell a security,
the Adviser may consider a variety of factors other than the holding period,
including but not limited to financial market conditions, corporate
developments, other investment opportunities, and fund redemptions.
Borrowing
The Fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33 1/3% of its total assets.
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Expanded Discussion of Risks
Diversification Risk
* This is a non-diversified fund. It will keep half of the portfolio
diversified for tax law purposes; however, it may invest up to 25% of
assets in the stocks or bonds of one company. As a result, there maybe a
limited number of companies each representing a larger percentage of the
portfolio and, if those companies are adversely effected by some event,
they would have a greater adverse effect on the portfolio than on a
portfolio where assets are diversified among a larger number of companies.
Strategy Risk
* You should recognize that market risks inherent in investment cannot be
avoided, nor is there any assurance that the Fund's investment objectives
will be achieved.
* Because the Fund may invest in a wide range of investments and markets, the
Fund's Adviser has substantially more investment discretion than the
Advisers of most mutual funds. The performance of the Fund will reflect in
part the Adviser's ability to effectively allocate the Fund's assets among
these investments and markets.
* The principal risk of the Fund's strategy is that the Adviser may
misjudge market conditions when allocating fund assets among stocks, bonds,
cash investments and markets. Investment performance could suffer, for
example, if only a small portion of fund assets were allocated to stocks
during a significant stock market advance or if a major portion of its
assets were allocated to stocks during a market decline. As a result, you
could be worse off than if no attempt had been made to allocate funds.
Stock Market Risks
* General: Equity securities fluctuate in value, often based on factors
unrelated to the value of the issuer of the securities, and such
fluctuations can be pronounced. Changes in the value of the Fund's
investments will result in changes in the value of its shares and thus the
Fund's total return to investors.
* Company Risks: Due to changing investors perceptions, individual stocks can
perform differently than the overall market.
* Sector and Industry Risk: The stocks of companies within specific economic
sectors or industries can periodically perform differently than the overall
stock market. To the extent that the Fund holds above average investment
positions in specific market sectors or industries, it increases not only
the potential for above-average returns, but also the possibility of
below-average returns or investment losses.
* Risks of Growth Stocks: Growth stocks typically trade at higher multiples
of current earnings than other stocks. Therefore, their stock prices tend
to be more acutely sensitive to changes in current or expected earnings
than the prices of other stocks. The stocks of growth companies are subject
to substantial price declines if earnings fail to meet investors
expectations.
* Risks of Value Stocks: Value stocks are shares in companies that appear to
be inexpensive relative to anticipated earnings and dividend growth. Value
stocks, however, can remain undervalued for years. There is not only the
risk that a value stock may never reach what the Adviser considers fair
value, it may decline even further in value.
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* Risks of Small Stocks: The Fund may purchase securities of smaller
capitalization companies which may be subject to more abrupt or erratic
market movements than larger, more established companies. Buying and
selling shares of small companies may be more difficult than it is for
larger companies because there are fewer shares available, and they tend to
trade less frequently. Smaller companies are also more likely to declare
bankruptcy or to cease operations.
Risks of Fixed Income Investments
* Interest Rate Risk. Debt securities will fluctuate in value with changes
in interest rates. In general, debt securities will increase in value when
interest rates fall and decrease in value when interest rates rise. Longer
term debt securities are generally more sensitive to interest rate changes.
In addition, the zero coupon obligations may be highly volatile to changing
interest rates.
* Credit or Default Risk: The Fund is subject to the risk that the issuers of
debt securities held by the Fund will not make payment on the securities.
There is also the risk that an issuer could suffer adverse changes in
financial condition that could lower the credit quality of a security. This
could lead to greater volatility in the price of the security and fund
shares. Also, a change in credit quality rating of a bond can affect the
bond's liquidity and make it more difficult for the Fund to sell.
* Risk of High Yield Securities or Funds: The Fund's investment in corporate
bonds may consist of non-investment grade fixed income securities or shares
in other investment companies that invest in such securities.
Non-investment grade obligations are commonly referred to as "high yield"
securities or "junk bonds." Although these securities or funds investing in
such securities usually offer higher yield than investment grade
securities, they also involve more risk of default. High yield bonds may
also be more susceptible to real or perceived adverse economic conditions
than investment grade bonds.
* Call Risk: Many corporate bonds may be redeemed (called) at the option of
the issuer before their stated maturity date. The Fund would then be forced
to invest the unanticipated proceeds at lower interest rates, resulting in
a decline in the Fund's income.
* Liquidity Risk: Compared with equity securities, there are generally fewer
active buyers and sellers of fixed income securities. It, therefore, can be
more difficult to liquidate fixed income holdings and receive a reasonable
or fair price. Such liquidity risk depends, in part, upon the entity that
issued the bonds and the amount of securities traded. Unlike most equity
securities, sales of smaller parcels of bond securities are often more
illiquid and thus the seller is more likely to receive a price less than
its listed market value.
* Prepayment and Extension Risk: Certain debt securities may be repaid before
the money is due. In such an event, the proceeds could be invested at lower
interest rates. Intermediate-term and long-term bonds commonly provide
protection against this possibility, but mortgage-backed securities do not.
Mortgage-backed securities are more sensitive to risks of prepayment
because they can be prepaid whenever their underlying collateral is
prepaid. Conversely, extension risk is the possibility that in an
environment of rising interest rates, expected prepayments will not be
made, with the result that the security's life will become longer than
anticipated. Typically, the security's value will drop when this occurs.
Risks of International Investing
Investing in securities of foreign companies generally involves greater risks
than investing in securities of domestic companies. Listed below are the risks
of foreign investments.
* Currency Risk: The value of foreign investments may be affected by changes
in currency exchange rates. The U.S. dollar value of a foreign security
generally decreases when the value of the U.S. dollar rises against
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the foreign currency in which the security is denominated, and tends to
increase when the value of the U.S. dollar falls against such currency.
* Political and Economic Risk: The economies of many of the countries in
which the Fund may invest are not as developed as the United States economy
and may be subject to significantly different forces. Political or social
instability, expropriation or confiscatory taxation, and limitations on the
removal of funds or other assets could also adversely affect the value of
the Fund's investments.
* Regulatory Risk: Foreign companies are generally not subject to the
regulatory controls imposed on United States issuers and, as a consequence,
there is generally less public information available about foreign
securities than is available about domestic securities. Foreign companies
are not subject to accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic
companies. Income from foreign securities owned by the Fund may be reduced
by withholding tax at the source which would reduce dividend income payable
to the Fund's shareholders.
* Market Risk: The securities markets in many of the countries will have
substantially less trading volume than the major United States markets. As
a result, the securities of some foreign companies may be less liquid and
experience more price volatility than comparable domestic securities. There
is generally less government regulation and supervision of foreign stock
exchanges, brokers and issuers which may make it difficult to enforce
contractual obligations. Transaction costs in foreign securities markets
are likely to be higher, since brokerage commission rates in foreign
countries are likely to be higher than in the United States. Further, the
settlement period of securities transactions in foreign markets may be
longer than in domestic markets. These considerations generally are more of
a concern in developing countries. For example, the possibility of
revolution and the dependence on foreign economic assistance may be greater
in these countries than in developed countries. The management of the Fund
seeks to mitigate the risks associated with these considerations through
diversification and active professional management.
Emerging Markets and Developing Countries: Investors should also be aware
that the Fund may invest in companies located within emerging or developing
countries. Investments in emerging markets or developing countries involve
exposure to economic structures that are generally less diverse and mature
and to political systems which can be expected to have less stability than
those of more developed countries. Such countries may have relatively
unstable governments, economies based on only a few industries, and
securities markets which trade only a small number of securities.
Historical experience indicates that emerging markets have been more
volatile than the markets of more mature economies; such markets have also
from time to time provided higher rates of return and greater risks to
investors. The Adviser believes that these characteristics of emerging
markets can be expected to continue in the future. In addition, throughout
the countries commonly referred to as the Eastern Bloc, the lack of a
capital market structure or market-oriented economy and the possible
reversal of recent favorable economic, political and social events in some
of those countries present greater risks than those associated with more
developed, market-oriented Western European countries and markets.
Year 2000 Considerations
The Fund could be adversely affected if the computer systems used by the Fund's
service providers and entities that are linked to the Funds' record do not
properly process and calculate date-related information and data from and after
January 1, 2000. The Adviser expects that all its relevant computer systems will
be able to correctly interpret the year 2000 when that date arrives. Also, the
Adviser has obtained satisfactory assurances that comparable steps are being
taken by each of the Fund's other major service providers. There is, however, no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the prices of securities in which the Fund invest could be
adversely affected by year 2000 problems experienced by the issuers of those
securities.
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Risks with Futures Contracts
When using stock and bond index futures to reallocate assets among stocks,
bonds, and cash equivalent investments, there may be an imperfect
correlation between changes in the market value of the futures position
relative to the underlying asset in the Fund. This can diminish the
effectiveness of using futures as a tool for reallocating fund assets.
The liquidity of futures market is one factor that determines their value.
If the Fund cannot close out a futures position, it may be compelled to
continue to make daily cash payments to the broker to meet margin
requirements, thus increasing the transaction cost.
Distribution Fees
Lindbergh Signature Fund has adopted a plan under Rule 12b-1 that allows the
Fund to pay distribution and other fees for the distribution of its shares and
for services provided to shareholders. The Plan allows for the payment of up to
0.25% of average annual net assets. Because these fees are paid out of the
Fund's assets on an on-going basis, over time, these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges.
How Your Shares are Valued
The share price (also called "net asset value" or NAV per share) is calculated
at the close of the New York Stock Exchange, normally 4 p.m. Eastern Time, each
day the New York Stock Exchange is open for business. To calculate the NAV, the
Fund's assets are valued and totaled, liabilities are subtracted, and the
balance, called net assets, is divided by the number of shares outstanding.
Current market values are used to price fund shares.
How Securities in the Portfolio are Valued
We use current market valuations to value the securities in the Fund:
Securities that trade on an organized exchange are valued at the last
published sales price on the exchange. If no sales are recorded, the
securities are valued at the average of the closing bid and asked prices on
the exchange.
Over-the-counter securities are valued at the average of closing bid and
asked prices.
Debt securities maturing in 60 days or less are usually valued at amortized
(gradually reduced) cost.
Longer-term debt securities may be valued by an independent pricing
service.
Securities with unavailable market quotations and other assets are valued
at "fair value"--which is determined or directed by the Board of Directors.
If any of the Fund's securities are traded in markets that close at different
times, events affecting portfolio values that occur between the time that their
prices are determined and the time the Fund's shares are priced will generally
not be reflected in the Fund's share price. The net asset value of the Fund's
shares may change on days when shareholders will not be able to purchase or
redeem the Fund's shares.
The value of securities denominated in foreign currencies and traded in foreign
markets will have their value converted into the U.S. dollar equivalents at the
prevailing market rate. Fluctuation in the value of foreign
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currencies in relation to the U.S. dollar may affect the net asset value of the
Fund's shares even if there has not been any change in the foreign currency
price of the Fund's investments.
Dividends
Dividends and capital gains, if any, are distributed once per year. The Fund
makes distributions of any net realized long-term capital gains and distributes
virtually all of its net income (interest and dividends less expenses) as well
as any capital gains realized from the sale of its holdings. Dividends and
distributions are automatically reinvested in additional shares on payment dates
at the ex-dividend net asset value, unless cash payments are requested on the
account application or in writing to the Transfer Agent. All shareholders on the
record date are entitled to the dividend.
Taxes
Investment earnings (dividends and capital gains) are taxable in the year in
which they were declared, not paid (whether they are received in cash or
reinvested in shares) and are distributed to shareholders. Any dividends and
capital gains you receive are taxable. So are gains and losses you receive when
you sell your shares as in any mutual fund. If you buy shares shortly before or
on the "record date" you could receive a portion of the money invested as a
taxable distribution. You will be sent timely information for your tax filing
needs. We recommend that you consult with a tax adviser about any possible tax
consequences on your account.
How to Buy Shares
Shares of the Fund are sold every day the New York Stock Exchange is open for
business, at the Fund's net asset value per share next calculated after receipt
of the purchase order in proper form. The Fund reserves the right to reject any
purchase request. Investors may be charged a fee if they effect transactions
through a broker or agent.
Minimum Investment
The minimum initial investment in the Fund is $3,000. The minimum initial
investment to open an IRA account if $2,000. The minimum investment may also be
waived for certain other types of retirement accounts and direct deposit
accounts. Minimum investments for certain other types of retirement accounts and
direct deposit accounts may be different. See "Shareholder Services."
Opening an Account
An account may be opened by mail or bank wire, as follows:
By Mail
To open a new account by mail:
(a) Complete and sign the account application.
(b) Enclose a check payable to the Lindbergh Signature Fund.
(c) Mail the application and the check to the Fund's Transfer Agent,
Unified Fund Services, Inc. (the "Transfer Agent") at the following
address:
<PAGE>
The Lindbergh Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
By Wire
To open a new account by wire, call the Transfer Agent. A representative will
assist you to obtain an account application by telecopy (or mail), which must be
completed, signed and telecopied (or mailed) to the Transfer Agent before
payment by wire may be made. Then, request your financial institution to wire
immediately available funds to:
ABA #
Attention: Lindbergh Signature Fund
Number of Fund
Credit Account #
The order is considered received when UMB Bank, N.A., the Trust's custodian (the
"Custodian"), receives payment by wire. The completed account application must
be mailed to the Transfer Agent on the same day the wire payment is made. See
"Opening an Account -- By Mail" above. The Trust will not permit redemptions
until the Transfer Agent receives the application in proper form. Financial
institutions may charge a fee for wire transfers.
Subsequent Investments
Once an account is open, additional purchases of Fund shares may be made at any
time in minimum amounts of $100.
By Mail
Send a check payable to the Lindbergh Signature Fund, to:
The Lindbergh Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
The Trust will charge a $15 fee against a shareholder's account for any check
returned for insufficient funds. The shareholder also will be responsible for
any losses suffered by the Trust as a result.
By Wire
Wire the funds as described above under "Opening an Account -- By Wire."
Shareholders need to call the Transfer Agent before wiring funds.
By ACH
Automated Clearing House ("ACH") is the electronic transfer of funds directly
between an account with a financial institution and the applicable Fund. Once an
account is open, shares may be purchased or redeemed through ACH. ACH can be in
minimum amounts of $100.
<PAGE>
In order to use the ACH service, the ACH authorization section of the account
application must be completed. For existing accounts, an ACH Authorization Form
may be obtained by calling the Transfer Agent.
To order a purchase by ACH, call the Transfer Agent. There are no charges for
ACH transactions imposed by the Fund or the Transfer Agent. ACH transactions are
completed approximately two business days following the placement of the
transfer order. Allow at least two weeks for preparation before using ACH.
ACH may be used to make direct deposits into a Fund account of part or all of
recurring payments made to a shareholder by his or her employer (corporate,
federal, military, or other) or by the Social Security Administration.
By Phone Order
Once an account is open, shares may be purchased at a certain day's price by
calling the Transfer Agent, before the close of regular trading on the New York
Stock Exchange (currently 4:00 p.m., Eastern time) on that day. Orders must be
for $1,000 or more and may not be for an amount greater than twice the value of
the existing account at the time the order is placed.
Payment by check or wire must be received within three business days after the
order is placed, or the order will be canceled and the shareholder will be
responsible for any resulting loss to the Fund. Payment of telephone orders by
check may not be mailed to the Transfer Agent's Post Office Box address, but
must be mailed to the Transfer Agent at:
Unified Fund Services, Inc.
431 North Pennsylvania Street
Indianapolis, Indiana 46204
Payment must be accompanied by the order number given at the time the order is
placed. A written confirmation with complete purchase information will be sent
to the shareholder of record shortly after payment is received.
How to Redeem Shares
Shares of the Fund may be redeemed on any day on which the Fund computes its net
asset value. Shares are redeemed at their net asset value next determined after
the Transfer Agent receives the redemption request in proper form. Redemption
requests may be made by mail or by telephone.
By Mail
A shareholder may redeem shares by mailing a written request to:
The Lindbergh Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
Written requests must state the shareholder's name, the name of the Fund, the
account number and the shares or dollar amount to be redeemed and be signed
exactly as the shares are registered.
Signatures Required
<PAGE>
Shareholders requesting a redemption of $5,000 or more, or a redemption of any
amount payable to a person other than the shareholder of record or to be sent to
an address other than that on record with the Trust, must have all signatures on
written redemption requests guaranteed.
The Transfer Agent will accept signatures guaranteed by a financial institution
whose deposits are insured by the FDIC; a member of the New York, American,
Boston, Midwest, or Pacific Stock Exchange; or any other "eligible guarantor
institution," as defined in the Securities Exchange Act of 1934.
The Transfer Agent will not accept signatures guaranteed by a notary public. The
Transfer Agent has adopted standards for accepting signature guarantees from the
above institutions. The Trust may elect in the future to limit eligible
signature guarantors to institutions that are members of a signature guarantee
program. The Trust and its Transfer Agent reserve the right to amend these
standards at any time without notice.
Redemption requests by corporate and fiduciary shareholders must be accompanied
by appropriate documentation establishing the authority of the person seeking to
act on behalf of the account. Forms of resolutions and other documentation to
assist in compliance with the Transfer Agent's procedures may be obtained by
calling the Transfer Agent.
By Phone
You may also redeem shares by telephone by calling the Transfer Agent. In order
to make redemption requests by telephone, the Telephone Privileges section of
the account application must be completed. For existing accounts, a Telephone
Privileges form may be obtained by calling the Transfer Agent.
Telephone redemptions may be requested only if the proceeds are to be issued to
the shareholder of record and mailed to the address on record with the Fund.
Upon request, proceeds of $100 or more may be transferred by ACH, and proceeds
of $1,000 or more may be transferred by wire, in either case to the account
stated on the account application. Shareholders will be charged for outgoing
wires.
Telephone privileges and account designations may be changed by sending the
Transfer Agent a written request with all signatures guaranteed as described
above.
The Transfer Agent requires personal identification before accepting any
redemption request by telephone, and telephone redemption instructions may be
recorded. If reasonable procedures are not followed by the Trust, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. In
the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, redemption by
mail should be considered.
Receiving Payment
The Trust normally will make payment for all shares redeemed within three
business days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. A requested wire of redemption proceeds normally will be effected
the following business day, but in no event more than three business days, after
receipt of the redemption request in proper form. However, when shares are
purchased by check or through ACH, the proceeds from the redemption of those
shares are not available, and the shares may not be exchanged, until the
purchase check or ACH transfer has been converted to federal funds, which could
take up to 15 calendar days.
<PAGE>
Shareholder Services
Each time shares are purchased or redeemed, a statement will be mailed showing
the details of the transaction and the number and value of shares owned after
the transaction. Transactions made in brokerage sweep accounts will be detailed
on a monthly brokerage statement. Share certificates are not issued. Financial
reports showing investments, income and expenses of the Fund are mailed to
shareholders semi-annually. After the end of each year, shareholders receive a
statement of all their transactions for the year.
The Trust provides a number of plans and services to meet the special needs of
certain investors, including:
an automatic investment plan,
a payroll deduction plan, and,
a systematic withdrawal plan to provide monthly payments.
Brochures describing these plans and related charges and account applications
are available free from the Transfer Agent.
Other Fund Information
Types of Information
If you'd like more information about the Lindbergh Funds, the following
documents are available free upon request:
<TABLE>
<S> <C>
Annual/Semiannual Report Additional information about the Fund's investments is available in the Fund's
to Shareholders annual and semiannual reports to shareholders. In these reports, you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during the most recent fiscal year.
Statement of Additional The SAI provides more detailed information about the Fund.
Information ("SAI")
</TABLE>
The current annual and semiannual reports and the SAI are incorporated by
reference into (and are thus legally a part of) this prospectus.
Where You Can Get This Information
By Telephone Call 1-800- Monday through Friday, 7 a.m.
to 4 p.m. Eastern Time.
You may also call this number for shareholder inquires.
Via the Internet Visit the Securities and Exchange Commission Web site
at "www.SEC.Gov".
<PAGE>
From the Securities You can review and copy information about the Fund
and Exchange (including the SAI) at the SEC's Public Reference Room
Commission in Washington, D.C. To find out more about this public
service, Exchange call the SEC at 1-800-SEC-0330. You
can also receive copies of this information, for a
fee, by writing the Public Reference Section,
Securities and Exchange Commission, Washington, DC
20549-6009.
By Mail Specify the document you are requesting when writing to
us at:
The Lindbergh Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
Fund's Investment Company Act
File Number:
<PAGE>
- --------------------------------------------------------------------------------
PART B
- --------------------------------------------------------------------------------
<PAGE>
Lindbergh Funds
Lindbergh Signature Fund
Statement of Additional Information
__________, 1999
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the current prospectus of Lindbergh Funds dated __________,
1999. To obtain a copy of the prospectus, call 1-800-862-3863 or write to:
Unified Management Corporation, 431 North Pennsylvania Street, Indianapolis,
Indiana 46204.
<PAGE>
TABLE OF CONTENTS
DESCRIPTION OF THE TRUST......................................................3
INVESTMENT RESTRICTIONS.......................................................4
ADDITIONAL INFORMATION ABOUT
FUND INVESTMENTS AND RISK CONSIDERATIONS.................................5
RISKS OF INTERNATIONAL INVESTING.............................................13
PORTFOLIO TRANSACTIONS.......................................................17
PORTFOLIO TURNOVER...........................................................18
MANAGEMENT OF THE TRUST......................................................18
PURCHASE AND REDEMPTION......................................................21
DETERMINATION OF NET ASSET VALUE.............................................22
TAX STATUS...................................................................22
PERFORMANCE INFORMATION......................................................23
PERFORMANCE COMPARISONS......................................................24
CUSTODIAN....................................................................25
TRANSFER AGENT, FUND ACCOUNTING AGENT, AND ADMINISTRATOR.....................25
INDEPENDENT ACCOUNTANTS AND COUNSEL..........................................25
FINANCIAL STATEMENTS.........................................................26
<PAGE>
DESCRIPTION OF THE TRUST
History of the Trust
Lindbergh Funds (the "Trust") is an open-end management investment company and
is a voluntary association of the type known as a "business trust" organized
under the laws of the Commonwealth of Massachusetts on June 16, 1999. There is
currently only one series within the Trust, the Lindbergh Signature Fund (the
"Fund"). It represents a separate non-diversified portfolio of securities.
Characteristics of Trust Shares
The Trustees have exclusive power, without the requirement of shareholder
approval, to issue series of shares without par value, each series representing
interests in a separate portfolio, or divide the shares of any portfolio into
classes, each class having such different dividend, liquidation, voting and
other rights as the Trustees may determine, and may establish and designate the
specific classes of shares of each portfolio. Before establishing a new class of
shares in an existing portfolio, the Trustees must determine that the
establishment and designation of separate classes would not adversely affect the
rights of the holders of the initial or previously established and designated
class or classes.
The assets received by the Trust from the issue or sale of shares of the Fund,
and all income, earnings, profits and proceeds thereof, subject only to the
rights of creditors, are separately allocated to the Fund. They constitute the
underlying assets of that Fund, are required to be segregated on the books of
accounts, and are to be charged with the expenses with respect to the Fund. Any
general expenses of the Trust, not readily identifiable as belonging to a
particular Fund, shall be allocated by or under the direction of the Board of
Trustees in such manner as the Board determines to be fair and equitable.
Each share of the Fund represents an equal proportionate interest in that Fund
with each other share and is entitled to such dividends and distributions, out
of the income belonging to that Fund, as are declared by the Board. Upon
liquidation of the Trust, shareholders of the Fund are entitled to share pro
rata in the net assets belonging to the Fund available for distribution.
Under the Trust's Master Trust Agreement, no annual or regular meeting of
shareholders is required. In addition, after the Trustees were initially elected
by the shareholders, the Trustees became a self-perpetuating body. Thus, there
will ordinarily be no shareholder meetings unless otherwise required by the
Investment Company Act of 1940 (the "1940 Act").
On any matter submitted to shareholders, the holder of each share is entitled to
one vote per share (with proportionate voting for fractional shares). On matters
affecting any individual Fund, a separate vote of that Fund would be required.
Shareholders of any Fund are not entitled to vote on any matter which does not
affect their Fund but which requires a separate vote of another Fund.
<PAGE>
Shares do not have cumulative voting rights, which means that in situations in
which shareholders elect Trustees, holders of more than 50% of the shares voting
for the election of Trustees can elect 100% of the Trust's Trustees, and the
holders of less than 50% of the shares voting for the election of Trustees will
not be able to elect any person as a Trustee.
Shares have no preemptive, subscription or conversion rights.
Trust shares are fully paid and non-assessable; and, there are no restrictions
on the right of shareholders to retain or dispose of their shares.
Shareholder Liability
Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Master Trust Agreement disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or the Trustees. The Master Trust Agreement provides for indemnification out of
the Trust's property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations.
INVESTMENT RESTRICTIONS
Lindbergh Signature Fund will not change any of the following investment
restrictions without the affirmative vote of a majority of the outstanding
voting securities of the Fund, which, as used herein, means the lesser of (i)
67% of the Fund's outstanding shares present at a meeting at which more than 50%
of the outstanding shares of the Fund are represented either in person or by
proxy, or (ii) more than 50% of the Fund's outstanding shares.
The Fund may not
(1) Issue senior securities.
(2) Borrow money, except that the Fund may borrow not in excess of 33 1/3%
of the total assets of the Fund from banks as a temporary measure for
extraordinary purposes.
(3) Underwrite the securities of other issuers.
(4) Purchase or sell real property (including limited partnership
interests, but excluding readily marketable interests in real estate
investment trusts or readily marketable securities or companies which
invest in real estate).
<PAGE>
(5) Engage in the purchase or sale of commodities or commodity contracts,
except that the Fund may invest in financial and currency futures
contracts and related options for bona fide hedging purposes and to
provide exposure while attempting to reduce transaction costs.
(6) Lend its assets, except that purchases of debt securities in
furtherance of the Fund's investment objectives will not constitute
lending of assets and except that the Fund may lend portfolio
securities with an aggregate market value of not more than one-third of
the Fund's net assets.
(7) Purchase any security on margin, except that it may obtain such
short-term credits as are necessary for clearance of securities
transactions. This restriction does not apply to bona fide hedging
activity utilizing financial futures and related options.
(8) Make short sales in situations where the security is not owned by the
Fund.
(9) Acquire more than 10% of the voting securities of any one issuer.
(10) With respect to 50% of the Fund, invest more than 5% of the value of
its total assets in securities of any one issuer, except such
limitation shall not apply to obligations issued or guaranteed by the
United States Government, its agencies or instrumentalities.
The following investment restrictions may be changed by the Board of Trustees
without a shareholder vote:
The Fund may not
(1) Invest in companies for the purpose of exercising control or management.
(2) Hypothecate, pledge, or mortgage any of its assets, except to secure
loans as a temporary measure for extraordinary purposes and except as
may be required to collateralize letters of credit to secure state
surety bonds.
(3) Invest more than 15% of its net assets in illiquid securities.
(4) Invest in oil, gas or other mineral leases.
(5) In connection with bona fide hedging activities, invest more than 5%
of its assets as initial margin deposits or premiums for futures
contracts and provided the Fund may enter into futures contracts
and option transactions only to the extent that obligations under
such contracts or transactions represent not more than 100% of the
Fund's assets.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage, resulting from a change in values of
portfolio securities or amount of net assets, will not be considered a violation
of any of the foregoing restrictions.
<PAGE>
ADDITIONAL INFORMATION ABOUT
FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the investments the
Fund may make and some of the techniques it may use, as described in the
Prospectus.
Forward Commitments and Reverse Repurchase Agreements
The Fund will direct its Custodian to place cash or U.S. government obligations
in a separate account of the Fund in an amount equal to the commitments of the
Fund to purchase or repurchase securities as a result of its forward commitment
or reverse repurchase agreement obligations. With respect to forward commitments
to sell securities, the Fund will direct its Custodian to place the securities
in a separate account. The Fund will direct its Custodian to segregate such
assets for when, as and if issued commitments only when it determines that
issuance of the security is probable. When a separate account is maintained, the
securities deposited in the separate account will be valued daily at market for
the purpose of determining the adequacy of the securities in the account. To the
extent funds are in a separate account, they will not be available for new
investment or to meet redemptions.
Commitments to purchase securities on a when, as and if issued basis will not be
recognized in the portfolio of the Fund until the Adviser determines that
issuance of the security is probable. At such time, the Fund will record the
transaction and, in determining its net asset value, will reflect the value of
the security daily.
Securities purchased on a forward commitment basis and subject to reverse
repurchase agreements are subject to changes in market value based upon the
public's perception of the creditworthiness of the issuer and changes in the
level of interest rates (which will generally result in all of those securities
changing in value in the same way; i.e., all those securities experiencing
appreciation when interest rates decline and depreciation when interest rates
rise). Therefore, if in order to achieve a higher level of income, the Fund
remains substantially fully invested at the same time that it has purchased on a
forward commitment basis or entered into reverse repurchase transactions, there
will be a possibility that the market value of the Fund's assets will have
greater fluctuation.
Leveraging
Leveraging the Fund creates an opportunity for increased net income but, at the
same time, creates special risk considerations. For example, leveraging may
exaggerate changes in the net asset value of Fund shares and in the yield on the
Fund's portfolio. Although the principal of such borrowings will be fixed, the
Fund's assets may change in value during the time the borrowing is outstanding.
Leveraging will create interest expenses for the Fund which can exceed the
income from the assets retained. To the extent the income derived from
securities purchased with borrowed funds exceeds the interest the Fund will have
to pay, the Fund's net income will be greater than if leveraging were
<PAGE>
not used. Conversely, if the income from the assets retained with borrowed funds
is not sufficient to cover the cost of leveraging, the net income of the Fund
will be less than if leveraging were not used, and therefore the amount
available for distribution to shareholders will be reduced.
Put and Call Options
The Fund may purchase put and call options.
Purchasing Options
By purchasing a put option, the Fund obtains the right (but not the obligation)
to sell the option's underlying instrument at a fixed "strike" price. In return
for this right, the Fund pays the current market price for the option (known as
the option premium). Options have various types of underlying instruments,
including specific securities, indices of securities prices, and futures
contracts. The Fund may terminate its position in a put option it has purchased
by allowing it to expire or by exercising the option. If the option is allowed
to expire, the Fund will lose the entire premium it paid. If the Fund exercises
the option, it completes the sale of the underlying instrument at the "strike"
price. The Fund also may terminate a put option position by closing it out in
the secondary market at its current price, if a liquid secondary market exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price does
not fall enough to offset the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of the premium paid, plus related
transaction costs).
The features of call options are essentially the same as those of put options,
except that the purchaser of a call option obtains the right to purchase, rather
than sell, the underlying instrument at the option's "strike" price. A call
buyer typically attempts to participate in potential price increases of the
underlying instrument with risk limited to the cost of the option if security
prices fall. At the same time, the buyer can expect to suffer a loss if the
underlying prices do not rise sufficiently to offset the cost of the option.
Writing Options
When the Fund writes a put option, it takes the opposite side of the transaction
from the option's purchaser. In return for receipt of the premium, the Fund
assumes the obligation to pay the "strike" price for the option's underlying
instrument if the other party to the option chooses to exercise it. When writing
an option on a futures contract the Fund will be required to make margin
payments for futures contracts. The Fund may seek to terminate its position in a
put option it writes before exercise by closing out the option in the secondary
market at its current price. If the secondary market is not liquid for a put
option the Fund has written, however, the Fund must continue to be prepared to
pay the "strike" price while the option is outstanding, regardless of price
changes, and must continue to segregate assets to cover its position.
<PAGE>
If the underlying prices rise, a put writer would generally expect to profit.
Although its gain would be limited to the amount of the premium it received. If
security prices remain the same over time, the writer also may profit, because
it should be able to close out the option at a lower price. If the underlying
prices fall, the put writer would expect to suffer a loss. This loss should be
less than the loss from purchasing the underlying instrument directly, however,
because the premium received for writing the option should mitigate the effects
of the decline.
Writing a call option obligates the Fund to sell or deliver the option's
underlying instrument, in return for the "strike" price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if the underlying prices remain the same or fall. Through receipt of
the option premium, a call writer mitigates the effects of a price decline. At
the same time, because a call writer must be prepared to deliver the underlying
instrument in return for the "strike" price, even if its current value is
greater, a call writer gives up some ability to participate in the underlying
price increases.
Combined Positions
The Fund may purchase and write options in combination with each other, or in
combination with futures or forward contracts, to adjust the risk and return
characteristics of the overall position. For example, the Fund may purchase a
put option and write a call option on the same underlying instrument, in order
to construct a combined position whose risk and return characteristics are
similar to selling a futures contract. Another possible combined position would
involve writing a call option at one "strike" price and buying a call option at
a lower price, in order to reduce the risk of the written call option in the
event of a substantial price increase. Because combined options positions
involve multiple trades, they result in higher transaction costs and may be more
difficult to open and close out.
Correlation of Price Changes
Because there are a limited number of types of exchange-traded options and
futures contracts, it is likely that the standardized contracts available will
not match the Fund's current or anticipated investments exactly. The Fund may
invest in options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in which it
typically invests.
Options and futures prices also can diverge from the prices of their underlying
instruments or precious metals, even if the underlying instruments or precious
metals match the Fund's investment well. Options and futures prices are affected
by such factors as current and anticipated short-term interest rates, changes in
volatility of the underlying instrument or precious metal, and the time
remaining until expiration of the contract, which may not affect the security or
the precious metal prices the same way. Imperfect correlation also may result
from: differing levels of demand in the options and futures markets and the
securities or precious metal markets, structural differences in how options and
futures and securities or precious metal are traded, or imposition of daily
price fluctuation limits or trading halts. The Fund may purchase or sell options
and futures contracts with a
<PAGE>
greater or lesser value than the securities or precious metal it wishes to hedge
or intends to purchase in order to attempt to compensate for differences in
volatility between the contract and the securities or precious metals, although
this may not be successful in all cases. If price changes in the Fund's options
or futures positions are poorly correlated with its other investments, the
positions may fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
Liquidity of Options and Futures Contracts
There is no assurance a liquid secondary market will exist for any particular
options or futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their "strike" prices are not close to the
underlying instrument or precious metal's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures contracts,
and may halt trading if a contract's price moves upward or downward more than
the limit in a given day. On volatile trading days when the price fluctuation
limit is reached or a trading halt is imposed, it may be impossible for the Fund
to enter into new positions or close out existing positions. If the secondary
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions, and
potentially could require the Fund to continue to hold a position until delivery
or expiration regardless of changes in its value. As a result, the Fund's access
to other assets held to cover its options or futures positions also could be
impaired. In addition, one of the requirements for qualification as a regulated
investment company for tax purposes in that less than 30% of the Fund's gross
income be derived from gains from the sale or other disposition of securities
held for less than three months. Accordingly, the Fund may be restricted in
effecting closing transactions within three months after entering into an option
or futures contract.
OTC Options
Unlike exchange-traded options, which are standardized with respect to the
underlying instrument, expiration date, contract size, and "strike" price, the
terms of over-the-counter options i.e., options not traded on exchanges ("OTC
options"), generally are established through negotiation with the other party to
the option contract. While this type of arrangement allows the Fund greater
flexibility to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed by the
clearing organization of the exchanges where they are traded. The risk of
illiquidity also is greater with OTC options, since these options generally can
be closed out only by negotiation with the other party to the option.
Foreign Currency Transactions
Investments in foreign companies usually involve use of currencies of foreign
countries. The Fund also may hold cash and cash-equivalent investments in
foreign currencies. The value of the Fund's assets as measured in U.S. dollars
will be affected by changes in currency exchange rates and exchange control
regulations. The Fund may, as appropriate markets are developed, but is not
required to, engage in currency transactions including cash market purchases at
the spot rates, forward currency
<PAGE>
contracts, exchange listed currency futures, exchange listed and
over-the-counter options on currencies, and currency swaps for two purposes. One
purpose is to settle investment transactions. The other purpose is to try to
minimize currency risks.
All currency transactions involve a cost. Although foreign exchange dealers
generally do not charge a fee, they do realize a profit based on the difference
(spread) between the prices at which they are buying and selling various
currencies. Commissions are paid on futures options and swaps transactions, and
options require the payment of a premium to the seller.
A forward contract involves a privately negotiated obligation to purchase or
sell at a price set at the time of the contract with delivery of the currency
generally required at an established future date. A futures contract is a
standardized contract for delivery of foreign currency traded on an organized
exchange that is generally settled in cash. An option gives the right to enter
into a contract. A swap is an agreement based on a nominal amount of money to
exchange the differences between currencies.
The Fund will generally use spot rates or forward contracts to settle a security
transaction or handle dividend and interest collection. When the Fund enters
into a contract for the purchase or sale of a security denominated in a foreign
currency or has been notified of a dividend or interest payment, it may desire
to lock in the price of the security or the amount of the payment in dollars. By
entering into a spot rate or forward contract, the Fund will be able to protect
itself against a possible loss resulting from an adverse change in the
relationship between different currencies from the date the security is
purchased or sold to the date on which payment is made or received or when the
dividend or interest is actually received.
The Fund may use forward or futures contracts, options, or swaps when the
investment manager believes the currency of a particular foreign country may
suffer a substantial decline against another currency. For example, it may enter
into a currency transaction to sell, for a fixed amount of dollars, the amount
of foreign currency approximating the value of some or all of the Fund's
portfolio securities denominated in such foreign currency. The precise matching
of the securities transactions and the value of securities involved generally
will not be possible. The projection of short-term currency market movements is
extremely difficult and successful execution of a short-term strategy is highly
uncertain.
The Fund may cross-hedge currencies by entering into transactions to purchase or
sell one or more currencies that are expected to decline in value relative to
other currencies in which the Fund has (or expects to have) portfolio exposure.
The Fund may engage in proxy hedging. Proxy hedging is often used when the
currency to which the Fund's portfolio is exposed is difficult to hedge. Proxy
hedging entails entering into a forward contract to sell a currency whose
changes in value are generally considered to be linked to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, and simultaneously buy U.S. dollars. The amount of
the contract would not exceed the value of the Fund's securities denominated in
linked securities.
<PAGE>
The Fund will not enter into a currency transaction or maintain an exposure as a
result of the transaction when it would obligate the Fund to deliver an amount
of foreign currency in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency. The Fund will designate cash or
securities in an amount equal to the value of the Fund's total assets committed
to consummating the transaction. If the value of the securities declines,
additional cash or securities will be designated on a daily basis so that the
value of the cash or securities will equal the amount of the Fund's commitment.
On the settlement date of the currency transaction, the Fund may either sell
portfolio securities and make delivery of the foreign currency or retain the
securities and terminate its contractual obligation to deliver the foreign
currency by purchasing an offsetting position. It is impossible to forecast what
the market value of portfolio securities will be on the settlement date of a
currency transaction. Accordingly, it may be necessary for the Fund to buy
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the securities are less than the amount of
foreign currency the Fund is obligated to deliver and a decision is made to sell
the securities and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received on
the sale of the portfolio securities if its market value exceeds the amount of
foreign currency the Fund is obligated to deliver. The Fund will realize gains
or losses on currency transactions.
The Fund may also buy put options and write covered call options on foreign
currencies to try to minimize currency risks. The risk of buying an option is
the loss of premium. The risk of selling (writing) an option is that the
currency option will minimize the currency risk only up to the amount of the
premium, and then only if rates move in the expected direction. If this does not
occur, the option may be exercised and the Fund would be required to buy the
underlying currency at the loss which may not be offset by the amount of the
premium. Through the writing of options on foreign currencies, the Fund may also
be required to forego all or a portion of the benefits which might otherwise
have been obtained from favorable movements on exchange rates. All options
written on foreign currencies will be covered; that is, the Fund will own
securities denominated in the foreign currency, hold cash equal to its
obligations or have contracts that offset the options.
The Fund may construct a synthetic foreign currency investment, sometimes called
a structured note, by (a) purchasing a money market instrument which is a note
denominated in one currency, generally U.S. dollars, and (b) concurrently
entering into a forward contract to deliver a corresponding amount of that
currency in exchange for a different currency on a future date and at a
specified rate of exchange. Because the availability of a variety of highly
liquid short-term U.S. dollar market instruments, or notes, a synthetic money
market position utilizing such U.S. dollar instruments may offer greater
liquidity than direct investment in foreign currency.
Segregated Assets and Covered Positions
When purchasing a stock index futures contract, selling an uncovered call
option, or purchasing securities on a when-issued or delayed delivery basis, the
Fund will restrict cash, which may be
<PAGE>
invested in repurchase obligations or liquid securities. When purchasing a stock
index futures contract, the amount of restricted cash or liquid securities, when
added to the amount deposited with the broker as margin, will be at least equal
to the market value of the futures contract and not less than the market price
at which the futures contract was established. When selling an uncovered call
option, the amount of restricted cash or liquid securities, when added to the
amount deposited with the broker as margin, will be at least equal to the value
of securities underlying the call option and not less than the strike price of
the call option. When purchasing securities on a when-issued or delayed delivery
basis, the amount of restricted cash or liquid securities will be at least equal
to the Fund's when-issued or delayed delivery commitments.
The restricted cash or liquid securities will either be identified as being
restricted in the Fund's accounting records or physically segregated in a
separate account at the Fund's custodian. For the purpose of determining the
adequacy of the liquid securities which have been restricted, the securities
will be valued at market or fair value. If the market or fair value of such
securities declines, additional cash or liquid securities will be restricted on
a daily basis so that the value of the restricted cash or liquid securities,
when added to the amount deposited with the broker as margin, equals the amount
of such commitments by the Fund.
Fund assets need not be segregated if the Fund "covers" the futures contract or
call option sold. For example, the Fund could cover a futures or forward
contract which it has sold short by owning the securities or currency underlying
the contract. The Fund may also cover this position by holding a call option
permitting the Fund to purchase the same futures or forward contract at a price
no higher than the price at which the sell position was established. The Fund
could cover a call option which it has sold by holding the same currency or
security (or, in the case of a stock index, a portfolio of stock substantially
replicating the movement of the index) underlying the call option. The Fund may
also cover by holding a separate call option of the same security or stock index
with a strike price no higher than the strike price of the call option sold by
the Fund. The Fund could cover a call option which it has sold on a futures
contract by entering into a long position in the same futures contract at a
price no higher than the strike price of the call option or by owning the
securities or currency underlying the futures contract. The Fund could also
cover a call option which it has sold by holding a separate call option
permitting it to purchase the same futures contract at a price no higher than
the strike price of the call option sold by the Fund.
Illiquid Investments
Illiquid investments are investments that cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued. Under the supervision of the Board of Trustees, the Adviser determines
the liquidity of the Fund's investments and, through reports from the Adviser,
the Board monitors trading activity in illiquid investments. In determining the
liquidity of the Fund's investments, the Adviser may consider various factors,
including (i) the frequency of trades and quotations, (ii) the number of dealers
and prospective purchasers in the marketplace, (iii) dealer undertakings to make
a market, (iv) the nature of the security (including any demand or tender
features), and (v) the nature of the marketplace for trades (including the
ability to assign or offset the
<PAGE>
Fund's rights and obligations relating to the investment). Investments currently
considered by the Trust to be illiquid include repurchase agreements not
entitling the holder to payments of principal and interest within seven days,
over-the-counter options, and restricted securities. However, with respect to
OTC options which the Fund writes, all or a portion of the value of the
underlying instrument may be illiquid depending on the assets held to cover the
option and the nature and terms of any agreement the Fund may have to close out
the option before expiration. In the absence of market quotations, illiquid
investments are priced at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. If, through a change in values, net
assets or other circumstances, the Fund were in a position where more than 15%
of its net assets were invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
Restricted Securities
Restricted securities generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the Securities
Act of 1933, or in a registered public offering. Where the registration is
required, the Fund holding restricted securities may be obligated to pay all or
part of the registration expense and a considerable period may elapse between
the time it decides to seek registration and the time the Fund may be permitted
to sell a security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, the Fund might obtain a less
favorable price than prevailed when it decided to seek registration of the
security.
RISKS OF INTERNATIONAL INVESTING
Political, Social and Economic Risks
Investing in securities of non-U.S. companies may entail additional risks due to
the potential political, social and economic instability of certain countries
and the risks of expropriation, nationalization, confiscation or the imposition
of restrictions on foreign investment, convertibility of currencies into U.S.
dollars and on repatriation of capital invested. In the event of such
expropriation, nationalization or other confiscation by any country, the Fund
could lose its entire investment in any such country.
Religious, Political, And Ethnic Instability
Certain countries in which the Fund may invest may have groups that advocate
radical religious or revolutionary philosophies or support ethnic independence.
Any disturbance on the part of such individuals could carry the potential for
widespread destruction or confiscation of property owned by individuals and
entities foreign to such country and could cause the loss of the Fund's
investment in those countries. Instability may also result from, among other
things: (i) authoritarian governments or military involvement in political and
economic decision-making, including changes in government through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic and social conditions; and (iii) hostile relations
with neighboring or other
<PAGE>
countries. Such political, social and economic instability could disrupt the
principal financial markets in which the Fund invests and adversely affect the
value of the Fund's assets.
Foreign Investment Restrictions
Certain countries prohibit or impose substantial restrictions on investments in
their capital markets, particularly their equity markets, by foreign entities
such as the Fund. These restrictions or controls may at times limit or preclude
investment in certain securities and may increase the cost and expenses of the
Fund. For example, certain countries require prior governmental approval before
investments by foreign persons may be made, or may limit the amount of
investment by foreign persons in a particular company, or limit the investment
by foreign persons to only a specific class of securities of a company that may
have less advantageous terms than securities of the company available for
purchase by nationals. Moreover, the national policies of certain countries may
restrict investment opportunities in issuers or industries deemed sensitive to
national interests. In addition, some countries require governmental approval
for the repatriation of investment income, capital or the proceeds of securities
sales by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
restrictions on foreign capital remittances abroad. The Fund could be adversely
affected by delays in, or a refusal to grant, any required governmental approval
for repatriation, as well as by the application to it of other restrictions on
investments.
Non-Uniform Corporate Disclosure Standards and Governmental Regulation
Foreign companies are subject to accounting, auditing and financial standards
and requirements that differ, in some cases significantly, from those applicable
to U.S. companies. In particular, the assets, liabilities, and profits appearing
on the financial statements of such a company may not reflect its financial
position or results of operations in the way they would be reflected had such
financial statements been prepared in accordance with U.S. generally accepted
accounting principles. Most of the securities held by a Foreign Region Fund will
not be registered with the SEC or regulators of any foreign country, nor will
the issuers thereof be subject to the SEC's reporting requirements. Thus, there
will be less available information concerning most foreign issuers of securities
held by the Fund than is available concerning U.S. issuers. In instances where
the financial statements of an issuer are not deemed to reflect accurately the
financial situation of the issuer, the Adviser will take appropriate steps to
evaluate the proposed investment, which may include on-site inspection of the
issuer, interviews with its management and consultations with accountants,
bankers and other specialists. There is substantially less publicly available
information about foreign companies than there are reports and ratings published
about U.S. companies and the U.S. government. In addition, where public
information is available, it may be less reliable than such information
regarding U.S. issuers. Issuers of securities in foreign jurisdictions are
generally not subject to the same degree of regulation as are U.S. issuers with
respect to such matters as restrictions on market manipulation, insider trading
rules, shareholder proxy requirements and timely disclosure of information.
Currency Fluctuations
<PAGE>
Since the Fund may invest a substantial portion of its total assets in the
securities of foreign issuers which are denominated in foreign currencies, the
strength or weakness of the U.S. dollar against such foreign currencies may
account for a significant part of the Fund's investment performance. A decline
in the value of any particular currency against the U.S. dollar will cause a
decline in the U.S. dollar value of the Fund's holdings of securities and cash
denominated in such currency and, therefore, will cause an overall decline in
the Fund's net asset value and any net investment income and capital gains
derived from such securities to be distributed in U.S. dollars to shareholders
of the Fund. Moreover, if the value of the foreign currencies in which the Fund
receives its income declines relative to the U.S. dollar between the receipt of
the income and the making of Fund distributions, the Fund may be required to
liquidate securities in order to make distributions if the Fund has insufficient
cash in U.S. dollars to meet distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors, including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the relative movement of
interest rates and pace of business activity in the other countries and the
United States, and other economic and financial conditions affecting the world
economy.
Although the Fund values its assets daily in terms of U.S. dollars, the Fund
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. The Fund will do so, from time to time, and investors should
be aware of the costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at
one rate, while offering a lesser rate of exchange should the Fund desire to
sell that currency to the dealer.
Adverse Market Characteristics
Securities of many foreign issuers may be less liquid and their prices more
volatile than securities of comparable U.S. issuers. In addition, foreign
securities markets and brokers generally are subject to less governmental
supervision and regulation than in the United States, and foreign securities
exchange transactions usually are subject to fixed commissions, which generally
are higher than negotiated commissions on U.S. transactions. In addition,
foreign securities exchange transactions may be subject to difficulties
associated with the settlement of such transactions. Delays in settlement could
result in temporary periods when assets of the Fund are uninvested and no return
is earned thereon. The inability of the Fund to make intended security purchases
due to settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of a portfolio security due to settlement
problems either could result in losses to the Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser. The
Adviser will consider such difficulties when determining the allocation of the
Fund's assets, although the Adviser does not believe that such difficulties will
have a material adverse effect on the Fund's portfolio trading activities.
<PAGE>
The Fund may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to: (i) determining and monitoring the financial strength, reputation
and standing of the foreign custodian; (ii) maintaining appropriate safeguards
to protect the Fund's investments, and (iii) obtaining and enforcing judgments
against such custodians.
Withholding Taxes
The Fund's net investment income from foreign issuers may be subject to non-U.S.
withholding taxes by the foreign issuer's country, thereby reducing the Fund's
net investment income or delaying the receipt of income where those taxes may be
recaptured.
Special Considerations Affecting Emerging Markets
Investing in the securities of issuers domiciled in emerging markets, including
the markets of Latin America and certain Asian markets such as Taiwan, Malaysia
and Indonesia, may entail special risks relating to the potential political and
economic instability and the risks of expropriation, nationalization,
confiscation or the imposition of restrictions on foreign investment,
convertibility of currencies into U.S. dollars and on repatriation of capital
invested. In the event of such expropriation, nationalization or other
confiscation by any country, the Fund could lose its entire investment in any
such country.
Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading volume in issuers compared to
the volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities in these markets. In addition, securities
traded in certain emerging markets may be subject to risks due to the
inexperience of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the possibility
of permanent or temporary termination of trading.
Settlement mechanisms in emerging securities markets may be less efficient and
less reliable than in more developed markets. In such emerging securities
markets there may be share registration and delivery delays or failures.
Most Latin American countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain Latin American countries.
Description of U.S. Government Securities
<PAGE>
As used in this Statement of Additional Information, the term "U.S. Government
Securities" refers to a variety of securities which are issued or guaranteed by
the United States Treasury, by various agencies of the United States Government,
and by various instrumentalities which have been established or sponsored by the
United States Government. The term also refers to "repurchase agreements"
collateralized by such securities.
U.S. Treasury Securities are backed by the "full faith and credit" of the United
States. Securities issued or guaranteed by Federal agencies and U.S. government
sponsored instrumentalities may or may not be backed by the full faith and
credit of the United States. In the case of securities not backed by the full
faith and credit of the United States, the investor must look principally to the
agency or instrumentality issuing or guaranteeing the obligation for ultimate
repayment, and may not be able to assert a claim against the United States
itself in the event the agency or instrumentality does not meet its commitment.
Some of the U.S. government agencies that issue or guarantee securities include
the Export-Import Bank of the United States, Farmers Home Administration,
Federal Housing Administration, Maritime Administration, Small Business
Administration, and the Tennessee Valley Authority.
An instrumentality of the U.S. government is a government agency organized under
Federal charter with government supervision. Instrumentalities issuing or
guaranteeing securities include, among other, Federal Home Loan Banks, the
Federal Land Banks, Central Bank for Cooperatives, Federal Intermediate Credit
Banks, and the Federal National Mortgage Association.
Description of Repurchase Agreements
Repurchase agreements are transactions by which a person purchases a security
and simultaneously commits to resell that security to the seller (a member bank
of the Federal Reserve System or recognized securities dealer) at an agreed upon
price on an agreed upon date within a number of days (usually not more than
seven) from the date of purchase. The resale price reflects the purchase price
plus an agreed upon market rate of interest which is unrelated to the coupon
rate or maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value of the underlying security.
The Fund may engage in a repurchase agreement with respect to any security in
which it is authorized to invest. Any repurchase transaction in which the Fund
engages will require collateralization equal to at least 102% of the Seller's
obligation during the entire term of the repurchase agreement. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the underlying
securities, as well as delays and costs to the Fund in connection with
bankruptcy proceedings), it is the Fund's current policy to limit repurchase
agreement transactions to those parties whose creditworthiness has been reviewed
and deemed satisfactory by the Adviser.
<PAGE>
The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to repurchase the underlying
securities at a time when the value of these securities has declined, the Trust
may incur a loss upon disposition of them. If the seller of the agreement
becomes insolvent and subject to liquidation or reorganization under the
Bankruptcy Code or other laws, a bankruptcy court may determine that the
underlying securities are collateral not within the control of the Trust and
therefore subject to sale by the trustee in bankruptcy. Finally, it is possible
that the Trust may not be able to substantiate its interest in the underlying
securities. While the Trust's management acknowledges these risks, it is
expected that they can be controlled through stringent security selection
criteria and careful monitoring procedures.
PORTFOLIO TRANSACTIONS
The Advisory Agreement between the Trust and Lindbergh Capital Management, Inc.
(the "Adviser") requires that the Adviser, in executing portfolio transactions
and selecting brokers or dealers, seek the best overall terms available. In
assessing the terms of a transaction, consideration may be given to various
factors, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer (for a specified transaction and on a continuing basis), the
reasonableness of the commission, if any, and the brokerage and research
services provided to the Trust and/or other accounts over which the Adviser or
an affiliate of the Adviser exercises investment discretion.
The Adviser has not and does not currently utilize soft-dollar or directed
brokerage arrangements. However, under the Advisory Agreement, the Adviser is
permitted, in certain circumstances, to pay a higher commission than might
otherwise be obtained in order to acquire brokerage and research services. The
Adviser must determine in good faith, however, that such commission is
reasonable in relation to the value of the brokerage and research services
provided -- viewed in terms of that particular transaction or in terms of all
the accounts over which investment discretion is exercised. In such case, the
Board of Trustees will review the commissions paid by the Fund of the Trust to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits obtained. The advisory fee of the Adviser
would not be reduced by reason of its receipt of such brokerage and research
services. To the extent that research services of value are provided by
broker/dealers through or with whom the Trust places portfolio transactions the
Adviser may be relieved of expenses which it might otherwise bear.
The Trust may, in some instances, purchase securities that are not listed on a
national securities exchange or quoted on NASDAQ, but rather are traded in the
over-the-counter market. When the transactions are executed in the
over-the-counter market, it is intended generally to seek first to deal with the
primary market makers. However, the services of brokers will be utilized if it
is anticipated that the best overall terms can thereby be obtained. Purchases of
newly issued securities usually are placed with those dealers from which it
appears that the best price or execution will be obtained.
Those dealers may be acting as either agents or principals.
<PAGE>
Brokerage fees paid by the Fund for the most recent fiscal years will, in future
periods, be included in the Trust's Statement of Additional Information.
PORTFOLIO TURNOVER
The Adviser buys and sells securities for the Fund to accomplish its investment
objectives. The Fund's investment policies may lead to frequent changes in
investments, particularly in periods of rapidly fluctuating interest rates. The
Fund's investments may also be traded to take advantage of perceived short-term
disparities in market values or yields among securities of comparable quality
and maturity. A change in the securities held by a Fund is known as "portfolio
turnover." It is anticipated that portfolio turnover for the Fund will be equal
to or less than 100%.
MANAGEMENT OF THE TRUST
Trustees
The business affairs of the Trust are managed by the Board of Trustees. The
Trustees establish policies, as well as review and approve contracts and their
continuance. The Trustees also select the officers and select the Trustees to
serve as audit committee members.
Trustees and Officers of the Trust
Trustees and officers of the Trust, together with information as to their
principal business occupations during at least the last five years, are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk. The officers of
the Trust listed below are affiliated persons of the Trust and the Adviser.
<TABLE>
<S> <C> <C>
Positions
with the
Name, Address and Age Trust Principal Occupation
Dewayne L. Wiggins (50) Trustee* and President of Adviser since 1988.
5520 Telegraph Road #204 President
St. Louis, MO 63129
Brian D. Fitzpatrick (46) Trustee Associate Professor of Finance, Rockhurst University, since
18135 Canterbury 1989; Management Assessor, Sprint, Inc. since 1992.
Stillwell, KS 66085
Roger J. Levy (60) Trustee President, The Illtex Agency Inc. since 1994; Director/Chief
4302B Laclede Avenue Financial Officer of Access Control Technologies, Inc. 1990
St. Louis, MO 63108 to 1998; registered representative of Park Avenue Life of
the Guardian Life Insurance Co.
<PAGE>
Susan Wiggins (43) Trustee* Secretary of the Adviser since 1992.
2668 Cripple Creek
St. Louis, MO 63129
David M. Weinbaum (50) Trustee Author, publisher since 1995; President, Melrose
1106 Kingshighway Properties since 1994; owner/operator of eight McDonalds
Rolla, MO 65401 restaurants through Davaron Corp., AArmy Corp. and sole
proprietor-ships since 1975.
Sandra J. Britton (46) Secretary Administrative Assistant for Adviser since August 1998;
5520 Telegraph Road #204 Accounting for Family Fare 1992 to June 1998.
St. Louis, MO 63129
Carol Highsmith (34) Vice President Secretary of the Star Select Funds and Secretary of Unified
431 N. Pennsylvania St. and Assistant Funds, Financial Services, Inc. and Unified Investment
Indianapolis, IN 46204 Secretary Advisers, Inc. (October 1996 to present); employed by
Unified Fund Services, Inc. (November 1994 to present).
Michael Durham (40) Treasurer Director of Operations for the Indiana Pork Producers Association (May 1994
431 N. Pennsylvania St. to May 1995), Vice President of Unified Fund Services, Inc.(May 1995 to present).
Indianapolis, IN 46204
* Dewayne L. Wiggins and Susan Wiggins are husband and wife.
</TABLE>
The compensation to be paid to the Trustees of the Trust is set forth in the
following table:
<TABLE>
<S> <C> <C> <C> <C>
Total
Pension or Estimated Compensation
Retirement Annual from Trust
Aggregate Accrued as Benefits (the Trust is
Compensation Part of Fund Upon not in a Fund
Name of Trustee from Trust (1) Expenses Retirement Complex)(1)
Dewayne L. Wiggins $ 0 $ 0 $ 0 $ 0
Brian D. Fitzpatrick $ 1,500 $ 0 $ 0 $ 1,500
Roger J. Levy $ 1,500 $ 0 $ 0 $ 1,500
David M. Weinbaum $ 1,500 $ 0 $ 0 $ 1,500
Susan Wiggins $ 0 $ 0 $ 0 $ 0
TOTAL $ 4,500 $ 0 $ 0 $ 4,500
(1) Trustee fees are Trust expenses. The compensation is estimated for the first
full year of the Trust.
</TABLE>
<PAGE>
Control Persons and Principal Holders of Securities
Dewayne L. Wiggins and Lindbergh Capital Management, Inc. are control persons by
virtue of Lindbergh Capital providing initial funds to cover Trust organization
and their roles in Trust governance.
Distributor
Unified Management Corporation, 431 North Pennsylvania, Indianapolis, Indiana
46204, is the exclusive agent for distribution of shares of the Fund. The
Distributor is obligated to sell shares of the Fund on a best efforts basis only
against purchase orders for the shares. Shares of the Fund are offered to the
public on a continuous basis.
Additional Information about Investment Adviser
The Adviser was organized in 1998. Its Co-Founders are Dewayne L. Wiggins and
his brother Steven N. Wiggins. Steven N. Wiggins is a professor of economics at
Texas A&M University, College Station, Texas. Dewayne L. Wiggins, along with his
wife Susan Wiggins, own 50.3% of the Adviser, and Steven Wiggins owns 49.7%.
The Adviser has registered the service mark "Lindbergh Signature Funds" and
retains the right to use the name "Lindbergh" in connection with another
investment company or business enterprise with which the Adviser is or may
become associated. The Trust's right to use the name "Lindbergh Signature Funds"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the Adviser on ninety days written notice.
The Adviser may make payments to banks or other financial institutions that
provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
<PAGE>
The Board of Trustees (including a majority of the "disinterested Trustees") and
shareholder approval was given for the Advisory Agreement through to and
including August 2001. The Agreement provides that it will continue initially
for two years, and from year to year thereafter as long as it is approved at
least annually both (i) by a vote of a majority of the outstanding voting
securities of such Fund (as defined in the 1940 Act) or by the Board of Trustees
of the Trust, and (ii) by a vote of a majority of the Trustees who are not
parties to the Advisory Agreement or "interested persons" of any party thereto,
cast in person at a meeting called for the purpose of voting on such approval.
The Agreements may be terminated on 60 days' written notice by either party and
will terminate automatically if assigned.
PURCHASE AND REDEMPTION
Terms of Purchase
The Trust reserves the right to reject any purchase order and to change the
amount of the minimum initial and subsequent investments in the Fund upon
notice.
Reopening an Account
A shareholder may reopen a closed account with a minimum investment of $1,000
without filing a new account application, during the calendar year the account
is closed or during the following calendar year, provided that the information
on the existing account application remains correct.
Brokers
The Trust has authorized one or more brokers to accept purchase and redemption
orders on behalf of the Fund. Authorized brokers are permitted to designate
other intermediaries to accept purchase and redemption orders on the Fund's
behalf. The Fund will be deemed to have received a purchase or redemption order
when an authorized broker or, if applicable, an authorized broker's designee,
accepts the order. Orders will be priced at the Fund's net asset value next
computed after the order is accepted by an authorized broker or the authorized
broker's designee.
Redemption in Kind
The Trust has committed to pay in cash all redemption requests by a shareholder
of record, limited in amount during any 90-day period up to the lesser of
$250,000 or 1% of the value of the particular Fund's net assets at the beginning
of such period. Such commitment is irrevocable without the prior approval of the
Securities and Exchange Commission. In the case of requests for redemption in
excess of such amount, the Board of Trustees reserves the right to make payments
in whole or in part in securities or other assets of the particular Fund. In
this event, the securities would be valued in the same manner as the Fund's net
asset value is determined. If the recipient sold such securities, brokerage
charges would be incurred.
<PAGE>
Suspension of Redemptions
The right of redemption may be suspended or the date of payment postponed (a)
during any period when the New York Stock Exchange is closed, (b) when trading
in the markets the Fund normally uses is restricted, or when an emergency exists
as determined by the Securities and Exchange Commission so that disposal of the
Fund's investments or determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the Securities and Exchange
Commission by order may permit to protect the Fund's shareholders.
DETERMINATION OF NET ASSET VALUE
The methods and days on which net asset value is calculated by the Fund are
described in the prospectus.
TAX STATUS
Status of the Fund
The Fund intends to pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, the Fund must, among other
requirements:
derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
invest in securities within certain statutory limits; and
distribute to its shareholders at least 90% of its net income earned during
the year.
Shareholders' Tax Status
Shareholders are subject to federal income tax on dividends and capital gains
received as cash or additional shares. Depending on the composition of the
Fund's income, a portion of the dividends from net investment income may qualify
for the dividends received deduction allowable to certain U.S. corporations. In
general, dividend income of the Fund distributed to certain U.S. corporate
shareholders will be eligible for the corporate dividends received deduction
only to the extent that (i) the Fund's income consists of dividends paid by
certain U.S. corporations and (ii) the Fund would have been entitled to the
dividends received deduction with respect to such dividend income if the Fund
were not a regulated investment company.
<PAGE>
The foregoing tax consequences apply whether dividends are received in cash or
as additional shares. No portion of any income dividend paid by any Fund is
eligible for the dividends received deduction available to corporations.
Capital Gains
Shareholders will pay federal tax at capital gains rates on long-term capital
gains distributed to them regardless of how long they have held the Fund shares.
Foreign Taxes
Dividend and interest income received by the Fund from sources outside the U.S.
may be subject to withholding and other taxes imposed by such foreign
jurisdictions. Tax conventions between certain countries and the U.S. may reduce
or eliminate these foreign taxes, however, and foreign countries generally do
not impose taxes on capital gains respecting investments by foreign investors.
PERFORMANCE INFORMATION
Quotations of the Fund's performance are based on historical earnings, show the
performance of a hypothetical investment, and are not intended to indicate
future performance of the Fund. An investor's shares when redeemed may be worth
more or less than their original cost. Performance of the Fund will vary based
on changes in market conditions and the level of the Fund's expenses.
Total Return
"Average annual total return," as defined by the Securities and Exchange
Commission, is computed by finding the average annual compounded rates of return
(over the one and five year periods and the period from initial public offering
through the end of the Fund's most recent fiscal year) that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n = ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of
the applicable period of the hypothetical
$1,000 investment made at the beginning
of the applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
Yield
<PAGE>
The yield of the Fund's shares is determined each day by dividing the net
investment income per share (as defined by the Securities and Exchange
Commission) earned by the Fund over a thirty-day period by the net asset value
per share of the Fund on the last day of the period. This value is annualized
using semi-annual compounding. This means that the amount of income generated
during the thirty-day period is assumed to be generated each month over a
12-month period and is reinvested every six months.
The "yield" of a money market fund refers to the income generated by an
investment in the Fund over a seven-day period. This income is then annualized.
The amount of income generated by investments during the week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly but, when annualized,
the income earned by an investment in the Fund is assumed to be reinvested. The
effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment.
The yield of does not necessarily reflect income actually earned by the
applicable shares because of certain adjustments required by the Securities and
Exchange Commission and, therefore, may not correlate to the dividends or other
distributions paid to shareholders. To the extent that financial institutions
and broker/dealers charge fees in connection with services provided in
conjunction with an investment in the Fund, performance will be reduced for
those shareholders paying those fees.
PERFORMANCE COMPARISONS
A comparison of the quoted non-standard performance of various investments is
valid only if performance is calculated in the same manner. Because there are
different methods of calculating performance, investors should consider the
effect of the methods used to calculate performance when comparing performance
of a particular Fund with the performance quoted with respect to other
investment companies or types of investments.
From time to time, in advertising and marketing literature, the Fund's
performance may be compared to the performance of broad groups of mutual funds
with similar investment goals, as tracked by independent organizations such as
Investment Company Data, Inc. ("ICD"), Lipper Analytical Services, Inc.
("Lipper"), CDA Investment Technologies, Inc. ("CDA"), Morningstar, Inc. And
other independent organizations. When these organizations' tracking results are
used, the Fund will be compared to the appropriate fund category, that is, by
fund objective and portfolio holdings or the appropriate volatility grouping,
where volatility is a measure of the Fund's risk. Rankings may be listed among
one or more of the asset-size classes as determined by the independent ranking
organization. Footnotes in advertisements and other marketing literature will
include the organization issuing the ranking, time period, and asset size class,
as applicable, for the ranking in question.
In addition, the Fund's performance may be compared to unmanaged indices of
securities that are comparable in their terms and intent to those in which the
Fund invests such as the Dow Jones Industrial Average ("DJIA"), Standard &
Poor's 500 Stock Index ("S&P 500"), the Lehman Brothers
<PAGE>
Aggregate Bond Index, the Russell 2000 Index, the Morgan Stanley Capital
International Europe, Australia and Far East Index, the Morgan Stanley REIT
Index, the NanoCap(TM) Index and the Consumer Price Index ("CPI"). The DJIA and
S&P 500 are unmanaged indices widely regarded as representative of the equity
market in general. The CPI is a commonly used measured of inflation.
Marketing and other literature for the Fund may include a description of the
potential risks and rewards associated with an investment in the Fund. The
description may include a comparison of the Fund to broad categories of
comparable funds in terms of potential risks and returns. The description may
also compare the Fund to bank products, such as certificates of deposit. Unlike
mutual funds, certificates of deposit are insured up to $100,000 by the U.S.
government and offer a fixed rate of return. Because bank products guarantee the
principal value of an investment and money market funds seek stability of
principal, these investments are considered to be less risky than investments in
either bond or equity funds, which may involve loss of principal.
The risks and rewards associated with an investment in bond or equity funds
depend upon many factors. For fixed income funds these factors include, but are
not limited to the Fund's overall investment objective, the average portfolio
maturity, credit quality of the securities held, and interest rate movements.
For equity funds, factors include the Fund's overall investment objective, the
types of equity securities held and the financial position of the issuers of the
securities. The risks and rewards associated with an investment in international
bond or equity funds will also depend upon currency exchange rate fluctuation.
Shorter-term bond funds generally are considered less risky and offer the
potential for less return than longer-term fixed income funds. The same is true
of domestic bond funds relative to international fixed income funds, and fixed
income funds that purchase higher quality securities relative to bond funds that
purchase lower quality securities. Growth and income equity funds are generally
considered to be less risky and offer the potential for less return than growth
funds. In addition, international equity funds usually are considered more risky
than domestic equity fund but generally offer the potential for greater return.
CUSTODIAN
UMB Bank, N.A., 928 Grand Boulevard, 10th Floor, Kansas City, Missouri 64106
("Custodian") serves as the custodian for the Fund.
TRANSFER AGENT, FUND ACCOUNTING AGENT, AND
ADMINISTRATOR
Unified Fund Services, Inc. (the "Transfer Agent"), P.O. Box 6110, Indianapolis,
Indiana 46206-6110, acts as the transfer agent, fund accounting agent and
administrator for the Trust. The Transfer Agent maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of shares, acts as dividend and
distribution disbursing agent and performs other accounting and shareholder
service functions. The Transfer Agent provides the Trust with certain monthly
reports, record-keeping and other management-related services. For its services
the Transfer Agent receives a monthly fee at an annual
<PAGE>
rate of ___ %. The Transfer Agent and Unified Management Corporation are both
wholly owned subsidiaries of Unified Financial Services, Inc.
Neither the Custodian nor Unified Fund Services, Inc., has any part in
determining the investment policies of the Trust or any of the Fund or which
securities are to be purchased or sold by the Fund, and neither can provide
protection to shareholders against possible depreciation of assets.
INDEPENDENT ACCOUNTANTS AND COUNSEL
McCurdy & Associates CPA's Inc., 27955 Clemens Road, Westlake, Ohio 44145,
independent accountants, have been selected as the Trust's auditors for the
initial seed capital audit and for the fiscal year ending August 31, 2000.
Charles W. Lutter, Jr., 103 Canyon Oaks, San Antonio, Texas 78232, is legal
counsel to the Trust.
FINANCIAL STATEMENTS
Seed capital audited statements will be added.
<PAGE>
- --------------------------------------------------------------------------------
PART C
- --------------------------------------------------------------------------------
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
(a) Lindbergh Fund's ("Registrant's") Master Trust Agreement dated
June 16, 1999, is filed herewith.
(b) Registrant's current By-Laws dated June 16, 1999, is
filed herewith.
(c) Not Applicable [other instruments defining rights of
security holders].
(d) Advisory Agreement between Registrant and Lindbergh Capital
Management, Inc. dated June 16, 1999, is filed herewith.
(e) Distribution Agreement among Registrant, Unified Management
Corporation and Lindbergh Capital Management, Inc. dated June
16, 1999, is filed herewith.
(f) Not Applicable [bonus or profit sharing contracts for
directors or officers].
(g) Custody Agreement between Registrant and UMB Bank, N.A. dated
June 16, 1999, is filed herewith.
(h) Mutual Fund Services Agreement between the Registrant and
Unified Fund Services, Inc. dated June 16, 1999, is filed
herewith.
(i) Opinion and Consent of Lynch, Brewer, Hoffman & Sands, LLP,
Attorneys at Law, dated July 2, 1999, is filed herewith.
(j) Consent of independent public accountants - to be supplied
with opinion on seed capital by pre-effective amendment.
(k) Not Applicable [omitted financial statements].
(l) Copy of Letter of Initial Stockholders - to be supplied with
pre-effective amendment.
<PAGE>
(m) Rule 12b-1 Plan is filed herewith.
(n) Financial Data Schedule - None.
(o) Not Applicable [Rule 18f-3 Plan].
Item 24. Persons Controlled by or under Common Control with the Registrant
Information pertaining to persons controlled by or under common control with
Registrant is incorporated by reference to the prospectus and the Statement of
Additional Information contained in Part A and Part B, respectively, of this
Registration Statement at the section entitled "The Investment Advisor."
Item 25. Indemnification
Under Article VI of the Registrant's Master Trust Agreement, each of its
Trustees and officers or person serving in such capacity with another entity at
the request of the Registrant (a "Covered Person") shall be indemnified (from
the assets of the Sub-Trust or Sub-Trusts in question) against all liabilities,
including, but not limited to, amounts paid in satisfaction of judgments, in
compromises or as fines or penalties, and expenses, including reasonable legal
and accounting fees, incurred by the Covered Person in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal before any court or administrative or legislative body, in which such
Covered Person may be or may have been involved as a party or otherwise or with
which such person may be or may have been threatened, while in office or
thereafter, by reason of being or having been such a Trustee or officer,
director or trustee, except with respect to any matter as to which it has been
determined that such Covered Person (i) did not act in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to the
best interests of the Trust or (ii) had acted with wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office (either and both of the conduct
described in (i) and (ii) being referred to hereafter as "Disabling Conduct"). A
determination that the Covered Person is not entitled to indemnification may be
made by (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, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of evidence
of Disabling Conduct, or (iii) a reasonable determination, based upon a review
of the facts, that the indemnitee was not liable by reason of Disabling Conduct
by (a) a vote of the majority of a quorum of Trustees who are neither
"interested persons" of the Trust as defined
<PAGE>
in Section 1(a)(19) of the 1940 Act nor parties to the proceeding, or (b) as
independent legal counsel in a written opinion.
Item 26. Business and Other Connections of Investment Adviser
Registrant's investment adviser is discussed in the Prospectus and Statement of
Additional Information contained in Part A and Part B of this Registration
Statement. In addition to that discussion, Steve Wiggins, Vice-President and
Co-Founder of Lindbergh Capital Management, Inc. is a professor of economics at
Texas A&M University, College Station, Texas.
Item 27. Principal Underwriters
(a) Unified Management Corporation the Registrant's distributor,
acts as distributor for the following funds:
<TABLE>
<S> <C> <C>
Industry Leaders Fund The Julius Bear Investment Funds
104 Summit Avenue 330 Madison Avenue
Summit, NJ 07902 New York, NY 10017
Labrador Mutual Fund Milestone Funds
2344 Corte De La Jara 1 Executive Boulevard
Pleasanton, CA 94566 Yonkers, NY
Saratoga Advantage Trust Securities Management & Timing Funds
1501 Franklin Avenue 620 Woodmere Avenue, Suite B
Mineola, NY 11501 Traverse City, MI 49686
Sparrow Funds Firstar Select Funds
225 S. Meramec Ave., Ste. 732 431 North Pennsylvania Street
St. Louis, MO 63105 Indianapolis, IN 46204
The Unified Funds
431 North Pennsylvania Street
Indianapolis, IN 46204
</TABLE>
(b) Information with respect to each director and officer of
Unified Management Corporation is incorporated by reference to
Schedule A of Form BD filed by it under the Securities
Exchange Act of 1934 (File No. 8-23508).
<PAGE>
(c) Not Applicable.
Item 28. Location of Accounts and Records
Accounts, books and other documents required to be maintained by Registrants
pursuant to Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained at: Registrants investment adviser,
Lindbergh Capital Management, Inc., 5520 Telegraph Road, Suite 204, St. Louis,
Missouri 63129 (minute books); Registrant's transfer agent, fund accounting and
administrative services provider, Unified Fund Services, Inc., 431 North
Pennsylvania Street, Indianapolis, Indiana 46204; and Registrant's custodian,
UMB Bank, N.A., 928 Grand Boulevard, Kansas City, Missouri 64106.
Item 29. Management Services Not Discussed in Parts A or B
None.
Item 30. Undertakings
The Registrant hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.
Registrant undertakes to call a meeting of shareholders for purposes of voting
upon the question of removal of one or more Trustees when requested in writing
to do so by the holders of at least 10% of the Trust's outstanding shares, and
in connection with such meeting to comply with the provisions of Section 16(c)
of the Investment Company Act of 1940 relating to shareholder communications.
<PAGE>
Index to Exhibits
Exhibit
Number Description of Document
(a) Registrant's Master Trust Agreement dated June 16, 1999
(b) Registrant's current By-Laws dated June 16, 1999
(d) Advisory Agreement between Registrant and Lindbergh Capital
Management, Inc. dated June 16, 1999
(e) Distribution Agreement among Registrant, Unified Management
Corporation and Lindbergh Capital Management, Inc. dated June
16, 1999
(g) Custody Agreement between Registrant and UMB Bank, N.A. dated
June 16, 1999
(h) Mutual Fund Services Agreement between the Registrant and
Unified Fund Services, Inc. dated June 16, 1999
(i) Opinion and Consent of Lynch, Brewer, Hoffman & Sands, LLP,
Attorneys at Law, dated July 2, 1999
(m) Rule 12b-1 Plan
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, there unto duly authorized, in
the city of Saint Louis and the State of Missouri, on the 16th day of June 1999.
Lindbergh Funds
By: /S/ DEWAYNE L. WIGGINS
Dewayne L. Wiggins, President
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.
<TABLE>
<S> <C> <C>
Signature Title Date
By: /S/ DEWAYNE L. WIGGINS President and Trustee June 16, 1999
-------------------------
Dewayne L. Wiggins
By: /S/ BRIAN D. FITZPATRICK Trustee June 16, 1999
----------------------------
Brian D. Fitzpatrick
By: /S/ ROGER J. LEVY Trustee June 16, 1999
-----------------------------
Roger J. Levy
By: /S/ DAVID M. WEINBAUM Trustee June 16, 1999
-----------------------
David M. Weinbaum
By: /S/ SUSAN WIGGINS Trustee June 16, 1999
------------------------------
Susan Wiggins
</TABLE>
<PAGE>
POWER OF ATTORNEY
We the undersigned officers and Trustees of Lindbergh Funds (the
"Trust"), do hereby severally constitute and appoint Dewayne L. Wiggins and
Charles W. Lutter, Jr., each of them acting singularly, as our true and lawful
attorneys, with full powers to them and each of them to sign for us, in our
names in the capacities indicated below, any amendment to the Registration
Statement of the Trust on Form N-1A to be filed with the Securities and Exchange
Commission and to take such further action in respect thereto as they, in their
sole discretion, deem necessary to enable the Trust to comply with the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940
and all requirements and regulations of the Securities and Exchange Commission,
hereby ratifying and confirming our signatures as they may be signed by our said
attorneys to any and all documents related to said amendment to the Registration
Statement.
IN WITNESS WHEREOF, we have hereunto set out hands on the dates
indicated below.
Lindbergh Funds
By: /S/ DEWAYNE L. WIGGINS
Dewayne L. Wiggins, President
<TABLE>
<S> <C> <C>>
Signature Title Date
By: /S/ DEWAYNE L. WIGGINS President and Trustee June 16, 1999
-----------------------------
Dewayne L. Wiggins
By: /S/ BRIAN D. FITZPATRICK Trustee June 16, 1999
-------------------------------
Brian D. Fitzpatrick
By: /S/ ROGER J. LEVY Trustee June 16, 1999
----------------------------------
Roger J. Levy
By: /S/ DAVID M. WEINBAUM Trustee June 16, 1999
--------------------------
David M. Weinbaum
By: /S/ SUSAN WIGGINS Trustee June 16, 1999
--------------------------------
Susan Wiggins
</TABLE>
EXHIBIT
NUMBER (a)
Master Trust Agreement
<PAGE>
LINDBERGH FUNDS
MASTER TRUST AGREEMENT
June 16, 1999
DECLARATIONS................................................................4
ARTICLE I.
NAME AND DEFINITIONS ..............................................4
Section 1.1 Name And Principal Office..............................4
Section 1.2 Definitions.....................................................4
(a) "By-Laws" ................................................4
(b) The "1940 Act" ...........................................4
(c) The term "Commission" ....................................4
(d) "Series" .................................................5
(e) "Shareholder" ............................................5
(f) "Shares"..................................................5
(g) The "Trust"...............................................5
(h) "Agreement" ..............................................5
(i) "Trustees" ...............................................5
(j) "Class"...................................................5
ARTICLE II.
PURPOSE OF TRUST...................................................5
ARTICLE III.
THE TRUSTEES.......................................................5
Section 3.1 Appointment, Election, Removal, Etc.............................5
(b) Number....................................................5
(c) Election..................................................5
(d) Term......................................................6
(e) Vacancies.................................................6
(f) Resignation...............................................6
(g) Removal...................................................6
(h) Effect of Death, Resignation, etc.........................6
(i) No Accounting.............................................6
Section 3.2 Powers.........................................................6
(a) Investments. .............................................7
(b) Disposition of Assets.....................................7
(c) Ownership Powers..........................................7
(d) Subscription..............................................7
(e) Form of Holding...........................................7
(f) Reorganization, Etc.......................................7
(g) Voting Trusts, Etc. ......................................7
(h) Compromise................................................8
<PAGE>
(i) Associations, Etc..........................................8
(j) Borrowing And Security.....................................8
(k) Guarantees, Etc............................................8
(l) Insurance. ................................................8
(m) Vote Required, Place And Type of Meeting...................8
(n) Distribution Plans.........................................8
Section 3.3 Certain Contracts...............................................8
Section 3.4 Trust Expenses. ................................................9
Section 3.5 Ownership of Assets of the Trust................................9
ARTICLE IV.
SHARES/SUB-TRUSTS...................................................9
Section 4.1 Description of Shares...........................................9
Section 4.2 Establishment and Designation of Sub-Trusts....................11
Section 4.3 Rights and Preferences of Sub-Trusts...........................11
(a) Assets Belonging to Sub-Trusts............................11
(b) Liabilities Belonging to Sub-Trusts. ....................11
(c) Determination of Treatment as Income And/or Capital.......11
(d) Dividends. ...............................................12
(e) Liquidation...............................................12
(f) Voting. ..................................................12
(g) Redemption by Shareholder. ...............................12
(h) Redemption by Trust. .....................................12
(i) Net Asset Value. .........................................13
(j) Transfer. ................................................13
(k) Equality. ................................................13
(l) Fractions. ...............................................13
(m) Conversion Rights. .......................................13
(n) Class Differences. .......................................14
Section 4.4 Ownership of Shares. .........................................14
Section 4.5 Investments in the Trust. .....................................14
Section 4.6 No Preemptive Rights. .........................................14
Section 4.7 Status of Shares and Limitation of Personal Liability. .......14
ARTICLE V.
SHAREHOLDERS' VOTING POWERS AND MEETINGS...........................14
Section 5.1 Voting Powers. ...............................................14
Section 5.2 Meetings and Notice. .........................................15
<PAGE>
Section 5.3 Record Dates. ................................................16
Section 5.4 Quorum and Required Vote. .....................................16
Section 5.5 Action by Written Consent. ...................................16
Section 5.6 Inspection of Records. ........................................16
Section 5.7 Additional Provisions. .......................................16
Section 5.8 Shareholder Communications. ...................................16
ARTICLE VI.
LIMITATION OF LIABILITY; INDEMNIFICATION...........................17
Section 6.1 Trustees, Shareholders, Etc. Not Personally Liable, Notice.....17
Section 6.2 Notice for Contracts...........................................17
Section 6.3 Trustee's Good Faith Action; Expert Advice; No Bond............18
Section 6.4 Indemnification of Shareholders................................18
Section 6.5 Indemnification of Trustees, Officers, Etc.....................18
Section 6.6 Compromise Payment.............................................19
Section 6.7 Indemnification Not Exclusive, Etc. ..........................19
Section 6.8 Liability of Third Persons Dealing with Trustees. ............19
ARTICLE VII.
MISCELLANEOUS
..................................................................20
Section 7.1 Duration and Termination of Trust..............................20
Section 7.2 Reorganization. ...............................................20
Section 7.3 Amendments. ..................................................21
Section 7.4 Filing of Copies; References; Headings. .......................21
Section 7.5 Applicable Law. ...............................................22
Section 7.6 Resident Agent.................................................22
<PAGE>
LINDBERGH FUNDS
MASTER TRUST AGREEMENT
This AGREEMENT AND DECLARATION OF TRUST (the "Agreement") is made at St. Louis,
Missouri, the 16th day of June 1999, by the Trustees named under this Agreement,
and by the holders of shares of beneficial interest to be issued as provided
under this Agreement as follows:
DECLARATIONS
WHEREAS this Trust has been created to conduct the business of an investment
company; and
WHEREAS this Trust is authorized to issue, in accordance with the provisions of
this Agreement, its shares of beneficial interest in separate series, with each
separate series to be a Sub-Trust described in this Agreement;
WHEREAS the Trustees have agreed to manage the property received by them as
trustees of a Massachusetts business trust in accordance with the provisions in
this Agreement.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may acquire (from time to time) as
Trustees under this Agreement IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust or Sub-Trusts created under
this Agreement as hereinafter set forth.
ARTICLE I.
NAME AND DEFINITIONS
Section 1.1 Name And Principal Office. This Trust shall be known as Lindbergh
Funds and the Trustees will conduct the business of the Trust under that name or
any other name or names as they may from time to time determine. The principal
place of business of the Trust shall be 5520 Telegraph Road, Suite 204, Saint
Louis, Missouri 63129, or at such other location as the Trustees may from time
to time determine.
Section 1.2 Definitions. Unless otherwise specifically stated, the following
terms shall mean:
(n) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time;
(b) The "1940 Act" refers to the Investment Company Act of 1940 and
regulations thereunder, all as amended from time to time;
(c) The term "Commission" shall have the meaning given it in the 1940
Act;
<PAGE>
(d) "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article IV, each of
which Series shall be a Sub-Trust of the Trust;
(e) "Shareholder" means a record owner of Shares;
(f) "Shares" refers to the transferable units of interest into which
the beneficial interest in the Trust and each Sub-Trust of the
Trust (as the context may require) shall be divided from time to
time;
(g) The "Trust" refers to the Lindbergh Funds business trust
established by this Agreement, as amended from time to time,
inclusive of each and every Sub-Trust established hereunder;
(h) "Agreement" shall mean this Agreement and Declaration of Trust as
amended or restated from time to time; (a) "Trustees" refers to the
Trustees of the Trust named herein or elected in accordance with
Article III;
(j) "Class" refers to any class of Shares of any Series or Sub-Trust
established and designated under or in accordance with the
provisions of Article IV.
ARTICLE II.
PURPOSE OF TRUST
The purpose of the Trust is to conduct the business of an investment company,
offering Shareholders of the Trust one or more investment programs; and to
engage in any business allowable under applicable law which the Trustees may
deem convenient or proper in furtherance of the Trust's business.
ARTICLE III.
THE TRUSTEES
Section 3.1 Appointment, Election, Removal, Etc.
(a) Initial Trustees. Upon the execution of this Declaration of Trust
or a counterpart hereof or some other writing in which he or she
accepts such Trusteeship and agrees to the provisions hereof,
Dewayne L. Wiggins of Saint Louis, Missouri; Brian D. Fitzpatrick
of Stillwell, Kansas; Roger J. Levy of Saint Louis, Missouri;
David M. Weinbaum of Rolla, Missouri; and Susan Wiggins of Saint
Louis, Missouri, shall become Trustee of the Trust and of each
Sub-trust hereunder.
(b) Number. The Trustee(s) serving as such, whether named above or
hereafter appointed or elected, have the discretion to increase or
decrease the number of Trustees. No decrease in the number of
Trustees may remove any Trustee from office prior to the
expiration of his term; however, a decrease in the number of
Trustees may coincide with the removal of a Trustee pursuant to
subsection (g) of this Section 3.1.
(c) Election. The Shareholders shall elect the Trustees of the Trust.
Subject to Section 16(a) of the 1940 Act, the Trustees may elect
their own successors and may, pursuant to Section 3.1(e), appoint
Trustees to fill vacancies.
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(d) Term. Whether named above, appointed, or elected pursuant to this
Agreement, each Trustee shall serve as a Trustee of the Trust and
each Sub-Trust during the lifetime of the Trust and until its
termination as hereinafter provided or until such Trustee sooner
dies, resigns, retires or is removed. The Trustees may elect
their own successors and may, pursuant to Section 3.1(f) hereof,
appoint Trustees to fill vacancies; provided that, immediately
after filling a vacancy, at least two-thirds of the Trustees then
holding office shall have been elected to such office by the
Shareholders at an annual or special meeting. If at any time less
than a majority of the Trustees then holding office were so
elected, the Trustees shall forthwith cause to be held as
promptly as possible, and in any event within 60 days, a meeting
of Shareholders for the purpose of electing Trustees to fill any
existing vacancies.
(e) Vacancies. Any vacancy resulting from death, resignation, removal
or any other means, including without limitation an increase in
the number of Trustees by the other Trustees, or any anticipated
vacancy may (but need not unless required by the 1940 Act) be
filled by a majority of the remaining Trustees. Subject to the
provisions of Section 16(a) of the 1940 Act, the remaining
Trustees, in their sole discretion, may appoint in writing a
Trustee to fill a vacancy, and this appointment shall become
effective upon the written acceptance of such named person and
his agreement to be bound by the provisions of this Agreement. In
the event of an appointment to fill an anticipated vacancy, the
appointment shall become effective at or after the date the
anticipated vacancy occurs. No further act is necessary for the
Trust estate to vest in the new Trustee once the appointment is
effective.
(f) Resignation. A Trustee may resign as a trustee by delivering to
the Trustees or any Trust officer a signed written document to
that effect. The effective date of such resignation will be the
later of date stated in the document or, the date of delivery of
the document to the Trust at its principal offices.
(g) Removal. Any Trustee may be removed with or without cause at any
time either: (i) by a written document stating the effective date
of the removal and signed by at least two-thirds of the number of
Trustees prior to such removal; or (ii) by at least a two-thirds
vote of the outstanding shares, with such vote cast in person or
by proxy at a meeting called for such purpose; or (iii) by a
written declaration signed by Shareholders owning at least
two-thirds of the outstanding shares and filed with the Trust's
custodian.
(h) Effect of Death, Resignation, etc. The death, resignation,
retirement, removal, or incapacity of one or more of the Trustees
shall not terminate the Trust or any Sub-Trust or revoke or
terminate any existing agency or contract created or entered into
pursuant to the terms of this Agreement.
(iv) No Accounting. No persons or estate of such person who has ceased
acting as Trustee shall be required to make an accounting to the
Trustees or Shareholders unless required by the 1940 Act or
justified by circumstances calling for removal for cause.
Section 3.2 Powers. The Trustees may, in accordance with this Trust Agreement,
carry on the business of the Trust and shall have all the powers necessary to
conduct such business to carry out the purpose of the Trust. The Trustees'
powers include, but are not limited to, the power to; adopt By-Laws consistent
with the Trust Agreement which specify procedures for conducting the daily
business affairs of the Trust, including the power to amend and repeal the
By-Laws to the extent that the By-Laws do not reserve that right to the
Shareholders; establish Sub-Trusts, each such Sub-Trust to operate as a separate
and distinct investment medium and with separately defined investment objectives
and policies;
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establish, from time to time in accordance with the provisions of
Section 4.1 hereof, classes of Shares of any Series or Sub-Trust or
divide the Shares of any Series or Sub-Trust into classes;
elect and remove officers and appoint and terminate agents and
consultants and hire and terminate employees, any one or more of the
foregoing of whom may be a Trustee, and may provide for the
compensation of all of the foregoing;
appoint from their own number, and terminate, any one or more
committees consisting of two or more Trustees, including without
implied limitation an executive committee, which may, when the Trustees
are not in session and subject to the 1940 Act, exercise some or all of
the power and authority of the Trustees as the Trustees may determine;
employ one or more Advisers, Administrators, Depositories and
Custodians and may authorize any Depository or Custodian to employ
subcustodians or agents and to deposit all or any part of such assets
in a system or systems for the central handling of securities and debt
instruments, retain transfer, dividend, accounting or Shareholder
servicing agents or any of the foregoing, provide for the distribution
of shares by the Trust through one or more distributors, principal
underwriters or otherwise; and
in general, they may delegate to any officer of the Trust, to any
committee of the Trustees and to any employee, adviser, administrator,
distributor, depository, custodian, transfer and dividend disbursing
agent, or any other agent or consultant of the Trust such authority,
powers, functions and duties as they consider desirable or appropriate
for the conduct of the business and affairs of the Trust, including
authority to act in the name of the Trust and of the Trustees, to sign
documents and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing, the Trustees, on behalf of the Trust, shall, in
accordance with the 1940 Act or other applicable law, have the authority:
(a) Investments. To invest cash and other property, and to hold cash
or other property uninvested without regard to the custom of
investments by trustees;
(b) Disposition of Assets. To sell, exchange, lend, pledge, mortgage,
write options on and lease any or all of the assets of the Trust;
(c) Ownership Powers. To vote, or give assent, or exercise any rights
of ownership, with respect to stock or other securities, debt
instruments or property; and to execute and deliver proxies or
powers of attorney to such person or persons as the Trustees shall
deem proper;
(d) Subscription. To exercise powers and rights of subscription which
arise out of ownership of securities or debt instruments;
(e) Form of Holding. To hold any assets of the Trust in the name of
the Trust, Trustees, Sub-Trust, nominee or otherwise;
(f) Reorganization, Etc. To consent to or participate in any plan for
the reorganization or consolidation of any corporation or issuer
for which a security or debt instrument is or was held in the
Trust;
(g) Voting Trusts, Etc. To join with other holders of any securities
or debt instruments in acting through a committee, depository,
voting trustee or otherwise, and in that connection to deposit any
security or debt instrument with, or transfer any security or debt
instrument to the other holders or a representative thereof and to
delegate to them such power and authority with regard to any
security or debt instrument (whether or not so deposited or
transferred) as the Trustees shall deem proper, and
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to pay such portion of the expenses and compensation of such
representative as the Trustees shall deem proper;
(h) Compromise. To compromise or arbitrate claims (or any matter in
controversy) in favor of or against the Trust or any Sub-Trust;
(i) Associations, Etc. To enter into joint ventures, general or
limited partnerships and any other combinations or associations;
(j) Borrowing And Security. To borrow funds and to mortgage the assets
of the Trust to secure the obligations arising out of such
borrowing;
(k) Guarantees, Etc. To make contracts of guaranty, endorse or
guarantee the payment of any obligations of any person; and to
mortgage and pledge any Trust property to secure any of or all
such obligations;
(l) Insurance. To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate for the
conduct of the Trust's business including, without limitation,
liability insurance for the benefit of the Shareholders, Trustees,
officers, employees, agents, consultants, investment advisors,
managers, administrators, distributors, principal underwriters or
independent contractors (or any person connected therewith);
(m) Vote Required, Place And Type of Meeting. Except as otherwise
provided by the 1940 Act or other applicable law, this Agreement
or the By-Laws, any action to be taken by the Trustees on behalf
of the Trust or any Sub-Trust may be taken by a majority of the
Trustees present at a meeting of Trustees (a quorum, consisting
of at least a majority of the Trustees then in office, being
present), within or without Massachusetts, including any meeting
held by means of a conference telephone or other communications
equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by
such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office
(or such larger or different number as may be required by the
1940 Act or other applicable law);
(n) Distribution Plans. To adopt on behalf of the Trust or any
Sub-Trust with respect to any class thereof a plan of distribution
and related agreements thereto pursuant to the terms of Rule 12b-1
and/or other provisions of the 1940 Act and to make payments from
the assets of the Trust or the relevant Sub-Trust or Sub-Trusts
pursuant to said Rule 12b-1 Plan.
Section 3.3 Certain Contracts. The Trustees may from time to time enter into
contracts with any type of organization or individual ("Contracting Party")to
provide services for the Trust. Any delegation of powers by the Trustees shall
not limit the generality of their powers and authority.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter or distributor or agent of
or for any Contracting Party, or of or for any parent or affiliate
of any contracting party or that the contracting party or any
parent or affiliate thereof is a Shareholder or has an interest in
the Trust or any Sub-Trust, or that
(ii) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited
partnerships or other organizations, or have other business or
interests,
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shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust or any
Sub-Trust and/or the Trustees or disqualify any Shareholder, Trustee or officer
of the Trust from voting upon or executing the same or create any liability or
accountability to the Trust, any Sub-Trust or its Shareholders, provided that in
the case of any relationship or interest referred to in the preceding clause (i)
on the part of any Trustee or officer of the Trust either (x) the material facts
as to such relationship or interest have been disclosed to or are known by the
Trustees not having any such relationship or interest and the contract involved
is approved in good faith by a majority of such Trustees not having any such
relationship or interest (even though such unrelated or disinterested Trustees
are less than a quorum of all of the Trustees), (y) the material facts as to
such relationship or interest and as to the contract have been disclosed to or
are known by the Shareholders entitled to vote thereon and the contract involved
is specifically approved in good faith by vote of the shareholders, or (z) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by the Shareholders.
Section 3.4 Trust Expenses. The Trustees are authorized to incur on behalf of
the Trust expenses which they deem necessary and proper to carry out the
business of the Trust. As an element of expenses, the Trustees are authorized to
determine, establish, and receive reasonable compensation for their services as
Trustees. The Trustees are authorized to pay all expenses from either principal
or income and may allocate expenses among the Sub-Trusts and/or one or more
classes of Shares thereof as the Trustees, in their discretion, deem necessary
and appropriate.
Section 3.5 Ownership of Assets of the Trust. Title to all of the Trust assets
shall at all times be considered as vested in the Trustees.
ARTICLE IV.
SHARES/SUB-TRUSTS
Section 4.1 Description of Shares. The beneficial interest in the Trust shall
consist of one class of no-par Shares; however, the Trustees have authority to
divide the class of Shares into Series of Shares each of which Series of Shares
shall be a separate and distinct Sub-Trust of the Trust, as they deem necessary
or desirable. Each Sub-Trust of Shares established will be deemed to be a
separate Trust under Massachusetts General Laws Chapter 182. The Trustees shall
have exclusive powers without Shareholder approval to establish any Sub-Trust
and to determine the relative rights and preferences between the Shares of the
separate Sub-Trusts as to right of redemption and the price, terms and manner of
redemption, special and relative rights as to dividends and other distributions
and on liquidation, sinking or purchase fund provisions, conversion rights, and
conditions under which the several Sub-Trusts shall have separate voting rights
or no voting rights.
In addition, the Trustees shall have exclusive power, without the requirement of
Shareholder approval, to issue classes of Shares of any Sub-Trust or divide the
Shares of any Sub-Trust into classes, each class having such
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difference dividend, liquidation, voting and other rights as the Trustees may
determine, and may establish and designate the specific classes of Shares of
each Sub-Trust. The fact that a Sub-Trust shall have initially been established
and designated without any specific establishment or designation or classes
(i.e., that all Shares of such Sub-Trust are initially of a single class), or
that a Sub-Trust shall have more than one established and designated class,
shall not limit the authority of the Trustees to establish and designate
separate classes, or one or more further classes, of said Sub-Trust without
approval of the holders of the initial class thereof, or previously established
and designated class or classes thereof, provided that the establishment and
designation of such further separate classes would not adversely affect the
rights of the holders of the initial or previously established and designated
class or classes.
The number of authorized Shares and the number of Shares of each Sub-Trust or
class thereof that may be issued is unlimited, and the Trustees may issue Shares
of any Sub-Trust or class thereof for such consideration and on such terms as
they may determine (or for no consideration if pursuant to a Share dividend or
split-up), all without action or approval of the Shareholders. All Shares when
so issued on the terms determined by the Trustees shall be fully paid and
non-assessable (but may be subject to mandatory contribution back to the Trust
as provided in subsection (h) of Section 4.4). The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Sub-Trust or class thereof into one or more Sub-Trusts or classes thereof
that may be established and designated from time to time. The Trustees may hold
as treasury Shares, reissue for such consideration and on such terms as they may
determine, or cancel, at their discretion from time to time, any Shares of any
Sub-Trust or class thereof reacquired by the Trust.
The Trustees may, at any time, abolish a Sub-Trust if no Shares of that
Sub-Trust are outstanding. The Trustees may from time to time close the transfer
books or establish record dates and times for the purposes of determining the
holders of Shares entitled to be treated as such, to the extent provided or
referred to in Section 5.3.
The establishment and designation of any Sub-Trust or of any class of Shares of
any Sub-Trust in addition to those established and designated in Section 4.2
shall be effective upon the vote of a majority of the then Trustees setting
forth such establishment and designation and the relative rights and preferences
of the Shares of such Sub-Trust or class, or as otherwise provided in such vote.
At any time that there are no Shares outstanding of any particular Sub-Trust or
class previously established and designated the Trustees may by vote of a
majority of their number (or by an instrument executed by an officer of the
Trust pursuant to the vote of a majority of the Trustees) abolish that Sub-Trust
or class and the establishment and designation thereof. Each vote referred to in
this paragraph shall be implemented by preparation and filing of an amendment to
this Agreement.
Any Trustee, officer or other agent of the Trust, and any organization in which
any such person is interested may acquire, own, hold and dispose of Shares of
any Sub-Trust (including any classes thereof) of the Trust to the same extent as
if such person were not a Trustee, officer or other agent of the Trust; and the
Trust may issue and sell or cause to be issued and sold and may purchase Shares
of any Sub-Trust (including any classes thereof from any such
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person or any such organization subject only to the general limitations,
restrictions or other provisions applicable to the sale or purchase of Shares of
such Sub-Trust (including any classes thereof) generally.
Section 4.2 Establishment and Designation of Sub-Trusts. Without limiting the
Trustees' authority to establish further Sub-Trusts pursuant to Section 4.1, the
Trustees hereby establish the following sub-trusts:
Lindbergh Signature Fund
Section 4.3 Rights and Preferences of Sub-Trusts. Unless otherwise specified by
the Trustees, the Sub-Trusts established above and all future Sub-Trusts or any
classes thereof have the following rights and preferences:
(a) Assets Belonging to Sub-Trusts. All consideration received by the
Trust for the issue or sale of Shares of a particular Sub-Trust
or any classes thereof, all assets in which the consideration is
invested, and proceeds from the sale, exchange or liquidation
thereof, all income earnings, profits and proceeds from those
assets and any items allocated to the Sub-Trust or class thereof
by the Trustees shall be held in trust by the Trustees for the
benefit of the Shareholders of that Sub-Trust or class thereof
shall irrevocably belong to that Sub-Trust (and be allocable to
any classes thereof) and shall be recorded on the books of
account of the Trust as assets belonging to that Sub-Trust. The
Trustees may, in a manner they deem fair and equitable, allocate
among the Sub-Trusts any items which are not readily identifiable
to any one particular Sub-Trust (and allocable to any classes
thereof). Each allocation shall be binding upon the Shareholders
of the Trust.
(b) Liabilities Belonging to Sub-Trusts. The liabilities belonging to
a Sub-Trust shall include all liabilities associated with the
assets of that particular Sub-Trust, all expenses and charges
attributable to that Sub-Trust and any general liabilities which
are not readily identifiable and which the Trustees may allocate
in a manner they deem fair and equitable to that Sub-Trust. In
addition, the liabilities in respect of a particular class of
Shares of a particular Sub-Trust and all expenses, costs, charges
and reserves belonging to that class of Shares, and any general
liabilities, expenses, costs, charges or reserves of that
particular Sub-Trust which are not readily identifiable as
belonging to any particular class of Shares of that Sub-Trust
shall be allocated and charged by the Trustees to and among any
one or more of the classes of Shares of that Sub-Trust
established and designated from time to time in such manner and
on such basis as the Trustees in their sole discretion deem fair
and equitable. Each allocation shall be binding upon the
Shareholders of the Trust. Only the assets of a particular
Sub-Trust (including any classes thereof) may be used to satisfy
a creditor of that Sub-Trust.
(c) Determination of Treatment as Income And/or Capital. Except as
otherwise provided by the 1940 Act, the Trustees shall have full
discretion to determine which items shall be treated as income and
which items as capital; and each such determination and allocation
shall be conclusive and binding upon the Shareholders.
(d) Dividends. Dividends and distributions on Shares of a particular
Sub-Trust or any class thereof may be paid with such frequency as
the Trustees may determine, which may be daily or otherwise
pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustees may determine, to the
holders of Shares of that Sub-Trust or class, from such of the
income and capital gains, accrued or realized, from the assets
belonging to that Sub-Trust, or in the case of a class, belonging
to that sub-trust and allocable to that class, as the Trustees
may determine, after providing for actual and accrued liabilities
belonging to that Sub-Trust or class. All dividends and
distributions on Shares of a particular Sub-Trust or class
thereof shall be distributed pro rata to the holders of Shares of
that Sub-Trust or class in proportion to the number of Shares of
that Sub-Trust held by
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such holders at the date and time of record established for the
payment of such dividends or distributions, except that in
connection with any dividend or distribution program or procedure
the Trustees may determine that no dividend or distribution shall
be payable on Shares as to which the Shareholder's purchase order
and/or payment have not been received by the time or times
established by the Trustees under such program or procedure. Such
dividends and distributions may be made in cash or Shares of that
Sub-Trust or class or a combination thereof as determined by the
Trustees or pursuant to any program that the Trustees may have in
effect at the time for the election by each Shareholder of the
mode of the making of such dividend or distribution to that
Shareholder. Any such dividend or distribution paid in Shares will
be paid at the net asset value thereof as determined in accordance
with the subsection (i) of Section 4.3.
The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be
treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon
the Shareholders.
(e) Liquidation. A Sub-Trust or any class there may be liquidated
after such liquidation has been authorized by a majority vote of
the Trustees then in office and approved by a majority of the
outstanding voting Shares of that Sub-Trust or in the case of a
class, belonging to that Sub-Trust and allocable to that class,
over the liabilities belonging to that Sub-Trust or class, as
defined in the 1940 Act. The Shareholders of that particular
Sub-Trust or class thereof shall receive the excess of assets in
the Sub-Trust or class thereof over the liabilities in the
Sub-Trust on a pro rata basis.
(f) Voting. On each matter submitted to a vote of the Shareholders,
each holder of a Share of each Sub- Trust or any class thereof
shall be entitled to one vote for each whole Share and for a
proportionate fractional vote for each fractional Share
outstanding in his name on the books of the Trust and all shares
of each Sub-Trust or class thereof shall vote as a separate
class, except as to voting for Trustees and as otherwise required
by the 1940 Act. As to any matter which does not affect the
interest of a particular Sub-Trust or class thereof, only the
holders of Shares of one or more of the affected Sub-Trusts or
classes thereof shall be entitled to vote.
(g) Redemption by Shareholder. Each Shareholder shall have the right
to tender all or part of his shares of the Sub-Trust or any class
thereof for redemption at such times as the By-Laws permit, but
at least once weekly, with the redemption price equal to the net
asset value per Share as defined in this section. The Trust shall
make payment in cash unless in the Trustee's judgment conditions
exist which make payment in cash undesirable, in which case the
Trust may make payment wholly or partly in assets belonging to
the Sub-Trust or class thereof. The Trust may postpone payment of
the redemption price and suspend the Shareholder's right of
redemption in appropriate circumstances, to the extent
permissible under the 1940 Act.
(h) Redemption by Trust. The Trustees shall have the right to redeem
the Shares of the Trust and Sub- Trusts or classes thereof at the
same redemption price as if the Shareholder were redeeming the
Shares. A redemption by the Trustees shall occur if: (1) the
Trustees determine in their sole discretion that failure to
redeem the Shares would result in material adverse consequences
to the Shareholders of any of the Sub-Trusts; or (2) the failure
of a Shareholder to maintain a minimum amount as set forth in the
current prospectus of the Trust (Sub-Trust). If the Trustees
exercise their right of redemption, the Shareholder shall have no
further right except to receive payment of the redemption price.
(i) Net Asset Value. The net asset value per Share of any Sub-Trust
shall be (a) in the case of a Sub-Trust whose Shares are not
divided into classes, the quotient obtained by dividing the value
of the net assets of that Sub-Trust (being the value of the
assets belonging to that Sub-Trust less the liabilities belonging
to that Sub-Trust) by the total number of Shares of that
Sub-Trust outstanding, and (b) in the case of a class of Shares
of a Sub-Trust whose Shares are divided into classes, the
quotient
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obtained by dividing the value of the assets of that Sub-Trust
allocable to such class (less the liabilities belonging to such
class) by the total number of Shares of such class outstanding.
The net asset value shall be computed in accordance with the
1940Act and regulations thereunder. In calculating the net asset
value, methods and procedures established by the Trustees shall be
used.
The Trustees may determine to maintain the net asset value per
Share of any Sub-Trust at a designated constant dollar amount and
in connection therewith may adopt procedures not inconsistent with
the 1940 Act for the continuing declarations of income
attributable to that Sub-Trust as dividends payable in additional
Shares of that Sub-Trust at the designated constant dollar amount
and for the handling of any losses attributable to that Sub-Trust.
Such procedures may provide that in the event of any loss each
Shareholder shall be deemed to have contributed to the capital of
the Trust attributable to that Sub-Trust his pro rata portion of
the total number of Shares required to be canceled in order to
permit the net asset value per Share of that Sub-Trust to be
maintained, after reflecting such loss, at the designated constant
dollar amount. Each Shareholder of the Trust shall be deemed to
have agreed, by his investment in any Sub-Trust with respect to
which the Trustees shall have adopted any such procedure, to make
the contribution referred to in the preceding sentence in the
event of any such loss.
(j) Transfer. All Shares of each particular Sub-Trust or class thereof
shall be transferable, but transfers of Shares of a particular
Sub-Trust or class thereof will be recorded on the Share transfer
records of the Trust applicable to that Sub-Trust or class only at
such times as Shareholders shall have the right to require the
Trust to redeem Shares of that Sub-Trust or class and at such
other times as may be permitted by the Trustees.
(k) Equality. Except as provided herein or in the instrument
designating and establishing any class of Shares or any
Sub-Trust, all Shares of each particular Sub-Trust or class
thereof shall represent an equal proportionate interest in the
assets belonging to that Sub-Trust, or in the case of a class,
belonging to that Sub-Trust and allocable to that class (subject
to the liabilities belonging to that Sub-Trust or class), and
each Share of any particular Sub-Trust or class shall be equal to
each other Share of that Sub-Trust or class; but the provisions
of this sentence shall not restrict any distinctions permissible
under subsection (d) of this Section 4.3 that may exist with
respect to dividends and distributions on Shares of the same
Sub-Trust or class. The Trustees may from time to time divide or
combine the Shares of any particular Sub-Trust or class into a
greater or lesser number of Shares of that Sub-Trust or class
without thereby changing the proportionate beneficial interest in
the assets of that Sub-Trust or class or in any way affecting the
rights of Shares of any other Sub-Trust or class.
(l) Fractions. A fractional Share of a Sub-Trust or class
proportionately carries all the rights and obligations of a whole
Share of the Sub-Trust or class.
(m) Conversion Rights. The Trustees shall have authority to establish
procedures pursuant to which a Shareholder of one Sub-Trust or
class thereof may exchange shares of that Sub-Trust for shares of
another Sub-Trust or class thereof.
(n) Class Differences. The relative rights and preferences of the
classes of any Sub-Trust may differ in such other respects as the
Trustees may determine to be appropriate in their sole discretion,
provided that such differences are set forth in the resolutions
adopted by the Trustees or the instrument establishing and
designating such classes and executed by a majority of the
Trustees (or by an instrument executed by an officer of the Trust
pursuant to a vote of a majority of the Trustees).
Section 4.4 Ownership of Shares. The ownership of Shares shall be recorded on
the books of the Trust or of a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Sub-Trust and each
class thereof. No certificates certifying the ownership of Shares need be issued
except as the
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Trustees determine. The Trustees may establish such rules as they consider
appropriate for the issuance of Share certificates, use of facsimile signatures,
transfer of Shares and similar matters. The record books of the Trust shall be
conclusive as to who are the Shareholders and as to the number of Shares of each
Sub-Trust and class thereof held from time to time by each such Shareholder.
Section 4.5 Investments in the Trust. The Trustees shall have authority to
establish procedures and policies with respect to acceptance or rejection of
investments in the Trust and Sub-Trusts and to authorize other persons to accept
and reject orders for the purchase of Shares in accordance therewith.
Section 4.6 No Preemptive Rights. The Shares of the Trust or Sub-Trusts have no
preemptive rights.
Section 4.7 Status of Shares and Limitation of Personal Liability. Shares shall
be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder, by virtue of having become a Shareholder, shall
be held to have expressly assented and agreed to the terms hereof and to have
become a party hereto.
The death of a Shareholder during the continuance of the Trust shall not operate
to terminate the Trust or any Sub-Trust thereof nor entitle the representative
of any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle the Shareholder
to any title in or to the whole or any part of the Trust property or right to
call for a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders partners. Neither the Trust nor
the Trustees, nor any officer, employee or agent of the Trust shall have any
power to bind personally any Shareholder, nor, except as specifically provided
herein, to call upon any Shareholder for the payment of any sum of money or
assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay.
ARTICLE V.
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 Voting Powers. The Shareholders shall only vote in the following
instances:
(i) election or removal of Trustees as provided herein;
(ii) approval of a contract for which the 1940 Act requires
Shareholder approval;
(iii)termination or reorganization of the Trust or any Sub-Trust if
required by Section 7.2;
(iv) amendment of the Trust Agreement if required by Section 7.3;
(v) determination of whether a derivative or class action suit should
be brought or pursued on behalf of the Trust or Sub-Trust or
class thereof as would the stockholders of a Massachusetts
business corporation, provided that the Shareholders of one
Sub-Trust or class thereof may not vote on an action on behalf of
another Sub-Trust or class thereof or one of its Shareholders;
and
(vi) such additional matters relating to the Trust as may be required
by the 1940 Act, this Agreement, the By-Laws or any registration
of the Trust with the Commission (or any successor agency) or any
state, or as the Trustees may consider necessary or desirable.
<PAGE>
There shall be no cumulative voting in Trustee elections.
Shares may be voted by proxy or in person. Shares held in the name of two or
more persons may be voted by proxy executed by one of the named persons unless
the Trust is notified to the contrary by written instructions, prior to the
execution of the proxy. A proxy purporting to be executed by or on behalf of a
Shareholder shall be presumed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall be on the challenger.
Until Shares are issued the Trustees may take any action required by law, this
Agreement or the By-Laws to be taken by Shareholders.
Proxies may be given orally or in writing or pursuant to any computerized or
mechanical data gathering process specifically approved by the Trustees.
Section 5.2 Meetings and Notice. No annual or regular meeting of Shareholders is
required; however, the Trustees may call meetings to take action on matters
which require Shareholder vote and for other matters which the Trustees
determine Shareholder vote is necessary or desirable.
The Trustees shall give Shareholders written notice of any Shareholder meeting
by mailing such notice, postage prepaid, at least seven days before the meeting
date to each Shareholder at the Shareholder's address as it appears on the
records of the Trust. The notice shall state the purpose of the meeting.
Upon written request of Shareholders holding 10% or more of the then outstanding
Shares, the Trustees shall call a meeting to vote upon the removal of a Trustee.
If the Trustees do not call a Shareholder meeting within 30 days after receipt
of the written request, Shareholders holding 10% or more the then outstanding
Shares may call a meeting for that purpose giving notice and following the
procedures governing Trustee-called meetings, set forth in this Agreement.
No notice is required for adjourned sessions which are held within a reasonable
time after the original meeting.
Section 5.3 Record Dates. For the purpose of determining Shareholders entitled
to vote or act at a meeting, to participate in a dividend or distribution, or
for the purpose of any other action, the Trustees may close the transfer books
for a period not exceeding 30 days (except at or in connection with the
termination of the Trust) as the Trustees may determine. Alternatively, without
closing the transfer books, the Trustees may fix a date and time not more than
60 days prior to the date of any meeting of Shareholders or other action as the
date and time of record for the determination of Shareholders entitled to vote
at such meeting or to be treated as Shareholders of record for purposes of such
other action, and any Shareholder who was a Shareholder at the date and time so
fixed shall be 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, even
though he has since that date and time disposed of his Shares; and, no person
becoming a Shareholder after that date and time 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.
Section 5.4 Quorum and Required Vote. A quorum to conduct business shall consist
of a majority of the Shares entitled to vote at a Shareholder's meeting. A
lesser number is sufficient for adjournments.
Unless otherwise required by applicable law or this Agreement a majority of the
voted Shares at a meeting at which a quorum is present shall be sufficient to
transact business, and Trustees shall be elected by a plurality.
<PAGE>
Section 5.5 Action by Written Consent. Unless otherwise required by applicable
law, Shareholders may take action without a meeting if a majority of the
Shareholders entitled to vote on the action (or such greater percentage as may
be required by applicable law for such action) consent in writing to such action
and their consents are filed with the records of the Shareholder meetings.
Written Consents shall be treated as votes taken at a Shareholder meeting.
Section 5.6 Inspection of Records. Shareholders may inspect the Trust's records
to the same extent permitted by Massachusetts Business Corporation Law to the
stockholders of a Massachusetts business corporation.
Section 5.7 Additional Provisions. The By-Laws may include further provisions
for Shareholders' votes and meetings and related matters not inconsistent with
the provisions hereof.
Section 5.8 Shareholder Communications. Whenever ten or more Shareholders of
record have been such for a 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 1% 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 Shareholder
meeting and accompanied by a form of communication and request which they wish
to transmit, the Trustees shall within five business days after receipt of such
application either (1) 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
Sub-Trust, as applicable; or (2) 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 paragraph (2)above the
Trustees, 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 business days after
such tender the Trustees shall mail to such applicants and file with the
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 such violation of applicable law, and specifying the
basis of such opinion. The Trustees shall thereafter comply with the
requirements of the 1940 Act.
<PAGE>
ARTICLE VI.
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 6.1 Trustees, Shareholders, Etc. Not Personally Liable, Notice. All
persons extending credit to, contracting with or having any claim against the
Trust shall look only to the assets of the Sub-Trust with which such person
dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other Sub-Trust
shall be personally liable therefor. Every note, bond, contract, instrument,
certificate or undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have been executed
or done only by or for the Trust (or the Sub-Trust) or the Trustees and not
personally. Nothing in this Agreement shall protect any Trustee or officer
against any liability to the Trust or the Shareholders to which such Trustee or
officer would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee or of such officer.
Section 6.2 Notice for Contracts. Every contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officers or officer shall
give notice (a) that this Agreement is on file with the Secretary of the
Commonwealth of Massachusetts, (b) that the document was executed or made on
behalf of the Trust or by them as Trustees or as officers and not by them
individually, and (c) that the obligations of such instrument are not binding
upon any of them or the Shareholders individually, but are binding only upon the
assets and property of the Trust, or the particular Sub-Trust in question, as
the case may be. Omission of such notice shall not operate to bind any Trustee,
officer or Shareholder individually.
Section 6.3 Trustee's Good Faith Action; Expert Advice; No Bond. The exercise by
the Trustees of their powers and discretion hereunder shall be binding upon
everyone interested. A Trustee shall be liable for his own wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and shall not be liable
for errors of judgment or mistakes of fact or law. Subject to the foregoing, (a)
the Trustees shall not be responsible or liable in any event for any neglect or
wrongdoing of any officer, agent, employee, consultant, adviser, administrator,
distributor or principal underwriter, custodian or transfer, dividend
disbursing, Shareholder servicing or accounting agent of the Trust, nor shall
any Trustee be responsible for the act or omission of any other Trustee; (b) the
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Agreement and their duties as Trustees, and shall be under
no liability for any act or omission in accordance with such advice or for
failing to follow such advice; and (c) in discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon the books of
account of the Trust and upon written reports made to the Trustees by any
officer appointed by them, any independent public accountant, and (with respect
to the subject matter of the contract involved) any officer, partner or
responsible employee of a contracting party appointed by the Trustees pursuant
to Section 3.3. The Trustees, as such, shall not be required to give any bond or
other security for the performance of their duties.
Section 6.4 Indemnification of Shareholders. In case any Shareholder(or former
Shareholder) of any Sub-Trust of the Trust shall be charged or held to be
personally liable for any obligation or liability of the Trust solely by reason
of being or having been a Shareholder and not because of such Shareholder's acts
or omissions or for some other reason, said Sub-Trust (upon proper and timely
request by the Shareholder) shall assume the defense against such charge and
satisfy any judgment thereon, and the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of said Sub-Trust estate to be held harmless
from and indemnified against all loss and expense arising from such liability.
<PAGE>
Section 6.5 Indemnification of Trustees, Officers, Etc. The Trust shall
indemnify (from the assets of the Sub-Trust or class thereof or Sub-Trusts or
classes thereof in question) each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise [hereinafter referred to as a "Covered Person"]) against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, except with respect to any
matter as to which it has been determined in one of the manners described below,
that such Covered Person (i) did not act in good faith in the reasonable belief
that such Covered Person's action was in or not opposed to the best interests of
the Trust or (ii) had acted with wilful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such Covered
Person's office (either and both of the conduct described in (i) and (ii) being
referred to hereafter as "Disabling Conduct"). A determination that the Covered
Person is not entitled to indemnification due to Disabling Conduct may be made
by (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, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of evidence
of Disabling Conduct, or (iii) a reasonable determination, based upon a review
of the facts, that the indemnitee was not liable by reason of Disabling Conduct
by (a) a vote of a majority of a quorum of Trustees who are neither "interested
persons" of the Trust as defined in section 2(a)(19) of the 1940 Act nor parties
to the proceeding, or (b) an independent legal counsel in a written opinion.
Expenses, including accountants' and counsel fees so incurred by any such
Covered Person (but excluding amounts paid in satisfaction of judgements, in
compromise or as fines or penalties), may be paid from time to time in advance
of the final disposition of any such action, suit or proceeding, provided that
the Covered Person shall have undertaken to repay the amounts so paid to the
Sub-Trust in question if it is ultimately determined that indemnification of
such expenses is not authorized under this Article VI and (i) the Covered Person
shall have provided security for such undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or (iii) a
majority of a quorum of the disinterested Trustees who are not a party to the
proceeding, or an independent legal counsel in a written opinion, shall have
determined, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe the Covered Party
ultimately will be found entitled to indemnification.
Section 6.6 Compromise Payment. Any compromise settlement shall be indemnified
only if approved: (a) by a majority of the disinterested Trustees not a party to
the proceeding; or (b) by a written opinion of an independent legal counsel. If
payment has been made pursuant to (a) or (b) and the recipient is subsequently
found to have engaged in bad faith, wilful misfeasance, gross negligence or
reckless disregard of duty, the Trust may recover such payment.
Section 6.7 Indemnification Not Exclusive, Etc. The right of indemnification
provided by this Article VI shall not be exclusive of or affect any other rights
to which any covered person may be entitled. The indemnification shall inure to
the benefit of such person's heirs, executors and administrators. Nothing
contained in this article shall affect any rights to indemnification to which
personnel of the Trust, other than Trustees and officers, and other persons may
be entitled by contract or otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf of any such person.
<PAGE>
Section 6.8 Liability of Third Persons Dealing with Trustees. No person dealing
with the Trustees shall be bound to make any inquiry concerning the validity of
any transaction made or to be made by the Trustees or to see to the application
of any payments made or property transferred to the Trust or upon its order.
ARTICLE VII.
MISCELLANEOUS
Section 7.1 Duration and Termination of Trust. This Trust shall continue for an
unlimited period. The Trust may be terminated at any time by a majority vote of
the Trustees then in office and approved by a majority vote of the outstanding
voting shares as defined in 1940 Act, Shares of each Sub-Trustor each class
thereof voting separately by Sub-Trust or class thereof.
No modification of any Sub-Trust or class shall terminate the Trust.
In the event of termination, the Trustees shall pay all due and anticipated
expenses, and then liquidate the assets in a manner the Trustees deem
appropriate and distribute the proceeds according to the provisions of this
Agreement.
Section 7.2 Reorganization. The Trustees may sell, convey, merge and transfer
the assets of the Trust, or the assets belonging to any one or more Sub-Trusts,
to another trust, partnership, association or corporation organized under the
laws of any state of the United States, or to the Trust to be held as assets
belonging to another Sub-Trust of the Trust, in exchange for cash, shares or
other securities (including, in the case of a transfer to another Sub-Trust of
the Trust, Shares of such other Sub-Trust) with such transfer either (1) being
made subject to, or with the assumption by the transferee of, the liabilities
belonging to each Sub-Trust the assets of which are so transferred, or (2) not
being made subject to, or not with the assumption of, such liabilities;
provided, however, that no assets belonging to any particular Sub-Trust shall be
so transferred unless the terms of such transfer shall have first been approved
at a meeting called for the purpose by the affirmation vote of the holders of a
majority of the outstanding voting Shares, as defined in the 1940 Act, of that
Sub-Trust. Following such transfer, the Trustees shall distribute such cash,
shares or other securities (giving due effect to the assets and liabilities
belonging to and any other differences among the various Sub-Trusts and classes
the assets belonging to which have been so transferred) among the Shareholders
of the Sub-Trust the assets belonging to which have been so transferred; and if
all of the assets of the Trust have been so transferred, the Trust shall be
terminated.
The Trust, or any one or more Sub-Trusts, may, either as the successor,
survivor, or non-survivor, (1) consolidate with one or more other trusts,
partnerships, associations or corporations organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States, to form a
new consolidated trust, partnership, association or corporation under the laws
of which any one of the constituent entities is organized, or (2) merge into one
or more other trusts, partnerships, associations or corporations organized under
the laws of the Commonwealth of Massachusetts or any other state of the United
States, or have one or more such trusts, partnerships, associations or
corporations merged into it, any such consolidation or merger to be upon such
terms and conditions as are specified in an agreement and plan of reorganization
entered into by the Trust, or one or more Sub-Trusts as the case may be, in
connection therewith. The terms "merge" or "merger" as used herein shall also
include the purchase or acquisition of any assets of any other trust,
partnership, association or corporation which is an investment company organized
under the laws of the Commonwealth of Massachusetts or any other state of the
United States. Any such consolidation or merger shall require the affirmative
vote of the holders of a majority of the outstanding voting Shares, as defined
in the 1940 Act, of each Sub-Trust affected thereby.
<PAGE>
Section 7.3 Amendments. All rights granted to the Shareholders under this
Agreement are granted subject to the reservation of the right to amend this
Agreement as herein provided, except that no amendment shall repeal the
limitations on personal liability of any Shareholder or Trustee or repeal the
prohibition of assessment upon the Shareholders without the express consent of
each Shareholder or Trustee involved. Subject to the foregoing, the provisions
of this Agreement (whether or not related to the rights of Shareholders) may be
amended at any time, so long as such amendment does not adversely affect the
rights of any Shareholder with respect to which such amendment is or purports to
be applicable and so long as such amendment is not in contravention of
applicable law, including the 1940 Act, by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust pursuant to the
vote of a majority of such Trustees). Any amendment to this Agreement that
adversely affects the rights of Shareholders may be adopted at any time by an
instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to a vote of a majority of such Trustees) when
authorized to do so by the vote in accordance with subsection (e) of Section 4.2
of Shareholders holding a majority of the Shares entitled to vote. Subject to
the foregoing, any such amendment shall be effective as provided in the
instrument containing the terms of such amendment or, if there is no provision
therein with respect to effectiveness, upon the execution of such instrument and
of a certificate (which may be a part of such instrument) executed by a trustee
or officer of the Trust to the effect that such amendment has been duly adopted.
Section 7.4 Filing of Copies; References; Headings. This Agreement and all
amendments shall be maintained in Trust offices for Shareholder inspection.
A copy of this Agreement and all amendments shall be filed with the appropriate
governmental offices as required, including the Secretary of the Commonwealth of
Massachusetts and the Boston City Clerk. Failure to make any such filing shall
not impair the effectiveness of this instrument or any such amendment.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such amendments have been made, as to the
identities of the Trustees and officers, and as to any matters in connection
with the Trust hereunder; and, with the same effect as if it were the original,
may rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like
"herein","hereof" and "hereunder" shall be deemed to refer to this instrument as
a whole as the same may be amended or affected by any such amendments.
As used in this Agreement the masculine gender shall include the feminine and
neuter genders. Headings are used for reference only and shall not affect the
meaning or construction of this Agreement. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original.
Any reference to this document shall include all amendments.
<PAGE>
Section 7.5 Applicable Law. This Agreement is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of said Commonwealth, including the
Massachusetts Business Corporation Law as the same may be amended from time to
time, to which reference is made with the intention that matters not
specifically covered herein or as to which an ambiguity may exist shall be
resolved as if the Trust were a business corporation organized in Massachusetts,
but the reference to said Business Corporation Law is not intended to give the
Trust, the Trustees, the Shareholders or any other person any right, power,
authority or responsibility available only to or in connection with an entity
organized in corporate form. The Trust shall be of the type referred to in
Section 1 of Chapter 182 of the Massachusetts General Laws and of the type
commonly called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
Section 7.6 Resident Agent. Mr. Edward S. Brewer, 101 Federal Street, 22nd
Floor, Boston, Massachusetts 02110-1800, for the purposes of complying with the
laws of the Commonwealth of Massachusetts is hereby appointed as resident agent
for the Trust within the Commonwealth of Massachusetts; and hereby is designated
as its attorney in the Commonwealth of Massachusetts upon whom may be served any
notice, process or pleading in any action or proceeding against the Trust. and
the undersigned does hereby consent that any such action or proceeding against
the Trust may be commenced in any court of competent jurisdiction and proper
venue within the State so designated by services of process upon said resident
agent with the same effect as if the Trust had been served lawfully with
process. It is requested that a copy of any notice, process or pleadings served
be mailed to the attention of Dewayne L. Wiggins, Lindbergh Funds, 5520
Telegraph Road, Suite 204, Saint Louis, Missouri 63129.
IN WITNESS WHEREOF, the undersigned have hereunto set their hand and seals for
themselves and their assigns, as of the date and year first above written.
___________________________ ______________________________
Dewayne L. Wiggins, Trustee Brian D. Fitzpatrick, Trustee
______________________ __________________________
Roger J. Levy, Trustee David M. Weinbaum, Trustee
______________________
Susan Wiggins, Trustee
STATE OF )
) ss:
COUNTY OF )
Before me, a Notary Public in and for said county and state, personally appeared
the above named , who acknowledged that he/she did sign the foregoing instrument
and that the same is his/her free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal on
this day of _________________ , _________________________
Notary Public
My Commission Expires:
EXHIBIT
NUMBER (b)
By-Laws
<PAGE>
BY-LAWS
OF
LINDBERGH FUNDS
ARTICLE 1. Agreement And Declaration of Trust And Principal Offices
1.1 Agreement And Declaration of Trust. These By-Laws shall be subject to the
Master Trust Agreement, as from time to time in effect (the "Declaration of
Trust"), of Lindbergh Funds, a Massachusetts business trust established by the
declaration of Trust (the "Trust").
ARTICLE 2. Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be held without call
or notice at such places and at such times as the Trustees may from time to time
determine, provided that notice of the first regular meeting following any such
determination shall be given to absent Trustees.
2.2 Special Meetings. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meeting when called by the
President or the Treasurer or by two or more Trustees, sufficient notice thereof
being given to each Trustee by the Secretary or an Assistant Secretary or by the
Trustees calling the meeting.
2.3 Notice. It shall be sufficient notice to a Trustee of a special meeting to
send notice by mail at least four days or by telegram/fax at least twenty-four
hours before the meeting addressed to the Trustee at his or her usual or last
known business or residence address or to give notice to him or her in person or
by telephone at least twenty-four hours before the meeting. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
or her before or after the meeting, is filed with the records of the meeting, or
to any Trustee who attends the meeting without protesting prior thereto or at
its commencement the lack of notice to him or her.
2.4 Quorum. At any meeting of the Trustees a majority of the Trustees then in
office shall constitute a quorum. Any meeting may be adjourned from time to time
by a majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
2.5 Participation by Telephone. One or more of the Trustees or of any committee
of the Trustees may participate in a meeting thereof by means of a conference
telephone or similar communications equipment allowing all persons participating
in the meeting to hear each other at the same time. Participation by such means
shall constitute presence in person at a meeting.
ARTICLE 3. Officers
3.1 Enumeration; Qualification. The officers of the Trust shall be a President,
a Treasurer, a Secretary and such other officers, including Vice Presidents, if
any, as the Trustees from time to time may in their discretion elect. The Trust
may also have such agents as the Trustees from time to time may in their
discretion appoint. Any officer may be but need not be a Trustee or shareholder.
Any two or more offices may be held by the same person.
<PAGE>
3.2 Election. The President, the Treasurer and the Secretary shall be elected
annually by the Trustees at a meeting held within the first four months of the
Trust's fiscal year. The meeting at which the officers are elected shall be
known as the annual meeting of Trustees. Other officers, if any, may be elected
or appointed by the Trustees at said meeting or at any other time. Vacancies in
any office may be filled at any time.
3.3 Tenure. The President, the Treasurer and the Secretary shall hold office
until the next annual meeting of the Trustees and until their respective
successors are chosen and qualified, or in each case until he or she sooner
dies, resigns, is removed or becomes disqualified. Each other officer shall hold
office and each agent shall retain authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provisions of these By-Laws, each officer shall
have, in addition to the duties and powers herein and in the Declaration of
Trust set forth, such duties and powers as are commonly incident to the office
occupied by him or her as if the Trust were organized as a Massachusetts
business corporation and such other duties and powers as the Trustees may from
time to time designate.
3.5. President. Unless the Trustees otherwise provide, the President shall
preside at all meetings of the shareholders and of the Trustees. The president
shall be the chief executive officer.
3.6 Vice President. The Vice President, or if there be more than one Vice
President, the Vice Presidents in the order determined by the Trustees (or if
there be no such determination, then in order of their election) shall in the
absence of the President or in the event of his inability or refusal to act,
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice
Presidents shall perform such other duties and have such other powers as The
Board of Trustees may from time to time prescribe.
3.7 Treasurer. The Treasurer shall be the chief accounting officer of the Trust,
and shall, subject to the provisions of the Declaration of Trust and to any
arrangement made by the Trustees with a custodian, investment adviser or
manager, or transfer, shareholder servicing or similar agent, be in charge of
the valuable papers, books of account and accounting records of the Trust, and
shall have such other duties and powers as may be designated from time to time
by the Trustees or by the President.
3.8 Assistant Treasurer. The Assistant Treasurer, or if there shall be more than
one, the Assistant Treasurers in the order determined by the Trustees (or if
there be no such determination, then in the order of their election), shall, in
the absence of the Treasurer or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the Treasurer and shall perform
such other duties and have such other powers as the Board of Trustees may from
time to time prescribe.
3.9 Secretary. The Secretary shall record all proceedings of the shareholders
and the Trustees in books to be kept therefor, which books or a copy thereof
shall be kept at the principal office of the Trust. In the absence of the
Secretary from any meeting of the shareholders or Trustees, an assistant
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.10 Assistant Secretary. The Assistant Secretary, or if there be more than one,
the Assistant Secretaries in the order determined by the Trustees (or if there
be no determination, then in the order of their election), shall, in the absence
of the Secretary or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Trustees may from time to time
prescribe.
<PAGE>
3.11 Resignations And Removals. Any Trustee or officer may resign at any time by
written instrument signed by him or her and delivered to the President or the
Secretary or to a meeting of the Trustees. Such resignation shall be effective
upon receipt unless specified to be effective at some other time. The Trustees
may remove any officer elected by them with or without cause. Except to the
extent expressly provided in a written agreement with the Trust, no Trustee or
officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
ARTICLE 4. Committees
4.1 General. The Trustees, by vote of a majority of the Trustees then in office,
may elect from their number an Executive Committee or other committees and may
delegate thereto some or all of their powers except those which by law, by the
Declaration of Trust, or by these By-Laws may not be delegated. Except as the
Trustees may otherwise determine, any such committee may make rules for the
conduct of its business, but unless otherwise provided by the Trustees or in
such rules, its business shall be conducted so far as possible in the same
manner as is provided by these By-Laws for the Trustees themselves. All members
of such committees shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any such committee at anytime. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its action to the Trustees. The Trustees shall have
power to rescind any action of any committee, but no such rescission shall have
retroactive effect.
ARTICLE 5. Reports
5.1 General. The Trustees and officers shall render reports at the time and in
the manner required by the Declaration of Trust or any applicable law. Officers
and Committees shall render such additional reports as they may deem desirable
or as may from time to time be required by the Trustees.
ARTICLE 6. Fiscal Year
6.1 General. The fiscal year of the Trust shall be fixed by resolution of the
Trustees.
ARTICLE 7. Seal
7.1 General. The seal of the Trust shall consist of a flat-faced die with the
word Massachusetts, together with the name of the Trust and the year of its
organization cut or engraved thereon, but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence shall
not impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 8. Execution of Papers
8.1 General. Except as the Trustees may generally or in particular cases
authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust.
<PAGE>
ARTICLE 9. Issuance of Share Certificates
9.1 Share Certificates. In lieu of issuing certificates for shares, the Trustees
or the transfer agent may either issue receipts therefor or may keep accounts
upon the books of the Trust for the record holders of such shares, who shall in
either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof. The Trustees
may at any time authorize the issuance of share certificates either in limited
cases or to all shareholders. In that event, a shareholder may receive a
certificate stating the number of shares owned by him, in such form as shall be
prescribed from time to time by the Trustees. Such certificate shall be signed
by the president or a vice president and by the treasurer or assistant
treasurer. Such signatures may be facsimiles if the certificate is signed by a
transfer agent, or by a registrar, other than a Trustees, officer or employee of
the Trust. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall cease to be such officer before such
certificate is issued, it may be issued by the Trust with the same effect as if
he were such officer at the time of its issue.
9.2 Loss of Certificates. In case of the alleged loss or destruction or the
mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 Issuance of New Certificate to Pledgee. A pledgee of shares transferred as
collateral security shall be entitled to a new certificate if the instrument of
transfer substantially describes the debt or duty that is intended to be secured
thereby. Such new certificate shall express on its face that it is held as
collateral security, and the name of the pledgor shall be stated thereon, who
alone shall be liable as a shareholder, and entitled to vote thereon.
9.4 Discontinuance of Issuance of Certificates. The Trustees may at anytime
discontinue the issuance of share certificates and may, by written notice to
each shareholder, require the surrender of shares certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect the ownership of
shares of the Trust.
ARTICLE 10. Dealings with Trustees and Officers
10.1 General. Any Trustee, officer or other agent of the Trust may acquire, own
and dispose of shares of the Trust to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may accept subscriptions to shares
or repurchase shares from any firm or company in which any Trustees, officer or
other agent of the Trust may have an interest.
ARTICLE 11. Amendments to the By-Laws
11.1 General. These By-Laws may be amended or repealed, in whole or in part, by
a majority of the Trustees then in office at any meeting of the Trustees, or by
one or more writings signed by such a majority.
The foregoing By-Laws were adopted by the Board of Trustees on June 16, 1999.
Lindbergh Funds
By:
Sandy Britton, Secretary
EXHIBIT
NUMBER (d)
Advisory Agreement
<PAGE>
ADVISORY AGREEMENT
AGREEMENT made as of June 16, 1999, between Lindbergh Capital Management, Inc.,
a corporation organized under the laws of the State of Missouri and having its
principal place of business in Saint Louis, Missouri (the "Adviser"), and
Lindbergh Funds, a Massachusetts business trust having its principal place of
business in Saint Louis, Missouri (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end management investment
company and is registered under the Investment Company Act of 1940 (the "1940
Act"); and
WHEREAS, the Adviser is engaged principally in the business of rendering
investment management services and is registered under the Investment Advisers
Act of 1940; and
WHEREAS, the Trust intends to initially offer shares in the Lindbergh Signature
Fund [such series (the "Initial Funds") together with all other series
subsequently established by the Trust with respect to which the Trust desires to
retain the Adviser to render investment Advisory services hereunder the Adviser
is willing to do (collectively referred to as the "Funds")];
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of Adviser.
(a) Initial Funds. The Trust hereby appoints the Adviser to act as Adviser and
Investment Adviser to each of the Initial Funds for the period and on the terms
herein set forth. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
(b) Additional Funds. In the event that the Trust establishes one or more series
of shares other than the Initial Funds with respect to which it desires to
retain the Adviser to render management and investment advisory services
hereunder, it shall so notify the Adviser in writing, indicating the advisory
fee which will be payable with respect to the additional series of shares. If
the Adviser is willing to render such services, it shall so notify the Trust in
writing, whereupon such series of shares shall become a Fund hereunder.
2. Duties of Adviser.
The Adviser, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) Investment Program. The Adviser will (i) furnish continuously an investment
program of each Fund, (ii) determine (subject to the overall supervision and
review of the Board of Trustees of the Trust) what investments shall be
purchased, held sold or exchanged by each Fund and what portion, if any, of the
assets of each Fund shall be held uninvested, and (iii) make changes on behalf
of the Trust in the investments of each Fund.
(b) Office Space and Facilities. The Adviser shall furnish the Trust office
space in the offices of the Adviser, or in such other place or places as may be
agreed upon from time to time, and all necessary office facilities, simple
business equipment, supplies, utilities, and telephone service for managing the
investments of the Trust. These services are exclusive of the necessary services
and records of any dividend disbursing agent, transfer agent, registrar or
custodian, and accounting and bookkeeping services to provided by the Trust's
transfer agent, record keeping service or custodian.
(c) Distribution Expenses. Except as may be provided in distribution expense
plans as contemplated by Rule 12b-1 under the 1940 Act, the Adviser shall bear
all sales, promotion or distribution expenses in connection with the
distribution of shares of any Fund and shall be the sole judge of the extent to
which sales or promotion expenses shall be incurred; provided however, that the
Adviser shall not be obligated to pay for any portion of the cost of
prospectuses or periodic reports provided to shareholders. Expenses incurred in
complying with laws regulating the issue or sale of securities shall not be
deemed to be sales, promotion or distribution expenses.
<PAGE>
(d) Portfolio Transactions. The Adviser shall place all orders for the purchase
and sale of portfolio securities for the account of each Fund with brokers or
dealers selected by the Adviser, although the Trust will pay the actual
brokerage commissions on portfolio transactions in accordance with Paragraph
3(c). In executing portfolio transactions and selecting brokers or dealers, the
Adviser will use its best efforts to seek on behalf of the Trust or any Fund
thereof the best overall terms available. In assessing the best overall terms
available for any transaction, the Adviser shall consider all factors it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any (for the specific
transaction and on a continuing basis). In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a particular
transaction, the Adviser may also consider the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934) provided to any Fund and/or other accounts over which the Adviser or an
affiliate of the Adviser exercises investment discretion. The Adviser is
authorized to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for any fund which
is in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Adviser determines
in good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of that particular transaction or in terms of all of the accounts over
which investment discretion is so exercised.
3. Allocation of Expenses.
Except for the services and facilities to be provided by the Adviser as set
forth in Paragraph 2 above, the Trust assumes and shall pay all expenses for all
other Trust operations and activities and shall reimburse the Adviser for any
such expenses incurred by the Adviser. The expenses to be borne by the Trust
shall include, without limitation:
(a) the charges and expenses of any registrar, stock transfer or dividend
disbursing agent, custodian, or depository appointed by the Trust for the
safekeeping of its cash, portfolio securities and other property;
(b) the charges and expenses of auditors;
(c) brokerage commissions for transactions in the portfolio securities of the
Trust;
(d) all taxes, including issuance and transfer taxes, and corporate fees payable
by the Trust to Federal, state or other governmental agencies;
(e) the cost of stock certificates (if any) representing shares of the Trust;
(f) expenses involved in registering and maintaining registrations of the Trust
and of its shares with the Securities and Exchange Commission and various states
and other jurisdictions, including reimbursement of actual expenses incurred by
the Adviser in performing such functions for the Trust, and including
compensation of persons who are Adviser employees in proportion to the relative
time spent on such matters;
(g) all expenses of shareholders' and Trustees' meetings, including meetings of
committees, and of preparing, printing and mailing proxy statements, quarterly
reports, semi-annual reports, annual reports and other communications to
shareholders;
(h) all expenses of preparing and setting in type prospectuses, and expenses of
printing and mailing the same to shareholders [but not expenses of printing and
mailing of prospectuses and literature used for promotional purposes in
accordance with Paragraph 2(d) above];
<PAGE>
(i) compensation and travel expenses of Trustees who are not "interest persons"
within the meaning of the 1940 Act;
(j) the expense of furnishing, or causing to be furnished, to each shareholder a
statement of his account, including the expense of mailing;
(k) charges and expenses of legal counsel and internal audit/compliance
personnel in connection with matters relating to the Trust, including, without
limitations, legal services rendered in connection with the Trust's corporate
and financial structure and relations with its shareholders, issuance of Trust
shares, and registration and qualification of securities under Federal, state
and other laws;
(l) the expenses of attendance at professional meetings of organizations such as
the Investment Company Institute, or Commerce Clearing House by officers and
Trustees of the Trust, and the membership or association dues of such
organizations;
(m) the cost and expense of maintaining the books and records of the Trust,
including general ledger accounting;
(n) the expense of obtaining and maintaining a fidelity bond as Section17(g) of
the 1940 Act;
(o) interest payable on Trust borrowings; and
(p) postage.
4. Advisory Fee.
(a) For the services and facilities to be provided to each of the Funds by the
Adviser as provided in Paragraph 2 hereof, the Trust shall pay the Adviser a
monthly fee with respect to each of the Funds as soon as practical after the
last day of each calendar month, which fee shall be paid at the rate set forth
below based upon the Monthly Average Net Assets [as defined in subparagraph (c)
below] of such Fund for such calendar month:
Advisory Fee Schedule
Fund Monthly Fee Rate
Lindbergh Signature Fund 1/12 x 0.75%
(b) In the case of termination of this Agreement with respect to any Fund during
any calendar month, the fee with respect to such Fund for that month shall be
reduced proportionately based upon the number of calendar days during which it
is in effect and the fee shall be computed upon the average net assets of such
Fund for the business days which it is so in effect.
(c) The "Monthly Average Net Assets" of any Fund of the Trust for any calendar
month shall be equal to the quotient produced by dividing (i) the sum of the net
assets of such Fund, determined in accordance with procedures established from
time to time by or under the direction of the Board of Trustees of the Trust in
accordance with the Declaration of Trust of the Trust, as of the close of
business on each day during such month that such Fund was open for business, by
(ii) the number of such days.
5. Expense Limitation.
The Adviser agrees that for any fiscal year of the Trust during which the total
of all expenses of the (including investment Advisory fees under this agreement,
but excluding interest, portfolio brokerage commissions and expenses, taxes and
extraordinary items) exceeds the lowest expense limitation imposed in any state
in which the Trust is then making sales of its shares or in which its shares are
then qualified for sale, the Adviser will reimburse the Trust for such expenses
not otherwise excluded from reimbursement by this Paragraph 5 to the extent that
they exceed such expense limitation.
<PAGE>
6. Relations With Trust.
Subject to and in accordance with the Declaration of Trust and By-Laws of the
Trust and the Articles of Incorporation and By-Laws of the Adviser,
respectively, it is understood that Trustees, officers, agents and shareholders
of the Trust are or may be interested in the Adviser (or any successor thereof)
as directors, officers, or otherwise; that directors, officers, agents and
shareholders of the Adviser are or may be interested in the Trust as Trustees,
officers, shareholders, or otherwise; that the Adviser (or any such successor)is
or may be interested in the Trust as a shareholder or otherwise; and that the
effect of any such adverse interests shall be governed by said Declaration of
Trust, Articles of Incorporation and By-Laws.
7. Liability of Adviser and Officers and Trustees of the Trust.
No provision of this Agreement shall be deemed to protect the Adviser against
any liability to the Trust or its shareholders to which it might otherwise be
subject by reason of any willful misfeasance, bad faith or gross negligence in
the performance of its duties or the reckless disregard of its obligations and
duties under this Agreement. Nor shall any provision hereof be deemed to protect
any Trustee or officer of the Trust against any such liability to which he might
otherwise be subject by reason of any willful misfeasance, bad faith or gross
negligence in the performance of his duties or the reckless disregard of his
obligations and duties.
8. Duration and Termination of this Agreement.
(a) Duration. This Agreement shall become effective with respect to each Initial
Fund on the date hereof and, with respect to any additional Fund, on the date of
receipt by the Trust of notice from the Adviser in accordance with Paragraph
1(b) hereof that the Manager is willing to serve as Adviser with respect to such
Fund. Unless terminated as herein provided, this Agreement shall remain in full
force and effect for a period of two years with respect to the Initial Funds and
to each additional Fund, and shall continue in full force and effect for period
on one year thereafter with respect to each Fund so long as such continuance
with respect to any such Fund is approved at least annually (i) by either the
Trustees of the Trust or by vote of a majority of the outstanding voting shares
(as defined in the 1940 Act) of such Fund, and (ii) in either event by the vote
of a majority of the Trustees of the Trust who are not parties to this Agreement
or "interested persons" (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval. Any
approval of this Agreement by the holders of a majority of the outstanding
shares (as defined in the 1940 Act) of any Fund shall be effective to continue
this Agreement with respect to any such Fund notwithstanding (i) that this
Agreement has not been approved by the holders of a majority of the outstanding
shares of any other Fund affected thereby, and (ii) that this Agreement has not
been approved by the vote of a majority of the outstanding shares of the Trust,
unless approval shall be required by any other applicable law or otherwise.
(b) Termination. This Agreement may be terminated at any time, without payment
of any penalty, by vote of the Trustees of the Trust or by vote of a majority of
the outstanding shares (as defined in the 1940 Act), or by the Adviser on sixty
(60) days' written notice to the other party.
(c) Automatic Termination. This Agreement shall automatically and immediately
terminate in the event of its assignment.
9. Services Not Exclusive.
The services of the Adviser to the Trust hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
10. Limitation of Liability.
(a) The Trust. The term "Lindbergh Funds" means and refers to the Trustees from
time to time serving under the Master Trust Agreement of the Trust dated June
16, 1999, as the same may subsequently thereto have been, or subsequently hereto
be amended. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the assets and
property of the Trust, as provided in the Master Trust Agreement of the Trust.
The execution and delivery of this Agreement have been authorized by the
Trustees and shareholders of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such Trustees and
shareholders nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the Trust as
provided in its Master Trust Agreement.
<PAGE>
(b) The Adviser. It is expressly agreed that the obligations of the Adviser
hereunder shall not be binding upon any of the shareholders, nominees, officers,
agents or employees of the Adviser, personally, but bind only the assets and
property of the Adviser, respectively. The execution and delivery of the
Agreement have been authorized by the directors and officers of the Adviser and
signed by an authorized officer of the Adviser, acting as such, and neither such
authorization by such directors and officers nor such execution and delivery by
such officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the assets
and property of the Adviser, respectively. This limitation of liability shall
not be deemed to protect the shareholders, nominees, officers, agents or
employees of the Adviser against any liability to the Trust or its shareholders
to which they might otherwise be subject by reason of any willful misfeasance,
bad faith or gross negligence in the performance of their duties or the reckless
disregard of their obligations and duties under this Agreement.
11. Interpretation.
This Agreement shall be governed by the laws of the State of Massachusetts. 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 caused this Agreement to be executed
as of the date first set forth above.
Lindbergh Funds Lindbergh Capital Management, Inc.
By: Dewayne L. Wiggins, President By: Dewayne L. Wiggins, President
Attest: Attest:
<PAGE>
EXHIBIT
NUMBER (e)
Distribution Agreement
<PAGE>
LINDBERGH SIGNATURE FUNDS
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of ______________, 1999 between Lindbergh
Signature Funds, a Maryland corporation (the "Trust"), and Unified Management
Corporation, an Indiana corporation (the "Distributor").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust desires to retain the Distributor as the principal
underwriter of the Trust's shares of beneficial interest (the "Shares"); and
WHEREAS, the Distributor is willing to render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
Section 1. Delivery of Documents. The Trust has delivered to the
Distributor copies of the following documents and will deliver to the
Distributor all future amendments and supplements thereto, if any:
(a) The Trust's Declaration of Trust and all amendments thereto (as
currently in effect and as from time to time amended, hereinafter referred to as
the "Declaration");
(b) The Trust's By-Laws (as currently in effect and as from time to time
amended, hereinafter referred to as the "By-Laws");
(c) Resolutions of the Board of Trustees authorizing the execution and
delivery of this Agreement;
(d) The Trust's Registration Statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act on Form N-1A most recently filed with
the Securities and Exchange Commission (the "Commission") and all subsequent
amendments or supplements thereto (the "Registration Statement");
(e) The Trust's Notification of Registration under the 1940 Act on Form
N-8A as filed with the Commission; and
(f) The Trust's current Prospectus and Statement of Additional Information
(as currently in effect and as from time to time amended and supplemented,
hereinafter collectively referred to as the "Prospectus").
Section 2. Distribution.
2.1 Appointment of Distributor. The Trust hereby appoints the Distributor
as principal underwriter of the Shares of each portfolio of the Trust that is
set forth on Exhibit A to this Agreement (each a "Fund") and the Distributor
hereby accepts such appointment and agrees to render the services and duties set
forth in this Agreement.
2.2 Services and Duties.
(a) The Trust agrees to sell through the Distributor, as agent, from time
to time during the term of this Agreement, Shares of each Fund upon the terms
and at the current offering prices as described in the Prospectus. The
Distributor will act only in its own behalf as principal in making agreements
with selected dealers or others for the sale and redemption of Shares, and shall
sell Shares only at the offering prices as set forth in the Prospectus. The
Distributor shall devote its best efforts to effect the sale of shares, but
shall not be obligated to sell any certain number of Shares.
<PAGE>
(b) In all matters relating to the sale and redemption of Shares, the
Distributor and its designated agent(s) will act in conformity with the Trust's
Declaration, By-laws and Prospectus and with the instructions and directions of
the Board of Trustees and will conform and comply with the requirements of the
Securities Exchange Act of 1934, as amended, the 1933 Act, the 1940 Act, the
regulations of the National Association of Securities Dealers, Inc. and all
other applicable federal or state laws or regulations. In connection with the
sale of Shares, the Distributor acknowledges and agrees that it is not
authorized to provide any information or make any representation other than as
contained in the Trust's Registration Statement or Prospectus and any sales
literature approved by the Trust.
(c) The Trust will not bear any costs and expenses incurred with respect to
distribution of shares except to the extent the Trust is permitted to do so by
applicable law. It is understood that the Adviser will bear the costs and
expenses incurred for (i) printing and mailing to prospective investors copies
of the Prospectus (including supplements thereto) and annual and interim reports
of the Trust which are used in connection with the offering of Trust's Shares;
(ii) preparing, printing and mailing any other literature used by the
Distributor in connection with the sale of the Shares and (iii) reimbursement
for NASD advertising compliance expenses advanced by the Distributor.
(d) All Trust Shares offered for sale by the Distributor shall be offered
for sale to the public at a price per Share (the "offering price") equal to
their net asset value (determined in the manner set forth in the Trust's
then-current Prospectus).
2.3 Sales and Redemptions.
(a) The Trust shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in connection
with maintaining facilities for the issue and transfer of the Shares and for
supplying information, prices and other data to be furnished by the Trust
hereunder, and all expenses in connection with preparing, printing and
distributing any Prospectus, except as set forth in Section 2.2(c) hereof.
(b) The Trust shall execute all documents, furnish all information and
otherwise take all actions which may be reasonably necessary in the discretion
of the Trust's officers in connection with the qualification of the Shares for
sale in such states as the Distributor may designate to the Trust and the Trust
may approve, and the Trust shall pay all fees which may be incurred in
connection with such qualification. The Distributor shall pay all expenses
connected with its qualification as a dealer under state or federal laws. It is
understood that certain advertising, marketing, shareholder servicing,
administration and/or distribution expenses to be incurred in connection with
the Shares may be paid as provided in any plan which may be adopted by the Trust
in accordance with Rule 12b-1 under the 1940 Act.
(c) The Trust shall have the right to suspend the sale of Shares at any
time in response to conditions in the securities markets or otherwise, and to
suspend the redemption of Shares at any time permitted by the 1940 Act or the
rules of the Commission
(d) The Trust reserves the right to reject any order for Shares.
(e) No Shares shall be offered by either the Trust or the Distributor under
any provisions of this Agreement and no orders for the purchase or sale of
Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the Registration Statement shall be suspended under any of the
provisions of the 1933 Act, or if and so long as a Prospectus as required by
Section 10 of the 1933 Act is not on file with the Commission; provided,
however, that nothing contained in this subsection shall in any way restrict or
have any application to or bearing upon the Trust's obligation to repurchase any
Shares from any shareholder in accordance with the provisions of the Prospectus.
2.4 Fees and Expenses. For performing its services under this Agreement,
Distributor will receive from the Trust a minimum fee of $6,000 per year to be
paid on a monthly basis. The Trust shall promptly reimburse Distributor for any
expenses which are to be paid by the Trust in accordance with the following
paragraph.
<PAGE>
In the performance of its obligations under this Agreement, all other costs
in connection with the offering of the Shares will be paid by the Trust. These
costs include, but are not limited to, licensing fees, filing fees, sales
literature review fees, travel and such other expenses as may be incurred by
Distributor on behalf of the Trust. See Exhibit B for fees.
Section 3. Limitation of Liability. The Distributor shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Trust in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Distributor's part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement. Any person, even
though also an officer, director, partner, employee or agent of the Distributor,
who may be or become an officer, trustee, employee or agent of the Trust, shall
be deemed, when rendering services to the Trust, or acting on any business of
the Trust (other than services or business in connection with the Distributors
duties as distributor hereunder), to be rendering such services to or acting
solely for the Trust and not as an officer, director, partner, employee or agent
of, or one under the control or direction of, the Distributor even though paid
by the Distributor.
Section 4. Indemnification.
4.1. Trust Representations. The Trust represents and warrants to the
Distributor that at all times the Registration Statement and Prospectus will in
all material respects conform to the applicable requirements of the 1933 Act and
the rules and regulations thereunder and will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation or warranty is made herein with respect to any statements in the
Registration Statement or Prospectus made in reliance upon and in conformity
with written information furnished to the Trust by, or on behalf of' and with
respect to, the Distributor specifically for use in the Registration Statement
or Prospectus.
4.2. Distributor's Representations. The Distributor represents and warrants
to the Trust that it is duly organized and validly existing as an Indiana
corporation and is and at all times will remain duly authorized and licensed to
carry out its services as contemplated herein.
4.3. Trust Indemnification. The Trust will indemnify, defend and hold
harmless the Distributor, its several officers and directors, and any person who
controls the Distributor within the meaning of Section 15 of the 1933 Act, from
and against any losses, claims, damages or liabilities, joint or several, to
which any of them may become subject under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectus or in any application or other document executed by or
on behalf of the Trust, or arise out of, or are based upon, information
furnished by or on behalf of the Trust filed in any state in order to qualify
the Shares under the securities or blue sky laws thereof ("Blue Sky
Application"), or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Distributor, its several officers and directors, and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act, for any legal or
other expenses reasonably incurred by any of them in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that the Trust shall not be liable in any case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, any untrue
statement, alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectus, any Blue Sky Application or any
application or other document executed by or on behalf of the Trust in reliance
upon and in conformity with written information furnished to the Trust by, or on
behalf of, and with respect to, the Distributor specifically for inclusion
therein.
The Trust shall not indemnify any person pursuant to this Section 4.3
unless the court or other body before which the proceeding was brought has
rendered a final decision on the merits that such person was not liable by
reason of his willful misfeasance, bad faith or gross negligence in the
performance of his duties, or his reckless disregard of obligations and duties,
under this Agreement ("disabling conduct") or, in the absence of such a
decision, a reasonable determination (based upon a review of the facts) that
such person was not liable by reason of disabling conduct has been made by the
vote of a majority of Trustees who are neither "interested persons" of the Trust
(as defined in the 1940 Act) nor parties to the proceeding, or by an independent
legal counsel in a written opinion.
<PAGE>
The Trust shall advance attorneys' fees and other expenses incurred by any
person in defending any claim, demand, action or suit which is the subject of a
claim for indemnification pursuant to this Section 4.3, so long as such person
shall: (i) undertake to repay all such advances unless it is ultimately
determined that he is entitled to indemnification hereunder; and (ii) provide
security for such undertaking, or the Trust shall be insured against losses
arising by reason of any lawful advances, or a majority of a quorum of
disinterested non-party Trustees of the Trust (or an independent legal counsel
in a written opinion) shall determine based on a review of readily available
facts (as opposed to a full trial-type inquiry) that there is reason to believe
that such person ultimately will be found entitled to indemnification hereunder.
4.4. Distributor's Indemnification. The Distributor will indemnify, defend
and hold harmless the Trust, the Trust's several officers and Trustees and any
person who controls the Trust within the meaning of Section 15 of the 1933 Act,
from and against any losses, claims, damages or liabilities, joint or several,
to which any of them may become subject under the 1933 Act or otherwise, insofar
as such losses, claims, damages, liabilities (or actions or proceedings in
respect hereof) arise out of, or are based upon, any breach of its
representations and warranties in Section 4.2 hereof, or which arise out of, or
are based upon, any true statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, any Blue Sky
Application or any application or other document executed by or on behalf of the
Trust, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, which statement or omission was made in reliance upon and in
conformity with written information furnished to the Trust or any of its several
officers and Trustees by, or on behalf of, and with respect to, the Distributor
specifically for inclusion therein, and will reimburse the Trust, the Trust's
several officers and Trustees, and any person who controls the Trust within the
meaning of Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by any of them in investigating, defending or preparing to
defend any such action, proceeding or claim.
4.5. General Indemnity Provisions. No indemnifying party shall be liable
under its indemnity agreement contained in Section 4.3 or 4.4 hereof with
respect to any claim made against such indemnifying party unless the indemnified
party shall have notified the indemnifying party in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the indemnified party (or after
the indemnified party shall have received notice of such service on any
designated agent), but failure to notify the indemnifying party of any such
claim shall not relieve it from any liability which it may otherwise have to the
indemnified party. The indemnifying party will be entitled to participate at its
own expense in the defense or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, and if the indemnifying party elects
to assume the defense, such defense shall be conducted by counsel chosen by it
and reasonably satisfactory to the indemnified party. In the event the
indemnifying party elects to assume the defense of any such suit and retain such
counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by the indemnified party.
Section 5. Duration and Termination. The term of this Agreement shall begin
on the date of this Agreement for each Fund that has executed an Exhibit hereto
on the date of this Agreement and shall continue in effect with respect to each
such Fund (and any subsequent Funds added pursuant to an Exhibit executed during
the initial term of this Agreement) for two years thereafter, and shall continue
in effect from year to year thereafter, subject to termination as hereinafter
provided, if such continuance is approved at least annually by (a) a majority of
the outstanding voting securities (as defined in the 1940 Act) of such Fund or
by vote of the Trust's Board of Trustees, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval. If a Fund
is added pursuant to an Exhibit executed after the date of this Agreement as
described above, this Agreement shall become effective with respect to that Fund
upon execution of the applicable Exhibit and shall continue in effect until the
next annual continuance of this Agreement and from year to year thereafter,
subject to approval as described above. This Agreement may be terminated by the
Trust with respect to any Fund at any time, without the payment of any penalty,
by the Board of Trustees or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of such Fund, on 60 days' written notice
to the Distributor, or by the Distributor at any time, without the payment of
any penalty, on 90 days' written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its assignment (as
defined in the 1940 Act).
<PAGE>
Section 6. Miscellaneous.
6.1. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
6.2. Construction. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. Subject to the provisions of Section 5 hereof, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors.
6.3. Notices. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Trust shall be sufficiently given
if addressed to the Trust and mailed or delivered to it at its principal office
set forth in the Registration Statement, or at such other place as the Trust may
from time to time designate in writing. Any notice or other instrument in
writing, authorized or required by this Agreement to be given to the Distributor
shall be sufficiently given if addressed to the Distributor and mailed or
delivered to it at 431 North Pennsylvania Street, Indianapolis, Indiana 46204,
Attention: President, or at such other place as the Distributor may from time to
time designate in writing.
6.4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana.
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit to be
executed by their officers designated below as of the date and year first above
written.
LINDBERGH SIGNATURE FUNDS
By _________________________
Title _________________________
Date: ______________
UNIFIED MANAGEMENT CORPORATION
By _________________________
Title _________________________
Date: ______________
By _________________________
Title _________________________
Date: ______________
<PAGE>
EXHIBIT A
to
Distribution Agreement
List of Portfolios
Lindbergh Signature Fund
<PAGE>
EXHIBIT B
to
Distribution Agreement
Fee Schedule
Annual minimum fee: $6,000*, billed on a monthly basis
Sales literature review and filing: $75.00 per hour, plus applicable NASD
advertising review fees
All other expenses in Section 2.4 are considered out-of-pocket.
* Minimum fee reduced to $1,500 in the first year of operation.
EXHIBIT
NUMBER (g)
Custody Agreement
<PAGE>
Custody Agreement
Dated
June 16, 1999
Between
UMB Bank, N.A.
and
Lindbergh Funds
<PAGE>
Table of Contents
Section Page
Appointment of Custodian....................................................4
Definitions.................................................................4
Securities.........................................................4
Assets ..........................................................4
Instructions.......................................................5
Special Instructions...............................................5
Delivery of Corporate Documents.............................................5
Powers and Duties of Custodian and Domestic Subcustodian....................6
Safekeeping........................................................6
Manner of Holding Securities.......................................6
Free Delivery of Assets............................................8
Exchange of Securities.............................................8
Purchases of Assets................................................8
Securities Purchases......................................8
Other Assets Purchased....................................9
Sales of Assets....................................................9
Securities Sold...........................................9
Other Assets Sold.........................................9
Options ..........................................................9
Futures Contracts.................................................10
Segregated Accounts...............................................10
Depositary Receipts...............................................11
Corporate Actions, Put Bonds, Called Bonds, Etc...................11
Interest Bearing Deposits.........................................11
Foreign Exchange Transactions.....................................12
Pledges or Loans of Securities....................................12
Stock Dividends, Rights, Etc......................................13
Routine Dealings..................................................13
Collections.......................................................13
Bank Accounts.....................................................14
Dividends, Distributions and Redemptions..........................14
Proceeds from Shares Sold.........................................14
Proxies and Notices; Compliance with the Shareholders Communication
Act of 1985......................................................14
Books and Records.................................................15
Opinion of Fund's Independent Certified Public Accountants........15
Reports by Independent Certified Public Accountants...............15
Bills and Other Disbursements.....................................15
Subcustodians..............................................................15
Domestic Subcustodians............................................16
Foreign Subcustodians.............................................16
Interim Subcustodians.............................................16
<PAGE>
Special Subcustodians.............................................17
Termination of a Subcustodian.....................................17
Certification Regarding Foreign Subcustodians.....................17
Standard of Care...........................................................17
General Standard of Care..........................................17
Actions Prohibited by Applicable Law, Events Beyond Custodian's
Control, Sovereign Risk, Etc......................................18
Liability for Past Records........................................18
Advice of Counsel.................................................18
Advice of the Fund and Others.....................................18
Instructions Appearing to be Genuine..............................18
Exceptions from Liability.........................................19
Liability of the Custodian for Actions of Others...........................19
Domestic Subcustodians............................................19
Liability for Acts and Omissions of Foreign Subcustodians.........19
Securities Systems, Interim Subcustodians, Special Subcustodians,
Securities Depositories and Clearing Agencies...................19
Defaults or Insolvency's of Brokers, Banks, Etc...................20
Reimbursement of Expenses.........................................20
Indemnification............................................................20
Indemnification by Fund...........................................20
Indemnification by Custodian......................................20
Advances ..................................................................21
Liens ..................................................................21
Compensation...............................................................22
Powers of Attorney.........................................................22
Termination and Assignment.................................................22
Additional Funds...........................................................22
Notices ..................................................................22
Miscellaneous..............................................................23
Appendix A.................................................................25
Appendix B.................................................................26
Schedule of Fees...........................................................27
<PAGE>
Custody Agreement
This agreement made as of this 16th day of June 1999, between UMB Bank,
N.A., a national banking association with its principal place of business
located at Kansas City, Missouri (hereinafter "Custodian"), and each of the
Funds listed on Appendix B hereof, together with such additional Funds which
shall be made parties to this Agreement by the execution of Appendix B hereto
(individually, a "Fund" and collectively, the "Funds").
WITNESSETH:
WHEREAS, each Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended; and
WHEREAS, each Fund desires to appoint Custodian as its custodian for
the custody of Assets (as hereinafter defined) owned by such Fund which Assets
are to be held in such accounts as such Fund may establish from time to time;
and
WHEREAS, Custodian is willing to accept such appointment on the terms
and conditions hereof.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:
1. Appointment of Custodian.
Each Fund hereby constitutes and appoints the Custodian as custodian of
Assets belonging to each such Fund which have been or may be from time to time
deposited with the Custodian. Custodian accepts such appointment as a custodian
and agrees to perform the duties and responsibilities of Custodian as set forth
herein on the conditions set forth herein.
2. Definitions.
For purposes of this Agreement, the following terms shall have the
meanings so indicated:
(a) "Security" or "Securities" shall mean stocks, bonds, bills, rights,
script, warrants, interim certificates and all negotiable or nonnegotiable paper
commonly known as Securities and other instruments or obligations.
(b) "Assets" shall mean Securities, monies and other property held by
the Custodian for the benefit of a Fund.
(c)(1) "Instructions", as used herein, shall mean: (i) a tested telex,
a written (including, without limitation, facsimile transmission) request,
direction, instruction or certification signed or initialed by or on behalf of a
Fund by an Authorized Person; (ii) a telephonic or other oral communication from
a person the Custodian reasonably believes to be an Authorized Person; or (iii)
a communication effected directly between an electro-mechanical or electronic
device or system (including, without limitation, computers) on behalf of a Fund.
Instructions in the form of oral communications shall be confirmed by the
appropriate Fund by tested telex or in writing in the manner set forth in clause
(i) above, but the lack of such confirmation shall in no way affect any action
taken by the Custodian in reliance upon such oral Instructions prior to the
Custodian's receipt of such confirmation. Each Fund authorizes the Custodian to
record any and all telephonic or other oral Instructions communicated to the
Custodian.
<PAGE>
(c)(2) "Special Instructions", as used herein, shall mean Instructions
countersigned or confirmed in writing by the Treasurer or any Assistant
Treasurer of a Fund or any other person designated by the Treasurer of such Fund
in writing, which countersignature or confirmation shall be included on the same
instrument containing the Instructions or on a separate instrument relating
thereto.
(c)(3) Instructions and Special Instructions shall be delivered to the
Custodian at the address and/or telephone, facsimile transmission or telex
number agreed upon from time to time by the Custodian and each Fund.
(c)(4) Where appropriate, Instructions and Special Instructions shall
be continuing instructions.
3. Delivery of Corporate Documents.
Each of the parties to this Agreement represents that its execution
does not violate any of the provisions of its respective charter, articles of
incorporation, articles of association or bylaws and all required corporate
action to authorize the execution and delivery of this Agreement has been taken.
Each Fund has furnished the Custodian with copies, properly certified
or authenticated, with all amendments or supplements thereto, of the following
documents:
(a) Certificate of Incorporation ( or equivalent document) of the Fund
as in effect on the date hereof;
(b) By-Laws of the Fund as in effect on the date hereof;
(c) Resolutions of the Board of Directors of the Fund appointing the
Custodian and approving the form of this Agreement; and
(d) The Fund's current prospectus and statements of additional
information.
Each Fund shall promptly furnish the Custodian with copies of any
updates, amendments or supplements to the foregoing documents.
In addition, each Fund has delivered or will promptly deliver to the
Custodian, copies of the Resolution(s) of its Board of Directors or Trustees and
all amendments or supplements thereto, properly certified or authenticated,
designating certain officers or employees of each such Fund who will have
continuing authority to certify to the Custodian: (a) the names, titles,
signatures and scope of authority of all persons authorized to give Instructions
or any other notice, request, direction, instruction, certificate or instrument
on behalf of each Fund, and (b) the names, titles and signatures of those
persons authorized to countersign or confirm Special Instructions on behalf of
each Fund (in both cases collectively, the "Authorized Persons" and
individually, an "Authorized Person"). Such Resolutions and certificates may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar Resolution or certificate to the
contrary. Upon delivery of a certificate which deletes or does not include the
name(s) of a person previously authorized to give Instructions or to countersign
or confirm Special Instructions, such persons shall no longer be considered an
Authorized Person authorized to give Instructions or to countersign or confirm
Special Instructions. Unless the certificate specifically requires that the
approval of anyone else will first have been obtained, the Custodian will be
under no obligation to inquire into the right of the person giving such
Instructions or Special Instructions to do so. Notwithstanding any of the
foregoing, no Instructions or Special Instructions received by the Custodian
from a Fund will be deemed to authorize or permit any director, trustee,
officer, employee, or agent of such Fund to withdraw any of the Assets of such
Fund upon the mere receipt of such authorization, Special Instructions or
Instructions from such director, trustee, officer, employee or agent.
<PAGE>
4. Powers and Duties of Custodian and Domestic Subcustodian.
Except for Assets held by any Subcustodian appointed pursuant to
Sections 5(b), (c), or (d) of this Agreement, the Custodian shall have and
perform the powers and duties hereinafter set forth in this Section 4. For
purposes of this Section 4 all references to powers and duties of the
"Custodian" shall also refer to any Domestic Subcustodian appointed pursuant to
Section 5(a).
(a) Safekeeping.
The Custodian will keep safely the Assets of each Fund which are
delivered to it from time to time. The Custodian shall not be responsible for
any property of a Fund held or received by such Fund and not delivered to the
Custodian.
(b) Manner of Holding Securities.
(1) The Custodian shall at all times hold Securities of each Fund either:
(i) by physical possession of the share certificates or other instruments
representing such Securities in registered or bearer form; or (ii) in book-entry
form by a Securities System (as hereinafter defined) in accordance with the
provisions of sub-paragraph (3) below.
(2) The Custodian may hold registrable portfolio Securities which have been
delivered to it in physical form, by registering the same in the name of the
appropriate Fund or its nominee, or in the name of the Custodian or its nominee,
for whose actions such Fund and Custodian, respectively, shall be fully
responsible. Upon the receipt of Instructions, the Custodian shall hold such
Securities in street certificate form, so called, with or without any indication
of fiduciary capacity. However, unless it receives Instructions to the contrary,
the Custodian will register all such portfolio Securities in the name of the
Custodian's authorized nominee. All such Securities shall be held in an account
of the Custodian containing only assets of the appropriate Fund or only assets
held by the Custodian as a fiduciary, provided that the records of the Custodian
shall indicate at all times the Fund or other customer for which such Securities
are held in such accounts and the respective interests therein.
(3) The Custodian may deposit and/or maintain domestic Securities owned by
a Fund in, and each Fund hereby approves use of: (a) The Depository Trust
Company; (b) The Participants Trust Company; and (c) any book-entry system as
provided in (i) Subpart O of Treasury Circular No. 300, 31 CFR 306.115, (ii)
Subpart B of Treasury Circular Public Debt Series No. 27-76, 31 CFR 350.2, or
(iii) the book-entry regulations of federal agencies substantially in the form
of 31 CFR 306.115. Upon the receipt of Special Instructions, the Custodian may
deposit and/or maintain domestic Securities owned by a Fund in any other
domestic clearing agency registered with the Securities and Exchange Commission
("SEC") under Section 17A of the Securities Exchange Act of 1934 (or as may
otherwise be authorized by the SEC to serve in the capacity of depository or
clearing agent for the Securities or other assets of investment companies) which
acts as a Securities depository. Each of the foregoing shall be referred to in
this Agreement as a "Securities System", and all such Securities Systems shall
be listed on the attached Appendix A. Use of a Securities System shall be in
accordance with applicable Federal Reserve Board and SEC rules and regulations,
if any, and subject to the following provisions:
(i) The Custodian may deposit the Securities directly or through
one or more agents or Subcustodians which are also qualified to act as
custodians for investment companies.
(ii) The Custodian shall deposit and/or maintain the Securities
in a Securities System, provided that such Securities are represented
in an account ("Account") of the Custodian in the Securities System
that includes only assets held by the Custodian as a fiduciary,
custodian or otherwise for customers.
(iii)The books and records of the Custodian shall at all times
identify those Securities belonging to any one or more Funds which are
maintained in a Securities System.
<PAGE>
(iv) The Custodian shall pay for Securities purchased for the
account of a Fund only upon (a) receipt of advice from the Securities
System that such Securities have been transferred to the Account of
the Custodian in accordance with the rules of the Securities System,
and (b) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of such Fund. The
Custodian shall transfer Securities sold for the account of a Fund
only upon (a) receipt of advice from the Securities System that
payment for such Securities has been transferred to the Account of the
Custodian in accordance with the rules of the Securities System, and
(b) the making of an entry on the records of the Custodian to reflect
such transfer and payment for the account of such Fund. Copies of all
advices from the Securities System relating to transfers of Securities
for the account of a Fund shall be maintained for such Fund by the
Custodian. The Custodian shall deliver to a Fund on the next
succeeding business day daily transaction reports that shall include
each day's transactions in the Securities System for the account of
such Fund. Such transaction reports shall be delivered to such Fund or
any agent designated by such Fund pursuant to Instructions, by
computer or in such other manner as such Fund and Custodian may agree.
(v) The Custodian shall, if requested by a Fund pursuant to
Instructions, provide such Fund with reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting
system, internal accounting control and procedures for safeguarding
Securities deposited in the Securities System.
(vi) Upon receipt of Special Instructions, the Custodian shall
terminate the use of any Securities System on behalf of a Fund as
promptly as practicable and shall take all actions reasonably
practicable to safeguard the Securities of such Fund maintained with
such Securities System.
(c) Free Delivery of Assets.
Notwithstanding any other provision of this Agreement and except as
provided in Section 3 hereof, the Custodian, upon receipt of Special
Instructions, will undertake to make free delivery of Assets, provided such
Assets are on hand and available, in connection with a Fund's transactions and
to transfer such Assets to such broker, dealer, Subcustodian, bank, agent,
Securities System or otherwise as specified in such Special Instructions.
(d) Exchange of Securities.
Upon receipt of Instructions, the Custodian will exchange portfolio
Securities held by it for a Fund for other Securities or cash paid in connection
with any reorganization, recapitalization, merger, consolidation, or conversion
of convertible Securities, and will deposit any such Securities in accordance
with the terms of any reorganization or protective plan.
Without Instructions, the Custodian is authorized to exchange
Securities held by it in temporary form for Securities in definitive form, to
surrender Securities for transfer into a name or nominee name as permitted in
Section 4(b)(2), to effect an exchange of shares in a stock split or when the
par value of the stock is changed, to sell any fractional shares, and, upon
receiving payment therefor, to surrender bonds or other Securities held by it at
maturity or call.
<PAGE>
(e) Purchases of Assets.
(1) Securities Purchases. In accordance with Instructions, the Custodian
shall, with respect to a purchase of Securities, pay for such Securities out of
monies held for a Fund's account for which the purchase was made, but only
insofar as monies are available therein for such purpose, and receive the
portfolio Securities so purchased. Unless the Custodian has received Special
Instructions to the contrary, such payment will be made only upon receipt of
Securities by the Custodian, a clearing corporation of a national Securities
exchange of which the Custodian is a member, or a Securities System in
accordance with the provisions of Section 4(b)(3) hereof. Notwithstanding the
foregoing, upon receipt of Instructions: (i) in connection with a repurchase
agreement, the Custodian may release funds to a Securities System prior to the
receipt of advice from the Securities System that the Securities underlying such
repurchase agreement have been transferred by book-entry into the Account
maintained with such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities System require that the Securities
System may make payment of such funds to the other party to the repurchase
agreement only upon transfer by book-entry of the Securities underlying the
repurchase agreement into such Account; (ii) in the case of Interest Bearing
Deposits, currency deposits, and other deposits, foreign exchange transactions,
futures contracts or options, pursuant to Sections 4(g), 4(h), 4(l), and 4(m)
hereof, the Custodian may make payment therefor before receipt of an advice of
transaction; and (iii) in the case of Securities as to which payment for the
Security and receipt of the instrument evidencing the Security are under
generally accepted trade practice or the terms of the instrument representing
the Security expected to take place in different locations or through separate
parties, such as commercial paper which is indexed to foreign currency exchange
rates, derivatives and similar Securities, the Custodian may make payment for
such Securities prior to delivery thereof in accordance with such generally
accepted trade practice or the terms of the instrument representing such
Security.
(2) Other Assets Purchased. Upon receipt of Instructions and except as
otherwise provided herein, the Custodian shall pay for and receive other Assets
for the account of a Fund as provided in Instructions.
(f) Sales of Assets.
(1) Securities Sold. In accordance with Instructions, the
Custodian will, with respect to a sale, deliver or cause to be delivered the
Securities thus designated as sold to the broker or other person specified in
the Instructions relating to such sale. Unless the Custodian has received
Special Instructions to the contrary, such delivery shall be made only upon
receipt of payment therefor in the form of: (a) cash, certified check, bank
cashier's check, bank credit, or bank wire transfer; (b) credit to the account
of the Custodian with a clearing corporation of a national Securities exchange
of which the Custodian is a member; or (c) credit to the Account of the
Custodian with a Securities System, in accordance with the provisions of Section
4(b)(3) hereof. Notwithstanding the foregoing, Securities held in physical form
may be delivered and paid for in accordance with "street delivery custom" to a
broker or its clearing agent, against delivery to the Custodian of a receipt for
such Securities, provided that the Custodian shall have taken reasonable steps
to ensure prompt collection of the payment for, or return of, such Securities by
the broker or its clearing agent, and provided further that the Custodian shall
not be responsible for the selection of or the failure or inability to perform
of such broker or its clearing agent or for any related loss arising from
delivery or custody of such Securities prior to receiving payment therefor.
(2) Other Assets Sold. Upon receipt of Instructions and except
as otherwise provided herein, the Custodian shall receive payment for and
deliver other Assets for the account of a Fund as provided in Instructions.
<PAGE>
(g) Options.
(1) Upon receipt of Instructions relating to the purchase of
an option or sale of a covered call option, the Custodian shall: (a) receive and
retain confirmations or other documents, if any, evidencing the purchase or
writing of the option by a Fund; (b) if the transaction involves the sale of a
covered call option, deposit and maintain in a segregated account the Securities
(either physically or by book-entry in a Securities System) subject to the
covered call option written on behalf of such Fund; and (c) pay, release and/or
transfer such Securities, cash or other Assets in accordance with any notices or
other communications evidencing the expiration, termination or exercise of such
options which are furnished to the Custodian by the Options Clearing Corporation
(the "OCC"), the securities or options exchanges on which such options were
traded, or such other organization as may be responsible for handling such
option transactions.
(2) Upon receipt of Instructions relating to the sale of a naked option
(including stock index and commodity options), the Custodian, the appropriate
Fund and the broker-dealer shall enter into an agreement to comply with the
rules of the OCC or of any registered national securities exchange or similar
organizations(s). Pursuant to that agreement and such Fund's Instructions, the
Custodian shall: (a) receive and retain confirmations or other documents, if
any, evidencing the writing of the option; (b) deposit and maintain in a
segregated account, Securities (either physically or by book-entry in a
Securities System), cash and/or other Assets; and (c) pay, release and/or
transfer such Securities, cash or other Assets in accordance with any such
agreement and with any notices or other communications evidencing the
expiration, termination or exercise of such option which are furnished to the
Custodian by the OCC, the securities or options exchanges on which such options
were traded, or such other organization as may be responsible for handling such
option transactions. The appropriate Fund and the broker-dealer shall be
responsible for determining the quality and quantity of assets held in any
segregated account established in compliance with applicable margin maintenance
requirements and the performance of other terms of any option contract.
(h) Futures Contracts.
Upon receipt of Instructions, the Custodian shall enter into a futures
margin procedural agreement among the appropriate Fund, the Custodian and the
designated futures commission merchant (a "Procedural Agreement"). Under the
Procedural Agreement the Custodian shall: (a) receive and retain confirmations,
if any, evidencing the purchase or sale of a futures contract or an option on a
futures contract by such Fund; (b) deposit and maintain in a segregated account
cash, Securities and/or other Assets designated as initial, maintenance or
variation "margin" deposits intended to secure such Fund's performance of its
obligations under any futures contracts purchased or sold, or any options on
futures contracts written by such Fund, in accordance with the provisions of any
Procedural Agreement designed to comply with the provisions of the Commodity
Futures Trading Commission and/or any commodity exchange or contract market
(such as the Chicago Board of Trade), or any similar organization(s), regarding
such margin deposits; and (c) release Assets from and/or transfer Assets into
such margin accounts only in accordance with any such Procedural Agreements. The
appropriate Fund and such futures commission merchant shall be responsible for
determining the type and amount of Assets held in the segregated account or paid
to the broker-dealer in compliance with applicable margin maintenance
requirements and the performance of any futures contract or option on a futures
contract in accordance with its terms.
<PAGE>
(i) Segregated Accounts.
Upon receipt of Instructions, the Custodian shall establish and
maintain on its books a segregated account or accounts for and on behalf of a
Fund, into which account or accounts may be transferred Assets of such Fund,
including Securities maintained by the Custodian in a Securities System pursuant
to Paragraph (b)(3) of this Section 4, said account or accounts to be maintained
(i) for the purposes set forth in Sections 4(g), 4(h) and 4(n) and (ii) for the
purpose of compliance by such Fund with the procedures required by the SEC
Investment Company Act Release Number 10666 or any subsequent release or
releases relating to the maintenance of segregated accounts by registered
investment companies, or (iii) for such other purposes as may be set forth, from
time to time, in Special Instructions. The Custodian shall not be responsible
for the determination of the type or amount of Assets to be held in any
segregated account referred to in this paragraph, or for compliance by the Fund
with required procedures noted in (ii) above.
(j) Depositary Receipts.
Upon receipt of Instructions, the Custodian shall surrender or cause to
be surrendered Securities to the depositary used for such Securities by an
issuer of American Depositary Receipts or International Depositary Receipts
(hereinafter referred to, collectively, as "ADRs"), against a written receipt
therefor adequately describing such Securities and written evidence satisfactory
to the organization surrendering the same that the depositary has acknowledged
receipt of instructions to issue ADRs with respect to such Securities in the
name of the Custodian or a nominee of the Custodian, for delivery in accordance
with such instructions.
Upon receipt of Instructions, the Custodian shall surrender or cause to
be surrendered ADRs to the issuer thereof, against a written receipt therefor
adequately describing the ADRs surrendered and written evidence satisfactory to
the organization surrendering the same that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver the
Securities underlying such ADRs in accordance with such instructions.
(k) Corporate Actions, Put Bonds, Called Bonds, Etc.
Upon receipt of Instructions, the Custodian shall: (a) deliver
warrants, puts, calls, rights or similar Securities to the issuer or trustee
thereof (or to the agent of such issuer or trustee) for the purpose of exercise
or sale, provided that the new Securities, cash or other Assets, if any,
acquired as a result of such actions are to be delivered to the Custodian; and
(b) deposit Securities upon invitations for tenders thereof, provided that the
consideration for such Securities is to be paid or delivered to the Custodian,
or the tendered Securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary in Instructions, to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or similar rights of security
ownership, and shall notify the appropriate Fund of such action in writing by
facsimile transmission or in such other manner as such Fund and Custodian may
agree in writing.
The Fund agrees that if it gives an Instruction for the performance of
an act on the last permissible date of a period established by any optional
offer or on the last permissible date for the performance of such act, the Fund
shall hold the Bank harmless from any adverse consequences in connection with
acting upon or failing to act upon such Instructions.
<PAGE>
(l) Interest Bearing Deposits.
Upon receipt of Instructions directing the Custodian to purchase
interest bearing fixed term and call deposits (hereinafter referred to,
collectively, as "Interest Bearing Deposits") for the account of a Fund, the
Custodian shall purchase such Interest Bearing Deposits in the name of such Fund
with such banks or trust companies, including the Custodian, any Subcustodian or
any subsidiary or affiliate of the Custodian (hereinafter referred to as
"Banking Institutions"), and in such amounts as such Fund may direct pursuant to
Instructions. Such Interest Bearing Deposits may be denominated in U.S. dollars
or other currencies, as such Fund may determine and direct pursuant to
Instructions. The responsibilities of the Custodian to a Fund for Interest
Bearing Deposits issued by the Custodian shall be that of a U.S. bank for a
similar deposit. With respect to Interest Bearing Deposits other than those
issued by the Custodian, (a) the Custodian shall be responsible for the
collection of income and the transmission of cash to and from such accounts; and
(b) the Custodian shall have no duty with respect to the selection of the
Banking Institution or for the failure of such Banking Institution to pay upon
demand.
(m) Foreign Exchange Transactions.
(l) Each Fund hereby appoints the Custodian as its agent in
the execution of all currency exchange transactions. The Custodian agrees to
provide exchange rate and U.S. Dollar information, in writing, to the Funds.
Such information shall be supplied by the Custodian at least by the business day
prior to the value date of the foreign exchange transaction, provided that the
Custodian receives the request for such information at least two business days
prior to the value date of the transaction.
(2) Upon receipt of Instructions, the Custodian shall settle
foreign exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery on behalf of and for the account of a Fund with
such currency brokers or Banking Institutions as such Fund may determine and
direct pursuant to Instructions. If, in its Instructions, a Fund does not direct
the Custodian to utilize a particular currency broker or Banking Institution,
the Custodian is authorized to select such currency broker or Banking
Institution as it deems appropriate to execute the Fund's foreign currency
transaction.
(3) Each Fund accepts full responsibility for its use of third
party foreign exchange brokers and for execution of said foreign exchange
contracts and understands that the Fund shall be responsible for any and all
costs and interest charges which may be incurred as a result of the failure or
delay of its third party broker to deliver foreign exchange. The Custodian shall
have no responsibility or liability with respect to the selection of the
currency brokers or Banking Institutions with which a Fund deals or the
performance of such brokers or Banking Institutions.
(4) Notwithstanding anything to the contrary contained herein,
upon receipt of Instructions the Custodian may, in connection with a foreign
exchange contract, make free outgoing payments of cash in the form of U.S.
Dollars or foreign currency prior to receipt of confirmation of such foreign
exchange contract or confirmation that the countervalue currency completing such
contract has been delivered or received.
(5) The Custodian shall not be obligated to enter into foreign
exchange transactions as principal. However, if the Custodian has made available
to a Fund its services as a principal in foreign exchange transactions and
subject to any separate agreement between the parties relating to such
transactions, the Custodian shall enter into foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future delivery on
behalf of and for the account of the Fund, with the Custodian as principal.
<PAGE>
(n) Pledges or Loans of Securities.
(1) Upon receipt of Instructions from a Fund, the Custodian will release or
cause to be released Securities held in custody to the pledgees designated in
such Instructions by way of pledge or hypothecation to secure loans incurred by
such Fund with various lenders including but not limited to UMB Bank, n.a.;
provided, however, that the Securities shall be released only upon payment to
the Custodian of the monies borrowed, except that in cases where additional
collateral is required to secure existing borrowings, further Securities may be
released or delivered, or caused to be released or delivered for that purpose
upon receipt of Instructions. Upon receipt of Instructions, the Custodian will
pay, but only from funds available for such purpose, any such loan upon
re-delivery to it of the Securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing such loan. In lieu of delivering
collateral to a pledgee, the Custodian, on the receipt of Instructions, shall
transfer the pledged Securities to a segregated account for the benefit of the
pledgee.
(2) Upon receipt of Special Instructions, and execution of a separate
Securities Lending Agreement, the Custodian will release Securities held in
custody to the borrower designated in such Instructions and may, except as
otherwise provided below, deliver such Securities prior to the receipt of
collateral, if any, for such borrowing, provided that, in case of loans of
Securities held by a Securities System that are secured by cash collateral, the
Custodian's instructions to the Securities System shall require that the
Securities System deliver the Securities of the appropriate Fund to the borrower
thereof only upon receipt of the collateral for such borrowing. The Custodian
shall have no responsibility or liability for any loss arising from the delivery
of Securities prior to the receipt of collateral. Upon receipt of Instructions
and the loaned Securities, the Custodian will release the collateral to the
borrower.
(o) Stock Dividends, Rights, Etc.
The Custodian shall receive and collect all stock dividends, rights,
and other items of like nature and, upon receipt of Instructions, take action
with respect to the same as directed in such Instructions.
(p) Routine Dealings.
The Custodian will, in general, attend to all routine and mechanical
matters in accordance with industry standards in connection with the sale,
exchange, substitution, purchase, transfer, or other dealings with Securities or
other property of each Fund except as may be otherwise provided in this
Agreement or directed from time to time by Instructions from any particular
Fund. The Custodian may also make payments to itself or others from the Assets
for disbursements and out-of-pocket expenses incidental to handling Securities
or other similar items relating to its duties under this Agreement, provided
that all such payments shall be accounted for to the appropriate Fund.
(q) Collections.
The Custodian shall (a) collect amounts due and payable to each Fund
with respect to portfolio Securities and other Assets; (b) promptly credit to
the account of each Fund all income and other payments relating to portfolio
Securities and other Assets held by the Custodian hereunder upon Custodian's
receipt of such income or payments or as otherwise agreed in writing by the
Custodian and any particular Fund; (c) promptly endorse and deliver any
instruments required to effect such collection; and (d) promptly execute
ownership and other certificates and affidavits for all federal, state, local
and foreign tax purposes in connection with receipt of income or other payments
with respect to portfolio Securities and other Assets, or in connection with the
transfer of such Securities or other Assets; provided, however, that with
respect to portfolio Securities registered in so-called street name, or physical
Securities with variable interest rates, the Custodian shall use its best
efforts to collect amounts due and payable to any such Fund. The Custodian shall
notify a Fund in writing by facsimile transmission or in such other manner as
such Fund and Custodian may agree in writing if any amount payable with respect
to portfolio Securities or other Assets is not received by the Custodian when
due. The Custodian shall not be responsible for the collection of amounts due
and payable with respect to portfolio Securities or other Assets that are in
default.
<PAGE>
(r) Bank Accounts.
Upon Instructions, the Custodian shall open and operate a bank account
or accounts on the books of the Custodian; provided that such bank account(s)
shall be in the name of the Custodian or a nominee thereof, for the account of
one or more Funds, and shall be subject only to draft or order of the Custodian.
The responsibilities of the Custodian to any one or more such Funds for deposits
accepted on the Custodian's books shall be that of a U.S. bank for a similar
deposit.
(s) Dividends, Distributions and Redemptions.
To enable each Fund to pay dividends or other distributions to
shareholders of each such Fund and to make payment to shareholders who have
requested repurchase or redemption of their shares of each such Fund
(collectively, the "Shares"), the Custodian shall release cash or Securities
insofar as available. In the case of cash, the Custodian shall, upon the receipt
of Instructions, transfer such funds by check or wire transfer to any account at
any bank or trust company designated by each such Fund in such Instructions. In
the case of Securities, the Custodian shall, upon the receipt of Special
Instructions, make such transfer to any entity or account designated by each
such Fund in such Special Instructions.
(t) Proceeds from Shares Sold.
The Custodian shall receive funds representing cash payments received
for shares issued or sold from time to time by each Fund, and shall credit such
funds to the account of the appropriate Fund. The Custodian shall notify the
appropriate Fund of Custodian's receipt of cash in payment for shares issued by
such Fund by facsimile transmission or in such other manner as such Fund and the
Custodian shall agree. Upon receipt of Instructions, the Custodian shall: (a)
deliver all federal funds received by the Custodian in payment for shares as may
be set forth in such Instructions and at a time agreed upon between the
Custodian and such Fund; and (b) make federal funds available to a Fund as of
specified times agreed upon from time to time by such Fund and the Custodian, in
the amount of checks received in payment for shares which are deposited to the
accounts of such Fund.
(u) Proxies and Notices; Compliance with the Shareholders Communication
Act of 1985.
The Custodian shall deliver or cause to be delivered to the appropriate
Fund all forms of proxies, all notices of meetings, and any other notices or
announcements affecting or relating to Securities owned by such Fund that are
received by the Custodian, any Subcustodian, or any nominee of either of them,
and, upon receipt of Instructions, the Custodian shall execute and deliver, or
cause such Subcustodian or nominee to execute and deliver, such proxies or other
authorizations as may be required. Except as directed pursuant to Instructions,
neither the Custodian nor any Subcustodian or nominee shall vote upon any such
Securities, or execute any proxy to vote thereon, or give any consent or take
any other action with respect thereto.
The Custodian will not release the identity of any Fund to an issuer
which requests such information pursuant to the Shareholder Communications Act
of 1985 for the specific purpose of direct communications between such issuer
and any such Fund unless a particular Fund directs the Custodian otherwise in
writing.
(v) Books and Records.
The Custodian shall maintain such records relating to its activities
under this Agreement as are required to be maintained by Rule 31a-1 under the
Investment Company Act of 1940 ("the 1940 Act") and to preserve them for the
periods prescribed in Rule 31a-2 under the 1940 Act. These records shall be open
for inspection by duly authorized officers, employees or agents (including
independent public accountants) of the appropriate Fund during normal business
hours of the Custodian.
<PAGE>
The Custodian shall provide accountings relating to its activities
under this Agreement as shall be agreed upon by each Fund and the Custodian.
(w) Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as each Fund may request
to obtain from year to year favorable opinions from each such Fund's independent
certified public accountants with respect to the Custodian's activities
hereunder and in connection with the preparation of each such Fund's periodic
reports to the SEC and with respect to any other requirements of the SEC.
(x) Reports by Independent Certified Public Accountants.
At the request of a Fund, the Custodian shall deliver to such Fund a
written report prepared by the Custodian's independent certified public
accountants with respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's accounting system,
internal accounting control and procedures for safeguarding cash, Securities and
other Assets, including cash, Securities and other Assets deposited and/or
maintained in a Securities System or with a Subcustodian. Such report shall be
of sufficient scope and in sufficient detail as may reasonably be required by
such Fund and as may reasonably be obtained by the Custodian.
(y) Bills and Other Disbursements.
Upon receipt of Instructions, the Custodian shall pay, or cause to be
paid, all bills, statements, or other obligations of a Fund.
5. Subcustodians.
From time to time, in accordance with the relevant provisions of this
Agreement, the Custodian may appoint one or more Domestic Subcustodians, Foreign
Subcustodians, Special Subcustodians, or Interim Subcustodians (as each are
hereinafter defined) to act on behalf of any one or more Funds. A Domestic
Subcustodian, in accordance with the provisions of this Agreement, may also
appoint a Foreign Subcustodian, Special Subcustodian, or Interim Subcustodian to
act on behalf of any one or more Funds. For purposes of this Agreement, all
Domestic Subcustodians, Foreign Subcustodians, Special Subcustodians and Interim
Subcustodians shall be referred to collectively as "Subcustodians".
(a) Domestic Subcustodians.
The Custodian may, at any time and from time to time, appoint any bank
as defined in Section 2(a)(5) of the 1940 Act or any trust company or other
entity, any of which meet the requirements of a custodian under Section 17(f) of
the 1940 Act and the rules and regulations thereunder, to act for the Custodian
on behalf of any one or more Funds as a subcustodian for purposes of holding
Assets of such Fund(s) and performing other functions of the Custodian within
the United States (a "Domestic Subcustodian"). Each Fund shall approve in
writing the appointment of the proposed Domestic Subcustodian; and the
Custodian's appointment of any such Domestic Subcustodian shall not be effective
without such prior written approval of the Fund(s). Each such duly approved
Domestic Subcustodian shall be listed on Appendix A attached hereto, as it may
be amended, from time to time.
(b) Foreign Subcustodians.
The Custodian may at any time appoint, or cause a Domestic Subcustodian
to appoint, any bank, trust company or other entity meeting the requirements of
an "eligible foreign custodian"
<PAGE>
under Section 17(f) of the 1940 Act and the rules and regulations thereunder to
act for the Custodian on behalf of any one or more Funds as a Subcustodian or
sub-Subcustodian (if appointed by a Domestic Subcustodian) for purposes of
holding Assets of the Fund(s) and performing other functions of the Custodian in
countries other than the United States of America (hereinafter referred to as a
"Foreign Subcustodian" in the context of either a Subcustodian or a
sub-Subcustodian); provided that the Custodian shall have obtained written
confirmation from each Fund of the approval of the Board of Directors or other
governing body of each such Fund (which approval may be withheld in the sole
discretion of such Board of Directors or other governing body or entity) with
respect to (i) the identity of any proposed Foreign Subcustodian (including
branch designation), (ii) the country or countries in which, and the securities
depositories or clearing agencies (hereinafter "Securities Depositories and
Clearing Agencies"), if any, through which, the Custodian or any proposed
Foreign Subcustodian is authorized to hold Securities and other Assets of each
such Fund, and (iii) the form and terms of the Subcustodian agreement to be
entered into with such proposed Foreign Subcustodian. Each such duly approved
Foreign Subcustodian and the countries where and the Securities Depositories and
Clearing Agencies through which they may hold Securities and other Assets of the
Fund(s) shall be listed on Appendix A attached hereto, as it may be amended,
from time to time. Each Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be held in a
country in which no Foreign Subcustodian is authorized to act, in order that
there shall be sufficient time for the Custodian, or any Domestic Subcustodian,
to effect the appropriate arrangements with a proposed Foreign Subcustodian,
including obtaining approval as provided in this Section 5(b). In connection
with the appointment of any Foreign Subcustodian, the Custodian shall, or shall
cause the Domestic Subcustodian to, enter into a subcustodian agreement with the
Foreign Subcustodian in form and substance approved by each such Fund. The
Custodian shall not consent to the amendment of, and shall cause any Domestic
Subcustodian not to consent to the amendment of, any agreement entered into with
a Foreign Subcustodian, which materially affects any Fund's rights under such
agreement, except upon prior written approval of such Fund pursuant to Special
Instructions.
(c) Interim Subcustodians.
Notwithstanding the foregoing, in the event that a Fund shall invest in
an Asset to be held in a country in which no Foreign Subcustodian is authorized
to act, the Custodian shall notify such Fund in writing by facsimile
transmission or in such other manner as such Fund and the Custodian shall agree
in writing of the unavailability of an approved Foreign Subcustodian in such
country; and upon the receipt of Special Instructions from such Fund, the
Custodian shall, or shall cause its Domestic Subcustodian to, appoint or approve
an entity (referred to herein as an "Interim Subcustodian") designated in such
Special Instructions to hold such Security or other Asset.
(d) Special Subcustodians.
Upon receipt of Special Instructions, the Custodian shall, on behalf of
a Fund, appoint one or more banks, trust companies or other entities designated
in such Special Instructions to act for the Custodian on behalf of such Fund as
a Subcustodian for purposes of: (i) effecting third-party repurchase
transactions with banks, brokers, dealers or other entities through the use of a
common Custodian or Subcustodian; (ii) providing depository and clearing agency
services with respect to certain variable rate demand note Securities, (iii)
providing depository and clearing agency services with respect to dollar
denominated Securities, and (iv) effecting any other transactions designated by
such Fund in such Special Instructions. Each such designated Subcustodian
(hereinafter referred to as a "Special Subcustodian") shall be listed on
Appendix A attached hereto, as it may be amended from time to time. In
connection with the appointment of any Special Subcustodian, the
<PAGE>
Custodian shall enter into a Subcustodian agreement with the Special
Subcustodian in form and substance approved by the appropriate Fund in Special
Instructions. The Custodian shall not amend any Subcustodian agreement entered
into with a Special Subcustodian, or waive any rights under such agreement,
except upon prior approval pursuant to Special Instructions.
(e) Termination of a Subcustodian.
The Custodian may, at any time in its discretion upon notification to
the appropriate Fund(s), terminate any Subcustodian of such Fund(s) in
accordance with the termination provisions under the applicable Subcustodian
agreement, and upon the receipt of Special Instructions, the Custodian will
terminate any Subcustodian in accordance with the termination provisions under
the applicable Subcustodian agreement.
(f) Certification Regarding Foreign Subcustodians.
Upon request of a Fund, the Custodian shall deliver to such Fund a
certificate stating: (i) the identity of each Foreign Subcustodian then acting
on behalf of the Custodian; (ii) the countries in which and the Securities
Depositories and Clearing Agencies through which each such Foreign Subcustodian
is then holding cash, Securities and other Assets of such Fund; and (iii) such
other information as may be requested by such Fund, and as the Custodian shall
be reasonably able to obtain, to evidence compliance with rules and regulations
under the 1940 Act.
6. Standard of Care.
(a) General Standard of Care.
The Custodian shall be liable to a Fund for all losses, damages and
reasonable costs and expenses suffered or incurred by such Fund resulting from
the negligence or willful misfeasance of the Custodian; provided, however, in no
event shall the Custodian be liable for special, indirect or consequential
damages arising under or in connection with this Agreement.
(b) Actions Prohibited by Applicable Law, Events Beyond Custodian's
Control, Sovereign Risk, Etc.
In no event shall the Custodian or any Domestic Subcustodian incur
liability hereunder (i) if the Custodian or any Subcustodian or Securities
System, or any Subcustodian, Securities System, Securities Depository or
Clearing Agency utilized by the Custodian or any such Subcustodian, or any
nominee of the Custodian or any Subcustodian (individually, a "Person") is
prevented, forbidden or delayed from performing, or omits to perform, any act or
thing which this Agreement provides shall be performed or omitted to be
performed, by reason of: (a) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or of
any foreign country, or political subdivision thereof or of any court of
competent jurisdiction (and neither the Custodian nor any other Person shall be
obligated to take any action contrary thereto); or (b) any event beyond the
control of the Custodian or other Person such as armed conflict, riots, strikes,
lockouts, labor disputes, equipment or transmission failures, natural disasters,
or failure of the mails, transportation, communications or power supply; or (ii)
for any loss, damage, cost or expense resulting from "Sovereign Risk." A
"Sovereign Risk" shall mean nationalization, expropriation, currency
devaluation, revaluation or fluctuation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency
<PAGE>
restrictions, exchange controls, taxes, levies or other charges affecting a
Fund's Assets; or acts of armed conflict, terrorism, insurrection or revolution;
or any other act or event beyond the Custodian's or such other Person's control.
(c) Liability for Past Records.
Neither the Custodian nor any Domestic Subcustodian shall have any
liability in respect of any loss, damage or expense suffered by a Fund, insofar
as such loss, damage or expense arises from the performance of the Custodian or
any Domestic Subcustodian in reliance upon records that were maintained for such
Fund by entities other than the Custodian or any Domestic Subcustodian prior to
the Custodian's employment hereunder.
(d) Advice of Counsel.
The Custodian and all Domestic Subcustodians shall be entitled to
receive and act upon advice of counsel of its own choosing on all matters. The
Custodian and all Domestic Subcustodians shall be without liability for any
actions taken or omitted in good faith pursuant to the advice of counsel.
(e) Advice of the Fund and Others.
The Custodian and any Domestic Subcustodian may rely upon the advice of
any Fund and upon statements of such Fund's accountants and other persons
believed by it in good faith to be expert in matters upon which they are
consulted, and neither the Custodian nor any Domestic Subcustodian shall be
liable for any actions taken or omitted, in good faith, pursuant to such advice
or statements.
(f) Instructions Appearing to be Genuine.
The Custodian and all Domestic Subcustodians shall be fully protected
and indemnified in acting as a custodian hereunder upon any Resolutions of the
Board of Directors or Trustees, Instructions, Special Instructions, advice,
notice, request, consent, certificate, instrument or paper appearing to it to be
genuine and to have been properly executed and shall, unless otherwise
specifically provided herein, be entitled to receive as conclusive proof of any
fact or matter required to be ascertained from any Fund hereunder a certificate
signed by any officer of such Fund authorized to countersign or confirm Special
Instructions.
(g) Exceptions from Liability.
Without limiting the generality of any other provisions hereof, neither
the Custodian nor any Domestic Subcustodian shall be under any duty or
obligation to inquire into, nor be liable for:
(i) the validity of the issue of any Securities purchased by
or for any Fund, the legality of the purchase thereof or evidence of ownership
required to be received by any such Fund, or the propriety of the decision to
purchase or amount paid therefor;
(ii) the legality of the sale of any Securities by or for
any Fund, or the propriety of the amount for which the same were sold; or
<PAGE>
(iii) any other expenditures, encumbrances of Securities,
borrowings or similar actions with respect to any Fund's Assets;
and may, until notified to the contrary, presume that all Instructions or
Special Instructions received by it are not in conflict with or in any way
contrary to any provisions of any such Fund's Declaration of Trust, Partnership
Agreement, Articles of Incorporation or By-Laws or votes or proceedings of the
shareholders, trustees, partners or directors of any such Fund, or any such
Fund's currently effective Registration Statement on file with the SEC.
7. Liability of the Custodian for Actions of Others.
(a) Domestic Subcustodians.
The Custodian shall be liable for the acts or omissions of any Domestic
Subcustodian to the same extent as if such actions or omissions were performed
by the Custodian itself.
(b) Liability for Acts and Omissions of Foreign Subcustodians.
The Custodian shall be liable to a Fund for any loss or damage to such
Fund caused by or resulting from the acts or omissions of any Foreign
Subcustodian to the extent that, under the terms set forth in the Subcustodian
agreement between the Custodian or a Domestic Subcustodian and such Foreign
Subcustodian, the Foreign Subcustodian has failed to perform in accordance with
the standard of conduct imposed under such Subcustodian agreement and the
Custodian or Domestic Subcustodian recovers from the Foreign Subcustodian under
the applicable Subcustodian agreement.
(c) Securities Systems, Interim Subcustodians, Special Subcustodians,
Securities Depositories and Clearing Agencies.
The Custodian shall not be liable to any Fund for any loss, damage or
expense suffered or incurred by such Fund resulting from or occasioned by the
actions or omissions of a Securities System, Interim Subcustodian, Special
Subcustodian, or Securities Depository and Clearing Agency unless such loss,
damage or expense is caused by, or results from, the negligence or willful
misfeasance of the Custodian.
(d) Defaults or Insolvency's of Brokers, Banks, Etc.
The Custodian shall not be liable for any loss, damage or expense
suffered or incurred by any Fund resulting from or occasioned by the actions,
omissions, neglects, defaults or insolvency of any broker, bank, trust company
or any other person with whom the Custodian may deal (other than any of such
entities acting as a Subcustodian, Securities System or Securities Depository
and Clearing Agency, for whose actions the liability of the Custodian is set out
elsewhere in this Agreement) unless such loss, damage or expense is caused by,
or results from, the negligence or willful misfeasance of the Custodian.
(e) Reimbursement of Expenses.
Each Fund agrees to reimburse the Custodian for all out-of-pocket
expenses incurred by the Custodian in connection with this Agreement, but
excluding salaries and usual overhead expenses.
<PAGE>
8. Indemnification.
(a) Indemnification by Fund.
Subject to the limitations set forth in this Agreement, each Fund
agrees to indemnify and hold harmless the Custodian and its nominees from all
losses, damages and expenses (including attorneys' fees) suffered or incurred by
the Custodian or its nominee caused by or arising from actions taken by the
Custodian, its employees or agents in the performance of its duties and
obligations under this Agreement, including, but not limited to, any
indemnification obligations undertaken by the Custodian under any relevant
Subcustodian agreement; provided, however, that such indemnity shall not apply
to the extent the Custodian is liable under Sections 6 or 7 hereof.
If any Fund requires the Custodian to take any action with respect to
Securities, which action involves the payment of money or which may, in the
opinion of the Custodian, result in the Custodian or its nominee assigned to
such Fund being liable for the payment of money or incurring liability of some
other form, such Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
(b) Indemnification by Custodian.
Subject to the limitations set forth in this Agreement and in addition
to the obligations provided in Sections 6 and 7, the Custodian agrees to
indemnify and hold harmless each Fund from all losses, damages and expenses
suffered or incurred by each such Fund caused by the negligence or willful
misfeasance of the Custodian.
9. Advances.
In the event that, pursuant to Instructions, the Custodian or any
Subcustodian, Securities System, or Securities Depository or Clearing Agency
acting either directly or indirectly under agreement with the Custodian (each of
which for purposes of this Section 9 shall be referred to as "Custodian"), makes
any payment or transfer of funds on behalf of any Fund as to which there would
be, at the close of business on the date of such payment or transfer,
insufficient funds held by the Custodian on behalf of any such Fund, the
Custodian may, in its discretion without further Instructions, provide an
advance ("Advance") to any such Fund in an amount sufficient to allow the
completion of the transaction by reason of which such payment or transfer of
funds is to be made. In addition, in the event the Custodian is directed by
Instructions to make any payment or transfer of funds on behalf of any Fund as
to which it is subsequently determined that such Fund has overdrawn its cash
account with the Custodian as of the close of business on the date of such
payment or transfer, said overdraft shall constitute an Advance. Any Advance
shall be payable by the Fund on behalf of which the Advance was made on demand
by Custodian, unless otherwise agreed by such Fund and the Custodian, and shall
accrue interest from the date of the Advance to the date of payment by such Fund
to the Custodian at a rate agreed upon in writing from time to time by the
Custodian and such Fund. It is understood that any transaction in respect of
which the Custodian shall have made an Advance, including but not limited to a
foreign exchange contract or transaction in respect of which the Custodian is
not acting as a principal, is for the account of and at the risk of the Fund on
behalf of which the Advance was made, and not, by reason of such Advance, deemed
to be a transaction undertaken by the Custodian for its own account and risk.
The Custodian and each of the Funds which are parties to this Agreement
acknowledge that the purpose of Advances is to finance temporarily the purchase
or sale of Securities for prompt delivery in accordance with the settlement
terms of such transactions or to meet emergency expenses not
<PAGE>
reasonably foreseeable by a Fund. The Custodian shall promptly notify the
appropriate Fund of any Advance. Such notification shall be sent by facsimile
transmission or in such other manner as such Fund and the Custodian may agree.
10. Liens.
The Bank shall have a lien on the Property in the Custody Account to
secure payment of fees and expenses for the services rendered under this
Agreement. If the Bank advances cash or securities to the Fund for any purpose
or in the event that the Bank or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of its duties hereunder, except such as may arise from its or
its nominee's negligent action, negligent failure to act or willful misconduct,
any Property at any time held for the Custody Account shall be security therefor
and the Fund hereby grants a security interest therein to the Bank. The Fund
shall promptly reimburse the Bank for any such advance of cash or securities or
any such taxes, charges, expenses, assessments, claims or liabilities upon
request for payment, but should the Fund fail to so reimburse the Bank, the Bank
shall be entitled to dispose of such Property to the extent necessary to obtain
reimbursement. The Bank shall be entitled to debit any account of the Fund with
the Bank including, without limitation, the Custody Account, in connection with
any such advance and any interest on such advance as the Bank deems reasonable.
11. Compensation.
Each Fund will pay to the Custodian such compensation as is agreed to
in writing by the Custodian and each such Fund from time to time. Such
compensation, together with all amounts for which the Custodian is to be
reimbursed in accordance with Section 7(e), shall be billed to each such Fund
and paid in cash to the Custodian.
12. Powers of Attorney.
Upon request, each Fund shall deliver to the Custodian such proxies,
powers of attorney or other instruments as may be reasonable and necessary or
desirable in connection with the performance by the Custodian or any
Subcustodian of their respective obligations under this Agreement or any
applicable Subcustodian agreement.
13. Termination and Assignment.
Any Fund or the Custodian may terminate this Agreement by notice in
writing, delivered or mailed, postage prepaid (certified mail, return receipt
requested) to the other not less than 90 days prior to the date upon which such
termination shall take effect. Upon termination of this Agreement, the
appropriate Fund shall pay to the Custodian such fees as may be due the
Custodian hereunder as well as its reimbursable disbursements, costs and
expenses paid or incurred. Upon termination of this Agreement, the Custodian
shall deliver, at the terminating party's expense, all Assets held by it
hereunder to the appropriate Fund or as otherwise designated by such Fund by
Special Instructions. Upon such delivery, the Custodian shall have no further
obligations or liabilities under this Agreement except as to the final
resolution of matters relating to activity occurring prior to the effective date
of termination.
This Agreement may not be assigned by the Custodian or any Fund without
the respective consent of the other, duly authorized by a resolution by its
Board of Directors or Trustees.
<PAGE>
14. Additional Funds.
An additional Fund or Funds may become a party to this Agreement after
the date hereof by an instrument in writing to such effect signed by such Fund
or Funds and the Custodian. If this Agreement is terminated as to one or more of
the Funds (but less than all of the Funds) or if an additional Fund or Funds
shall become a party to this Agreement, there shall be delivered to each party
an Appendix B or an amended Appendix B, signed by each of the additional Funds
(if any) and each of the remaining Funds as well as the Custodian, deleting or
adding such Fund or Funds, as the case may be. The termination of this Agreement
as to less than all of the Funds shall not affect the obligations of the
Custodian and the remaining Funds hereunder as set forth on the signature page
hereto and in Appendix B as revised from time to time.
15. Notices.
As to each Fund, notices, requests, instructions and other writings
delivered to Lindbergh Funds, Attn: Dewayne L. Wiggins, 5520 Telegraph Road,
Suite 204, Saint Louis, Missouri 63129, postage prepaid, or to such other
address as any particular Fund may have designated to the Custodian in writing,
shall be deemed to have been properly delivered or given to a Fund.
Notices, requests, instructions and other writings delivered to the
Securities Administration department of the Custodian at its office at 928 Grand
Blvd., 10th Floor, Attn: Ralph Santoro, Kansas City, Missouri 64106, or mailed
postage prepaid, to the Custodian's Securities Administration department, Post
Office Box 226, Attn: Ralph Santoro, Kansas City, Missouri 64141, or to such
other addresses as the Custodian may have designated to each Fund in writing,
shall be deemed to have been properly delivered or given to the Custodian
hereunder; provided, however, that procedures for the delivery of Instructions
and Special Instructions shall be governed by Section 2(c) hereof.
16. Miscellaneous.
(a) This Agreement is executed and delivered in the State of Missouri
and shall be governed by the laws of such state.
(b) All of the terms and provisions of this Agreement shall be binding
upon, and inure to the benefit of, and be enforceable by the respective
successors and assigns of the parties hereto.
(c) No provisions of this Agreement may be amended, modified or waived,
in any manner except in writing, properly executed by both parties hereto;
provided, however, Appendix A may be amended from time to time as Domestic
Subcustodians, Foreign Subcustodians, Special Subcustodians, and Securities
Depositories and Clearing Agencies are approved or terminated according to the
terms of this Agreement.
(d) 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.
(e) This Agreement shall be effective as of the date of execution
hereof.
<PAGE>
(f) This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(g) The following terms are defined terms within the meaning of this
Agreement, and the definitions thereof are found in the following sections of
the Agreement:
Term Section
Account 4(b)(3)(ii)
ADR'S 4(j)
Advance 9
Assets 2(b)
Authorized Person 3
Banking Institution 4(1)
Domestic Subcustodian 5(a)
Foreign Subcustodian 5(b)
Instruction 2(c)(1)
Interim Subcustodian 5(c)
Interest Bearing Deposit 4(1)
Liens 10
CC 4(g)(1)
Person 6(b)
Procedural Agreement 4(h)
SEC 4(b)(3)
Securities 2(a)
Securities Depositories and
Clearing Agencies 5(b)
Securities System 4(b)(3)
Shares 4(s)
Sovereign Risk 6(b)
Special Instruction 2(c)(2)
Special Subcustodian 5(d)
Subcustodian 5
1940 Act 4(v)
(h) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid by any court of competent
jurisdiction, the remaining portion or portions shall be considered severable
and shall not be affected, and the rights and obligations of the parties shall
be construed and enforced as if this Agreement did not contain the particular
part, term or provision held to be illegal or invalid.
(i) This Agreement constitutes the entire understanding and agreement
of the parties hereto with respect to the subject matter hereof, and accordingly
supersedes, as of the effective date of this Agreement, any custodian agreement
heretofore in effect between the Fund and the Custodian.
IN WITNESS WHEREOF, the parties hereto have caused this Custody
Agreement to be executed by their respective duly authorized officers.
Lindbergh Funds UMB Bank, N.A.
By:_______________________ By: _____________________
Name: Dewayne L.Wiggins Name: Ralph R. Santoro
Title: President Title: Senior Vice President
Date: Date:
<PAGE>
Appendix A
Custody Agreement
Domestic Subcustodians:
United Missouri Trust Company of New York
Securities Systems:
Federal Book Entry
Depository Trust Company
Participant Trust Company
Special Subcustodians:
Securities Depositories
Countries
Foreign Subcustodians
Clearing Agencies
Euroclear
Lindbergh Funds UMB Bank, N.A.
By: By:
Name: Dewayne L. Wiggins Name: Ralph R. Santoro
Title: President Title: Senior Vice President
Date: Date:
<PAGE>
Appendix B
Custody Agreement
The following open-end management investment companies ("Funds") are
hereby made parties to the Custody Agreement dated June 16, 1999, with UMB Bank,
N.A. ("Custodian") and Lindbergh Funds, and agree to be bound by all the terms
and conditions contained in said Agreement:
Lindbergh Signature Fund
Lindbergh Funds UMB Bank, N.A.
By: By:
Name: Dewayne L. Wiggins Name: Ralph R. Santoro
Title: President Title: Senior Vice President
Date: Date:
<PAGE>
UMB Bank, n.a.
Schedule of Fees for Domestic Custody Services
Prepared for the Lindbergh Signature Fund
Net Asset Value Fees
To be computed as of month-end on the average net asset value of each
portfolio at the annual rate of:
1.00 basis point on the first $100,000,000; plus
.75 basis point on the next $100,000,000; plus
.50 basis point in excess of $200,000,000;
*Subject to a $250 per month minimum per portfolio
Portfolio Transaction Fees
*DTC - Equities $ 4.00
*DTC - Fixed Income 7.00
*PTC 12.00
*Fed Book Entry 8.00
*Physical 25.00
Principal Paydown 5.00
Option (Initial Only)/Future (only if put on as asset) 25.00
Corporate Action/Call/Reorg 25.00
*Third-Party VRDN (Bank Book Entry) 15.00
*UMB Repurchase Agreement 5.00
*Tri-Party Repurchase Agreement 15.00
Wires In/Out & checks Issued (Non-Settlement Related) 8.00
*Fund of Fund Security Transaction
~ In-house Sweep (Scout &/or MMF) no charge
~ Preferred List** 10.00
~ All other 25.00
Fund of Fund Dividend Transaction
~ Sweep Income no charge
~ Preferred List** 5.00
~ All other 10.00
*A transaction includes buys, sells, maturities, or free security movements.
Out-of-Pocket Expenses
Includes, but is not limited to, security transfer fees, certificate fees,
shipping/courier fees or charges, FDIC insurance premiums, specialized
programming charges, and system access/connect charges.
This fee schedule pertains to custody of U.S. Domestic assets only. UMB
Bank will provide its fee schedule for Euroclear and international custody
upon request.
Fees for services not contemplated by this schedule will be negotiated on a
case-by-case basis.
Schedule offered above is valid through December 31, 1999
EXHIBIT
NUMBER (h)
Mutual Fund Services Agreement
<PAGE>
1
MUTUAL FUND SERVICES AGREEMENT
Fund Administration Services
Fund Accounting Services
Transfer Agency Services
between
LINDBERGH FUNDS
and
UNIFIED FUND SERVICES, INC.
June 16, 1999
Exhibit A - Portfolio Listing
Exhibit B - Fund Administration Services Description
Exhibit C - Fund Accounting Services Description
Exhibit D - Transfer Agency Services Description
Exhibit E - Fees and Expenses
<PAGE>
MUTUAL FUND SERVICES AGREEMENT
AGREEMENT (this "Agreement"), dated as of June 16, 1999, between the
Lindbergh Funds, a Massachusetts business trust (the "Fund"), and Unified Fund
Services, Inc., an Indiana corporation ("Unified").
WITNESSTH:
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 wishes to retain Unified to provide certain transfer
agent, fund accounting and administration services with respect to the Fund, and
Unified is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
Section 1. Appointment. The Fund hereby appoints Unified to provide
transfer agent, fund accounting and fund administration services for the Fund,
subject to the supervision of the Board of Trustees of the Fund (the "Board"),
for the period and on the terms set forth in this Agreement. Unified accepts
such appointment and agrees to furnish the services herein set forth in return
for the compensation as provided in Section 6 and Exhibit E to this Agreement.
The Fund will initially consist of the portfolios, funds and/or classes of
shares (each a "Portfolio"; collectively the "Portfolios") listed on Exhibit A.
The Fund shall notify Unified in writing of each additional Portfolio
established by the Fund. Each new Portfolio shall be subject to the provisions
of this Agreement, except to the extent that the provisions (including those
relating to the compensation and expenses payable by the Fund and its
Portfolios) may be modified with respect to each new Portfolio in writing by the
Fund and Unified at the time of the addition of the new Portfolio.
Section 2. Representations and Warranties of Unified. Unified represents
and warrants to the Fund that:
(a) Unified is a corporation duly organized and existing under the
laws of the State of Indiana;
(b) Unified is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement, and all
requisite corporate proceedings have been taken by Unified to authorize
Unified to enter into and perform this Agreement;
(c) Unified has, and will continue to have, access to the facilities,
personnel and equipment required to fully perform its duties and
obligations hereunder;
(d) no legal or administrative proceedings have been instituted or
threatened against Unified that would impair its ability to perform its
duties and obligations under this Agreement; and
(e) Unified's entrance into this Agreement will not cause a material
breach or be in material conflict with any other agreement or obligation of
Unified or any law or regulation applicable to Unified.
Section 3. Representations and Warranties of the Fund. The Fund represents
and warrants to Unified that:
(a) the Fund is a business trust duly organized and existing under the
laws of the Commonwealth of Massachusetts;
(b) the Fund is empowered under applicable laws and by its Declaration
of Trust and By-Laws to enter into and perform this Agreement, and the Fund
has taken all requisite proceedings to authorize the Fund to enter into and
perform this Agreement;
<PAGE>
(c) the Fund is an investment company properly registered under the
1940 Act; a registration statement under the Securities Act of 1933, as
amended ("1933 Act") and the 1940 Act on Form N-lA has been filed and will
be effective and will remain effective during the term of this Agreement,
and all necessary filings under the laws of the states will have been made
and will be current during the term of this Agreement;
(d) no legal or administrative proceedings have been instituted or
threatened against the Fund that would impair its ability to perform its
duties and obligations under this Agreement; and
(e) the Fund's entrance into this Agreement will not cause a material
breach or be in material conflict with any other agreement or obligation of
the Fund or any law or regulation applicable to it.
Section 4. Delivery of Documents. The Fund will promptly furnish to Unified
such copies, properly certified or authenticated, of contracts, documents and
other related information that Unified may request or requires to properly
discharge its duties. Such documents may include but are not limited to the
following:
(a) Resolutions of the Board authorizing the appointment of Unified to
provide certain transfer agency, fund accounting and administration
services to the Fund and approving this Agreement;
(b) The Fund's Declaration of Trust;
(c) The Fund's By-Laws;
(d) The Fund's Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's registration statement including exhibits, as amended,
on Form N-1A (the "Registration Statement") under the 1933 Act and the 1940
Act, as filed with the SEC;
(f) Copies of the Management Agreement between the Fund and its
investment adviser (the "Advisory Agreement");
(g) Opinions of counsel and auditors reports;
(h) The Fund's Prospectus and Statement of Additional Information
relating to all Portfolios and all amendments and supplements thereto (such
Prospectus and Statement of Additional Information and supplements thereto,
as presently in effect and as from time to time hereafter amended and
supplemented, herein called the "Prospectuses"); and
(i) Such other agreements as the Fund may enter into from time to time
including securities lending agreements, futures and commodities account
agreements, brokerage agreements, and options agreements.
Section 5. Services Provided by Unified.
(a) Unified will provide the following services subject to the
control, direction and supervision of the Board and in compliance with the
objectives, policies and limitations set forth in the Fund's Registration
Statement, Declaration of Trust and By-Laws; applicable laws and
regulations; and all resolutions and policies implemented by the Board:
(i) Fund Administration, as described on Exhibit B to this Agreement.
(ii) Fund Accounting, as described on Exhibit C to this Agreement.
(iii) Transfer Agency, as described on Exhibit D to this Agreement.
<PAGE>
(iv) Dividend Disbursing. Unified will serve as the Fund's dividend
disbursing agent. Unified will prepare and mail checks, place wire
transfers of credit income and capital gain payments to shareholders. The
Fund will advise Unified in advance of the declaration of any dividend or
distribution and the record and payable date thereof. Unified will, on or
before the payment date of any such dividend or distribution, notify the
Fund's Custodian of the estimated amount required to pay any portion of
such dividend or distribution payable in cash, and on or before the payment
date of such distribution, the Fund will instruct its Custodian to make
available to Unified sufficient funds for the cash amount to be paid out.
If a shareholder is entitled to receive additional shares by virtue of any
such distribution or dividend, appropriate credits will be made to each
shareholder's account and/or certificates delivered where requested. A
shareholder not receiving certificates will receive a confirmation from
Unified indicating the number of shares credited to his/her account.
(b) Unified will also:
(i) provide office facilities with respect to the provision of the
services contemplated herein (which may be in the offices of Unified or a
corporate affiliate of Unified);
(ii) provide or otherwise obtain personnel sufficient, in Unified's
sole discretion, for provision of the services contemplated herein;
(iii) furnish equipment and other materials, which Unified, in its
sole discretion, believes are necessary or desirable for provision of the
services contemplated herein; and
(iv) keep records relating to the services provided hereunder in such
form and manner as set forth on Exhibits B, C and D and as Unified may
otherwise deem appropriate or advisable, all in accordance with the 1940
Act. To the extent required by Section 31 of the 1940 Act and the rules
thereunder, Unified agrees that all such records prepared or maintained by
Unified relating to the services provided hereunder are the property of the
Fund and will be preserved for the periods prescribed under Rule 31a-2
under the 1940 Act, maintained at the Fund's expense, and made available in
accordance with such Section and rules. Unified further agrees to surrender
promptly to the Fund upon its request and cease to retain in its records
and files those records and documents created and maintained by Unified
pursuant to this Agreement.
Section 6. Fees: Expenses: Expense Reimbursement.
(a) As compensation for the services rendered to the Fund pursuant to
this Agreement the Fund shall pay Unified monthly fees determined as set
forth on Exhibit E to this Agreement. Such fees are to be billed monthly
and shall be due and payable upon receipt of the invoice. Upon any
termination of this Agreement and before the end of any month, the fee for
the part of the month before such termination shall be equal to the fee
normally due for the full monthly period and shall be payable upon the date
of termination of this Agreement.
(b) For the purpose of determining fees calculated as a function of a
Portfolio's net assets, the value of the Portfolio's net assets shall be
computed as required by the Prospectus, generally accepted accounting
principles, and resolutions of the Board.
(c) Unified will from time to time employ or associate with such
person or persons as may be appropriate to assist Unified in the
performance of this Agreement. Such person or persons may be officers and
employees who are employed or designated as officers by both Unified and
the Fund. The compensation of such person or persons for such employment
shall be paid by Unified and no obligation will be incurred by or on behalf
of the Fund in such respect.
<PAGE>
(d) Unified will bear all of its own expenses in connection with the
performance of the services under this Agreement except as otherwise
expressly provided herein. The Fund agrees to promptly reimburse Unified
for any equipment and supplies specially ordered by or for the Fund through
Unified and for any other expenses not contemplated by this Agreement that
Unified may incur on the Fund's behalf at the Fund's request or as
consented to by the Fund. Such other expenses to be incurred in the
operation of the Fund and to be borne by the Fund, include, but are not
limited to: taxes; interest; brokerage fees and commissions; salaries and
fees of officers and directors who are not officers, directors,
shareholders or employees of Unified, or the Fund's investment adviser or
distributor; SEC and state Blue Sky registration and qualification fees,
levies, fines and other charges; advisory fees; charges and expenses of
custodians; insurance premiums including fidelity bond premiums; auditing
and legal expenses; costs of maintenance of corporate existence; expenses
of typesetting and printing of prospectuses and for distribution to current
shareholders of the Fund; expenses of printing and production cost of
shareholders' reports and proxy statements and materials; costs and expense
of Fund stationery and forms; costs and expenses of special telephone and
data lines and devices; costs associated with corporate, shareholder, and
Board meetings; and any extraordinary expenses and other customary Fund
expenses. In addition, Unified may utilize one or more independent pricing
services, approved from time to time by the Board, to obtain securities
prices and to act as backup to the primary pricing services, in connection
with determining the net asset values of the Fund, and the Fund will
reimburse Unified for the Fund's share of the cost of such services based
upon the actual usage, or a pro-rata estimate of the use, of the services
for the benefit of the Fund.
(e) The Fund may request additional services, additional processing,
or special reports. Such requests may be provided by Unified at additional
charges. In this event, the Fund shall submit such requests in writing
together with such specifications as may be reasonably required by Unified,
and Unified shall respond to such requests in the form of a price
quotation. The Fund's written acceptance of the quotation must be received
prior to implementation of such request. Additional services will be
charged at Unified's standard rates.
(f) All fees, out-of-pocket expenses, or additional charges of Unified
shall be billed on a monthly basis and shall be due and payable upon
receipt of the invoice.
Unified will render, after the close of each month in which services
have been furnished, a statement reflecting all of the charges for such
month. Charges remaining unpaid after thirty (30) days shall bear interest
in finance charges equivalent to, in the aggregate, the Prime Rate (as
publicly announced by Star Bank, N.A., from time to time) plus 2.00% per
year and all costs and expenses of effecting collection of any such sums,
including reasonable attorney's fees, shall be paid by the Fund to Unified.
In the event that the Fund is more than sixty (60) days delinquent in
its payments of monthly billings in connection with this Agreement (with
the exception of specific amounts which may be contested in good faith by
the Fund), this Agreement may be terminated upon thirty (30) days' written
notice to the Fund by Unified. The Fund must notify Unified in writing of
any contested amounts within thirty (30) days of receipt of a billing for
such amounts. Disputed amounts are not due and payable while they are being
investigated.
<PAGE>
Section 7. Proprietary and Confidential Information. Unified agrees on
behalf of itself and its employees to treat confidentially and as proprietary
information of the Fund, all records and other information relative to the
Fund's prior, present or potential shareholders, and to not use such records and
information for any purpose other than performance of Unified's responsibilities
and duties hereunder. Unified may seek a waiver of such confidentiality
provisions by furnishing reasonable prior notice to the Fund and obtaining
approval in writing from the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the service agent may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities. Waivers of
confidentiality are automatically effective without further action by Unified
with respect to Internal Revenue Service levies, subpoenas and similar actions,
or with respect to any request by the Fund.
Section 8. Duties, Responsibilities and Limitations of Liability.
(a) In the performance of its duties hereunder, Unified shall be
obligated to exercise due care and diligence, and to act in good faith in
performing the services provided for under this Agreement. In performing
its services hereunder, Unified shall be entitled to rely on any oral or
written instructions, notices or other communications from the Fund and its
custodian, officers and trustees, investors, agents and other service
providers which Unified reasonably believes to be genuine, valid and
authorized. Unified shall also be entitled to consult with and rely on the
advice and opinions of outside legal counsel retained by the Fund, as
necessary or appropriate.
(b) Unified shall not be liable for any error of judgment or mistake
of law or for any loss or expense suffered by the Fund, in connection with
the matters to which this Agreement relates, except for a loss or expense
solely caused by or resulting from willful misfeasance, bad faith or
negligence on Unified's part in the performance of its duties or from
reckless disregard by Unified of its obligations and duties under this
Agreement. Any person, even though also an officer, director, partner,
employee or agent of Unified, who may be or become an officer, director,
partner, employee or agent of the Fund, shall be deemed when rendering
services to the Fund or acting on any business of the Fund (other than
services or business in connection with Unified's duties hereunder) to be
rendering such services to or acting solely for the Fund and not as an
officer, director, partner, employee or agent or person under the control
or direction of Unified even though paid by Unified.
(c) Except for a loss or expense solely caused by or resulting from
willful misfeasance, bad faith or negligence on Unified's part in the
performance of its duties or from reckless disregard by Unified of its
obligations and duties under this Agreement, Unified shall not be
responsible for, and the Fund shall indemnify and hold Unified harmless
from and against, any and all losses, damages, costs, reasonable attorneys'
fees and expenses, payments, expenses and liabilities arising out of or
attributable to:
(i) all actions of Unified or its officers or agents required to be
taken pursuant to this Agreement;
(ii) the reliance on or use by Unified or its officers or agents of
information, records, or documents which are received by Unified or its
officers or agents and furnished to it or them by or on behalf of the Fund,
and which have been prepared or maintained by the Fund or any third party
on behalf of the Fund;
(iii) the Fund's refusal or failure to comply with the terms of this
Agreement or the Fund's lack of good faith, or its actions, or lack thereof
involving negligence or willful misfeasance;
(iv) the breach of any representation or warranty of the Fund
hereunder;
(v) the taping or other form of recording of telephone conversations
or other forms of electronic communications with investors and
shareholders, or reliance by Unified on telephone or other electronic
instructions of any person acting on behalf of a shareholder or shareholder
account for which telephone or other electronic services have been
authorized;
(vi) the reliance on or the carrying out by Unified or its officers or
agents of any proper instructions reasonably believed to be duly
authorized, or requests of the Fund or recognition by Unified of any share
certificates which are reasonably believed to bear the proper signatures of
the officers of the Fund and the proper countersignature of any transfer
agent or registrar of the Fund;
<PAGE>
(vii) any delays, inaccuracies, errors in or omissions from data
provided to Unified by data and pricing services;
(viii) the offer or sale of shares by the Fund in violation of any
requirement under the federal securities laws or regulations or the
securities laws or regulations of any state, or in violation of any stop
order or other determination or ruling by any federal agency or any state
agency with respect to the offer or sale of such shares in such state (1)
resulting from activities, actions, or omissions by the Fund or its other
service providers and agents, or (2) existing or arising out of activities,
actions or omissions by or on behalf of the Fund prior to the effective
date of this Agreement; and
(ix) the compliance by the Fund, its investment adviser, and its
distributor with applicable securities, tax, commodities and other laws,
rules and regulations.
Section 9. Terms. This Agreement shall become effective on the date first
herein above written. This Agreement may be modified or amended from time to
time by mutual agreement between the parties hereto. This Agreement shall
continue in effect unless terminated by either party on at least ninety (90)
days' prior written notice. Upon termination of this Agreement, the Fund shall
pay to Unified such compensation and any reimbursable expenses as may be due
under the terms hereof as of the date of termination or the date that the
provision of services ceases, whichever is sooner.
Should the Fund exercise its right to terminate this Agreement, the Fund
agrees to pay a termination/conversion fee, simultaneous with the transfer of
all Fund records to the successor mutual fund service provider(s), in an amount
equal to the total compensation under this agreement for the 90 day period
immediately preceding the termination notice date. In addition, the Fund agrees
to pay for all conversion tape set-up fees, test conversion preparation and
processing fees and final conversion fees.
Such compensation to Unified shall be for the expenses incurred in
connection with the retrieval, compilation and movement of books, records and
materials relative to the deconversion or conversion of Fund records to the
successor mutual fund service provider as directed by the Fund. Notwithstanding
the foregoing, any amount owed by the Fund to Unified prior to the
termination/conversion shall still be due and payable under the terms of this
Agreement. No such compensation shall be due to Unified if Unified terminates
this Agreement for reasons other than a default by the Fund.
Upon the termination of the Agreement for any reason, Unified agrees to
provide the Fund with complete and accurate tranfer agency, fund accounting and
administration records and to assist the Fund in the orderly transfer of
accounts and records. Without limiting the generality of the foregoing, Unified
agrees upon termination of this Agreement:
(a) to deliver to the successor mutual fund service provider(s), computer
tapes containing the Fund's accounts and records together with such record
layouts and additional information as may be necessary to enable the successor
mutual fund service provider(s) to utilize the information therein;
(b) to cooperate with the successor mutual fund service provider(s) in the
interpretation of the Fund's account and records;
(c) to forward all shareholder calls, mail and correspondence to the new
mutual fund service provider(s) upon de-conversion; and
(d) to act in good faith, to make the conversion as smooth as possible for
the successor mutual fund service provider(s) and the Fund.
Section 10. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed to have been given when delivered in person or by
certified mail, return receipt requested, to the parties at the following
address (or such other address as a party may specify by notice to the other):
<PAGE>
(a) If to the Fund, to:
Lindbergh Funds
5520 Telegraph Road #204
St. Louis, Missouri 63129
Attention: President
(b) If to Unified, to:
Unified Fund Services, Inc.
431 North Pennsylvania Street
Indianapolis, Indiana 46204
Attention: President
Notice shall be effective upon receipt if by mail, on the date of personal
delivery (by private messenger, courier service or otherwise) or upon confirmed
receipt of telex or facsimile, whichever occurs first.
Section 11. Assignability. This Agreement shall not be assigned by either
party hereto without the prior written consent of the other party.
Section 12. Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
nor shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
Section 13. Force Majeure. Unified shall not be responsible or liable for
any failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
control, including without limitations, acts of God, earthquake, fires, floods,
wars, acts of civil or military authorities, or governmental actions, nor shall
any such failure or delay give the Fund the right to terminate this Agreement.
Section 14. Use or Name. The Fund and Unified agree not to use the other's
name nor the names of such other's affiliates, designees, or assignees in any
prospectus, sales literature, or other printed material written in a manner not
previously, expressly approved in writing by the other or such other's
affiliates, designees, or assignees except where required by the SEC or any
state agency responsible for securities regulation.
Section 15. Amendments. This Agreement may be modified or amended from time
to time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.
Section 16. Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance it shall nevertheless
remain applicable to all other persons and circumstances.
Section 17. Year 2000. Unified covenants and agrees that it will use
reasonable commercial efforts to not allow a Year 2000 problem in its computer
systems, software or equipment owned, leased or licensed by it or its affiliates
to interfere with its performance under this Agreement. Each of Unified and the
Fund will use reasonable commercial efforts to cooperate and share information
to further comply with this Section 14, and to minimize the impact of any Year
2000 problem of such party on the performance of this Agreement. Each of Unified
and the Fund will inform the other party of any circumstance indicating a
possible obstacle to such compliance, and the steps being taken to avoid or
overcome the obstacle. A "Year 2000 problem" means a date-handling problem
relating to the Year 2000 date change that would cause a computer system,
software or equipment to fail to correctly perform, process or handle
date-related data for the dates within and between the 20th and 21st centuries
and all other centuries. Any modification of a defect to Unified's computer
systems, software or equipment necessary to solve a Year 2000 problem shall be
at no additional charge to the Fund.
<PAGE>
Section 18. Governing Law. This Agreement shall be governed by the laws of
the State of Indiana.
Section 19. Execution. This Agreement may be executed by one or more
counterparts, each of which shall be deemed an original, but all of which
together will constitute one in the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Mutual Fund
Services Agreement to be signed by their respective duly authorized officers as
of the day and year first above written.
LINDBERGH FUNDS
By: Date________________
Print Name:
Title:
Attest:
UNIFIED FUND SERVICES, INC.
By: Date
Print Name:
Title:
By: Date
Print Name:
Title:
Attest:
<PAGE>
EXHIBIT A
to
Mutual Fund Services Agreement
List of Portfolios
Lindbergh Signature Fund
<PAGE>
EXHIBIT B
to
Mutual Fund Services Agreement
General Description of Fund Administration Services
I. Financial and Tax Reporting
A. Prepare agreed upon management reports and Board of Trustees materials such
as unaudited financial statements, distribution summaries, and deviations
of mark-to-market valuation and the amortized cost for money market funds.
B. Report Fund performance to outside services as directed by Fund management.
C. Prepare and file Fund's Form N-SAR with the SEC.
D. Prepare and coordinate printing of Fund's Semiannual and Annual Reports to
Shareholders.
E. In conjunction with transfer agent, notify shareholders as to what portion,
if any, of the distributions made by the Fund's during the prior fiscal
year were exempt-interest dividends under Section 852(b)(5)(A) of the Code.
F. Provide Form 1099-MISC to persons other than corporations (i.e., Trustees)
to whom the Fund paid more than $600 during the year.
G. Provide financial information for Fund proxy statements and Prospectuses
(Expense Table).
II. Portfolio Compliance
A. Assist with monitoring each Portfolio's compliance with investment
restrictions (e.g., issuer or industry diversification, etc.) listed in the
current Prospectus and Statement of Additional Information.
B. Assist with monitoring each Portfolio's compliance with the requirements of
Section 851 of the Code for qualification as a RIC (i.e., 90% Income, 30%
Income-Short Three, Diversification Tests).
C. Assist with monitoring investment manager's compliance with Board
directives such as "Approved Issuers Listings for Repurchase Agreements",
Rule 17a-7, and Rule 12d-3 procedures.
D. Administer compliance by the Fund's Trustees, officers and "access persons"
under the terms of the Fund's Code of Ethics and SEC regulations.
III. Regulatory Affairs and Corporate Governance
A. Assist Fund counsel in the preparation and filing of post-effective
amendments to the Fund's registration statement on Form N-lA and
supplements as needed.
B. Administer shareholder meetings, and assist Fund counsel in the preparation
and filing of proxy materials.
C. Prepare and file Rule 24f-2 Notices.
D. Prepare and file all state notifications of intent to sell the Fund's
securities including annual renewals, adding new Portfolios, preparing and
filing sales reports, filing copies of the registration statement and final
prospectus and statement of additional information, and increasing
registered amounts of securities in individual states.
E. Prepare Board materials for all Board meetings.
<PAGE>
F. Assist with the review and monitoring of fidelity bond and errors and
omissions insurance coverage and make any related regulatory filings.
G. Prepare and update documents such as charter document, By-Laws, foreign
qualification filings.
H. Assist in identifying and monitoring pertinent regulatory and legislative
developments which may affect the Fund and, in response to the results of
such monitoring, coordinate and provide support to the Fund and the Fund's
investment adviser with respect to those developments and results,
including support with respect to routine regulatory examinations or
investigations of the Fund, and with respect to such matters, to work in
conjunction with outside counsel, auditors and other professional
organizations engaged by the Fund.
I. File copies of financial reports to shareholders with the SEC under Rule
30b2-1.
IV. General Administration
A. For new Portfolios obtain Employer Identification Number and CUSIP numbers.
Estimate organizational costs and expenses and monitor against actual
disbursements.
B. Coordinate all communications and data collection with regard to any
regulatory examinations and yearly audits by independent accountants.
<PAGE>
EXHIBIT C
to
Mutual Fund Services Agreement
Description of Fund Accounting Services
I. General Description
Unified shall provide the following accounting services to the Fund:
A. Calculate dividend and capital gain distributions in accordance with
distribution policies detailed in the Fund's Prospectus. Assist Fund
management in making final determinations of distribution amounts.
B. Estimate and recommend year-end dividend and capital gain distributions
necessary to establish Fund's status as a regulated investment company
("RIC") under Section 4982 of the Internal revenue Code of 1986, as amended
(the "Code") regarding minimum distribution requirements.
C. Assist the Fund's public accountants or other professionals with the
preparing and filing Fund's Federal tax return on Form 1120-RIC along with
all state and local tax returns where applicable. Also assist with the
preparation and filing Federal Excise Tax Return (Form 8613).
D. Maintain the books and records and accounting controls for the Fund's
assets, including records of all securities transactions.
E. Calculate each Portfolio's net asset value in accordance with the
Prospectus and (once the Portfolio meets eligibility requirements) transmit
to NASDAQ and to such other entities as directed by the Fund.
F. Account for dividends and interest received and distributions made by the
Fund.
G. Prepare Fund or Portfolio expense projections, establish accruals and
review on a periodic basis, including expenses based on a percentage of
Fund's average daily net assets (advisory and administrative fees) and
expenses based on actual charges annualized and accrued daily (audit fees,
registration fees, directors' fees, etc.).
H. Produce transaction data, financial reports and such other periodic and
special reports as the Board may reasonably request.
I. Liaison with the Fund's independent auditors.
J. Monitor and administer arrangements with the Fund's Custodian and
depository banks.
K. A listing of reports that will be available to the Fund is included below.
II. Daily Reports
A. General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C. Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
<PAGE>
D. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E. Other Reports
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
IV. Monthly Reports
Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
10.SEC Yield Calculation Work Sheet (fixed-income funds only)
<PAGE>
EXHIBIT D
to
Mutual Fund Services Agreement
Description of Transfer Agency Services
The following is a general description of the transfer agency services
Unified shall provide to the Fund.
A. Shareholder Recordkeeping. Maintain records showing for each Fund
shareholder the following: (i) name, address and tax identifying number;
(ii) number of shares of each Portfolio; (iii) historical information
including, but not limited to, dividends paid and date and price of all
transactions including individual purchases and redemptions; and (iv) any
dividend reinvestment order, application, dividend address and
correspondence relating to the current maintenance of the account.
B. Shareholder Issuance. Record the issuance of shares of each Portfolio.
Except as specifically agreed in writing between Unified and the Fund,
Unified shall have no obligation when countersigning and issuing and/or
crediting shares to take cognizance of any other laws relating to the issue
and sale of such shares except insofar as policies and procedures of the
Stock Transfer Association recognize such laws.
C. Purchase Orders. Process all orders for the purchase of shares of the Fund
in accordance with the Fund's current registration statement. Upon receipt
of any check or other payment for purchase of shares of the Fund from an
investor, Unified will (i) stamp the envelope with the date of receipt,
(ii) forthwith process the same for collection, (iii) determine the amounts
thereof due the Fund, and notify the Fund of such determination and
deposit, such notification to be given on a daily basis of the total
amounts determined and deposited to the Fund's custodian bank account
during such day. Unified shall then credit the share account of the
investor with the number of Portfolio shares to be purchased made on the
date such payment is received by Unified, as set forth in the Fund's
current prospectus and shall promptly mail a confirmation of said purchase
to the investor, all subject to any instructions which the Fund may give to
Unified with respect to the timing or manner of acceptance of orders for
shares relating to payments so received by it.
D. Redemption Orders. Receive and stamp with the date of receipt all requests
for redemptions or repurchase of shares held in certificate or
non-certificate form, and process redemptions and repurchase requests as
follows: (i) if such certificate or redemption request complies with the
applicable standards approved by the Fund, Unified shall on each business
day notify the Fund of the total number of shares presented and covered by
such requests received by Unified on such day; (ii) on or prior to the
seventh calendar day succeeding any such requests received by Unified,
Unified shall notify the Custodian, subject to instructions from the Fund,
to transfer monies to such account as designated by Unified for such
payment to the redeeming shareholder of the applicable redemption or
repurchase price; (iii) if any such certificate or request for redemption
or repurchase does not comply with applicable standards, Unified shall
promptly notify the investor of such fact, together with the reason
therefor, and shall effect such redemption at the Fund's price next
determined after receipt of documents complying with said standards, or, at
such other time as the Fund shall so direct.
E. Telephone Orders. Process redemptions, exchanges and transfers of Fund
shares upon telephone instructions from qualified shareholders in
accordance with the procedures set forth in the Fund's current Prospectus.
Unified shall be permitted to redeem, exchange and/or transfer Fund shares
from any account for which such services have been authorized.
F. Transfer of Shares. Upon receipt by Unified of documentation in proper form
to effect a transfer of shares, including in the case of shares for which
certificates have been issued the share certificates in proper form for
transfer, Unified will register such transfer on the Fund's shareholder
records maintained by Unified pursuant to instructions received from the
transferor, cancel the certificates representing such shares, if any, and
if so requested, countersign, register, issue and mail by first class mail
new certificates for the same or a smaller whole number of shares.
<PAGE>
G. Shareholder Communications and Meetings. Address and mail all
communications by the Fund to its shareholders promptly following the
delivery by the Fund of the material to be mailed. Prepare shareholder
lists, mail and certify as to the mailing of proxy materials, receive the
tabulated proxy cards, render periodic reports to the Fund on the progress
of such tabulation, and provide the Fund with inspectors of election at any
meeting of shareholders.
H. Share Certificates. If the Fund issues certificates, and if a shareholder
of the Fund requests a certificate representing his shares, Unified as
Transfer Agent, will countersign and mail by first class mail with receipt
confirmed, a share certificate to the investor at his/her address as it
appears on the Fund's transfer hooks. Unified shall supply, at the expense
of the Fund, a supply of blank share certificates. The certificates shall
be properly signed, manually or by facsimile, as authorized by the Fund,
and shall bear the Fund's seal or facsimile; and notwithstanding the death,
resignation or removal of any officers of the Fund authorized to sign
certificates, Unified may, until otherwise directed by the Fund, continue
to countersign certificates which bear the manual or facsimile signature of
such officer.
I. Returned checks. In the event that any check or other order for the payment
of money is returned unpaid for any reason, Unified will take such steps,
including redepositing the check for collection or returning the check to
the investor, as Unified may, at its discretion, deem appropriate and
notify the Fund of such action, or as the Fund may instruct.
J. Shareholder Correspondence. Acknowledge all correspondence from
shareholders relating to their share accounts and undertake such other
shareholder correspondence as may from time to time be mutually agreed
upon.
<PAGE>
EXHIBIT E
to
MUTUAL FUND SERVICES AGREEMENT
TRANSFER AGENCY FEE SCHEDULE
The prices contained herein are effective for twelve months from the
execution date of the Transfer Agency contract.
I Conversion Fee: Manual conversion/new fund establishment - fee not to
exceed $1,500 per portfolio. Electronic conversions - $2.00 per shareholder
account with a $5,000 minimum fee.
II Standard Base Fee for Standard Base Services
The Base Fee* is $18.00 for money market funds and $14.00 for equity/bond
funds per active Shareholder Account per year with a minimum fee of $15,000
per portfolio. An Active Shareholder Account is any Shareholder Account
existing on Transfer Agent's computerized files with a non-zero Share
balance. There is a $.40 per account charge for any account with a zero
share balance for the current month, as determined on the last day of each
month. The base fee will be billed on a monthly basis.
*The Base Fee does not include: forms design and printing, statement
production, envelope design and printing, postage and handling, shipping,
statement microfiche copies and 800 number access to Unified's shareholder
services group.
Unified supports for an additional monthly fee of $0.05 per account per
service: receivables accounting, 12b-1 fund reporting, back-end sales load
recapture accounting, and/or detailed dealer and representative load
commission accounting and reporting. Funds paying dividends more frequently
than once per quarter (generally, money market funds) are charged an
additional $0.30 per month per account.
Unified will provide lost account search services in connection of SEC
Rules 17Ad-17 and 17a-24 at a cost of $2.50 per account searched. These
"Electronic Data Search Services" will be performed on a semi-annual basis.
This service will apply to only Active Shareholder Accounts maintained on
the transfer agency system coded as RPO accounts.
In addition to the above fees, there will be a $500.00 minimum fee/rerun
charge when the nightly processing has be repeated due to incorrect NAV or
dividend information received from the Fund Accountant/Portfolio Pricing
Agent.
III Standard Services Provided
-Open new accounts
-Maintain Shareholder accounts
Including:
-Maintain certificate records
-Change addresses
-Prepare daily reports on number of Shares, accounts
-Prepare Shareholder federal tax information
-Withhold taxes on U.S. resident and non-resident alien accounts
-Reply to Shareholder calls and correspondence other than that for Fund
information and related inquiries
-Process purchase of Shares
-Issue/Cancel certificates (Excessive use may be subject to additional
charges)
-Process partial and complete redemptions
-Process regular and legal transfer of accounts
-Mail semi-annual and annual reports
-Process dividends and distributions
-Prepare Shareholder meeting lists
-Process one proxy per year per fund. Tabulation is limited to three.
-Receive and tabulate proxies
-Confirm all transactions as provided by the terms of each Shareholder's
account
-Provide a system which will enable Fund to monitor the total number of
Shares sold in each state. System has capability to halt sales and warn of
potential oversell. (Blue Sky Reports)
-Determine/Identify lost Shareholder accounts
<PAGE>
IV Standard Reports Available
-12b-1 Disbursement Report
-12b-1 Disbursement Summary
-Dealer Commission Report
-Dealer Commission Summary Report
-Exchange Activity Report
-Fees Paid Summary Report
-Fund Accrual Details
-Holdings by Account Type
-Posting Details
-Posting Summary
-Settlement Summary
-Tax Register
-Transactions Journal
V NSCC Interfaces
<TABLE>
<S> <C> <C>
-Fund/Serv and/or Networking set-up $1,000
-Fund/Serv processing $150 per month
-Networking processing $250 per month
-Fund/Serv transactions $0.35 per trade
-Direct Networking expenses
Per item $0.025 Monthly dividend fund
Per item $0.015 Non-monthly dividend fund
VI Additional Fees for Services Outside the Standard Base
-Interactive Voice Response System Set-up Pass through
-Archiving of old records/storage of aged records Pass through
-Off-line Shareholder research $25/hour (Billed to customer account)
-Check copies $3/each (Billed to customer account)
-Statement copies $5/each (Billed to customer account)
-Mutual Fund fulfillment/prospect file maintenance $1.00/item
-Shareholder communications charges (Faxes) Pass through
-Leased line/equipment on TA's computer system Pass through
-Dial-up access to TA's computer system Pass through
-Labels $.05 ea/$100 minimum
-Electronic filings of approved forms $75/transmission
-Monthly Director's Reports $25/mo/portfolio
-AD-HOC REPORTWRITER Report Generation $50.00 per report
-Bank Reconciliation Service $50.00 monthly maintenance fee per bank account
$1.50 per bank item
-Systems Programming Labor Charges:
Programmers or Consultants $125.00/hour
Officers $150.00/hour
-Additional Proxy Processing:
Each processing $225.00 fixed charge per processing
Preparation and Tabulation $0.145/proxy issued
(includes 3 tabulations, sixteen
propositions)
Each Extra Tabulation $23.00 fixed charge per processing
$0.02 per proxy tabulated
</TABLE>
FUND ACCOUNTING FEE SCHEDULE
Standard Fee
0.05% for the first $50 million in total fund assets;
0.03% from $50 million to $100 million in total fund assets;
0.02% from $100 million to $200 million in total fund assets;
0.01% over $200 million in total fund assets.
Out of Pocket Fees: Fees charged for outside pricing
services and all accompanying
administrative expenditures.
Subject to an annual minimum of $18,000 per portfolio.
Optional Services Available - Initial (for desired services)
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
_______________ -Additional portfolio sub-adviser fee $10,000/portfolio
_______________ -Multiple custodian fee $5,000/fund group
_______________ -GNMA securities fee $2,500/portfolio
_______________ -Statistical reporting fee (ICI, Lipper, Donoghue, etc.) $100/report
_______________ -Quarterly tax and compliance checklist $4,000/portfolio
_______________ -S.E.C. audit requirements pass through
Special Report Generation Fees
AD-HOC Report Generation $75.00 per report
Reruns $75.00 per run
Extract Tapes $110.00 plus
Systems Programming Labor Charges
System Support Representatives $100.00/hour
Programmers, Consultants or
Department Heads $125.00/hour
Officers $150.00/hour
De-Conversion Fees
De-Conversion fees will be subject to additional charges commensurate with
particular circumstances and dependent upon scope of problems.
</TABLE>
FUND ADMINISTRATION SERVICES FEE SCHEDULE
Standard Fee
0.07% for the first $50 million in total fund assets;
0.05% from $50 million to $100 million in total fund assets;
0.04% from $100 million to $200 million in total fund assets;
0.02% over $200 million in total fund assets.
Subject to an annual minimum of $18,000 per portfolio.
Additional Services and Fees
1. Assistance in preparation and filing for an exemptive order
or no action letter from the Securities and Exchange Commission $1,500
minimum
2. Assist in the preparation and filing of additional Fund's Registration
Statement on Form N1-A or any replacement thereof $500 minimum
<TABLE>
<S> <C> <C>
3. Assistance in preparation, filing and vote compilation of
Proxy Statement for Special Shareholders Meeting. $10,000 minimum per Special Meeting
4. Assistance in Dissolution and Deregistration of the Fund
(including related Proxy Statement) $15,000 minimum
5. Reorganization/Merger of the Fund or portfolios (including
proxy statement and excluding tax opinion) $17,000 minimum
6. Such other duties related to the administration of the
Fund as agreed to by Unified Negotiable
</TABLE>
Dated: June 2, 1995
<PAGE>
EXHIBIT
NUMBER (i)
Opinion and Consent
<PAGE>
Lynch, Brewer, Hoffman & Sands, LLP
Attorneys at Law
101 Federal Street, 22nd Floor
Boston, Massachusetts 02110-1800
------------------
Telephone (617) 951-0800 Fax (617) 951-0811
July 2, 1999
Lindbergh Funds
5520 Telegraph Road, Suite 204
Saint Louis, Missouri 63129
Ladies and Gentlemen:
As counsel to Lindbergh Funds, a Massachusetts business trust (the
"Trust"), we have been asked to render our opinion with respect to the issuance
of an indefinite number of shares of beneficial interest in the Trust
representing interests in Lindbergh Signature Fund (the "Shares"), the Shares
being a series of the Trust as more fully described in the Prospectus and
Statement of Additional Information in the form contained in the Trust's
Registration Statement on Form N-1A, to which this opinion is an exhibit, to be
filed with the Securities and Exchange Commission.
We have examined the Master Trust Agreement of the Trust dated June 16,
1999, the Prospectus and Statement of Additional Information contained in such
Registration Statement, and such other documents, records and certificates as we
have deemed necessary for the purposes of this opinion. In rendering this
opinion, we have, with your approval, relied, as to all questions of fact
material to this opinion, upon certain certificates of public officials and of
your officers and assumed the genuineness of the signatures on, and the
authenticity of, all documents furnished to us, which facts we have not
independently verified.
Based upon the foregoing, we are of the opinion that the Shares, when
issued, delivered and paid for in accordance with the terms of the Prospectus
and Statement of Additional Information, will be legally issued, fully paid and
non-assessable by the Trust.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission.
Very truly yours,
/s/ Lynch, Brewer, Hoffman & Sands, LLP
LYNCH, BREWER, HOFFMAN & SANDS, LLP
EXHIBIT
NUMBER (m)
Rule 12b-1 Plan
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Plan Pursuant to Rule 12b-1
June 16, 1999
Recitals
1. Lindbergh Funds, an unincorporated business trust organized under the laws of
the Commonwealth of Massachusetts (the "Trust"), is engaged in business as an
open-end management investment company and is registered as such under the
Investment Company Act of 1940 as amended (the "Act").
2. The Trust operates as a "series company" within the meaning of Rule 18f-2
under the Act and is authorized to issue shares of beneficial interest in
various series or sub-trusts (collectively the "Funds").
3. Funds of the Trust may utilize Fund assets to pay for, or reimburse payment
for, sales or promotional services or activities that have been or will be
provided in connection with distribution of shares of the Funds if such payments
are made pursuant to a Plan adopted and continued in accordance with Rule 12b-1
under the Act.
4. The Trustees as a whole, and the Trustees who are not interested persons of
the Trust (as defined in the Act) and who have no direct or indirect financial
interest in the operation of this Plan and any agreements relating to it (the
"Qualified Trustees"), having determined, in the exercise of reasonable business
judgment and in light of their fiduciary duties under state law and under
Section 36(a) and (b) of the Act, that there is a reasonable likelihood that
this Plan will benefit the Fund and its shareholders, have approved the Plan by
votes cast in person at a meeting called for the purpose of voting on this Plan
and agreements related thereto.
5. Shareholder approval of the Plan was initially obtained in connection with
action taken to prepare and file the initial registration statement on Form
N-1A.
Plan Provisions
Section 1. Expenditures
(a) Purposes. Fund assets may be utilized to pay for or reimburse expenditures
in connection with sales and promotional services related to the distribution of
Fund shares, including a broker-dealer acting as the Trust's agent in various
states and filing promotional materials with regulatory authorities and personal
services provided to prospective and existing Fund shareholders, which include
the costs of: printing and distribution of prospectuses and promotional
materials; making slides and charts for presentations; assisting shareholders
and prospective investors in understanding and dealing with the Fund; and travel
and out-of-pocket expenses (e.g. copy and long distance telephone charges)
related thereto.
(b) Amounts. Fund assets may be utilized to pay for or reimburse expenditures in
connection with sales and promotional services related to the distribution of
Fund shares provided the total amount expended pursuant to this Plan does not
exceed 0.25% of net assets on an annual basis.
Section 2. Term and Termination
(a) Initial Term. This Plan shall become effective upon effective registration
of the Fund and shall continue in effect for a period of one year thereafter
unless terminated or otherwise continued or discontinued as provided in this
Plan.
<PAGE>
(b) Continuation of the Plan. This Plan and any related agreements shall
continue in effect for periods of one year thereafter for so long as such
continuance is specifically approved at least annual by votes of a majority of
both (a) the Trustees of the Trust and (b) the Qualified Trustees, cast in
person at a meeting called for the purpose of voting on this Plan and such
related agreements.
(c) Termination of the Plan. This Plan may be terminated at any time by vote of
a majority of the Qualified Trustees, or by vote of a majority of the
outstanding voting securities of the Fund.
Section 3. Amendments
This Plan may not be amended to increase materially the amount of distribution
expenditures provided for in Section 1 hereof unless such amendment is approved
by a vote of the majority of the outstanding voting securities of the Fund, and
no material amendment to the Plan shall be made unless approved in the manner
provided for annual renewal in Section 2(b) hereof.
Section 4. Independent Trustees
While this Plan is in effect with respect to the Fund, the selection and
nomination of Trustees who are not interested persons of the Trust (as defined
in the Act) shall be committed to the discretion of the Trustees who are not
interested persons.
Section 5. Quarterly Reports
The Treasurer of the Trust shall provide to the Trustees and the Trustees shall
review, at least quarterly, a written report of the amounts accrued and the
amounts expended under this Plan for distribution, along with the purposes for
which such expenditures were made.
Section 6. Recordkeeping
The Trust shall preserve copies of this Plan and any related agreements and all
reports made pursuant to Section 5 hereof, for a period of not less than six
years from the date of this Plan, the agreements or such report, as the case may
be, the first two years in an easily accessible place.
Section 7. Agreements Related to this Plan
Agreements with persons providing distribution services to be paid for or
reimbursed under this Plan shall provide that:
(a) the agreement will continue in effect for a period of one year and will
continue thereafter only if specifically approved by vote of a majority of the
Trustees of the Trust;
(b) the agreement may be terminated at any time, without payment of any penalty,
by vote of a majority of (i) the Qualified Trustees or (ii) the outstanding
voting securities of the Fund, on not more than sixty (60) days written notice
to any other party to the agreement;
(c) the agreement will terminate automatically in the event of an assignment;
(d) in the event the agreement is terminated or otherwise discontinued, no
further payments or reimbursements will be made by the fund after the effective
date of such action; and
(e) payments and/or reimbursements may only be made for the specific sales or
promotional services or activities identified in Section 1 of this Plan and must
be made on or before the last day of the one year period commencing on the last
day of the calendar quarter during which the service or activity was performed.
