<PAGE> PAGE 1
000 A000000 04/30/95
000 C000000 0000810271
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 A
001 A000000 COMMON SENSE TRUST
001 B000000 811-05018
001 C000000 7139930500
002 A000000 2800 POST OAK BLVD.
002 B000000 HOUSTON
002 C000000 TX
002 D010000 77056
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 11
007 C010100 1
007 C020100 GROWTH FUND
007 C030100 N
007 C010200 2
007 C020200 GROWTH & INCOME FUND
007 C030200 N
007 C010300 3
007 C020300 GOVERNMENT FUND
007 C030300 N
007 C010400 4
007 C020400 MONEY MARKET FUND
007 C030400 N
007 C010500 5
007 C020500 MUNICIPAL BOND FUND
007 C030500 N
007 C010600 6
007 C020600 GROWTH II FUND
007 C030600 N
007 C010700 7
007 C020700 GROWTH & INCOME II FUND
007 C030700 N
007 C010800 8
007 C020800 GOVERNMENT II FUND
007 C030800 N
007 C010900 9
007 C020900 GROWTH OPPORTUNITY II FUND
007 C030900 N
007 C011000 10
007 C021000 INTERNATIONAL EQUITY II FUND
<PAGE> PAGE 2
007 C031000 N
007 C011100 11
007 C021100 EMERGING GROWTH II FUND
007 C031100 N
007 C011200 12
007 C011300 13
007 C011400 14
007 C011500 15
007 C011600 16
007 C011700 17
007 C011800 18
007 C011900 19
007 C012000 20
011 A00AA01 COMMON SENSE DISTRIBUTORS
011 B00AA01 8-37352
011 C01AA01 DULUTH
011 C02AA01 GA
011 C03AA01 30199
011 C04AA01 0001
012 A00AA01 COMMON SENSE SHAREHOLDER SERVICES
012 B00AA01 84-1499
012 C01AA01 DULUTH
012 C02AA01 GA
012 C03AA01 30199
013 A00AA01 ERNST & YOUNG LLP
013 B01AA01 HOUSTON
013 B02AA01 TX
013 B03AA01 77010
015 A00AA01 STATE STREET BANK & TRUST CO.
015 B00AA01 C
015 C01AA01 BOSTON
015 C02AA01 MA
015 C03AA01 02110
015 E01AA01 X
018 00AA00 Y
019 A00AA00 Y
019 B00AA00 11
019 C00AA00 CSTHOUSTON
020 A000001 FIRST BOSTON CORP.
020 B000001 13-5659485
020 C000001 822
020 A000002 MORGAN STANLEY & CO., INC.
020 B000002 13-2655998
020 C000002 802
020 A000003 LEHMAN BROTHERS, INC.
020 B000003 13-2518466
020 C000003 750
020 A000004 GOLDMAN SACHS & CO.
020 B000004 13-5108880
020 C000004 742
020 A000005 MERRILL LYNCH, INC.
<PAGE> PAGE 3
020 B000005 13-5674085
020 C000005 699
020 A000006 SALOMON BROTHERS, INC.
020 B000006 13-3082694
020 C000006 694
020 A000007 MONTGOMERY SECURITIES
020 B000007 94-1701676
020 C000007 400
020 A000008 PAINEWEBBER, INC.
020 B000008 13-2638166
020 C000008 276
020 A000009 SMITH BARNEY, INC.
020 B000009 13-1912900
020 C000009 211
020 A000010 BROWN ALEX & SONS, INC.
020 B000010 52-0256630
020 C000010 154
021 000000 7156
022 A000001 SALOMON BROTHERS, INC.
022 B000001 13-3082694
022 C000001 6722841
022 D000001 142376
022 A000002 LEHMAN BROTHERS, INC.
022 B000002 13-2518466
022 C000002 2760370
022 D000002 169519
022 A000003 SBC CAPITAL MARKETS, INC.
022 B000003 ----
022 C000003 1759005
022 D000003 0
022 A000004 STATE STREET BANK & TRUST CO.
022 B000004 04-1867445
022 C000004 1454457
022 D000004 0
022 A000005 MORGAN STANLEY & CO., INC.
022 B000005 13-2655998
022 C000005 235411
022 D000005 250412
022 A000006 PRUDENTIAL SECURITIES
022 B000006 22-2347336
022 C000006 251469
022 D000006 183104
022 A000007 NOMURA SECURITIES INTERNATIONAL, INC.
022 B000007 13-2642206
022 C000007 179216
022 D000007 240468
022 A000008 MERRILL LYNCH, INC.
022 B000008 13-5674085
022 C000008 177140
022 D000008 92332
022 A000009 DONALDSON, LUFKIN & JENRETTE SECURITIES CORP.
<PAGE> PAGE 4
022 B000009 13-2741729
022 C000009 93322
022 D000009 131461
022 A000010 NATIONSBANK
022 B000010 75-0520130
022 C000010 137897
022 D000010 45341
023 C000000 14821087
023 D000000 1576936
026 A000000 Y
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
054 A00AA00 Y
054 B00AA00 N
054 C00AA00 N
054 D00AA00 N
054 E00AA00 N
054 F00AA00 N
054 G00AA00 Y
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 N
054 L00AA00 N
054 M00AA00 Y
054 N00AA00 N
054 O00AA00 Y
055 A00AA00 N
055 B00AA00 N
056 00AA00 N
057 00AA00 N
077 A000000 Y
077 B000000 N
077 C000000 Y
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 Y
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
<PAGE> PAGE 5
077 N000000 N
077 O000000 Y
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
008 A000101 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B000101 A
008 C000101 801-8286
008 D010101 HOUSTON
008 D020101 TX
008 D030101 77056
008 A000102 DELETE
024 000100 Y
025 A000101 SALOMON BROTHERS, INC.
025 B000101 13-3082694
025 C000101 D
025 D000101 55570
025 D000102 0
025 D000103 0
025 D000104 0
025 D000105 0
025 D000106 0
025 D000107 0
025 D000108 0
028 A010100 24823
028 A020100 0
028 A030100 0
028 A040100 21898
028 B010100 24044
028 B020100 168458
028 B030100 0
028 B040100 19145
028 C010100 25079
028 C020100 0
028 C030100 0
028 C040100 34957
028 D010100 23254
028 D020100 0
028 D030100 0
028 D040100 31379
028 E010100 28019
028 E020100 0
028 E030100 0
028 E040100 38709
028 F010100 31581
028 F020100 0
028 F030100 0
028 F040100 33047
028 G010100 156800
<PAGE> PAGE 6
028 G020100 168458
028 G030100 0
028 G040100 179135
028 H000100 152645
029 000100 Y
030 A000100 11294
030 B000100 8.50
030 C000100 0.25
031 A000100 1997
031 B000100 0
032 000100 0
033 000100 9297
034 000100 N
035 000100 0
036 B000100 0
037 000100 N
038 000100 0
039 000100 N
040 000100 N
041 000100 N
045 000100 Y
046 000100 N
047 000100 Y
048 000100 0.000
048 A010100 1000000
048 A020100 0.650
048 B010100 1000000
048 B020100 0.600
048 C010100 1000000
048 C020100 0.550
048 D010100 1000000
048 D020100 0.500
048 E010100 0
048 E020100 0.000
048 F010100 0
048 F020100 0.000
048 G010100 0
048 G020100 0.000
048 H010100 0
048 H020100 0.000
048 I010100 0
048 I020100 0.000
048 J010100 0
048 J020100 0.000
048 K010100 4000000
048 K020100 0.450
049 000100 N
050 000100 N
051 000100 N
052 000100 N
053 A000100 N
<PAGE> PAGE 7
058 A000100 N
059 000100 Y
060 A000100 Y
060 B000100 Y
061 000100 250
062 A000100 N
062 B000100 0.0
062 C000100 0.0
062 D000100 0.0
062 E000100 0.0
062 F000100 0.0
062 G000100 0.0
062 H000100 0.0
062 I000100 0.0
062 J000100 0.0
062 K000100 0.0
062 L000100 0.0
062 M000100 0.0
062 N000100 0.0
062 O000100 0.0
062 P000100 0.0
062 Q000100 0.0
062 R000100 0.0
066 A000100 Y
066 B000100 N
066 C000100 Y
066 D000100 N
066 E000100 N
066 F000100 N
066 G000100 N
067 000100 N
068 A000100 N
068 B000100 N
069 000100 N
070 A010100 Y
070 A020100 Y
070 B010100 Y
070 B020100 N
070 C010100 N
070 C020100 N
070 D010100 Y
070 D020100 N
070 E010100 N
070 E020100 N
070 F010100 Y
070 F020100 Y
070 G010100 Y
070 G020100 N
070 H010100 Y
070 H020100 N
070 I010100 N
<PAGE> PAGE 8
070 I020100 N
070 J010100 Y
070 J020100 N
070 K010100 Y
070 K020100 Y
070 L010100 Y
070 L020100 Y
070 M010100 Y
070 M020100 N
070 N010100 Y
070 N020100 N
070 O010100 Y
070 O020100 N
070 P010100 Y
070 P020100 N
070 Q010100 N
070 Q020100 N
070 R010100 N
070 R020100 N
071 A000100 2562055
071 B000100 2383919
071 C000100 2006885
071 D000100 118
072 A000100 6
072 B000100 7672
072 C000100 17370
072 D000100 0
072 E000100 0
072 F000100 6721
072 G000100 0
072 H000100 0
072 I000100 4178
072 J000100 46
072 K000100 0
072 L000100 520
072 M000100 77
072 N000100 47
072 O000100 0
072 P000100 0
072 Q000100 129
072 R000100 14
072 S000100 7
072 T000100 0
072 U000100 0
072 V000100 0
072 W000100 15
072 X000100 11754
072 Y000100 0
072 Z000100 13288
072AA000100 173293
072BB000100 101834
<PAGE> PAGE 9
072CC010100 70880
072CC020100 0
072DD010100 22053
072DD020100 0
072EE000100 147256
073 A010100 0.1550
073 A020100 0.0000
073 B000100 1.0350
073 C000100 0.0000
074 A000100 3
074 B000100 55570
074 C000100 49248
074 D000100 102203
074 E000100 18650
074 F000100 2154304
074 G000100 0
074 H000100 0
074 I000100 0
074 J000100 38775
074 K000100 0
074 L000100 5914
074 M000100 125
074 N000100 2424792
074 O000100 118345
074 P000100 2297
074 Q000100 0
074 R010100 0
074 R020100 0
074 R030100 0
074 R040100 1800
074 S000100 0
074 T000100 2302350
074 U010100 152426
074 U020100 0
074 V010100 15.10
074 V020100 0.00
074 W000100 0.0000
074 X000100 573159
074 Y000100 0
075 A000100 0
075 B000100 2171243
076 000100 0.00
008 A000201 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B000201 A
008 C000201 801-8286
008 D010201 HOUSTON
008 D020201 TX
008 D030201 77056
024 000200 Y
025 A000201 SBC CAPITAL MARKETS, INC.
025 B000201 ----------
<PAGE> PAGE 10
025 C000201 D
025 D000201 12425
025 D000202 0
025 D000203 0
025 D000204 0
025 D000205 0
025 D000206 0
025 D000207 0
025 D000208 0
028 A010200 7796
028 A020200 0
028 A030200 0
028 A040200 10236
028 B010200 6764
028 B020200 75104
028 B030200 0
028 B040200 8014
028 C010200 8069
028 C020200 0
028 C030200 0
028 C040200 12888
028 D010200 6445
028 D020200 0
028 D030200 0
028 D040200 10455
028 E010200 7432
028 E020200 3272
028 E030200 0
028 E040200 12423
028 F010200 9398
028 F020200 0
028 F030200 0
028 F040200 10966
028 G010200 45904
028 G020200 78376
028 G030200 0
028 G040200 64982
028 H000200 42236
029 000200 Y
030 A000200 2703
030 B000200 8.50
030 C000200 0.25
031 A000200 472
031 B000200 0
032 000200 0
033 000200 2231
034 000200 N
035 000200 0
036 B000200 0
037 000200 N
038 000200 0
<PAGE> PAGE 11
039 000200 N
040 000200 N
041 000200 N
045 000200 Y
046 000200 N
047 000200 Y
048 000200 0.000
048 A010200 1000000
048 A020200 0.650
048 B010200 1000000
048 B020200 0.600
048 C010200 1000000
048 C020200 0.550
048 D010200 1000000
048 D020200 0.500
048 E010200 0
048 E020200 0.000
048 F010200 0
048 F020200 0.000
048 G010200 0
048 G020200 0.000
048 H010200 0
048 H020200 0.000
048 I010200 0
048 I020200 0.000
048 J010200 0
048 J020200 0.000
048 K010200 4000000
048 K020200 0.450
049 000200 N
050 000200 N
051 000200 N
052 000200 N
053 A000200 N
058 A000200 N
059 000200 Y
060 A000200 Y
060 B000200 Y
061 000200 250
062 A000200 N
062 B000200 0.0
062 C000200 0.0
062 D000200 0.0
062 E000200 0.0
062 F000200 0.0
062 G000200 0.0
062 H000200 0.0
062 I000200 0.0
062 J000200 0.0
062 K000200 0.0
062 L000200 0.0
<PAGE> PAGE 12
062 M000200 0.0
062 N000200 0.0
062 O000200 0.0
062 P000200 0.0
062 Q000200 0.0
062 R000200 0.0
066 A000200 Y
066 B000200 N
066 C000200 N
066 D000200 N
066 E000200 Y
066 F000200 N
066 G000200 N
067 000200 N
068 A000200 N
068 B000200 N
069 000200 N
070 A010200 Y
070 A020200 Y
070 B010200 N
070 B020200 N
070 C010200 N
070 C020200 N
070 D010200 N
070 D020200 N
070 E010200 N
070 E020200 N
070 F010200 N
070 F020200 N
070 G010200 N
070 G020200 N
070 H010200 N
070 H020200 N
070 I010200 N
070 I020200 N
070 J010200 Y
070 J020200 N
070 K010200 Y
070 K020200 N
070 L010200 Y
070 L020200 Y
070 M010200 Y
070 M020200 N
070 N010200 Y
070 N020200 N
070 O010200 Y
070 O020200 N
070 P010200 Y
070 P020200 N
070 Q010200 N
070 Q020200 N
<PAGE> PAGE 13
070 R010200 N
070 R020200 N
071 A000200 425306
071 B000200 410429
071 C000200 677421
071 D000200 61
072 A000200 6
072 B000200 2082
072 C000200 9956
072 D000200 0
072 E000200 0
072 F000200 2306
072 G000200 0
072 H000200 0
072 I000200 977
072 J000200 22
072 K000200 0
072 L000200 166
072 M000200 31
072 N000200 47
072 O000200 0
072 P000200 0
072 Q000200 59
072 R000200 11
072 S000200 3
072 T000200 0
072 U000200 0
072 V000200 0
072 W000200 5
072 X000200 3627
072 Y000200 0
072 Z000200 8411
072AA000200 35517
072BB000200 25187
072CC010200 44195
072CC020200 0
072DD010200 7735
072DD020200 0
072EE000200 71731
073 A010200 0.1650
073 A020200 0.0000
073 B000200 1.5950
073 C000200 0.0000
074 A000200 3
074 B000200 12425
074 C000200 16609
074 D000200 72574
074 E000200 32839
074 F000200 615869
074 G000200 0
074 H000200 0
<PAGE> PAGE 14
074 I000200 0
074 J000200 18019
074 K000200 0
074 L000200 2840
074 M000200 42
074 N000200 771220
074 O000200 14072
074 P000200 704
074 Q000200 0
074 R010200 0
074 R020200 0
074 R030200 0
074 R040200 780
074 S000200 0
074 T000200 755664
074 U010200 49662
074 U020200 0
074 V010200 15.22
074 V020200 0.00
074 W000200 0.0000
074 X000200 127408
074 Y000200 15523
075 A000200 0
075 B000200 709602
076 000200 0.00
008 A000301 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B000301 A
008 C000301 801-8286
008 D010301 HOUSTON
008 D020301 TX
008 D030301 77056
024 000300 Y
025 A000301 SALOMON BROTHERS, INC.
025 B000301 13-3082694
025 C000301 D
025 D000301 29505
025 D000302 0
025 D000303 0
025 D000304 0
025 D000305 0
025 D000306 0
025 D000307 0
025 D000308 0
028 A010300 3474
028 A020300 1628
028 A030300 0
028 A040300 8772
028 B010300 3735
028 B020300 1696
028 B030300 0
028 B040300 6906
<PAGE> PAGE 15
028 C010300 3016
028 C020300 1697
028 C030300 0
028 C040300 8145
028 D010300 3291
028 D020300 1583
028 D030300 0
028 D040300 7292
028 E010300 3699
028 E020300 1610
028 E030300 0
028 E040300 8622
028 F010300 3451
028 F020300 1475
028 F030300 0
028 F040300 7160
028 G010300 20666
028 G020300 9689
028 G030300 0
028 G040300 46897
028 H000300 18904
029 000300 Y
030 A000300 968
030 B000300 6.75
030 C000300 0.25
031 A000300 245
031 B000300 0
032 000300 0
033 000300 723
034 000300 N
035 000300 0
036 B000300 0
037 000300 N
038 000300 0
039 000300 N
040 000300 N
041 000300 N
045 000300 Y
046 000300 N
047 000300 Y
048 000300 0.000
048 A010300 1000000
048 A020300 0.600
048 B010300 1000000
048 B020300 0.550
048 C010300 1000000
048 C020300 0.500
048 D010300 1000000
048 D020300 0.450
048 E010300 1000000
048 E020300 0.400
<PAGE> PAGE 16
048 F010300 0
048 F020300 0.000
048 G010300 0
048 G020300 0.000
048 H010300 0
048 H020300 0.000
048 I010300 0
048 I020300 0.000
048 J010300 0
048 J020300 0.000
048 K010300 5000000
048 K020300 0.350
049 000300 N
050 000300 N
051 000300 N
052 000300 N
053 A000300 N
058 A000300 N
059 000300 Y
060 A000300 Y
060 B000300 Y
061 000300 250
062 A000300 Y
062 B000300 0.0
062 C000300 0.0
062 D000300 14.8
062 E000300 0.0
062 F000300 0.0
062 G000300 0.0
062 H000300 0.0
062 I000300 0.0
062 J000300 0.0
062 K000300 0.0
062 L000300 0.0
062 M000300 35.3
062 N000300 66.5
062 O000300 0.0
062 P000300 0.0
062 Q000300 0.0
062 R000300 0.0
063 A000300 0
063 B000300 6.0
064 A000300 N
064 B000300 N
066 A000300 N
067 000300 N
068 A000300 N
068 B000300 N
069 000300 N
070 A010300 Y
070 A020300 Y
<PAGE> PAGE 17
070 B010300 N
070 B020300 N
070 C010300 Y
070 C020300 N
070 D010300 N
070 D020300 N
070 E010300 Y
070 E020300 Y
070 F010300 N
070 F020300 N
070 G010300 Y
070 G020300 N
070 H010300 N
070 H020300 N
070 I010300 N
070 I020300 N
070 J010300 Y
070 J020300 N
070 K010300 Y
070 K020300 N
070 L010300 N
070 L020300 N
070 M010300 N
070 M020300 N
070 N010300 Y
070 N020300 N
070 O010300 Y
070 O020300 N
070 P010300 Y
070 P020300 N
070 Q010300 N
070 Q020300 N
070 R010300 N
070 R020300 N
071 A000300 378079
071 B000300 450898
071 C000300 330611
071 D000300 114
072 A000300 6
072 B000300 12890
072 C000300 0
072 D000300 0
072 E000300 0
072 F000300 988
072 G000300 0
072 H000300 0
072 I000300 263
072 J000300 29
072 K000300 0
072 L000300 34
072 M000300 23
<PAGE> PAGE 18
072 N000300 3
072 O000300 0
072 P000300 0
072 Q000300 44
072 R000300 7
072 S000300 0
072 T000300 0
072 U000300 0
072 V000300 0
072 W000300 3
072 X000300 1394
072 Y000300 0
072 Z000300 11496
072AA000300 4916
072BB000300 9045
072CC010300 15371
072CC020300 0
072DD010300 11338
072DD020300 0
072EE000300 0
073 A010300 10.3400
073 A020300 0.0000
073 B000300 0.0000
073 C000300 0.0000
074 A000300 1
074 B000300 48785
074 C000300 0
074 D000300 335698
074 E000300 0
074 F000300 0
074 G000300 0
074 H000300 0
074 I000300 0
074 J000300 38121
074 K000300 0
074 L000300 3967
074 M000300 843
074 N000300 427415
074 O000300 91863
074 P000300 248
074 Q000300 0
074 R010300 0
074 R020300 4731
074 R030300 0
074 R040300 753
074 S000300 0
074 T000300 329820
074 U010300 31892
074 U020300 0
074 V010300 10.34
074 V020300 0.00
<PAGE> PAGE 19
074 W000300 0.0000
074 X000300 32558
074 Y000300 143886
075 A000300 0
075 B000300 329143
076 000300 0.00
008 A000401 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B000401 A
008 C000401 801-8286
008 D010401 HOUSTON
008 D020401 TX
008 D030401 77056
024 000400 Y
025 A000401 SALOMON BROTHERS, INC.
025 B000401 13-3082694
025 C000401 D
025 D000401 3535
025 A000402 SBC CAPITAL MARKETS, INC.
025 B000402 ----------
025 C000402 D
025 D000402 3700
025 D000403 0
025 D000404 0
025 D000405 0
025 D000406 0
025 D000407 0
025 D000408 0
028 A010400 5192
028 A020400 192
028 A030400 0
028 A040400 5666
028 B010400 4422
028 B020400 214
028 B030400 0
028 B040400 5054
028 C010400 4095
028 C020400 226
028 C030400 0
028 C040400 5772
028 D010400 5128
028 D020400 208
028 D030400 0
028 D040400 4453
028 E010400 4888
028 E020400 234
028 E030400 0
028 E040400 4900
028 F010400 4882
028 F020400 213
028 F030400 0
028 F040400 5957
<PAGE> PAGE 20
028 G010400 28607
028 G020400 1287
028 G030400 0
028 G040400 31802
028 H000400 0
029 000400 N
030 A000400 0
030 B000400 0.00
030 C000400 0.00
034 000400 N
035 000400 0
036 B000400 0
037 000400 N
038 000400 0
039 000400 N
040 000400 N
041 000400 N
045 000400 Y
046 000400 N
047 000400 Y
048 000400 0.000
048 A010400 2000000
048 A020400 0.500
048 B010400 2000000
048 B020400 0.475
048 C010400 0
048 C020400 0.000
048 D010400 0
048 D020400 0.000
048 E010400 0
048 E020400 0.000
048 F010400 0
048 F020400 0.000
048 G010400 0
048 G020400 0.000
048 H010400 0
048 H020400 0.000
048 I010400 0
048 I020400 0.000
048 J010400 0
048 J020400 0.000
048 K010400 4000000
048 K020400 0.450
049 000400 N
050 000400 N
051 000400 N
052 000400 N
053 A000400 Y
053 B000400 Y
053 C000400 N
058 A000400 N
<PAGE> PAGE 21
059 000400 Y
060 A000400 Y
060 B000400 Y
061 000400 250
062 A000400 Y
062 B000400 0.0
062 C000400 38.4
062 D000400 13.3
062 E000400 0.0
062 F000400 0.0
062 G000400 0.0
062 H000400 0.0
062 I000400 48.7
062 J000400 0.0
062 K000400 0.0
062 L000400 0.0
062 M000400 0.0
062 N000400 0.0
062 O000400 0.0
062 P000400 0.0
062 Q000400 0.0
062 R000400 0.0
063 A000400 39
063 B000400 0.0
064 A000400 N
064 B000400 N
066 A000400 N
067 000400 N
068 A000400 N
068 B000400 N
069 000400 N
070 A010400 Y
070 A020400 Y
070 B010400 N
070 B020400 N
070 C010400 N
070 C020400 N
070 D010400 N
070 D020400 N
070 E010400 N
070 E020400 N
070 F010400 N
070 F020400 N
070 G010400 N
070 G020400 N
070 H010400 N
070 H020400 N
070 I010400 N
070 I020400 N
070 J010400 N
070 J020400 N
<PAGE> PAGE 22
070 K010400 Y
070 K020400 N
070 L010400 Y
070 L020400 N
070 M010400 N
070 M020400 N
070 N010400 Y
070 N020400 N
070 O010400 Y
070 O020400 N
070 P010400 N
070 P020400 N
070 Q010400 N
070 Q020400 N
070 R010400 N
070 R020400 N
071 A000400 0
071 B000400 0
071 C000400 0
071 D000400 0
072 A000400 6
072 B000400 1600
072 C000400 0
072 D000400 0
072 E000400 0
072 F000400 138
072 G000400 0
072 H000400 0
072 I000400 257
072 J000400 3
072 K000400 0
072 L000400 27
072 M000400 12
072 N000400 13
072 O000400 0
072 P000400 0
072 Q000400 28
072 R000400 6
072 S000400 1
072 T000400 0
072 U000400 0
072 V000400 0
072 W000400 1
072 X000400 486
072 Y000400 210
072 Z000400 1324
072AA000400 0
072BB000400 0
072CC010400 0
072CC020400 0
072DD010400 1325
<PAGE> PAGE 23
072DD020400 0
072EE000400 0
073 A010400 0.0243
073 A020400 0.0000
073 B000400 0.0000
073 C000400 0.0000
074 A000400 5
074 B000400 7235
074 C000400 47453
074 D000400 0
074 E000400 0
074 F000400 0
074 G000400 0
074 H000400 0
074 I000400 0
074 J000400 0
074 K000400 0
074 L000400 218
074 M000400 36
074 N000400 54947
074 O000400 0
074 P000400 76
074 Q000400 0
074 R010400 0
074 R020400 0
074 R030400 0
074 R040400 380
074 S000400 0
074 T000400 54491
074 U010400 54491
074 U020400 0
074 V010400 1.00
074 V020400 0.00
074 W000400 1.0000
074 X000400 24364
074 Y000400 0
075 A000400 55315
075 B000400 0
076 000400 0.00
008 A000501 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B000501 A
008 C000501 801-8286
008 D010501 HOUSTON
008 D020501 TX
008 D030501 77056
024 000500 N
025 A000501 DELETE
025 D000501 0
025 A000502 DELETE
025 D000502 0
025 D000503 0
<PAGE> PAGE 24
025 D000504 0
025 D000505 0
025 D000506 0
025 D000507 0
025 D000508 0
028 A010500 2112
028 A020500 440
028 A030500 0
028 A040500 4483
028 B010500 1717
028 B020500 439
028 B030500 0
028 B040500 2403
028 C010500 1913
028 C020500 436
028 C030500 0
028 C040500 2091
028 D010500 1917
028 D020500 435
028 D030500 0
028 D040500 2656
028 E010500 2654
028 E020500 432
028 E030500 0
028 E040500 3471
028 F010500 2203
028 F020500 433
028 F030500 0
028 F040500 2504
028 G010500 12516
028 G020500 2615
028 G030500 0
028 G040500 17608
028 H000500 11599
029 000500 Y
030 A000500 475
030 B000500 4.75
030 C000500 0.25
031 A000500 54
031 B000500 0
032 000500 0
033 000500 421
034 000500 N
035 000500 0
036 B000500 0
037 000500 N
038 000500 0
039 000500 N
040 000500 N
041 000500 N
045 000500 Y
<PAGE> PAGE 25
046 000500 N
047 000500 Y
048 000500 0.000
048 A010500 1000000
048 A020500 0.600
048 B010500 1000000
048 B020500 0.550
048 C010500 1000000
048 C020500 0.500
048 D010500 0
048 D020500 0.000
048 E010500 0
048 E020500 0.000
048 F010500 0
048 F020500 0.000
048 G010500 0
048 G020500 0.000
048 H010500 0
048 H020500 0.000
048 I010500 0
048 I020500 0.000
048 J010500 0
048 J020500 0.000
048 K010500 3000000
048 K020500 0.450
049 000500 N
050 000500 N
051 000500 N
052 000500 N
053 A000500 N
058 A000500 N
059 000500 Y
060 A000500 Y
060 B000500 Y
061 000500 250
062 A000500 Y
062 B000500 0.0
062 C000500 0.0
062 D000500 0.0
062 E000500 3.4
062 F000500 0.0
062 G000500 0.0
062 H000500 0.0
062 I000500 0.0
062 J000500 0.0
062 K000500 0.0
062 L000500 0.0
062 M000500 0.0
062 N000500 0.0
062 O000500 96.6
062 P000500 0.0
<PAGE> PAGE 26
062 Q000500 0.0
062 R000500 0.0
063 A000500 0
063 B000500 20.2
064 A000500 Y
064 B000500 N
066 A000500 N
067 000500 N
068 A000500 N
068 B000500 N
069 000500 N
070 A010500 Y
070 A020500 Y
070 B010500 N
070 B020500 N
070 C010500 Y
070 C020500 N
070 D010500 N
070 D020500 N
070 E010500 Y
070 E020500 N
070 F010500 N
070 F020500 N
070 G010500 Y
070 G020500 N
070 H010500 N
070 H020500 N
070 I010500 N
070 I020500 N
070 J010500 Y
070 J020500 N
070 K010500 Y
070 K020500 N
070 L010500 N
070 L020500 N
070 M010500 N
070 M020500 N
070 N010500 Y
070 N020500 N
070 O010500 Y
070 O020500 N
070 P010500 Y
070 P020500 Y
070 Q010500 N
070 Q020500 N
070 R010500 N
070 R020500 N
071 A000500 6715
071 B000500 5444
071 C000500 105704
071 D000500 5
<PAGE> PAGE 27
072 A000500 6
072 B000500 3687
072 C000500 0
072 D000500 0
072 E000500 0
072 F000500 332
072 G000500 0
072 H000500 0
072 I000500 109
072 J000500 3
072 K000500 0
072 L000500 15
072 M000500 14
072 N000500 15
072 O000500 0
072 P000500 0
072 Q000500 44
072 R000500 9
072 S000500 1
072 T000500 0
072 U000500 0
072 V000500 0
072 W000500 1
072 X000500 543
072 Y000500 0
072 Z000500 3144
072AA000500 2
072BB000500 187
072CC010500 3816
072CC020500 0
072DD010500 3012
072DD020500 0
072EE000500 0
073 A010500 0.3540
073 A020500 0.0000
073 B000500 0.0000
073 C000500 0.0000
074 A000500 55
074 B000500 0
074 C000500 3900
074 D000500 109511
074 E000500 0
074 F000500 0
074 G000500 0
074 H000500 0
074 I000500 0
074 J000500 990
074 K000500 0
074 L000500 2463
074 M000500 4
074 N000500 116923
<PAGE> PAGE 28
074 O000500 3158
074 P000500 87
074 Q000500 0
074 R010500 0
074 R020500 0
074 R030500 0
074 R040500 303
074 S000500 0
074 T000500 113375
074 U010500 8499
074 U020500 0
074 V010500 13.34
074 V020500 0.00
074 W000500 0.0000
074 X000500 11271
074 Y000500 0
075 A000500 0
075 B000500 110771
076 000500 0.00
008 A000601 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B000601 A
008 C000601 801-8286
008 D010601 HOUSTON
008 D020601 TX
008 D030601 77056
024 000600 Y
025 A000601 SBC CAPITAL MARKETS, INC.
025 B000601 ----------
025 C000601 D
025 D000601 2020
025 D000602 0
025 D000603 0
025 D000604 0
025 D000605 0
025 D000606 0
025 D000607 0
025 D000608 0
028 A010600 2259
028 A020600 0
028 A030600 0
028 A040600 113
028 B010600 2726
028 B020600 0
028 B030600 0
028 B040600 123
028 C010600 2796
028 C020600 0
028 C030600 0
028 C040600 223
028 D010600 2294
028 D020600 0
<PAGE> PAGE 29
028 D030600 0
028 D040600 197
028 E010600 3503
028 E020600 0
028 E030600 0
028 E040600 223
028 F010600 3952
028 F020600 0
028 F030600 0
028 F040600 329
028 G010600 17530
028 G020600 0
028 G030600 0
028 G040600 1208
028 H000600 6635
029 000600 Y
030 A000600 349
030 B000600 5.50
030 C000600 0.00
031 A000600 48
031 B000600 0
032 000600 0
033 000600 301
034 000600 Y
035 000600 29
036 A000600 N
036 B000600 0
037 000600 N
038 000600 0
039 000600 N
040 000600 Y
041 000600 Y
042 A000600 0
042 B000600 0
042 C000600 100
042 D000600 0
042 E000600 0
042 F000600 0
042 G000600 0
042 H000600 0
043 000600 62
044 000600 0
045 000600 Y
046 000600 N
047 000600 Y
048 000600 0.000
048 A010600 1000000
048 A020600 0.650
048 B010600 1000000
048 B020600 0.600
048 C010600 1000000
<PAGE> PAGE 30
048 C020600 0.550
048 D010600 1000000
048 D020600 0.500
048 E010600 0
048 E020600 0.000
048 F010600 0
048 F020600 0.000
048 G010600 0
048 G020600 0.000
048 H010600 0
048 H020600 0.000
048 I010600 0
048 I020600 0.000
048 J010600 0
048 J020600 0.000
048 K010600 4000000
048 K020600 0.450
049 000600 N
050 000600 N
051 000600 N
052 000600 N
053 A000600 Y
053 B000600 Y
053 C000600 N
058 A000600 N
059 000600 Y
060 A000600 Y
060 B000600 Y
061 000600 250
062 A000600 N
062 B000600 0.0
062 C000600 0.0
062 D000600 0.0
062 E000600 0.0
062 F000600 0.0
062 G000600 0.0
062 H000600 0.0
062 I000600 0.0
062 J000600 0.0
062 K000600 0.0
062 L000600 0.0
062 M000600 0.0
062 N000600 0.0
062 O000600 0.0
062 P000600 0.0
062 Q000600 0.0
062 R000600 0.0
066 A000600 Y
066 B000600 N
066 C000600 Y
066 D000600 N
<PAGE> PAGE 31
066 E000600 N
066 F000600 N
066 G000600 N
067 000600 N
068 A000600 N
068 B000600 N
069 000600 N
070 A010600 Y
070 A020600 Y
070 B010600 Y
070 B020600 N
070 C010600 Y
070 C020600 N
070 D010600 Y
070 D020600 N
070 E010600 Y
070 E020600 N
070 F010600 Y
070 F020600 Y
070 G010600 Y
070 G020600 N
070 H010600 Y
070 H020600 N
070 I010600 Y
070 I020600 N
070 J010600 Y
070 J020600 N
070 K010600 Y
070 K020600 Y
070 L010600 Y
070 L020600 Y
070 M010600 N
070 M020600 N
070 N010600 Y
070 N020600 N
070 O010600 Y
070 O020600 N
070 P010600 N
070 P020600 N
070 Q010600 N
070 Q020600 N
070 R010600 N
070 R020600 N
071 A000600 30793
071 B000600 15297
071 C000600 15802
071 D000600 97
072 A000600 6
072 B000600 94
072 C000600 127
072 D000600 0
<PAGE> PAGE 32
072 E000600 0
072 F000600 58
072 G000600 0
072 H000600 0
072 I000600 145
072 J000600 0
072 K000600 0
072 L000600 8
072 M000600 12
072 N000600 58
072 O000600 0
072 P000600 0
072 Q000600 10
072 R000600 6
072 S000600 0
072 T000600 62
072 U000600 0
072 V000600 0
072 W000600 0
072 X000600 359
072 Y000600 73
072 Z000600 -65
072AA000600 737
072BB000600 701
072CC010600 1706
072CC020600 0
072DD010600 0
072DD020600 0
072EE000600 0
073 A010600 0.0000
073 A020600 0.0000
073 B000600 0.0000
073 C000600 0.0000
074 A000600 3
074 B000600 2020
074 C000600 2276
074 D000600 520
074 E000600 0
074 F000600 24986
074 G000600 0
074 H000600 0
074 I000600 0
074 J000600 156
074 K000600 0
074 L000600 341
074 M000600 6
074 N000600 30308
074 O000600 2066
074 P000600 67
074 Q000600 0
074 R010600 0
<PAGE> PAGE 33
074 R020600 0
074 R030600 0
074 R040600 13
074 S000600 0
074 T000600 28162
074 U010600 884
074 U020600 1344
074 V010600 12.69
074 V020600 12.60
074 W000600 0.0000
074 X000600 20520
074 Y000600 2078
075 A000600 0
075 B000600 17865
076 000600 0.00
008 A000701 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B000701 A
008 C000701 801-8286
008 D010701 HOUSTON
008 D020701 TX
008 D030701 77056
024 000700 Y
025 A000701 SBC CAPITAL MARKETS, INC.
025 B000701 ----------
025 C000701 D
025 D000701 1225
025 D000702 0
025 D000703 0
025 D000704 0
025 D000705 0
025 D000706 0
025 D000707 0
025 D000708 0
028 A010700 1192
028 A020700 0
028 A030700 0
028 A040700 48
028 B010700 1558
028 B020700 40
028 B030700 0
028 B040700 85
028 C010700 1210
028 C020700 0
028 C030700 0
028 C040700 166
028 D010700 1512
028 D020700 0
028 D030700 0
028 D040700 199
028 E010700 1399
028 E020700 27
<PAGE> PAGE 34
028 E030700 0
028 E040700 290
028 F010700 1892
028 F020700 0
028 F030700 0
028 F040700 176
028 G010700 8763
028 G020700 67
028 G030700 0
028 G040700 964
028 H000700 3504
029 000700 Y
030 A000700 146
030 B000700 5.50
030 C000700 0.00
031 A000700 19
031 B000700 0
032 000700 0
033 000700 127
034 000700 Y
035 000700 19
036 A000700 N
036 B000700 0
037 000700 N
038 000700 0
039 000700 N
040 000700 Y
041 000700 Y
042 A000700 0
042 B000700 0
042 C000700 100
042 D000700 0
042 E000700 0
042 F000700 0
042 G000700 0
042 H000700 0
043 000700 36
044 000700 0
045 000700 Y
046 000700 N
047 000700 Y
048 000700 0.000
048 A010700 1000000
048 A020700 0.650
048 B010700 1000000
048 B020700 0.600
048 C010700 1000000
048 C020700 0.550
048 D010700 1000000
048 D020700 0.500
048 E010700 0
<PAGE> PAGE 35
048 E020700 0.000
048 F010700 0
048 F020700 0.000
048 G010700 0
048 G020700 0.000
048 H010700 0
048 H020700 0.000
048 I010700 0
048 I020700 0.000
048 J010700 0
048 J020700 0.000
048 K010700 4000000
048 K020700 0.450
049 000700 N
050 000700 N
051 000700 N
052 000700 N
053 A000700 Y
053 B000700 Y
053 C000700 N
058 A000700 N
059 000700 Y
060 A000700 Y
060 B000700 Y
061 000700 250
062 A000700 N
062 B000700 0.0
062 C000700 0.0
062 D000700 0.0
062 E000700 0.0
062 F000700 0.0
062 G000700 0.0
062 H000700 0.0
062 I000700 0.0
062 J000700 0.0
062 K000700 0.0
062 L000700 0.0
062 M000700 0.0
062 N000700 0.0
062 O000700 0.0
062 P000700 0.0
062 Q000700 0.0
062 R000700 0.0
066 A000700 Y
066 B000700 N
066 C000700 N
066 D000700 N
066 E000700 Y
066 F000700 N
066 G000700 N
067 000700 N
<PAGE> PAGE 36
068 A000700 N
068 B000700 N
069 000700 N
070 A010700 Y
070 A020700 Y
070 B010700 Y
070 B020700 N
070 C010700 Y
070 C020700 N
070 D010700 Y
070 D020700 N
070 E010700 Y
070 E020700 N
070 F010700 Y
070 F020700 Y
070 G010700 Y
070 G020700 N
070 H010700 Y
070 H020700 N
070 I010700 Y
070 I020700 N
070 J010700 Y
070 J020700 N
070 K010700 Y
070 K020700 N
070 L010700 Y
070 L020700 Y
070 M010700 N
070 M020700 N
070 N010700 Y
070 N020700 N
070 O010700 Y
070 O020700 N
070 P010700 N
070 P020700 N
070 Q010700 N
070 Q020700 N
070 R010700 N
070 R020700 N
071 A000700 13202
071 B000700 5868
071 C000700 9659
071 D000700 61
072 A000700 6
072 B000700 63
072 C000700 138
072 D000700 0
072 E000700 0
072 F000700 36
072 G000700 0
072 H000700 0
<PAGE> PAGE 37
072 I000700 33
072 J000700 0
072 K000700 0
072 L000700 7
072 M000700 12
072 N000700 58
072 O000700 0
072 P000700 0
072 Q000700 10
072 R000700 6
072 S000700 0
072 T000700 36
072 U000700 0
072 V000700 0
072 W000700 0
072 X000700 198
072 Y000700 23
072 Z000700 26
072AA000700 313
072BB000700 337
072CC010700 1106
072CC020700 0
072DD010700 43
072DD020700 26
072EE000700 0
073 A010700 0.0950
073 A020700 0.0540
073 B000700 0.0000
073 C000700 0.0000
074 A000700 5
074 B000700 1225
074 C000700 1385
074 D000700 1442
074 E000700 327
074 F000700 12193
074 G000700 0
074 H000700 0
074 I000700 0
074 J000700 333
074 K000700 0
074 L000700 32
074 M000700 9
074 N000700 16951
074 O000700 805
074 P000700 33
074 Q000700 0
074 R010700 0
074 R020700 0
074 R030700 0
074 R040700 95
074 S000700 0
<PAGE> PAGE 38
074 T000700 16018
074 U010700 556
074 U020700 723
074 V010700 12.53
074 V020700 12.51
074 W000700 0.0000
074 X000700 4812
074 Y000700 1088
075 A000700 0
075 B000700 11077
076 000700 0.00
008 A000801 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B000801 A
008 C000801 801-8286
008 D010801 HOUSTON
008 D020801 TX
008 D030801 77056
024 000800 Y
025 A000801 SBC CAPITAL MARKETS, INC.
025 B000801 ----------
025 C000801 D
025 D000801 425
025 D000802 0
025 D000803 0
025 D000804 0
025 D000805 0
025 D000806 0
025 D000807 0
025 D000808 0
028 A010800 735
028 A020800 41
028 A030800 0
028 A040800 619
028 B010800 692
028 B020800 36
028 B030800 0
028 B040800 94
028 C010800 1182
028 C020800 31
028 C030800 0
028 C040800 193
028 D010800 667
028 D020800 43
028 D030800 0
028 D040800 176
028 E010800 1023
028 E020800 45
028 E030800 0
028 E040800 134
028 F010800 895
028 F020800 41
<PAGE> PAGE 39
028 F030800 0
028 F040800 115
028 G010800 5194
028 G020800 237
028 G030800 0
028 G040800 1331
028 H000800 2482
029 000800 Y
030 A000800 91
030 B000800 4.75
030 C000800 0.00
031 A000800 13
031 B000800 0
032 000800 0
033 000800 78
034 000800 Y
035 000800 13
036 A000800 N
036 B000800 0
037 000800 N
038 000800 0
039 000800 N
040 000800 Y
041 000800 Y
042 A000800 0
042 B000800 0
042 C000800 100
042 D000800 0
042 E000800 0
042 F000800 0
042 G000800 0
042 H000800 0
043 000800 26
044 000800 0
045 000800 Y
046 000800 N
047 000800 Y
048 000800 0.000
048 A010800 1000000
048 A020800 0.600
048 B010800 1000000
048 B020800 0.550
048 C010800 1000000
048 C020800 0.500
048 D010800 1000000
048 D020800 0.450
048 E010800 1000000
048 E020800 0.400
048 F010800 0
048 F020800 0.000
048 G010800 0
<PAGE> PAGE 40
048 G020800 0.000
048 H010800 0
048 H020800 0.000
048 I010800 0
048 I020800 0.000
048 J010800 0
048 J020800 0.000
048 K010800 5000000
048 K020800 0.350
049 000800 N
050 000800 N
051 000800 N
052 000800 N
053 A000800 Y
053 B000800 Y
053 C000800 N
058 A000800 N
059 000800 Y
060 A000800 Y
060 B000800 Y
061 000800 250
062 A000800 Y
062 B000800 0.0
062 C000800 0.0
062 D000800 3.6
062 E000800 0.0
062 F000800 0.0
062 G000800 0.0
062 H000800 0.0
062 I000800 0.0
062 J000800 0.0
062 K000800 0.0
062 L000800 0.0
062 M000800 25.2
062 N000800 68.2
062 O000800 0.0
062 P000800 0.0
062 Q000800 0.0
062 R000800 0.0
063 A000800 0
063 B000800 4.4
064 A000800 N
064 B000800 N
066 A000800 N
067 000800 N
068 A000800 N
068 B000800 N
069 000800 N
070 A010800 Y
070 A020800 Y
070 B010800 N
<PAGE> PAGE 41
070 B020800 N
070 C010800 Y
070 C020800 N
070 D010800 N
070 D020800 N
070 E010800 Y
070 E020800 N
070 F010800 N
070 F020800 N
070 G010800 Y
070 G020800 N
070 H010800 N
070 H020800 N
070 I010800 N
070 I020800 N
070 J010800 Y
070 J020800 N
070 K010800 Y
070 K020800 N
070 L010800 N
070 L020800 N
070 M010800 N
070 M020800 N
070 N010800 Y
070 N020800 N
070 O010800 Y
070 O020800 N
070 P010800 Y
070 P020800 N
070 Q010800 N
070 Q020800 N
070 R010800 N
070 R020800 N
071 A000800 4995
071 B000800 1309
071 C000800 9369
071 D000800 14
072 A000800 6
072 B000800 378
072 C000800 0
072 D000800 0
072 E000800 0
072 F000800 27
072 G000800 0
072 H000800 0
072 I000800 16
072 J000800 0
072 K000800 0
072 L000800 2
072 M000800 12
072 N000800 54
<PAGE> PAGE 42
072 O000800 0
072 P000800 0
072 Q000800 13
072 R000800 6
072 S000800 0
072 T000800 26
072 U000800 0
072 V000800 0
072 W000800 1
072 X000800 157
072 Y000800 17
072 Z000800 238
072AA000800 39
072BB000800 56
072CC010800 314
072CC020800 0
072DD010800 149
072DD020800 98
072EE000800 0
073 A010800 0.3396
073 A020800 0.3006
073 B000800 0.0000
073 C000800 0.0000
074 A000800 0
074 B000800 425
074 C000800 0
074 D000800 10950
074 E000800 0
074 F000800 0
074 G000800 0
074 H000800 0
074 I000800 0
074 J000800 0
074 K000800 0
074 L000800 362
074 M000800 6
074 N000800 11743
074 O000800 0
074 P000800 13
074 Q000800 0
074 R010800 0
074 R020800 0
074 R030800 0
074 R040800 0
074 S000800 0
074 T000800 11730
074 U010800 539
074 U020800 450
074 V010800 11.87
074 V020800 11.87
074 W000800 0.0000
<PAGE> PAGE 43
074 X000800 1510
074 Y000800 0
075 A000800 0
075 B000800 9123
076 000800 0.00
008 A000901 SMITH BARNEY STRATEGY ADVISERS, INC.
008 B000901 A
008 C000901 801-0000
008 D010901 NEW YORK
008 D020901 NY
008 D030901 10048
024 000900 Y
025 A000901 CITIBANK
025 B000901 13-6190676
025 C000901 D
025 D000901 6990
025 A000902 PAINE WEBBER GROUP, INC.
025 B000902 13-2638166
025 C000902 E
025 D000902 257
025 A000903 SALOMON, INC.
025 B000903 13-3082694
025 C000903 E
025 D000903 361
025 D000904 0
025 D000905 0
025 D000906 0
025 D000907 0
025 D000908 0
028 A010900 5298
028 A020900 0
028 A030900 0
028 A040900 187
028 B010900 4762
028 B020900 222
028 B030900 0
028 B040900 362
028 C010900 4388
028 C020900 0
028 C030900 0
028 C040900 588
028 D010900 3979
028 D020900 0
028 D030900 0
028 D040900 758
028 E010900 4152
028 E020900 0
028 E030900 0
028 E040900 1492
028 F010900 3266
028 F020900 0
<PAGE> PAGE 44
028 F030900 0
028 F040900 1369
028 G010900 25845
028 G020900 222
028 G030900 0
028 G040900 4756
028 H000900 10858
029 000900 Y
030 A000900 597
030 B000900 5.50
030 C000900 0.00
031 A000900 80
031 B000900 0
032 000900 0
033 000900 517
034 000900 Y
035 000900 65
036 A000900 N
036 B000900 0
037 000900 N
038 000900 0
039 000900 N
040 000900 Y
041 000900 Y
042 A000900 0
042 B000900 0
042 C000900 100
042 D000900 0
042 E000900 0
042 F000900 0
042 G000900 0
042 H000900 0
043 000900 128
044 000900 0
045 000900 Y
046 000900 N
047 000900 Y
048 000900 1.000
048 A010900 0
048 A020900 0.000
048 B010900 0
048 B020900 0.000
048 C010900 0
048 C020900 0.000
048 D010900 0
048 D020900 0.000
048 E010900 0
048 E020900 0.000
048 F010900 0
048 F020900 0.000
048 G010900 0
<PAGE> PAGE 45
048 G020900 0.000
048 H010900 0
048 H020900 0.000
048 I010900 0
048 I020900 0.000
048 J010900 0
048 J020900 0.000
048 K010900 0
048 K020900 0.000
049 000900 N
050 000900 N
051 000900 N
052 000900 N
053 A000900 N
058 A000900 N
059 000900 Y
060 A000900 Y
060 B000900 Y
061 000900 1000
062 A000900 N
062 B000900 0.0
062 C000900 0.0
062 D000900 0.0
062 E000900 0.0
062 F000900 0.0
062 G000900 0.0
062 H000900 0.0
062 I000900 0.0
062 J000900 0.0
062 K000900 0.0
062 L000900 0.0
062 M000900 0.0
062 N000900 0.0
062 O000900 0.0
062 P000900 0.0
062 Q000900 0.0
062 R000900 0.0
066 A000900 Y
066 B000900 N
066 C000900 Y
066 D000900 N
066 E000900 N
066 F000900 N
066 G000900 N
067 000900 N
068 A000900 N
068 B000900 N
069 000900 N
070 A010900 Y
070 A020900 Y
070 B010900 Y
<PAGE> PAGE 46
070 B020900 N
070 C010900 N
070 C020900 N
070 D010900 Y
070 D020900 N
070 E010900 Y
070 E020900 N
070 F010900 Y
070 F020900 N
070 G010900 Y
070 G020900 N
070 H010900 Y
070 H020900 N
070 I010900 N
070 I020900 N
070 J010900 Y
070 J020900 N
070 K010900 N
070 K020900 N
070 L010900 Y
070 L020900 Y
070 M010900 Y
070 M020900 N
070 N010900 Y
070 N020900 N
070 O010900 Y
070 O020900 N
070 P010900 N
070 P020900 N
070 Q010900 N
070 Q020900 N
070 R010900 N
070 R020900 N
071 A000900 56133
071 B000900 24444
071 C000900 37798
071 D000900 65
072 A000900 6
072 B000900 323
072 C000900 513
072 D000900 0
072 E000900 0
072 F000900 260
072 G000900 0
072 H000900 0
072 I000900 85
072 J000900 37
072 K000900 0
072 L000900 9
072 M000900 11
072 N000900 59
<PAGE> PAGE 47
072 O000900 0
072 P000900 0
072 Q000900 6
072 R000900 9
072 S000900 4
072 T000900 128
072 U000900 0
072 V000900 0
072 W000900 0
072 X000900 608
072 Y000900 0
072 Z000900 228
072AA000900 309
072BB000900 0
072CC010900 2770
072CC020900 0
072DD010900 163
072DD020900 0
072EE000900 60
073 A010900 0.0600
073 A020900 0.0000
073 B000900 0.0150
073 C000900 0.0000
074 A000900 3
074 B000900 6990
074 C000900 0
074 D000900 1995
074 E000900 0
074 F000900 57096
074 G000900 0
074 H000900 0
074 I000900 0
074 J000900 57
074 K000900 0
074 L000900 691
074 M000900 7
074 N000900 66839
074 O000900 3025
074 P000900 103
074 Q000900 0
074 R010900 0
074 R020900 0
074 R030900 0
074 R040900 129
074 S000900 0
074 T000900 63582
074 U010900 3350
074 U020900 1621
074 V010900 12.80
074 V020900 12.78
074 W000900 0.0000
<PAGE> PAGE 48
074 X000900 10852
074 Y000900 0
075 A000900 0
075 B000900 52015
076 000900 0.00
008 A001001 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B001001 A
008 C001001 801-8286
008 D011001 HOUSTON
008 D021001 TX
008 D031001 77056
008 A001002 SMITH BARNEY MUTUAL FUNDS MGT., INC.
008 B001002 S
008 C001002 801-0000
008 D011002 NEW YORK
008 D021002 NY
008 D031002 10013
024 001000 Y
025 A001001 STATE STREET BANK & TRUST CO.
025 B001001 04-1867445
025 C001001 D
025 D001001 593
025 D001002 0
025 D001003 0
025 D001004 0
025 D001005 0
025 D001006 0
025 D001007 0
025 D001008 0
028 A011000 0
028 A021000 0
028 A031000 0
028 A041000 0
028 B011000 0
028 B021000 0
028 B031000 0
028 B041000 0
028 C011000 0
028 C021000 0
028 C031000 0
028 C041000 0
028 D011000 2000
028 D021000 0
028 D031000 0
028 D041000 0
028 E011000 336
028 E021000 0
028 E031000 0
028 E041000 0
028 F011000 813
028 F021000 0
<PAGE> PAGE 49
028 F031000 0
028 F041000 3
028 G011000 3149
028 G021000 0
028 G031000 0
028 G041000 3
028 H001000 475
029 001000 Y
030 A001000 26
030 B001000 5.50
030 C001000 0.00
031 A001000 22
031 B001000 0
032 001000 0
033 001000 4
034 001000 Y
035 001000 0
036 A001000 N
036 B001000 0
037 001000 N
038 001000 0
039 001000 N
040 001000 Y
041 001000 Y
042 A001000 0
042 B001000 0
042 C001000 100
042 D001000 0
042 E001000 0
042 F001000 0
042 G001000 0
042 H001000 0
043 001000 1
044 001000 0
045 001000 Y
046 001000 N
047 001000 Y
048 001000 1.000
048 A011000 0
048 A021000 0.000
048 B011000 0
048 B021000 0.000
048 C011000 0
048 C021000 0.000
048 D011000 0
048 D021000 0.000
048 E011000 0
048 E021000 0.000
048 F011000 0
048 F021000 0.000
048 G011000 0
<PAGE> PAGE 50
048 G021000 0.000
048 H011000 0
048 H021000 0.000
048 I011000 0
048 I021000 0.000
048 J011000 0
048 J021000 0.000
048 K011000 0
048 K021000 0.000
049 001000 N
050 001000 N
051 001000 N
052 001000 N
053 A001000 Y
053 B001000 Y
053 C001000 N
058 A001000 N
059 001000 Y
060 A001000 Y
060 B001000 Y
061 001000 250
062 A001000 N
062 B001000 0.0
062 C001000 0.0
062 D001000 0.0
062 E001000 0.0
062 F001000 0.0
062 G001000 0.0
062 H001000 0.0
062 I001000 0.0
062 J001000 0.0
062 K001000 0.0
062 L001000 0.0
062 M001000 0.0
062 N001000 0.0
062 O001000 0.0
062 P001000 0.0
062 Q001000 0.0
062 R001000 0.0
066 A001000 Y
066 B001000 N
066 C001000 Y
066 D001000 N
066 E001000 N
066 F001000 N
066 G001000 N
067 001000 N
068 A001000 N
068 B001000 Y
069 001000 N
070 A011000 Y
<PAGE> PAGE 51
070 A021000 Y
070 B011000 Y
070 B021000 Y
070 C011000 Y
070 C021000 Y
070 D011000 Y
070 D021000 Y
070 E011000 Y
070 E021000 Y
070 F011000 Y
070 F021000 Y
070 G011000 Y
070 G021000 Y
070 H011000 Y
070 H021000 Y
070 I011000 N
070 I021000 N
070 J011000 Y
070 J021000 Y
070 K011000 Y
070 K021000 Y
070 L011000 Y
070 L021000 Y
070 M011000 Y
070 M021000 Y
070 N011000 Y
070 N021000 Y
070 O011000 Y
070 O021000 Y
070 P011000 Y
070 P021000 Y
070 Q011000 Y
070 Q021000 Y
070 R011000 Y
070 R021000 Y
071 A001000 2691
071 B001000 0
071 C001000 1645
071 D001000 0
072 A001000 3
072 B001000 9
072 C001000 7
072 D001000 0
072 E001000 0
072 F001000 4
072 G001000 0
072 H001000 0
072 I001000 6
072 J001000 10
072 K001000 0
072 L001000 0
<PAGE> PAGE 52
072 M001000 0
072 N001000 5
072 O001000 0
072 P001000 0
072 Q001000 0
072 R001000 5
072 S001000 0
072 T001000 1
072 U001000 0
072 V001000 0
072 W001000 1
072 X001000 32
072 Y001000 20
072 Z001000 4
072AA001000 1
072BB001000 0
072CC011000 190
072CC021000 0
072DD011000 0
072DD021000 0
072EE001000 0
073 A011000 0.0000
073 A021000 0.0000
073 B001000 0.0000
073 C001000 0.0000
074 A001000 0
074 B001000 593
074 C001000 0
074 D001000 0
074 E001000 0
074 F001000 2881
074 G001000 0
074 H001000 0
074 I001000 49
074 J001000 0
074 K001000 0
074 L001000 96
074 M001000 48
074 N001000 3667
074 O001000 270
074 P001000 6
074 Q001000 0
074 R011000 0
074 R021000 0
074 R031000 0
074 R041000 50
074 S001000 0
074 T001000 3341
074 U011000 229
074 U021000 34
074 V011000 12.69
<PAGE> PAGE 53
074 V021000 12.68
074 W001000 0.0000
074 X001000 853
074 Y001000 0
075 A001000 0
075 B001000 1770
076 001000 0.00
008 A001101 VAN KAMPEN AMERICAN CAPITAL ASSET MGT., INC.
008 B001101 A
008 C001101 801-8286
008 D011101 HOUSTON
008 D021101 TX
008 D031101 77056
024 001100 Y
025 A001101 SBC CAPITAL MARKETS, INC.
025 B001101 ----------
025 C001101 D
025 D001101 460
025 D001102 0
025 D001103 0
025 D001104 0
025 D001105 0
025 D001106 0
025 D001107 0
025 D001108 0
028 A011100 0
028 A021100 0
028 A031100 0
028 A041100 0
028 B011100 0
028 B021100 0
028 B031100 0
028 B041100 0
028 C011100 0
028 C021100 0
028 C031100 0
028 C041100 0
028 D011100 500
028 D021100 0
028 D031100 0
028 D041100 0
028 E011100 839
028 E021100 0
028 E031100 0
028 E041100 0
028 F011100 2223
028 F021100 0
028 F031100 0
028 F041100 11
028 G011100 3562
028 G021100 0
<PAGE> PAGE 54
028 G031100 0
028 G041100 11
028 H001100 1633
029 001100 Y
030 A001100 58
030 B001100 5.50
030 C001100 0.00
031 A001100 8
031 B001100 0
032 001100 0
033 001100 50
034 001100 Y
035 001100 0
036 A001100 N
036 B001100 0
037 001100 N
038 001100 0
039 001100 N
040 001100 Y
041 001100 Y
042 A001100 0
042 B001100 0
042 C001100 100
042 D001100 0
042 E001100 0
042 F001100 0
042 G001100 0
042 H001100 0
043 001100 1
044 001100 0
045 001100 Y
046 001100 N
047 001100 Y
048 001100 0.000
048 A011100 1000000
048 A021100 0.650
048 B011100 1000000
048 B021100 0.600
048 C011100 1000000
048 C021100 0.550
048 D011100 1000000
048 D021100 0.500
048 E011100 0
048 E021100 0.000
048 F011100 0
048 F021100 0.000
048 G011100 0
048 G021100 0.000
048 H011100 0
048 H021100 0.000
048 I011100 0
<PAGE> PAGE 55
048 I021100 0.000
048 J011100 0
048 J021100 0.000
048 K011100 4000000
048 K021100 0.450
049 001100 N
050 001100 N
051 001100 N
052 001100 N
053 A001100 Y
053 B001100 Y
053 C001100 N
058 A001100 N
059 001100 Y
060 A001100 Y
060 B001100 Y
061 001100 250
062 A001100 N
062 B001100 0.0
062 C001100 0.0
062 D001100 0.0
062 E001100 0.0
062 F001100 0.0
062 G001100 0.0
062 H001100 0.0
062 I001100 0.0
062 J001100 0.0
062 K001100 0.0
062 L001100 0.0
062 M001100 0.0
062 N001100 0.0
062 O001100 0.0
062 P001100 0.0
062 Q001100 0.0
062 R001100 0.0
066 A001100 Y
066 B001100 Y
066 C001100 N
066 D001100 N
066 E001100 N
066 F001100 N
066 G001100 N
067 001100 N
068 A001100 N
068 B001100 N
069 001100 N
070 A011100 Y
070 A021100 Y
070 B011100 Y
070 B021100 N
070 C011100 N
<PAGE> PAGE 56
070 C021100 N
070 D011100 Y
070 D021100 N
070 E011100 Y
070 E021100 N
070 F011100 Y
070 F021100 N
070 G011100 Y
070 G021100 N
070 H011100 Y
070 H021100 N
070 I011100 N
070 I021100 N
070 J011100 Y
070 J021100 N
070 K011100 Y
070 K021100 N
070 L011100 Y
070 L021100 N
070 M011100 Y
070 M021100 N
070 N011100 Y
070 N021100 N
070 O011100 N
070 O021100 N
070 P011100 Y
070 P021100 N
070 Q011100 N
070 Q021100 N
070 R011100 Y
070 R021100 N
071 A001100 3091
071 B001100 135
071 C001100 1158
071 D001100 12
072 A001100 6
072 B001100 6
072 C001100 1
072 D001100 0
072 E001100 0
072 F001100 2
072 G001100 0
072 H001100 0
072 I001100 2
072 J001100 0
072 K001100 0
072 L001100 1
072 M001100 0
072 N001100 10
072 O001100 0
072 P001100 0
<PAGE> PAGE 57
072 Q001100 0
072 R001100 3
072 S001100 0
072 T001100 1
072 U001100 0
072 V001100 0
072 W001100 0
072 X001100 19
072 Y001100 11
072 Z001100 -1
072AA001100 2
072BB001100 17
072CC011100 89
072CC021100 0
072DD011100 0
072DD021100 0
072EE001100 0
073 A011100 0.0000
073 A021100 0.0000
073 B001100 0.0000
073 C001100 0.0000
074 A001100 5
074 B001100 460
074 C001100 986
074 D001100 0
074 E001100 0
074 F001100 3031
074 G001100 0
074 H001100 0
074 I001100 0
074 J001100 61
074 K001100 0
074 L001100 265
074 M001100 30
074 N001100 4838
074 O001100 1169
074 P001100 3
074 Q001100 0
074 R011100 0
074 R021100 0
074 R031100 0
074 R041100 41
074 S001100 0
074 T001100 3625
074 U011100 202
074 U021100 90
074 V011100 12.40
074 V021100 12.39
074 W001100 0.0000
074 X001100 2517
074 Y001100 0
<PAGE> PAGE 58
075 A001100 0
075 B001100 1101
076 001100 0.00
SIGNATURE TANYA LODEN
TITLE CONTROLLER
<PAGE> 1
N-SAR ITEM 77C
Sub-item 77c is incorporated herein by reference to the proxy statement
of the Registrant filed with the SEC on October 24, 1994.
a) A Special Meeting of Shareholders was held on December 16, 1994.
b) Inapplicable
c) The following was voted on at the meeting:
1) Approval of a new investment advisory agreement between the Registrant and
American Capital Asset Management, Inc. to take effect upon the closing of
the proposed acquisition of American Capital Management & Research, Inc. by
The Van Kampen Merritt Companies, Inc.
Common Sense Growth Fund
For 63,438,416.088 Against 2,012,985.670
--------------- --------------
Common Sense Growth & Income Fund
For 21,774,070.600 Against 548,371.015
--------------- --------------
Common Sense Government Fund
For 18,902,239.443 Against 402,626.446
--------------- ------------
Common Sense Money Market Fund
For 27,242,979.055 Against 741,989.390
--------------- ------------
Common Sense Municipal Bond Fund
For 4,681,113.800 Against 132,647.781
-------------- ------------
Common Sense II Growth Fund
For 440,451.542 Against 6,954.483
------------ ----------
Common Sense II Growth & Income Fund
For 353,320.598 Against 1,152.683
------------ ----------
Common Sense II Government Fund
For 370,189.061 Against 625.828
------------ --------
d) Inapplicable
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994 by and between COMMON SENSE
TRUST, a Massachusetts business trust, hereinafter referred to as the "TRUST,"
and American Capital Asset Management, Inc., a Delaware corporation,
hereinafter referred to as the "Adviser."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
a. The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST's Common Sense Growth Fund (the "Fund") for the period and on the terms
set forth in this Agreement. The ADVISER accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
b. In the event that the TRUST establishes one or more funds with respect to
which it desires to retain the ADVISER to act as investment adviser hereunder,
it shall notify the ADVISER in writing. If the ADVISER is willing to render
such services it shall notify the TRUST in writing whereupon such fund shall
become a fund hereunder and the compensation payable by such new fund to the
ADVISER will be as agreed in writing at that time.
(2.) Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectuses and the stated investment
objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the TRUST's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the Fund, and formulation and implementation of investment
programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of the Fund of the TRUST with brokers or
dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the TRUST including, by way
of illustration, the preparation of registration statements, prospectuses,
reports, proxy solicitation materials and amendments thereto, the furnishing of
legal services except for services provided by outside counsel to the TRUST
selected by the Trustees, and the supervision of the TRUST's Treasurer and the
<PAGE> 2
personnel working under his direction; and
d. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and the Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization by
the TRUST's Trustees of appropriate policies and procedures, the ADVISER may,
to the extent authorized by law, cause the TRUST to pay a broker or dealer that
provides brokerage and research services to the ADVISER an amount of commission
for effecting a fund investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction. In the event of such authorization and to the extent authorized by
law the ADVISER shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of fund investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office
space, facilities, and equipment used by the Treasurer and such personnel in
the performance of their normal duties for the TRUST which consist of
maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
qualifying the TRUST and its shares for distribution under state
2
<PAGE> 3
and federal securities laws; (x) expenses of printing and mailing of
registration statements, prospectuses, reports, notices and proxy solicitation
materials of the TRUST; (xi) all other expenses incidental to holding meetings
of the TRUST's shareholders including proxy solicitations therefor; (xii)
expenses for servicing shareholder accounts; (xiii) insurance premiums for
fidelity coverage and errors and omissions insurance; (xiv) dues for the
TRUST's membership in trade associations approved by the Trustees; and (xv)
such non-recurring expenses as may arise, including those associated with
actions, suits, or proceedings to which the TRUST is a party and the legal
obligation which the TRUST may have to indemnify its officers and trustees with
respect thereto. To the extent that any of the foregoing expenses are allocated
between the TRUST and any other party, such allocations shall be pursuant to
methods approved by the Trustees.
(3.) Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the TRUST are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ("1940 Act")
any of the shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common control
with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(4.) Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, with respect to the
Fund, a monthly fee calculated at the following annual rates:
.65% of the first $1 billion of average daily net assets; .60% of the next $1
billion of average daily net assets; .55% of the next $1 billion of average
daily net assets; .50% of the next $1 billion of average daily net assets; and
.45% of average daily net assets in excess of $4 billion.
3
<PAGE> 4
Average daily net assets of the Fund shall be determined by taking the average
of the net assets for each business day during a given calendar month, made in
the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of American Capital Management & Research, Inc., or
its successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of American Capital Management & Research, Inc., or its
successor, to receive in connection with the Fund's transactions or other
arrangements which may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability asserted against
the TRUST and the Fund, provided that, if the ADVISER made the decision or took
the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; and (v) any indemnification paid by the TRUST to its
officers and trustees and the ADVISER in accordance with applicable state and
federal laws as a result of such litigation.
If the ADVISER shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
(5.) Books and Records
4
<PAGE> 5
In compliance with the requirements of the 1940 Act, the ADVISER hereby agrees
that, to the extent required by law, all records which it maintains for the
TRUST are the property of the TRUST and further agrees to surrender promptly to
the TRUST any of such records upon the TRUST's request. The ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the Act.
(6.) Duration and Termination
This Agreement will become effective with respect to the Fund on the date
hereof, and with respect to any additional funds, on the date of receipt by the
TRUST of notice from the ADVISER in accordance with Section 1(b) hereof that
the ADVISER is willing to serve as investment adviser with respect to such
fund, provided that this Agreement (as supplemented by the terms specified in
any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Fund subject to this Agreement, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each, provided
such continuance is specifically approved at least annually, (a) by the vote of
a majority of those members of the TRUST's Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the TRUST's Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, by the TRUST (by vote of the
TRUST's Trustees or by vote of a majority of the outstanding voting securities
of the Fund), or by the ADVISER, on sixty days' written notice. This Agreement
will immediately terminate in the event of its assignment.
(7.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement shall be effective as to the Fund until approved by
vote of a majority of the outstanding voting securities of the Fund if such
vote is required by the 1940 Act.
(8.) Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person",
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in
5
<PAGE> 6
the 1940 Act and the Rules and Regulations thereunder, subject, however, to
such exemptions as may be granted to either the ADVISER or the TRUST by the
Securities and Exchange Commission, or such interpretive positions as may be
taken by the Commission or its staff, under said Act, and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934 and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated January 29,
1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ CURTIS W. MORELL
------------------------------------
Name: Curtis W. Morell
----------------------------------
Its: Vice President
-----------------------------------
AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ NORI L. GABERT
-----------------------------------
Name: Nori L. Gabert
---------------------------------
Its: Vice President
----------------------------------
6
<PAGE> 1
EXHIBIT 77 0
COMMON SENSE TRUST -- COMMON SENSE GROWTH FUND
Underwritings Pursuant to Rule 10f-3
1. Name of Issuer: Office Max
Securities Acquired from: Donaldson, Lufkin & Jenrette Sec. Corp.
Syndicate Members: See attached list
Principal Amount in Offering: 33,000,000
Principal Amount Purchased: 84,800
Price Per Share: $19.00
Purchase Date: 11-2-94
2. Name of Issuer: Sunbeam-Oster
Securities Acquired from: Merrill Lynch & Co.
Syndicate Members: See attached list
Principal Amount in Offering: 10,000,000
Principal Amount Purchased: 150,000
Price Per Share: $24.00
Purchase Date: 11-17-94
3. Name of Issuer: Nabisco Holdings Corp.
Securities Acquired from: Lehman Brothers Inc.
Syndicate Members: See attached list
Principal Amount in Offering: 45,000,000
Principal Amount Purchased: 15.00
Price Per Share: $24.50
Purchase Date: 1-19-95
4. Name of Issuer: Nabisco Holdings Corp.
Securities Acquired from: Kemper Securities, Inc.
Syndicate Members: See attached list
Principal Amount in Offering: 45,000,000
Principal Amount Purchased: 200
Price Per Share: $24.50
Purchase Date: 1-19-95
5. Name of Issuer: Nabisco Holdings Corp.
Securities Acquired from: Salmon Brothers Inc.
Syndicate Members: See attached list
Principal Amount in Offering: 45,000,000
Principal Amount Purchased: 1,000
Price Per Share: $24.50
Purchase Date: 1-19-95
<PAGE> 2
6. Name of Issuer: Nabisco Holdings Corp.
Securities Acquired from: Goldman, Sachs, & Co.
Syndicate Members: See attached list
Principal Amount in Offering: 45,000,000
Principal Amount Purchased: 219,400
Price Per Share: $24.50
Purchase Date: 1-19-95
7. Name of Issuer:
Securities Acquired from:
Syndicate Members:
Principal Amount in Offering:
Principal Amount Purchased:
Price Per Share:
Purchase Date:
<PAGE> 3
NABISCO HOLDINGS CORP.
Goldman, Sachs & Co. ............................................
Bear, Stearns & Co. Inc. ........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
Morgan Stanley & Co. Incorporated................................
Advest, Inc. ....................................................
Sanford C. Bernstein & Co., Inc. ................................
CS First Boston Corporation......................................
Cleary Gull Reiland & McDevitt Inc. .............................
Dain Bosworth Incorporated ......................................
Dean Witter Reynolds Inc. .......................................
Dillon, Read & Co. Inc. .........................................
Doft & Co., Inc. ................................................
Donaldson, Lufkin & Jenrette Securities Corporation..............
A. G. Edwards & Sons, Inc. ......................................
Interstate/Johnson Lane Corporation..............................
Janney Montgomery Scott Inc. ....................................
Johnston, Lemon & Co. Incorporated...............................
Edward 0. Jones & Co. ...........................................
Kemper Securities, Inc. .........................................
C.J. Lawrence/Deutsche Bank Securities Corporation...............
Lazard Freres & Co. .............................................
Lehman Brothers Inc. ............................................
McDonald & Company Securities, Inc. .............................
J.P. Morgan Securities Inc. .....................................
Oppenheimer & Co., Inc. .........................................
PaineWebber Incorporated.........................................
Prudential Securities Incorporated...............................
Pryor, McClendon, Counts & Co., Inc. ............................
Rauscher Pierce Refsnes, Inc. ...................................
The Robinson-Humphrey Company, Inc. .............................
Salomon Brothers Inc ............................................
Smith Barney Inc ................................................
Sutro & Co. Incorporated.........................................
Tucker Anthony Incorporated......................................
Wasserstein Perella Securities, Inc. ............................
Wertheim Schroder & Co. Incorporated.............................
Wheat, First Securities, Inc. ...................................
<PAGE> 4
OFFICEMAX, INC.
U.S. UNDERWRITERS
Donaldson, Lufkin & Jenrette Securities Corporation..............
Morgan Stanley & Co. Incorporated................................
William Blair & Company..........................................
Dean Witter Reynolds Inc. .......................................
McDonald & Company Securities, Inc. .............................
Bear, Stearns & Co. Inc. ........................................
Alex. Brown & Sons Incorporated .................................
A.G. Edwards & Sons, Inc. .......................................
Goldman, Sachs & Co. ............................................
Hambrecht & Quist Incorporated...................................
Lazard Freres & Co. .............................................
Lehman Brothers Inc ............................................
Montgomery Securities............................................
J. P. Morgan Securities Inc. ....................................
Oppenheimer & Co., Inc. .........................................
PaineWebber Incorporated.........................................
Prudential Securities Incorporated...............................
Robertson, Stephens & Company, L.P. .............................
Salomon Brothers Inc ............................................
Smith Barney Inc. ...............................................
SBCI Swiss Bank Corporation Investment Banking...................
UBS Securities Inc. .............................................
Wertheim Schroder & Co. Incorporated.............................
Sanford C. Bernstein & Co., Inc. ................................
C.J. Lawrence/Deutsche Bank Securities Corporation...............
Advest, Inc. ....................................................
Arnhold and S. Bleichroeder, Inc. ...............................
Robert W. Baird & Co. Incorporated...............................
J. C. Bradford & Co. ............................................
The Chicago Corporation..........................................
Cowen & Company..................................................
Crowell, Weedon & Co. ...........................................
Dain Bosworth Incorporated.......................................
Equitable Securities Corporation.................................
First Albany Corporation.........................................
First of Michigan Corporation....................................
First Southwest Company..........................................
Furman Selz Incorporated.........................................
Gruntal & Co., Incorporated......................................
Interstate/Johnson Lane Corporation..............................
Janney Montgomery Scott Inc. ....................................
Johnston, Lemon & Co. Incorporated...............................
Edward D. Jones & Co. ...........................................
Josephthal, Lyon & Ross, Inc. ...................................
Kemper Securities, Inc. .........................................
Ladenburg, Thalmann & Co. Inc. ..................................
Legg Mason Wood Walker Incorporated..............................
Moran & Associates, Inc. Securities Brokerage....................
Morgan Keegan & Company, Inc. ...................................
Needham & Company, Inc. .........................................
<PAGE> 5
OFFICEMAX, INC. (continued)
Neuberger & Berman...............................................
The Ohio Company.................................................
Piper Jaffray Inc. ..............................................
Principal Financial Securities, Inc. ............................
Ragen MacKenzie Incorporated.....................................
Rauscher Pierce Refsnes, Inc. ...................................
Raymond James & Associates, Inc. ................................
The Robinson-Humphrey Company, Inc. .............................
Roney & Co. .....................................................
Scott & Stringfellow, Inc. ......................................
Stephens Inc. ...................................................
Sutro & Co. Incorporated.........................................
Tucker Anthony Incorporated......................................
Unterberg Harris.................................................
Wheat, First Securities, Inc. ...................................
Adams, Harkness & Hill, Inc. ....................................
Baron Capital, Inc. .............................................
Brean Murray, Foster Securities Inc. ............................
Fahnestock & Co. Inc. ...........................................
Luther, Smith and Small..........................................
Mabon Securities Corp. ..........................................
Parker/Hunter Incorporated.......................................
Pennsylvania Merchant Group Ltd. ................................
Pryor, McClendon, Counts & Co., Inc. ............................
The Seidler Companies Incorporated...............................
Sturdivant & Co., Inc ...........................................
Williams MacKay Jordan & Co., Inc. ..............................
INTERNATIONAL MANAGER
Donaldson, Lufkin & Jenrette Securities Corporation..............
Morgan Stanley & Co. International Limited.......................
William Blair & Company..........................................
Dean Witter International Ltd. ..................................
McDonald & Company Securities, Inc. .............................
Banque Indosuez..................................................
Barclays de Zoete Wedd Limited...................................
Cazenove & Co. ..................................................
Credit Lyonnais Securities.......................................
Deutsche Bank Aktiengesellschaft.................................
Internationale Nederlanden Bank N.V. ............................
James Capel & Co. ...............................................
Kleinwort Benson Limited.........................................
Lazard Brothers & Co. Limited....................................
N M Rothschild & Sons Limited....................................
Pribas Capital Markets...........................................
Societe Generale.................................................
Sumitomo Finance International PLC...............................
UBS Limited......................................................
<PAGE> 6
SUNBEAM-OSTER
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
Donaldson, Lufkin & Jenrette Securities Corporation..............
Goldman, Sachs & Co. ............................................
Bear, Stearns & Co. Inc. ........................................
CS First Boston Corporation......................................
Alex. Brown & Sons Incorporated..................................
Dean Witter Reynolds Inc. .......................................
Dillon, Read & Co. Inc. .........................................
Doft & Co., Inc. ................................................
A.G. Edwards & Sons. Inc. .......................................
Lazard Freres & Co. .............................................
Legg Mason Wood Walker, Incorporated.............................
Lehman Brothers Inc. ............................................
Morgan Stanley & Co. Incorporated................................
Oppenheimer & Co., Inc. .........................................
PaineWebber Incorporated.........................................
Prudential Securities Incorporated...............................
Salomon Brothers Inc ............................................
Smith Barney Inc. ...............................................
S.G. Warburg & Co. Inc. .........................................
Wertheim Schroder & Co. Incorporated.............................
Advest, Inc. ....................................................
Arnhold and S. Bleichroeder, Inc. ...............................
Robert W. Baird & Co. Incorporated...............................
William Blair & Company..........................................
J.C. Bradford & Co. .............................................
Dain Bosworth Incorporated.......................................
Fahnestock & Co. Inc. ...........................................
First Albany Corporation.........................................
First of Michigan Corporation....................................
Furman Selz Incorporated.........................................
Gabelli & Company, Inc. .........................................
Howard, Weil, Labouisse, Friedrichs Incorporated.................
Interstate/Johnson Lane Corporation..............................
Janney Montgomery Scott Inc. ....................................
Edward D. Jones & Co. ...........................................
Kemper Securities, Inc. .........................................
Mabon Securities Corp. ..........................................
McDonald & Company Securities, Inc. .............................
<PAGE> 7
SUNBEAM-OSTER (continued)
Morgan Keegan & Company, Inc. ..................................
Neuberger & Berman..............................................
Piper Jaffray Inc. .............................................
Principal Financial Securities, Inc. ...........................
Ragen MacKenzie Incorporated....................................
Rauscher Pierce Refsnes, Inc. ..................................
Raymond James & Associates, Inc. ...............................
The Robinson-Humphrey Company, Inc. ............................
The Seidler Companies Incorporated..............................
Stephens Inc. ..................................................
Stifel, Nicolaus & Company, Incorporated........................
Sutro & Co. Incorporated........................................
Tucker Anthony Incorporated.....................................
Wheat, First Securities, Inc. ..................................
George K. Baum & Company........................................
Brean Murray, Foster Securities Inc. ...........................
The Chapman Company.............................................
The Chicago Corporation.........................................
Crowell, Weedon & Co. ..........................................
Dominick & Dominick, Incorporated...............................
First Manhattan Co. ............................................
Gerard Klauer Mattison & Co., Inc. .............................
Hanifen, Imhoff Inc. ...........................................
J.J.B. Hilliard, W. L. Lyons, Inc. .............................
The Ohio Company................................................
Ormes Capital Markets Inc. .....................................
Parker/Hunter Incorporated......................................
Muriel Siebert & Co., Inc. .....................................
Wm Smith Securities, Inc. ......................................
Smith, Moore & Co. .............................................
Spencer Trask Securities Incorporated...........................
Utendahl Capital Partners, L.P. ................................
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994 by and between COMMON SENSE
TRUST, a Massachusetts business trust, hereinafter referred to as the "TRUST,"
and American Capital Asset Management, Inc., a Delaware corporation,
hereinafter referred to as the "Adviser."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
a. The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST's Common Sense Growth and Income Fund (the "Fund") for the period and on
the terms set forth in this Agreement. The ADVISER accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
b. In the event that the TRUST establishes one or more funds with respect to
which it desires to retain the ADVISER to act as investment adviser hereunder,
it shall notify the ADVISER in writing. If the ADVISER is willing to render
such services it shall notify the TRUST in writing whereupon such fund shall
become a fund hereunder and the compensation payable by such new fund to the
ADVISER will be as agreed in writing at that time.
(2.) Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectuses and the stated investment
objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the TRUST's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the Fund, and formulation and implementation of investment
programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of the Fund of the TRUST with brokers or
dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the TRUST including, by way
of illustration, the preparation of registration statements, prospectuses,
reports, proxy solicitation materials and amendments thereto, the furnishing of
legal services except for services provided by outside counsel to the TRUST
selected by the
<PAGE> 2
Trustees, and the supervision of the TRUST's Treasurer and the personnel
working under his direction; and
d. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and the Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization by
the TRUST's Trustees of appropriate policies and procedures, the ADVISER may,
to the extent authorized by law, cause the TRUST to pay a broker or dealer that
provides brokerage and research services to the ADVISER an amount of commission
for effecting a fund investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction. In the event of such authorization and to the extent authorized by
law the ADVISER shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of fund investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office
space, facilities, and equipment used by the Treasurer and such personnel in
the performance of their normal duties for the TRUST which consist of
maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
2
<PAGE> 3
qualifying the TRUST and its shares for distribution under state and federal
securities laws; (x) expenses of printing and mailing of registration
statements, prospectuses, reports, notices and proxy solicitation materials of
the TRUST; (xi) all other expenses incidental to holding meetings of the
TRUST's shareholders including proxy solicitations therefor; (xii) expenses for
servicing shareholder accounts; (xiii) insurance premiums for fidelity coverage
and errors and omissions insurance; (xiv) dues for the TRUST's membership in
trade associations approved by the Trustees; and (xv) such non-recurring
expenses as may arise, including those associated with actions, suits, or
proceedings to which the TRUST is a party and the legal obligation which the
TRUST may have to indemnify its officers and trustees with respect thereto. To
the extent that any of the foregoing expenses are allocated between the TRUST
and any other party, such allocations shall be pursuant to methods approved by
the Trustees.
(3.) Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the TRUST are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ("1940 Act")
any of the shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common control
with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(4.) Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, with respect to the
Fund, a monthly fee calculated at the following annual rates:
.65% of the first $1 billion of average daily net assets; .60% of the next $1
billion of average daily net assets; .55% of the next $1 billion of average
daily net assets; .50% of the next $1 billion of average daily net assets; and
.45% of average daily net assets in excess of $4 billion.
3
<PAGE> 4
Average daily net assets of the Fund shall be determined by taking the average
of the net assets for each business day during a given calendar month, made in
the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of American Capital Management & Research, Inc., or
its successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of American Capital Management & Research, Inc., or its
successor, to receive in connection with the Fund's transactions or other
arrangements which may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability asserted against
the TRUST and the Fund, provided that, if the ADVISER made the decision or took
the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; and (v) any indemnification paid by the TRUST to its
officers and trustees and the ADVISER in accordance with applicable state and
federal laws as a result of such litigation.
If the ADVISER shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
4
<PAGE> 5
(5.) Books and Records
In compliance with the requirements of the 1940 Act, the ADVISER hereby agrees
that, to the extent required by law, all records which it maintains for the
TRUST are the property of the TRUST and further agrees to surrender promptly to
the TRUST any of such records upon the TRUST's request. The ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the Act.
(6.) Duration and Termination
This Agreement will become effective with respect to the Fund on the date
hereof, and with respect to any additional funds, on the date of receipt by the
TRUST of notice from the ADVISER in accordance with Section 1(b) hereof that
the ADVISER is willing to serve as investment adviser with respect to such
fund, provided that this Agreement (as supplemented by the terms specified in
any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Fund subject to this Agreement, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each, provided
such continuance is specifically approved at least annually, (a) by the vote of
a majority of those members of the TRUST's Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the TRUST's Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, by the TRUST (by vote of the
TRUST's Trustees or by vote of a majority of the outstanding voting securities
of the Fund), or by the ADVISER, on sixty days' written notice. This Agreement
will immediately terminate in the event of its assignment.
(7.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement shall be effective as to the Fund until approved by
vote of a majority of the outstanding voting securities of the Fund if such
vote is required by the 1940 Act.
(8.) Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person",
5
<PAGE> 6
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the 1940 Act and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the TRUST by the Securities and
Exchange Commission, or such interpretive positions as may be taken by the
Commission or its staff, under said Act, and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated January 29,
1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ CURTIS W. MORELL
------------------------------------
Name: Curtis W. Morell
----------------------------------
Its: Vice President
-----------------------------------
AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ NORI L. GABERT
------------------------------------
Name: Nori L. Gabert
----------------------------------
Its: Vice President
-----------------------------------
6
<PAGE> 1
EXHIBIT 77 0
COMMON SENSE TRUST -- COMMON SENSE GROWTH & INCOME FUND
Underwritings Pursuant to Rule 10f-3
1. Name of Issuer: Nabisco Holdings Corp.
Securities Acquired from: Goldman, Sachs & Co.
Syndicate Members: See attached list
Principal Amount in Offering: 45,000,000
Principal Amount Purchased: 72,300
Price Per Share: $24.50
Purchase Date: 1-19-95
2. Name of Issuer: AmeriSource
Securities Acquired from: Donaldson, Lufkin & Jenrette Sec. Corp.
Syndicate Members: See attached list
Principal Amount in Offering: 6,600,000
Principal Amount Purchased: 13,500
Price Per Share: $21.00
Purchase Date: 4-3-95
3. Name of Issuer: PMI Group, Inc.
Securities Acquired from: Goldman, Sachs & Co.
Syndicate Members: See attached list
Principal Amount in Offering: 21,500,000
Principal Amount Purchased: 75,000
Price Per Share: $34.00
Purchase Date: 4-10-95
4. Name of Issuer: Repsol S.A. ADR
Securities Acquired from: Goldman, Sachs & Co.
Syndicate Members: See attached list
Principal Amount in Offering: 8,500,000
Principal Amount Purchased: 86,000
Price Per Share: $28.83
Purchase Date: 4-11-95
5. Name of Issuer:
Securities Acquired from:
Syndicate Members:
Principal Amount in Offering:
Principal Amount Purchased:
Price Per Share:
Purchase Date:
<PAGE> 2
NABISCO HOLDINGS CORP.
Goldman, Sachs & Co. ............................................
Bear, Stearns & Co. Inc. ........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
Morgan Stanley & Co. Incorporated................................
Advest, Inc. ....................................................
Sanford C. Bernstein & Co., Inc. ................................
CS First Boston Corporation......................................
Cleary Gull Reiland & McDevitt Inc. .............................
Dain Bosworth Incorporated ......................................
Dean Witter Reynolds Inc. .......................................
Dillon, Read & Co. Inc. .........................................
Doft & Co., Inc. ................................................
Donaldson, Lufkin & Jenrette Securities Corporation..............
A. G. Edwards & Sons, Inc. ......................................
Interstate/Johnson Lane Corporation..............................
Janney Montgomery Scott Inc. ....................................
Johnston, Lemon & Co. Incorporated...............................
Edward 0. Jones & Co. ...........................................
Kemper Securities, Inc. .........................................
C.J. Lawrence/Deutsche Bank Securities Corporation...............
Lazard Freres & Co. .............................................
Lehman Brothers Inc. ............................................
McDonald & Company Securities, Inc. .............................
J.P. Morgan Securities Inc. .....................................
Oppenheimer & Co., Inc. .........................................
PaineWebber Incorporated.........................................
Prudential Securities Incorporated...............................
Pryor, McClendon, Counts & Co., Inc. ............................
Rauscher Pierce Refsnes, Inc. ...................................
The Robinson-Humphrey Company, Inc. .............................
Salomon Brothers Inc ............................................
Smith Barney Inc ................................................
Sutro & Co. Incorporated.........................................
Tucker Anthony Incorporated......................................
Wasserstein Perella Securities, Inc. ............................
Wertheim Schroder & Co. Incorporated.............................
Wheat, First Securities, Inc. ...................................
<PAGE> 3
PMI GROUP, INC.
Goldman, Sachs & Co. .........................................................
Dean Witter Reynolds Inc. ...................................................
Morgan Stanley & Co. Incorporated ...........................................
Salomon Brothers Inc. .......................................................
Robert W. Baird & Co. Incorporated ..........................................
Bear, Stearns & Co. Inc. ....................................................
Sanford C. Bernstein & Co., Inc. ............................................
J.C. Bradford & Co. .........................................................
Alex. Brown & Sons Incorporated .............................................
The Chicago Corporation .....................................................
Cleary Gull Reiland & McDevitt Inc. .........................................
Conning & Company ...........................................................
CS First Boston Corporation .................................................
Donaldson, Lufkin & Jenrette Securities Corporation .........................
Fox-Pitt, Kelton Inc. .......................................................
Johnston, Lemon & Co. Incorporated ..........................................
Lehman Brothers Inc. ........................................................
Luther, Smith & Small, Inc. .................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated ..........................
Montgomery Securities .......................................................
Neuberger & Berman ..........................................................
Northington Capital Markets, Inc. ...........................................
Oppenheimer & Co., Inc. .....................................................
PaineWebber Incorporated ....................................................
Prudential Securities Incorporated ..........................................
Pryor, McClendon, Counts & Co., Inc. ........................................
Samuel A. Ramirez & Co., Inc. ...............................................
Muriel Siebert & Co., Inc. ..................................................
Smith Barney Inc. ...........................................................
Stifel, Nicolaus & Company, Incorporated ....................................
Wasserstein Perella Securities, Inc. ........................................
<PAGE> 4
REPSOL S.A. ADR
Goldman, Sachs & Co. .........................................................
CS First Boston Corporation .................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated ..........................
Morgan Stanley & Co. Incorporated ...........................................
Howard, Weil, Labouisse, Friedrichs Incorporated ............................
Bear, Stearns & Co. Inc. ....................................................
Donaldson, Lufkin & Jenrette Securities Corporation .........................
Kleinwort Benson North America Inc. .........................................
C.J. Lawrence/Deutsche Bank Securities Corporation ..........................
Lehman Brothers Inc. ........................................................
McDonald & Company Securities, Inc. .........................................
J.P. Morgan Securities Inc. .................................................
NatWest Securities Limited ..................................................
PaineWebber Incorporated ....................................................
Rauscher Pierce Refsnes, Inc. ...............................................
Smith Barney Inc. ...........................................................
S.G. Warburg & Co. Inc. .....................................................
<PAGE> 5
AMERI SOURCE
U.S. UNDERWRITERS
Donaldson, Lufkin & Jenrette Securities Corporation .......................
Smith Barney Inc. .........................................................
BT Securities Corporation .................................................
Dean Witter Reynolds Inc. .................................................
Dillon, Read & Co. Inc. ...................................................
A.G. Edwards & Sons, Inc. .................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated ........................
Montgomery Securities .....................................................
Morgan Stanley & Co. Incorporated .........................................
Oppenheimer & Co., Inc. ...................................................
PaineWebber Incorporated ..................................................
Wheat First Butcher Singer ................................................
Advest, Inc. ..............................................................
Arnhold and S. Bleichroeder, Inc. .........................................
William Blair & Company....................................................
Cleary Gull Reiland & McDevitt Inc. .......................................
Cowen & Company ...........................................................
Crowell, Weedon & Co. .....................................................
Fahnestock & Co. Inc. .....................................................
First of Michigan Corporation .............................................
Furman Selz Incorporated...................................................
J.J. B. Hilliard, W.T. Lyons, Inc. ........................................
Interstate/Johnson Lane Corporation .......................................
Janney Montgomery Scott Inc. ..............................................
Johnston, Lemon & Co. Incorporated ........................................
Ladenburg, Thalmann & Co. Inc. ............................................
C.J. Lawrence/Deutsche Bank Securities Corporation ........................
McDonald & Company Securities, Inc. .......................................
The Ohio Company ..........................................................
Parker/Hunter Incorporated ................................................
Pennsylvania Merchant Group Ltd. ..........................................
Ragen MacKenzie Incorporated ..............................................
Raymond James & Associates, Inc. ..........................................
The Robinson-Humphrey Company, Inc. .......................................
Roney & Co. ...............................................................
Scott & Stringfellow, Inc. ................................................
Stephens Inc. .............................................................
Sutro & Co. Incorporated ..................................................
Tucker Anthony Incorporated ...............................................
Dabney/Resnick, Inc. ......................................................
Ferris, Baker Watts, Incorporated .........................................
Freimark Blair & Company Inc. .............................................
C.L. King & Associates, Inc. ..............................................
Monness Crespi Hardt & Co. Inc. ...........................................
Pryor, McClendon, Counts & Co., Inc. ......................................
INTERNATIONAL UNDERWRITERS
Donaldson, Lufkin & Jenrett Securities Corporation ........................
Smith Barney Inc. .........................................................
Bankers Trust Interantional PLC ...........................................
Cazenove & Co. ............................................................
Credit Lyonnais Securities ................................................
Deutsche Bank Aktiengesellschaft ..........................................
Internatioanale Nederlanden Bank N.V. .....................................
Kleinwort Benson Limited ..................................................
Paribas Capital Markets ...................................................
Societe Generale ..........................................................
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994 by and between COMMON SENSE
TRUST, a Massachusetts business trust, hereinafter referred to as the "TRUST,"
and American Capital Asset Management, Inc., a Delaware corporation,
hereinafter referred to as the "Adviser."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
a. The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST's Common Sense Government Fund (the "Fund") for the period and on the
terms set forth in this Agreement. The ADVISER accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
b. In the event that the TRUST establishes one or more funds with respect to
which it desires to retain the ADVISER to act as investment adviser hereunder,
it shall notify the ADVISER in writing. If the ADVISER is willing to render
such services it shall notify the TRUST in writing whereupon such fund shall
become a fund hereunder and the compensation payable by such new fund to the
ADVISER will be as agreed in writing at that time.
(2.) Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectuses and the stated investment
objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the TRUST's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the Fund, and formulation and implementation of investment
programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of the Fund of the TRUST with brokers or
dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the TRUST including, by way
of illustration, the preparation of registration statements, prospectuses,
reports, proxy solicitation materials and amendments thereto, the furnishing of
legal services except for services provided by outside counsel to the TRUST
selected by the Trustees, and the supervision of the TRUST's Treasurer and the
<PAGE> 2
personnel working under his direction; and
d. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and the Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization by
the TRUST's Trustees of appropriate policies and procedures, the ADVISER may,
to the extent authorized by law, cause the TRUST to pay a broker or dealer that
provides brokerage and research services to the ADVISER an amount of commission
for effecting a fund investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction. In the event of such authorization and to the extent authorized by
law the ADVISER shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of fund investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office
space, facilities, and equipment used by the Treasurer and such personnel in
the performance of their normal duties for the TRUST which consist of
maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
qualifying the TRUST and its shares for distribution under state
2
<PAGE> 3
and federal securities laws; (x) expenses of printing and mailing of
registration statements, prospectuses, reports, notices and proxy solicitation
materials of the TRUST; (xi) all other expenses incidental to holding meetings
of the TRUST's shareholders including proxy solicitations therefor; (xii)
expenses for servicing shareholder accounts; (xiii) insurance premiums for
fidelity coverage and errors and omissions insurance; (xiv) dues for the
TRUST's membership in trade associations approved by the Trustees; and (xv)
such non-recurring expenses as may arise, including those associated with
actions, suits, or proceedings to which the TRUST is a party and the legal
obligation which the TRUST may have to indemnify its officers and trustees with
respect thereto. To the extent that any of the foregoing expenses are allocated
between the TRUST and any other party, such allocations shall be pursuant to
methods approved by the Trustees.
(3.) Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the TRUST are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ("1940 Act")
any of the shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common control
with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(4.) Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, with respect to the
Fund, a monthly fee calculated at the following annual rates:
.60% of the first $1 billion of average daily net assets; .55% of the next $1
billion of average daily net assets; .50% of the next $1 billion of average
daily net assets; .45% of the next $1 billion of average daily net assets; .40%
of the next $1 billion of average daily net assets; and .35% of average daily
net assets in excess of $5 billion.
3
<PAGE> 4
Average daily net assets of the Fund shall be determined by taking the average
of the net assets for each business day during a given calendar month, made in
the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of American Capital Management & Research, Inc., or
its successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of American Capital Management & Research, Inc., or its
successor, to receive in connection with the Fund's transactions or other
arrangements which may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability asserted against
the TRUST and the Fund, provided that, if the ADVISER made the decision or took
the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; and (v) any indemnification paid by the TRUST to its
officers and trustees and the ADVISER in accordance with applicable state and
federal laws as a result of such litigation.
If the ADVISER shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
4
<PAGE> 5
(5.) Books and Records
In compliance with the requirements of the 1940 Act, the ADVISER hereby agrees
that, to the extent required by law, all records which it maintains for the
TRUST are the property of the TRUST and further agrees to surrender promptly to
the TRUST any of such records upon the TRUST's request. The ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the Act.
(6.) Duration and Termination
This Agreement will become effective with respect to the Fund on the date
hereof, and with respect to any additional funds, on the date of receipt by the
TRUST of notice from the ADVISER in accordance with Section 1(b) hereof that
the ADVISER is willing to serve as investment adviser with respect to such
fund, provided that this Agreement (as supplemented by the terms specified in
any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Fund subject to this Agreement, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each, provided
such continuance is specifically approved at least annually, (a) by the vote of
a majority of those members of the TRUST's Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the TRUST's Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, by the TRUST (by vote of the
TRUST's Trustees or by vote of a majority of the outstanding voting securities
of the Fund), or by the ADVISER, on sixty days' written notice. This Agreement
will immediately terminate in the event of its assignment.
(7.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement shall be effective as to the Fund until approved by
vote of a majority of the outstanding voting securities of the Fund if such
vote is required by the 1940 Act.
(8.) Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person",
5
<PAGE> 6
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the 1940 Act and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the TRUST by the Securities and
Exchange Commission, or such interpretive positions as may be taken by the
Commission or its staff, under said Act, and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated January 29,
1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ CURTIS W. MORELL
------------------------------------
Name: Curtis W. Morell
----------------------------------
Its: Vice President
-----------------------------------
AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ NORI L. GABERT
------------------------------------
Name: Nori L. Gabert
----------------------------------
Its: Vice President
-----------------------------------
6
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994 by and between COMMON SENSE
TRUST, a Massachusetts business trust, hereinafter referred to as the "TRUST,"
and American Capital Asset Management, Inc., a Delaware corporation,
hereinafter referred to as the "Adviser."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
a. The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST's Common Sense Money Market Fund (the "Fund") for the period and on the
terms set forth in this Agreement. The ADVISER accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
b. In the event that the TRUST establishes one or more funds with respect to
which it desires to retain the ADVISER to act as investment adviser hereunder,
it shall notify the ADVISER in writing. If the ADVISER is willing to render
such services it shall notify the TRUST in writing whereupon such fund shall
become a fund hereunder and the compensation payable by such new fund to the
ADVISER will be as agreed in writing at that time.
(2.) Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectuses and the stated investment
objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the TRUST's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the Fund, and formulation and implementation of investment
programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of the Fund of the TRUST with brokers or
dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the TRUST including, by way
of illustration, the preparation of registration statements, prospectuses,
reports, proxy solicitation materials and amendments thereto, the furnishing of
legal services except for services provided by outside counsel to the TRUST
selected by the
<PAGE> 2
Trustees, and the supervision of the TRUST's Treasurer and the personnel
working under his direction; and
d. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and the Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization by
the TRUST's Trustees of appropriate policies and procedures, the ADVISER may,
to the extent authorized by law, cause the TRUST to pay a broker or dealer that
provides brokerage and research services to the ADVISER an amount of commission
for effecting a fund investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction. In the event of such authorization and to the extent authorized by
law the ADVISER shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of fund investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office
space, facilities, and equipment used by the Treasurer and such personnel in
the performance of their normal duties for the TRUST which consist of
maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
2
<PAGE> 3
qualifying the TRUST and its shares for distribution under state and federal
securities laws; (x) expenses of printing and mailing of registration
statements, prospectuses, reports, notices and proxy solicitation materials of
the TRUST; (xi) all other expenses incidental to holding meetings of the
TRUST's shareholders including proxy solicitations therefor; (xii) expenses for
servicing shareholder accounts; (xiii) insurance premiums for fidelity coverage
and errors and omissions insurance; (xiv) dues for the TRUST's membership in
trade associations approved by the Trustees; and (xv) such non-recurring
expenses as may arise, including those associated with actions, suits, or
proceedings to which the TRUST is a party and the legal obligation which the
TRUST may have to indemnify its officers and trustees with respect thereto. To
the extent that any of the foregoing expenses are allocated between the TRUST
and any other party, such allocations shall be pursuant to methods approved by
the Trustees.
(3.) Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the TRUST are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ("1940 Act")
any of the shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common control
with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(4.) Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, with respect to the
Fund, a monthly fee calculated at the following annual rates:
.50% of the first $2 billion of average daily net assets; .475% of the next $2
billion of average daily net assets; and .45% of average daily net assets in
excess of $4 billion.
3
<PAGE> 4
Average daily net assets of the Fund shall be determined by taking the average
of the net assets for each business day during a given calendar month, made in
the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of American Capital Management & Research, Inc., or
its successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of American Capital Management & Research, Inc., or its
successor, to receive in connection with the Fund's transactions or other
arrangements which may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability asserted against
the TRUST and the Fund, provided that, if the ADVISER made the decision or took
the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; and (v) any indemnification paid by the TRUST to its
officers and trustees and the ADVISER in accordance with applicable state and
federal laws as a result of such litigation.
If the ADVISER shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
4
<PAGE> 5
(5.) Books and Records
In compliance with the requirements of the 1940 Act, the ADVISER hereby agrees
that, to the extent required by law, all records which it maintains for the
TRUST are the property of the TRUST and further agrees to surrender promptly to
the TRUST any of such records upon the TRUST's request. The ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the Act.
(6.) Duration and Termination
This Agreement will become effective with respect to the Fund on the date
hereof, and with respect to any additional funds, on the date of receipt by the
TRUST of notice from the ADVISER in accordance with Section 1(b) hereof that
the ADVISER is willing to serve as investment adviser with respect to such
fund, provided that this Agreement (as supplemented by the terms specified in
any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Fund subject to this Agreement, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each, provided
such continuance is specifically approved at least annually, (a) by the vote of
a majority of those members of the TRUST's Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the TRUST's Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, by the TRUST (by vote of the
TRUST's Trustees or by vote of a majority of the outstanding voting securities
of the Fund), or by the ADVISER, on sixty days' written notice. This Agreement
will immediately terminate in the event of its assignment.
(7.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement shall be effective as to the Fund until approved by
vote of a majority of the outstanding voting securities of the Fund if such
vote is required by the 1940 Act.
5
<PAGE> 6
(8.) Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person",
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the 1940 Act and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the TRUST by the Securities and
Exchange Commission, or such interpretive positions as may be taken by the
Commission or its staff, under said Act, and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated January 29,
1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ CURTIS W. MORELL
------------------------------------
Name: Curtis W. Morell
----------------------------------
Its: Vice President
-----------------------------------
AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ NORI L. GABERT
------------------------------------
Name: Nori L. Gabert
----------------------------------
Its: Vice President
-----------------------------------
6
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994 by and between COMMON SENSE
TRUST, a Massachusetts business trust, hereinafter referred to as the "TRUST,"
and American Capital Asset Management, Inc., a Delaware corporation,
hereinafter referred to as the "Adviser."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
a. The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST's Common Sense Municipal Bond Fund (the "Fund") for the period and on the
terms set forth in this Agreement. The ADVISER accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
b. In the event that the TRUST establishes one or more funds with respect to
which it desires to retain the ADVISER to act as investment adviser hereunder,
it shall notify the ADVISER in writing. If the ADVISER is willing to render
such services it shall notify the TRUST in writing whereupon such fund shall
become a fund hereunder and the compensation payable by such new fund to the
ADVISER will be as agreed in writing at that time.
(2.) Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectuses and the stated investment
objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the TRUST's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the Fund, and formulation and implementation of investment
programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of the Fund of the TRUST with brokers or
dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the TRUST including, by way
of illustration, the preparation of registration statements, prospectuses,
reports, proxy solicitation materials and amendments thereto, the furnishing of
legal services except for services provided by outside counsel to the TRUST
selected by the
<PAGE> 2
Trustees, and the supervision of the TRUST's Treasurer and the personnel
working under his direction; and
d. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and the Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization by
the TRUST's Trustees of appropriate policies and procedures, the ADVISER may,
to the extent authorized by law, cause the TRUST to pay a broker or dealer that
provides brokerage and research services to the ADVISER an amount of commission
for effecting a fund investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction. In the event of such authorization and to the extent authorized by
law the ADVISER shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of fund investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office
space, facilities, and equipment used by the Treasurer and such personnel in
the performance of their normal duties for the TRUST which consist of
maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
2
<PAGE> 3
qualifying the TRUST and its shares for distribution under state and federal
securities laws; (x) expenses of printing and mailing of registration
statements, prospectuses, reports, notices and proxy solicitation materials of
the TRUST; (xi) all other expenses incidental to holding meetings of the
TRUST's shareholders including proxy solicitations therefor; (xii) expenses for
servicing shareholder accounts; (xiii) insurance premiums for fidelity coverage
and errors and omissions insurance; (xiv) dues for the TRUST's membership in
trade associations approved by the Trustees; and (xv) such non-recurring
expenses as may arise, including those associated with actions, suits, or
proceedings to which the TRUST is a party and the legal obligation which the
TRUST may have to indemnify its officers and trustees with respect thereto. To
the extent that any of the foregoing expenses are allocated between the TRUST
and any other party, such allocations shall be pursuant to methods approved by
the Trustees.
(3.) Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the TRUST are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ("1940 Act")
any of the shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common control
with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(4.) Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, with respect to the
Fund, a monthly fee calculated at the following annual rates:
.60% of the first $1 billion of average daily net assets; .55% of the next $1
billion of average daily net assets; .50% of the next $1 billion of average
daily net assets; and .45% of average daily net assets in excess of $3 billion.
3
<PAGE> 4
Average daily net assets of the Fund shall be determined by taking the average
of the net assets for each business day during a given calendar month, made in
the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of American Capital Management & Research, Inc., or
its successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of American Capital Management & Research, Inc., or its
successor, to receive in connection with the Fund's transactions or other
arrangements which may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability asserted against
the TRUST and the Fund, provided that, if the ADVISER made the decision or took
the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; and (v) any indemnification paid by the TRUST to its
officers and trustees and the ADVISER in accordance with applicable state and
federal laws as a result of such litigation.
If the ADVISER shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
(5.) Books and Records
4
<PAGE> 5
In compliance with the requirements of the 1940 Act, the ADVISER hereby agrees
that, to the extent required by law, all records which it maintains for the
TRUST are the property of the TRUST and further agrees to surrender promptly to
the TRUST any of such records upon the TRUST's request. The ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the Act.
(6.) Duration and Termination
This Agreement will become effective with respect to the Fund on the date
hereof, and with respect to any additional funds, on the date of receipt by the
TRUST of notice from the ADVISER in accordance with Section 1(b) hereof that
the ADVISER is willing to serve as investment adviser with respect to such
fund, provided that this Agreement (as supplemented by the terms specified in
any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Fund subject to this Agreement, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each, provided
such continuance is specifically approved at least annually, (a) by the vote of
a majority of those members of the TRUST's Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the TRUST's Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, by the TRUST (by vote of the
TRUST's Trustees or by vote of a majority of the outstanding voting securities
of the Fund), or by the ADVISER, on sixty days' written notice. This Agreement
will immediately terminate in the event of its assignment.
(7.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement shall be effective as to the Fund until approved by
vote of a majority of the outstanding voting securities of the Fund if such
vote is required by the 1940 Act.
(8.) Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person",
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in
5
<PAGE> 6
the 1940 Act and the Rules and Regulations thereunder, subject, however, to
such exemptions as may be granted to either the ADVISER or the TRUST by the
Securities and Exchange Commission, or such interpretive positions as may be
taken by the Commission or its staff, under said Act, and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934 and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated January 29,
1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ CURTIS W. MORELL
------------------------------------
Name: Curtis W. Morell
----------------------------------
Its: Vice President
-----------------------------------
AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ NORI L. GABERT
------------------------------------
Name: Nori L. Gabert
----------------------------------
Its: Vice President
-----------------------------------
6
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994 by and between COMMON SENSE
TRUST, a Massachusetts business trust, hereinafter referred to as the "TRUST,"
and American Capital Asset Management, Inc., a Delaware corporation,
hereinafter referred to as the "Adviser."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
a. The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST's Common Sense II Growth Fund (the "Fund") for the period and on the
terms set forth in this Agreement. The ADVISER accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
b. In the event that the TRUST establishes one or more funds with respect to
which it desires to retain the ADVISER to act as investment adviser hereunder,
it shall notify the ADVISER in writing. If the ADVISER is willing to render
such services it shall notify the TRUST in writing whereupon such fund shall
become a fund hereunder and the compensation payable by such new fund to the
ADVISER will be as agreed in writing at that time.
(2.) Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectuses and the stated investment
objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the TRUST's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the Fund, and formulation and implementation of investment
programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of the Fund of the TRUST with brokers or
dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the TRUST including, by way
of illustration, the preparation of registration statements, prospectuses,
reports, proxy solicitation materials and amendments thereto, the furnishing of
legal services except for services provided by outside counsel to the TRUST
selected by the Trustees, and the supervision of the TRUST's Treasurer and the
<PAGE> 2
personnel working under his direction; and
d. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and the Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization by
the TRUST's Trustees of appropriate policies and procedures, the ADVISER may,
to the extent authorized by law, cause the TRUST to pay a broker or dealer that
provides brokerage and research services to the ADVISER an amount of commission
for effecting a fund investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction. In the event of such authorization and to the extent authorized by
law the ADVISER shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of fund investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office
space, facilities, and equipment used by the Treasurer and such personnel in
the performance of their normal duties for the TRUST which consist of
maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
qualifying the TRUST and its shares for distribution under state
2
<PAGE> 3
and federal securities laws; (x) expenses of printing and mailing of
registration statements, prospectuses, reports, notices and proxy solicitation
materials of the TRUST; (xi) all other expenses incidental to holding meetings
of the TRUST's shareholders including proxy solicitations therefor; (xii)
expenses for servicing shareholder accounts; (xiii) insurance premiums for
fidelity coverage and errors and omissions insurance; (xiv) dues for the
TRUST's membership in trade associations approved by the Trustees; and (xv)
such non-recurring expenses as may arise, including those associated with
actions, suits, or proceedings to which the TRUST is a party and the legal
obligation which the TRUST may have to indemnify its officers and trustees with
respect thereto. To the extent that any of the foregoing expenses are allocated
between the TRUST and any other party, such allocations shall be pursuant to
methods approved by the Trustees.
(3.) Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the TRUST are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ("1940 Act")
any of the shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common control
with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(4.) Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, with respect to the
Fund, a monthly fee calculated at the following annual rates:
.65% of the first $1 billion of average daily net assets; .60% of the next $1
billion of average daily net assets; .55% of the next $1 billion of average
daily net assets; .50% of the next $1 billion of average daily net assets; and
.45% of average daily net assets in excess of $4 billion.
3
<PAGE> 4
Average daily net assets of the Fund shall be determined by taking the average
of the net assets for each business day during a given calendar month, made in
the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of American Capital Management & Research, Inc., or
its successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of American Capital Management & Research, Inc., or its
successor, to receive in connection with the Fund's transactions or other
arrangements which may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability asserted against
the TRUST and the Fund, provided that, if the ADVISER made the decision or took
the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; (v) any indemnification paid by the TRUST to its
officers and trustees and the ADVISER in accordance with applicable state and
federal laws as a result of such litigation; and (vi) amounts paid to Common
Sense Distributors, the distributor of the Trust's shares, in connection with a
distribution plan adopted by the Trust's Trustees pursuant to Rule 12b-1 under
the Act.
If the ADVISER shall serve for less than the whole of any month,
4
<PAGE> 5
the foregoing compensation shall be prorated.
(5.) Books and Records
In compliance with the requirements of the 1940 Act, the ADVISER hereby agrees
that, to the extent required by law, all records which it maintains for the
TRUST are the property of the TRUST and further agrees to surrender promptly to
the TRUST any of such records upon the TRUST's request. The ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the Act.
(6.) Duration and Termination
This Agreement will become effective with respect to the Fund on the date
hereof, and with respect to any additional funds, on the date of receipt by the
TRUST of notice from the ADVISER in accordance with Section 1(b) hereof that
the ADVISER is willing to serve as investment adviser with respect to such
fund, provided that this Agreement (as supplemented by the terms specified in
any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Fund subject to this Agreement, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each, provided
such continuance is specifically approved at least annually, (a) by the vote of
a majority of those members of the TRUST's Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the TRUST's Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, by the TRUST (by vote of the
TRUST's Trustees or by vote of a majority of the outstanding voting securities
of the Fund), or by the ADVISER, on sixty days' written notice. This Agreement
will immediately terminate in the event of its assignment.
(7.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement shall be effective as to the Fund until approved by
vote of a majority of the outstanding voting securities of the Fund if such
vote is required by the 1940 Act.
(8.) Miscellaneous Provisions
5
<PAGE> 6
For the purposes of this Agreement, the terms "affiliated person",
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the 1940 Act and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the TRUST by the Securities and
Exchange Commission, or such interpretive positions as may be taken by the
Commission or its staff, under said Act, and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated January 29,
1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ CURTIS W. MORELL
------------------------------------
Name: Curtis W. Morell
----------------------------------
Its: Vice President
----------------------------------
AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ NORI L. GABERT
------------------------------------
Name: Nori L. Gabert
Its: Vice President
----------------------------------
6
<PAGE> 1
EXHIBIT 77 0
COMMON SENSE TRUST -- COMMON SENSE II GROWTH FUND
Underwritings Pursuant to Rule 10f-3
1. Name of Issuer: Office Max
Securities Acquired from: Donaldson, Lufkin & Jenrette Sec. Corp.
Syndicate Members: See attached list
Principal Amount in Offering: 33,000,000
Principal Amount Purchased: 400
Price Per Share: $19.00
Purchase Date: 11-2-94
2. Name of Issuer: Sunbeam-Oster
Securities Acquired from: Donaldson, Lufkin & Jenrette Sec. Corp.
Syndicate Members: See attached list
Principal Amount in Offering: 10,000,000
Principal Amount Purchased: 1,000
Price Per Share: $24.00
Purchase Date: 11-17-94
3. Name of Issuer: Nabisco Holdings Corp.
Securities Acquired from: Goldman, Sachs & Co.
Syndicate Members: See attached list
Principal Amount in Offering: 45,000,000
Principal Amount Purchased: 1,700
Price Per Share: $24.50
Purchase Date: 1-19-95
4. Name of Issuer:
Securities Acquired from:
Syndicate Members:
Principal Amount in Offering:
Principal Amount Purchased:
Price Per Share:
Purchase Date:
5. Name of Issuer:
Securities Acquired from:
Syndicate Members:
Principal Amount in Offering:
Principal Amount Purchased:
Price Per Share:
Purchase Date:
<PAGE> 2
OFFICEMAX, INC.
U.S. UNDERWRITERS
Donaldson, Lufkin & Jenrette Securities Corporation..............
Morgan Stanley & Co. Incorporated................................
William Blair & Company..........................................
Dean Witter Reynolds Inc. .......................................
McDonald & Company Securities, Inc. .............................
Bear, Stearns & Co. Inc. ........................................
Alex. Brown & Sons Incorporated .................................
A.G. Edwards & Sons, Inc. .......................................
Goldman, Sachs & Co. ............................................
Hambrecht & Quist Incorporated...................................
Lazard Freres & Co. .............................................
Lehman Brothers Inc ............................................
Montgomery Securities............................................
J. P. Morgan Securities Inc. ....................................
Oppenheimer & Co., Inc. .........................................
PaineWebber Incorporated.........................................
Prudential Securities Incorporated...............................
Robertson, Stephens & Company, L.P. .............................
Salomon Brothers Inc ............................................
Smith Barney Inc. ...............................................
SBCI Swiss Bank Corporation Investment Banking...................
UBS Securities Inc. .............................................
Wertheim Schroder & Co. Incorporated.............................
Sanford C. Bernstein & Co., Inc. ................................
C.J. Lawrence/Deutsche Bank Securities Corporation...............
Advest, Inc. ....................................................
Arnhold and S. Bleichroeder, Inc. ...............................
Robert W. Baird & Co. Incorporated...............................
J. C. Bradford & Co. ............................................
The Chicago Corporation..........................................
Cowen & Company..................................................
Crowell, Weedon & Co. ...........................................
Dain Bosworth Incorporated.......................................
Equitable Securities Corporation.................................
First Albany Corporation.........................................
First of Michigan Corporation....................................
First Southwest Company..........................................
Furman Selz Incorporated.........................................
Gruntal & Co., Incorporated......................................
Interstate/Johnson Lane Corporation..............................
Janney Montgomery Scott Inc. ....................................
Johnston, Lemon & Co. Incorporated...............................
Edward D. Jones & Co. ...........................................
Josephthal, Lyon & Ross, Inc. ...................................
Kemper Securities, Inc. .........................................
Ladenburg, Thalmann & Co. Inc. ..................................
Legg Mason Wood Walker Incorporated..............................
Moran & Associates, Inc. Securities Brokerage....................
Morgan Keegan & Company, Inc. ...................................
Needham & Company, Inc. .........................................
<PAGE> 3
OFFICEMAX, INC. (continued)
Neuberger & Berman...............................................
The Ohio Company.................................................
Piper Jaffray Inc. ..............................................
Principal Financial Securities, Inc. ............................
Ragen MacKenzie Incorporated.....................................
Rauscher Pierce Refsnes, Inc. ...................................
Raymond James & Associates, Inc. ................................
The Robinson-Humphrey Company, Inc. .............................
Roney & Co. .....................................................
Scott & Stringfellow, Inc. ......................................
Stephens Inc. ...................................................
Sutro & Co. Incorporated.........................................
Tucker Anthony Incorporated......................................
Unterberg Harris.................................................
Wheat, First Securities, Inc. ...................................
Adams, Harkness & Hill, Inc. ....................................
Baron Capital, Inc. .............................................
Brean Murray, Foster Securities Inc. ............................
Fahnestock & Co. Inc. ...........................................
Luther, Smith and Small..........................................
Mabon Securities Corp. ..........................................
Parker/Hunter Incorporated.......................................
Pennsylvania Merchant Group Ltd. ................................
Pryor, McClendon, Counts & Co., Inc. ............................
The Seidler Companies Incorporated...............................
Sturdivant & Co., Inc ...........................................
Williams MacKay Jordan & Co., Inc. ..............................
INTERNATIONAL MANAGER
Donaldson, Lufkin & Jenrette Securities Corporation..............
Morgan Stanley & Co. International Limited.......................
William Blair & Company..........................................
Dean Witter International Ltd. ..................................
McDonald & Company Securities, Inc. .............................
Banque Indosuez..................................................
Barclays de Zoete Wedd Limited...................................
Cazenove & Co. ..................................................
Credit Lyonnais Securities.......................................
Deutsche Bank Aktiengesellschaft.................................
Internationale Nederlanden Bank N.V. ............................
James Capel & Co. ...............................................
Kleinwort Benson Limited.........................................
Lazard Brothers & Co. Limited....................................
N M Rothschild & Sons Limited....................................
Pribas Capital Markets...........................................
Societe Generale.................................................
Sumitomo Finance International PLC...............................
UBS Limited......................................................
<PAGE> 4
SUNBEAM-OSTER
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
Donaldson, Lufkin & Jenrette Securities Corporation..............
Goldman, Sachs & Co. ............................................
Bear, Stearns & Co. Inc. ........................................
CS First Boston Corporation......................................
Alex. Brown & Sons Incorporated..................................
Dean Witter Reynolds Inc. .......................................
Dillon, Read & Co. Inc. .........................................
Doft & Co., Inc. ................................................
A.G. Edwards & Sons. Inc. .......................................
Lazard Freres & Co. .............................................
Legg Mason Wood Walker, Incorporated.............................
Lehman Brothers Inc. ............................................
Morgan Stanley & Co. Incorporated................................
Oppenheimer & Co., Inc. .........................................
PaineWebber Incorporated.........................................
Prudential Securities Incorporated...............................
Salomon Brothers Inc ............................................
Smith Barney Inc. ...............................................
S.G. Warburg & Co. Inc. .........................................
Wertheim Schroder & Co. Incorporated.............................
Advest, Inc. ....................................................
Arnhold and S. Bleichroeder, Inc. ...............................
Robert W. Baird & Co. Incorporated...............................
William Blair & Company..........................................
J.C. Bradford & Co. .............................................
Dain Bosworth Incorporated.......................................
Fahnestock & Co. Inc. ...........................................
First Albany Corporation.........................................
First of Michigan Corporation....................................
Furman Selz Incorporated.........................................
Gabelli & Company, Inc. .........................................
Howard, Weil, Labouisse, Friedrichs Incorporated.................
Interstate/Johnson Lane Corporation..............................
Janney Montgomery Scott Inc. ....................................
Edward D. Jones & Co. ...........................................
Kemper Securities, Inc. .........................................
Mabon Securities Corp. ..........................................
McDonald & Company Securities, Inc. .............................
<PAGE> 5
SUNBEAM-OSTER (continued)
Morgan Keegan & Company, Inc. ..................................
Neuberger & Berman..............................................
Piper Jaffray Inc. .............................................
Principal Financial Securities, Inc. ...........................
Ragen MacKenzie Incorporated....................................
Rauscher Pierce Refsnes, Inc. ..................................
Raymond James & Associates, Inc. ...............................
The Robinson-Humphrey Company, Inc. ............................
The Seidler Companies Incorporated..............................
Stephens Inc. ..................................................
Stifel, Nicolaus & Company, Incorporated........................
Sutro & Co. Incorporated........................................
Tucker Anthony Incorporated.....................................
Wheat, First Securities, Inc. ..................................
George K. Baum & Company........................................
Brean Murray, Foster Securities Inc. ...........................
The Chapman Company.............................................
The Chicago Corporation.........................................
Crowell, Weedon & Co. ..........................................
Dominick & Dominick, Incorporated...............................
First Manhattan Co. ............................................
Gerard Klauer Mattison & Co., Inc. .............................
Hanifen, Imhoff Inc. ...........................................
J.J.B. Hilliard, W. L. Lyons, Inc. .............................
The Ohio Company................................................
Ormes Capital Markets Inc. .....................................
Parker/Hunter Incorporated......................................
Muriel Siebert & Co., Inc. .....................................
Wm Smith Securities, Inc. ......................................
Smith, Moore & Co. .............................................
Spencer Trask Securities Incorporated...........................
Utendahl Capital Partners, L.P. ................................
<PAGE> 6
NABISCO HOLDINGS CORP.
Goldman, Sachs & Co. ............................................
Bear, Stearns & Co. Inc. ........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
Morgan Stanley & Co. Incorporated................................
Advest, Inc. ....................................................
Sanford C. Bernstein & Co., Inc. ................................
CS First Boston Corporation......................................
Cleary Gull Reiland & McDevitt Inc. .............................
Dain Bosworth Incorporated ......................................
Dean Witter Reynolds Inc. .......................................
Dillon, Read & Co. Inc. .........................................
Doft & Co., Inc. ................................................
Donaldson, Lufkin & Jenrette Securities Corporation..............
A. G. Edwards & Sons, Inc. ......................................
Interstate/Johnson Lane Corporation..............................
Janney Montgomery Scott Inc. ....................................
Johnston, Lemon & Co. Incorporated...............................
Edward 0. Jones & Co. ...........................................
Kemper Securities, Inc. .........................................
C.J. Lawrence/Deutsche Bank Securities Corporation...............
Lazard Freres & Co. .............................................
Lehman Brothers Inc. ............................................
McDonald & Company Securities, Inc. .............................
J.P. Morgan Securities Inc. .....................................
Oppenheimer & Co., Inc. .........................................
PaineWebber Incorporated.........................................
Prudential Securities Incorporated...............................
Pryor, McClendon, Counts & Co., Inc. ............................
Rauscher Pierce Refsnes, Inc. ...................................
The Robinson-Humphrey Company, Inc. .............................
Salomon Brothers Inc ............................................
Smith Barney Inc ................................................
Sutro & Co. Incorporated.........................................
Tucker Anthony Incorporated......................................
Wasserstein Perella Securities, Inc. ............................
Wertheim Schroder & Co. Incorporated.............................
Wheat, First Securities, Inc. ...................................
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994 by and between COMMON SENSE
TRUST, a Massachusetts business trust, hereinafter referred to as the "TRUST,"
and American Capital Asset Management, Inc., a Delaware corporation,
hereinafter referred to as the "Adviser."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
a. The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST's Common Sense II Growth and Income Fund (the "Fund") for the period and
on the terms set forth in this Agreement. The ADVISER accepts such appointment
and agrees to furnish the services herein set forth for the compensation herein
provided.
b. In the event that the TRUST establishes one or more funds with respect to
which it desires to retain the ADVISER to act as investment adviser hereunder,
it shall notify the ADVISER in writing. If the ADVISER is willing to render
such services it shall notify the TRUST in writing whereupon such fund shall
become a fund hereunder and the compensation payable by such new fund to the
ADVISER will be as agreed in writing at that time.
(2.) Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectuses and the stated investment
objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the TRUST's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the Fund, and formulation and implementation of investment
programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of the Fund of the TRUST with brokers or
dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the TRUST including, by way
of illustration, the preparation of registration statements, prospectuses,
reports, proxy solicitation materials and amendments thereto, the furnishing of
legal services except for services provided by outside counsel to the TRUST
selected by the
<PAGE> 2
Trustees, and the supervision of the TRUST's Treasurer and the personnel
working under his direction; and
d. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and the Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization by
the TRUST's Trustees of appropriate policies and procedures, the ADVISER may,
to the extent authorized by law, cause the TRUST to pay a broker or dealer that
provides brokerage and research services to the ADVISER an amount of commission
for effecting a fund investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction. In the event of such authorization and to the extent authorized by
law the ADVISER shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of fund investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office
space, facilities, and equipment used by the Treasurer and such personnel in
the performance of their normal duties for the TRUST which consist of
maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
2
<PAGE> 3
qualifying the TRUST and its shares for distribution under state and federal
securities laws; (x) expenses of printing and mailing of registration
statements, prospectuses, reports, notices and proxy solicitation materials of
the TRUST; (xi) all other expenses incidental to holding meetings of the
TRUST's shareholders including proxy solicitations therefor; (xii) expenses for
servicing shareholder accounts; (xiii) insurance premiums for fidelity coverage
and errors and omissions insurance; (xiv) dues for the TRUST's membership in
trade associations approved by the Trustees; and (xv) such non-recurring
expenses as may arise, including those associated with actions, suits, or
proceedings to which the TRUST is a party and the legal obligation which the
TRUST may have to indemnify its officers and trustees with respect thereto. To
the extent that any of the foregoing expenses are allocated between the TRUST
and any other party, such allocations shall be pursuant to methods approved by
the Trustees.
(3.) Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the TRUST are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ("1940 Act")
any of the shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common control
with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(4.) Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, with respect to the
Fund, a monthly fee calculated at the following annual rates:
.65% of the first $1 billion of average daily net assets; .60% of the next $1
billion of average daily net assets; .55% of the next $1 billion of average
daily net assets; .50% of the next $1 billion of average daily net assets; and
.45% of average daily net assets in excess of $4 billion.
3
<PAGE> 4
Average daily net assets of the Fund shall be determined by taking the average
of the net assets for each business day during a given calendar month, made in
the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of American Capital Management & Research, Inc., or
its successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of American Capital Management & Research, Inc., or its
successor, to receive in connection with the Fund's transactions or other
arrangements which may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability asserted against
the TRUST and the Fund, provided that, if the ADVISER made the decision or took
the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; (v) any indemnification paid by the TRUST to its
officers and trustees and the ADVISER in accordance with applicable state and
federal laws as a result of such litigation; and (vi) amounts paid to Common
Sense Distributors, the distributor of the Trust's shares, in connection with a
distribution plan adopted by the Trust's Trustees pursuant to Rule 12b-1 under
the Act.
4
<PAGE> 5
If the ADVISER shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
(5.) Books and Records
In compliance with the requirements of the 1940 Act, the ADVISER hereby agrees
that, to the extent required by law, all records which it maintains for the
TRUST are the property of the TRUST and further agrees to surrender promptly to
the TRUST any of such records upon the TRUST's request. The ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the Act.
(6.) Duration and Termination
This Agreement will become effective with respect to the Fund on the date
hereof, and with respect to any additional funds, on the date of receipt by the
TRUST of notice from the ADVISER in accordance with Section 1(b) hereof that
the ADVISER is willing to serve as investment adviser with respect to such
fund, provided that this Agreement (as supplemented by the terms specified in
any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Fund subject to this Agreement, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each, provided
such continuance is specifically approved at least annually, (a) by the vote of
a majority of those members of the TRUST's Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the TRUST's Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, by the TRUST (by vote of the
TRUST's Trustees or by vote of a majority of the outstanding voting securities
of the Fund), or by the ADVISER, on sixty days' written notice. This Agreement
will immediately terminate in the event of its assignment.
(7.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement shall be effective as to the Fund until approved by
vote of a majority of the outstanding voting securities of the Fund if such
vote is required by the 1940 Act.
5
<PAGE> 6
(8.) Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person",
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the 1940 Act and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the TRUST by the Securities and
Exchange Commission, or such interpretive positions as may be taken by the
Commission or its staff, under said Act, and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated January 29,
1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ CURTIS W. MORELL
-------------------------------------
Name: Curtis W. Morell
-----------------------------------
Its: Vice President
------------------------------------
AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ NORI L. GABERT
-------------------------------------
Name: Nori L. Gabert
-----------------------------------
Its: Vice President
------------------------------------
6
<PAGE> 1
EXHIBIT 77 0
COMMON SENSE TRUST -- COMMON SENSE II GROWTH AND INCOME FUND
Underwritings Pursuant to Rule 10f-3
1. Name of Issuer: Nabisco Holdings Corp.
Securities Acquired from: Goldman, Sachs & Co.
Syndicate Members: See attached list
Principal Amount in Offering: 45,000,000
Principal Amount Purchased: 900
Price Per Share: $24.50
Purchase Date: 1-19-95
2. Name of Issuer: AmeriSource
Securities Acquired from: Donaldson, Lufkin & Jenrette Sec. Corp.
Syndicate Members: See attached list
Principal Amount in Offering: 6,600,000
Principal Amount Purchased: 500
Price Per Share: $21.00
Purchase Date: 4-3-95
3. Name of Issuer: PMI Group, Inc.
Securities Acquired from: Goldman, Sachs & Co.
Syndicate Members: See attached list
Principal Amount in Offering: 21,500,000
Principal Amount Purchased: 2,200
Price Per Share: $34.00
Purchase Date: 4-10-95
4. Name of Issuer: Repsol S.A. ADR
Securities Acquired from: Goldman, Sachs & Co.
Syndicate Members: See attached list
Principal Amount in Offering: 8,500,000
Principal Amount Purchased: 2,000
Price Per Share: $28.83
Purchase Date: 4-11-95
5. Name of Issuer:
Securities Acquired from:
Syndicate Members:
Principal Amount in Offering:
Principal Amount Purchased:
Price Per Share:
Purchase Date:
<PAGE> 2
NABISCO HOLDINGS CORP.
Goldman, Sachs & Co. ............................................
Bear, Stearns & Co. Inc. ........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
Morgan Stanley & Co. Incorporated................................
Advest, Inc. ....................................................
Sanford C. Bernstein & Co., Inc. ................................
CS First Boston Corporation......................................
Cleary Gull Reiland & McDevitt Inc. .............................
Dain Bosworth Incorporated ......................................
Dean Witter Reynolds Inc. .......................................
Dillon, Read & Co. Inc. .........................................
Doft & Co., Inc. ................................................
Donaldson, Lufkin & Jenrette Securities Corporation..............
A. G. Edwards & Sons, Inc. ......................................
Interstate/Johnson Lane Corporation..............................
Janney Montgomery Scott Inc. ....................................
Johnston, Lemon & Co. Incorporated...............................
Edward 0. Jones & Co. ...........................................
Kemper Securities, Inc. .........................................
C.J. Lawrence/Deutsche Bank Securities Corporation...............
Lazard Freres & Co. .............................................
Lehman Brothers Inc. ............................................
McDonald & Company Securities, Inc. .............................
J.P. Morgan Securities Inc. .....................................
Oppenheimer & Co., Inc. .........................................
PaineWebber Incorporated.........................................
Prudential Securities Incorporated...............................
Pryor, McClendon, Counts & Co., Inc. ............................
Rauscher Pierce Refsnes, Inc. ...................................
The Robinson-Humphrey Company, Inc. .............................
Salomon Brothers Inc ............................................
Smith Barney Inc ................................................
Sutro & Co. Incorporated.........................................
Tucker Anthony Incorporated......................................
Wasserstein Perella Securities, Inc. ............................
Wertheim Schroder & Co. Incorporated.............................
Wheat, First Securities, Inc. ...................................
<PAGE> 3
AMERI SOURCE
U.S. UNDERWRITERS
Donaldson, Lufkin & Jenrette Securities Corporation .......................
Smith Barney Inc. .........................................................
BT Securities Corporation .................................................
Dean Witter Reynolds Inc. .................................................
Dillon, Read & Co. Inc. ...................................................
A.G. Edwards & Sons, Inc. .................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated ........................
Montgomery Securities .....................................................
Morgan Stanley & Co. Incorporated .........................................
Oppenheimer & Co., Inc. ...................................................
PaineWebber Incorporated ..................................................
Wheat First Butcher Singer ................................................
Advest, Inc. ..............................................................
Arnhold and S. Bleichroeder, Inc. .........................................
William Blair & Company....................................................
Cleary Gull Reiland & McDevitt Inc. .......................................
Cowen & Company ...........................................................
Crowell, Weedon & Co. .....................................................
Fahnestock & Co. Inc. .....................................................
First of Michigan Corporation .............................................
Furman Selz Incorporated...................................................
J.J. B. Hilliard, W.T. Lyons, Inc. ........................................
Interstate/Johnson Lane Corporation .......................................
Janney Montgomery Scott Inc. ..............................................
Johnston, Lemon & Co. Incorporated ........................................
Ladenburg, Thalmann & Co. Inc. ............................................
C.J. Lawrence/Deutsche Bank Securities Corporation ........................
McDonald & Company Securities, Inc. .......................................
The Ohio Company ..........................................................
Parker/Hunter Incorporated ................................................
Pennsylvania Merchant Group Ltd. ..........................................
Ragen MacKenzie Incorporated ..............................................
Raymond James & Associates, Inc. ..........................................
The Robinson-Humphrey Company, Inc. .......................................
Roney & Co. ...............................................................
Scott & Stringfellow, Inc. ................................................
Stephens Inc. .............................................................
Sutro & Co. Incorporated ..................................................
Tucker Anthony Incorporated ...............................................
Dabney/Resnick, Inc. ......................................................
Ferris, Baker Watts, Incorporated .........................................
Freimark Blair & Company Inc. .............................................
C.L. King & Associates, Inc. ..............................................
Monness Crespi Hardt & Co. Inc. ...........................................
Pryor, McClendon, Counts & Co., Inc. ......................................
INTERNATIONAL UNDERWRITERS
Donaldson, Lufkin & Jenrett Securities Corporation ........................
Smith Barney Inc. .........................................................
Bankers Trust Interantional PLC ...........................................
Cazenove & Co. ............................................................
Credit Lyonnais Securities ................................................
Deutsche Bank Aktiengesellschaft ..........................................
Internatioanale Nederlanden Bank N.V. .....................................
Kleinwort Benson Limited ..................................................
Paribas Capital Markets ...................................................
Societe Generale ..........................................................
<PAGE> 4
PMI GROUP, INC.
Goldman, Sachs & Co. .........................................................
Dean Witter Reynolds Inc. ...................................................
Morgan Stanley & Co. Incorporated ...........................................
Salomon Brothers Inc. .......................................................
Robert W. Baird & Co. Incorporated ..........................................
Bear, Stearns & Co. Inc. ....................................................
Sanford C. Bernstein & Co., Inc. ............................................
J.C. Bradford & Co. .........................................................
Alex. Brown & Sons Incorporated .............................................
The Chicago Corporation .....................................................
Cleary Gull Reiland & McDevitt Inc. .........................................
Conning & Company ...........................................................
CS First Boston Corporation .................................................
Donaldson, Lufkin & Jenrette Securities Corporation .........................
Fox-Pitt, Kelton Inc. .......................................................
Johnston, Lemon & Co. Incorporated ..........................................
Lehman Brothers Inc. ........................................................
Luther, Smith & Small, Inc. .................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated ..........................
Montgomery Securities .......................................................
Neuberger & Berman ..........................................................
Northington Capital Markets, Inc. ...........................................
Oppenheimer & Co., Inc. .....................................................
PaineWebber Incorporated ....................................................
Prudential Securities Incorporated ..........................................
Pryor, McClendon, Counts & Co., Inc. ........................................
Samuel A. Ramirez & Co., Inc. ...............................................
Muriel Siebert & Co., Inc. ..................................................
Smith Barney Inc. ...........................................................
Stifel, Nicolaus & Company, Incorporated ....................................
Wasserstein Perella Securities, Inc. ........................................
<PAGE> 5
REPSOL S.A. ADR
Goldman, Sachs & Co. .........................................................
CS First Boston Corporation .................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated ..........................
Morgan Stanley & Co. Incorporated ...........................................
Howard, Weil, Labouisse, Friedrichs Incorporated ............................
Bear, Stearns & Co. Inc. ....................................................
Donaldson, Lufkin & Jenrette Securities Corporation .........................
Kleinwort Benson North America Inc. .........................................
C.J. Lawrence/Deutsche Bank Securities Corporation ..........................
Lehman Brothers Inc. ........................................................
McDonald & Company Securities, Inc. .........................................
J.P. Morgan Securities Inc. .................................................
NatWest Securities Limited ..................................................
PaineWebber Incorporated ....................................................
Rauscher Pierce Refsnes, Inc. ...............................................
Smith Barney Inc. ...........................................................
S.G. Warburg & Co. Inc. .....................................................
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994 by and between COMMON SENSE
TRUST, a Massachusetts business trust, hereinafter referred to as the "TRUST,"
and American Capital Asset Management, Inc., a Delaware corporation,
hereinafter referred to as the "Adviser."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
a. The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST's Common Sense II Government Fund (the "Fund") for the period and on the
terms set forth in this Agreement. The ADVISER accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
b. In the event that the TRUST establishes one or more funds with respect to
which it desires to retain the ADVISER to act as investment adviser hereunder,
it shall notify the ADVISER in writing. If the ADVISER is willing to render
such services it shall notify the TRUST in writing whereupon such fund shall
become a fund hereunder and the compensation payable by such new fund to the
ADVISER will be as agreed in writing at that time.
(2.) Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectuses and the stated investment
objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the TRUST's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the Fund, and formulation and implementation of investment
programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of the Fund of the TRUST with brokers or
dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the TRUST including, by way
of illustration, the preparation of registration statements, prospectuses,
reports, proxy solicitation materials and amendments thereto, the furnishing of
legal services except for services provided by outside counsel to the TRUST
selected by the Trustees, and the supervision of the TRUST's Treasurer and the
<PAGE> 2
personnel working under his direction; and
d. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and the Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization by
the TRUST's Trustees of appropriate policies and procedures, the ADVISER may,
to the extent authorized by law, cause the TRUST to pay a broker or dealer that
provides brokerage and research services to the ADVISER an amount of commission
for effecting a fund investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction. In the event of such authorization and to the extent authorized by
law the ADVISER shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of fund investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office
space, facilities, and equipment used by the Treasurer and such personnel in
the performance of their normal duties for the TRUST which consist of
maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
qualifying the TRUST and its shares for distribution under state
2
<PAGE> 3
and federal securities laws; (x) expenses of printing and mailing of
registration statements, prospectuses, reports, notices and proxy solicitation
materials of the TRUST; (xi) all other expenses incidental to holding meetings
of the TRUST's shareholders including proxy solicitations therefor; (xii)
expenses for servicing shareholder accounts; (xiii) insurance premiums for
fidelity coverage and errors and omissions insurance; (xiv) dues for the
TRUST's membership in trade associations approved by the Trustees; and (xv)
such non-recurring expenses as may arise, including those associated with
actions, suits, or proceedings to which the TRUST is a party and the legal
obligation which the TRUST may have to indemnify its officers and trustees with
respect thereto. To the extent that any of the foregoing expenses are allocated
between the TRUST and any other party, such allocations shall be pursuant to
methods approved by the Trustees.
(3.) Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the TRUST are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ("1940 Act")
any of the shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common control
with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(4.) Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, with respect to the
Fund, a monthly fee calculated at the following annual rates:
.60% of the first $1 billion of average daily net assets; .55% of the next $1
billion of average daily net assets; .50% of the next $1 billion of average
daily net assets; .45% of the next $1 billion of average daily net assets; .40%
of the next $1 billion of average daily net assets; and .35% of average daily
net assets in excess of $5 billion.
3
<PAGE> 4
Average daily net assets of the Fund shall be determined by taking the average
of the net assets for each business day during a given calendar month, made in
the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of American Capital Management & Research, Inc., or
its successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of American Capital Management & Research, Inc., or its
successor, to receive in connection with the Fund's transactions or other
arrangements which may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability asserted against
the TRUST and the Fund, provided that, if the ADVISER made the decision or took
the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; (v) any indemnification paid by the TRUST to its
officers and trustees and the ADVISER in accordance with applicable state and
federal laws as a result of such litigation; and (vi) amounts paid to Common
Sense Distributors, the distributor of the Trust's shares, in connection with a
distribution plan adopted by the Trust's Trustees pursuant to Rule 12b-1 under
the Act.
4
<PAGE> 5
If the ADVISER shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
(5.) Books and Records
In compliance with the requirements of the 1940 Act, the ADVISER hereby agrees
that, to the extent required by law, all records which it maintains for the
TRUST are the property of the TRUST and further agrees to surrender promptly to
the TRUST any of such records upon the TRUST's request. The ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the Act.
(6.) Duration and Termination
This Agreement will become effective with respect to the Fund on the date
hereof, and with respect to any additional funds, on the date of receipt by the
TRUST of notice from the ADVISER in accordance with Section 1(b) hereof that
the ADVISER is willing to serve as investment adviser with respect to such
fund, provided that this Agreement (as supplemented by the terms specified in
any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Fund subject to this Agreement, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each, provided
such continuance is specifically approved at least annually, (a) by the vote of
a majority of those members of the TRUST's Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the TRUST's Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, by the TRUST (by vote of the
TRUST's Trustees or by vote of a majority of the outstanding voting securities
of the Fund), or by the ADVISER, on sixty days' written notice. This Agreement
will immediately terminate in the event of its assignment.
(7.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement shall be effective as to the Fund until approved by
vote of a majority of the outstanding voting securities of the Fund if such
vote is required by the 1940 Act.
5
<PAGE> 6
(8.) Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person",
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the 1940 Act and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the TRUST by the Securities and
Exchange Commission, or such interpretive positions as may be taken by the
Commission or its staff, under said Act, and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated January 29,
1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ CURTIS W. MORELL
--------------------------------------
Name: Curtis W. Morell
-----------------------------------
Its: Vice President
-----------------------------------
AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ NORI L. GABERT
--------------------------------------
Name: Nori L. Gabert
------------------------------------
Its: Vice President
------------------------------------
6
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 19th day of December, 1994 by and between COMMON SENSE
TRUST, a Massachusetts business trust, hereinafter referred to as the "TRUST,"
and SMITH BARNEY STRATEGY ADVISERS INC., hereinafter referred to as the
"ADVISER", a Delaware corporation.
The TRUST and the ADVISER agree as follows:
1. Appointment
The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST's Common Sense II Aggressive Opportunity Fund (the "Fund") for the period
and on the terms set forth in this Agreement. The ADVISER accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectuses and the stated investment
objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the FUND's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the Fund, and formulation and implementation of investment
programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of the Fund of the TRUST with brokers or
dealers selected by the ADVISER; and
c. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a. and b. above and
pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and the Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization
by the TRUST's Trustees of appropriate policies and procedures, the ADVISER
may, to the extent authorized by law, cause the TRUST to pay a broker or dealer
that provides brokerage and research services to the ADVISER
<PAGE> 2
an amount of commission for effecting a fund investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction. In the event of such authorization and to the
extent authorized by law the ADVISER shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of fund investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office
space, facilities, and equipment used by the Treasurer and such personnel in
the performance of their normal duties for the TRUST which consist of
maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
qualifying the TRUST and its shares for distribution under state and federal
securities laws; (x) expenses of printing and mailing of registration
statements, prospectuses, reports, notices and proxy solicitation materials of
the TRUST; (xi) all other expenses incidental to holding meetings of the
TRUST's shareholders including proxy solicitations therefor; (xii) expenses for
servicing shareholder accounts; (xiii) insurance premiums for fidelity coverage
and errors and omissions insurance; (xiv) dues for the TRUST's membership in
trade associations approved by the Trustees; and (xv) such non-recurring
expenses as may arise, including those associated with actions, suits, or
proceedings to which the TRUST is a party and the legal obligation which the
TRUST may have to indemnify its officers and trustees with respect thereto. To
the extent that any of the foregoing expenses are allocated between the TRUST
and any other party, such allocations shall be pursuant to methods approved by
the Trustees.
2
<PAGE> 3
3. Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the TRUST are not impaired.
Except as otherwise required by the Investment Company Act of 1940 ("1940 Act")
any of the shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common control
with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
4. Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, with respect to the
Fund, a monthly fee calculated at the annual rate of 1.00% of the Fund's
average daily net assets.
Average daily net assets of the Fund shall be determined by taking the average
of the net assets for each business day during a given calendar month, made in
the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of The Travelers Inc., in connection with the
purchase and sale of assets of the TRUST, less any direct expenses incurred by
such person, in connection with obtaining such commissions, fees, brokerage or
similar payments. The ADVISER shall use its best efforts to recapture all
available tender offer solicitation fees and exchange offer fees in connection
with the Fund's transactions and shall advise the Trustees of any other
commissions, fees, brokerage or similar payments which may be possible for the
ADVISER or any other direct or indirect majority owned subsidiary of The
Travelers Inc. to receive in connection with the Fund's transactions or other
arrangements which may benefit the TRUST.
3
<PAGE> 4
In the event that the ordinary business expenses of the Fund, for any fiscal
year should exceed the most restrictive expense limitation applicable in the
states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability asserted against
the TRUST and the Fund, provided that, if the ADVISER made the decision or took
the actions which resulted in such claim, it acted in good faith without
negligence or misconduct; (v) any indemnification paid by the TRUST to its
officers and trustees and the ADVISER in accordance with applicable state and
federal laws as a result of such litigation; and (vi) amounts paid to Common
Sense Distributors, the distributor of the Trust's shares, in connection with a
distribution plan adopted by the Trust's Trustees pursuant to Rule 12b-1 under
the Act.
If the ADVISER shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
5. Books and Records
In compliance with the requirements of the 1940 Act, the ADVISER hereby agrees
that, to the extent required by law, all records which it maintains for the
TRUST are the property of the TRUST and further agrees to surrender promptly to
the TRUST any of such records upon the TRUST's request. The ADVISER further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the Act.
6. Duration and Termination
This Agreement will become effective on the date hereof and shall continue
until the earlier of June 30, 1995 or such time as the Fund is no longer a
portfolio of the TRUST; provided, however, that the TRUST and the ADVISER may
mutually agree to a 90 day extension of the term of this Agreement. This
Agreement will immediately terminate in the event of its assignment.
4
<PAGE> 5
7. Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment of this Agreement shall be effective as to the Fund until approved by
vote of a majority of the outstanding voting securities of the Fund if such
vote is required by the 1940 Act.
8. Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person,"
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the 1940 Act and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the TRUST by the Securities and
Exchange Commission, or such interpretive positions as may be taken by the
Commission or its staff, under said Act, and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated January 29,
1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
5
<PAGE> 6
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ NORI L. GABERT
------------------------
Name: Nori L. Gabert
------------------------
Its: Vice President
------------------------
SMITH BARNEY STRATEGY ADVISERS INC., a Delaware corporation
By: /s/ STEVEN TREADWAY
------------------------
Name: Steven Treadway
------------------------
Its: Director
------------------------
6
<PAGE> 1
ADMINISTRATION AGREEMENT
December 19, 1994
American Capital Asset Management, Inc.
2800 Post Oak Boulevard
Houston, Texas 77056
Dear Sirs:
The Common Sense Trust (the "Trust") on behalf of the Common
Sense II Aggressive Opportunity Fund (the "Fund") and Smith Barney Strategy
Advisers Inc. ("Strategy Advisers") confirm their agreement with American
Capital Asset Management, Inc. ("ACAM") as follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in its
Declaration of Trust dated January 29, 1987, as amended from time to time (the
"Declaration of Trust"), in its Prospectus and Statement of Additional
Information as from time to time in effect, and in such manner and to such
extent as may from time to time be approved by the Trustees of the Fund (the
"Trustees"). Copies of the Fund's Prospectus, Statement of Additional
Information and Declaration of Trust have been or will be submitted to ACAM.
Strategy Advisers serves as the Fund's investment adviser; and the Fund and
Strategy Advisers desire to employ and hereby appoint ACAM to act as the Fund's
administrator. ACAM accepts this appointment and agrees to furnish the
services to the Fund for the compensation set forth below.
2. Services as Administrator
Subject to the supervision and direction of the Trustees, ACAM will
(a) assist in supervising all aspects of the Fund's operations except those
performed by the Fund's investment adviser, distributor, or transfer agent
under the contracts governing those relationships; (b) supply the Fund with
office facilities (which may be in ACAM's own offices), data processing
services, clerical, accounting and bookkeeping services, including, but not
limited to, the calculation of (i) the net asset value of shares of the Fund,
(ii) applicable contingent deferred sales charges and similar fees and charges
and (iii) distribution fees, internal auditing and legal services, internal
executive and administrative services, and stationary and office supplies; and
(c) prepare reports to shareholders of the Fund, tax returns and reports to and
filings with the Securities and Exchange Commission and state blue sky
authorities. Notwithstanding the foregoing, ACAM will not provide any services
hereunder to the Fund or Strategy Advisers that would constitute it as a
investment adviser to the Fund or Strategy Advisers.
3. Compensation
In consideration of services rendered pursuant to this Agreement,
Strategy Advisers will pay ACAM on the first business day of each month a fee
for the previous month at an annual rate of .05%
<PAGE> 2
of the Fund's average daily net assets. The fee for the period from
the date of this Agreement to the end of the first monthly period shall be
prorated according to the proportion that such period bears to the full monthly
period. Upon any termination of this Agreement before the end of any month,
the fee for such part of a month shall be prorated according to the proportion
which such period bears to the full monthly period and shall be payable upon
the date of termination of this Agreement. For the purpose of determining fees
payable to ACAM, the value of the Fund's net assets shall be computed at the
times and in the manner specified in the Fund's Prospectus and Statement of
Additional Information as from time to time in effect.
4. Expenses
ACAM will bear all expenses in connection with the performance of its
services under this Agreement. The Fund will bear certain other expenses to be
incurred in its operation, including: taxes, interest, brokerage fees and
commissions, if any; fees of Trustees of the Fund who are not officers,
directors or employees of Strategy Advisers, ACAM or their affiliates or any
person who is an affiliate of any person to whom duties may be delegated
hereunder; Securities and Exchange Commission fees and state blue sky
qualification fees; advisory fees payable to Strategy Advisers or any other
investment adviser or subadviser to the Fund, charges of custodians and
transfer and dividend disbursing agents; the Fund's or Trustees' proportionate
share of insurance premiums and professional association dues and assessments;
outside auditing and legal expenses; costs of maintenance of the Fund's
existence; costs attributable to investor services, including, without
limitation, telephone and personnel expenses; costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders; costs of shareholders' reports
and meetings of the officers or Trustees and any extraordinary expenses. In
addition, the Fund will pay all distribution fees pursuant to a Distribution
Plan adopted under Rule 12b-1 of the Investment Company Act of 1940.
5. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund (including
fees pursuant to this Agreement and the Fund's investment advisory agreement,
but excluding distribution fees, interest, taxes, brokerage and, if permitted
by state securities commissions, extraordinary expenses) exceed the expense
limitations of any state having jurisdiction over the Fund, ACAM will reimburse
Strategy Advisers, should Strategy Advisers reimburse the Fund, for a portion
of that excess expense to the extent required by state law in an amount equal
to the same proportion as its respective fees bear to the combined fees payable
to Strategy Advisors under its advisory agreement with the Fund and this
agreement. The expense reimbursement obligation of ACAM will be limited to the
amount of its fees hereunder. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
6. Standard of Care
ACAM shall exercise its best judgment in rendering the services listed
in paragraph 2 above. ACAM shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, provided that nothing herein shall be
deemed to protect or purport to protect ACAM against liability to the Fund or
to its shareholders to which ACAM would otherwise be subject by reason of
willful misfeasance, bad faith or negligence on
2
<PAGE> 3
its part in the performance of its duties or by reason of ACAM's reckless
disregard of its obligations and duties under this Agreement.
7. Term of Agreement
This agreement shall continue until the earlier of June 30, 1995, or
such time as the Fund is no longer a portfolio of the Trust; provided, however,
that Strategy Advisers may extend the term of this Agreement for two successive
periods of 90 days each, with each such extension causing an increase in the
fee rate payable hereunder by Strategy Advisers to ACAM immediately preceding
such extension by 10%.
8. Service to Other Companies or Accounts
Strategy Advisers and the Fund understand that ACAM now acts, will
continue to act and may act in the future as administrator to one or more other
investment companies, and Strategy Advisers and the Fund have no objection to
ACAM so acting. In addition, Strategy Advisers and the Fund understand that
the persons employed by ACAM or its affiliates to assist in the performance of
its duties hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict the right of ACAM
or its affiliates to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
9. Limitation of Liability
Strategy Advisers, the Fund and ACAM agree that the obligations of the
Fund under this Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Fund individually, but are binding only upon the assets and
property of the Fund, as provided in the Declaration of Trust. The execution
and delivery of this Agreement has been duly authorized by Strategy Advisers,
the Fund and ACAM, and signed by an authorized officer of each, acting as such.
Neither the authorization by the Trustees of the Fund, nor the execution and
delivery by the officer of the Fund 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 Fund as provided in the
Declaration of Trust.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and returning to us the enclosed
copy hereof.
3
<PAGE> 4
Very truly yours,
Common Sense II Aggressive
Opportunity Fund
By: /s/ NORI L. GABERT
----------------------------------
Title: Vice President
Smith Barney Strategy Advisers Inc.
By: /s/ STEVEN TREADWAY
----------------------------------
Title: Director
Accepted:
American Capital Asset Management, Inc.
By: /s/ NORI L. GABERT
-----------------------------------
Title: Vice President
4
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 21st day of February, 1995 by and between COMMON
SENSE TRUST, a Massachusetts business trust, hereinafter referred to as the
"TRUST," and Van Kampen American Capital Asset Management, Inc., a Delaware
corporation, hereinafter referred to as "the ADVISER."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
The TRUST hereby appoints the ADVISER to act as investment adviser to
the TRUST's Common Sense II International Equity Fund (the "Fund") for the
period and on the terms set forth in this Agreement. The ADVISER accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
(2.) Subadvisers
It is understood that the ADVISER, subject to the prior approval of
the TRUST'S Trustees, may and intends to employ or associate itself with such
person or persons as the ADVISER may believe to be particularly fitted to
assist it in the performance of this Agreement, provided, however, that the
compensation of such person or persons shall be paid by the ADVISER. Without
limiting the generality of the foregoing, the Trust hereby agrees that the
ADVISER enter into an agreement with Smith Barney Mutual Funds Management Inc.
(the "Subadviser") pursuant to which the Subadviser is authorized, in its sole
discretion and without prior consultation with the ADVISER to provide to the
Fund the investment advisory services specified therein and that so long as
such agreement remains in effect the ADVISER shall have no obligation hereunder
to render to the Fund the services specified therein.
(3.) Services Rendered and Expenses Paid by the ADVISER
The ADVISER, subject to the control, direction and supervision of the
TRUST's Trustees and in conformity with applicable laws, the TRUST's
Declaration of Trust, Bylaws, registration statement, prospectuses and the
stated investment objectives, policies and restrictions of the Fund, shall:
a. subject to the provisions of the Subadvisory
Agreement (hereinafter defined), the ADVISER will manage the investment and
reinvestment of the TRUST's assets;
b. conduct and manage the day-to-day operations of the
TRUST including, by way of illustration, the preparation of registration
statements, prospectuses, reports, proxy solicitation materials and amendments
thereto, the furnishing of legal services except for services provided by
outside counsel to the TRUST selected by the Trustees, and the supervision of
the TRUST's Treasurer and the personnel working under his direction; and
c. furnish to the TRUST office space, facilities,
equipment and personnel adequate to provide the services described in
paragraphs a., b., and c. above and pay the compensation of each TRUST trustee
and TRUST officer who is an affiliated person of the ADVISER, except the
compensation of the TRUST's Treasurer and related expenses as provided below.
1
<PAGE> 2
Except as otherwise agreed, or as otherwise provided herein, the TRUST
shall pay, or arrange for others to pay, all its expenses other than those
expressly stated to be payable by the ADVISER hereunder, which expenses payable
by the TRUST shall include (i) interest and taxes; (ii) brokerage commissions
and other costs in connection with the purchase and sale of fund investments;
(iii) compensation of its trustees and officers other than those who are
affiliated persons of the ADVISER or the Subadviser; (iv) compensation of its
Treasurer, compensation of personnel working under the Treasurer's direction,
and expenses of office space, facilities, and equipment used by the Treasurer
and such personnel in the performance of their normal duties for the TRUST
which consist of maintenance of the accounts, books and other documents which
constitute the record forming the basis for the TRUST's financial statements,
preparation of such financial statements and other TRUST documents and reports
of a financial nature required by federal and state laws, and participation in
the production of the TRUST's registration statement, prospectuses, proxy
solicitation materials and reports to shareholders; (v) fees of outside counsel
to and of independent accountants of the TRUST selected by the Trustees; (vi)
custodian, registrar and shareholder service agent fees and expenses; (vii)
expenses related to the repurchase or redemption of its shares including
expenses related to a program of periodic repurchases or redemptions; (viii)
expenses related to the issuance of its shares against payment therefor by or
on behalf of the subscribers thereto; (ix) fees and related expenses of
registering and qualifying the TRUST and its shares for distribution under
state and federal securities laws; (x) expenses of printing and mailing of
registration statements, prospectuses, reports, notices and proxy solicitation
materials of the TRUST; (xi) all other expenses incidental to holding meetings
of the TRUST's shareholders including proxy solicitations therefor; (xii)
expenses for servicing shareholder accounts; (xiii) insurance premiums for
fidelity coverage and errors and omissions insurance; (xiv) dues for the
TRUST's membership in trade associations approved by the Trustees; and (xv)
such non-recurring expenses as may arise, including those associated with
actions, suits, or proceedings to which the TRUST is a party and the legal
obligation which the TRUST may have to indemnify its officers and trustees with
respect thereto. To the extent that any of the foregoing expenses are allocated
between the TRUST and any other party, such allocations shall be pursuant to
methods approved by the Trustees.
(4.) Restriction on the ADVISER's Powers
Neither the ADVISER nor the Subadviser shall commit the Fund to any
extent beyond the amount of the cash and securities placed by the Fund under
the control of the ADVISER.
In carrying out its duties hereunder the ADVISER shall comply with all
reasonable instructions of the Fund in connection therewith. Such instructions
may be given by the Trustees or by any other person authorized by a resolution
of the Trustees provided a certified copy of such resolution has been supplied
to the ADVISER.
All securities, cash, and other assets of the Fund shall be placed and
maintained in the care of a member bank of the Federal Reserve System of the
United States approved by the Trustees as custodian and one or more "Eligible
Foreign Custodians" (as defined in Rule 17f-5 under the 1940 Act) as approved
by the Trustees as sub-custodians.
Persons authorized by resolution of the Trustees shall have the right
to inspect and copy contracts, notes, vouchers, and copies of entries in books
or electronic recording media relating to the Fund's transactions at the
registered office of the ADVISER at any time during normal business hours.
2
<PAGE> 3
(5.) Role of the ADVISER
The ADVISER, and any person controlled by or under common control with
the ADVISER, shall be free to render similar services to others and engage in
other activities, so long as the services rendered to the TRUST are not
impaired.
Except as otherwise required by the Investment Company Act of 1940
("1940 Act") any of the shareholders, trustees, officers and employees of the
TRUST may be a shareholder, director, officer or employee of, or be otherwise
interested in, the ADVISER, and in any person controlled by or under common
control with the ADVISER, and the ADVISER, and any person controlled by or
under common control with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad
faith, negligence, or reckless disregard of obligations or duties hereunder on
the part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(6.) Compensation Payable to the ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services
rendered, facilities furnished and expenses paid by the ADVISER, with respect
to the Fund, a monthly fee computed at 1.00%, per annum, of the Fund's average
daily net assets.
Average daily net assets of the Fund shall be determined by taking the
average of the net assets for each business day during a given calendar month,
made in the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section
6 shall be reduced by any commissions, tender solicitation and other fees,
brokerage or similar payments received by the ADVISER, or any other direct or
indirect majority owned subsidiary of Van Kampen American Capital, Inc., or its
successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of Van Kampen American Capital, Inc., or its successor, to
receive in connection with the Fund's transactions or other arrangements which
may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any
fiscal year should exceed the most restrictive expense limitation applicable in
the states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the
3
<PAGE> 4
investment advisory fee and other operating costs paid by the Fund except for
(i) interest and taxes; (ii) brokerage commissions; (iii) expenses incurred as
a result of litigation in connection with a suit involving a claim for recovery
by the Fund; (iv) as a result of litigation involving a defense against a
liability asserted against the TRUST and the Fund, provided that, if the
ADVISER made the decision or took the actions which resulted in such claim, it
acted in good faith without negligence or misconduct; (v) any indemnification
paid by the TRUST to its officers and trustees and the ADVISER in accordance
with applicable state and federal laws as a result of such litigation; and (vi)
amounts paid to Common Sense Distributors, the distributor of the Trust's
shares, in connection with a distribution plan adopted by the Trust's Trustees
pursuant to Rule 12b-1 under the Act.
If the ADVISER shall serve for less than the whole of any month, the
foregoing compensation shall be prorated.
(7.) Books and Records
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the ADVISER hereby agrees that, to the extent required by law, all records
which it maintains for the TRUST are the property of the TRUST and further
agrees to surrender promptly to the TRUST any of such records upon the TRUST's
request. The ADVISER further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the Act.
(8.) Duration and Termination
This Agreement will become effective with respect to the Fund on the
date hereof, and, unless sooner terminated as provided herein, shall continue
in effect for a period of two years. Thereafter, if not terminated, this
Agreement shall continue in effect for successive periods of twelve months
each, provided such continuance is specifically approved at least annually, (a)
by the vote of a majority of those members of the TRUST's Trustees who are not
interested persons of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the TRUST's
Trustees or by vote of a majority of the outstanding voting securities of the
Fund. Notwithstanding the foregoing, this Agreement may be terminated as to
the Fund at any time, without the payment of any penalty, by the TRUST (by vote
of the TRUST's Trustees or by vote of a majority of the outstanding voting
securities of the Fund), or by the ADVISER, on sixty days' written notice. This
Agreement will immediately terminate in the event of its assignment.
This Agreement shall terminate forthwith by notice in writing on the
happening of any of the following events:
a. if the TRUST or the ADVISER shall go into liquidation
(except a voluntary liquidation for the purpose of and followed by a bona fide
reconstruction or amalgamation upon terms previously approved in writing by the
party not in liquidation) or if a receiver or receiver and manager of any of
the assets of any of them is appointed; or
b. if either of the parties hereto shall commit any
breach of the provisions hereof and shall not have remedied such breach within
30 days after the service of notice by the party not in breach on the other
requiring the same to be remedied.
4
<PAGE> 5
Termination shall be without prejudice to the completion of any
transactions which the ADVISER shall have committed to on behalf of the Fund
prior to the time of termination. The ADVISER shall not effect and the Fund
shall not be entitled to instruct the ADVISER to effect any further
transactions on behalf of the Fund subsequent to the time termination takes
effect.
On the termination of this Agreement and completion of all matters
referred to in the foregoing paragraph, the ADVISER shall deliver or cause to
be delivered to the TRUST all documents, records, books and any other
properties which are in its possession, power or control and which are valid
and in force at the date of termination.
(9.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. No amendment of this Agreement shall be effective as to the Fund until
approved by vote of a majority of the outstanding voting securities of the Fund
if such vote is required by the 1940 Act.
(10.) Miscellaneous Provisions
(a) Definitions
For the purposes of this Agreement, the terms "affiliated person",
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the 1940 Act and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the TRUST by the Securities and
Exchange Commission, or such interpretive positions as may be taken by the
Commission or its staff, under said Act, and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the Rules and Regulations thereunder.
(c) Choice of Law
This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State
of Texas.
(d) Other Provisions
The Declaration of Trust establishing Common Sense Trust, dated
January 29, 1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
TRUSTEES under the Declaration collectively as TRUSTEES, but not as individuals
or personally; and no TRUSTEE, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the TRUST Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a TRUST by TRUST basis and the assets of one TRUST shall not be liable for
the obligations of any other TRUST.
5
<PAGE> 6
The parties hereto each have caused this Agreement to be signed in
duplicate on its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ NORI L. GABERT
-------------------------------------
Nori L. Gabert
VAN KAMPEN AMERICAN CAPITAL ASSET
MANAGEMENT, INC.
By: /s/ NORI L. GABERT
-------------------------------------
Nori L. Gabert
6
<PAGE> 1
SUBADVISORY AGREEMENT
COMMON SENSE TRUST
(COMMON SENSE II INTERNATIONAL EQUITY FUND)
February 21, 1995
Smith Barney Mutual Funds Management Inc.
1345 Avenue of the Americas, 22nd Floor
New York, New York 10105
Dear Sirs:
Common Sense Trust (the "Trust"), a corporation organized under the
laws of the Commonwealth of Massachusetts, on behalf of the Common Sense II
International Equity Fund (the "Fund") and Van Kampen American Capital Asset
Management, Inc. (the "Adviser"), each confirms its agreement with Smith Barney
Mutual Funds Management Inc. (the "Sub-Adviser"), as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Trust desires to employ its capital relating to the Fund by
investing and reinvesting in investments of the kind and in accordance with the
investment objective(s), policies and limitations specified in the prospectus
(the "Prospectus") and the statement of additional information (the
"Statement") filed with the Securities and Exchange Commission as part of the
Trust's Registration Statement on Form N-1A, as amended or supplemented from
time to time, and in the manner and to the extent as may from time to time be
approved by the Trustees of the Trust (the "Board"). Copies of the Prospectus
and the Statement have been or will be submitted to the Sub-Adviser. The Trust
agrees promptly to provide copies of all amendments and supplements to the
current Prospectus and the Statement to the Sub-Adviser on an on-going basis.
Until the Trust delivers any such amendment or supplement to the Sub-Adviser,
the Sub-Adviser shall be fully protected in relying on the Prospectus and
Statement of Additional Information as previously furnished to the Sub-Adviser.
The Trust employs the Adviser as the advisor to the Fund pursuant to an
advisory agreement dated February 21, 1995 (the "Advisory Agreement") and
the Trust and the Adviser desire to employ and hereby appoint the Sub-Adviser
to act as the investment sub-adviser to the Fund. The Sub-Adviser accepts the
appointment and agrees to furnish the services for the compensation set forth
below.
2. SERVICES AS SUB-ADVISER
Subject to the supervision, direction and approval of the Trustees of
the Trust and the Adviser, the Sub-Adviser shall conduct a continual program
of investment, evaluation and, if appropriate in the view of the Sub-Adviser,
sale and reinvestment of the Fund's assets. The Sub-Adviser is authorized, in
its sole discretion and without prior consultation with the Adviser, to: (a)
manage the Fund's assets in accordance with the Fund's investment objective(s)
and policies as stated in the Prospectus and the Statement; (b) make investment
decisions for the Fund; (c) place purchase and sale orders for portfolio
<PAGE> 2
transactions on behalf of the Fund; and (d) employ professional portfolio
managers and securities analysts who provide research services to the Fund.
In addition, (i) the Sub-Adviser shall furnish the Adviser daily
information concerning portfolio transactions and quarterly and annual reports
concerning transactions and performance of the Fund in such form as may be
mutually agreed upon, and the Sub-Adviser agrees to review the Fund and discuss
the management of it with the Adviser and the Board of Directors of the Trust.
(ii) Unless the Adviser gives the Sub-Adviser written instructions to
the contrary, the Sub-Adviser shall use its good faith judgment in a manner
which it reasonably believes best serves the interests of the Fund's
shareholders to vote or abstain from voting all proxies solicited by or with
respect to the issuers of securities in which assets of the Fund may be
invested.
(iii) The Sub-Adviser shall maintain and preserve such records related
to the Fund's transactions as required under the Investment Company Act of
1940, as amended (the "1940 Act"). The Adviser shall maintain and preserve all
books and other records not related to the Fund's transactions as required
under the 1940 Act. The Sub-Adviser shall timely furnish to the Adviser all
information relating to the Sub-Adviser's services hereunder reasonably
requested by the Adviser to keep and preserve the books and records of the
Fund. The Sub-Adviser agrees that all records which it maintains for the Fund
are the property of the Trust and the Sub-Adviser will surrender promptly to
the Trust copies of any such records.
(iv) The Sub-Adviser shall maintain compliance procedures for the
Fund that it reasonably believes are adequate to ensure the Fund's compliance
with (A) the 1940 Act and the rules and regulations promulgated thereunder and
(B) the Fund's investment objective(s) and policies as stated in the Prospectus
and Statement. The Sub-Adviser shall maintain compliance procedures that it
reasonably believes are adequate to ensure its compliance with the Investment
Advisers Act of 1940.
(v) The Sub-Adviser has adopted a written code of ethics that it
reasonably believes complies with the requirements of Rule 17j-1 under the 1940
Act, which it will provide to the Trust. The Sub-Adviser has policies and
procedures regarding the detection and prevention and the misuse of material,
nonpublic information by the Sub-Adviser and its employees as required by the
Insider Trading and Securities Fraud Enforcement Act of 1988.
3. BROKERAGE
In selecting brokers or dealers (including, if permitted by applicable
law, Smith Barney Inc. or any other broker or dealer affiliated with the
Adviser of the Sub-Adviser) to execute transactions on behalf of the Fund, the
Sub-Adviser will seek the best overall terms available. In assessing the best
overall terms available for any transaction, the Sub-Adviser will consider
factors it deems relevant, including, but not limited to, 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
selecting brokers or dealers to execute a particular transaction, and in
evaluating the best overall terms available, the Sub-Adviser is authorized to
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Fund
and/or other accounts over which the Sub-Adviser or its affiliates exercise
investment discretion. Nothing in this paragraph shall be deemed to prohibit
the Sub-Adviser from paying an amount of commission for effecting a securities
transaction in excess of the amount of commission another member of an
exchange, broker, or dealer would have charged for effecting that
2
<PAGE> 3
transaction, if the Sub-Adviser determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such member, broker, or dealer, viewed in terms
of either that particular transaction or its overall responsibilities with
respect to the Fund and/or other accounts over which the Sub-Adviser or its
affiliates exercise investment discretion.
4. INFORMATION PROVIDED TO THE TRUST AND THE ADVISER
The Sub-Adviser shall keep the Trust and the Adviser informed of
developments materially affecting the Fund's holdings, and shall, on its own
initiative, furnish the Trust and the Adviser from time to time with whatever
information the Sub-Adviser believes is appropriate for this purpose.
5. COMPENSATION TO SBM
For its services hereunder the Sub-Adviser shall receive an amount for
each month (or such other valuation period as may be mutually agreed upon)
equivalent, on an annual basis, to 50% of the compensation actually received by
the Adviser pursuant to the investment advisory fee schedule set forth in the
Advisory Agreement taking into account any waiver or return to the Fund of any
or all of such advisory fee by the Adviser (with any such return of fees to be
treated as if not actually received).
6. EXPENSES
The Sub-Adviser shall bear all expenses (excluding brokerage costs,
custodian fees, auditors fees or other expenses to be borne by the Fund or the
Trust) in connection with the performance of its services under the Agreement.
The Fund will bear certain other expenses to be incurred in its operation,
including, but not limited to, investment advisory fees, sub-advisory fees
(other than sub-advisory fees paid pursuant to this Agreement) and
administration fees; fees for necessary professional and brokerage services;
costs relating to local administration of securities; fees for any pricing
service; the costs of regulatory compliance; and pro rata costs associated with
maintaining the Trust's legal existence and shareholder relations. All other
expenses not specifically assumed by the Sub-Adviser hereunder or by the
Adviser under the Advisory Agreement are borne by the Fund or the Trust.
7. STANDARD OF CARE
The Sub-Adviser shall exercise its best judgment and shall act in good
faith in rendering the services listed in paragraphs 2 and 3 above. The
Sub-Adviser shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund or the Adviser in connection with the matters
to which this Agreement relates, provided that nothing in this Agreement shall
be deemed to protect or purport to protect the Sub-Adviser against any
liability to the Adviser, the Trust or to the shareholders of the Fund to which
the Sub-Adviser would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
by reason of the Sub-Adviser's reckless disregard of its obligations and
duties under this Agreement.
8. TERM OF AGREEMENT
This Agreement shall become effective on the date hereof (the
"Effective Date") and shall continue for an initial two-year term and shall
continue thereafter so long as such continuance is specifically approved at
least annually as required by the 1940 Act. This Agreement is terminable,
without penalty, on 60 days' written notice, by the Trustees of the Trust or by
vote of holders of a majority (as defined in the 1940 Act and the rules
thereunder) of the outstanding voting securities of the Fund, or upon 60 days'
written notice, by the Sub-Adviser. This Agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act and
the rules thereunder).
3
<PAGE> 4
9. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Trust understands that the Sub-Adviser now acts, will continue to
act and may act in the future as investment manager or adviser to fiduciary and
other managed accounts, and as investment manager or adviser to other
investment companies, including any offshore entities, or accounts, and the
Trust has no objection to the Sub-Adviser's so acting, provided that whenever
the Fund and one or more other investment companies or accounts managed or
advised by the Sub-Adviser have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with a
formula believed to be equitable to each company and account. The Trust
recognizes that in some cases this procedure may adversely affect the size of
the position obtainable for the Fund. In addition, the Trust understands that
the persons employed by the Sub-Adviser to assist in the performance of the
Sub-Adviser's duties under this Agreement will not devote their full time to
such service and nothing contained in this Agreement shall be deemed to limit
or restrict the right of the Sub-Adviser or any affiliate of the Sub-Adviser to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
10. OTHER PROVISIONS
The Declaration of Trust establishing Common Sense Trust, dated
January 29, 1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
TRUSTEES under the Declaration collectively as TRUSTEES, but not as individuals
or personally; and no TRUSTEE, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the TRUST Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a TRUST by TRUST basis and the assets of one TRUST shall not be liable for
the obligations of any other TRUST.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning the
enclosed copy of this Agreement.
Very truly yours,
COMMON SENSE TRUST
By: /s/ NORI L. GABERT
--------------------------------
Nori L. Gabert
VAN KAMPEN AMERICAN CAPITAL ASSET
MANAGEMENT, INC.
By: /s/ NORI L. GABERT
--------------------------------
Nori L. Gabert
Accepted:
SMITH BARNEY MUTUAL FUNDS MANAGEMENT INC.
By: /s/ CHRISTINA T. SYDOX
-------------------------------------
Christina T. Sydox
4
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 21st day of February, 1995 by and between COMMON
SENSE TRUST, a Massachusetts business trust, hereinafter referred to as the
"TRUST," and Van Kampen American Capital Asset Management, Inc., a Delaware
corporation, hereinafter referred to as the "ADVISER."
The TRUST and the ADVISER agree as follows:
(1.) Appointment
a. The TRUST hereby appoints the ADVISER to act as investment
adviser to the TRUST's Common Sense II Emerging Growth Fund (the "Fund") for
the period and on the terms set forth in this Agreement. The ADVISER accepts
such appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
b. In the event that the TRUST establishes one or more funds with
respect to which it desires to retain the ADVISER to act as investment adviser
hereunder, it shall notify the ADVISER in writing. If the ADVISER is willing to
render such services it shall notify the TRUST in writing whereupon such fund
shall become a fund hereunder and the compensation payable by such new fund to
the ADVISER will be as agreed in writing at that time.
(2.) Services Rendered and Expenses Paid by the ADVISER
The ADVISER, subject to the control, direction and supervision of the
TRUST's Trustees and in conformity with applicable laws, the TRUST's
Declaration of Trust, Bylaws, registration statement, prospectuses and the
stated investment objectives, policies and restrictions of the Fund, shall:
a. manage the investment and reinvestment of the TRUST's
assets including, by way of illustration, the evaluation of pertinent economic,
statistical, financial and other data, determination of the industries and
companies to be represented in the Fund, and formulation and implementation of
investment programs;
b. maintain a trading desk and place all orders for the
purchase and sale of portfolio investments for the account of the Fund of the
TRUST with brokers or dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the
TRUST including, by way of illustration, the preparation of registration
statements, prospectuses, reports, proxy solicitation materials and amendments
thereto, the furnishing of legal services except for services provided by
outside counsel to the TRUST selected by the Trustees, and the supervision of
the TRUST's Treasurer and the personnel working under his direction; and
d. furnish to the TRUST office space, facilities,
equipment and personnel adequate to provide the services described in
paragraphs a., b., and c. above and pay the compensation of each TRUST trustee
and TRUST officer who is an affiliated person of the ADVISER, except the
compensation of the TRUST's Treasurer and related expenses as provided below.
<PAGE> 2
In performing the services described in paragraph b. above, the
ADVISER shall use its best efforts to obtain for the TRUST and the Fund the
most favorable price and execution available and shall maintain records
adequate to demonstrate compliance with this requirement. Subject to prior
authorization by the TRUST's Trustees of appropriate policies and procedures,
the ADVISER may, to the extent authorized by law, cause the TRUST to pay a
broker or dealer that provides brokerage and research services to the ADVISER
an amount of commission for effecting a fund investment transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction. In the event of such authorization and to the
extent authorized by law the ADVISER shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST
shall pay, or arrange for others to pay, all its expenses other than those
expressly stated to be payable by the ADVISER hereunder, which expenses payable
by the TRUST shall include (i) interest and taxes; (ii) brokerage commissions
and other costs in connection with the purchase and sale of fund investments;
(iii) compensation of its trustees and officers other than those who are
affiliated persons of the ADVISER; (iv) compensation of its Treasurer,
compensation of personnel working under the Treasurer's direction, and expenses
of office space, facilities, and equipment used by the Treasurer and such
personnel in the performance of their normal duties for the TRUST which consist
of maintenance of the accounts, books and other documents which constitute the
record forming the basis for the TRUST's financial statements, preparation of
such financial statements and other TRUST documents and reports of a financial
nature required by federal and state laws, and participation in the production
of the TRUST's registration statement, prospectuses, proxy solicitation
materials and reports to shareholders; (v) fees of outside counsel to and of
independent accountants of the TRUST selected by the Trustees; (vi) custodian,
registrar and shareholder service agent fees and expenses; (vii) expenses
related to the repurchase or redemption of its shares including expenses
related to a program of periodic repurchases or redemptions; (viii) expenses
related to the issuance of its shares against payment therefor by or on behalf
of the subscribers thereto; (ix) fees and related expenses of registering and
qualifying the TRUST and its shares for distribution under state and federal
securities laws; (x) expenses of printing and mailing of registration
statements, prospectuses, reports, notices and proxy solicitation materials of
the TRUST; (xi) all other expenses incidental to holding meetings of the
TRUST's shareholders including proxy solicitations therefor; (xii) expenses for
servicing shareholder accounts; (xiii) insurance premiums for fidelity coverage
and errors and omissions insurance; (xiv) dues for the TRUST's membership in
trade associations approved by the Trustees; and (xv) such non-recurring
expenses as may arise, including those associated with actions, suits, or
proceedings to which the TRUST is a party and the legal obligation which the
TRUST may have to indemnify its officers and trustees with respect thereto. To
the extent that any of the foregoing expenses are allocated between the TRUST
and any other party, such allocations shall be pursuant to methods approved by
the Trustees.
(3.) Role of the ADVISER
The ADVISER, and any person controlled by or under common control with
the ADVISER, shall be free to render similar services to others and engage in
other activities, so long as the services rendered to the TRUST are not
impaired.
Except as otherwise required by the Investment Company Act of 1940
("1940 Act") any of the shareholders, trustees, officers and employees of the
TRUST may be a shareholder, director, officer or employee of, or be otherwise
interested in, the ADVISER, and in any person controlled by or under
2
<PAGE> 3
common control with the ADVISER, and the ADVISER, and any person controlled by
or under common control with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad
faith, negligence, or reckless disregard of obligations or duties hereunder on
the part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
(4.) Compensation Payable to the ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services
rendered, facilities furnished and expenses paid by the ADVISER, with respect
to the Fund, a monthly fee calculated at the following annual rates:
0.65% of the first $1 billion of the Fund's average daily net assets;
0.60% of the next $1 billion of the Fund's average daily net assets;
0.55% of the next $1 billion of the Fund's average daily net assets;
0.50% of the next $1 billion of the Fund's average daily net assets; and
0.45% of the Fund's average daily net assets in excess of $4 billion.
Average daily net assets of the Fund shall be determined by taking the
average of the net assets for each business day during a given calendar month,
made in the manner provided in the TRUST's Declaration of Trust.
The fees payable to the ADVISER by the TRUST pursuant to this Section
4 shall be reduced by any commissions, tender solicitation and other fees,
brokerage or similar payments received by the ADVISER, or any other direct or
indirect majority owned subsidiary of Van Kampen American Capital Inc., or its
successor, in connection with the purchase and sale of assets of the TRUST,
less any direct expenses incurred by such person, in connection with obtaining
such commissions, fees, brokerage or similar payments. The ADVISER shall use
its best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with the Fund's transactions and shall advise
the Trustees of any other commissions, fees, brokerage or similar payments
which may be possible for the ADVISER or any other direct or indirect majority
owned subsidiary of Van Kampen American Capital Inc., or its successor, to
receive in connection with the Fund's transactions or other arrangements which
may benefit the TRUST.
In the event that the ordinary business expenses of the Fund, for any
fiscal year should exceed the most restrictive expense limitation applicable in
the states where the TRUST's shares are qualified for sale, unless waived, the
compensation due to the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the TRUST, and if
such amount should exceed such monthly compensation, the ADVISER shall pay the
Fund an amount sufficient to make up the deficiency, subject to readjustment
during the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the Fund include the investment advisory fee and other
operating costs paid by the Fund except for (i) interest and taxes; (ii)
brokerage commissions; (iii) expenses incurred as a result of litigation in
connection with a suit involving a claim for recovery by the Fund; (iv) as a
result of litigation involving a defense against a liability
3
<PAGE> 4
asserted against the TRUST and the Fund, provided that, if the ADVISER made the
decision or took the actions which resulted in such claim, it acted in good
faith without negligence or misconduct; (v) any indemnification paid by the
TRUST to its officers and trustees and the ADVISER in accordance with
applicable state and federal laws as a result of such litigation; and (vi)
amounts paid to Common Sense Distributors, the distributor of the Trust's
shares, in connection with a distribution plan adopted by the Trust's Trustees
pursuant to Rule 12b-1 under the Act.
If the ADVISER shall serve for less than the whole of any month, the
foregoing compensation shall be prorated.
(5.) Books and Records
In compliance with the requirements of the 1940 Act, the ADVISER
hereby agrees that, to the extent required by law, all records which it
maintains for the TRUST are the property of the TRUST and further agrees to
surrender promptly to the TRUST any of such records upon the TRUST's request.
The ADVISER further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under
the Act.
(6.) Duration and Termination
This Agreement will become effective with respect to the Fund on the
date hereof, and with respect to any additional funds, on the date of receipt
by the TRUST of notice from the ADVISER in accordance with Section 1(b) hereof
that the ADVISER is willing to serve as investment adviser with respect to such
fund, provided that this Agreement (as supplemented by the terms specified in
any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Fund subject to this Agreement, in
accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect for a period of two
years. Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Fund for successive periods of twelve months each, provided
such continuance is specifically approved at least annually, (a) by the vote of
a majority of those members of the TRUST's Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the TRUST's Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, by the TRUST (by vote of the
TRUST's Trustees or by vote of a majority of the outstanding voting securities
of the Fund), or by the ADVISER, on sixty days' written notice. This Agreement
will immediately terminate in the event of its assignment.
(7.) Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. No amendment of this Agreement shall be effective as to the Fund until
approved by vote of a majority of the outstanding voting securities of the Fund
if such vote is required by the 1940 Act.
4
<PAGE> 5
(8.) Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person",
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the 1940 Act and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the TRUST by the Securities and
Exchange Commission, or such interpretive positions as may be taken by the
Commission or its staff, under said Act, and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the Rules and Regulations thereunder.
The Declaration of Trust establishing Common Sense Trust, dated
January 29, 1987, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name "Common Sense Trust" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of said
TRUST shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of said TRUST, but the Trust Estate only shall
be liable. All obligations of the TRUST under this Agreement shall apply only
on a Fund by Fund basis and the assets of one Fund shall not be liable for the
obligations of any other Fund.
The parties hereto each have caused this Agreement to be signed in
duplicate on its behalf by its duly authorized officer on the above date.
COMMON SENSE TRUST
By: /s/ NORI L. GABERT
--------------------------------
VAN KAMPEN AMERICAN CAPITAL ASSET
MANAGEMENT, INC.
By: /s/ NORI L. GABERT
--------------------------------
5
<PAGE> 1
COMMON SENSE TRUST - COMMON SENSE II EMERGING GROWTH
FILE #811-5018
Attachment 77H to Form NSAR
for the period ended April 30, 1995
American Capital Asset Management, Inc. ("ACAM"), the Registrant's investment
adviser, capitalized Common Sense Trust - Common Sense II Emerging Growth.
When the Fund was capitalized, ACAM was the sole shareholder of all classes of
shares, Class A and Class B, that the Fund offered and, therefore, was
considered a controlling person (owning more than 25% of the voting securities
as defined by the Investment Company Act of 1940) of each class of shares.
Once the Fund's shares were offered to the public, and sales increased (thus
causing ACAM's controlling ownership to drop below 25%), ACAM ceased to be a
controlling person of the Fund.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> CST GROWTH
<SERIES>
<NUMBER> 1
<NAME> CST GROWTH
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 2,172,982,926
<INVESTMENTS-AT-VALUE> 2,379,975,417
<RECEIVABLES> 44,688,143
<ASSETS-OTHER> 125,135
<OTHER-ITEMS-ASSETS> 2,920
<TOTAL-ASSETS> 2,424,791,615
<PAYABLE-FOR-SECURITIES> 118,344,888
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,096,890
<TOTAL-LIABILITIES> 122,441,778
<SENIOR-EQUITY> 1,524,256
<PAID-IN-CAPITAL-COMMON> 2,018,050,103
<SHARES-COMMON-STOCK> 152,425,634
<SHARES-COMMON-PRIOR> 141,740,595
<ACCUMULATED-NII-CURRENT> 9,852,865
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 65,930,122
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 206,992,491
<NET-ASSETS> 2,302,349,837
<DIVIDEND-INCOME> 17,369,676
<INTEREST-INCOME> 7,672,643
<OTHER-INCOME> 0
<EXPENSES-NET> 11,753,955
<NET-INVESTMENT-INCOME> 13,288,364
<REALIZED-GAINS-CURRENT> 71,459,294
<APPREC-INCREASE-CURRENT> 70,879,900
<NET-CHANGE-FROM-OPS> 155,627,558
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 22,052,763
<DISTRIBUTIONS-OF-GAINS> 147,255,728
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,783,492
<NUMBER-OF-SHARES-REDEEMED> 12,376,753
<SHARES-REINVESTED> 12,278,300
<NET-CHANGE-IN-ASSETS> 132,442,535
<ACCUMULATED-NII-PRIOR> 18,617,264
<ACCUMULATED-GAINS-PRIOR> 141,726,556
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,720,918
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,753,955
<AVERAGE-NET-ASSETS> 2,171,242,789
<PER-SHARE-NAV-BEGIN> 15.31
<PER-SHARE-NII> .09
<PER-SHARE-GAIN-APPREC> .89
<PER-SHARE-DIVIDEND> .155
<PER-SHARE-DISTRIBUTIONS> 1.035
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.10
<EXPENSE-RATIO> 1.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> CST GROWTH & INCOME
<SERIES>
<NUMBER> 2
<NAME> CST GROWTH & INCOME
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 642,446,971
<INVESTMENTS-AT-VALUE> 750,315,037
<RECEIVABLES> 20,859,504
<ASSETS-OTHER> 42,324
<OTHER-ITEMS-ASSETS> 3,259
<TOTAL-ASSETS> 771,220,124
<PAYABLE-FOR-SECURITIES> 14,071,674
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,484,914
<TOTAL-LIABILITIES> 15,556,588
<SENIOR-EQUITY> 496,622
<PAID-IN-CAPITAL-COMMON> 633,781,856
<SHARES-COMMON-STOCK> 49,662,176
<SHARES-COMMON-PRIOR> 45,213,652
<ACCUMULATED-NII-CURRENT> 3,008,399
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,330,393
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 108,046,266
<NET-ASSETS> 755,663,536
<DIVIDEND-INCOME> 9,955,841
<INTEREST-INCOME> 2,081,785
<OTHER-INCOME> 0
<EXPENSES-NET> 3,626,652
<NET-INVESTMENT-INCOME> 8,410,974
<REALIZED-GAINS-CURRENT> 10,330,428
<APPREC-INCREASE-CURRENT> 44,194,549
<NET-CHANGE-FROM-OPS> 62,935,951
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7,735,223
<DISTRIBUTIONS-OF-GAINS> 71,730,542
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,125,152
<NUMBER-OF-SHARES-REDEEMED> 4,440,429
<SHARES-REINVESTED> 5,763,801
<NET-CHANGE-IN-ASSETS> 42,768,252
<ACCUMULATED-NII-PRIOR> 2,332,648
<ACCUMULATED-GAINS-PRIOR> 71,730,507
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,306,206
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,626,652
<AVERAGE-NET-ASSETS> 709,601,911
<PER-SHARE-NAV-BEGIN> 15.77
<PER-SHARE-NII> .17
<PER-SHARE-GAIN-APPREC> 1.04
<PER-SHARE-DIVIDEND> .165
<PER-SHARE-DISTRIBUTIONS> 1.595
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.22
<EXPENSE-RATIO> 1.03
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> CST GOVERNMENT
<SERIES>
<NUMBER> 3
<NAME> CST GOVERNMENT
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 381,862,187
<INVESTMENTS-AT-VALUE> 384,482,783
<RECEIVABLES> 42,912,198
<ASSETS-OTHER> 19,041
<OTHER-ITEMS-ASSETS> 964
<TOTAL-ASSETS> 427,414,986
<PAYABLE-FOR-SECURITIES> 91,862,607
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,732,387
<TOTAL-LIABILITIES> 97,594,994
<SENIOR-EQUITY> 318,923
<PAID-IN-CAPITAL-COMMON> 363,172,535
<SHARES-COMMON-STOCK> 31,892,262
<SHARES-COMMON-PRIOR> 33,535,250
<ACCUMULATED-NII-CURRENT> 253,265
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (37,270,798)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,346,067
<NET-ASSETS> 329,819,992
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 12,889,894
<OTHER-INCOME> 0
<EXPENSES-NET> 1,393,556
<NET-INVESTMENT-INCOME> 11,496,338
<REALIZED-GAINS-CURRENT> (4,128,878)
<APPREC-INCREASE-CURRENT> 15,371,348
<NET-CHANGE-FROM-OPS> 22,738,808
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 11,338,002
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,048,891
<NUMBER-OF-SHARES-REDEEMED> 4,649,029
<SHARES-REINVESTED> 957,150
<NET-CHANGE-IN-ASSETS> (5,141,654)
<ACCUMULATED-NII-PRIOR> 94,929
<ACCUMULATED-GAINS-PRIOR> (33,141,920)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 987,430
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,393,556
<AVERAGE-NET-ASSETS> 329,143,319
<PER-SHARE-NAV-BEGIN> 9.99
<PER-SHARE-NII> .35
<PER-SHARE-GAIN-APPREC> .344
<PER-SHARE-DIVIDEND> .344
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.34
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> CST MONEY MARKET
<SERIES>
<NUMBER> 4
<NAME> CST MONEY MARKET
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 54,687,304
<INVESTMENTS-AT-VALUE> 54,687,304
<RECEIVABLES> 219,186
<ASSETS-OTHER> 35,922
<OTHER-ITEMS-ASSETS> 4,741
<TOTAL-ASSETS> 54,947,153
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 456,382
<TOTAL-LIABILITIES> 456,382
<SENIOR-EQUITY> 544,913
<PAID-IN-CAPITAL-COMMON> 53,946,149
<SHARES-COMMON-STOCK> 54,491,318
<SHARES-COMMON-PRIOR> 56,400,415
<ACCUMULATED-NII-CURRENT> (291)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 54,490,771
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,600,236
<OTHER-INCOME> 0
<EXPENSES-NET> 276,574
<NET-INVESTMENT-INCOME> 1,323,662
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,323,662
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,325,144
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 28,606,627
<NUMBER-OF-SHARES-REDEEMED> 31,802,425
<SHARES-REINVESTED> 1,286,701
<NET-CHANGE-IN-ASSETS> (1,910,579)
<ACCUMULATED-NII-PRIOR> 1,191
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 138,287
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 486,806
<AVERAGE-NET-ASSETS> 55,314,750
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .024
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .024
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> CST MUNICIPAL BOND FUND
<SERIES>
<NUMBER> 5
<NAME> CST MUNICIPAL
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 110,978,067
<INVESTMENTS-AT-VALUE> 113,411,053
<RECEIVABLES> 3,453,243
<ASSETS-OTHER> 3,562
<OTHER-ITEMS-ASSETS> 54,815
<TOTAL-ASSETS> 116,922,673
<PAYABLE-FOR-SECURITIES> 3,158,333
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 389,681
<TOTAL-LIABILITIES> 3,548,014
<SENIOR-EQUITY> 84,988
<PAID-IN-CAPITAL-COMMON> 110,905,434
<SHARES-COMMON-STOCK> 8,498,779
<SHARES-COMMON-PRIOR> 8,692,763
<ACCUMULATED-NII-CURRENT> 162,780
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (211,529)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,432,986
<NET-ASSETS> 113,374,659
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,686,807
<OTHER-INCOME> 0
<EXPENSES-NET> 543,061
<NET-INVESTMENT-INCOME> 3,143,746
<REALIZED-GAINS-CURRENT> (184,756)
<APPREC-INCREASE-CURRENT> 3,816,347
<NET-CHANGE-FROM-OPS> 6,775,337
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,012,124
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 960,355
<NUMBER-OF-SHARES-REDEEMED> 1,354,762
<SHARES-REINVESTED> 200,423
<NET-CHANGE-IN-ASSETS> 1,286,240
<ACCUMULATED-NII-PRIOR> 31,158
<ACCUMULATED-GAINS-PRIOR> (26,773)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 332,314
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 543,061
<AVERAGE-NET-ASSETS> 110,771,393
<PER-SHARE-NAV-BEGIN> 12.89
<PER-SHARE-NII> .37
<PER-SHARE-GAIN-APPREC> .434
<PER-SHARE-DIVIDEND> .354
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.34
<EXPENSE-RATIO> .99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 6A
<NAME> CST II GROWTH-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-1-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 27,916,399
<INVESTMENTS-AT-VALUE> 29,801,597
<RECEIVABLES> 497,395
<ASSETS-OTHER> 5,898
<OTHER-ITEMS-ASSETS> 3,091
<TOTAL-ASSETS> 30,307,981
<PAYABLE-FOR-SECURITIES> 2,065,772
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 79,975
<TOTAL-LIABILITIES> 2,145,747
<SENIOR-EQUITY> 22,283
<PAID-IN-CAPITAL-COMMON> 26,379,545
<SHARES-COMMON-STOCK> 883,874
<SHARES-COMMON-PRIOR> 368,584
<ACCUMULATED-NII-CURRENT> (73,528)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (159,907)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,993,841
<NET-ASSETS> 28,162,234
<DIVIDEND-INCOME> 126,789
<INTEREST-INCOME> 93,943
<OTHER-INCOME> 0
<EXPENSES-NET> 285,420
<NET-INVESTMENT-INCOME> (64,688)
<REALIZED-GAINS-CURRENT> 35,971
<APPREC-INCREASE-CURRENT> 1,705,900
<NET-CHANGE-FROM-OPS> 1,677,183
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 567,705
<NUMBER-OF-SHARES-REDEEMED> 52,415
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 17,998,598
<ACCUMULATED-NII-PRIOR> (8,840)
<ACCUMULATED-GAINS-PRIOR> (195,878)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 58,062
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 359,045
<AVERAGE-NET-ASSETS> 7,258,865
<PER-SHARE-NAV-BEGIN> 11.89
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .81
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.69
<EXPENSE-RATIO> 2.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 6B
<NAME> CST II GROWTH-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-1-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,344,411
<SHARES-COMMON-PRIOR> 487,917
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 905,177
<NUMBER-OF-SHARES-REDEEMED> 48,683
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 10,606,299
<PER-SHARE-NAV-BEGIN> 11.85
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> .78
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.60
<EXPENSE-RATIO> 3.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 7A
<NAME> CST II GROWTH & INCOME-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-1-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 15,433,986
<INVESTMENTS-AT-VALUE> 16,571,838
<RECEIVABLES> 368,111
<ASSETS-OTHER> 6,549
<OTHER-ITEMS-ASSETS> 4,552
<TOTAL-ASSETS> 16,951,050
<PAYABLE-FOR-SECURITIES> 805,312
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 128,075
<TOTAL-LIABILITIES> 933,387
<SENIOR-EQUITY> 12,797
<PAID-IN-CAPITAL-COMMON> 14,973,792
<SHARES-COMMON-STOCK> 556,335
<SHARES-COMMON-PRIOR> 296,465
<ACCUMULATED-NII-CURRENT> (6,475)
<OVERDISTRIBUTION-NII> 19,597
<ACCUMULATED-NET-GAINS> (145,085)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,182,634
<NET-ASSETS> 16,017,663
<DIVIDEND-INCOME> 137,720
<INTEREST-INCOME> 63,113
<OTHER-INCOME> 0
<EXPENSES-NET> 174,432
<NET-INVESTMENT-INCOME> 26,401
<REALIZED-GAINS-CURRENT> (23,692)
<APPREC-INCREASE-CURRENT> 1,105,622
<NET-CHANGE-FROM-OPS> 1,108,331
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 42,548
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 305,669
<NUMBER-OF-SHARES-REDEEMED> 49,354
<SHARES-REINVESTED> 3,554
<NET-CHANGE-IN-ASSETS> 8,906,163
<ACCUMULATED-NII-PRIOR> 35,899
<ACCUMULATED-GAINS-PRIOR> (121,393)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 36,001
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 197,784
<AVERAGE-NET-ASSETS> 5,178,097
<PER-SHARE-NAV-BEGIN> 11.71
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> .885
<PER-SHARE-DIVIDEND> .095
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.53
<EXPENSE-RATIO> 2.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 7B
<NAME> CST II GROWTH & INCOME-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-1-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 723,354
<SHARES-COMMON-PRIOR> 311,052
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 22,777
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 26,227
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 442,205
<NUMBER-OF-SHARES-REDEEMED> 32,159
<SHARES-REINVESTED> 2,257
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 5,899,059
<PER-SHARE-NAV-BEGIN> 11.70
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> .854
<PER-SHARE-DIVIDEND> .054
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.51
<EXPENSE-RATIO> 3.53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 8A
<NAME> CST II GOVERNMENT-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-1-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 11,207,571
<INVESTMENTS-AT-VALUE> 11,375,109
<RECEIVABLES> 361,851
<ASSETS-OTHER> 5,795
<OTHER-ITEMS-ASSETS> 282
<TOTAL-ASSETS> 11,743,037
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,953
<TOTAL-LIABILITIES> 12,953
<SENIOR-EQUITY> 9,885
<PAID-IN-CAPITAL-COMMON> 11,608,656
<SHARES-COMMON-STOCK> 538,892
<SHARES-COMMON-PRIOR> 394,544
<ACCUMULATED-NII-CURRENT> (3,016)
<OVERDISTRIBUTION-NII> 4,984
<ACCUMULATED-NET-GAINS> (52,979)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 167,538
<NET-ASSETS> 11,730,084
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 378,290
<OTHER-INCOME> 0
<EXPENSES-NET> 140,168
<NET-INVESTMENT-INCOME> 238,122
<REALIZED-GAINS-CURRENT> (17,418)
<APPREC-INCREASE-CURRENT> 314,316
<NET-CHANGE-FROM-OPS> 535,020
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 148,926
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 218,047
<NUMBER-OF-SHARES-REDEEMED> 86,038
<SHARES-REINVESTED> 12,338
<NET-CHANGE-IN-ASSETS> 4,387,928
<ACCUMULATED-NII-PRIOR> 5,367
<ACCUMULATED-GAINS-PRIOR> (35,561)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 27,369
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 156,991
<AVERAGE-NET-ASSETS> 5,195,723
<PER-SHARE-NAV-BEGIN> 11.54
<PER-SHARE-NII> .33
<PER-SHARE-GAIN-APPREC> .340
<PER-SHARE-DIVIDEND> .340
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.87
<EXPENSE-RATIO> 2.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 8B
<NAME> CST II GOVERNMENT-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-1-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 449,594
<SHARES-COMMON-PRIOR> 241,885
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 3,399
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 97,579
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 228,718
<NUMBER-OF-SHARES-REDEEMED> 28,960
<SHARES-REINVESTED> 7,952
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 3,927,250
<PER-SHARE-NAV-BEGIN> 11.54
<PER-SHARE-NII> .29
<PER-SHARE-GAIN-APPREC> .341
<PER-SHARE-DIVIDEND> .301
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.87
<EXPENSE-RATIO> 3.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 9A
<NAME> CST II GROWTH OPPORTUNITY-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-1-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 63,027,373
<INVESTMENTS-AT-VALUE> 66,080,569
<RECEIVABLES> 748,350
<ASSETS-OTHER> 6,485
<OTHER-ITEMS-ASSETS> 3,285
<TOTAL-ASSETS> 66,838,689
<PAYABLE-FOR-SECURITIES> 3,024,982
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 231,972
<TOTAL-LIABILITIES> 3,256,954
<SENIOR-EQUITY> 49,707
<PAID-IN-CAPITAL-COMMON> 60,053,300
<SHARES-COMMON-STOCK> 3,349,714
<SHARES-COMMON-PRIOR> 2,216,296
<ACCUMULATED-NII-CURRENT> 124,848
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 300,684
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,053,196
<NET-ASSETS> 63,581,735
<DIVIDEND-INCOME> 322,700
<INTEREST-INCOME> 512,737
<OTHER-INCOME> 0
<EXPENSES-NET> 607,707
<NET-INVESTMENT-INCOME> 227,730
<REALIZED-GAINS-CURRENT> 309,288
<APPREC-INCREASE-CURRENT> 2,769,867
<NET-CHANGE-FROM-OPS> 3,306,885
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 163,211
<DISTRIBUTIONS-OF-GAINS> 40,710
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,394,911
<NUMBER-OF-SHARES-REDEEMED> 278,508
<SHARES-REINVESTED> 17,015
<NET-CHANGE-IN-ASSETS> 24,395,452
<ACCUMULATED-NII-PRIOR> 60,329
<ACCUMULATED-GAINS-PRIOR> 51,407
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 260,489
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 607,707
<AVERAGE-NET-ASSETS> 35,211,911
<PER-SHARE-NAV-BEGIN> 12.20
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> .615
<PER-SHARE-DIVIDEND> .06
<PER-SHARE-DISTRIBUTIONS> .015
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.80
<EXPENSE-RATIO> 2.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 9B
<NAME> CST II GROWTH OPPORTUNITY-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,620,981
<SHARES-COMMON-PRIOR> 996,432
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 19,301
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 728,765
<NUMBER-OF-SHARES-REDEEMED> 105,830
<SHARES-REINVESTED> 1,614
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 16,803,162
<PER-SHARE-NAV-BEGIN> 12.17
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .605
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .015
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.78
<EXPENSE-RATIO> 2.87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 10A
<NAME> CST II INTERNATIONAL EQUITY-CLASS A
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> FEB-21-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 3,283,697
<INVESTMENTS-AT-VALUE> 3,473,460
<RECEIVABLES> 96,132
<ASSETS-OTHER> 47,890
<OTHER-ITEMS-ASSETS> 49,240
<TOTAL-ASSETS> 3,666,722
<PAYABLE-FOR-SECURITIES> 270,053
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 55,909
<TOTAL-LIABILITIES> 325,962
<SENIOR-EQUITY> 2,632
<PAID-IN-CAPITAL-COMMON> 3,142,890
<SHARES-COMMON-STOCK> 228,871
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 3,837
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,142
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 190,259
<NET-ASSETS> 3,340,760
<DIVIDEND-INCOME> 6,615
<INTEREST-INCOME> 9,547
<OTHER-INCOME> 0
<EXPENSES-NET> 12,325
<NET-INVESTMENT-INCOME> 3,837
<REALIZED-GAINS-CURRENT> 1,142
<APPREC-INCREASE-CURRENT> 190,259
<NET-CHANGE-FROM-OPS> 195,238
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 229,035
<NUMBER-OF-SHARES-REDEEMED> 164
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,340,560
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,425
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 32,058
<AVERAGE-NET-ASSETS> 1,687,250
<PER-SHARE-NAV-BEGIN> 11.81
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .86
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.69
<EXPENSE-RATIO> 2.87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 10B
<NAME> CST II INTERNATIONAL EQUITY-CLASS B
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> FEB-21-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 34,353
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 34,454
<NUMBER-OF-SHARES-REDEEMED> 101
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 82,854
<PER-SHARE-NAV-BEGIN> 11.81
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> .83
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.68
<EXPENSE-RATIO> 1.03
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 11A
<NAME> CST II EMERGING GROWTH-CLASS A
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> FEB-21-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 4,387,516
<INVESTMENTS-AT-VALUE> 4,476,914
<RECEIVABLES> 325,512
<ASSETS-OTHER> 30,674
<OTHER-ITEMS-ASSETS> 5,297
<TOTAL-ASSETS> 4,838,397
<PAYABLE-FOR-SECURITIES> 1,168,711
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 44,711
<TOTAL-LIABILITIES> 1,213,422
<SENIOR-EQUITY> 2,923
<PAID-IN-CAPITAL-COMMON> 3,548,821
<SHARES-COMMON-STOCK> 201,914
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (747)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (15,420)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 89,398
<NET-ASSETS> 3,624,975
<DIVIDEND-INCOME> 898
<INTEREST-INCOME> 6,365
<OTHER-INCOME> 0
<EXPENSES-NET> 8,010
<NET-INVESTMENT-INCOME> (747)
<REALIZED-GAINS-CURRENT> (15,420)
<APPREC-INCREASE-CURRENT> 89,398
<NET-CHANGE-FROM-OPS> 73,231
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 202,079
<NUMBER-OF-SHARES-REDEEMED> 165
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,624,775
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,789
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,814
<AVERAGE-NET-ASSETS> 864,928
<PER-SHARE-NAV-BEGIN> 11.81
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .60
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.40
<EXPENSE-RATIO> 2.92
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000810271
<NAME> COMMON SENSE TRUST
<SERIES>
<NUMBER> 11B
<NAME> CST II EMERGING GROWTH-CLASS B
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> FEB-21-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 90,434
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 91,130
<DISTRIBUTIONS-OF-GAINS> 696
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 235,775
<PER-SHARE-NAV-BEGIN> 11.81
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .59
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.39
<EXPENSE-RATIO> 2.89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1> EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
