As filed with the Securities and Exchange Commission on April 29, 1996
Securities Act File No. 33-27352
Investment Company Act File No. 811-5780
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 14 X
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 X
Amendment No. 17
ENDEAVOR SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
2101 East Coast Highway, Suite 300
Corona del Mar, California 92625
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Are Code: (800) 854-8393
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James R. McInnis
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President
Endeavor Series Trust
2101 East Coast Highway, Suite 300, Corona del Mar, California 92625
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(Name and Address of Agent for Service)
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Copies to:
Robert N. Hickey, Esq.
Sullivan & Worcester LLP
1025 Connecticut Avenue, N.W. Washington, D.C. 20036
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It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
X on May 1, 1996 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
on pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on pursuant to paragraph (a)(2) of Rule 485
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
_________________________________________
The Registrant has previously filed a declaration of
indefinite registration of shares of beneficial interest of
its TCW Money Market Portfolio (formerly, Money Market
Portfolio), TCW Managed Asset Allocation Portfolio (formerly,
Managed Asset Allocation Portfolio), T. Rowe Price
International Stock Portfolio (formerly, Global Growth
Portfolio), Value Equity Portfolio (formerly, Quest for Value
Equity Portfolio), Value Small Cap Portfolio (formerly, Quest
for Value Small Cap Portfolio), Dreyfus U.S. Government
Securities Portfolio (formerly, U.S. Government Securities
Portfolio), T. Rowe Price Equity Income Portfolio and T. Rowe
Price Growth Stock Portfolio pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended, (the "1940 Act").
Registrant's Rule 24f-2 Notice, on behalf of its TCW Money
Market Portfolio, TCW Managed Asset Allocation Portfolio, T.
Rowe Price International Stock Portfolio, Value Equity
Portfolio, Value Small Cap Portfolio, Dreyfus U.S. Government
Securities Portfolio, T. Rowe Price Equity Income Portfolio
and T. Rowe Price Growth Stock Portfolio for the fiscal year
ended December 31, 1995 was filed on February 28, 1996.
ENDEAVOR SERIES TRUST
Cross Reference Sheet
Pursuant to Rule 495(a)
Part A
Item Registration Statement
No. Caption Caption in Prospectus
1. Cover Page Cover Page
2. Synopsis Not Applicable
3. Condensed Financial
Information Financial Highlights
4. General Description Cover Page; The Fund; of
Registrant Investment
Objectives and Policies
5. Management of the Fund The Fund; Management of
the Fund; Additional
Information
6. Capital Stock and Other
Securities The Fund; Dividends,
Distributions and Taxes;
Organization and
Capitalization of the
Fund; Additional
Information
7. Purchase of Securities Sale and Redemption Being
Offered of Shares
8. Redemption or Repurchase Sale and Redemption of
Shares
9. Pending Legal Proceedings Not Applicable
PART B
Item Registration Statement Caption in Statement
No. Caption of Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and
History Organization and
Capitalization of the Fund
13. Investment Objectives and
Policies Investment Objectives and
Policies
14. Management of the Fund Management of the Fund
15. Control Persons and
Principal Management of the Fund
Holders of Securities
16. Investment Advisory and
Other Services Management of the Fund
17. Brokerage Allocation and
Other Practices Portfolio Transactions
18. Capital Stock and Other
Securities Organization and
Capitalization of the Fund
19. Purchase, Redemption and
Pricing of Securities
Being Offered Net Asset Value;
Redemption of Shares
20. Tax Status Taxes
21. Underwriters Management of the Fund
22. Calculation of
Performance Data Performance Information
23. Financial Statements Financial Statements
PART C
The information required to be included in Part C is
set forth under the appropriate Item, so numbered, in Part C
to this Post-Effective Amendment.<PAGE>
This Part C, Item 24 (b)
is to be used in future Edgar filings
when incorporating exhibits by reference. These exhibits have
already been filed electronically with SEC.
ENDEAVOR SERIES TRUST
PART C
Other Information
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Included in Part A:
Audited Financial Highlights for the
TCW Money Market Portfolio, TCW
Managed Asset Allocation Portfolio,
Value Equity Portfolio, Value Small
Cap Portfolio, Dreyfus U.S.
Government Securities Portfolio, T.
Rowe Price International Stock
Portfolio, T. Rowe Price Equity
Income Portfolio and T. Rowe Price
Growth Stock Portfolio for the period
ended December 31, 1995.
Included in Part B:
The following audited Financial
Statements for the TCW Money Market
Portfolio, TCW Managed Asset
Allocation Portfolio, Value Equity
Portfolio, Value Small Cap Portfolio,
Dreyfus U.S. Government Securities
Portfolio, T. Rowe Price
International Stock Portfolio, T.
Rowe Price Equity Income Portfolio
and T. Rowe Price Growth Stock
Portfolio for the year ended December
31, 1995 are incorporated into the
Statement of Additional Information
of the Registrant by reference to the
Registrant's Annual Report for the
fiscal year ended December 31, 1995:
Portfolio of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Report of Independent Auditors
Included in Part C:
Consent of Independent Auditors is
filed herein.
(b) Exhibits:
All references are to the Registrant's
registration statement on Form N-1A as
filed with the SEC on March 7, 1989, File
Nos. 33-27352 and 811-5780 (the
"Registration Statement").
Exhibit No. Description of Exhibits
(1)(a) Agreement and Declaration of
Trust is filed herein.
(1)(b) Amendment No. 1 to Agreement
and Declaration of Trust is
filed herein.
(1)(c) Amendment No. 2 to Agreement
and Declaration of Trust is
filed herein.
(1)(d) Amendment No. 3 to Agreement
and Declaration of Trust is
filed herein.
(1)(e) Amendment No. 4 to Agreement
and Declaration of Trust is
filed herein.
(1)(f) Amendment No. 5 to Agreement
and Declaration of Trust is
filed herein.
(1)(g) Amendment No. 6 to Agreement
and Declaration of Trust is
filed herein.
(2) Amended and Restated By-Laws
are filed herein.
(3) Not Applicable.
(4)(a) Specimen certificate for shares
of beneficial interest of the
Domestic Money Market Portfolio
is filed herein.
(4)(b) Deleted
(4)(c) Specimen certificate for shares
of beneficial interest of the
Domestic Managed Asset
Allocation Portfolio is filed
herein.
(4)(d) Deleted
(4)(e) Specimen certificate for shares
of beneficial interest of the
Global Growth Portfolio is
filed herein.
(4)(f) Specimen certificate for shares
of beneficial interest of the
Quest for Value Equity
Portfolio is filed herein.
(4)(g) Specimen certificate for shares
of beneficial interest of the
Quest for Value Small Cap
Portfolio is filed herein.
(4)(h) Specimen certificate for shares
of beneficial interest of the
U.S. Government Securities
Portfolio is filed herein.
(4)(i) Specimen certificate for shares
of beneficial interest of the
T. Rowe Price Equity Income
Portfolio is filed herein.
(4)(j) Specimen certificate for shares
of beneficial interest of the
T. Rowe Price Growth Stock
Portfolio is filed herein.
(5)(a) Management Agreement dated
November 23, 1992 between
Registrant and Endeavor
Investment Advisers is filed
herein.
(5)(a)(1) Supplement dated April 29, 1993
to Management Agreement between
Registrant and Endeavor
Investment Advisers with
respect to Quest for Value
Equity Portfolio and Quest for
Value Small Cap Portfolio is
filed herein.
(5)(a)(2) Supplement dated March 25, 1994
to Management Agreement between
Registrant and Endeavor
Investment Advisers with
respect to U.S. Government
Securities Portfolio is filed
herein.
(5)(a)(3) Supplement dated December 28,
1994 to Management Agreement
between Registrant and Endeavor
Investment Advisers with
respect to the T. Rowe Price
Equity Income Portfolio and T.
Rowe Price Growth Stock
Portfolio is filed herein.
(5)(b) Investment Advisory Agreement
between TCW Funds Management,
Inc. and Endeavor Investment
Advisers with respect to the
Money Market Portfolio and
Managed Asset Allocation
Portfolio is filed herein.
(5)(c) Deleted
(5)(d) Deleted
(5)(e) Investment Advisory Agreement
between Quest for Value
Advisors and Endeavor
Investment Advisers with
respect to Quest for Value
Small Cap Portfolio is filed
herein.
(5)(f) Investment Advisory Agreement
between Quest for Value
Advisors and Endeavor
Investment Advisers with
respect to Quest for Value
Equity Portfolio is filed
herein.
(5)(g) Investment Advisory Agreement
between The Boston Company
Asset Management, Inc. and
Endeavor Investment Advisers
with respect to the U.S.
Government Securities Portfolio
is filed herein.
(5)(g)(1) Transfer and Assumption of
Investment Advisory Agreement
among The Boston Company Asset
Management, Inc., The Dreyfus
Corporation, Endeavor
Investment Advisers and
Registrant with respect to the
Dreyfus U.S. Government
Securities Portfolio is filed
herein.
(5)(h) Investment Advisory Agreement
between T. Rowe Price
Associates, Inc. and Endeavor
Investment Advisers with
respect to the T. Rowe Price
Equity Income Portfolio is
filed herein.
(5)(i) Investment Advisory Agreement
between T. Rowe Price
Associates, Inc. and Endeavor
Investment Advisers with
respect to the T. Rowe Price
Growth Stock Portfolio is filed
herein.
(5)(j) Investment Advisory Agreement
between Rowe Price-Fleming,
International, Inc. and
Endeavor Investment Advisers
with respect to the Global
Growth Portfolio is filed
herein.
(6) Participation Agreement between
Registrant, Endeavor Management
Co. and PFL Life Insurance
Company is filed herein.
(7) Not Applicable.
(8)(a) Custody Agreement between
Registrant and Boston Safe
Deposit & Trust Company is
filed herein.
(8)(b) Supplement dated April 19, 1993
to Custody Agreement between
Registrant and Boston Safe
Deposit & Trust Company with
respect to the Quest for Value
Equity Portfolio and Quest for
Value Small Cap Portfolio is
filed herein.
(8)(c) Supplement dated December 30,
1994 to Custody Agreement
between Registrant and Boston
Safe Deposit & Trust Company
with respect to the T. Rowe
Price Equity Income Portfolio
and T. Rowe Price Growth Stock
Portfolio is filed herein.
(8)(d) Supplement dated March 25, 1994
to Custody Agreement between
Registrant and Boston Safe
Deposit & Trust Company with
respect to the U.S. Government
Securities Portfolio is filed
herein.
(9)(a) Transfer Agency and Registrar
Agreement between Registrant
and The Shareholder Services
Group, Inc. (currently known as
First Data Investor Services
Group, Inc.) is filed herein.
(9)(b) License Agreement between
Endeavor Management Co. and
Registrant is filed herein.
(9)(b)(1) Amendment to License Agreement
between Endeavor Management Co.
and Registrant is filed herein.
(9)(c) Administration Agreement
between Endeavor Management Co.
and The Boston Company
Advisors, Inc. is filed herein.
(9)(c)(1) Supplement dated April 19, 1993
to Administration Agreement
between Endeavor Investment
Advisers and The Boston Company
Advisors, Inc., with respect to
the Quest for Value Equity
Portfolio and Quest for Value
Small Cap Portfolio is filed
herein.
(9)(c)(2) Consent to Assignment of
Administration Agreement dated
May 4, 1994 between Endeavor
Investment Advisers and The
Boston Company Advisors, Inc.
to The Shareholder Services
Group, Inc. is filed herein.
(9)(c)(3) Supplement dated October 24,
1994 to Administration
Agreement between Endeavor
Investment Advisers and The
Shareholder Services Group,
Inc. (currently known as First
Data Investor Services Group,
Inc.) with respect to the T.
Rowe Price Equity Income
Portfolio and T. Rowe Price
Growth Stock Portfolio is filed
herein.
(9)(c)(4) Supplement dated March 25, 1994
to Administration Agreement
between Endeavor Investment
Advisers and The Boston Company
Advisors, inc. with respect to
the U.S. Government Securities
Portfolio is filed herein.
(10) Not Applicable.
(11) Consent of Independent Auditors
is filed herein.
(12) Not Applicable.
(13) Subscription Agreement between
Registrant and PFL Life
Insurance Company is filed
herein.
(14) Not Applicable.
(15) Not Applicable.
(16) Not Applicable.
(17) Financial Data Schedules are
filed herein.
(18) Not Applicable.
(19) Powers of Attorney are filed
herein.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT
As of the effective date of this Post-Effective
Amendment, PFL Life Insurance Company's separate accounts, PFL
Endeavor Variable Annuity Account and PFL Endeavor Platinum
Variable Annuity Account, and AUSA Life Insurance Company's
separate account, AUSA Endeavor Variable Annuity Account, held
all the outstanding shares of the Registrant. PFL Life
Insurance Company, a stock life insurance company organized
under the laws of the State of Iowa, and AUSA Life Insurance
Company, a stock life insurance company organized under the
laws of the State of New York, are each wholly-owned indirect
subsidiaries of AEGON USA, Inc., an Iowa corporation. All of
the stock of AEGON USA, Inc. is indirectly owned by AEGON n.v.
of The Netherlands.
Item 26. NUMBER OF HOLDERS OF SECURITIES
Set forth below are the number of record holders, as of
April 15, 1996, of the shares of beneficial interest of the
Registrant.
Number of
Record
Title of Class Holders
Shares of Beneficial Interest of the
TCW Money Market Portfolio. . . . . . . . . . . . .3
Shares of Beneficial Interest of the
TCW Managed Asset Allocation
Portfolio. . . . . . . . . . . . . . . . . . .. . .3
Shares of Beneficial Interest of the
Value Equity Portfolio. . . . . . . . . . . . . . .3
Shares of Beneficial Interest of the
Value Small Cap Portfolio . . . . . . . . . . . . .3
Shares of Beneficial Interest of the
Dreyfus U.S. Government Securities
Portfolio. . . . . . . . . . . . . . . . . . . . . 3
Shares of Beneficial Interest of the
T. Rowe Price International Stock
Portfolio. . . . . . . . . . . . . . . . . . . . . 3
Shares of Beneficial Interest of the
T. Rowe Price Equity Income Portfolio . . . . . . .3
Shares of Beneficial Interest of the
T. Rowe Price Growth Stock Portfolio. . . . . . . .3
Item 27. INDEMNIFICATION
Reference is made to the following documents:
Agreement and Declaration of Trust, as amended, as
filed as Exhibits 1(a) - 1(g) hereto;
Amended and Restated By-Laws as filed as Exhibit 2
hereto; and
Participation Agreement between Registrant, Endeavor
Management Co. and PFL Life Insurance Company as
filed as Exhibit 6 hereto.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended (the "Act") may be
permitted to Trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in
the Act, and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or
paid by a Trustee, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by any such Trustee, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
The Registrant, its Trustees and officers, Endeavor
Investment Advisers (the "Manager"), and persons affiliated
with them are insured under a policy of insurance maintained
by the Registrant and the Manager within the limits and
subject to the limitations of the policy, against certain
expenses in connection with the defense of actions suits or
proceedings, and certain liabilities that might me imposed as
a result of such actions, suits or proceedings, to which they
are parties by reason of being or having been such Trustees or
officers. The policy expressly excludes coverage for any
Trustee or officer whose personal dishonesty, fraudulent
breach of trust, lack of good faith, or intention to deceive
or defraud has been finally adjudicated or may be established
or who willfully fails to act prudently.
Item 28. (a) Business and Other Connections of the
Investment Adviser
Investment Adviser - Endeavor Investment Advisers
The Manager is a registered investment adviser
providing investment management and administrative services to
the Registrant.
The list required by this Item 28 of partners and
their officers and directors of the Manager together with
information as to any other business, profession, vocation or
employment of a substantial nature engaged in by such officers
and directors during the past two years is incorporated by
reference to Schedule B and D of Form ADV filed by the Manager
pursuant to the Investment Advisers Act of 1940 (SEC No.
801-41827).
Item 28. (a) Business and Other Connections of Investment
Adviser
Investment Adviser - TCW Funds Management, Inc.
TCW Funds Management, Inc. ("TCW") is a wholly owned
subsidiary of The TCW Group, Inc. whose direct and indirect
subsidiaries, including Trust Company of the West and TCW
Asset Management Company, provide a variety of trust
investment management and investment advisory services.
The list required by this Item 28 of officers and
directors of TCW, together with information as to any other
business, profession, vocation or employment of a substantial
nature engaged in by such officers and directors during the
past two years is incorporated by reference to Schedules A and
D of Form ADV filed by TCW pursuant to the Investment Advisers
Act of 1940 (SEC file No. 801-29075).
Item 28 (a) Business and Other Connections of Investment
Adviser
Investment Adviser - OpCap Advisors
OpCap Advisors ("OpCap") (formerly known as Quest
for Value Advisors) is a subsidiary of Oppenheimer Capital, a
registered investment adviser, which provides a variety of
investment management services for clients. OpCap manages
registered investment companies other than certain Portfolios
of the Registrant.
The list required by this Item 28 of the officers
and directors of OpCap, together with information as to any
other business, profession, vocation or employment of a
substantial nature engaged in by such officers and directors
during the past two years is incorporated by reference to
Schedules D and F of Form ADV filed by OpCap pursuant to the
Investment Advisers Act of 1940 (SEC file No. 801-27180).
Item 28 (a) Business and Other Connections of Investment
Adviser
Investment Adviser - The Dreyfus Corporation
The Dreyfus Corporation ("Dreyfus") is a wholly
owned subsidiary of Mellon Bank, N.A. Dreyfus is a registered
investment adviser founded in 1947 providing a variety of
investment management services for clients.
The list required by this Item 28 of the officers
and directors of Dreyfus, together with information as to any
other business, profession, vocation or employment of a
substantial nature engaged in by such officers and directors
during the past two years is incorporated by reference to
Schedules A and D of Form ADV filed by Dreyfus pursuant to the
Investment Advisers Act of 1940 (SEC file No. 801-8147).
Item 28 (a) Business and Other Connections of Investment
Adviser
Investment Adviser - T. Rowe Price Associates, Inc.
T. Rowe Price Associates, Inc. ("T. Rowe Price")
serves as investment manager to a variety of individual and
institutional investors, including limited and real estate
partnerships and other mutual funds.
The list required by this Item 28 of officers and
directors of T. Rowe Price together with information as to any
other business, profession, vocation or employment of a
substantial nature engaged in by such officers and directors
during the past two years is incorporated by reference to
Schedules A and D of Form ADV filed by T. Rowe Price pursuant
to the Investment Advisers Act of 1940 (SEC file No. 801-856).
Item 28 (b) Business and Other Connections of Investment
Adviser
Investment Adviser - Rowe Price-Fleming
International, Inc.
Rowe Price-Fleming International, Inc. ("Price-Fleming")
is a joint venture between T. Rowe Price and Robert
Fleming Holdings Limited ("Flemings"). Flemings is a
diversified investment organization which participates in a
global network of regional investment offices in New York,
London, Zurich, Geneva, Tokyo, Hong Kong, Manila, Kuala
Lumpur, South Africa and Taiwan.
The list required by this Item 28 of officers and
directors of Price-Fleming, together with information as to
any other business, profession, vocation or employment of a
substantial nature engaged in by such officers and directors
during the past two years is incorporated by reference to
Schedules A and D of Form ADV filed by Price-Fleming pursuant
to the Investment Advisers Act of 1940 (SEC file No.
801-14714).
Item 29 Principal Underwriter
(a) Inapplicable
(b) Inapplicable
Item 30 Location of Accounts and Records
The Registrant maintains the records required by
Section 31(a) of the 1940 Act and Rules 31a-1 to 31a-3
inclusive thereunder at its principal office, located at 2101
East Coast Highway, Suite 300, Corona del Mar, California
92625 as well as at the offices of its investment advisers and
administrator: TCW Funds Management, Inc., 865 S. Figueroa
Street, Los Angeles, California 90071; OpCap Advisors, c/o
Oppenheimer Capital, One World Financial Center, New York, New
York 10281; The Dreyfus Corporation, 200 Park Avenue, New
York, New York 10166; T. Rowe Price Associates, Inc., 100 East
Pratt Street, Baltimore, Maryland 21202; Rowe Price-Fleming
International, Inc., 100 East Pratt Street, Baltimore,
Maryland 21202; and First Data Investor Services Group, Inc.
("First Data") (formerly, The Shareholder Services Group,
Inc.), located at 53 State Street, One Exchange Place, Boston,
Massachusetts 02109. Certain records, including records
relating to the Registrant's shareholders and the physical
possession of its securities, may be maintained pursuant to
Rule 31a-3 at the main office of the Registrant's transfer
agent and dividend disbursing agent, First Data and the
Registrant's custodian, Boston Safe Deposit and Trust Company,
located at One Boston Place, Boston, Massachusetts 02108.
Item 31 Management Services
None
Item 32 Undertakings
(a) Inapplicable
(b) Inapplicable
(c) The Registrant will furnish each person to whom
a prospectus is delivered with a copy of the Registrant's
latest annual report to shareholders, upon request and without
charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, and the Investment Company Act of 1940, as amended, the
Registrant, ENDEAVOR SERIES TRUST, certifies that it meets the
requirements for effectiveness of this Post-Effective
Amendment to its Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and the Registrant has
duly caused this Post-Effective Amendment to its Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in this City of Corona del Mar,
State of California on the 29th day of April, 1996.
ENDEAVOR SERIES TRUST
Registrant
By: /s/James R. McInnis*
James R. McInnis
President
Pursuant to the requirements of the Securities Act of
1933, this Post-Effective Amendment to its Registration
Statement has been signed below by the following persons in
the capacities and on the date(s) indicated.
Signature Title Date
/s/James R. McInnis* President April 29, 1996
James R. McInnis (Principal executive
officer)
/s/Alan J. Schryer* Chief Financial Officer April 29, 1996
Alan J. Schryer (Treasurer) (principal
financial and accounting
officer)
/s/Vincent J. McGuinness* Trustee April 29, 1996
Vincent J. McGuinness
/s/Timothy A. Devine* Trustee April 29, 1996
Timothy A. Devine
/s/Thomas J. Hawekotte* Trustee April 29, 1996
Thomas J. Hawekotte
/s/Steven L. Klosterman* Trustee April 29, 1996
Steven L. Klosterman
/s/Halbert D. Lindquist* Trustee April 29, 1996
Halbert D. Lindquist
/s/R. Daniel Olmstead* Trustee April 29, 1996
R. Daniel Olmstead
* By: /s/Robert N. Hickey
Robert N. Hickey
Attorney-in-fact
<PAGE>
Prospectus
ENDEAVOR SERIES TRUST
Endeavor Series Trust (the "Fund") is a diversified,
open-end management investment company, that offers a
selection of managed investment portfolios, each with its own
investment objective designed to meet different investment
goals. There can be no assurance that these investment
objectives will be achieved.
This Prospectus describes the following eight portfolios
currently offered by the Fund (the "Portfolios").
* TCW Money Market Portfolio
* TCW Managed Asset Allocation Portfolio
* T. Rowe Price International Stock Portfolio
* Value Equity Portfolio
* Value Small Cap Portfolio
* Dreyfus U.S. Government Securities Portfolio
* T. Rowe Price Equity Income Portfolio
* T. Rowe Price Growth Stock Portfolio
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus sets forth concisely the information
about the Fund and the Portfolios that a prospective investor
should know before investing. Please read the Prospectus and
retain it for future reference. Additional information
contained in a Statement of Additional Information also dated
May 1, 1996 has been filed with the Securities and Exchange
Commission and is available upon request without charge by
writing or calling the Fund at the address or telephone number
set forth on the back cover of this Prospectus. The Statement
of Additional Information is incorporated by reference into
this Prospectus.
The date of this Prospectus is May 1, 1996.
THE FUND
Endeavor Series Trust is a diversified, open-end
management investment company that offers a selection of
managed investment portfolios. Each portfolio constitutes a
separate mutual fund with its own investment objective and
policies. The Fund currently issues shares of eight
portfolios. The Trustees of the Fund may establish additional
portfolios at any time.
Shares of the Portfolios are issued and redeemed at their
net asset value without a sales load and are offered to
various separate accounts of PFL Life Insurance Company and
certain of its affiliates ("PFL") to fund various insurance
contracts, including variable life insurance policies (whether
scheduled premium, flexible premium or single premium
policies) or variable annuity contracts. These insurance
contracts are hereinafter referred to as the "Contracts." The
rights of PFL as the record holder for a separate account of
shares of the Portfolios are different from the rights of the
owner of a Contract. The terms "shareholder" or "shareholders"
in this Prospectus refer to PFL and not to any Contract owner.
The structure of the Fund permits Contract owners, within
the limitations described in the appropriate Contract, to
allocate the amounts held by PFL under the Contracts for
investment in the various portfolios of the Fund. See the
prospectus and other material accompanying this Prospectus for
a description of the Contracts, which portfolios of the Fund
are available to Contract owners, and the relationship between
increases or decreases in the net asset value of shares of the
portfolios (and any dividends and distributions on such
shares) and the benefits provided under the Contracts.
It is conceivable that in the future it may be
disadvantageous for scheduled premium variable life insurance
separate accounts, flexible and single premium variable life
insurance separate accounts, and variable annuity separate
accounts to invest simultaneously in the Fund due to tax or
other considerations. The Trustees of the Fund intend to
monitor events for the existence of any irreconcilable
material conflict between or among such accounts, and PFL will
take whatever remedial action may be necessary.
Investment Objectives
The Investment objectives of the Portfolios are as
follows:
TCW Money Market Portfolio (formerly, Money Market
Portfolio) - seeks current income, preservation of capital
and maintenance of liquidity through investment in short-term
money market securities. The Portfolio's shares are neither
insured by nor guaranteed by the U.S. government. The
Portfolio seeks to maintain a constant net asset value of
$1.00 per share although no assurances can be given that such
constant net asset value will be maintained.
TCW Managed Asset Allocation Portfolio (formerly, Managed
Asset Allocation Portfolio) - seeks high total return through
a managed asset allocation portfolio of equity, fixed income
and money market securities.
T. Rowe Price International Stock Portfolio - seeks
long-term growth of capital through investments primarily in
common stocks of established non-U.S. companies.
Value Equity Portfolio (formerly, Quest for Value Equity
Portfolio) - seeks long term capital appreciation through
investment in a diversified portfolio of equity securities
selected on the basis of a value oriented approach to
investing.
Value Small Cap Portfolio (formerly, Quest for Value
Small Cap Portfolio) - seeks capital appreciation through
investment in a diversified portfolio of equity securities of
companies with market capitalizations of under $1 billion.
Dreyfus U.S. Government Securities Portfolio (formerly,
U.S. Government Securities Portfolio) - seeks as high a level
of total return as is consistent with prudent investment
strategies by investing under normal conditions at least 65%
of its assets in U.S government debt obligations and
mortgage-backed securities issued or guaranteed by the U.S. government,
its agencies or instrumentalities.
T. Rowe Price Equity Income Portfolio - seeks to provide
substantial dividend income and also capital appreciation by
investing primarily in dividend-paying common stocks of
established companies.
T. Rowe Price Growth Stock Portfolio - seeks long-term
growth of capital and to increase dividend income through
investment primarily in common stocks of well-established
growth companies.
FINANCIAL HIGHLIGHTS
The following tables are based on a Portfolio share
outstanding throughout each period and should be read in
conjunction with the financial statements and related notes
that also appear in the Fund's Annual Report dated December
31, 1995, which is incorporated by reference into the
Statement of Additional Information. The information
contained in the Fund's Annual Report has been audited by
Ernst & Young LLP, independent auditors, whose report appears
in the Annual Report. Additional information concerning the
performance of the Fund is included in the Annual Report which
may be obtained without charge by writing the Fund at the
address on the back cover of this Prospectus.
<TABLE>
<CAPTION>
TCW MONEY MARKET PORTFOLIO*
Year Year Year Year Period
Ended Ended Ended Ended Ended
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91*
<S> <C> <C> <C> <C> <C>
Operating Performance:
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income# 0.0540 0.0337 0.0218 0.0287 0.0377
Dividends from net
investment income (0.0540) (0.0336) (0.0218) (0.0287) (0.0377)
Distributions from net
realized capital gains ---- (0.0001) ---- ---- ----
Total distributions (0.0540) (0.0337) (0.0218) (0.0287) (0.0377)
Net asset value,
end of period $1.00 $1.00 $1.00 $ 1.00 $ 1.00
Total return++ 5.54% 3.41% 2.19% 2.90% 3.84%
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) $27,551 $20,766 $12,836 $4,527 $1,907
Ratio of net investment
income to average
net assets 5.37% 3.58% 2.19% 2.84% 5.02%+
Ratio of operating
expenses to average
net assets** 0.60% 0.85% 0.99% 0.91% 0.00%+
</TABLE>
* Effective May 1, 1996, the name of the Money Market Portfolio was
changed to TCW Money Market Portfolio. The Portfolio commenced
operations on April 8, 1991.
** Annualized operating expense ratios before waiver of fees and/or
reimbursement of expenses by investment manager for the years ended
December 31, 1993, December 31, 1992 and the period ended December
31, 1991 were 1.23%, 2.37% and 8.48%, respectively.
+ Annualized.
++ Total return represents the aggregate total return for the periods
indicated. The total return of the Portfolio does not reflect the
charges against the separate accounts of PFL or the Contracts.
# Net investment income/(loss) before fees waived and/or reimbursement
of expenses by investment manager for the years ended December 31,
1993, December 31, 1992 and the period ended December 31, 1991 were
$0.0195, $0.0140 and $(0.0259), respectively.
<TABLE>
<CAPTION>
TCW MANAGED ASSET ALLOCATION PORTFOLIO*
Year Year Year Year Period
Ended Ended Ended Ended Ended
12/31/95 12/31/94+++ 12/31/93+++ 12/31/92+++ 12/31/91*
<S> <C> <C> <C> <C> <C>
Operating Performance:
Net asset value,
beginning of period $13.48 $14.30 $12.31 $11.37 $10.00
Net investment income# 0.33 0.28 0.23 0.24 0.10
Net realized and
unrealized gain/(loss)
on investments 2.72 (1.03) 1.84 0.77 1.27
Net increase/(decrease)
in net assets from
investment operations 3.05 (0.75) 2.07 1.01 1.37
Dividends from net
investment income (0.25) (0.07) (0.08) (0.07) ---
Net asset value, end of
period $16.28 $13.48 $14.30 $12.31 $11.37
Total return++ 22.91% (5.28)% 16.79% 9.01% 13.70%
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) $198,876 $172,449 $96,657 $14,055 $4,247
Ratio of net
investment income
to average net assets 2.12% 2.03% 1.71% 2.11% 4.54%+
Ratio of operating
expenses to average
net assets** 0.84% 0.90% 1.12% 1.18% 0.00%+
Portfolio turnover rate 93% 67% 67% 50% 61%
</TABLE>
* Effective May 1, 1996, the name of the Managed Asset Allocation
Portfolio was changed to TCW Managed Asset Allocation Portfolio.
The Portfolio commenced operations on April 8, 1991.
** Annualized operating expense ratios before waiver of fees and/or
reimbursement of expense by investment manager for the year ended
December 31, 1992 and the period ended December 31, 1991 were 1.73%
and 5.18%, respectively.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated. The total return of the Portfolio does not reflect the
charges against the separate accounts of PFL or the Contracts.
+++ Per share amounts have been calculated using the monthly average
share method, which more appropriately presents the per share data
for this period since use of the undistributed method does not
accord with results of operations.
# Net investment income/(loss) before fees waived and/or reimbursement
of expenses by investment manager for the year ended December 31,
1992 and the period ended December 31, 1991 were $0.18 and $(0.01),
respectively.
<TABLE>
<CAPTION>
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO*
Year Year Year Year Period
Ended Ended Ended Ended Ended
12/31/95## 12/31/94 12/31/93+++ 12/31/92+++ 12/31/91*
<S> <C> <C> <C> <C> <C>
Operating Performance:
Net asset value,
beginning of period $11.31 $11.99 $10.12 $10.52 $10.00
Net investment
income/(loss)# 0.09 (0.02) (0.04) 0.00*** 0.06
Net realized and
unrealized gain/(loss)
on investments 1.06 (0.66) 1.91 (0.38) 0.46
Net increase/(decrease)
in net assets from
investment operations 1.15 (0.68) 1.87 (0.38) 0.52
Distributions:
Dividends from net
investment income ---- ---- ---- (0.02) ----
Distributions from net
realized gains (0.27) ---- ---- ---- ----
Total Distributions (0.27) ---- ---- (0.02) ----
Net asset value,
end of period $12.19 $11.31 $11.99 $10.12 $10.52
Total return++ 10.37% (5.67)% 18.48% (3.61)% 5.20%
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) $92,352 $84,102 $52,777 $6,305 $3,200
Ratio of net investment
income/(loss) to
average net assets 0.81% (0.16)% (0.31%) 0.01% 3.18%+
Ratio of operating
expenses to average
net assets** 1.15% 1.16% 1.52% 1.43% 0.00%+
Portfolio turnover rate 111% 88% 37% 34% 0%
</TABLE>
* Effective March 24, 1995, the name of the Global Growth Portfolio
was changed to T. Rowe Price International Stock Portfolio and the
investment objective was changed from investment on a global basis
to investment on an international basis (i.e., in non-U.S.
companies). The Portfolio commenced operations on April 8, 1991.
** Annualized operating expense ratios before waiver of fees and/or
reimbursement of expenses by investment manager for the year ended
December 31, 1992 and the period ended December 31, 1991 were 2.10%
and 6.83%, respectively.
*** Amount represents less than $0.01 per share.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated. The total return of the Portfolio does not reflect the
charges against the separate accounts of PFL or the Contracts.
+++ Per share amounts have been calculated using the monthly average
share method, which more appropriately presents the per share data
for this period since use of the undistributed method does not
accord with results of operations.
# Net investment loss before fees waived and/or reimbursement of
expenses by investment manager for the year ended December 31, 1992
and the period ended December 31, 1991 were $(0.07) and $(0.07),
respectively.
## Rowe Price-Fleming International, Inc. became the Portfolio's
Adviser effective January 3, 1995.
<TABLE>
<CAPTION>
VALUE EQUITY PORTFOLIO*
Year Year Period
Ended Ended Ended
12/31/95 12/31/94 12/31/93*+++
<S> <C> <C> <C>
Operating Performance:
Net asset value, beginning of
period $10.69 $10.28 $10.00
Net investment income# 0.15 0.09 0.05
Net realized and unrealized
gain on investments 3.52 0.33 0.23
Net increase in net assets
from investment operations 3.67 0.42 0.28
Distributions:
Dividends from net investment
income (0.09) (0.01) ---
Distributions from net
realized gains (0.04) --- ---
Total distributions (0.13) (0.01) ---
Net asset value, end of period $14.23 $10.69 $10.28
Total return++ 34.59% 4.09% 2.80%
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's) $68,630 $32,776 $11,178
Ratio of net investment
income to average
net assets 1.56% 1.31% 0.84%+
Ratio of operating
expenses to average
net assets** 0.86% 1.02% 1.30%+
Portfolio turnover rate 28% 56% 1%
</TABLE>
* Effective May 1, 1996, the name of the Quest for Value Equity
Portfolio was changed to Value Equity Portfolio. The Portfolio
commenced operations on May 27, 1993.
** Annualized expense ratio before waiver of fees by investment manager
for the period ended December 31, 1993 was 2.10%.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated. The total return of the Portfolio does not reflect the
charges against the separate accounts of PFL or the Contracts.
+++ Per share amounts have been calculated using the monthly average
share method, which more appropriately presents the per share data
for this period since use of the undistributed method did not accord
with results of operations.
# Net investment income before fees waived by investment manager for
the period ended December 31, 1993 was $0.00.
<TABLE>
<CAPTION>
VALUE SMALL CAP PORTFOLIO*
Year Year Period
Ended Ended Ended
12/31/95 12/31/94+++ 12/31/93*+++
<S> <C> <C> <C>
Operating Performance:
Net asset value, beginning of period $10.98 $11.18 $10.00
Net investment income# 0.15 0.10 0.22
Net realized and unrealized
gain/(loss) on investments 1.36 (0.30) 0.96
Net increase/(decrease) in net assets
from investment operations 1.51 (0.20) 1.18
Distributions:
Dividends from net investment
income (0.10) --- ---
Distributions from net realized
gains (0.17) --- ---
Total distributions (0.27) --- ---
Net asset value, end of period $12.22 $10.98 $11.18
Total return++ 14.05% (1.79)% 11.80%
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's) $52,597 $35,966 $12,699
Ratio of net investment
income to average
net assets 1.56% 0.89% 3.98%+
Ratio of operating
expenses to average
net assets** 0.87% 1.03% 1.30%+
Portfolio turnover rate 75% 77% 41%
</TABLE>
* Effective May 1, 1996, the name of the Quest for Value Small Cap
Portfolio was changed to Value Small Cap Portfolio. The Portfolio
commenced operations on May 4, 1993.
** Annualized operating expense ratio before waiver of fees by
investment manager for the period ended December 31, 1993 was 2.10%.
+ Annualized.
++ Total return represents aggregate total return for the periods
indicated. The total return of the Portfolio does not reflect the
charges against the separate accounts of PFL or the Contracts.
+++ Per share amounts have been calculated using the monthly average
share method, which more appropriately presents the per share data
for this period since use of the undistributed method did not accord
with results of operations.
# Net investment income before fees waived by investment manager for
the period ended December 31, 1993 was $0.18.
<TABLE>
<CAPTION>
DREYFUS U.S. GOVERNMENT SECURITIES PORTFOLIO*
Year Period
Ended Ended
12/31/95 12/31/94*+++
<S> <C> <C>
Operating performance:
Net asset value, beginning of period..... $9.96 $10.00
Net investment income#................... 0.30 0.24
Net realized and unrealized gain/(loss)
on investments.......................... 1.25 (0.28)
Net increase/(decrease) in net assets
resulting from investment operations.... 1.55 (0.04)
Dividends from net investment income..... (0.12) ----
Net asset value, end of period........... $11.39 $9.96
Total return++........................... 15.64% (0.40)%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)..... $12,718 $3,505
Ratio of net investment income to average
net assets............................... 5.58% 4.14%+
Ratio of operating expenses to average
net assets**............................. 0.84% 0.78%+
Portfolio turnover rate.................. 161% 100%
</TABLE>
* Effective May 1, 1996, the name of the U.S. Government Securities
Portfolio was changed to Dreyfus U.S. Government Securities
Portfolio. The Portfolio commenced operations on May 13, 1994.
** Annualized operating expense ratio before waiver of fees and
reimbursement of expenses by investment manager for the period ended
December 31, 1994 was 1.83%.
+ Annualized.
++ Total return represents aggregate total return for the period
indicated. The total return of the Portfolio does not reflect the
charges against the separate accounts of PFL or the Contracts.
+++ Per share amounts have been calculated using the monthly average
share method, which more appropriately presents the per share data
for this period since use of the undistributed method did not accord
with results of operations.
# Net investment income before fees waived and reimbursement of
expenses by investment manager for the period ended December 31,
1994 was $0.18.
<TABLE>
<CAPTION>
T. Rowe Price Equity Income Portfolio
Year
Ended
12/31/95*+++
<S> <C>
Operating Performance:
Net asset value, beginning of year.......................... $10.00
Net investment income....................................... 0.34
Net realized and unrealized gain on investments............. 2.71
Net increase in net assets resulting from
investment operations..................................... 3.05
Net asset value, end of year................................ $13.05
Total return++.............................................. 30.50%
Ratios to average net assets/supplemental data:
Net assets, end of year (in 000's).......................... $21,910
Ratio of net investment income to average net
assets.................................................... 3.24%+
Ratio of operating expenses to average net assets........... 1.15%+
Portfolio turnover rate..................................... 16%
</TABLE>
* The Portfolio commenced operations on January 3, 1995.
+ Annualized.
++ Total return represents aggregate total return for the period
indicated. The total return of the Portfolio does not reflect the
charges against the separate accounts of PFL or the Contracts.
+++ Per share amounts have been calculated using the monthly average
share method which more appropriately presents the per share data
for the period since use of the undistributed method did not accord
with results of operations.
<TABLE>
<CAPTION>
T. Rowe Price Growth Stock Portfolio
Year
Ended
12/31/95*+++
<S> <C>
Operating Performance:
Net asset value, beginning of year............................. $10.00
Net investment income.......................................... 0.08
Net realized and unrealized gain on investments................ 3.64
Net increase in net assets resulting from investment
operations................................................... 3.72
Net asset value, end of year................................... $13.72
Total return++................................................. 37.20%
Ratios to average net assets/supplemental data:
Net assets, end of year (in 000's)............................. $21,651
Ratio of net investment income to average net assets........... 0.69%+
Ratio of operating expenses to average net assets.............. 1.26%+
Portfolio turnover rate........................................ 64%
</TABLE>
* The Portfolio commenced operations on January 3, 1995.
+ Annualized.
++ Total return represents aggregate total return for the period
indicated. The total return of the Portfolio does not reflect the
charges against the separate accounts of PFL or the Contracts.
+++ Per share amounts have been calculated using the monthly average
share method which more appropriately presents the per share data
for the period since use of the undistributed method did not accord
with results of operations.
____________________
Endeavor Investment Advisers (the "Manager") has agreed,
until terminated by the Manager, to assume expenses of the
Portfolios that exceed the rates stated below. This has the
effect of lowering each Portfolio's expense ratio and of
increasing returns otherwise available to investors at the
time such amounts are assumed. While this arrangement is in
effect, the Manager pays all expenses of the Portfolios to the
extent they exceed the following percentages of a Portfolio's
average net assets: TCW Money Market - .99%, TCW Managed Asset
Allocation - 1.25%, T. Rowe Price International Stock - 1.53%,
Value Equity - 1.30%, Value Small Cap -1.30%, Dreyfus U.S.
Government Securities - 1.00%, T. Rowe Price Equity Income -
1.30% and T. Rowe Price Growth Stock - 1.30%.
INVESTMENT OBJECTIVES AND POLICIES
The following is a brief description of the investment
objectives and policies of the Portfolios. The investment
objective and the policies of each Portfolio other than those
listed under the caption "Investment Restrictions" in the
Statement of Additional Information are not fundamental
policies and may be changed by the Trustees of the Fund
without the approval of shareholders. Certain portfolio
investments and techniques discussed below are described in
greater detail in the Statement of Additional Information. Due
to the uncertainty inherent in all investments, there can be
no assurance that the Portfolios will be able to achieve their
respective investment objectives.
TCW Money Market Portfolio
The investment objective of the TCW Money Market
Portfolio (formerly known as the Money Market Portfolio) is to
provide current income, preservation of capital and liquidity
through investment in short-term money market securities.
The Portfolio seeks to maintain a constant net asset
value of $1.00 per share. If the Trustees believe that the
extent of any deviation from a $1.00 price per share may
result in material dilution or other unfair results to
shareholders, they will take such steps as they consider
appropriate to eliminate or reduce these consequences to the
extent reasonably practicable. This may include selling
portfolio securities prior to maturity, shortening the average
maturity of the Portfolio, withholding or reducing dividends,
redeeming shares in kind, reducing the number of the
Portfolio's outstanding shares without monetary consideration,
or utilizing a net asset value per share determined by using
available market quotations.
The Portfolio expects to invest in the following types of
money market securities:
* securities issued or guaranteed as to principal and
interest by the U.S. government or by its agencies
or instrumentalities ("U.S. government securities");
* certificates of deposit, bankers' acceptances and
other obligations issued or guaranteed by bank
holding companies in the United States and their
subsidiaries;
* U.S. dollar denominated obligations ("Eurodollar
obligations") of bank holding companies in the
United States, their subsidiaries and their foreign
branches or of the International Bank for
Reconstruction and Development (also known as the
World Bank);
* commercial paper and other short-term obligations
of, and variable amount master demand notes and
variable rate notes issued by U.S. and foreign
corporations; and
* repurchase agreements (see "Investment Strategies").
Investment Criteria. With respect to investments in money
market securities, in accordance with applicable regulations
of the Securities and Exchange Commission, the Portfolio will:
~ invest only in high quality money market instruments that
present minimal credit risks;
~ invest only in money market instruments with remaining or
implied maturities of thirteen months or less; and
~ maintain an average dollar weighted maturity of the
Portfolio's investments of 90 days or less.
The Portfolio will invest only in high quality money
market instruments, i.e., securities which have been assigned
the highest quality ratings by nationally recognized
statistical rating organizations ("NRSROs") such as "A-1" by
Standard & Poor's Ratings Service, a division of McGraw-Hill
Companies, Inc. ("Standard & Poor's") or "Prime-1" by Moody's
Investors Service, Inc. ("Moody's"), or if not rated,
determined to be of comparable quality; provided, that up to
5% of the Portfolio's total assets may be invested in
instruments assigned the second highest quality ratings such
as "A-2" or "Prime-2", or if not rated, determined to be of
comparable quality. For a description of the NRSROs and their
ratings, see the Appendix attached to the Statement of
Additional Information.
The Portfolio may not invest in the securities of any one
issuer if, immediately after such investment, more than 5% of
the total assets of the Portfolio (taken at current value)
would be invested in the securities of such issuer; provided,
that this limitation does not apply to U.S. government
securities or to repurchase agreements secured by such
securities and that with respect to 25% of the Portfolio's
total assets more than 5% may be invested in securities of any
one issuer for three business days after the purchase thereof
if the securities have been assigned the highest quality
ratings by NRSROs, or if not rated, have been determined to be
of comparable quality. With respect to U.S. government
securities, the Portfolio will not invest more than 55% of its
assets in securities issued or guaranteed by the U.S. Treasury
or any single U.S. government agency or instrumentality. See
"Investment Restrictions" in the Statement of Additional
Information for a further description of the Portfolio's
investment criteria.
U.S. Government Securities. Securities issued or
guaranteed as to principal and interest by the U.S. government
or its agencies and instrumentalities include U.S. Treasury
obligations, consisting of bills, notes and bonds, which
principally differ in their interest rates, maturities and
times of issuance, and obligations issued or guaranteed by
agencies and instrumentalities which are supported by (i) the
full faith and credit of the U.S. Treasury (such as securities
of the Small Business Administration), (ii) the limited
authority of the issuer to borrow from the U.S. Treasury (such
as securities of the Student Loan Marketing Association) or
(iii) the authority of the U.S. government to purchase certain
obligations of the issuer (such as securities of the Federal
National Mortgage Association). No assurance can be given that
the U.S. government will provide financial support to U.S.
government agencies or instrumentalities as described in
clauses (ii) or (iii) above in the future, other than as set
forth above, since it is not obligated to do so by law.
Other Money Market Securities. Other money market
securities in which the Portfolio may invest include U.S.
dollar denominated instruments (such as bankers' acceptances,
commercial paper, certificates of deposit and Eurodollar
obligations) issued or guaranteed by bank holding companies in
the United States, their subsidiaries and their foreign
branches. These bank obligations may be general obligations of
the parent bank holding company or may be limited to the
issuing entity by the terms of the specific obligation or by
government regulation.
Obligations of the International Bank for Reconstruction
and Development (also known as the World Bank) are supported
by subscribed but unpaid commitments of its member countries.
There can be no assurance that these commitments will be
undertaken or complied with in the future.
The other money market securities in which the Portfolio
may invest also include certain variable and floating rate
instruments and participations in corporate loans to
corporations in whose commercial paper or other short-term
obligations the Portfolio may invest. Because the bank issuing
the participations does not guarantee them in any way, they
are subject to the credit risks generally associated with the
underlying corporate borrower. To the extent that the
Portfolio may be regarded as a creditor of the issuing bank
(rather than of the underlying corporate borrower under the
terms of the loan participation), the Portfolio may also be
subject to credit risks associated with the issuing bank. The
secondary market, if any, for these loan participations is
extremely limited and any such participations purchased by the
Portfolio will be regarded as illiquid.
Other money market securities in which the Portfolio may
invest also include bonds and notes with remaining maturities
of thirteen months or less, variable rate notes and variable
amount master demand notes. A variable amount master demand
note differs from ordinary commercial paper in that it is
issued pursuant to a written agreement between the issuer and
the holder, its amount may be increased from time to time by
the holder (subject to an agreed maximum) or decreased by the
holder or the issuer, it is payable on demand, the rate of
interest payable on it varies with an agreed formula and it is
typically not rated by a rating agency. Transfer of such notes
is usually restricted by the issuer, and there is no secondary
trading market for them. Any variable amount master demand
note purchased by the Portfolio will be regarded as an
illiquid security. See "Investment Restrictions" in the
Statement of Additional Information.
Foreign Securities. The Portfolio may invest up to 10% of
its total assets in the securities (payable in U.S. dollars)
of foreign issuers in developed countries and in the
securities of foreign branches of U.S. banks such as
negotiable certificates of deposit (Eurodollars). Because the
Portfolio may invest in foreign securities, investment in the
Portfolio involves investment risks that are different in some
respects from an investment in a fund which invests only in
debt obligations of U.S. domestic issuers. Such risks may
include adverse future political and economic developments,
the possible imposition of foreign withholding taxes on
interest income payable on the securities held in the
Portfolio, possible seizure or nationalization of foreign
deposits, the possible establishment of exchange controls, or
the adoption of other foreign governmental restrictions which
might adversely affect the payment of principal and interest
on securities in the Portfolio. There may also be less
publicly available information about a foreign issuer than
about a domestic issuer and foreign issuers are not generally
subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to
those applicable to domestic issuers.
The Portfolio may employ certain investment strategies
which are described under the caption "Investment Strategies"
below and in the Statement of Additional Information.
TCW Managed Asset Allocation Portfolio
The investment objective of the TCW Managed Asset
Allocation Portfolio (formerly known as the Managed Asset
Allocation Portfolio) is to provide high total return through
a managed asset allocation portfolio of equity, fixed income
and money market securities. The Portfolio seeks to achieve
its objective by investing primarily in securities issued by
United States companies.
The composition of the Portfolio's investments will be
based on the determination by the Portfolio's Adviser (as
hereinafter defined) of the appropriate weighting for each
asset class and will be adjusted periodically. In making
adjustments to the asset allocation, the Portfolio's Adviser
will use its asset allocation model and will integrate its
view of the expected returns for each asset class, conditions
in the stock, bond and money markets, interest rate and
corporate earnings growth trends, and economic conditions.
The asset class weightings may theoretically range from
0% to 100%, although the Portfolio's Adviser expects these
extremes to be reached rarely, if at all, for any class. The
Portfolio will be "rebalanced" or checked for possible
reallocation monthly or more often if market conditions
demand. The Portfolio's Adviser generally expects the number
of asset shifts between asset classes to occur approximately
three or four times per year.
The equity portion of the Portfolio will be invested in a
diversified selection of equity securities of established
companies in sound financial condition. The equity securities
in which the Portfolio will be invested may include common
stocks, preferred stocks, securities convertible into or
exchangeable for common stocks and warrants. The Portfolio's
Adviser will strive to achieve total returns from dividends
and capital gains in excess of those from broadly-based stock
market indices, but will not incur excessive risk of loss to
do so.
The fixed income portion of the Portfolio will be
invested in taxable securities including securities issued or
guaranteed by the U.S. government and its agencies or
instrumentalities and high grade corporate and mortgage-backed
bonds with maturities typically ranging from 2 to 30 years.
The weighted average maturity of such investments will
generally range from 3 to 10 years and securities will, at
time of purchase, have ratings within the four highest rating
categories established by Moody's, Standard & Poor's, or a
similar nationally recognized rating service or if not rated,
be of comparable quality as determined by the Portfolio's
Adviser. The rating services' descriptions of these bond
ratings are set forth in the Appendix to the Statement of
Additional Information. Securities rated in the fourth highest
category may have speculative characteristics; changes in
economic or business conditions are more likely to lead to a
weakened capacity to make principal and interest payments than
in the case of higher grade bonds. Like the three highest
grades, however, these securities are considered investment
grade.
Mortgage-backed bonds have yield and maturity
characteristics corresponding to the underlying mortgage
loans. Thus, for example, unlike other bonds, which pay a
fixed rate of interest until maturity when the entire
principal amount comes due, payments on mortgage-backed bonds
include both interest and a partial repayment of principal.
Fluctuating prepayments of principal may result from the
refinancing or foreclosure of the underlying mortgage loans.
Although maturities of the underlying mortgage loans range up
to 30 years, such prepayments may shorten the effective
maturities. Because of the prepayment feature, mortgage-backed
bonds may be less effective than other types of securities as
a means of "locking in" attractive long-term interest rates.
This is caused by the need to reinvest repayments of principal
generally and the possibility of significant unscheduled
prepayments resulting from declines in mortgage interest
rates. As a result, mortgage-backed bonds may have less
potential for capital appreciation during periods of declining
interest rates than other investments of comparable
maturities, while having a comparable risk of decline during
periods of rising interest rates.
Foreign Securities. The Portfolio may invest up to 10%
of its total assets in equity securities (payable in U.S.
dollars) of foreign issuers in developed countries. Because
the Portfolio may invest in foreign securities, investment in
the Portfolio involves investment risks that are different in
some respects from an investment in a fund which invests only
in securities of U.S. domestic issuers. Such risks may
include adverse future political and economic developments,
the possible imposition of foreign withholding taxes on
interest income payable on the securities held in the
Portfolio, possible seizure or nationalization of foreign
deposits, the possible establishment of exchange controls, or
the adoption of other foreign governmental restrictions which
might adversely affect the payment of principal and interest
on securities in the Portfolio. There may also be less
publicly available information about a foreign issuer than
about a domestic issuer and foreign issuers are not generally
subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to
those applicable to domestic issuers.
The cash portion of the Portfolio will be invested in the
same portfolio securities that are eligible for investment by
the TCW Money Market Portfolio described above. The Portfolio
may employ certain investment strategies which are discussed
under the caption "Investment Strategies" below and in the
Statement of Additional Information.
T. Rowe Price International Stock Portfolio
The T. Rowe Price International Stock Portfolio was
formerly known as the Global Growth Portfolio. Effective
March 24, 1995, the name of the Global Growth Portfolio was
changed to T. Rowe Price International Stock Portfolio and the
Portfolio's investment objective was changed from seeking
long-term capital appreciation through a policy of investing
in small capitalization common stocks and their convertible
equivalents on a global basis to the investment objective and
policies set forth below.
The investment objective of the T. Rowe Price
International Stock Portfolio is to seek long-term growth of
capital through investments primarily in common stocks of
established non-U.S. companies.
Over the last 30 years, many foreign economies have grown
faster than the United States' economy, and the return from
equity investments in these countries has often exceeded the
return on similar investments in the United States. Moreover,
there has normally been a wide and largely unrelated variation
in performance between international equity markets over this
period. Although there can be no assurance that these
conditions will continue, the Portfolio's Adviser, within the
framework of diversification, seeks to identify and invest in
companies participating in the faster growing foreign
economies and markets. The Adviser believes that investment
in foreign securities offers significant potential for long-term
capital appreciation and an opportunity to achieve
investment diversification.
The Adviser intends to invest substantially all of the
Portfolio's assets outside the United States and diversify
investments broadly among countries throughout the world -
developed, newly industrialized and emerging - by having at
least five different countries represented in the Portfolio.
The Portfolio may invest in countries of the Far East and
Europe as well as South Africa, Australia, Canada, and other
areas (including developing countries). Further, not more
than 20% of the Portfolio's net asset value will be invested
in securities of issuers located in any one country with the
exception of issuers located in Australia, Canada, France,
Japan, the United Kingdom or Germany (where the investment
limitation is 35%). In addition, the Adviser will consider
factors applicable to United States investors in making
investment decisions for the Portfolio.
In seeking its objective, the Portfolio invests primarily
in common stocks of established foreign companies which have,
in the Adviser's opinion, the potential for growth of capital.
However, the Portfolio may also invest in a variety of other
equity related securities such as preferred stocks, warrants
and convertible securities, as well as corporate and
governmental debt securities, when considered consistent with
the Portfolio's investment objective and program. The
Portfolio may also invest in investment funds which have been
authorized by the governments of certain countries
specifically to permit foreign investment in securities of
companies listed and traded on the stock exchanges in these
respective countries. The Portfolio's investment in these
funds is subject to the provisions of the Investment Company
Act of 1940 (the "1940 Act"). If the Portfolio invests in
such investment funds, the Portfolio's shareholders will bear
not only their proportionate share of the expenses of the
Portfolio (including operating expenses and the fees of the
investment manager), but also will bear indirectly similar
expenses of the underlying investment funds. In addition, the
securities of these investment funds may trade at a premium of
their net asset value. Under normal conditions, the
Portfolio's investments in securities other than common stocks
is limited to no more than 35% of its total assets.
In determining the appropriate distribution of
investments among various countries and geographic regions,
the Portfolio's Adviser ordinarily considers the following
factors: prospects for relative economic growth between
foreign countries; expected levels of inflation; government
policies influencing business conditions; the outlook for
currency relationships; and the range of individual investment
opportunities available to international investors.
In analyzing companies for investment, the Adviser
ordinarily looks for one or more of the following
characteristics: an above-average earnings growth per share;
high return on invested capital; healthy balance sheet; sound
financial and accounting policies and overall financial
strength; strong competitive advantages; effective research
and product development and marketing; efficient service;
pricing flexibility; strength of management; and general
operating characteristics which will enable the companies to
compete successfully in their market place. While current
dividend income is not a prerequisite in the selection of
portfolio companies, the companies in which the Portfolio
invests normally will have a record of paying dividends, and
will generally be expected to increase the amounts of such
dividends in future years as earnings increase. It is
expected that the Portfolio's investments will ordinarily be
traded on exchanges located at least in the respective
countries in which the various issuers of such securities are
principally based.
In the event that future economic or financial conditions
abroad adversely affect equity securities, or stocks are
considered overvalued, or the Portfolio's Adviser believes
that investing for defensive purposes is appropriate, or in
order to meet anticipated redemption requests, the Portfolio
may invest part or all of its assets in U.S. government
securities, investment-grade debt obligations of U.S.
companies and high quality (within the two highest rating
categories assigned by an NRSRO) short-term debt securities
(with remaining maturities of one year or less) including
certificates of deposit, bankers' acceptances, commercial
paper, short-term corporate securities and repurchase
agreements.
The international objectives of the Portfolio allow
investors an opportunity to achieve potentially higher
returns, reflecting participation in countries and economies
with higher growth rates than those available domestically.
However, foreign investments involve certain risks that are
not present in domestic securities. Because the Portfolio
intends to purchase securities denominated in foreign
currencies, a change in the value of any such currency against
the U.S. dollar will result in a change in the U.S. dollar
value of the Portfolio's assets and the Portfolio's income. In
addition, although a portion of the Portfolio's investment
income may be received or realized in such currencies, the
Portfolio will be required to compute and distribute its
income in U.S. dollars. Therefore, if the exchange rate for
any such currency declines after the Portfolio's income has
been earned and computed in U.S. dollars but before conversion
and payment, the Portfolio could be required to liquidate
portfolio securities to make such distributions.
The values of foreign investments and the investment
income derived from them may also be affected unfavorably by
changes in currency exchange control regulations. Although the
Portfolio will invest only in securities denominated in
foreign currencies that are fully exchangeable into U.S.
dollars without legal restriction at the time of investment,
there can be no assurance that currency controls will not be
imposed subsequently. In addition, the values of foreign fixed
income investments will fluctuate in response to changes in
U.S. and foreign interest rates.
There may be less information publicly available about a
foreign issuer than about a U.S. issuer, and foreign issuers
are not generally subject to accounting, auditing and
financial reporting standards and practices comparable to
those in the United States. Foreign stock markets are
generally not as developed or efficient as, and may be more
volatile than, those in the United States. While growing in
volume, they usually have substantially less volume than U.S.
markets and the Portfolio's investment securities may be less
liquid and subject to more rapid and erratic price movements
than securities of comparable U.S. companies. Equity
securities may trade at price/earnings multiples higher than
comparable United States securities and such levels may not be
sustainable. There is generally less government supervision
and regulation of foreign stock exchanges, brokers and listed
companies than in the United States. Moreover, settlement
practices for transactions in foreign markets may differ from
those in United States markets. Such differences may include
delays beyond periods customary in the United States and
practices, such as delivery of securities prior to receipt of
payment, which increase the likelihood of a "failed
settlement." Failed settlements can result in losses to the
Portfolio. In less liquid and well developed stock markets,
such as those in some Asian and Latin American countries,
volatility may be heightened by actions of a few major
investors. For example, substantial increases or decreases in
cash flows of mutual funds investing in these markets could
significantly affect stock prices and, therefore, share
prices.
Foreign brokerage commissions, custodial expenses and
other fees are also generally higher than for securities
traded in the United States. Consequently, the overall
expense ratios of international funds are usually somewhat
higher than those of typical domestic stock funds.
In addition, the economies, markets and political
structures of a number of the countries in which the Portfolio
can invest do not compare favorably with the United States and
other mature economies in terms of wealth and stability.
Therefore, investments in these countries may be riskier, and
will be subject to erratic and abrupt price movements. Some
economies are less well developed and less diverse (for
example, Latin America, Eastern Europe and certain Asian
countries), and more vulnerable to the ebb and flow of
international trade, trade barriers and other protectionist or
retaliatory measures (for example, Japan, southeast Asia and
Latin America). Some countries, particularly in Latin
America, are grappling with severe inflation and high levels
of national debt. Investments in countries that have recently
begun moving away from central planning and state-owned
industries toward free markets, such as the Eastern European
or Chinese economies, should be regarded as speculative.
Certain portfolio countries have histories of instability
and upheaval (Latin America) and internal politics that could
cause their governments to act in a detrimental or hostile
manner toward private enterprise or foreign investment. Any
such actions, for example, nationalizing an industry or
company, could have a severe and adverse effect on security
prices and impair the Portfolio's ability to repatriate
capital or income. The Portfolio's Adviser will not invest
the Portfolio's assets in countries where it believes such
events are likely to occur.
Income received by the Portfolio from sources within
foreign countries may be reduced by withholding and other
taxes imposed by such countries. Tax conventions between
certain countries and the United States may reduce or
eliminate such taxes. The Portfolio's Adviser will attempt to
minimize such taxes by timing of transactions and other
strategies, but there can be no assurance that such efforts
will be successful. Any such taxes paid by the Portfolio will
reduce its net income available for distribution to
shareholders.
The Portfolio may employ certain investment strategies
which are discussed under the caption "Investment Strategies"
below and in the Statement of Additional Information.
Value Equity Portfolio
The investment objective of the Value Equity Portfolio
(formerly known as the Quest for Value Equity Portfolio) is
long-term capital appreciation through investment in
securities (primarily equity securities) of companies that are
believed by the Portfolio's Adviser to be undervalued in the
marketplace in relation to factors such as the companies'
assets or earnings.
It is the Portfolio Adviser's intention to invest in
securities which in its opinion possess one or more of the
following characteristics: undervalued assets, valuable
consumer or commercial franchises, securities valuation below
peer companies, substantial and growing cash flow and/or a
favorable price to book value relationship.
Investment policies aimed at achieving the Portfolio's
objective are set in a flexible framework of securities
selection which primarily includes equity securities, such as
common stocks, preferred stocks, convertible securities,
rights and warrants in proportions which vary from time to
time. Under normal circumstances at least 65% of the
Portfolio's assets will be invested in common stocks or
securities convertible into common stocks. The Portfolio will
invest primarily in stocks listed on the New York Stock
Exchange. In addition, it may also purchase securities listed
on other domestic securities exchanges or traded in the
domestic over-the-counter market and foreign securities that
are listed on a domestic or foreign securities exchange,
traded in the domestic or foreign over-the-counter markets or
represented by American Depositary Receipts.
In the event that future economic or financial conditions
adversely affect equity securities, or stocks are considered
overvalued, or the Portfolio's Adviser believes that investing
for defensive purposes is appropriate, or in order to meet
anticipated redemption requests, the Portfolio may invest part
or all of its assets in U.S. government securities and high
quality short-term debt securities (with remaining maturities
of one year or less) including certificates of deposit,
bankers' acceptances, commercial paper, short-term corporate
securities and repurchase agreements.
The Portfolio may invest in certain foreign securities
which may represent a greater degree of risk than investing in
domestic securities. These risks are discussed in the above
section of this Prospectus describing the T. Rowe Price
International Stock Portfolio.
It is the present intention of the Portfolio's Adviser to
invest no more than 5% of the Portfolio's net assets in bonds
rated below Baa3 by Moody's or BBB by Standard & Poor's
(commonly known as "junk bonds"). In the event that the
Portfolio's Adviser intends in the future to invest more than
5% of the Portfolio's net assets in junk bonds, appropriate
disclosures will be made to existing and prospective
shareholders. For information about the possible risks of
investing in junk bonds see "Investment Objective and Policies
- - Lower Rated Bonds" in the Statement of Additional
Information.
The Portfolio may employ certain investment strategies
which are discussed under the caption "Investment Strategies"
below and in the Statement of Additional Information.
Value Small Cap Portfolio
The investment objective of the Value Small Cap Portfolio
(formerly known as the Quest for Value Small Cap Portfolio) is
to seek capital appreciation through investments in a
diversified portfolio consisting primarily of equity
securities of companies with market capitalizations of under
$1 billion.
Small-capitalization companies are often under-priced for
the following reasons: (i) institutional investors, which
currently represent a majority of the trading volume in the
shares of publicly-traded companies, are often less interested
in such companies because in order to acquire an equity
position that is large enough to be meaningful to an
institutional investor, such an investor may be required to
buy a large percentage of the company's outstanding equity
securities and (ii) such companies may not be regularly
researched by stock analysts, thereby resulting in greater
discrepancies in valuation.
The Portfolio may also purchase securities in initial
public offerings, or shortly after such offerings have been
completed, when the Portfolio's Adviser believes that such
securities have greater-than-average market appreciation
potential.
Under normal circumstances, at least 65% of the
Portfolio's assets will be invested in common stocks and
securities convertible into common stocks. Securities
purchased by the Portfolio will be traded on the New York
Stock Exchange, the American Stock Exchange or in the
over-the-counter market, and will also include options,
warrants, bonds, notes and debentures which are convertible
into or exchangeable for, or which grant a right to purchase
or sell, such securities. In addition, the Portfolio may
purchase foreign securities that are listed on a domestic or
foreign securities exchange, traded in domestic or foreign
over-the-counter markets or represented by American Depositary
Receipts.
In the event that future economic or financial conditions
adversely affect equity securities, or stocks are considered
overvalued, or the Portfolio's Adviser believes that investing
for defensive purposes is appropriate, or in order to meet
anticipated redemption requests, the Portfolio may invest part
or all of its assets in U.S. government securities and high
quality short-term debt securities (with remaining maturities
of one year or less) including certificates of deposit,
bankers' acceptances, commercial paper, short-term corporate
securities and repurchase agreements.
The Portfolio is expected to have greater risk exposure
and reward potential than a fund which invests primarily in
larger-capitalization companies. The trading volumes of
securities of smaller-capitalization companies are normally
less than those of larger-capitalization companies. This
often translates into greater price swings, both upward and
downward. Since trading volumes are lower, new demand for the
securities of such companies could result in
disproportionately large increases in the price of such
securities. The waiting period for the achievement of an
investor's objectives might be longer since these securities
are not closely monitored by research analysts and, thus, it
takes more time for investors to become aware of fundamental
changes or other factors which have motivated the Portfolio's
purchase. Small-capitalization companies often achieve higher
growth rates and experience higher failure rates than do
larger-capitalization companies.
The Portfolio may invest in certain foreign securities
which may represent a greater degree of risk than investing in
domestic securities. These risks are discussed in the above
section of this Prospectus describing the T. Rowe Price
International Stock Portfolio.
It is the present intention of the Portfolio's Adviser to
invest no more than 5% of the Portfolio's net assets in bonds
rated below Baa3 by Moody's or BBB by Standard & Poor's
(commonly known as "junk bonds"). In the event that the
Portfolio's Adviser intends in the future to invest more than
5% of the Portfolio's net assets in junk bonds, appropriate
disclosures will be made to existing and prospective
shareholders. For information about the possible risks of
investing in junk bonds, see "Investment Objectives and
Policies - Lower Rated Bonds" in the Statement of Additional
Information.
The Portfolio may employ certain investment strategies
which are discussed under the caption "Investment Strategies"
below and in the Statement of Additional Information.
Dreyfus U.S. Government Securities Portfolio
The investment objective of the Dreyfus U.S. Government
Securities Portfolio (formerly known as the U.S. Government
Securities Portfolio) is to seek as high a level of total
return as is consistent with prudent investment strategies by
investing under normal conditions at least 65% of its assets
in U.S. government debt obligations and mortgage-backed
securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities ("U.S. Government Securities").
The Portfolio expects to invest in the following types of
U.S. Government Securities:
* U.S. Treasury obligations;
* obligations issued or guaranteed by agencies or
instrumentalities of the U.S. government which are
backed by their own credit and may not be backed by
the full faith and credit of the U.S. government;
* mortgage-backed securities guaranteed by the
Government National Mortgage Association that are
supported by the full faith and credit of the U.S.
government and which are the "modified pass-through"
type of mortgage-backed security ("GNMA
Certificates"). Such securities entitle the holder
to receive all interest and principal payments due
whether or not payments are actually made on the
underlying mortgages;
* mortgage-backed securities guaranteed by agencies or
instrumentalities of the U.S. government which are
supported by their own credit but not the full faith
and credit of the U.S. government, such as the
Federal Home Loan Mortgage Corporation and the
Federal National Mortgage Association; and
* collateralized mortgage obligations issued by
private issuers for which the underlying mortgage-backed
securities serving as collateral are backed
(i) by the credit alone of the U.S. government
agency or instrumentality which issues or guarantees
the mortgage-backed securities, or (ii) by the full
faith and credit of the U.S. government.
Mortgage-Backed Securities. The mortgage-backed
securities in which the Portfolio invests represent
participation interests in pools of mortgage loans which are
guaranteed by agencies or instrumentalities of the U.S.
government. However, the guarantee of these types of
securities runs only to the principal and interest payments
and not to the market value of such securities. In addition,
the guarantee only runs to the portfolio securities held by
the Portfolio and not the purchase of shares of the Portfolio.
Mortgage-backed securities are issued by lenders such as
mortgage bankers, commercial banks, and savings and loan
associations. Such securities differ from conventional debt
securities which provide for periodic payment of interest in
fixed amounts (usually semiannually) with principal payments
at maturity or specified call dates. Mortgage-backed
securities provide for monthly payments which are, in effect,
a "pass-through" of the monthly interest and principal
payments (including any prepayments) made by the individual
borrowers on the pooled mortgage loans. Principal prepayments
result from the sale of the underlying property or the
refinancing or foreclosure of underlying mortgages.
The yield of mortgage-backed securities is based on the
average life of the underlying pool of mortgage loans, which
is computed on the basis of the maturities of the underlying
instruments. The actual life of any particular pool may be
shortened by unscheduled or early payments of principal and
interest. The occurrence of prepayments is affected by a wide
range of economic, demographic and social factors and,
accordingly, it is not possible to accurately predict the
average life of a particular pool. For pools of fixed rate
30-year mortgages, it has been common practice to assume that
prepayments will result in a 12-year average life. The actual
prepayment experience of a pool of mortgage loans may cause
the yield realized by the Portfolio to differ from the yield
calculated on the basis of the average life of the pool. In
addition, if any of these mortgage-backed securities are
purchased at a premium, the premium may be lost in the event
of early prepayment which may result in a loss to the
Portfolio.
Prepayments tend to increase during periods of falling
interest rates, while during periods of rising interest rates
prepayments will most likely decline. Reinvestment by the
Portfolio of scheduled principal payments and unscheduled
prepayments may occur at higher or lower rates than the
original investment, thus affecting the yield of the
Portfolio. Monthly interest payments received by the
Portfolio have a compounding effect which will increase the
yield to shareholders as compared to debt obligations that pay
interest semiannually. Because of the reinvestment of
prepayments of principal at current rates, mortgage-backed
securities may be less effective than Treasury bonds of
similar maturity at maintaining yields during periods of
declining interest rates. Also, although the value of debt
securities may increase as interest rates decline, the value
of these pass-through type of securities may not increase as
much due to the prepayment feature.
Collateralized Mortgage Obligations. Collateralized
mortgage obligations ("CMOs"), which are debt obligations
collateralized by mortgage loans or mortgage pass-through
securities, provide the holder with a specified interest in
the cash flow of a pool of underlying mortgages or other
mortgage-backed securities. Issuers of CMOs frequently elect
to be taxed as a pass-through entity known as real estate
mortgage investment conduits. CMOs are issued in multiple
classes, each with a specified fixed or floating interest rate
and a final distribution date. The relative payment rights of
the various CMO classes may be structured in many ways. In
most cases, however, payments of principal are applied to the
CMO classes in the order of their respective stated
maturities, so that no principal payments will be made on a
CMO class until all other classes having an earlier stated
maturity date are paid in full. The classes may include
accrual certificates (also known as "Z-Bonds"), which only
accrue interest at a specified rate until other specified
classes have been retired and are converted thereafter to
interest-paying securities. They may also include planned
amortization classes which generally require, within certain
limits, that specified amounts of principal be applied on each
payment date, and generally exhibit less yield and market
volatility than other classes.
Stripped Mortgage-Backed Securities. The Portfolio may
also invest a portion of its assets in stripped mortgage-backed
securities ("SMBS"), which are derivative multi-class
mortgage securities. SMBS are usually structured with two
classes that receive different proportions of the interest and
principal distributions from a pool of mortgage assets. The
Portfolio will only invest in SMBS whose mortgage assets are
U.S. Government Securities.
A common type of SMBS will be structured so that one
class receives some of the interest and most of the principal
from the mortgage assets, while the other class receives most
of the interest and the remainder of the principal. In the
most extreme case, one class will receive all of the interest
(the interest-only or "IO" class) while the other class will
receive all of the principal (the principal-only or "PO"
class). The yield to maturity on an IO class is extremely
sensitive to the rate of principal payments (including
prepayments) on the related underlying mortgage assets, and a
rapid rate of principal payments may have a material adverse
effect on the Portfolio's yield to maturity from these
securities. If the underlying mortgage assets experience
greater than anticipated prepayments of principal, the
Portfolio may fail to fully recoup its initial investment in
these securities even if the security is in one of the highest
rating categories.
The Portfolio may invest not more than 5% of its total
assets in CMOs deemed by its Adviser to be complex, such as
floating rate and inverse floating rate tranches and SMBS.
Non-Mortgage Asset Backed Securities. The Portfolio may
invest in non-mortgage backed securities including interests
in pools of receivables, such as motor vehicle installment
purchase obligations and credit card receivables. Such
securities are generally issued as pass-through certificates,
which represent undivided fractional ownership interests in
the underlying pools of assets.
Non-mortgage backed securities are not issued or
guaranteed by the U.S. government or its agencies or
instrumentalities; however, the payment of principal and
interest on such obligations may be guaranteed up to certain
amounts and for a certain time period by a letter of credit
issued by a financial institution (such as a bank or insurance
company) unaffiliated with the issuers of such securities. In
addition, such securities generally will have remaining
estimated lives at the time of purchase of five years or less.
The purchase of non-mortgage backed securities raises
considerations peculiar to the financing of the instruments
underlying such securities. For example, most organizations
that issue asset backed securities relating to motor vehicle
installment purchase obligations perfect their interests in
their respective obligations only by filing a financing
statement and by having the servicer of the obligations, which
is usually the originator, take custody thereof. In such
circumstances, if the servicer were to sell the same
obligations to another party, in violation of its duty not to
do so, there is a risk that such party could acquire an
interest in the obligations superior to that of holders of the
asset backed securities. Also, although most such obligations
grant a security interest in the motor vehicle being financed,
in most states the security interest in a motor vehicle must
be noted on the certificate of title to perfect such security
interest against competing claims of other parties. Due to
the large number of vehicles involved, however, the
certificate of title to each vehicle financed, pursuant to the
obligations underlying the asset backed securities, usually is
not amended to reflect the assignment of the seller's security
interest for the benefit of the holders of the asset backed
securities. Therefore, there is the possibility that
recoveries on repossessed collateral may not, in some cases,
be available to support payments on those securities. In
addition, various state and federal laws give the motor
vehicle owner the right to assert against the holder of the
owner's obligation certain defenses such owner would have
against the seller of the motor vehicle. The assertion of
such defenses could reduce payments on the related asset
backed securities. Insofar as credit card receivables are
concerned, credit card holders are entitled to the protection
of a number of state and federal consumer credit laws, many of
which give such holders the right to set off certain amounts
against balances owed on the credit card, thereby reducing the
amounts paid on such receivables. In addition, unlike most
other asset backed securities, credit card receivables are
unsecured obligations of the card holder.
U.S. Treasury Obligations. U.S. Treasury obligations
consist of bills, notes and bonds which principally differ in
their interest rates, maturities and times of issuance.
Obligations issued or guaranteed by agencies or
instrumentalities of the U.S. government are supported by (i)
the full faith and credit of the U.S. Treasury (such as
securities of the Small Business Administration), (ii) the
limited authority of the issuer to borrow from the U.S.
Treasury (such as securities of the Student Loan Marketing
Association) or (iii) the authority of the U.S. government to
purchase certain obligations of the issuer (such as securities
of the Federal National Mortgage Association). No assurance
can be given that the U.S. government will provide financial
support to U.S. government agencies or instrumentalities as
described in clauses (ii) or (iii) above in the future, other
than as set forth above, since it is not obligated to do so by
law. The Portfolio will not invest more than 55% of the value
of its assets in GNMA Certificates or in securities issued or
guaranteed by any other single U.S. government agency or
instrumentality.
Corporate and Other Obligations. In seeking to obtain
its investment objective, the Portfolio may also invest in a
broad range of debt securities, other than U.S. Government
Securities, with varying maturities such as corporate
convertible and non-convertible debt obligations such as fixed
and variable rate bonds. The weighted average maturity of
such investments will generally range from 2 to 10 years.
Debt securities may also include money market securities,
including bank certificates of deposit and time deposits,
bankers' acceptances, prime commercial paper, high-grade,
short-term corporate obligations, and repurchase agreements
with respect to these instruments.
Investment-grade debt securities are securities rated Baa
or higher by Moody's or BBB or higher by Standard & Poor's,
and unrated securities that are of equivalent quality in the
opinion of the Portfolio's Adviser. The rating services'
descriptions of these bond ratings are set forth in the
Appendix to the Statement of Additional Information.
Securities rated in the fourth highest category may have
speculative characteristics; changes in economic conditions
are more likely to lead to a weakened capacity to make
principal and interest payments than in the case of higher
grade bonds. Like the three highest grades, however, these
securities are considered investment grade.
Lower-Rated Securities. The Portfolio may also invest a
portion of its assets, not to exceed 25%, in securities rated
below Baa by Moody's or BBB by Standard & Poor's (commonly
known as "junk bonds"), so long as they are consistent with
the Portfolio's objective of seeking as high a level of total
return as is consistent with prudent investment strategies.
Such securities may include bonds rated as low as C by Moody's
and by Standard & Poor's. See the Appendix to the Statement
of Additional Information. The Portfolio's Adviser
anticipates that a substantial portion of the Portfolio's
lower-rated securities will be in the higher end of these
ratings.
Lower-rated and comparable unrated securities
(collectively referred to in this discussion as "lower-rated
securities") will likely have some quality and protective
characteristics that, in the judgment of the rating
organization, are out-weighed by large uncertainties or major
risk exposures to adverse conditions; and are predominantly
speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of
the obligation.
While the market values of lower-rated securities tend to
react less to fluctuations in interest rate levels than the
market values of higher-rated securities, the market values of
certain lower-rated securities also tend to be more sensitive
to individual corporate developments and changes in economic
conditions than higher-rated securities. In addition, lower-rated
securities generally present a higher degree of credit
risk. Issuers of lower-rated securities are often highly
leveraged and may not have more traditional methods of
financing available to them so that their ability to service
their debt obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired.
The risk of loss due to default by such issuers is
significantly greater because lower-rated securities generally
are unsecured and frequently are subordinated to the prior
payment of senior indebtedness. The Portfolio may incur
additional expenses to the extent that it is required to seek
recovery upon a default in the payment of principal or
interest on its portfolio holdings. The existence of limited
markets for lower-rated securities may diminish the
Portfolio's ability to obtain accurate market quotations for
purposes of valuing such securities and calculating its net
asset value For additional information about the possible
risks of investing in junk bonds, see "Investment Objectives
and Policies - Lower-Rated Bonds" in the Statement of
Additional Information.
Foreign Securities. The Portfolio may invest up to 15%
of its total assets in debt securities, including securities
denominated in foreign currencies of foreign issuers
(including foreign governments) in developed countries and
emerging markets. Because the Portfolio may invest in foreign
securities, investment in the Portfolio involves investment
risks that are different in some respects from an investment
in a fund which invests only in securities of U.S. domestic
issuers. Such risks may include adverse future political and
economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities
held in the Portfolio, possible seizure or nationalization of
foreign deposits, the possible establishment of exchange
controls, or the adoption of other foreign governmental
restrictions which might adversely affect the payment of
principal and interest on securities in the Portfolio. There
may also be less publicly available information about a
foreign issuer than about a domestic issuer and foreign
issuers are not generally subject to uniform accounting,
auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic
issuers.
The considerations described above generally are more of
a concern in developing countries inasmuch as their economic
systems are generally smaller and less diverse and mature and
their political systems less stable than those in developed
countries. The Portfolio seeks to mitigate the risks
associated with these considerations through diversification
and active portfolio management.
The Portfolio may invest up to 35% of its assets in U.S.
dollar-denominated obligations issued by foreign branches of
domestic banks ("Eurodollar" obligations) and domestic
branches of foreign banks ("Yankee dollar" obligations).
The Portfolio may employ certain investment strategies
which are discussed under the caption "Investment Strategies"
below and in the Statement of Additional Information.
T. Rowe Price Equity Income Portfolio
The investment objective of the T. Rowe Price Equity
Income Portfolio is to seek to provide substantial dividend
income and also capital appreciation by investing primarily in
dividend-paying common stocks of established companies. In
pursuing its objective, the Portfolio emphasizes companies
with favorable prospects for increasing dividend income, and
secondarily, capital appreciation. Over time, the income
component (dividends and interest earned) of the Portfolio's
investments is expected to be a significant contributor to the
Portfolio's total return. The Portfolio's yield is expected
to be significantly above that of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500"). Total return will
consist primarily of dividend income and secondarily of
capital appreciation (or depreciation).
The investment program of the Portfolio is based on
several premises. First, the Portfolio's Adviser believes
that, over time, dividend income can account for a significant
component of the total return from equity investments.
Second, dividends are normally a more stable and predictable
source of return than capital appreciation. While the price
of a company's stock generally increases or decreases in
response to short-term earnings and market fluctuations, its
dividends are generally less volatile. Finally, the
Portfolio's Adviser believes that stocks which distribute a
high level of current income tend to have less price
volatility than those which pay below average dividends.
To achieve its objective, the Portfolio, under normal
circumstances, will invest at least 65% of its total assets in
income-producing common stocks, whose prospects for dividend
growth and capital appreciation are considered favorable by
its Adviser. To enhance capital appreciation potential, the
Portfolio also uses a "value" approach and invests in stocks
and other securities its Adviser believes are temporarily
undervalued by various measures, such as price/earnings
ratios. The Portfolio's investments will generally be made in
companies which share some of the following characteristics:
* established operating histories;
* above-average current dividend yields relative to
the S&P 500;
* low price/earnings ratios relative to the S&P 500;
* sound balance sheets and other financial
characteristics; and
* low stock price relative to company's underlying
value as measured by assets, earnings, cash flow or
business franchises.
Although the Portfolio will invest primarily in U.S.
common stocks, it may also purchase other types of securities,
for example, foreign securities, preferred stocks, convertible
securities and warrants, when considered consistent with the
Portfolio's investment objective and program.
In the event that future economic or financial conditions
adversely affect equity securities, or stocks are considered
overvalued, or the Portfolio's Adviser believes that investing
for defensive purposes is appropriate, or in order to meet
anticipated redemption requests, the Portfolio may invest part
or all of its assets in U.S. government securities and high
quality (within the two highest rating categories assigned by
an NRSRO) U.S. and foreign dollar-denominated money market
securities including certificates of deposit, bankers'
acceptances, commercial paper, short-term corporate securities
and repurchase agreements.
The Portfolio may invest up to 25% of its total assets in
foreign securities. These include non-dollar denominated
securities traded outside the U.S. and dollar denominated
securities traded in the U.S. (such as American Depositary
Receipts). Such investments increase a portfolio's
diversification and may enhance return, but they may represent
a greater degree of risk than investing in domestic
securities. These risks are discussed in the above section of
this Prospectus describing the T. Rowe Price International
Stock Portfolio.
The Portfolio may invest in debt securities of any type
including municipal securities, without regard to quality or
rating. Such securities would be purchased in companies which
meet the investment criteria for the Portfolio. The price of
a bond fluctuates with changes in interest rates, rising when
interest rates fall and falling when interest rates rise. The
Portfolio, however, will not invest more than 10% of its total
assets in securities rated below Baa by Moody's or BBB by
Standard & Poor's (commonly known as "junk bonds"). Such
securities may include bonds rated as low as C by Moody's and
by Standard & Poor's. See the Appendix to the Statement of
Additional Information. Investments in non-investment grade
securities entail certain risks which are discussed in the
above section of this Prospectus describing the Dreyfus U.S.
Government Securities Portfolio under the heading "Lower-Rated
Securities."
The Portfolio may employ certain investment strategies
which are discussed under the caption "Investment Strategies"
below and in the Statement of Additional Information.
T. Rowe Price Growth Stock Portfolio
The investment objectives of the T. Rowe Price Growth
Stock Portfolio are to seek long-term growth of capital and to
increase dividend income through investment primarily in
common stocks of well-established growth companies. A growth
company is defined as one which: (1) has demonstrated
historical growth of earnings faster than the growth of
inflation and the economy in general; and (2) has indications
of being able to continue this growth pattern in the future.
Total return will consist primarily of capital appreciation or
depreciation and secondarily of dividend income.
More than fifty years ago, Thomas Rowe Price pioneered
the Growth Stock Theory of Investing. It is based on the
premise that inflation represents a more serious, long-term
threat to an investor's portfolio than stock market
fluctuations or recessions. Mr. Price believed that when a
company's earnings grow faster than both inflation and the
economy in general, the market will eventually reward its
long-term earnings growth with a higher stock price. In
addition, the company should be able to raise its dividend in
line with its growth in earnings.
Although corporate earnings can be expected to be lower
during periods of recession, it is the Portfolio Adviser's
opinion that, over the long term, the earnings of well-established
growth companies will not be affected adversely by
unfavorable economic conditions to the same extent as the
earnings of more cyclical companies. However, investors
should be aware that the Portfolio's share value may not
always reflect the long-term earnings trend of growth
companies.
The Portfolio will invest primarily in the common stock
of a diversified group of well-established growth companies.
While current dividend income is not a prerequisite in the
selection of a growth company, the companies in which the
Portfolio will invest normally have a record of paying
dividends and are generally expected to increase the amounts
of such dividends in future years as earnings increase.
Although the Portfolio will invest primarily in U.S.
common stocks, it may also purchase other types of securities,
for example, foreign securities, preferred stocks, convertible
securities and warrants, when considered consistent with the
Portfolio's investment objectives and program.
In the event that future economic or financial conditions
adversely affect equity securities, or stocks are considered
overvalued, or the Portfolio's Adviser believes that investing
for defensive purposes is appropriate, or in order to meet
anticipated redemption requests, the Portfolio may invest part
or all of its assets in U.S. government securities and high
quality (within the two highest rating categories assigned by
an NRSRO) U.S. and foreign dollar-denominated money market
securities including certificates of deposit, bankers'
acceptances, commercial paper, short-term corporate securities
and repurchase agreements.
The Portfolio may invest up to 30% of its total assets in
foreign securities. These include non-dollar denominated
securities traded outside the U. S. and dollar denominated
securities traded in the U. S. (such as American Depositary
Receipts). Such investments increase a portfolio's
diversification and may enhance return, but they may represent
a greater degree of risk than investing in domestic
securities. These risks are discussed in the above section of
this Prospectus describing the T. Rowe Price International
Stock Portfolio.
The Portfolio may employ certain investment strategies
which are discussed under the caption "Investment Strategies"
below and in the Statement of Additional Information.
Investment Strategies
In addition to making investments directly in securities,
the Portfolios (other than the TCW Money Market Portfolio) may
write covered call and put options and hedge their investments
by purchasing options and engaging in transactions in futures
contracts and related options. The Adviser to the TCW Managed
Asset Allocation Portfolio does not presently intend to
utilize futures contracts and related options but may do so in
the future. The T. Rowe Price International Stock, Dreyfus
U.S. Government Securities, T. Rowe Price Equity Income and T.
Rowe Price Growth Stock Portfolios may engage in foreign
currency exchange transactions to protect against changes in
future exchange rates. All Portfolios except the TCW Money
Market Portfolio may invest in American Depositary Receipts
and European Depositary Receipts. All Portfolios may enter
into repurchase agreements, may make forward commitments to
purchase securities, lend their portfolio securities and
borrow funds under certain limited circumstances. The T.
Rowe Price Equity Income, T. Rowe Price Growth Stock, T. Rowe
Price International Stock and Dreyfus U.S. Government
Securities Portfolios may invest in hybrid instruments. The
investment strategies referred to above and the risks related
to them are summarized below and certain of these strategies
are described in more detail in the Statement of Additional
Information.
Options and Futures Transactions. A Portfolio (other than
the TCW Money Market Portfolio) may seek to increase the
current return on its investments by writing covered call or
covered put options. In addition, a Portfolio (other than the
TCW Money Market Portfolio) may at times seek to hedge against
either a decline in the value of its portfolio securities or
an increase in the price of securities which its Adviser plans
to purchase through the writing and purchase of options and
the purchase and sale of futures contracts and related
options. The Adviser to the TCW Managed Asset Allocation
Portfolio has no present intention to use this strategy, but
may do so in the future.
The Adviser to the Dreyfus U.S. Government Securities
Portfolio does not presently intend to purchase or sell call
or put options but may enter into interest rate futures
contracts and write and purchase put and call options on such
futures contracts. The Portfolio may purchase and sell
interest rate futures contracts as a hedge against changes in
interest rates. A futures contract is an agreement between
two parties to buy and sell a security for a set price on a
future date. Futures contracts are traded on designated
"contracts markets" which, through their clearing
corporations, guarantee performance of the contracts.
Currently, there are futures contracts based on securities
such as long-term U.S. Treasury bonds, U.S. Treasury notes,
GNMA Certificates and three-month U.S. Treasury bills.
Generally, if market interest rates increase, the value
of outstanding debt securities declines (and vice versa).
Entering into a futures contract for the sale of securities
has an effect similar to the actual sale of securities,
although the sale of the futures contracts might be
accomplished more easily and quickly. For example, if the
Portfolio holds long-term U.S. Government Securities and the
Adviser anticipates a rise in long-term interest rates, it
could, in lieu of disposing of its portfolio securities, enter
into futures contracts for the sale of similar long-term
securities. If interest rates increased and the value of the
Portfolio's securities declined, the value of the Portfolio's
futures contracts would increase, thereby protecting the
Portfolio by preventing the net asset value from declining as
much as it otherwise would have. Similarly, entering into
futures contracts for the purchase of securities has an effect
similar to the actual purchase of the underlying securities,
but permits the continued holding of securities other than the
underlying securities. For example, if the Adviser expects
long-term interest rates to decline, the Portfolio might enter
into futures contracts for the purchase of long-term
securities, so that it could gain rapid market exposure that
may offset anticipated increases in the cost of securities it
intends to purchase, while continuing to hold higher-yielding
short-term securities or waiting for the long-term market to
stabilize.
A Portfolio (other than the TCW Money Market Portfolio)
also may purchase and sell listed put and call options on
futures contracts. An option on a futures contract gives the
purchaser the right, in return for the premium paid, to assume
a position in a futures contract (a long position if the
option is a call and a short position if the option is a put),
at a specified exercise price at any time during the option
period. When an option on a futures contract is exercised,
delivery of the futures position is accompanied by cash
representing the difference between the current market price
of the futures contract and the exercise price of the option.
The Dreyfus U.S. Government Securities Portfolio may
purchase put options on interest rate futures contracts in
lieu of, and for the same purpose as, sale of a futures
contract. It also may purchase such put options in order to
hedge a long position in the underlying futures contract in
the same manner as it purchases "protective puts" on
securities. The purchase of call options on interest rate
futures contracts is intended to serve the same purpose as the
actual purchase of the futures contract, and the Portfolio
will set aside cash or cash equivalents sufficient to purchase
the amount of portfolio securities represented by the
underlying futures contracts.
A Portfolio may not purchase futures contracts or related
options if, immediately thereafter, more than 33 1/3% (25% for
the T. Rowe Price Equity Income Portfolio, the T. Rowe Price
Growth Stock Portfolio and the T. Rowe Price International
Stock Portfolio) of the Portfolio's total assets would be so
invested.
The Portfolios' Advisers generally expect that options
and futures transactions for the Portfolios will be conducted
on securities and other exchanges. In certain instances,
however, a Portfolio may purchase and sell options in the
over-the-counter market. The staff of the Securities and
Exchange Commission considers over-the-counter options to be
illiquid. A Portfolio's ability to terminate option positions
established in the over-the-counter market may be more limited
than in the case of exchange traded options and may also
involve the risk that securities dealers participating in such
transactions would fail to meet their obligations to the
Portfolio. There can be no assurance that a Portfolio will be
able to effect closing transactions at any particular time or
at an acceptable price. The use of options and futures
involves the risk of imperfect correlation between movements
in options and futures prices and movements in the prices of
the securities that are being hedged. Expenses and losses
incurred as a result of these hedging strategies will reduce
the Portfolio's current return.
Foreign Currency Transactions. The Dreyfus U.S.
Government Securities, T. Rowe Price Equity Income, T. Rowe
Price Growth Stock and T. Rowe Price International Stock
Portfolios may purchase foreign currency on a spot (or cash)
basis, enter into contracts to purchase or sell foreign
currencies at a future date ("forward contracts"), purchase
and sell foreign currency futures contracts, and purchase
exchange traded and over-the-counter call and put options on
foreign currency futures contracts and on foreign currencies.
The Adviser to a Portfolio may engage in these transactions to
protect against uncertainty in the level of future exchange
rates in connection with the purchase and sale of portfolio
securities ("transaction hedging") and to protect the value of
specific portfolio positions ("position hedging").
Hedging transactions involve costs and may result in
losses. The Dreyfus U.S. Government Securities, T. Rowe Price
Equity Income, T. Rowe Price Growth Stock and T. Rowe Price
International Stock Portfolios may write covered call options
on foreign currencies to offset some of the costs of hedging
those currencies. A Portfolio will engage in over-the-counter
transactions only when appropriate exchange traded
transactions are unavailable and when, in the opinion of the
Portfolio's Adviser, the pricing mechanism and liquidity are
satisfactory and the participants are responsible parties
likely to meet their contractual obligations. A Portfolio's
ability to engage in hedging and related option transactions
may be limited by tax considerations.
Transaction and position hedging do not eliminate
fluctuations in the underlying prices of the securities which
the Portfolio owns or intends to purchase or sell. They simply
establish a rate of exchange which one can achieve at some
future point in time. Additionally, although these techniques
tend to minimize the risk of loss due to a decline in the
value of the hedged currency, they tend to limit any potential
gain which might result from the increase in the value of such
currency.
Interest Rate Transactions. In order to attempt to
protect the value of its portfolio from interest rate
fluctuations, the Dreyfus U.S. Government Securities Portfolio
may enter into various hedging transactions, such as interest
rate swaps and the purchase or sale of interest rate caps and
floors. Interest rate swaps involve the exchange by the
Portfolio with another party of their respective commitments
to pay or receive interest, e.g., an exchange of floating rate
payments for fixed rate payments. The purchase of an interest
rate cap entitles the purchaser, to the extent that a
specified index exceeds a predetermined interest rate, to
receive payments of interest on a notional principal amount
from the party selling such interest rate cap. The purchase
of an interest rate floor entitles the purchaser, to the
extent that a specified index falls below a predetermined
interest rate, to receive payments of interest on a notional
principal amount from the party selling such interest rate
floor. The Adviser to the Portfolio expects to enter into
these transactions on behalf of the Portfolio primarily to
preserve a return or spread on a particular investment or
portion of its portfolio or to protect against any increase in
the price of securities the Portfolio anticipates purchasing
at a later date. The Portfolio intends to use these
transactions as a hedge and not as a speculative investment.
The Portfolio will not sell interest rate caps or floors that
it does not own.
The Portfolio may enter into interest rate swaps, caps
and floors on either an asset-based or liability-based basis,
depending on whether it is hedging its assets or its
liabilities, and will usually enter into interest rate swaps
on a net basis, i.e., the two payment streams are netted out,
with the Portfolio receiving or paying, as the case may be,
only the net amount of the two payments. Inasmuch as these
hedging transactions are entered into for good faith hedging
purposes, the Adviser to the Portfolio and the Fund believe
such obligations do not constitute senior securities and
accordingly, will not treat them as being subject to the
Portfolio's borrowing restrictions. The net amount of the
excess, if any, of the Portfolio's obligations over its
entitlement with respect to each interest rate swap will be
accrued on a daily basis and an amount of cash or liquid
securities having an aggregate net asset value at least equal
to the accrued excess will be maintained in a segregated
account by the Portfolio's custodian. The Portfolio will not
enter into any interest rate swap, cap or floor transactions
unless the unsecured senior debt or the claims-paying ability
of the other party thereto is rated in the highest category of
at least one NRSRO at the time of entering into such
transaction. If there is a default by the other party to such
a securities transaction, the Portfolio will have contractual
remedies pursuant to the agreements related to the
transactions. The swap market has grown substantially in
recent years with a large number of banks and investment
banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the
swap market has become relatively liquid. Caps and floors are
more recent innovations for which standardized documentation
has not yet been developed and, accordingly, they are less
liquid than swaps.
Dollar Roll Transactions. The Dreyfus U.S. Government
Securities Portfolio may enter into dollar roll transactions
with selected banks and broker-dealers. Dollar roll
transactions are comprised of the sale by the Portfolio of
mortgage-based securities, together with a commitment to
purchase similar, but not identical, securities at a future
date. In addition, the Portfolio is paid a fee as
consideration for entering into the commitment to purchase.
Dollar rolls may be renewed after cash settlement and
initially may involve only a firm commitment agreement by the
Portfolio to buy a security. If the broker-dealer to whom the
Portfolio sells the security becomes insolvent, the
Portfolio's right to purchase or repurchase the security may
be restricted; the value of the security may change adversely
over the term of the dollar roll; the security that the
Portfolio is required to repurchase may be worth less than the
security that the Portfolio originally held, and the return
earned by the Portfolio with the proceeds of a dollar roll may
not exceed transaction costs. Dollar roll transactions are
treated as borrowings for purposes of the 1940 Act, and the
aggregate of such transactions and all other borrowings of the
Portfolio (including reverse repurchase agreements) will be
subject to the requirement that the Portfolio maintain asset
coverage of 300% for all borrowings.
Borrowings. A Portfolio other than the Dreyfus U.S.
Government Securities, T. Rowe Price Equity Income, T. Rowe
Price Growth Stock and T. Rowe Price International Stock
Portfolios may borrow money from banks for temporary purposes
in amounts up to 5% of its total assets. The Dreyfus U.S.
Government Securities Portfolio may borrow from banks and
enter into reverse repurchase agreements or dollar rolls
transactions in an amount equal to up to 33 1/3% of the value
of its net assets (computed at the time the loan is made) to
take advantage of investment opportunities and for temporary,
extraordinary or emergency purposes. The Dreyfus U.S.
Government Securities Portfolio may pledge up to 33 1/3% of
its total assets to secure these borrowings. If the
Portfolio's asset coverage for borrowings falls below 300%,
the Portfolio will take prompt action to reduce its
borrowings.
The T. Rowe Price Equity Income, T. Rowe Price Growth
Stock and T. Rowe Price International Stock Portfolios may
borrow money from banks as a temporary measure for emergency
purposes, to facilitate redemption requests, or for other
purposes consistent with the Portfolio's investment objective
and program in an amount up to 33 1/3% of the Portfolio's net
assets. Each Portfolio may pledge up to 33 1/3% of its total
assets to secure these borrowings. These Portfolios may not
purchase additional securities when borrowings exceed 5% of
total assets.
As a matter of operating policy, each of the Dreyfus U.S.
Government Securities, T. Rowe Price Equity Income, T. Rowe
Price Growth Stock and T. Rowe Price International Stock
Portfolios will limit all borrowings to no more than 25% of
such Portfolio's net assets.
American and European Depositary Receipts. All Portfolios
except the TCW Money Market Portfolio may purchase foreign
securities in the form of American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs") or other
securities convertible into securities of corporations in
which the Portfolios are permitted to invest pursuant to their
respective investment objectives and policies. These
securities may not necessarily be denominated in the same
currency into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company
which evidence ownership of underlying securities issued by a
foreign corporation. EDRs are receipts issued in Europe by
banks or depositories which evidence a similar ownership
arrangement. Generally, ADRs, in registered form, are designed
for use in United States securities markets and EDRs, in
bearer form, are designed for use in European securities
markets.
Repurchase Agreements. All Portfolios may enter into
repurchase agreements with a bank, broker-dealer or other
financial institution as a means of earning a fixed rate of
return on its cash reserves for periods as short as overnight.
A repurchase agreement is a contract pursuant to which a
Portfolio, against receipt of securities of at least equal
value including accrued interest, agrees to advance a
specified sum to the financial institution which agrees to
reacquire the securities at a mutually agreed upon time
(usually one day) and price. Each repurchase agreement entered
into by a Portfolio will provide that the value of the
collateral underlying the repurchase agreement will always be
at least equal to the repurchase price, including any accrued
interest. The Portfolio's right to liquidate such securities
in the event of a default by the seller could involve certain
costs, losses or delays and, to the extent that proceeds from
any sale upon a default of the obligation to repurchase are
less than the repurchase price, the Portfolio could suffer a
loss.
Forward Commitments. Each Portfolio may make contracts to
purchase securities for a fixed price at a future date beyond
customary settlement time ("forward commitments") if it holds,
and maintains until the settlement date in a segregated
account, cash or high-grade debt obligations in an amount
sufficient to meet the purchase price, or if it enters into
offsetting contracts for the forward sale of other securities
it owns. Forward commitments may be considered securities in
themselves and involve a risk of loss if the value of the
security to be purchased declines prior to the settlement
date, which risk is in addition to the risk of decline in
value of the Portfolio's other assets. Where such purchases
are made through dealers, the Portfolio relies on the dealer
to consummate the sale. The dealer's failure to do so may
result in the loss to the Portfolio of an advantageous yield
or price.
Securities Loans. Each Portfolio may seek to obtain
additional income by making secured loans of its portfolio
securities with a value up to 33 1/3% of its total assets. All
securities loans will be made pursuant to agreements requiring
the loans to be continuously secured by collateral in cash or
high-grade debt obligations at least equal at all times to the
market value of the loaned securities. The borrower pays to
the Portfolio an amount equal to any dividends or interest
received on loaned securities. The Portfolio retains all or a
portion of the interest received on investment of cash
collateral or receives a fee from the borrower. Lending
portfolio securities involves risks of delay in recovery of
the loaned securities or in some cases loss of rights in the
collateral should the borrower fail financially.
Hybrid Instruments. The T. Rowe Price Equity Income, T.
Rowe Price Growth Stock and T. Rowe Price International Stock
Portfolios may invest up to 10% of their total assets, and the
Dreyfus U.S. Government Securities Portfolio may invest up to
5% of its total assets, in hybrid instruments. Hybrid
instruments have recently been developed and combine the
elements of futures contacts or options with those of debt,
preferred equity or a depository instrument. Often these
hybrid instruments are indexed to the price of a commodity,
particular currency, or a domestic or foreign debt or equity
securities index. Hybrid instruments may take a variety of
forms, including, but not limited to, debt instruments with
interest or principal payments or redemption terms determined
by reference to the value of a currency or commodity or
securities index at a future point in time, preferred stock
with dividend rates determined by reference to the value of a
currency, or convertible securities with the conversion terms
related to a particular commodity. Hybrid instruments may
bear interest or pay dividends at below market (or even
relatively nominal) rates. Under certain conditions, the
redemption value of such an instrument could be zero. Hybrid
instruments can have volatile prices and limited liquidity and
their use by a Portfolio may not be successful.
Fixed-Income Securities - Downgrades. If any security
invested in by any of the Portfolios loses its rating or has
its rating reduced after the Portfolio has purchased it,
unless required by law, the Portfolio is not required to sell
or otherwise dispose of the security, but may consider doing
so.
Illiquid Securities. Each Portfolio may invest up to 10%
(15% with respect to T. Rowe Price International Stock
Portfolio, T. Rowe Price Equity Income Portfolio and T. Rowe
Price Growth Stock Portfolio) of its net assets in illiquid
securities and other securities which are not readily
marketable, including non-negotiable time deposits, certain
restricted securities not deemed by the Fund's Trustees to be
liquid and repurchase agreements with maturities longer than
seven days. Securities eligible for resale pursuant to Rule
144A under the Securities Act of 1933, which have been
determined to be liquid, will not be considered by the
Portfolios' Advisers to be illiquid or not readily marketable
and, therefore, are not subject to the aforementioned 10% or
15% limits. The inability of a Portfolio to dispose of
illiquid or not readily marketable investments readily or at a
reasonable price could impair the Portfolio's ability to raise
cash for redemptions or other purposes. The liquidity of
securities purchased by a Portfolio which are eligible for
resale pursuant to Rule 144A will be monitored by the
Portfolios' Advisers on an ongoing basis, subject to the
oversight of the Trustees. In the event that such a security
is deemed to be no longer liquid, a Portfolio's holdings will
be reviewed to determine what action, if any, is required to
ensure that the retention of such security does not result in
a Portfolio having more than 10% or 15%, as applicable, of its
assets invested in illiquid or not readily marketable
securities.
MANAGEMENT OF THE FUND
The Trustees and officers of the Fund provide broad
supervision over the business and affairs of the Portfolios
and the Fund.
The Manager
The Fund is managed by Endeavor Investment Advisers ("the
Manager") which, subject to the supervision and direction of
the Trustees of the Fund, has overall responsibility for the
general management and administration of the Fund. The
Manager is a general partnership of which Endeavor Management
Co. is the managing partner. Endeavor Management Co., by whose
employees all management services performed under the
management agreement are rendered to the Fund, holds a 50.01%
interest in the Manager and AUSA Financial Markets, Inc., an
affiliate of PFL, holds the remaining 49.99% interest therein.
Vincent J. McGuinness, a Trustee of the Fund, together with
his family members and trusts for the benefit of his family
members, own all of Endeavor Management Co.'s outstanding
common stock. Mr. McGuinness is Chairman, Chief Executive
Officer and President of Endeavor Management Co.
The Manager is responsible for providing investment
management and administrative services to the Fund and in the
exercise of such responsibility selects the investment
advisers for the Fund's Portfolios (the "Advisers") and
monitors the Advisers' investment programs and results,
reviews brokerage matters, oversees compliance by the Fund
with various federal and state statutes, and carries out the
directives of the Trustees. The Manager is responsible for
providing the Fund with office space, office equipment, and
personnel necessary to operate and administer the Fund's
business, and also supervises the provision of services by
third parties such as the Fund's custodian and transfer agent.
Pursuant to an administration agreement, First Data Investor
Services Group, Inc. ("First Data") will assist the Manager in
the performance of its administrative responsibilities to the
Fund.
As compensation for these services the Fund pays the
Manager a monthly fee at the annual rate of .50% of the
average daily net assets of the TCW Money Market Portfolio,
.75% of the average daily net assets of the TCW Managed Asset
Allocation Portfolio, .90% of the average daily net assets of
the T. Rowe Price International Stock Portfolio, .80% of the
average daily net assets of the Value Equity Portfolio, .80%
of the average daily net assets of the Value Small Cap
Portfolio, .65% of the average daily net assets of the Dreyfus
U.S. Government Securities Portfolio, .80% of the average
daily net assets of the T. Rowe Price Equity Income Portfolio
and .80% of the average daily net assets of the T. Rowe Price
Growth Stock Portfolio. The management fees paid by the
Portfolios (other than the TCW Money Market Portfolio),
although higher than the fees paid by most other investment
companies in general, are comparable to management fees paid
for similar services by many investment companies with similar
investment objectives and policies. From the management fees,
the Manager pays the expenses of providing investment advisory
services to the Portfolios, including the fees of the Adviser
of each Portfolio and the fees and expenses of First Data
pursuant to the administration agreement.
In addition to the management fees, the Fund pays all
expenses not assumed by the Manager, including, without
limitation, expenses for legal, accounting and auditing
services, interest, taxes, costs of printing and distributing
reports to shareholders, proxy materials and prospectuses,
charges of its custodian, transfer agent and dividend
disbursing agent, registration fees, fees and expenses of the
Trustees who are not interested persons of the Fund,
insurance, brokerage costs, litigation, and other
extraordinary or nonrecurring expenses. All general Fund
expenses are allocated among and charged to the assets of the
Portfolios of the Fund on a basis that the Trustees deem fair
and equitable, which may be on the basis of relative net
assets of each Portfolio or the nature of the services
performed and relative applicability to each Portfolio.
The Advisers
Pursuant to an investment advisory agreement with the
Manager, the Adviser to a Portfolio furnishes continuously an
investment program for the Portfolio, makes investment
decisions on behalf of the Portfolio, places all orders for
the purchase and sale of investments for the Portfolio's
account with brokers or dealers selected by such Adviser and
may perform certain limited related administrative functions
in connection therewith. For its services, the Manager pays
the Adviser a fee based on a percentage of the average daily
net assets of the Portfolio. An Adviser may place portfolio
securities transactions with broker-dealers who furnish it
with certain services of value in advising the Portfolio and
other clients. In so doing, an Adviser may cause a Portfolio
to pay greater brokerage commissions than it might otherwise
pay. In seeking the most favorable price and execution
available, an Adviser may, if permitted by law, consider sales
of the Contracts as a factor in the selection of
broker-dealers. OpCap Advisors may select, under certain
circumstances, Oppenheimer & Co., Inc., one of its affiliates,
to execute transactions for the Value Equity and Value Small
Cap Portfolios. T. Rowe Price Associates, Inc. and Rowe
Price-Fleming International, Inc. may utilize certain brokers
indirectly related to them in the capacity as broker in
connection with the execution of transactions for the T. Rowe
Price Equity Income, T. Rowe Price Growth Stock and T. Rowe
Price International Stock Portfolios. See the Statement of
Additional Information for a further discussion of Portfolio
trading.
TCW Funds Management, Inc. ("TCW") is the Adviser to the
Money Market Portfolio and the TCW Managed Asset Allocation
Portfolio. As compensation for its services as investment
adviser, the Manager pays TCW a monthly fee at the annual rate
of .25% of the average daily net assets of the TCW Money
Market Portfolio (subject to reduction in certain
circumstances) and .375% of the average daily net assets of
the TCW Managed Asset Allocation Portfolio (subject to
reduction in certain circumstances). TCW is a wholly owned
subsidiary of The TCW Group, Inc., whose subsidiaries,
including Trust Company of the West and TCW Asset Management
Company, provide a variety of trust, investment management and
investment advisory services. TCW and its affiliates, which
as of December 31, 1995 had approximately $52 billion under
management or committed for management, provide investment
advisory services to a number of open-end and closed-end
investment companies.
James M. Goldberg, a Managing Director and Chairman of
the Fixed Income Policy Committee of TCW, is the portfolio
manager for the TCW Money Market Portfolio. Mr. Goldberg has
been with TCW since 1984. Investment decisions for the equity
portion of the TCW Managed Asset Allocation Portfolio are made
by Norman Ridley in consultation with Stefan D. Abrams. Mr.
Ridley is a Senior Vice President of TCW and has been with the
firm since 1985. Since 1992 Mr. Abrams has been a Managing
Director of TCW and is Director of Equity Strategy and Asset
Allocation. Investment decisions for the fixed income portion
of the TCW Managed Asset Allocation Portfolio are made by Mr.
Goldberg.
OpCap Advisors ("OpCap") (formerly known as Quest for
Value Advisors) is the Adviser to the Value Equity Portfolio
and the Value Small Cap Portfolio. As compensation for its
services as investment adviser, the Manager pays OpCap a
monthly fee at the annual rate of .40% of the average daily
net assets of each of the Value Equity and Value Small Cap
Portfolios.
OpCap is a majority-owned subsidiary of Oppenheimer
Capital, a general partnership which is registered as an
investment adviser under the Investment Advisers Act of 1940.
The employees of Oppenheimer Capital render all investment
management services performed under the Investment Advisory
Agreement to the Portfolios. Oppenheimer Financial Corp.
holds a 33% interest in Oppenheimer Capital. Oppenheimer
Capital, L.P., a Delaware limited partnership of which
Oppenheimer Financial Corp. is the sole general partner, owns
the remaining 67% interest of Oppenheimer Capital. The units
of Oppenheimer Capital, L.P. are traded on the New York Stock
Exchange. OpCap and its affiliates have operated as
investment advisers to both mutual funds and other clients
since 1968, and had approximately $37.3 billion under
management as of December 31, 1995.
Timothy J. McCormack is the portfolio manager for the
Value Small Cap Portfolio. Mr. McCormack has been with
Oppenheimer Capital since August, 1994. From March, 1993 to
July, 1994 Mr. McCormack was an analyst at U.S. Trust Company
and from July, 1991 to March, 1993 Mr. McCormack was with
Gabelli & Company. Eileen Rominger, Managing Director of
Oppenheimer Capital, is the portfolio manager for the Value
Equity Portfolio. Ms. Rominger has been with Oppenheimer
Capital since 1981.
The Dreyfus Corporation ("Dreyfus") is the Adviser to the
Dreyfus U.S. Government Securities Portfolio. Dreyfus, which
was formed in 1947, is a wholly-owned subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of December 31, 1995, Dreyfus
managed or administered approximately $80 billion in assets
for more than 1.7 million investor accounts nationwide. As
compensation for its services as investment adviser, the
Manager pays Dreyfus a monthly fee at the annual rate of .15%
of the average daily net assets of the Dreyfus U.S. Government
Securities Portfolio.
Mellon is a publicly-owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered
under the Federal Bank Holding Company Act of 1956, as
amended. Mellon provides a comprehensive range of financial
products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding
companies in the United States based on total assets.
Mellon's principal wholly-owned subsidiaries are Mellon Bank,
N.A., Mellon Bank (DE) National Association, Mellon Bank (MD),
The Boston Company, Inc., AFCO Credit Corporation and a number
of companies known as Mellon Financial Services Corporations.
Through its subsidiaries, including Dreyfus, Mellon managed
more than $233 billion in assets as of December 31, 1995,
including approximately $81 billion in proprietary mutual fund
assets. As of December 31, 1995, Mellon, through various
subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $786
billion in assets, including approximately $60 billion in
mutual fund assets.
Prior to May 1, 1996, The Boston Company Asset
Management, Inc. ("Boston Company"), an affiliate of Dreyfus,
was the Portfolio's Adviser. Boston Company is a wholly-owned
subsidiary of The Boston Company, Inc., which is an indirect
wholly-owned subsidiary of Mellon.
Andrew S. Windmueller, who has been employed by Dreyfus
since October, 1994 and by The Boston Company, Inc. since
1986, is the portfolio manager for the Dreyfus U.S. Government
Securities Portfolio. Mr. Windmueller is a member of the
Fixed Income Strategy Committee and the Head of Credit
Research of The Boston Company, Inc. and Vice President of
Boston Company.
T. Rowe Price Associates, Inc. ("T. Rowe Price") is the
Adviser to the T. Rowe Price Equity Income Portfolio and the
T. Rowe Price Growth Stock Portfolio. As compensation for its
services as investment adviser, the Manager pays T. Rowe Price
a monthly fee at the annual rate of .40% of the daily net
assets of each of the T. Rowe Price Equity Income and T. Rowe
Price Growth Stock Portfolios. T. Rowe Price serves as
investment manager to a variety of individual and
institutional investor accounts, including limited and real
estate partnerships and other mutual funds.
Investment decisions with respect to the T. Rowe Price
Equity Income Portfolio are made by an Investment Advisory
Committee composed of the following members: Brian C. Rogers,
Chairman, Thomas H. Broadus, Jr., Richard P. Howard, and
William J. Stromberg. The Committee Chairman has day-to-day
responsibility for managing the Portfolio and works with the
Committee in developing and executing the Portfolio's
investment program. Mr. Rogers has been Chairman of the
Committee since 1993. He joined T. Rowe Price in 1982 and has
been managing investments since 1983.
Investment decisions with respect to the T. Rowe Price
Growth Stock Portfolio are made by an Investment Advisory
Committee composed of the following members: John D.
Gillespie, Chairman, James A.C. Kennedy and Brian C. Rogers.
The Committee Chairman has day-to-day responsibility for
managing the Portfolio and works with the Committee in
developing and executing the Portfolio's investment program.
Mr. Gillespie has been Chairman of the Committee since 1994.
He joined T. Rowe Price in 1986 and has been managing
investments since 1989.
Rowe Price-Fleming International, Inc. ("Price-Fleming")
is the Adviser to the T. Rowe Price International Stock
Portfolio (formerly the Global Growth Portfolio). As
compensation for its services as investment adviser, the
Manager pays Price-Fleming a monthly fee at an annual rate
based on the Portfolio's average daily net assets as follows:
.75% up to $20 million; .60% in excess of $20 million up to
$50 million; and .50% of assets in excess of $50 million. At
such time as the net assets of the Portfolio exceed $200
million, the fee shall be .50% of total average daily net
assets.
Prior to January 1, 1995, Ivory & Sime International,
Inc. ("I&S") and Ivory & Sime plc acted as adviser and sub-adviser,
respectively, for the Global Growth Portfolio. As
compensation for its services as investment adviser, the
Manager paid ISI a monthly fee at the annual rate of .45% of
the average daily net assets of the Portfolio up to $400
million and .30% of average daily net assets in excess of $400
million. As compensation for its services, Ivory & Sime plc
received from ISI 78% of the gross monthly fees paid by the
Manager to ISI.
Price-Fleming was incorporated in Maryland in 1979 as a
joint venture between T. Rowe Price and Robert Fleming
Holdings Limited ("Flemings"). Flemings is a diversified
investment organization which participates in a global network
of regional investment offices in New York, London, Zurich,
Geneva, Tokyo, Hong Kong, Manila, Kuala Lampur, South Korea
and Taiwan.
T. Rowe Price was incorporated in Maryland in 1947 as
successor to the investment counseling business founded by the
late Thomas Rowe Price, Jr., in 1937. Flemings was
incorporated in 1974 in the United Kingdom as successor to the
business founded by Robert Fleming in 1873. As of December
31, 1995, T. Rowe Price and its affiliates managed more than
$70 billion of assets of which Price-Fleming managed the U.S.
equivalent of approximately $20 billion.
The common stock of Price-Fleming is 50% owned by a
wholly-owned subsidiary of T. Rowe Price, 25% by a subsidiary
of Fleming and 25% by Jardine Fleming Group Limited ("Jardine
Fleming"). (Half of Jardine Fleming is owned by Flemings and
half by Jardine Matheson Holdings Limited.) T. Rowe Price has
the right to elect a majority of the board of directors of
Price-Fleming, and Flemings has the right to elect the
remaining directors, one of whom will be nominated by Jardine
Fleming.
Investment decisions with respect to the T. Rowe Price
International Stock Portfolio are made by an investment
advisory group composed of the following members: Martin G.
Wade, Christopher D. Alderson, Peter B. Askew, Richard J.
Bruce, Mark J. T. Edwards, John R. Ford, Robert C. Howe, James
B. M. Seddon, Benedict R. F. Thomas and David J. L. Warren.
Martin Wade joined Price-Fleming in 1979 and has 27 years
of experience with the Fleming Group in research, client
service and investment management. (Fleming Group includes
Flemings and/or Jardine Fleming). Christopher Alderson joined
Price-Fleming in 1988 and has 10 years of experience with the
Fleming Group in research and portfolio management. Peter
Askew joined Price-Fleming in 1988 and has 21 years of
experience managing multi-currency fixed income portfolios.
Richard Bruce joined Price-Fleming in 1991 and has eight years
of experience in investment management with the Fleming Group
in Tokyo. Mark Edwards joined Price-Fleming in 1986 and has
15 years of experience in financial analysis. John Ford
joined Price-Fleming in 1982 and has 16 years of experience
with Fleming Group in research and portfolio management.
Robert Howe joined Price Fleming in 1986 and has 15 years of
experience in economic research, company research and
portfolio management. James Seddon joined Price-Fleming in
1987 and has nine years of experience in investment
management. Benedict Thomas joined Price-Fleming in 1988 and
has seven years of portfolio management experience. David
Warren joined Price-Fleming in 1984 and has 16 years of
experience in equity research, fixed income research and
portfolio management.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Portfolio intends to qualify as a "regulated
investment company" under the Internal Revenue Code. By so
qualifying, a Portfolio will not be subject to federal income
taxes to the extent that its net investment income and net
realized capital gains are distributed to shareholders.
It is the intention of each Portfolio to distribute
substantially all its net investment income. Although the
Trustees of the Fund may decide to declare dividends at other
intervals, dividends from investment income of each Portfolio
are expected to be declared annually (except with respect to
the TCW Money Market Portfolio where dividends will be
declared daily and paid monthly) and will be distributed to
the various separate accounts of PFL and not to Contract
owners in the form of additional full and fractional shares of
the Portfolio and not in cash. The result is that the
investment performance of the Portfolios, including the effect
of dividends, is reflected in the cash value of the Contracts.
See the prospectus for the Contracts accompanying this
Prospectus.
All net realized long- or short-term capital gains of
each Portfolio, if any, will be declared and distributed at
least annually either during or after the close of the
Portfolio's fiscal year and will be reinvested in additional
full and fractional shares of the Portfolio. In certain
foreign countries, interest and dividends are subject to a tax
which is withheld by the issuer. U.S. income tax treaties with
certain countries reduce the rates of these withholding taxes.
The Fund intends to provide the documentation necessary to
achieve the lower treaty rate of withholding whenever
applicable or to seek refund of amounts withheld in excess of
the treaty rate.
For a discussion of the impact on Contract owners of
income taxes PFL may owe as a result of (i) its ownership of
shares of the Portfolios, (ii) its receipt of dividends and
distributions thereon, and (iii) its gains from the purchase
and sale thereof, reference should be made to the prospectus
for the Contracts accompanying this Prospectus.
SALE AND REDEMPTION OF SHARES
The Fund offers shares of each Portfolio continuously to
separate accounts of PFL and may at any time offer shares to
any other insurer approved by the Trustees.
AEGON USA Securities, Inc. ("AEGON Securities"), an
affiliate of PFL is the principal underwriter and distributor
of the Contracts. AEGON Securities places orders for the
purchase or redemption of shares of each Portfolio based on,
among other things, the amount of net Contract premiums or
purchase payments transferred to the separate accounts,
transfers to or from a separate account investment division,
policy loans, loan repayments, and benefit payments to be
effected on a given date pursuant to the terms of the
Contracts. Such orders are effected, without sales charge, at
the net asset value per share for each Portfolio determined as
of the close of regular trading on the New York Stock Exchange
(currently 4:00 p.m., New York City time), on that same date.
The net asset value of the shares of each Portfolio for
the purpose of pricing orders for the purchase and redemption
of shares is determined as of the close of the New York Stock
Exchange, Monday through Friday, exclusive of national
business holidays. Net asset value per share is computed by
dividing the value of all assets of a Portfolio (including
accrued interest and dividends), less all liabilities of the
Portfolio (including accrued expenses and dividends payable),
by the number of outstanding shares of the Portfolio. The
assets of the TCW Money Market Portfolio are valued at
amortized cost and the assets of the other Portfolios are
valued on the basis of their market values or, in the absence
of a market value with respect to any portfolio securities, at
fair value as determined by or under the direction of the
Fund's Board of Trustees including the employment of an
independent pricing service, as described in the Statement of
Additional Information.
Shares of the Portfolios may be redeemed on any day on
which the Fund is open for business.
PERFORMANCE INFORMATION
From time to time, the Fund may advertise the "average
annual or cumulative total return" of the TCW Managed Asset
Allocation, Value Equity, Value Small Cap, Dreyfus U.S.
Government Securities, T. Rowe Price Equity Income, T. Rowe
Price Growth Stock and T. Rowe Price International Stock
Portfolios or the "yield" and "effective yield" of the TCW
Money Market and Dreyfus U.S. Government Securities Portfolios
and may compare the performance of the Portfolios with that of
other mutual funds with similar investment objectives as
listed in rankings prepared by Lipper Analytical Services,
Inc., or similar independent services monitoring mutual fund
performance, and with appropriate securities or other relevant
indices. The "average annual total return" of a Portfolio
refers to the average annual compounded rate of return over
the stated period that would equate an initial investment in
that Portfolio at the beginning of the period to its ending
redeemable value, assuming reinvestment of all dividends and
distributions and deduction of all recurring charges other
than charges and deductions which are, or may be, imposed
under the Contracts. Figures will be given for the recent
one, five and ten year periods and for the life of the
Portfolio if it has not been in existence for any such
periods. When considering "average annual total return"
figures for periods longer than one year, it is important to
note that a Portfolio's annual total return for any given year
might have been greater or less than its average for the
entire period. "Cumulative total return" represents the total
change in value of an investment in a Portfolio for a
specified period (again reflecting changes in Portfolio share
prices and assuming reinvestment of Portfolio distributions).
The TCW Money Market Portfolio's "yield" refers to the income
generated by an investment in the Portfolio over a seven-day
period (which period will be stated in the advertisement).
This income is then "annualized." That is, the amount of
income generated by the investment during that week is assumed
to be generated each week over a 52-week period and is shown
as a percentage of the investment. The "effective yield" is
calculated similarly but, when annualized, the income earned
by an investment in the Portfolio is assumed to be reinvested.
The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed
reinvestment. The Dreyfus U.S. Government Securities Portfolio
may advertise its 30-day yield. Such yield refers to the
income that is generated over a stated 30-day (or one month)
period (which period will be stated in the advertisement),
divided by the net asset value per share on the last day of
the period. The income is annualized by assuming that the
income during the 30-day period remains the same each month
over one year and compounded semi-annually. The methods used
to calculate "average annual and cumulative total return" and
"yield" are described further in the Statement of Additional
Information.
The performance of each Portfolio will vary from time to
time in response to fluctuations in market conditions,
interest rates, the composition of the Portfolio's investments
and expenses. Consequently, a Portfolio's performance figures
are historical and should not be considered representative of
the performance of the Portfolio for any future period.
ORGANIZATION AND CAPITALIZATION OF THE FUND
The Fund was established in November 1988 as a business
trust under Massachusetts law. The Fund has authorized an
unlimited number of shares of beneficial interest which may,
without shareholder approval, be divided into an unlimited
number of series. Shares of the Fund are presently divided
into eight series of shares, one for each of the Fund's eight
Portfolios. Shares are freely transferable, are entitled to
dividends as declared by the Trustees, and in liquidation are
entitled to receive the net assets of their respective
Portfolios, but not the net assets of the other Portfolios.
Fund shares are entitled to vote at any meeting of
shareholders. The Fund does not generally hold annual meetings
of shareholders and will do so only when required by law.
Matters submitted to a shareholder vote must be approved by
each portfolio of the Fund separately except (i) when required
by the 1940 Act, shares will be voted together as a single
class and (ii) when the Trustees have determined that the
matter does not affect all portfolios, then only shareholders
of the affected portfolio will be entitled to vote on the
matter.
Owners of the Contracts have certain voting interests in
respect of shares of the Portfolios. See "Voting Rights" in
the prospectus for the Contracts accompanying this Prospectus
for a description of the rights granted Contract owners to
instruct voting of shares.
ADDITIONAL INFORMATION
Transfer Agent and Custodian
All cash and securities of the Fund are held by Boston
Safe Deposit and Trust Company as custodian. First Data,
located at One Exchange Place, Boston, Massachusetts 02109,
serves as transfer agent for the Fund.
Independent Auditors
Ernst & Young LLP, located at 200 Clarendon Street,
Boston, Massachusetts, 02116, serves as the Fund's independent
auditors.
Statements contained in this Prospectus as to the
contents of any contract or other document referred to are not
necessarily complete, and, in each instance, reference is made
to the copy of such contract or other document filed as an
exhibit to the registration statement of which this Prospectus
forms a part, each such statement being qualified in all
respects by such reference.
TABLE OF CONTENTS
Page
The Fund
Financial Highlights
Investment Objectives and Policies
TCW Money Market Portfolio
TCW Managed Asset Allocation
Portfolio
T. Rowe Price International Stock
Portfolio
Value Equity Portfolio
Value Small Cap Portfolio
Dreyfus U.S. Government Securities
Portfolio
T. Rowe Price Equity Income
Portfolio
T. Rowe Price Growth Stock
Portfolio
Investment Strategies
Management of the Fund
The Manager
The Advisers
Dividends, Distributions and Taxes
Sale and Redemption of Shares
Performance Information
Organization and Capitalization
of the Fund
Additional Information
Transfer Agent and Custodian
Independent Auditors
--------------
No person has been authorized to
give any information or to make any
representation not contained in this
Prospectus and, if given or made,
such information or representation
must not be relied upon as having
been authorized. This Prospectus
does not constitute an offering of
any securities other than the
registered securities to which it
relates or an offer to any person in
any state or jurisdiction of the
United States or any country where
such offer would be unlawful.
ENDEAVOR SERIES TRUST
2101 East Coast Highway,
Suite 300
Corona del Mar, California 92625
(714) 760-0505
Manager
Endeavor Investment Advisers
2101 East Coast Highway
Suite 300
Corona del Mar, California 92625
Investment Advisers
TCW Funds Management, Inc.
865 S. Figueroa Street
Los Angeles, California 90071
OpCap Advisors
One World Financial Center
New York, New York 10281
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Rowe Price-Fleming International,
Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Custodian
Boston Safe Deposit and Trust
Company
One Boston Place
Boston, Massachusetts 02108
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ENDEAVOR SERIES TRUST
This Statement of Additional Information is not a
prospectus and should be read in conjunction with the
Prospectus for the TCW Money Market Portfolio (formerly, the
Money Market Portfolio), the TCW Managed Asset Allocation
Portfolio (formerly, the Managed Asset Allocation Portfolio),
the T. Rowe Price International Stock Portfolio (formerly, Global
Growth Portfolio), the Value Equity Portfolio
(formerly, the Quest for Value Equity Portfolio), the Value
Small Cap Portfolio (formerly, the Quest for Value Small Cap
Portfolio), the Dreyfus U.S. Government Securities Portfolio,
(formerly, the U.S. Government Securities Portfolio) the T.
Rowe Price Equity Income Portfolio and the T. Rowe Price
Growth Stock Portfolio of Endeavor Series Trust (the "Fund"),
dated May 1, 1996, which may be obtained by writing the Fund
at 2101 East Coast Highway, Suite 300, Corona del Mar,
California 92625 or by telephoning (714) 760-0505. Unless
otherwise defined herein, capitalized terms have the meanings
given to them in the Prospectus.
TABLE OF CONTENTS
Page
Investment Objectives and Policies................ 4
Options and Futures Strategies............... 4
Foreign Currency Transactions................ 10
Repurchase Agreements........................ 14
Forward Commitments.......................... 15
Securities Loans............................. 15
Lower Rated Bonds ........................... 15
Interest Rate Transactions................... 16
Dollar Roll Transactions..................... 18
Portfolio Turnover........................... 19
Investment Restrictions........................... 20
Other Policies............................... 22
Performance Information........................... 24
Total Return................................. 24
Yield........................................ 27
Non-Standardized Performance................. 28
Portfolio Transactions............................ 28
Management of the Fund............................ 31
Trustees and Officers........................ 31
The Manager.................................. 39
The Advisers................................. 41
Redemption of Shares.............................. 44
Net Asset Value................................... 45
Taxes............................................. 47
Federal Income Taxes......................... 47
Organization and Capitalization of the Fund....... 49
Legal Matters..................................... 51
Custodian......................................... 51
Financial Statements.............................. 51
Appendix.......................................... A-1
______________________
No person has been authorized to give any information or
to make any representation not contained in this Statement of
Additional Information or in the Prospectus and, if given or
made, such information or representation must not be relied
upon as having been authorized. This Statement of Additional
Information does not constitute an offering of any securities
other than the registered securities to which it relates or an
offer to any person in any state or other jurisdiction of the
United States or any country where such offer w unlawful.
The date of this Statement of Additional Information is
May 1, 1996.
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INVESTMENT OBJECTIVES AND POLICIES
The following information supplements the discussion of
the investment objectives and policies of the Portfolios in
the Prospectus of the Fund. The Fund is managed by Endeavor
Investment Advisers. The Manager has selected TCW Funds
Management, Inc. as investment adviser for the TCW Money
Market Portfolio and the TCW Managed Asset Allocation
Portfolio, Rowe Price-Fleming International, Inc. as
investment adviser for the T. Rowe Price International Stock
Portfolio, OpCap Advisors (formerly, Quest for Value Advisors)
as investment adviser for the Value Equity Portfolio and Value
Small Cap Portfolio, The Dreyfus Corporation as investment
adviser for the Dreyfus U.S. Government Securities Portfolio
and T. Rowe Price Associates, Inc. as investment adviser for
the T. Rowe Price Equity Income Portfolio and T. Rowe Price
Growth Stock Portfolio.
Options and Futures Strategies (All Portfolios except TCW
Money Market Portfolio)
A Portfolio may seek to increase the current return on
its investments by writing covered call or covered put
options. In addition, a Portfolio may at times seek to hedge
against either a decline in the value of its portfolio
securities or an increase in the price of securities which its
Adviser plans to purchase through the writing and purchase of
options including options on stock indices and the purchase
and sale of futures contracts and related options. A Portfolio
may utilize options or futures contracts and related options
for other than hedging purposes to the extent that the
aggregate initial margins and premiums do not exceed 5% of the
Portfolio's net asset value. The Adviser to the Managed Asset
Allocation Portfolio does not presently intend to utilize
options or futures contracts and related options but may do so
in the future. Expenses and losses incurred as a result of
such hedging strategies will reduce a Portfolio's current
return.
The ability of a Portfolio to engage in the options and
futures strategies described below will depend on the
availability of liquid markets in such instruments. Markets in
options and futures with respect to stock indices and U.S.
government securities are relatively new and still developing.
It is impossible to predict the amount of trading interest
that may exist in various types of options or futures.
Therefore no assurance can be given that a Portfolio will be
able to utilize these instruments effectively for the purposes
stated below.
Writing Covered Options on Securities. A Portfolio may
write covered call options and covered put options on
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optionable securities of the types in which it is permitted to
invest from time to time as its Adviser determines is
appropriate in seeking to attain the Portfolio's investment
objective. Call options written by a Portfolio give the holder
the right to buy the underlying security from the Portfolio at
a stated exercise price; put options give the holder the
right to sell the underlying security to the Portfolio at a
stated price.
A Portfolio may only write call options on a covered
basis or for cross-hedging purposes and will only write
covered put options. A put option would be considered
"covered" if the Portfolio owns an option to sell the
underlying security subject to the option having an exercise
price equal to or greater than the exercise price of the
"covered" option at all times while the put option is
outstanding. A call option is covered if the Portfolio owns
or has the right to acquire the underlying securities subject
to the call option (or comparable securities satisfying the
cover requirements of securities exchanges) at all times
during the option period. A call option is for cross-hedging
purposes if it is not covered, but is designed to provide a
hedge against another security which the Portfolio owns or has
the right to acquire. In the case of a call written for
cross-hedging purposes or a put option, the Portfolio will
maintain in a segregated account at the Fund's custodian bank
cash or short-term U.S. government securities with a value
equal to or greater than the Portfolio's obligation under the
option. A Portfolio may also write combinations of covered
puts and covered calls on the same underlying security.
A Portfolio will receive a premium from writing an
option, which increases the Portfolio's return in the event
the option expires unexercised or is terminated at a profit.
The amount of the premium will reflect, among other things,
the relationship of the market price of the underlying
security to the exercise price of the option, the term of the
option, and the volatility of the market price of the
underlying security. By writing a call option, a Portfolio
will limit its opportunity to profit from any increase in the
market value of the underlying security above the exercise
price of the option. By writing a put option, a Portfolio will
assume the risk that it may be required to purchase the
underlying security for an exercise price higher than its then
current market price, resulting in a potential capital loss if
the purchase price exceeds the market price plus the amount of
the premium received.
A Portfolio may terminate an option which it has written
prior to its expiration by entering into a closing purchase
transaction in which it purchases an option having the same
terms as the option written. The Portfolio will realize a
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profit (or loss) from such transaction if the cost of such
transaction is less (or more) than the premium received from
the writing of the option. Because increases in the market
price of a call option will generally reflect increases in the
market price of the underlying security, any loss resulting
from the repurchase of a call option may be offset in whole or
in part by unrealized appreciation of the underlying security
owned by the Portfolio.
Purchasing Put and Call Options on Securities. A
Portfolio may in the future purchase put options to protect
its portfolio holdings in an underlying security against a
decline in market value. This protection is provided during
the life of the put option since the Portfolio, as holder of
the put, is able to sell the underlying security at the
exercise price regardless of any decline in the underlying
security's market price. For the purchase of a put option to
be profitable, the market price of the underlying security
must decline sufficiently below the exercise price to cover
the premium and transaction costs. By using put options in
this manner, any profit which the Portfolio might otherwise
have realized on the underlying security will be reduced by
the premium paid for the put option and by transaction costs.
A Portfolio may also in the future purchase a call option
to hedge against an increase in price of a security that it
intends to purchase. This protection is provided during the
life of the call option since the Portfolio, as holder of the
call, is able to buy the underlying security at the exercise
price regardless of any increase in the underlying security's
market price. For the purchase of a call option to be
profitable, the market price of the underlying security must
rise sufficiently above the exercise price to cover the
premium and transaction costs. By using call options in this
manner, any profit which the Portfolio might have realized had
it bought the underlying security at the time it purchased the
call option will be reduced by the premium paid for the call
option and by transaction costs.
No Portfolio intends to purchase put or call options if,
as a result of any such transaction, the aggregate cost of
options held by the Portfolio at the time of such transaction
would exceed 5% of its total assets.
Purchase and Sale of Options and Futures on Stock
Indices. A Portfolio may in the future purchase and sell
options on stock indices and stock index futures contracts
either as a hedge against movements in the equity markets or
for other investment purposes.
Options on stock indices are similar to options on
specific securities except that, rather than the right to take
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or make delivery of the specific security at a specific price,
an option on a stock index gives the holder the right to
receive, upon exercise of the option, an amount of cash if the
closing level of that stock index is greater than, in the case
of a call, or less than, in the case of a put, the exercise
price of the option. This amount of cash is equal to such
difference between the closing price of the index and the
exercise price of the option expressed in dollars times a
specified multiple. The writer of the option is obligated, in
return for the premium received, to make delivery of this
amount. Unlike options on specific securities, all settlements
of options on stock indices are in cash and gain or loss
depends on general movements in the stocks included in the
index rather than price movements in particular stocks.
Currently options traded include the Standard & Poor's 500
Composite Stock Price Index, the NYSE Composite Index, the
AMEX Market Value Index, the National Over-The-Counter Index,
the Nikkei 225 Stock Average Index, the Financial Times Stock
Exchange 100 Index and other standard broadly based stock
market indices. Options are also traded in certain industry or
market segment indices such as the Pharmaceutical Index.
A stock index futures contract is an agreement in which
one party agrees to deliver to the other an amount of cash
equal to a specific dollar amount times the difference between
the value of a specific stock index at the close of the last
trading day of the contract and the price at which the
agreement is made. No physical delivery of securities is
made.
If a Portfolio's Adviser expects general stock market
prices to rise, it might purchase a call option on a stock
index or a futures contract on that index as a hedge against
an increase in prices of particular equity securities it wants
ultimately to buy for the Portfolio. If in fact the stock
index does rise, the price of the particular equity securities
intended to be purchased may also increase, but that increase
would be offset in part by the increase in the value of the
Portfolio's index option or futures contract resulting from
the increase in the index. If, on the other hand, the
Portfolio's Adviser expects general stock market prices to
decline, it might purchase a put option or sell a futures
contract on the index. If that index does in fact decline, the
value of some or all of the equity securities held by the
Portfolio may also be expected to decline, but that decrease
would be offset in part by the increase in the value of the
Portfolio's position in such put option or futures contract.
Purchase and Sale of Interest Rate Futures. A Portfolio
may in the future purchase and sell interest rate futures
contracts on U.S. Treasury bills, notes and bonds and
Government National Mortgage Association ("GNMA") certificates
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either for the purpose of hedging its portfolio securities
against the adverse effects of anticipated movements in
interest rates or for other investment purposes.
A Portfolio may sell interest rate futures contracts in
anticipation of an increase in the general level of interest
rates. Generally, as interest rates rise, the market value of
the securities held by a Portfolio will fall, thus rt asset
value of the Portfolio. This interest rate risk
can be reduced without employing futures as a hedge by selling
such securities and either reinvesting the proceeds in
securities with shorter maturities or by holding assets in
cash. However, this strategy entails increased transaction
costs in the form of dealer spreads and brokerage commissions
and would typically reduce the Portfolio's average yield as a
result of the shortening of maturities.
The sale of interest rate futures contracts provides a
means of hedging against rising interest rates. As rates
increase, the value of a Portfolio's short position in the
futures contracts will also tend to increase thus offsetting
all or a portion of the depreciation in the market value of
the Portfolio's investments that are being hedged. While the
Portfolio will incur commission expenses in selling and
closing out futures positions (which is done by taking an
opposite position in the futures contract), commissions on
futures transactions are lower than transaction costs incurred
in the purchase and sale of portfolio securities.
A Portfolio may purchase interest rate futures contracts
in anticipation of a decline in interest rates when it is not
fully invested. As such purchases are made, it is expected
that an equivalent amount of futures contracts will be closed
out.
A Portfolio will enter into futures contracts which are
traded on national or foreign futures exchanges, and are
standardized as to maturity date and the underlying financial
instrument. Futures exchanges and trading in the United
States are regulated under the Commodity Exchange Act by the
Commodity Futures Trading Commission ("CFTC"). Futures are
traded in London at the London International Financial Futures
Exchange, in Paris, at the MATIF, and in Tokyo at the Tokyo
Stock Exchange.
Options on Futures Contracts. A Portfolio may in the
future purchase and write call and put options on stock index
and interest rate futures contracts. A Portfolio may use such
options on futures contracts in connection with its hedging
strategies in lieu of purchasing and writing options directly
on the underlying securities or stock indices or purchasing or
selling the underlying futures. For example, a Portfolio may
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purchase put options or write call options on stock index
futures or interest rate futures, rather than selling futures
contracts, in anticipation of a decline in general stock
market prices or rise in interest rates, respectively, or
purchase call options or write put options on stock index or
interest rate futures, rather than purchasing such futures, to
hedge against possible increases in the price of equity
securities or debt securities, respectively, which the
Portfolio intends to purchase.
In connection with transactions in stock index options,
stock index futures, interest rate futures and related options
on such futures, a Portfolio will be required to deposit as
"initial margin" an amount of cash and short-term U.S.
government securities. The current initial margin requirement
per contract is approximately 2% of the contract amount.
Thereafter, subsequent payments (referred to as "variation
margin") are made to and from the broker to reflect changes in
the value of the futures contract. Brokers may establish
deposit requirements higher than exchange minimums.
Limitations. A Portfolio will not purchase or sell
futures contracts or options on futures contracts or stock
indices for non-hedging purposes if, as a result, the sum of
the initial margin deposits on its existing futures contracts
and related options positions and premiums paid for options on
futures contracts or stock indices would exceed 5% of the net
assets of the Portfolio unless the transaction meets certain
"bona fide hedging" criteria.
Risks of Options and Futures Strategies. The effective
use of options and futures strategies depends, among other
things, on a Portfolio's ability to terminate options and
futures positions at times when its Adviser deems it desirable
to do so. Although a Portfolio will not enter into an option
or futures position unless its Adviser believes that a liquid
market exists for such option or future, there can be no
assurance that a Portfolio will be able to effect closing
transactions at any particular time or at an acceptable price.
The Advisers generally expect that options and futures
transactions for the Portfolios will be conducted on
recognized exchanges. In certain instances, however, a
Portfolio may purchase and sell options in the
over-the-counter market. The staff of the Securities and
Exchange Commission considers over-the-counter options to be
illiquid. A Portfolio's ability to terminate option positions
established in the over-the-counter market may be more limited
than in the case of exchange traded options and may also
involve the risk that securities dealers participating in such
transactions would fail to meet their obligations to the
Portfolio.
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The use of options and futures involves the risk of
imperfect correlation between movements in options and futures
prices and movements in the price of the securities that are
the subject of the hedge. The successful use of these
strategies also depends on the ability of a Portfolio's
Adviser to forecast correctly interest rate movements and
general stock market price movements. This risk increases as
the composition of the securities held by the Portfolio
diverges from the composition of the relevant option or
futures contract.
Foreign Currency Transactions (Dreyfus U.S. Government
Securities, T. Rowe Price Equity Income, T. Rowe Price Growth
Stock and T. Rowe Price International Stock Portfolios)
Foreign Currency Exchange Transactions. The Dreyfus U.S.
Government Securities, T. Rowe Price Equity Income, T. Rowe
Price Growth Stock and T. Rowe Price International Stock
Portfolios may engage in foreign currency exchange
transactions to protect against uncertainty in the level of
future exchange rates. The Adviser to a Portfolio may engage
in foreign currency exchange transactions in connection with
the purchase and sale of portfolio securities ("transaction
hedging"), and to protect the value of specific portfolio
positions ("position hedging").
A Portfolio may engage in "transaction hedging" to
protect against a change in the foreign currency exchange rate
between the date on which the Portfolio contracts to purchase
or sell the security and the settlement date, or to "lock in"
the U.S. dollar equivalent of a dividend or interest payment
in a foreign currency. For that purpose, a Portfolio may
purchase or sell a foreign currency on a spot (or cash) basis
at the prevailing spot rate in connection with the settlement
of transactions in portfolio securities denominated in that
foreign currency.
If conditions warrant, a Portfolio may also enter into
contracts to purchase or sell foreign currencies at a future
date ("forward contracts") and purchase and sell foreign
currency futures contracts as a hedge against changes in
foreign currency exchange rates between the trade and
settlement dates on particular transactions and not for
speculation. A foreign currency forward contract is a
negotiated agreement to exchange currency at a future time at
a rate or rates that may be higher or lower than the spot
rate. Foreign currency futures contracts are standardized
exchange-traded contracts and have margin requirements.
For transaction hedging purposes, a Portfolio may also
purchase exchange-listed and over-the-counter call and put
options on foreign currency futures contracts and on foreign
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currencies. A put option on a futures contract gives a
Portfolio the right to assume a short position in the futures
contract until expiration of the option. A put option on
currency gives a Portfolio the right to sell a currency at an
exercise price until the expiration of the option. A call
option on a futures contract gives a Portfolio the right to
assume a long position in the futures contract until the
expiration of the option. A call option on currency gives a
Portfolio the right to purchase a currency at the exercise
price until the expiration of the option.
A Portfolio may engage in "position hedging" to protect
against a decline in the value relative to the U.S. dollar of
the currencies in which its portfolio securities are
denominated or quoted (or an increase in the value of currency
for securities which the Portfolio intends to buy, when it
holds cash reserves and short-term investments). For position
hedging purposes, a Portfolio may purchase or sell foreign
currency futures contracts and foreign currency forward
contracts, and may purchase put or call options on foreign
currency futures contracts and on foreign currencies on
exchanges or over-the-counter markets. In connection with
position hedging, a Portfolio may also purchase or sell
foreign currency on a spot basis.
The precise matching of the amounts of foreign currency
exchange transactions and the value of the portfolio
securities involved will not generally be possible since the
future value of such securities in foreign currencies will
change as a consequence of market movements in the value of
those securities between the dates the currency exchange
transactions are entered into and the dates they mature.
It is impossible to forecast with precision the market
value of portfolio securities at the expiration or maturity of
a forward or futures contract. Accordingly, it may be
necessary for a Portfolio to purchase additional foreign
currency on the spot market (and bear the expense of such
purchase) if the market value of the security or securities
being hedged is less than the amount of foreign currency the
Portfolio is obligated to deliver and if a decision is made to
sell the security or securities and make delivery of the
foreign currency. Conversely, it may be necessary to sell on
the spot market some of the foreign currency received upon the
sale of the portfolio security or securities if the market
value of such security or securities exceeds the amount of
foreign currency the Portfolio is obligated to deliver.
Hedging transactions involve costs and may result in
losses. A Portfolio may write covered call options on foreign
currencies to offset some of the costs of hedging those
currencies. A Portfolio will engage in over-the-counter
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transactions only when appropriate exchange-traded
transactions are unavailable and when, in the opinion of the
Portfolio's Adviser, the pricing mechanism and liquidity are
satisfactory and the participants are responsible parties
likely to meet their contractual obligations. A Portfolio's
ability to engage in hedging and related option transactions
may be limited by tax considerations.
Transaction and position hedging do not eliminate
fluctuations in the underlying prices of the securities which
a Portfolio owns or intends to purchase or sell. They simply
establish a rate of exchange which one can achieve at some
future point in time. Additionally, although these techniques
tend to minimize the risk of loss due to a decline in the
value of the hedged currency, they tend to limit any potential
gain which might result from the increase in the value of such
currency.
Currency Forward and Futures Contracts. A forward foreign
currency exchange contract involves an obligation to purchase
or sell a specific currency at a future date, which may be any
fixed number of days from the date of the contract as agreed
by the parties, at a price set at the time of the contract.
In the case of a cancelable forward contract, the holder has
the unilateral right to cancel the contract at maturity by
paying a specified fee. The contracts are traded in the
interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A
forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades. A foreign
currency futures contract is a standardized contract for the
future delivery of a specified amount of a foreign currency at
a future date at a price set at the time of the contract.
Foreign currency futures contracts traded in the United States
are designed by and traded on exchanges regulated by the CFTC,
such as the New York Mercantile Exchange. A Portfolio would
enter into foreign currency futures contracts solely for
hedging or other appropriate investment purposes as defined in
CFTC regulations.
Forward foreign currency exchange contracts differ from
foreign currency futures contracts in certain respects. For
example, the maturity date of a forward contract may be any
fixed number of days from the date of the contract agreed upon
by the parties, rather than a predetermined date in any given
month. Forward contracts may be in any amounts agreed upon by
the parties rather than predetermined amounts. Also, forward
foreign exchange contracts are traded directly between
currency traders so that no intermediary is required. A
forward contract generally requires no margin or other
deposit.
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At the maturity of a forward or futures contract, a
Portfolio may either accept or make delivery of the currency
specified in the contract, or at or prior to maturity enter
into a closing transaction involving the purchase or sale of
an offsetting contract. Closing transactions with respect to
forward contracts are usually effected with the currency
trader who is a party to the original forward contract.
Closing transactions with respect to futures contracts are
effected on a commodities exchange; a clearing corporation
associated with the exchange assumes responsibility for
closing out such contracts.
Positions in foreign currency futures contracts may be
closed out only on an exchange or board of trade which
provides a secondary market in such contracts. Although a
Portfolio intends to purchase or sell foreign currency futures
contracts only on exchanges or boards of trade where there
appears to be an active secondary market, there can be no
assurance that a secondary market on an exchange or board of
trade will exist for any particular contract or at any
particular time. In such event, it may not be possible to
close a futures position and, in the event of adverse price
movements, a Portfolio would continue to be required to make
daily cash payments of variation margin.
Foreign Currency Options. Options on foreign currencies
operate similarly to options on securities, and are traded
primarily in the over-the-counter market, although options on
foreign currencies have recently been listed on several
exchanges. Such options will be purchased or written only when
a Portfolio's Adviser believes that a liquid secondary market
exists for such options. There can be no assurance that a
liquid secondary market will exist for a particular option at
any specific time. Options on foreign currencies are affected
by all of those factors which influence foreign exchange rates
and investments generally.
The value of a foreign currency option is dependent upon
the value of the foreign currency and the U.S. dollar, and may
have no relationship to the investment merits of a foreign
security. Because foreign currency transactions occurring in
the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency
options, investors may be disadvantaged by having to deal in an
odd lot market(generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less
favorable than for round lots.
There is no systematic reporting of last sale information
for foreign currencies and there is no regulatory requirement
that quotations available through dealers or other market
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sources be firm or revised on a timely basis. Available
quotation information is generally representative of very
large transactions in the interbank market and thus may not
reflect relatively smaller transactions (less than $1 million)
where rates may be less favorable. The interbank market in
foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the
markets for the underlying currencies remain open, significant
price and rate movements may take place in the underlying
markets that cannot be reflected in the options markets.
Foreign Currency Conversion. Although foreign exchange
dealers do not charge a fee for currency conversion, they do
realize a profit based on the difference (the "spread")
between prices at which they are buying and selling various
currencies. Thus, a dealer may offer to sell a foreign
currency to a Portfolio at one rate, while offering a lesser
rate of exchange should a Portfolio desire to resell that
currency to the dealer.
Repurchase Agreements (All Portfolios)
Each of the Portfolios may enter into repurchase
agreements with a bank, broker-dealer, or other financial
institution but no Portfolio may invest more than 10% (15%
with respect to each of the T. Rowe Price Equity Income, T.
Rowe Price Growth Stock and T. Rowe Price International Stock
Portfolios) of its net assets in repurchase agreements having
maturities of greater than seven days. A Portfolio may enter
into repurchase agreements, provided the Fund's custodian
always has possession of securities serving as collateral
whose market value at least equals the amount of the
repurchase obligation. To minimize the risk of loss a
Portfolio will enter into repurchase agreements only with
financial institutions which are considered by its Adviser to
be creditworthy under guidelines adopted by the Trustees of
the Fund. If an institution enters an insolvency proceeding,
the resulting delay in liquidation of the securities serving
as collateral could cause a Portfolio some loss, as well as
legal expense, if the value of the securities declines prior
to liquidation.
Forward Commitments (All Portfolios)
Each of the Portfolios may enter into forward commitments
to purchase securities. An amount of cash or short-term U.S.
government securities equal to the Portfolio's commitment will
be deposited in a segregated account at the Fund's custodian
bank to secure the Portfolio's obligation. Although a
Portfolio will generally enter into forward commitments to
purchase securities with the intention of actually acquiring
the securities for its portfolio (or for delivery pursuant to
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options contracts it has entered into), the Portfolio may
dispose of a security prior to settlement if its Adviser deems
it advisable to do so. The Portfolio may realize short-term
gains or losses in connection with such sales.
Securities Loans (All Portfolios)
Each of the Portfolios may pay reasonable finders',
administrative and custodial fees in connection with loans of
its portfolio securities. Although voting rights or the right
to consent accompanying loaned securities pass to the
borrower, a Portfolio retains the right to call the loan at
any time on reasonable notice, and will do so in order that
the securities may be voted by the Portfolio with respect to
matters materially affecting the investment. A Portfolio may
also call a loan in order to sell the securities involved.
Loans of portfolio securities will only be made to borrowers
considered by a Portfolio's Adviser to be creditworthy under
guidelines adopted by the Trustees of the Fund.
Lower Rated Bonds (Value Equity, Value Small Cap, Dreyfus U.S.
Government Securities and T. Rowe Price Equity Income
Portfolios)
Each of the Value Equity Portfolio and the Value Small
Cap Portfolio may invest up to 5% of its assets, the T. Rowe
Price Equity Income Portfolio may invest up to 10% of its
assets, and the Dreyfus U.S. Government Securities Portfolio
may invest up to 25% of its assets in bonds rated below Baa3
by Moody's Investors Service Inc. ("Moody's") or BBB by
Standard & Poor's Ratings Service, a division of McGraw-Hill
Companies, Inc. ("Standard & Poor's") (commonly known as "junk
bonds"). Securities rated less than Baa by Moody's or BBB by
Standard & Poor's are classified as non-investment grade
securities and are considered speculative by those rating
agencies. It is the Portfolio Adviser's policy not to rely
exclusively on ratings issued by credit rating agencies but to
supplement such ratings with the Adviser's own independent and
ongoing review of credit quality. Junk bonds may be issued as
a consequence of corporate restructurings, such as leveraged
buyouts, mergers, acquisitions, debt recapitalizations, or
similar events or by smaller or highly leveraged companies.
When economic conditions appear to be deteriorating, junk
bonds may decline in market value due to investors' heightened
concern over credit quality, regardless of prevailing interest
rates. Although the growth of the high yield securities
market in the 1980s had paralleled a long economic expansion,
recently many issuers have been affected by adverse economic
and market conditions. It should be recognized that an
economic downturn or increase in interest rates is likely to
have a negative effect on (i) the high yield bond market, (ii)
the value of high yield securities and (iii) the ability of
-14-
<PAGE>
the securities' issuers to service their principal and
interest payment obligations, to meet their projected business
goals or to obtain additional financing. The market for junk
bonds, especially during periods of deteriorating economic
conditions, may be less liquid than the market for investment
grade bonds. In periods of reduced market liquidity, junk
bond prices may become more volatile and may experience sudden
and substantial price declines. Also, there may be
significant disparities in the prices quoted for junk bonds by
various dealers. Under such conditions, a Portfolio may find
it difficult to value its junk bonds accurately. Under such
conditions, a Portfolio may have to use subjective rather than
objective criteria to value its junk bond investments
accurately and rely more heavily on the judgment of the Fund's
Board of Trustees. Prices for junk bonds also may be affected
by legislative and regulatory developments. For example, new
fedeerral rules require that savings and loans gradually reduce
their holdings of high-yield securities. Also, from time to
time, Congress has considered legislation to restrict or
eliminate the corporate tax deduction for interest payments or
to regulate corporate restructurings such as takeovers,
mergers or leveraged buyouts. Such legislation, if enacted,
could depress the prices of outstanding junk bonds.
Interest Rate Transactions (Dreyfus U.S. Government Securities
Portfolio)
Among the strategic transactions into which the Dreyfus
U.S. Government Securities Portfolio may enter are interest
rate swaps and the purchase or sale of related caps and
floors. The Portfolio expects to enter into these
transactions primarily to preserve a return or spread on a
particular investment or portion of its portfolio, to protect
against currency fluctuations, as a duration management
technique or to protect against any increase in the price of
securities the Portfolio anticipates purchasing at a later
date. The Portfolio intends to use these transactions as
hedges and not as speculative investments and will not sell
interest rate caps or floors where it does not own securities
or other instruments providing the income stream the Portfolio
may be obligated to pay. Interest rate swaps involve the
exchange by the Portfolio with another party of their
respective commitments to pay or receive interest, e.g., an
exchange of floating rate payments for fixed rate payments
with respect to a notional amount of principal. A currency
swap is an agreement to exchange cash flows on a notional
amount of two or more currencies based on the relative value
differential among them and an index swap is an agreement to
swap cash flows on a notional amount based on changes in the
values of the reference indices. The purchase of a cap
entitles the purchaser to receive payments on a notional
principal amount from the party selling such floor to the
-15- <PAGE>
extent that a specified index falls below a predetermined
interest rate or amount.
The Portfolio will usually enter into swaps on a net
basis, i.e., the two payment streams are netted out in a cash
settlement on the payment date or dates specified in the
instrument, with the Portfolio receiving or paying, as the
case may be, only the net amount of the two payments.
Inasmuch as these swaps, caps and floors are entered into for
good faith hedging purposes, the Adviser to the Portfolio and
the Fund believe such obligations do not constitute senior
securities under the Investment Company Act of 1940 (the "1940
Act") and, accordingly, will not treat them as being subject
to its borrowing restrictions. The Portfolio will not enter
into any swap, cap and floor transaction unless, at the time
of entering into such transaction, the unsecured long-term
debt of the counterparty, combined with any credit
enhancements, is rated at least "A" by Standard & Poor's or
Moody's or has an equivalent rating from a nationally
recognized statistical rating organization ("NRSRO") or is
determined to be of equivalent credit quality by the Adviser.
For a description of the NRSROs and their ratings, see the
Appendix. If there is a default by the counterparty, the
Portfolio may have contractual remedies pursuant to the
agreements related to the transaction. The swap market has
grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals
and as agents utilizing standardized swap documentation. As a
result, the swap market has become relatively liquid. Caps
and floors are more recent innovations for which standardized
documentation has not yet been fully developed and,
accordingly, they are less liquid than swaps.
With respect to swaps, the Portfolio will accrue the net
amount of the excess, if any, of its obligations over its
entitlements with respect to each swap on a daily basis and
will segregate an amount of cash or liquid high grade
securities having a value equal to the accrued excess. Caps
and floors require segregation of assets with a value equal to
the Portfolio's net obligations, if any.
Dollar Roll Transactions (Dreyfus U.S. Government Securities
Portfolio)
The Dreyfus U.S. Government Securities Portfolio may
enter into "dollar roll" transactions, which consist of the
sale by the Portfolio to a bank or broker-dealer (the
"counterparty") of GNMA certificates or other mortgage-backed
securities together with a commitment to purchase from the
counterparty similar, but not identical, securities at a
future date. The counterparty receives all principal and
interest payments, including prepayments, made on the security
-16-
<PAGE>
while it is the holder. The Portfolio receives a fee from the
counterparty as consideration for entering into the commitment
to purchase. Dollar rolls may be renewed over a period of
several months with a different repurchase price and a cash
settlement made at each renewal without physical delivery of
securities. Moreover, the transaction may be preceded by a
firm commitment agreement pursuant to which the Portfolio
agrees to buy a security on a future date.
The Portfolio will not use such transactions for
leveraging purposes and, accordingly, will segregate cash,
U.S. government securities or other high grade debt
obligations in an amount sufficient to meet its purchase
obligations under the transactions. The Portfolio will also
maintain asset coverage of at least 300% for all outstanding
firm commitments, dollar rolls and other borrowings.
Dollar rolls are treated for purposes of the 1940 Act as
borrowings of the Portfolio because they involve the sale of a
security coupled with an agreement to repurchase. Like all
borrowings, a dollar roll involves costs to the Portfolio.
For example, while the Portfolio receives a fee as
consideration for agreeing to repurchase the security, the
Portfolio forgoes the right to receive all principal and
interest payments while the counterparty holds the security.
These payments to the counterparty may exceed the fee received
by the Portfolio, thereby effectively charging the Portfolio
interest on its borrowing. Further, although the Portfolio
can estimate the amount of expected principal prepayment over
the term of the dollar roll, a variation in the actual amount
of prepayment could increase or decrease the cost of the
Portfolio's borrowing.
The entry into dollar rolls involves potential risks of
loss that are different from those related to the securities
underlying the transactions. For example, if the counterparty
becomes insolvent, the Portfolio's right to purchase from the
counterparty might be restricted. Additionally, the value of
such securities may change adversely before the Portfolio is
able to purchase them. Similarly, the Portfolio may be
required to purchase securities in connection with a dollar
roll at a higher price than may otherwise be available on the
open market. Since, as noted above, the counterparty is
required to deliver a similar, but not identical, security to
the Portfolio, the security that the Portfolio is required to
buy under the dollar roll may be worth less than an identical
security. Finally, there can be no assurance that the
Portfolio's use of the cash that it receives from a dollar
roll will provide a return that exceeds borrowing costs.
-17-
<PAGE>
Portfolio Turnover
While it is impossible to predict portfolio turnover
rates, the Advisers to the Portfolios other than the Dreyfuss
U.S. Government Securities Portfolio aanndd the TCW Money Market
Portfolio anticipate that portfolio turnover will generally
not exceed 100% per year. The Adviser to the Dreyfus U.S.
Government Securities Portfolio anticipates that portfolio
turnover will generally not exceed 100% per year, exclusive of
dollar roll transactions. With respect to the TCW Money
Market Portfolio, although the Portfolio intends normally to
hold its investments to maturity, the short maturities of
these investments are expected by the Portfolio's Adviser to
result in a relatively high rate of portfolio turnover.
For the fiscal year ended December 31, 1995, the
portfolio turnover rate for the T. Rowe Price International
Stock Portfolio was 111% as compared with a turnover rate of
88% for the fiscal year ended December 31, 1994. The increase
in portfolio turnover rate was in connection with the change
of the Portfolio's investment objective from investment on a
global basis to investment on an international basis (i.e., in
non-U.S. companies).
For the fiscal year ended December 31, 1995, the
portfolio turnover rate for the Dreyfus U.S. Government
Securities Portfolio was 161% as compared with a turnover rate
of 100% for the period ended December 31, 1994. The increase
in portfolio turnover rate was due to an increased number of
market-related investment opportunities for the Portfolio.
INVESTMENT RESTRICTIONS
Except for restriction numbers 2, 3, 4, 11 and 12 with
respect to the T. Rowe Price Equity Income and T. Rowe Price
Growth Stock Portfolios and restriction number 11 with respect
to the T. Rowe Price International Stock Portfolio (which
restrictions are not fundamental policies), the following
investment restrictions (numbers 1 through 12) are fundamental
policies, which may not be changed without the approval of a
majority of the outstanding shares of the Portfolio, and apply
to each of the Portfolios except as otherwise indicated. As
provided in the 1940 Act, a vote of a majority of the
outstanding shares necessary to amend a fundamental policy
means the affirmative vote of the lesser of (1) 67% or more of
the shares present at a meeting, if the holders of more than
50% of the outstanding shares of the Portfolio are present or
represented by proxy, or (2) more than 50% of the outstanding
shares of the Portfoli
A Portfolio may not:
-18- <PAGE>
1. Borrow money or issue senior securities (as defined in
the 1940 Act), provided that a Portfolio may borrow amounts
not exceeding 5% of the value of its total assets (not
including the amount borrowed) for temporary purposes, except
that the Dreyfus U.S. Government Securities Portfolio may
borrow from banks or through reverse repurchase agreements or
dollar roll transactions in an amount equal to up to 33 1/3%
of the value of its total assets (calculated when the loan is
made) for temporary, extraordinary or emergency purposes and
to take advantage of investment opportunities and may pledge
up to 33 1/3% of the value of its total assets to secure those
borrowings, and except that the T. Rowe Price Equity Income
Portfolio, the T. Rowe Price Growth Stock Portfolio and T.
Rowe Price International Stock Portfolio may (i) borrow for
non-leveraging, temporary or emergency purposes and (ii)
engage in reverse repurchase agreements and make other
investments or engage in other transactions, which may involve
a borrowing, in a manner consistent with each Portfolio's
investment objective and program, provided that the
combination of (i) and (ii) shall not exceed 33 1/3% of the
value of each Portfolios's total assets (including the amount
borrowed) less liabilities (other than borrowings) and may
pledge up to 33 1/3% of the value of its total assets to
secure those borrowings.
2. Pledge, hypothecate, mortgage or otherwise encumber its
assets, except to secure borrowings permitted by restriction 1
above. Collateral arrangements with respect to margin for
futures contracts and options are not deemed to be pledges or
other encumbrances for purposes of this restriction.
3. Purchase securities on margin, except a Portfolio may
obtain such short-term credits as may be necessary for the
clearance of securities transactions and may make margin
deposits in connection with transactions in options, futures
contracts and options on such contracts.
4. Make short sales of securities or maintain a short
position for the account of the Portfolio, unless at all times
when a short position is open the Portfolio owns an equal
amount of such securities or owns securities which, without
payment of any further consideration, are convertible or
exchangeable for securities of the same issue as, and in equal
amounts to, the securities sold short.
5. Underwrite securities issued by other persons, except to
the extent that in connection with the disposition of its
portfolio investments it may be deemed to be an underwriter
under federal securities laws.
6. Purchase or sell real estate, although a Portfolio may
purchase securities of issuers which deal in real estate,
-19-
securities which are secured by interests in real estate and
securities representing interests in real estate.
7. Purchase or sell commodities or commodity contracts,
except that all Portfolios other than the TCW Money Market
Portfolio may purchase or sell financial futures contracts and
related options. For purposes of this restriction, currency
contracts or hybrid investments shall not be considered
commodities.
8. Make loans, except by purchase of debt obligations in
which the Portfolio may invest consistently with its
investment policies, by entering into repurchase agreements or
through the lending of its portfolio securities.
9. Invest in the securities of any issuer if, immediately
after such investment, more than 5% of the total assets of the
Portfolio (taken at current value) would be invested in the
securities of such issuer or acquire more than 10% of the
outstanding voting securities of any issuer, provided that
this limitation does not apply to obligations issued or
guaranteed as to principal and interest by the U.S. government
or its agencies and instrumentalities or to repurchase
agreements secured by such obligations and that up to 25% of
the Portfolio's total assets (taken at current value) may be
invested without regard to this limitation.
10. Invest more than 25% of the value of its total assets in
any one industry, provided that this limitation does not apply
to obligations issued or guaranteed as to interest and
principal by the U.S. government, its agencies and
instrumentalities, and repurchase agreements secured by such
obligations, and in the case of the TCW Money Market Portfolio
obligations of domestic branches of United States banks.
11. Invest more than 10% (15% with respect to the T. Rowe
Price Equity Income Portfolio, the T. Rowe Price Growth Stock
Portfolio and the T. Rowe Price International Stock Portfolio)
of its assets (taken at current value at the time of each
purchase) in illiquid securities including repurchase
agreements maturing in more than seven days.
12. Purchase securities of any issuer for the purpose of
exercising control or management.
All percentage limitations on investments will apply at
the time of the making of an investment and shall not be
considered violated unlesss an excess or deficiency occurs or
exists immediately after and as a result of such investment.
Other Policies
-20- <PAGE>
The TCW Money Market Portfolio may not invest in the
securities of any one issuer if, immediately after such
investment, more than 5% of the total assets of the Portfolio
(taken at current value) would be invested in the securities
of such issuer, provided that this limitation does not apply
to obligations issued or guaranteed as to principal and
interest by the U.S. government or its agencies and
instrumentalities or to repurchase agreements secured by such
obligations and that with respect to 25% of the Portfolio's
total assets more than 5% may be invested in securities of any
one issuer for three business days after the purchase thereof
if the securities have been assigned the highest quality
rating by NRSROs, or if not rated, have been determined to be
of comparable quality. These limitations apply to time
deposits, including certificates of deposit, bankers'
acceptances, letters of credit and similar instruments; they
do not apply to demand deposit accounts. For a description of
the NRSROs' ratings, see the Appendix.
In addition, the TCW Money Market Portfolio may not
purchase any security that matures more than thirteen months
(397 days) from the date of purchase or which has an implied
maturity of more than thirteen months (397 days) except as
provided in (1) below. For the purposes of satisfying this
requirement, the maturity of a portfolio instrument shall be
deemed to be the period remaining until the date noted on the
face of the instrument as the date on which the principal
amount must be paid, or in the case of an instrument called
for redemption, the date on which the redemption payment must
be made, except that:
1. An instrument that is issued or guaranteed by the U.S.
government or any agency thereof which has a variable rate of
interest readjusted no less frequently than every 25 months
(762 days) may be deemed to have a maturity equal to the
period remaining until the next readjustment of the interest
rate.
2. A variable rate instrument, the principal amount of which
is scheduled on the face of the instrument to be paid in
thirteen months (397 days) or less, may be deemed to have a
maturity equal to the period remaining until the next
readjustment of the interest rate.
3. A variable rate instrument that is subject to a demand
feature may be deemed to have a maturity equal to the longer
of the period remaining until the next readjustment of the
interest rate or the period remaining until the principal
amount can be recovered through demand.
4. A floating rate instrument that is subject to a demand
feature may be deemed to have a maturity equal to the period
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<PAGE>
remaining until the principal amount can be recovered through
demand.
5. A repurchase agreement may be deemed to have a maturity
equal to the period remaining until the date on which the
repurchase of the underlying securities is scheduled to occur,
or where no date is specified, but the agreement is subject to
demand, the notice period applicable to a demand for the
repurchase of the securities.
6. A portfolio lending agreement may be treated as having a
maturity equal to the period remaining until the date on which
the loaned securities are scheduled to be returned, or where
no date is specified, but the agreement is subject to demand,
the notice period applicable to a demand for the return of the
loaned securities.
Each of the Value Equity and Value Small Cap Portfolios
may not invest more than 5% of the value of its total assets
in warrants not listed on either the New York or American
Stock Exchange. Each of the T. Rowe Price Equity Income, T.
Rowe Price Growth Stock and T. Rowe Price International Stock
Portfolios will not invest in warrants if, as a result
thereof, more than 2% of the value of the total assets of the
Portfolio would be invested in warrants which are not listed
on the New York Stock Exchange, the American Stock Exchange,
or a recognized foreign exchange, or more than 5% of the value
of the total assets of the Portfolio would be invested in
warrants whether or not so listed. However, the acquisition
of warrants attached to other securities is not subject to
this restriction.
PERFORMANCE INFORMATION
Total return and yield will be computed as described
below.
Total Return
Each Portfolio's "average annual total return" figures
described and shown in the Prospectus are computed according
to a formula prescribed by the Securities and Exchange
Commission. The formula can be expressed as follows:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1000 payment
made at the beginning of the 1, 5, or 10 years (or other)
-22- <PAGE>
periods at the end of the 1, 5, or 10 years (or other) periods
(or fractional portion thereof)
The table below shows the average annual total return for
the TCW Managed Asset Allocation, Value Equity, Value Small
Cap, Dreyfus U.S. Government Securities, T. Rowe Price Equity
Income and T. Rowe Price Growth Stock Portfolios for the
specific periods.
With respect to the T. Rowe Price International Stock
Portfolio which commenced operation April 8, 1991, effective
January 1, 1995, the Portfolio's Adviser was changed to Rowe
Price-Fleming International, Inc. ("Price-Fleming"). Prior to
March 24, 1995, the Portfolio was known as the Global Growth
Portfolio. Subsequent to such time, the Portfolio's
investment objective was changed from investments in small
capitalization companies on a global basis to investments in a
broad range of established companies on an international basis
(i.e., non-U.S. companies). Because of the change of the
Portfolio's Adviser, performance information for the period
from inception to December 31, 1995 is not presented. Such
information is not reflective of Price- Fleming's ability to
manage the Portfolio. Information with respect to the
Portfolio's per share income and capital changes from
inception through December 31, 1995 is set forth in the
Prospectus. Average annual total return information for the
period from inception to December 31, 1994 is available upon
written request to the Fund.
-23-
<PAGE>
For Period
For the From Incep-
Year Ended tion to
December 31, December 31,
1995 1995
TCW Managed Asset
Allocation(1) 22.91%/22.91%* 11.65%/11.28%*
T. Rowe Price International
Stock................. 10.37%/10.37%* N/A
Value Equity(2)......... 34.59%/34.59%* 15.08%/14.86%*
Value Small Cap(3)...... 14.05%/14.05%* 8.82%/8.67%*
T. Rowe Price Equity
Income(4)............. N/A 30.50%/30.50%*
T. Rowe Price Growth
Stock(4).............. N/A 37.20%/37.20%*
Dreyfus U.S. Government
Securities(5)......... 15.64%/15.64%* 9.01%/8.76%*
* The figure shows what the Portfolio's performance would
have been in the absence of fee waivers and/or
reimbursement of other expenses.
(1) The Portfolio commenced operations on April 8, 1991.
(2) The Portfolio commenced operations on May 27, 1993.
(3) The Portfolio commencceedd ooperations on May 4, 1993.
(4) The Portfolio commenced operations on January 3, 1995.
(5) The Portfolio commenced operations on May 13, 1994.
The calculations of total return assume the reinvestment
of all dividends and capital gains distributions on the
reinvestment dates during the period and the deduction of all
recurring expenses that were charged to shareholders accounts.
The above table does not reflect charges and deductions which
are, or may be, imposed under the Contracts.
The performance of each Portfolio will vary from time to
time in response to fluctuations in market conditions,
interest rates, the composition of the Portfolio's investments
and expenses. Consequently, a Portfolio's performance figures
are historical and should not be considered representative of
the performance of the Portfolio for any future period.
-24- <PAGE>
Yield
From time to time, the Fund may quote the TCW Money
Market Portfolio's and the Dreyfus U.S. Government Securities
Portfolio's yield and effective yield in advertisements or in
reports or other communications to shareholders. Yield
quotations are expressed in annualized terms and may be quoted
on a compounded basis.
The annualized current yield for the TCW Money Market
Portfolio is computed by: (a) determining the net change in
the value of a hypothetical pre-existing account in the
Portfolio having a balance of one share at the beginning of a
seven calendar day period for which yield is to be quoted;
(b) dividing the net change by the value of the account at the
beginning of the period to obtain the base period return; and
(c) annualizing the results (i.e., multiplying the base period
return by 365/7). The net change in the value of the account
reflects the value of additional shares purchased with
dividends declared on the original share and any such
additional shares, but does not include realized gains and
losses or unrealized appreciation and depreciation. In
addition, the TCW Money Market Portfolio may calculate a
compound effective annualized yield by adding 1 to the base
period return (calculated as described above), raising the sum
to a power equal to 365/7 and subtracting 1.
The Dreyfus U.S. Government Securities Portfolio's 30-day
yield will be calculated according to a formula prescribed by
the Securities and Exchange Commission. The formula can be
expressed as follows:
YIELD = 2[(a-b+1)6-1]
cd
Where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of
reimbursement)
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = the net asset value per share on the last day
of the period
For the purpose of determining the interest earned (variable
"a" in the formula) on debt obligations that were purchased by
the Portfolio at a discount or premium, the formula generally
calls for amortization of the discount or premium; the
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<PAGE>
amortization schedule will be adjusted monthly to reflect
changes in the market values of the debt obligations.
Yield information is useful in reviewing a Portfolio's
performance, but because yields fluctuate, such information
cannot necessarily be used to compare an investment in a
Portfolio's shares with bank deposits, savings accounts and
similar investment alternatives which often provide an agreed
or guaranteed fixed yield for a stated period of time.
Shareholders should remember that yield is a function of the
kind and quality of the instruments in the Portfolios'
investment portfolios, portfolio maturity, operating expenses
and market conditions.
It should be recognized that in periods of declining
interest rates the yields will tend to be somewhat higher than
prevailing market rates, and in periods of rising interest
rates the yields will tend to be somewhat lower. Also, when
interest rates are falling, the inflow of net new money to a
Portfolio from the continuous sale of its shares will likely
be invested in instruments producing lower yields than the
balance of the Portfolio's investments, thereby reducing the
current yield of the Portfolio. In periods of rising interest
rates, the opposite can be expected to occur.
Non-Standardized Performance
In addition to the performance information described
above, the Fund may provide total return information with
respect to the Portfolios for designated periods, such as for
the most recent six months or most recent twelve months. This
total return information is computed as described under "Total
Return" above except that no annualization is made.
PORTFOLIO TRANSACTIONS
Subject to the supervision and control of the Manager and
the Trustees of the Fund, each Portfolio's Adviser is
responsible for decisions to buy and sell securities for its
account and for the placement of its portfolio business and
the negotiation of commissions, if any, paid on such
transactions. Brokerage commissions are paid on transactions
in equity securities traded on a securities exchange and on
options, futures contracts and options thereon. Fixed income
securities and certain equity securities in which the
Portfolios invest are traded in the over-the-counter market.
These securities are generally traded on a net basis with
dealers acting as principal for their own account without a
stated commission, although prices of such securities usually
include a profit to the dealer. In over-the-counter
transactions, orders are placed directly with a principal
market maker unless a better price and execution can be
-26-
<PAGE>
obtained by using a broker. In underwritten offerings,
securities are usually purchased at a fixed price which
includes an amount of compensation to the underwriter
generally referred to as the underwriter's concession or
discount. Certain money market securities may be purchased
directly from an issuer, in which case no commissions or
discounts are paid. U.S. government securities are generally
purchased from underwriters or dealers, although certain
newly-issued U.S. government securities may be purchased
directly from the U.S. Treasury or from the issuing agency or
instrumentality. Each Portfolio's Adviser is responsible for
effecting its portfolio transactions and will do so in a
manner deemed fair and reasonable to the Portfolio and not
according to any formula. The primary consideration in all
portfolio transactions will be prompt execution of orders in
an efficient manner at a favorable price. In selecting
broker-dealers and negotiating commissions, an Adviser
considers the firm's reliability, the quality of its execution
services on a continuing basis and its financial condition.
When more than one firm is believed to meet these criteria,
preference may be given to brokers that provide the Portfolios
or their Advisers with brokerage and research services within
the meaning of Section 28(e) of the Securities Exchange Act of
1934. Each Portfolio's Adviser is of the opinion that, because
this material must be analyzed and reviewed, its receipt and
uuse does not tend to reduce expenses but may benefit the
Portfolio by supplementing the Adviser's research. In seeking
the most favorable price and execution available, an Adviser
may, if permitted by law, consider sales of the Contracts as
described in the Prospectus a factor in the selection of
broker-dealers.
An Adviser may effect portfolio transactions for other
investment companies and advisory accounts. Research services
furnished by broker-dealers through which a Portfolio effects
its securities transactions may be used by the Portfolio's
Adviser in servicing all of its accounts; not all such
services may be used in connection with the Portfolio. In the
opinion of each Adviser, it is not possible to measure
separately the benefits from research services to each of its
accounts, including a Portfolio. Whenever concurrent decisions
are made to purchase or sell securities by a Portfolio and
another account, the Portfolio's Adviser will attempt to
allocate equitably portfolio transactions among the Portfolio
and other accounts. In making such allocations between the
Portfolio and other accounts, the main factors to be
considered are the respective investment objectives, the
relative size of portfolio holdings of the same or comparable
securities, the availability of cash for investment, the size
of investment commitments generally held, and the opinions of
the persons responsible for recommending investments to the
Portfolio and the other accounts. In some cases this procedure
-27-
<PAGE>
could have an adverse effect on a Portfolio. In the opinion of
each Adviser, however, the results of such procedures will, on
the whole, be in the best interest of each of the accounts.
The Adviser to the Value Equity and Value Small Cap
Portfolios may execute brokerage transactions through
Oppenheimer & Co. Inc. ("Opco"), an affiliated broker-dealer
of the Adviser, acting as agent in accordance with procedures
established by the Fund's Board of Trustees, but will not
purchase any securities from or sell any securities to Opco
acting as principal for its own account.
The Adviser to the T. Rowe Price International Stock, T.
Rowe Price Equity Income and T. Rowe Price Growth Stock
Portfolios may execute portfolio transactions through certain
affiliates of Robert Fleming Holdings Limited and Jardine
Fleming Group Limited, persons indirectly related to the
Adviser, acting as agent in accordance with procedures
established by the Fund's Board of Trustees, but will not
purchase any securities from or sell any securities to any
such affiliate acting as principal for its own account.
For the year ended December 31, 1993, the TCW Money
Market Portfolio did not pay any brokerage commissions, while
the TCW Managed Asset Allocation Portfolio and T. Rowe Price
International Stock Portfolio (formerly, the Global Growth
Portfolio) paid $84,401 and $199,921, respectively, in
brokerage commissions. For the fiscal period ended December
31, 1993, the Value Equity Portfolio and Value Small Cap
Portfolio paid $11,051 and $23,537, respectively in brokerage
commissions, of which $7,758 (70%) with respect to the Value
Equity Portfolio and $17,401 (74%) with respect to the Value
Small Cap Portfolio was paid to Opco. For the year ended
December 31, 1994, the TCW Money Market Portfolio did not pay
any brokerage commissions, while the TCW Managed Asset
Allocation Portfolio and T. Rowe Price International Stock
Portfolio paid $175,548 and $554,048, respectively, in
brokerage commissions. For the year ended December 31, 1994,
the Value Equity Portfolio and Value Small Cap Portfolio paid
$58,472 and $100,262, respectively, in brokerage commissions,
of which $32,796 (78.29%) with respect to the Value Equity
Portfolio and $58,028 (72.78%) with respect to the Value Small
Cap Portfolio was paid to Opco. For the fiscal period ended
December 31, 1994, the Dreyfus U.S. Government Securities
Portfolio paid no brokerage commissions. For the year ended
December 31, 1995, the TCW Money Market Portfolio and the
Dreyfus U.S. Government Securities Portfolio did not pay any
brokerage commissions, while the TCW Managed Asset Allocation
Portfolio paid $187,103 in brokerage commissions. For the
year ended December 31, 1995, the T. Rowe Price International
Stock Portfolio, the Value Equity Portfolio and the Value
Small Cap Portfolio paid $395,753, $57,800, and $101,885,
-28-
<PAGE>
respectively, in brokerage commissions of which $33,338
(8.42%), $15,101 (3.82%) and $673 (.17%) with respect to the
T. Rowe Price International Stock Portfolio was paid to Robert
Fleming Holdings Limited and Jardine Fleming Group Limited,
Ord Minnett and OpCo, respectively, $29,271 (50.64%) with
respect to the Value Equity Portfolio and $36,216 (35.55%)
with respect to the Value Small Cap Portfolio was paid to
OpCo. For the fiscal period ended December 31, 1995, the T.
Rowe Price Equity Income Portfolio and the T. Rowe Price
Growth Stock Portfolio paid $18,059 and $39,447, respectively
in brokerage commissions of which $10 (0.06%) with respect to
the T. Rowe Price Equity Income Portfolio was paid to OpCo and
$536 (1.36%), $507 (1.29%) and $23 (0.06%) with respect to the
T. Rowe Price Growth Stock Portfolio was paid to Boston Safe
Deposit and Trust Company, Jardine Fleming Group Limited and
OpCo, respectively.
MANAGEMENT OF THE FUND
Trustees and Officers
The Trustees and executive officers of the Trust, their ages
and their principal occupations during the past five years are
set forth below. Unless otherwise indicated, the business
address of each is 2101 East Coast Highway, Suite 300, Corona
del Mar, California 92625.
Principal
Position(s) Occupation(s)
Held with During Past
Name, Age and Address Registrant 5 Years
James R. McInnis (48) President President of Endeavor
Group (broker-dealer)
since June, 1991;
President of
McGuinness &
Associates (insurance
marketing) from
March, 1983 to June,
1991.
Position(s) Occupation(s)
Held with During Past
Name, Age and Address Registrant 5 Years
*Vincent J. McGuinness(61) Trustee Chairman, Chief
Executive Officer and
Director of
McGuinness &
Associates, Endeavor
Group, VJM
Corporation (oil and
gas), McGuinness
Group (insurance
marketing) and until
January, 1994 Swift
Energy Marketing
Company and since
September, 1988
Endeavor Management
Co.; President of VJM
Corporation, Endeavor
Management Co. and,
since February, 1996,
McGuinness &
Associates.
Timothy A. Devine (61) Trustee Prior to September,
2200 S. Fairview 1993, President and
Santa Ana, California Chief Executive
92704 Officer, Devine
Properties, Inc.
Since September,
1993, Vice President,
Plant Control, Inc.
(landscape
contracting and
maintenance).
Thomas J. Hawekotte (61) Trustee President, Thomas J.
1200 Lake Shore Drive Hawekotte, P.C. (law
Chicago, Illinois 60610 practice).
-30- <PAGE>
Principal
Position(s) Occupation(s)
Held with During Past
Name, Age and Address Registrant 5 Years
Steven L. Klosterman (44) Trustee Since July, 1995,
462 Stevens Avenue President of
Suite 206 Klosterman Capital
Solana Beach, California Corporation
92075 (investment adviser);
Investment Counselor,
Robert J. Metcalf &
Associates, Inc.
(investment adviser)
from August, 1990 to
June, 1995.
*Halbert D. Lindquist (49) Trustee President, Lindquist
1650 E. Fort Lowell Road Enterprises, Inc.
Tucson, Arizona 85719-2324 (financial services)
and since December,
1987 Tucson Asset
Management, Inc.
(financial services),
and since November,
1987, Presidio
Government
Securities,
Incorporated (broker-
dealer).
R. Daniel Olmstead,Jr.(64) Trustee Rancher since
2885 N. River Road December, 1989.
St. Anthony, Idaho 83445
Norman Ridley (50) Vice President Since 1985, Senior
865 S. Figueroa Street Vice President, TCW
Suite 1800 Asset Management
Los Angeles, California Company and Trust
90017 Company of the West.
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<PAGE>
Principal
Position(s) Occupation(s)
Held with During Past
Name, Age and Address Registrant 5 Years
Ronald E. Robison (57) Vice President Since November, 1987,
865 S. Figueroa Street Managing Director and
Suite 1800 Chief Operating
Los Angeles, California Officer, TCW Funds
90017 Management Inc.;
since March, 1990,
Managing Director,
Trust Company of the
West and TCW Asset
Management Company.
James M. Goldberg (50) Vice President Since June, 1984,
865 S. Figueroa Street Managing Director,
Suite 1800 TCW Asset Management
Los Angeles, California Company and Trust
90017 Company of the West
and since January,
1987 Managing
Director, TCW Funds
Management, Inc.
Eileen Rominger (41) Vice President Since May, 1994,
One World Financial Center Managing Director,
New York, New York 10281 Oppenheimer Capital,
prior thereto Senior
Vice President,
Oppenheimer Capital;
Portfolio Manager,
Oppenheimer Quest
Value Fund, Inc., OCC
Accumulation Trust,
Enterprise
Accumulation Trust
and Penn Series Fund,
open-end investment
companies.
-32- <PAGE>
Principal
Position(s) Occupation(s)
Held with During Past
Name, Age and Address Registrant 5 Years
Alan J. Schryer (38) Chief Financial Since August, 1994,
Officer Controller and since
(Treasurer) November, 1994 Chief
Financial Officer of
McGuinness &
Associates, Endeavor
Group, VJM
Corporation,
McGuinness Group and
Endeavor Management
Co. and Director,
Endeavor Management
Co.; from February,
1992 to August, 1994,
Sole Proprietor, A.J.
Schryer Companies
(real estate
financce); and from
August, 1987 to
January, 1992,
Controller and Vice
President of IDM
Securities
Corporation (broker-
dealer).
-33- <PAGE>
Principal
Position(s) Occupation(s)
Held with During Past
Name, Age and Address Registrant 5 Years
Pamela A. Shelton (47) Secretary Since October, 1993,
Executive Secretary
to Chairman of the
Board and Chief
Executive Officer of,
and since April,
1996, Secretary of
McGuinness &
Associates, Endeavor
Group, VJM
Corporation,
McGuinness Group and
Endeavor Management
Co.; from July, 1992
to October, 1993,
Administrative
Secretary, Mayor and
City Council, City of
Laguna Niguel,
California; and from
November, 1986 to
July, 1992, Executive
Secretary to Chairman
of the Board and
Chief Executive
Officer of, and from
October, 1990 to
July, 1992, Secretary
of McGuinness &
Associates, Endeavor
Group, VJM
Corporation,
McGuinness Group,
Endeavor Management
Co. and Swift Energy
Marketing Company.
* An "interested person" of the Fund as defined in the 1940
Act.
No remuneration will be paid by the Fund to any Trustee
or officer of the Fund who is affiliated with the Manager or
the Advisers. Each Trustee who is not an affiliated person of
the Fund will be reimbursed for out-of-pocket expenses
-34- <PAGE>
receives an annual fee of $2,500 and $500 for attendance at
each regularly scheduled Trustees' meeting. Set forth below
for each of the Trustees of the Fund is the aggregate
compensation paid to such Trustees for the fiscal year ended
December 31, 1995.
COMPENSATION TABLE
Total
Compensation
From Fund
Aggregate and Fund
Name of Compensation Complex
Person From Fund Paid to Trustees
Vincent J. McGuinness - -
Timothy A. Devine 4,500 4,500
Thomas J. Hawekotte 4,500 4,500
Steven L. Klosterman 4,500 4,500
Halbert D. Lindquist 4,500 4,500
R. Daniel Olmstead 4,500 4,500
The Agreement and Declaration of Trust of the Fund
provides that the Fund will indemnify its Trustees and
officers against liabilities and expenses incurred in
connection with litigation in which they may be involved
because of their offices with the Fund, except if it is
determined in the manner specified in the Agreement and
Declaration of Trust that they have not acted in good faith in
the reasonable belief that their actions were in the best
interests of the Fund or that such indemnification would
relieve any officer or Trustee of any liability to the Fund or
its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his duties. The
Fund, at its expense, provides liability insurance for the
benefit of its Trustees and officers.
As of the date of this Statement of Additional
Information, the officers and Trustees of the Fund as a group
owned less than 1% of the outstanding shares of the Fund.
The Manager
The Management Agreement between the Fund and the Manager
with respect to the TCW Money Market, TCW Managed Asset
Allocation and T. Rowe Price International Stock Portfolios
was approved by the Trustees of the Fund (including all of the
Trustees who are not "interested persons" of the Manager) on
July 20, 1992, and by the shareholders of the Fund on November
23, 1992. With respect to the Value Equity and Value Small
-35- <PAGE>
Cap Portfolios, the Management Agreement was approved by the
Trustees of the Fund (including all of the Trustees who are
not "interested persons" of the Manager) on April 19, 1993 and
by PFL Life Insurance Company, the sole shareholder of the
Value Equity and Value Small Cap Portfolios, on April 19,
1993. With respect to the Dreyfus U.S. Government Securities
Portfolio, the Management Agreement was approved by the
Trustees of the Fund (including all of the Trustees who are
not "interested persons" of the Manager) on January 24, 1994
and by PFL Life Insurance Company, the sole shareholder of the
Dreyfus U.S. Government Securities Portfolio, on March 7,
1994. With respect to the T. Rowe Price Equity Income and T.
Rowe Price Growth Stock Portfolios, the Management Agreement
was approved by the Trustees of the Fund (including all of the
Trustees who are not "interested persons" of the Manager) on
October 24, 1994 and by PFL Life Insurance Company, the sole
shareholder of the T. Rowe Price Equity Income and T. Rowe
Price Growth Stock Portfolios, on November 1, 1994. See
"Organization and Capitalization of the Fund." The Management
Agreement will continue in force for two years from its date,
November 23, 1992 with respect to the TCW Money Market, TCW
Managed Asset Allocation and T. Rowe Price International Stock
Portfolios, April 19, 1993 with respect to the Value Equity
and Value Small Cap Portfolios, March 25, 1994 with respect to
the Dreyfus U.S. Government Securities Portfolio and December
28, 1994 with respect to the T. Rowe Price Equity Income and
T. Rowe Price Growth Stock Portfolios, and from year to year
thereafter, but only so long as its continuation as to each
Portfolio is specifically approved at least annually (i) by
the Trustees or by the vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the
Portfolio, and (ii) by the vvoottee of a majority of the Trustees
who are not parties to the Management Agreement or "interested
persons" (as defined in the 1940 Act) of any such party, by
votes cast in person at a meeting called for the purpose of
voting on such approval. The Management Agreement provides
that it shall terminate automatically if assigned, and that it
may be terminated as to any Portfolio without penalty by the
Trustees of the Fund or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of
the Portfolio upon 60 days' prior written notice to the
Manager, or by the Manager upon 90 days' prior written notice
to the Fund, or upon such shorter notice as may be mutually
agreed upon. In the event the Manager ceases to be the Manager
of the Fund, the right of the Fund to use the identifying name
of "Endeavor" may be withdrawn.
The Advisers
The Investment Advisory Agreements between the Manager
and TCW Funds Management, Inc. were approved by the Trustees
of the Fund (including all the Trustees who are not
-36-
<PAGE>
"interested persons" of the Manager or of the Adviser) on July
20, 1992, and by the shareholders of the Fund on November 23,
1992. The Investment Advisory Agreements between the Manager
and OpCap Advisors (formerly known as Quest for Value
Advisors) were approved by the Trustees of the Fund (including
all of the Trustees who are not "interested persons" of the
Manager or of the Adviser) on April 19, 1993 and by PFL Life
Insurance Company as sole shareholder of the Value Equity and
Value Small Cap Portfolios on April 19, 1993. The Investment
Advisory Agreement between the Manager and The Boston Company
Asset Management, Inc. was approved by the Trustees of the
Fund (including all of the Trustees who are not "interested
persons" of the Manager or of the Adviser) on January 24, 1994
and by PFL Life Insurance Company as sole shareholder of the
Dreyfus U.S. Government Securities Portfolio on March 7, 1994.
The Investment Advisory Agreement was transferred to The
Dreyfus Corporation effective May 1, 1996. The Investment
Advisory Agreements between the Manager and T. Rowe Price
Associates, Inc. were approved by the Trustees of the Fund
(including all of the Trustees who are not "interested
persons" of the Manager or of the Adviser) on October 24, 1994
and by PFL Life Insurance Company as sole shareholder of the
T. Rowe Price Equity Income and T. Rowe Price Growth Stock
Portfolios on November 1, 1994. Effective January 1, 1995,
Price-Fleming became the Adviser of the T. Rowe Price
International Stock Portfolio. The Investment Advisory
Agreement with Price-Fleming for the T. Rowe Price
International Stock Portfolio was approved by the Trustees of
the Fund (including all of the Trustees who are not
"interested persons" of the Manager or of the Adviser) on
December 19, 1994 and by shareholders of the Portfolio on
March 24, 1995. See "Organization and Capitalization of the
Fund."
Each agreement will continue in force for two years from
its date, November 23, 1992 with respect to the TCW Money
Market and TCW Managed Asset Allocation Portfolios, April 19,
1993 with respect to the Value Equity and Value Small Cap
Portfolios, March 25, 1994 with respect to the Dreyfus U.S.
Government Securities Portfolio, December 28, 1994 with
respect to the T. Rowe Price Equity Income and T. Rowe Price
Growth Stock Portfolios and January 1, 1995 with respect to
the T. Rowe Price International Stock Portfolio, and from year
to year thereafter, but only so long as its continuation as to
a Portfolio is specifically approved at least annually (i) by
the Trustees or by the vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the
Portfolio, and (ii) by the vote of a majority of the Trustees
who are not parties to the agreement or interested persons (as
defined in the 1940 Act) of any such party, by votes cast in
person at a meeting called for the purpose of voting on such
approval. Each Investment Advisory Agreement provides that it
-37- <PAGE>
shall terminate automatically if assigned or if the Management
Agreement with respect to the related Portfolio terminates,
and that it may be terminated as to a Portfolio without
penalty by the Manager, by the Trustees of the Fund or by vote
of a majority of the outstanding voting securities (as defined
in the 1940 Act) of the Portfolio on not less than 60 days'
prior written notice to the Adviser or by the Adviser on not
less than 150 days' prior written notice to the Manager, or
upon such shorter notice as may be mutually agreed upon.
The following table shows the fees paid by each of the
Portfolios and any fee waivers or reimbursements during the
fiscal years ended December 31, 1993, December 31, 1994 and
December 31, 1995.
1995*
Investment Investment
Management Management Other
Fee Fee Expenses
Paid Waived Reimbursed
TCW Money Market
Portfolio.............. $ 117,465 $ --- $ ---
TCW Managed Asset
Allocation Portfolio... $ 1,388,652 $ --- $ ---
T. Rowe Price
International Stock
Portfolio.............. $ 759,830 $ --- $ ---
Value Equity Portfolio... $ 395,205 $ --- $ ---
Value Small Cap
Portfolio.............. $ 339,672 $ --- $ ---
Dreyfus U.S. Government
Securities Portfolio... $ 42,531 $ --- $ ---
T. Rowe Price Equity
Income Portfolio....... $ 70,664 $ --- $ ---
T. Rowe Price Growth
Stock Portfolio........ $ 75,681 $ --- $ ---
1994
Investment
Management Investment Other
Fee Management Expenses
Paid Fee Waived Reimbursed
TCW Money Market
Portfolio...............$ 111,100 $ --- $ ---
TCW Managed Asset
Allocation Portfolio....$1,151,688 $ --- $ ---
T. Rowe Price
International Stock
Portfolio...............$ 696,732 $ --- $ ---
Value Equity Portfolio....$ 191,316 $ --- $ ---
-38- <PAGE>
Value Small Cap Portfolio.$ 214,198 $ --- $ ---
Dreyfus U.S. Government
Securities Portfolio**..$ 8,087 $ 8,087 $ 4,955
1993***
Investment Investment
Management Management Other
Fee Fee Expenses
Paid Waived Reimbursed
TCW Money Market
Portfolio.............. $ 23,471 $ 21,640 ---
TCW Managed Asset
Allocation Portfolio... $305,989 --- ---
T. Rowe Price
International Stock
Portfolio.............. $211,211 --- ---
Value Equity Portfolio... --- $ 18,606 ---
Value Small Cap
Portfolio.............. --- $ 17,970 ---
* The information presented for the T. Rowe Price Equity
Income and T. Rowe Price Growth Stock Portfolios is for
the period January 3, 1995 (commencement of operations)
ended December 31, 1995.
** The information presented with respect to the Dreyfus
U.S. Government Securities Portfolio is for the period
May 13, 1994 (commencement of operations) ended
December 31, 1994.
*** The information presented with respect to the Value
Equity Portfolio is for the period May 27, 1993
(commencement of operations) ended December 31, 1993
and with respect to the Value Small Cap Portfolio, is
for the period May 4, 1993 (commencement of operations)
ended December 31, 1993.
___________________________
Each Investment Advisory Agreement provides that the
Adviser shall not be subject to any liability to the Fund or
the Manager for any act or omission in the course of or
connected with rendering services thereunder in the absence of
willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties on the part of the Adviser.
-39-
<PAGE>
REDEMPTION OF SHARES
The Fund may suspend redemption privileges or postpone
the date of payment on shares of the Portfolios for more than
seven days during any period (1) when the New York Stock
Exchange is closed or trading on the Exchange is restricted as
determined by the Securities and Exchange Commission, (2) when
an emergency exists, as defined by the Securities and Exchange
Commission, which makes it not reasonably practicable for a
Portfolio to dispose of securities owned by it or fairly to
determine the value of its assets, or (3) as the Securities
and Exchange Commission may otherwise permit.
The value of the shares on redemption may be more or
less than the shareholder's cost, depending upon the market
value of the portfolio securities at the time of redemption.
NET ASSET VALUE
The net asset value per share of each Portfolio is
determined as of the close of regular trading of the New York
Stock Exchange (currently 4:00 p.m., New York City time),
Monday through Friday, exclusive of national business
holidays. The Fund will be closed on the following national
business holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Portfolio securities for
which the primary market is on a domestic or foreign exchange
or which are traded over-the-counter and quoted on the NASDAQ
System will be valued at the last sale price on the day of
valuation or, if there was no sale that day, at the last
reported bid price, using prices as of the close of trading.
Portfolio securities not quoted on the NASDAQ System that are
actively traded in the over-the-counter market, including
listed securities for which the primary market is believed to
be over-the-counter, will be valued at the most recently
quoted bid price provided by the principal market makers.
In the case of any securities which are not actively
traded, reliable market quotations may not be considered to be
readily available. These investments are stated at fair value
as determined under the direction of the Trustees. Such fair
value is expected to be determined by utilizing information
furnished by a pricing service which determines valuations for
normal, institutional-size trading units of such securities
using methods based on market transactions for comparable
securities and various relationships between securities which
are generally recognized by institutional traders.
If any securities held by a Portfolio are restricted as
to resale, their fair value will be determined following
procedures approved by the Trustees. The fair value of such
-40-
<PAGE>
securities is generally determined as the amount which the
Portfolio could reasonably expect to realize from an orderly
disposition of such securities over a reasonable period of
time. The valuation procedures applied in any specific
instance are likely to vary from case to case. However,
consideration is generally given to the financial position of
the issuer and other fundamental analytical data relating to
the investment and to the nature of the restrictions on
disposition of the securities (including any registration
expenses that might be borne by the Portfolio in connection
with such disposition). In addition, specific factors are also
generally considered, such as the cost of the investment, the
market value of any unrestricted securities of the same class
(both at the time of purchase and at the time of valuation),
the size of the holding, the prices of any recent transactions
or offers with respect to such securities and any available
analysts' reports regarding the issuer.
Notwithstanding the foregoing, short-term debt
securities with maturities of 60 days or less will be valued
at amortized cost.
The TCW Money Market Portfolio's investment policies
and method of securities valuation are intended to permit the
Portfolio generally to maintain a constant net asset value of
$1.00 per share by computing the net asset value per share to
the nearest $.01 per share. The Portfolio is permitted to use
the amortized cost method of valuation for its portfolio
securities pursuant to regulations of the Securities and
Exchange Commission. This method may result in periods during
which value, as determined by amortized cost, is higher or
lower than the price the Portfolio would receive if it sold
the instrument. The net asset value per share would be subject
to fluctuation upon any significant changes in the value of
the Portfolio's securities. The value of debt securities, such
as those in the Portfolio, usually reflects yields generally
available on securities of similar yield, quality and
duration. When such yields decline, the value of a portfolio
holding such securities can be expected to decline. Although
the Portfolio seeks to maintain the net asset value per share
of the Portfolio at $1.00, there can be no assurance that net
asset value will not vary.
The Trustees of the Fund have undertaken to establish
procedures reasonably designed, taking into account current
market conditions and the Portfolio's investment objective, to
stabilize the net asset value per share for purposes of sales
and redemptions at $1.00. These procedures include the
determination, at such intervals as the Trustees deem
appropriate, of the extent, if any, to which the net asset
value per share calculated by using available market
quotations deviates from $1.00 per share. In the event such
-41- <PAGE>
deviation exceeds one half of one percent, the Trustees are
required to promptly consider what action, if any, should be
initiated.
With respect to the TCW Managed Asset Allocation
Portfolio, the Value Equity Portfolio, the Value Small Cap
Portfolio, the Dreyfus U.S. Government Securities Portfolio,
the T. Rowe Price International Stock Portfolio, the T. Rowe
Price Equity Income Portfolio and the T. Rowe Price Growth
Stock Portfolio, foreign securities traded outside the United
States are generally valued as of the time their trading is
complete, which is usually different from the close of the New
York Stock Exchange. Occasionally, events affecting the value
of such securities may occur between such times and the close
of the New York Stock Exchange that will not be reflected in
the computation of the Portfolio's net asset value. If events
materially affecting the value of such securities occur during
such period, these securities will be valued at their fair
value according to procedures decided upon in good faith by
the Fund's Board of Trustees. All securities and other assets
of the Portfolio initially expressed in foreign currencies
will be converted to U.S. dollar values at the mean of the bid
and offer prices of such currencies against U.S. dollars last
quoted on a valuation date by any recognized dealer.
TAXES
Federal Income Taxes
Each Portfolio intends to qualify each year as a
"regulated investment company" under the Internal Revenue Code
of 1986, as amended (the "Code"). By so qualifying, a
Portfolio will not be subject to federal income taxes to the
extent that its net investment income and net realized capital
gains are distributed.
In order to so qualify, a Portfolio must, among other
things, (1) derive at least 90% of its gross income in each
taxable year from dividends, interest, payments with respect
to securities loans, gains from the sale or other disposition
of stocks or securities or foreign currencies, or other income
(including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of
investing in such stocks or securities; (2) derive less than
30% of its gross income in each taxable year from the sale or
other disposition of stocks or securities held less than three
months (the Portfolio's transactions in future transactions,
straddles and options may be restricted in order to comply
with this requirement); and (3) diversify its holdings so
that, at the end of each quarter of the Portfolio's taxable
year, (a) at least 50% of the market value of the Portfolio's
assets is represented by cash, government securities and other
-42-
<PAGE>
securities limited in respect of any one issuer to 5% of the
value of the Portfolio's assets and to not more than 10% of
the voting securities of such issuer, and (b) not more than
25% of the value of its assets is invested in securities of
any one issuer (other than government securities).
As a regulated investment company, a Portfolio will not
be subject to federal income tax on net investment income and
capital gains (short- and long-term), if any, that it
distributes to its shareholders if at least 90% of its net
investment income and net short-term capital gains for the
taxable year are distributed, but will be subject to tax at
regular corporate rates on any income or gains that are not
distributed. In general, dividends will be treated as paid
when actually distributed, except that dividends declared in
October, November or December and made payable to shareholders
of record in such a month will be treated as having been paid
by the Portfolio (and received by shareholders) on December
31, provided the dividend is paid in the following January.
Each Portfolio intends to satisfy the distribution requirement
in each taxable year.
The Portfolios will not be subject to the 4% federal
excise tax imposed on registered investment companies that do
not distribute all of their income and gains each calendar
year because such tax does not apply to a registered
investment company whose only shareholders are segregated
asset accounts of life insurance companies held in connection
with variable annuity and/or variable life insurance policies.
The Fund intends to comply with section 817(h) of the
Code and the regulations issued thereunder. As required by
regulations under that section, the only shareholders of the
Fund and its Portfolios will be life insurance company
segregated asset accounts (also referred to as separate
accounts) that fund variable life insurance or annuity
contracts and the general account of PFL Life Insurance
Company which provided the initial capital for the Portfolios
of the Fund. See the prospectus or other material for the
Contracts for additional discussion of the taxation of
segregated asset accounts and of the owner of the particular
Contract described therein.
Section 817(h) of the Code and Treasury Department
regulations thereunder impose certain diversification
requirements on the segregated asset accounts investing in the
Portfolios of the Fund. These requirements, which are in
addition to the diversification requirements applicable to the
Fund under the 1940 Act and under the regulated investment
company provisions of the Code, may limit the types and
amounts of securities in which the Portfolios may invest.
Failure to meet the requirements of section 817(h) could
-43-
<PAGE>
result in current taxation of the owner of the Contract on the
income of the Contract.
The Fund may therefore find it necessary to take action
to ensure that a Contract continues to qualify as a Contract
under federal tax laws. The Fund, for example, may be required
to alter the investment objectives of a Portfolio or
substitute the shares of one Portfolio for those of another.
No such change of investment objectives or substitution of
securities will take place without notice to the shareholders
of the affected Portfolio and the approval of a majority of
such shareholders and without prior approval of the Securities
and Exchange Commission, to the extent legally required.
ORGANIZATION AND CAPITALIZATION OF THE FUND
The Fund is a Massachusetts business trust organized on
November 18, 1988. A copy of the Fund's Agreement and
Declaration of Trust, as amended, which is governed by
Massachusetts law, is on file with the Secretary of State of
The Commonwealth of Massachusetts.
The Trustees of the Fund have authority to issue an
unlimited number of shares of beneficial interest without par
value of one or more series. Currently, the Trustees have
established and designated eight series. Each series of shares
represents the beneficial interest in a separate Portfolio of
assets of the Fund, which is separately managed and has its
own investment objective and policies. The Trustees of the
Fund have authority, without the necessity of a shareholder
vote, to establish additional portfolios and series of shares.
The shares outstanding are, and those offered hereby when
issued will be, fully paid and nonassessable by the Fund. The
shares have no preemptive, conversion or subscription rights
and are fully transferable.
The assets received from the sale of shares of a
Portfolio, and all income, earnings, profits and proceeds
thereof, subject only to the rights of creditors, constitute
the underlying assets of the Portfolio. The underlying assets
of a Portfolio are required to be segregated on the Fund's
books of account and are to be charged with the expenses with
respect to that Portfolio. Any general expenses of the Fund
not readily attributable to a Portfolio will be allocated by
or under the direction of the Trustees in such manner as the
Trustees determine to be fair and equitable, taking into
consideration, among other things, the nature and type of
expense and the relative sizes of the Portfolio and the other
Portfolios.
Each share has one vote, with fractional shares voting
proportionately. Shareholders of a Portfolio are not entitled
-44- <PAGE>
to vote on any matter that requires a separate vote of the
shares of another Portfolio but which does not affect the
Portfolio. The Agreement and Declaration of Trust does not
require the Fund to hold annual meetings of shareholders.
Thus, there will ordinarily bily be no annual shareholder meetings,
unless otherwise required by the 1940 Act. The Trustees of
the Fund may appoint their
successors until fewer than a majority oof the Trustees have
been elected by shareholders, at which time a meeting of
shareholders will be called to elect Trustees. Under the
Agreement and Declaration of Trust, any Trustee may be removed
by vote of two-thirds of the outstanding shares of the Fund,
and holders of 10% or more of the outstanding shares can
require the Trustees to call a meeting of shareholders for the
purpose of voting on the removal of one or more Trustees. If
ten or more shareholders who have been such for at least six
months and who hold in the aggregate shares with a net asset
value of at least $25,000 inform the Trustees that they wish
to communicate with other shareholders, the Trustees either
will give such shareholders access to the shareholder lists or
will inform them of the cost involved if the Fund forwards
materials to the shareholders on their behalf. If the Trustees
object to mailing such materials, they must inform the
Securities and Exchange Commission and thereafter comply with
the requirements of the 1940 Act.
PFL will vote shares of the Fund as described under the
caption "Voting Rights" in the prospectus or other material
for the Contracts which accompanies the Prospectus.
As of March 31, 1996, the PFL Endeavor Variable Annuity
Account owned of record the following percentages of the
outstanding shares of each Portfolio: 82.29 % of the TCW Money
Market Portfolio; 96.46% of the TCW Managed Asset Allocation
Portfolio; 93.92% of the T. Rowe Price International Stock
Portfolio; 91.17% of the Value Equity Portfolio; 91.94% of the
Value Small Cap Portfolio; 71.80% of the Dreyfus U.S.
Government Securities Portfolio; 83.95% of the T. Rowe Price
Equity Income Portfolio; and 85.12% of the T. Rowe Price
Growth Stock Portfolio. As of March 31, 1996, the PFL
Endeavor Platinum Variable Annuity Account owned of record the
following percentages of the outstanding shares of each
Portfolio: 16.14% of the TCW Money Market Portfolio; 2.92% of
the TCW Managed Asset Allocation Portfolio; 4.98% of the T.
Rowe Price International Stock Portfolio; 7.25% of the Value
Equity Portfolio; 6.59% of the Value Small Cap Portfolio;
25.68% of the Dreyfus U.S. Government Securities Portfolio;
13.48% of the T. Rowe Price Equity Income Portfolio; and
12.75% of the T. Rowe Price Growth Stock Portfolio. As of
March 31, 1996, the AUSA Endeavor Variable Annuity Account
owned of record the following percentages of the outstanding
shares of each Portfolio: 1.57% of the TCW Money Market
-45-
<PAGE>
Portfolio; 0.58% of the TCW Managed Asset Allocation
Portfolio; 1.10% of the T. Rowe Price International Stock
Portfolio; 1.59% of the Value Equity Portfolio; 1.48% of the
Value Small Cap Portfolio; 2.52% of the Dreyfus U.S.
Government Securities Portfolio; 2.56% of the T. Rowe Price
Equity Income Portfolio; and 2.13% of the T. Rowe Price Growth
Stock Portfolio.
Under Massachusetts law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of the Fund. However, the Agreement and
Declaration of Trust disclaims shareholder liability for acts
and obligations of the Fund and requires that notice of such
disclaimer be given in each agreement, obligation or
instrument entered into or executed by the Fund or the
Trustees. The Agreement and Declaration of Trust provides for
indemnification out of Fund property for all loss and expense
of any shareholders held personally liable for obligations of
the Fund. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to
circumstances in which the Fund would be unable to meet its
obligations. The likelihood of such circumstances is remote.
LEGAL MATTERS
Certain legal matters are passed on for the Fund by
Sullivan & Worcester LLP of Washington, D.C.
CUSTODIAN
Boston Safe Deposit and Trust Company, located at One
Boston Place, Boston, Massachusetts 02108, serves as the
custodian of the Fund. Under the Custody Agreement, Boston
Safe holds the Portfolios' securities and keeps all necessary
records and documents.
FINANCIAL STATEMENTS
The financial statements of each Portfolio for the
fiscal year ended December 31, 1995, including notes to the
financial statements and supplementary information and the
Independent Auditors' Report, are included in the Fund's
Annual Report to shareholders. A copy of the Annual Report
accompanies this Statement of Additional Information. The
financial statements included in the Annual Report are
incorporated herein by reference.
-46- <PAGE>
APPENDIX
SECURITIES RATINGS
Standard & Poor's Bond Ratings
A Standard & Poor's corporate debt rating is a current
assessment of the creditworthiness of an obligor with respect
to a specific obligation. Debt rated "AAA" has the highest
rating assigned by Standard & Poor's. Capacity to pay interest
and repay principal is extremely strong. Debt rated "AA" has a
very strong capacity to pay interest and to repay principal
and differs from the highest rated issues only in small
degree. Debt rated "A" has a strong capacity to pay interest
and repay principal although it is somewhat more susceptible
to the adverse effects of changes in circumstances and
economic conditions than debt of a higher rated category. Debt
rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and to repay principal for debt in
this category than for higher rated categories. Bonds rated
"BB", "B", "CCC" and "CC" are regarded, on balance, as
predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance
with the terms of the obligation. "BB" indicates the lowest
degree of speculation and "CC" the highest degree of
speculation. While such bonds will likely have some quality
and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
The ratings from "AA" to "B" may be modified by the addition
of a plus or minus sign to show relative standing within the
major rating categories.
Moody's Bond Ratings
Bonds rated "Aaa" by Moody's are judged to be of the
best quality and to carry the smallest degree of investment
risk. Bonds rated "Aa" are judged to be of high quality by all
standards. Bonds rated "A" possess many favorable investment
attributes and are to be considered as higher medium grade
obligations. Bonds rated "Baa" are considered as medium grade
obligations, i.e., they are neither highly protected nor
poorly secured and have speculative characteristics as well.
Bonds are rated "Ba", "B", "Caa", "Ca", "C" when protection of
interest and principal payments is questionable. A "Ba" rating
indicates some speculative elements while "Ca" represents a
high degree of speculation and "C" represents the lowest rated
class of bonds. "Caa", "Ca" and "C" bonds may be in default.
Moody's applies numerical modifiers "1", "2" and "3" in each
generic rrating classification from "Aa" to "B" in its
corporate bond rating system. The modifier "1" indicates that
<PAGE>
the security ranks in the higher end of its generic rating
category; the modifier "2" indicates a mid-range ranking; and
the modifier "3" indicates that the issue ranks at the lower
end of its generic rating category.
Standard & Poor's Commercial Paper Ratings
"A" is the highest commercial paper rating category
utilized by Standard & Poor's, which uses the numbers "1+",
"1", "2" and "3" to denote relative strength within its "A"
classification. Commercial paper issuers rated "A" by Standard
& Poor's have the following characteristics. Liquidity ratios
are better than industry average. Long-term debt rating is "A"
or better. The issuer has access to at least two additional
channels of borrowing. Basic earnings and cash flow are in an
upward trend. Typically, the issuer is a strong company in a
well-established industry and has superior management. Issues
rated "B" are regarded as having only an adequate capacity for
timely payment. However, such capacity may be damaged by
changing conditions or short-term adversities. The rating "C"
is assigned to short-term debt obligations with a doubtful
capacity for repayment. An issue rated "D" is either in
default or is expected to be in default upon maturity.
Moody's Commercial Paper Ratings
"Prime-1" is the highest commercial paper rating
assigned by Moody's, which uses the numbers "1", "2" and "3"
to denote relative strength within its highest classification
of Prime. Commercial paper issuers rated Prime by Moody's have
the following characteristics. Their short-term debt
obligations carry the smallest degree of investment risk.
Margins of support for current indebtedness are large or
stable with cash flow and asset protection well assured.
Current liquidity provides ample coverage of near-term
liabilities and unused alternative financing arrangements are
generally available. While protective elements may change over
the intermediate or longer terms, such changes are most
unlikely to impair the fundamentally strong position of
short-term obligations.
IBCA Limited/IBCA Inc. Commercial Paper Ratings. Short-term
obligations, including commercial paper, rated A-1+ by IBCA
Limited or its affiliate IBCA Inc., are obligations supported
by the highest capacity for timely repayment. Obligations
rated A-1 have a very strong capacity for timely repayment.
Obligations rated A-2 have a strong capacity for timely
repayment, although such capacity may be susceptible to
adverse changes in business, economic or financial conditions.
Fitch Investors Services, Inc. Commercial Paper Ratings. Fitch
Investors Services, Inc. employs the rating F-1+ to indicate
A-2
<PAGE>
issues regarded as having the strongest degree of assurance
for timely payment. The rating F-1 reflects an assurance of
timely payment only slightly less in degree than issues rated
F-1+, while the rating F-2 indicates a satisfactory degree of
assurance for timely payment, although the margin of safety
is not as great as indicated by the F-1+ and F-1 categories.
Duff & Phelps Inc. Commercial Paper Ratings. Duff & Phelps
Inc. employs the designation of Duff 1 with respect to top
grade commercial paper and bank money instruments. Duff 1+
indicates the highest certainty of timely payment: short-term
liquidity is clearly outstanding, and safety is just below
risk-free U.S. Treasury short-term obligations. Duff 1-
indicates high certainty of timely payment. Duff 2 indicates
good certainty of timely payment: liquidity factors and
company fundamentals are sound.
Thomson BankWatch, Inc. ("BankWatch") Commercial Paper
Ratings. BankWatch will assign both short-term debt ratings
and issuer ratings to the issuers it rates. BankWatch will
assign a short-term rating ("TBW-1", "TBW-2", "TBW-3", or
"TBW-4") to each class of debt (e.g., commercial paper or
non-convertible debt), having a maturity of one-year or less,
issued by a holding company structure or an entity within the
holding company structure that is rated by BankWatch.
Additionally, BankWatch will assign an issuer rating ("A",
"A/B", "B", "B/C", "C", "C/D", "D", "D/E", and "E") to each
issuer that it rates.
Various of the NRSROs utilize rankings within rating
categories indicated by a + or -. The Portfolios, in
accordance with industry practice, recognize such rankings
within categories as graduations, viewing for example Standard
& Poor's rating of A-1+ and A-1 as being in Standard & Poor's
highest rating category.
AGREEMENT AND DECLARATION OF TRUST
OF
THE ENDEAVOR SERIES FUND
Dated: November 18, 1988
AGREEMENT AND DECLARATION OF TRUST OF
THE ENDEAVOR SERIES FUND
Table of Contents
Page
RECITALS................................................... 1
ARTICLE I THE TRUST................................... 2
Section 1.1 Name........................................ 2
Section 1.2 Offices; Resident Agent..................... 2
Section 1.3 Nature of Trust............................. 2
Section 1.4 Definitions................................. 3
ARTICLE II PURPOSE OF THE TRUST........................ 4
ARTICLE III SHARES...................................... 4
Section 3.1 Division of Beneficial Interest............. 4
Section 3.2 Ownership of Shares......................... 4
Section 3.3 Investment in the Trust..................... 4
Section 3.4 No Preemptive Rights........................ 4
Section 3.5 Status of Shares; Limitation of
Personal Liability........................ 4
Section 3.6 Establishment, etc. of Series............... 5
(a) Assets Belonging to Series............. 5
(b) Liabilities of Series.................. 6
(c) Dividends, Distributions, Redemptions
and Repurchases...................... 6
(d) Voting................................. 7
(e) Equality............................... 7
(f) Fractional Shares...................... 7
(g) Exchange Privilege..................... 7
(h) Combination of Series.................. 7
ARTICLE IV TRUSTEES.................................... 8
Section 4.1 Number, Designation, Election,
Term, etc................................. 8
(a) Number................................. 8
(b) Election and Term...................... 8
(c) Resignation, Retirement and Removal.... 8
(d) Vacancies.............................. 8
(e) Acceptance of Trusts................... 9
(f) Effect of Death, Resignation, etc...... 9
(g) No Accounting.......................... 9
(h) Filings................................ 9
Page
Section 4.2 Powers...................................... 10
Section 4.3 Payment of Trust Expenses and
Compensation of Trustees................. 13
Section 4.4 Ownership of Assets of the Trust............ 13
Section 4.5 Certain Contracts........................... 13
ARTICLE V NET ASSET VALUE AND NET INCOME;
REDEMPTIONS.............................. 15
Section 5.1 Net Asset Value and Net Income.............. 15
Section 5.2 Redemptions by Shareholders................. 15
Section 5.3 Redemptions at the Option of the Trust...... 16
ARTICLE VI SHAREHOLDERS' VOTING POWERS AND MEETINGS.... 16
Section 6.1 Voting Powers............................... 16
Section 6.2 Meetings.................................... 17
Section 6.3 Record Dates................................ 17
Section 6.4 Quorum and Required Vote.................... 18
Section 6.5 Action by Written Consent................... 18
Section 6.6 Inspection of Records....................... 18
Section 6.7 Additional Provisions....................... 18
ARTICLE VII LIMITATION OF LIABILITY; INDEMNIFICATION.... 19
Section 7.1 Trustees, Shareholders, etc. Not
Personally Liable; Notice................ 19
Section 7.2 Trustees' Good Faith Action; Expert
Advice; No Bond or Surety................. 19
Section 7.3 Apparent Authority of the Trustees.......... 20
Section 7.4 Indemnification of Trustees, Officers, etc.. 20
Section 7.5 Compromise Payment.......................... 21
Section 7.6 Indemnification Not
Exclusive, etc........................... 22
Section 7.7 Indemnification of Shareholders............. 22
ARTICLE VIII MISCELLANEOUS............................... 22
Section 8.1 Duration and Termination of Trust........... 22
Section 8.2 Reorganization.............................. 23
Section 8.3 Amendments; etc............................. 23
Section 8.4 Filing of Copies............................ 23
Section 8.5 Applicable Law.............................. 24
Section 8.6 References; Gender; Headings;
Counterparts............................. 24
Section 8.7 Use of the Name "Endeavor"................... 24
SIGNATURES................................................. 24
ACKNOWLEDGMENTS........................................... 26
AGREEMENT AND DECLARATION OF TRUST OF
THE ENDEAVOR SERIES FUND
This AGREEMENT AND DECLARATION OF TRUST, made at Boston,
Massachusetts this 18th day of November, 1988, by and between Bryan
G. Tyson, an individual residing in Brookline, Massachusetts (the
"Settlor"), and the trustee whose signature is set forth below (the
"Initial Trustee"),
W I T N E S S E T H T H A T:
WHEREAS, the Settlor proposes to deliver to the Initial
Trustee the sum of one hundred dollars ($100.00) lawful money of
the United States of America in trust hereunder and to authorize
the Initial Trustee and all other individuals acting as Trustees
hereunder to employ such funds, and any other funds coming into
their hands or the hands of their successor or successors as such
Trustees, to carry on the business of an investment company and as
such of buying, selling, investing or otherwise dealing in and with
stocks, bonds, debentures, warrants and other securities and
interests therein, financial futures contracts, or options with
respect to securities or financial futures contracts, or options
with respect to securities or financial futures contracts, and such
other and further investment media and other property as the
Trustees may deem advisable, which are not prohibited by law or the
terms of this Declaration; and
WHEREAS, the Initial Trustee is willing to accept such sum,
together with any and all additions thereto and the income or
increments thereof, upon the terms, conditions and trusts
hereinafter set forth; and
WHEREAS, the beneficial interest in the assets held by the
Trustees shall be divided into transferable Shares, all in
accordance with the provisions hereinafter set forth; and
WHEREAS, it is desired that the trust established hereby be
managed and operated as a trust with transferable shares under the
laws of Massachusetts, of the type commonly known as a
Massachusetts business trust, in accordance with the provisions
hereinafter set forth;
NOW, THEREFORE, the Initial Trustee, for himself and his
successors as Trustees, hereby declares, and agrees with the
Settlor, for himself and for all persons who shall hereafter become
holders of Shares that the Trustees will hold the sum delivered to
them upon the execution hereof, and all other and further cash,
securities and other property of every type and description which
they may in any way acquire in their capacity as such Trustees,
together with the income therefrom and the proceeds thereof, IN
TRUST NEVERTHELESS, to manage and dispose of the same for the
benefit of the holders from time to time of the Shares being issued
and to be issued hereunder and in the manner and subject to the
provisions hereof, to wit:
ARTICLE I
THE TRUST
Section 1.1. Name. The name of the Trust shall be "The
Endeavor Series Fund", and so far as may be practicable the
Trustees shall conduct the Trust's activities, execute all
documents and sue or be sued under that name, which name (and the
word "Trust" wherever used in this Declaration of Trust, except
where the context otherwise requires) shall refer to the Trustees
in their capacity as Trustees, and not individually or personally,
and shall not refer to the officers, agents or employees of the
Trust or of such Trustees, or to the Shareholders. If the Trustees
determine that the use of such name is not practicable, legal or
convenient at any time or in any jurisdiction, or if the Trust is
required to discontinue the use of such name pursuant to Section
8.7 hereof, then the Trustees may, subject to Section 8.7, use such
other designation or adopt such other name for the Trust as they
deem proper, and the Trust may hold property and conduct its
activities under such other designation or name.
Section 1.2. Offices; Resident Agent. The Trust shall have
an office in Boston, Massachusetts, unless changed by the Trustees
to another location in Massachusetts or elsewhere, but such office
need not be the sole or principal office of the Trust. The Trust
may have such other offices or places of business as the Trustees
may from time to time determine to be necessary or expedient. The
Trustees may appoint, and from time to time replace, a resident
agent for the Trust in The Commonwealth of Massachusetts.
Section 1.3. Nature of Trust. The Trust shall be a trust
with transferable shares under the laws of The Commonwealth of
Massachusetts, of the type referred to in Section 1 of Chapter 182
of the Massachusetts General Laws and commonly known as a
Massachusetts business trust. The Trust is not intended to be,
shall not be deemed to be, and shall not be treated as, a general
partnership, limited partnership, joint venture, corporation or
joint stock company. The Shareholders shall be beneficiaries and
their relationship to the Trustees shall be solely in that capacity
in accordance with the rights conferred upon them hereunder.
Section 1.4. Definitions. As used in this Declaration of
Trust, the following terms shall have the meanings set forth below
unless the context thereof otherwise requires:
"Bylaws" means the Bylaws of the Trust, as amended from time
to time.
"Contracting Party" has the meaning designated in Section 4.5
hereof.
"Declaration" and "Declaration of Trust" means this Agreement
and Declaration of Trust and all amendments or modifications
thereof as from time to time in effect.
"Initial Trustee" has the meaning designated in the preamble
hereto.
"Majority of the Trustees" means a majority of the Trustees in
office at the time in question. At any time at which there shall
be only one Trustee in office, such phrase shall mean such Trustee.
"1940 Act" means the Investment Company Act of 1940 and the
rules and regulations thereunder, both as amended from time to
time, and any order or orders thereunder which may from time to
time be applicable to the Trust.
"Settlor" has the meaning designated in the preamble hereto.
"Shareholder" means a record owner of Shares.
"Shares" means the equal proportionate transferable units of
interest into which the beneficial interest in the Trust or in the
Trust property belonging to any Series of the Trust (as the context
may require) shall be divided from time to time.
"Series" refers to each Series of Shares established and
designated under or in accordance with the provisions of Article
III.
"Trust" means the Massachusetts business trust established by
this Agreement and Declaration of Trust, as amended from time to
time.
"Trustees" means, collectively, the Initial Trustee, so long
as he shall continue in office, and all other individuals who at
the time in question have been duly elected or appointed as
Trustees of the Trust in accordance with the provisions hereof and
who have qualified and are then in office. At any time at which
there shall be only one Trustee in office, such term shall mean
such single Trustee.
ARTICLE II
PURPOSE OF THE TRUST
The purpose of the trust is to provide investors a managed
investment primarily in securities, debt instruments and other
instruments and rights of a financial character.
ARTICLE III
SHARES
Section 3.1. Division of Beneficial Interest. The
beneficial interest in the Trust shall at all times be divided into
Shares, without par value, each of which shall represent an equal
proportionate interest in the Trust with each other Share of the
same Series, none having priority or preference over another. The
number of Shares authorized shall be unlimited. The Trustees may
from time to time divide or combine the Shares of any particular
Series into a greater or lesser number of Shares of that Series
without thereby changing the proportionate beneficial interests of
the Shares of that Series in the assets belonging to that Series or
in any way affecting the rights of Shareholders of any other
Series.
Section 3.2. Ownership of Shares. The ownership of Shares
shall be recorded on the books of the Trust or of a transfer or
similar agent. No certificates evidencing the ownership of Shares
shall be issued except as the Trustees may otherwise determine from
time to time. The Trustees may make such rules as they consider
appropriate for the issuance of share certificates, the transfer of
Shares and similar matters. The record books of the Trust as kept
by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders and as to the
number of Shares held from time to time by each such Shareholder.
Section 3.3. Investment in the Trust. The Trustees may
accept investment in the Trust from such persons and on such terms
and for such consideration, which may consist of cash or tangible
or intangible property or a combination thereof, as they or the
Bylaws from time to time authorize.
Section 3.4. No Preemptive Rights. Shareholders shall have
no preemptive or other right to subscribe to any additional Shares
or other securities issued by the Trust.
Section 3.5. Status of Shares; Limitation of Personal
Liability. Shares shall be deemed to be personal property, giving
only the rights provided in this instrument. Every Shareholder by
virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the Trust
nor to entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against the
Trust or the Trustees, but only to the rights of said decedent
under this Declaration of Trust. Ownership of Shares shall not
entitle the Shareholder to any title in or to the whole or any part
of the Trust property or any right to call for a partition or
division of the same or for an accounting, nor shall the ownership
of Shares constitute the Shareholders partners. Neither the Trust
nor the Trustees, nor any officer, employee or agent of the Trust
shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any sum of money or
assessment whatsoever other than such as the Shareholder may at any
time personally agree to pay.
Section 3.6. Establishment, etc. of Series. Without
limiting the authority of the Trustees to establish and designate
further Series, there is hereby established the following one
Series to be designated the "Money Market Portfolio." The Shares
of such Series, and the Shares of any further Series that may from
time to time be established and designated by the Trustees, shall
(unless the Trustees otherwise determine with respect to some
further Series at the time of establishing and designating the
same) have the following relative rights and preferences:
(a) Assets Belonging to Series. Any portion of the
Trust property allocated to a particular Series, and all
consideration received by the Trust for the issue or sale of
Shares of such Series, together with all assets in which such
consideration is invested or reinvested, all interest,
dividends, income, earnings, profits and gains therefrom, and
proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be held by the Trustees
in trust for the benefit of the Shareholders of that Series
and shall irrevocably belong to that Series for all purposes,
and shall be so recorded upon the books and accounts of the
Trust, and the Shareholders of such Series shall not have, and
shall be conclusively deemed to have waived, any claims to the
assets of any Series of Shares of which they are not
Shareholders. Such consideration, assets, interest,
dividends, income, earnings, profits, gains and proceeds,
together with any general items allocated to that Series as
provided in the following sentence, are herein referred to
collectively as "assets belonging to" that Series. In the
event that thee are any assets, interest, dividends, income,
earnings, profits, gains and proceeds which are not readily
identifiable as belonging to any particular Series, the
Trustees shall allocate such general items to and among any
one or more of the Series established and designated from time
to time in such manner and on such basis as they, in their
sole discretion, deem fair and equitable; and any general
items so allocated to a particular Series shall belong to that
Series. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for
all purposes.
(b) Liabilities of Series. The assets belonging to each
particular Series shall be charged with the liabilities in
respect of that Series and all expenses, costs, charges and
reserves attributable to that Series, and any general
liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as pertaining to any
particular Series shall be allocated and charged by the
Trustees to and among any one or more of the Series
established and designated from time to time in such manner
and on such basis as the Trustees in their sole discretion
deem fair and equitable. The indebtedness, expenses, costs,
charges and reserves allocated and so charged to a particular
Series are herein referred to as "liabilities of" that Series.
Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon
the Shareholders of all Series for all purposes. All persons
who have extended credit which has been allocated to a
particular Series, or who have a claim or contract which has
been allocated to any particular Series, shall look only to
the assets of that particular Series for payment of such
credit, claim or contract.
(c) Dividends, Distributions, Redemptions, and
Repurchases. Notwithstanding any other provisions of this
Declaration of Trust, including, without limitation, Article
VI, no dividend or distribution (including, without
limitation, any distribution paid upon termination of the
Trust or of any Series) with respect to, nor any redemption or
repurchase of, the Shares of any Series shall be effected by
the Trust other than from the assets belonging to such Series,
nor, except as specifically provided in Section 7.7 hereof,
shall any Shareholder of any particular Series otherwise have
any right or claim against the assets belonging to any other
Series except to the extent that such Shareholder has such a
right or claim hereunder as a Shareholder of such other
Series.
(d) Voting. The Shareholders of each particular Series
shall have the voting rights set forth in or determined under
Article VI hereof.
(e) Equality. All Shares of each particular Series
shall represent an equal proportionate interest in the assets
belonging to that Series (subject to the liabilities of that
Series), and each Share of any particular Series shall be
equal to each other Share of that Series.
(f) Fractional Shares. Any fractional Share of any
Series shall carry proportionately all the rights and
obligations of a whole Share of that Series, including rights
with respect to voting, receipt of dividends and
distributions, redemption of Shares and termination of the
Trust.
(g) Exchange Privilege. The Trustees shall have the
authority to provide that the holders of Shares of any Series
shall have the right to exchange said Shares for Shares of one
or more other Series in accordance with such requirements and
procedures as may be established by the Trustees.
(H) Combination of Series. The Trustees shall have the
authority, without the approval of the Shareholders of any
Series unless otherwise required by applicable law, to combine
any two or more Series into a single Series.
The establishment and designation of any Series in addition to
the Series established and designated in this Section 3.6 shall be
effected by an instrument executed by a Majority of the Trustees
(or by an officer of the Trust pursuant to the vote of a Majority
of the Trustees) setting forth such establishment and designation
and the relative rights and preferences of the Shares of such
Series and the manner in which the same may be amended (a
"Certificate of Designation"). A Certificate of Designation may
provide that the number of Shares of any such Series which may be
issued is unlimited, or may limit the number issuable. At any time
that there are no Shares outstanding of any particular Series
previously established and designated, including the Series
established and designated in this Section 3.6, the Trustees may by
an instrument executed by a Majority of the Trustees (or by an
officer of the Trust pursuant to the vote of a Majority of the
Trustees) (a "Certificate of Termination") terminate such Series.
Each Certificate of Designation, Certificate of Termination and any
instrument amending a Certificate of Designation shall have the
status of an amendment to this Declaration of Trust.
ARTICLE IV
TRUSTEES
Section 4.1. Number, Designation, Election, Term, etc.
(a) Number. A Majority of the Trustees may increase or
decrease the number of Trustees to a number other than the
number theretofore determined. No decrease in the number of
Trustees shall have the effect of removing any Trustee from
office prior to the expiration of his term, but the number of
Trustees may be decreased in conjunction with the removal of a
Trustee pursuant to subsection (c) of this Section 4.1.
(b) Election and Term. The Trustees shall be elected by
the Shareholders prior to the effective date of the Trust's
registration statement under the 1940 Act, and the term of
office of any Trustees in office before such election shall
terminate at the time of such election. Subject to the 1940
Act and to the preceding sentence of this subsection (b), the
Trustees shall have the power to set and alter the terms of
office of the Trustees, and at any time to lengthen or shorten
their own terms or make their terms of unlimited duration, to
appoint their own successors and, pursuant to subsection (d)
of this Section 4.1, to fill vacancies; provided, that a
Trustee or Trustees shall be elected by the Shareholders at
any such time or times such action is required under the 1940
Act; and provided further, that after the initial election of
Trustees by the Shareholders, the term of office of any
incumbent Trustee shall continue until the termination of this
Trust or his earlier death, resignation, retirement,
bankruptcy, adjudicated incompetency, or other incapacity or
removal, or if not so terminated, until the appointment or
election of such Trustee's successor in office has become
effective.
(c) Resignation, Retirement and Removal. Any Trustee
may resign his trust or retire as a Trustee, by a written
instrument signed by him and delivered to the other Trustees
or to any officer of the Trust, and such resignation or
retirement shall take effect upon such delivery or upon such
later date as is specified in such instrument. Any Trustee
may be removed with or without cause at any time by written
instrument signed by at least two-thirds of the Trustees in
office immediately prior to such removal, specifying the date
upon which such removal shall become effective.
(d) Vacancies. Any vacancy or anticipated vacancy
resulting from any reason, including without limitation the
death, resignation, retirement, removal or incapacity of any
of the Trustees, or an increase in the number of Trustees, may
(but unless required by the 1940 Act need not) be filled by a
Majority of the Trustees, subject to the provisions of the
1940 Act; provided, that if there shall be no Trustees in
office, such vacancy or vacancies shall be filled by the
Shareholders. Any such appointment or election shall take
effect immediately, except that an appointment or election in
anticipation of a vacancy to occur by reason of retirement,
resignation or increase in the number of Trustees to be
effective at a later date shall become effective only at or
after the effective date of said retirement, resignation or
increase in the number of Trustees.
(e) Acceptance of Trusts. Whenever any conditions to
the appointment or election of any individual as a Trustee
hereunder who was not, immediately prior to such appointment
or election, acting as a Trustee shall have been satisfied,
such individual shall become a Trustee and the Trust estate
shall vest in the new Trustee, together with the continuing
Trustees, without any further act or conveyance. Such new
Trustee shall accept such appointment or election in writing
and agree in such writing to be bound by the provisions
hereof, but the execution of such writing shall not be
requisite to the effectiveness of the appointment or election
of a new Trustee.
(f) Effect of Death, Resignation, etc. The death,
resignation, retirement, removal or incapacity of the
Trustees, or any one of them, shall not operate to annul or
terminate the Trust or to revoke or terminate any existing
agency or contract created or entered into pursuant to the
terms of this Declaration of Trust. Whenever a vacancy shall
occur, until such vacancy is filled as provided in this
Section 4.1, the Trustees in office, regardless of their
number, shall have all the powers granted to the Trustees and
shall discharge all the duties imposed upon the Trustees by
this Declaration.
(g) No Accounting. Except to the extent required by the
1940 Act or under circumstances which would justify his
removal for cause, no individual ceasing to be a Trustee (nor
the estate of any such individual) shall be required to make
an accounting to the Shareholders or remaining Trustees upon
such cessation.
(h) Filings. Whenever there shall be a change in the
composition of the Trustees, the Trust shall cause to be filed
in the office of the Secretary of State of The Commonwealth of
Massachusetts, and in each other place where the Trust is
required to file amendments to this Declaration, a certificate
executed by a Trustee or officer of the Trust as to the fact
of the appointment or election of an individual who was not
theretofore a Trustee or as to the resignation, removal or
death of a Trustee, but the filing of such certificate shall
not be requisite to the effectiveness of any such appointment,
election, resignation or removal of a Trustee.
Section 4.2 Powers. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by
the Trustees, and they shall have all powers necessary or
convenient to carry out that responsibility. Without limiting the
foregoing, the Trustees may adopt Bylaws not inconsistent with this
Declaration of Trust providing for the conduct of the business and
affairs of the Trust and may amend and repeal them to the extent
that such Bylaws do not reserve that right to the Shareholders;
they may from time to time in accordance with the provisions of
Section 3.6 hereof establish one or more Series to which they may
allocate such of the Trust property, subject to such liabilities,
as they shall deem appropriate; they may as they consider
appropriate elect and remove officers, appoint and terminate agents
and consultants, and hire and terminate employees, any one or more
of the foregoing of whom may be a Trustee, and may provide for the
compensation of all of the foregoing; they may appoint from their
own number, and terminate, any one or more committees consisting of
one or more Trustees, including without implied limitation an
executive committee, which may, when the Trustees are not in
session and subject to the 1940 Act, exercise some or all of the
power and authority of the Trustees as the Trustees may determine;
they may employ one or more custodians and may authorize any
custodian to employ subcustodians or agents and to deposit all or
any part of the securities held by the Trust in a system or systems
for the central handling of securities; they may retain investment
advisers, administrators, transfer agents, dividend disbursing
agents, accounting agents or shareholder servicing agents, or any
of the foregoing; they may provide for the distribution of
securities issued by the Trust through one or more principal
underwriters, or otherwise; they may set record dates or times for
the determination of Shareholders entitled to participate in,
benefit from or act with respect to various matters; and in general
they may delegate to any officer of the Trust, to any committee of
the Trustees, and to any employee, agent or consultant of the Trust
such authority, powers, functions and duties as they consider
desirable or appropriate for the conduct of the business and
affairs of the Trust, including without implied limitation the
power and authority to act in the name of the Trust and of the
Trustees, to sign documents, and to act as attorney-in-fact for the
Trustees.
Without limiting the foregoing and to the extent not
inconsistent with the 1940 Act or other applicable law, the
Trustees shall have power and authority:
(a) to invest and reinvest cash, and to hold cash
uninvested;
(b) to sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease the assets of the
Trust except as otherwise provided in Section 8.2;
(c) to vote or give assent or exercise any rights of
ownership with respect to stock or other securities or
property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall deem
proper, granting to such person or persons such power and
discretion with relation to securities or property as the
Trustees shall deem proper;
(d) to exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities;
(e) to hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of the Trustees or of the
Trust or of the Series to which such security or property has
been allocated, or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees, or otherwise;
(f) to consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
issuer, any security of which is or was held in the Trust; to
consent to any contract, lease, mortgage, purchase or sale of
property by any such corporation or issuer, and to pay calls
or subscriptions with respect to any security held in the
Trust;
(g) to join with other security holders in acting
through a committee, depositary, voting trustee or otherwise,
and in that connection to deposit any security with, or
transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with
relation to any security (wether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree
to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
(h) to compromise, arbitrate or otherwise adjust claims
in favor of or against or any matter in controversy including
but not limited to claims for taxes;
(i) to enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) to borrow funds;
(k) to endorse or guarantee the payment of any notes or
other obligations of any person; to make contracts of guaranty
or suretyship, or otherwise assume liability for payment
thereof; and to mortgage or pledge the Trust property or any
part thereof to secure any part of or all such obligations;
(l) to purchase and pay for entirely out of the Trust
property such insurance as they may deem necessary or
appropriate for the conduct of the business of the Trust,
including without limitation insurance policies insuring the
assets of the Trust, or payment of distributions and principal
on its portfolio investments, and insurance policies insuring
the Shareholders, Trustees, officers, employees, agents,
investment advisers or managers, principal underwriters, or
independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of
holding, being or having held any such office or position, or
by reason of any action alleged to have been taken or omitted
by any such person in any such capacity, including any action
taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to
indemnify any such person against such liability; and
(m) to pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry
out pension, profit-sharing, share bonus, share purchase,
savings, thrift and other retirement, incentive and benefit
plans, trusts and provisions, including the purchasing of life
insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by
trustees, nor shall the Trustees be limited to investing in
obligations maturing before the possible termination of the Trust.
The Trustees shall not be required to obtain a court order to deal
with any assets of the Trust or take any other actions hereunder.
Except as otherwise provided herein or from time to time in
the Bylaws, any action to be taken by the Trustees may be taken by
a majority of the Trustees present at a meeting of Trustees (a
quorum being present), within or without Massachusetts, or by
written consents of a Majority of the Trustees. Any meeting of
Trustees may be held by means of a telephone conference call or
other communications facility by means of which all individuals
participating in the meeting can hear each other at the same time
and participation by such means shall (except to the extent
required otherwise by the 1940 Act) constitute presence in person
at such meeting.
Section 4.3. Payment of Trust Expenses and Compensation of
Trustees. The Trustees are authorized to pay or to cause to be
paid out of the assets of the Trust, all expenses, fees, charges,
taxes and liabilities incurred or arising in connection with the
Trust, or in connection with the management thereof, including, but
not limited to, the Trustees' compensation and such expenses and
charges for the services of the Trust's officers, employees,
investment adviser or manager, principal underwriter, auditor,
counsel, custodian, transfer agent, shareholder servicing agent,
and such other agents or independent contractors and such other
expenses and charges, as the Trustees may deem necessary or proper
to incur. Without limiting the generality of any other provision
hereof, the Trustees shall be entitled to reasonable compensation
from the Trust for their services as Trustees and may fix the
amount of such compensation.
Section 4.4. Ownership of Assets of the Trust. Title to all
of the assets of the Trust shall at all times be considered as
vested in the Trustees.
Section 4.5. Certain Contracts. Subject to compliance with
the provisions of the 1940 Act, but notwithstanding any limitations
of present and future law or custom in regard to delegation of
powers by trustees generally, the Trustees may, at any time and
from time to time and without limiting the generality of their
powers and authority otherwise set forth herein, enter into one or
more contracts with any one or more corporations, trusts,
associations, partnerships, limited partnerships, other type of
organizations, or individuals (a "Contracting Party"), to provide
for the performance and assumption of some or all of the following
services, duties and responsibilities to, for or on behalf of the
Trust or the Trustees, and to provide for the performance and
assumption of such other services, duties and responsibilities in
addition to those set forth below as the Trustees may deem
appropriate:
(a) subject to the general supervision of the Trustees
and in conformity with the stated policy of the Trustees with
respect to the investments of the Trust or of any Series, to
manage such investments, to make investment decisions with
respect thereto, and to place purchase and sale orders for
portfolio transactions relating to such investments;
(b) subject to the general supervision of the Trustees
and in conformity with any policies of the Trustees with
respect to the operations of the Trust, to supervise all or
any part of the operations of the Trust and to provide all or
any part of the administrative and clerical personnel, office
space, and office equipment and services appropriate for the
efficient administration and operations of the Trust;
(c) to distribute the Shares or other securities issued
by the Trust, to be principal underwriter of such Shares or
securities, or to act as agent of the Trust in the sale of
such Shares or securities and the acceptance or rejection of
orders for the purchase thereof;
(d) to act as depositary for and to maintain custody of
the property of the Trust and accounting records in connection
therewith;
(e) to maintain records of ownership of outstanding
Shares, the issuance and redemption and the transfer thereof,
and to disburse any dividends declared by the Trustees and in
accordance with the policies of the Trustees and the
instructions of any particular Shareholder to reinvest any
such dividends; and
(f) to handle all or any part of the accounting
responsibilities, whether with respect to the Trust's
properties, Shareholders or otherwise.
The same person may be a Contracting Party for some or all of
the services, duties and responsibilities to, for and of the Trust
or the Trustees, and the contracts with respect thereto may contain
such terms interpretive of or in addition to the delineation of the
services, duties and responsibilities provided for, including
provisions that are consistent with the 1940 Act relating to the
standard of duty and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine.
Nothing herein shall preclude, prevent or limit the Trust or a
Contract Party from entering into sub-contractual arrangements
relative to any of the matters referred to in this Section 4.5.
The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, investment adviser or manager, principal underwriter
or distributor, or agent of or for any Contracting Party or of
or for any parent or affiliate of any Contracting Party, or
that any Contracting Party or any parent or affiliate thereof
is a Shareholder or has an interest in the Trust, or that
(ii) any Contracting Party may have a contract providing
for the rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited
partnerships or other organizations, or have other businesses
or interests, shall not affect the validity of any such
contract or disqualify any Shareholder, Trustee or officer of
the Trust from voting upon or executing the same or create any
liability or accountability to the Trust or to the
Shareholders; provided, that such contract is approved in the
manner required by the 1940 Act.
ARTICLE V
NET ASSET VALUE AND NET INCOME; REDEMPTIONS
Section 5.1. Net Asset Value and Net Income. Subject to the
applicable provisions of the 1940 Act, the Trustees, in their
absolute discretion, may prescribe and shall set forth in the
Bylaws or in a duly adopted vote of the Trustees such bases and
time for determining the net asset value per Share of outstanding
Shares or net income attributable to the Shares, as they may deem
necessary or desirable. The Trustees shall have full discretion,
to the extent not inconsistent with the 1940 Act, to determine
whether any moneys or other assets received by the Trust shall be
treated as income or as capital and whether any item of expense
shall be charged to income or capital, and their determination made
in good faith shall be conclusive and binding upon the
Shareholders. In the case of stock dividends received by the
Trust, the Trustees shall have full discretion to determine, in
light of the particular circumstances, how much, if any, of the
value thereof shall be treated as income and how much of the
balance, if any, shall be treated as capital.
Section 5.2. Redemption by Shareholders. Each holder of
Shares of a particular Series shall have the right at such times as
may be permitted by the Trust, but no less frequently than once
each week, to require the Trust to redeem all or any part of his
Shares of that Series at a redemption price equal to the net asset
value per Share of that Series next determined after such Shares
are properly tendered for redemption; provided, that the Trustees
may from time to time, in their discretion, determine and impose a
fee for such redemption. Payment of the redemption price shall be
in cash; provided, however, that if the Trustees determined, which
determination shall be conclusive, that conditions exist which make
payment wholly in cash unwise or undesirable, the Trust may make
payment wholly or partly in securities or other assets belonging to
such Series at the value of such securities or assets used in such
determination of net asset value. Notwithstanding the foregoing,
the Trust may postpone payment of the redemption price and may
suspend the right of the holders of Shares of any Series to require
the Trust to redeem Shares of that Series during any period or at
any time when and to the extent permissible under the 1940 Act.
Section 5.3. Redemptions at the Option of the Trust. Each
Share of any Series shall be subject to redemption at any time at
the option of the Trust at the redemption price which would be
applicable if such Share were then being redeemed by a Shareholder
pursuant to Section 5.2 hereof: (i) if the Trustees determine in
their sole discretion that failure to do so redeem may have
materially adverse consequences to the holders of Shares of the
Trust or of any Series, or (ii) upon such other conditions with
respect to maintenance of Shareholder accounts of a minimum amount
as may from time to time be determined by the Trustees.
ARTICLE VI
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 6.1. Voting Powers. Shareholders shall have power
to vote only (i) for the election of Trustees as provided in
Section 4.1(b) hereof, (ii) with respect to the approval or
termination of any contract as to which Shareholder action is
required by the 1940 Act, (iii) with respect to any termination or
reorganization of the Trust or any Series to the extent and as
provided in Sections 8.1 and 8.2 hereof, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as
provided in Section 8.3 hereof, (v) to the same extent as the
stockholders of a Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf
of the Trust or any Series, or the Shareholders (except that a
Shareholder of a particular Series shall not in any event be
entitled to maintain a derivative or class action on behalf of any
other Series or the or the Shareholders thereof), and (vi) with
respect to such additional matters as may be required by the 1940
Act, this Declaration of Trust, the Bylaws, or any registration
with the Securities and Exchange Commission (or any successor
agency) or any state, or as the Trustees may consider necessary or
desirable. Each matter required or permitted to be voted upon at a
meeting or by written consent of Shareholders shall be submitted to
a separate vote of the outstanding Shares of each Series entitled
to vote thereon; provided, that (i) when required by this
Declaration or by the 1940 Act, actions of Shareholders shall be
taken by all Shares of all Series voting as a single class and (ii)
when the Trustees determine that any matter to be submitted to a
vote of Shareholders affects only the rights or interests of
Shareholders of one or more but not all Series, then only the
Shareholders of the Series so affected shall be entitled to vote
thereon. Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share
shall be entitled to a proportionate fractional vote. There shall
be no cumulative voting in the election of Trustees. Shares may be
voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on behalf of
a Shareholder shall be deemed valid unless challenged at or prior
to its exercise and the burden of proving invalidity shall rest on
the challenger. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law,
this Declaration of Trust or the Bylaws to be taken by
Shareholders.
Section 6.2. Meetings. Meetings of Shareholders may be
called by the Trustees from time to time for the purpose of taking
action upon any matter requiring the vote or authority of
Shareholders as herein provided, or upon any other matter deemed by
the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the
Trustees by mailing such notice at least seven days before such
meeting, postage prepaid, stating the time, place and purpose of
the meeting, to each Shareholder entitled to vote at such meeting
at the Shareholder's address as it appears on the records of the
Trust. If the Trustees shall fail to call or give notice of any
meeting of Shareholders for a period of thirty days after written
application by Shareholders holding at least twenty-five percent of
the then outstanding Shares entitled to vote at such meeting
requesting that a meeting be called for a purpose requiring action
by the Shareholders as provided herein or in the Bylaws, then
Shareholders holding at least twenty-five percent of the then
outstanding shares entitled to vote at such meeting may call and
give notice of such meeting, and thereupon the meeting shall be
held in the manner provided for herein in case of call thereof by
the Trustees. Notice of a meeting need not be given to any
Shareholder if a written waiver of notice, executed by him before
or after the meeting, is filed with the records of the meeting, or
to any Shareholder who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 6.3 Record Dates. For the purpose of determining
the Shareholders who are entitled to vote or act at any meeting or
any adjournment thereof, or who are entitled to participate in any
dividend or distribution, or for the purpose of any other action,
the Trustees may from time to time close the transfer books for
such period, not exceeding thirty days (except at or in connection
with the termination of the Trust), as the Trustees may determine;
or without closing the transfer books the Trustees may fix a date
and time not more than ninety days prior to the date of any meeting
of Shareholders or other action as the date and time of record for
the determination of Shareholders entitled to vote at such meeting
or any adjournment thereof or to be treated as Shareholders of
record for purposes of such other action, and any Shareholder who
was a Shareholder at the date and time so fixed shall be entitled
to vote at such meeting or any adjournment thereof or to be treated
as Shareholders of record for purposes of such other action, even
though he has since that date and time disposed of his Shares, and
no Shareholder becoming such after that date and time shall be so
entitled to vote at such meeting or any adjournment thereof or to
be treated as a Shareholder of record for purposes of such other
action.
Section 6.4. Quorum and Required Vote. A majority of the
Shares entitled to vote shall be a quorum for the transaction of
business at a Shareholders' meeting, but any lesser number shall be
sufficient for adjournments. Any adjourned session or sessions may
be held within a reasonable time after the date set for the
original meeting without the necessity of further notice. Except
when a larger vote is required by any provision of this Declaration
of Trust or the Bylaws, a majority of the Shares voted shall decide
any questions and a plurality shall elect a Trustee.
Section 6.5. Action by Written Consent. Any action taken by
Shareholders may be taken without a meeting if a majority of
Shareholders entitled to vote on the matter (or such larger
proportion thereof as shall be required by any express provision of
this Declaration of Trust or the Bylaws) consent to the action in
writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
Section 6.6. Inspection of Records. The records of the
Trust shall be open to inspection by Shareholders to the same
extent as is permitted stockholders of a Massachusetts business
corporation under the Massachusetts Business Corporation Law.
Section 6.7. Additional Provisions. The Bylaws may include
further provisions for Shareholders' votes and meetings and related
matters.
ARTICLE VII
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 7.1. Trustees, Shareholders, etc. Not Personally
Liable; Notice. All persons extending credit to, contracting with
or having any claim against the Trust or any Series shall look only
to the assets of the Trust, or to the extent the liability of the
Trust may have been expressly limited by contract to the assets of
a particular Series, only to the assets belonging to that Series,
for payment under such credit, contract or claim, and neither the
Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be
personally liable therefor. Every note, bond, contract,
instrument, certificate or undertaking and every other act or thing
whatsoever executed or done by or on behalf of the Trust or the
Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with
respect to their or his capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
Nothing in this Declaration of Trust shall protect any Trustee
against any liability to which such Trustee would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officer or
officers shall give notice that this Declaration of Trust is on
file with the Secretary of State of The Commonwealth of
Massachusetts and shall recite that the same was executed or made
by or on behalf of the Trust or by them as Trustee or Trustees or
as officer or officers and not individually and that the
obligations of such instrument are not binding upon any of them or
the Shareholders individually but are binding only upon the assets
and property of the Trust or the asset belonging to a particular
Series, and may contain such further recital as he or they may deem
appropriate, but the omission thereof shall not operate to bind any
Trustee or Trustees or officer or officers or Shareholder or
Shareholders individually.
Section 7.2. Trustees' Good Faith Action; Expert Advice; No
Bond or Surety. The exercise by the Trustees of their powers and
discretions hereunder shall be binding upon everyone interested. A
Trustee shall be liable for his own willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or
law. Subject to the foregoing, (i) the Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of
any officer, agent, employee, consultant or Contracting Party, nor
shall any Trustee be responsible for the act or omission of any
other Trustee; (ii) the Trustees may take advice of counsel or
other experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act
or omission in accordance with such advice or for failing to follow
such advice; and (iii) in discharging their duties, the Trustees,
when acting in good faith, shall be entitled to rely upon the books
of account of the Trust and upon written reports made to the
Trustees by any officer appointed by them, any independent
accountant, and (with respect to the subject matter of the contract
involved) any officer, partner or responsible employee of a
Contracting Party. The Trustees shall not be required to give any
bond as such, nor any surety or any other security if a bond is
required.
Section 7.3. Apparent Authority of the Trustees. No person
dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by
the Trustees or to see to the application of any payments made or
property transferred to the Trust or upon its order.
Section 7.4. Indemnification of Trustees, Officers, etc.
The Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise) (hereinafter
referred to, together with such person's heirs, executors,
administrators or other legal representatives, as a "Covered
Person") against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise
or as fines and penalties, and counsel fees reasonably incurred by
any Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party or
otherwise or with which such Covered Person may be or may have been
threatened, while in office or thereafter, by reason of being or
having been such a Covered Person, except with respect to any
matter as to which such Covered Person shall have been finally
adjudicated in any such action, suit or other proceeding (i) not to
have acted in good faith in the reasonable belief that such Covered
Person's action was in the best interests of the Trust or (ii) to
be liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's office.
Expenses, including counsel fees so incurred by any such Covered
Person (but excluding amounts paid in satisfaction of judgments, in
compromise, or as fines or penalties), shall be paid from time to
time by the Trust in advance of the final disposition of any such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Covered Person to repay amounts so paid to the Trust
if it is ultimately determined that indemnification of such
expenses is not authorized under this Article; provided, however,
that either (i) such Covered Person shall have provided appropriate
security for such undertaking, (ii) the Trust shall be insured
against losses arising from any such advance payments, or (iii)
either a majority of a quorum of Trustees who are neither
"interested persons" of the Trust as the quoted phrase is defined
in the 1940 Act (or who have been exempted from being an
"interested person" by any rule, regulation or order of the
Commission) nor parties to the action, suit or other proceeding in
question and against whom no other action, suit or proceeding on
the same or similar grounds is then or has been pending or
threatened (such quorum of such Trustees being referred to
hereinafter as the "Disinterested Trustees"), or an independent
legal counsel in a written opinion, shall have determined, based on
a review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that such Covered
Person will be found entitled to indemnification under this
Article.
Section 7.5. Compromise Payment. As to any matter disposed
of (whether by a compromise payment, pursuant to a consent decree
or otherwise) without an adjudication by a court, or by any other
body before whom the proceeding was brought, that such Covered
Person either (i) did not act in good faith in the reasonable
belief that his action was in the best interests of the Trust or
(ii) is liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered
Person's office, indemnification shall be provided if (i) approved
as in the best interests of the Trust by a majority of the
Disinterested Trustees upon a determination, based upon a review of
readily available facts (as opposed to a full trial-type inquiry)
that such Covered Person acted in good faith in the reasonable
belief that his action was in the best interests of the Trust and
is not liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office, or (ii) there has
been obtained an opinion in writing of independent legal counsel,
based upon a review of the readily available facts (as opposed to a
full trial-type inquiry) to the effect that such Covered Person
appears to have acted in good faith in the reasonable belief that
his action was in the best interests of the Trust and that such
indemnification would not protect such Covered Person against any
liability to the Trust to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office. Any such approval or opinion shall not prevent the
recovery from any Covered Person of any amount paid to such Covered
Person in accordance with this Section 7.5 as indemnification if
such Covered Person is subsequently adjudicated by a court of
competent jurisdiction not to have acted in good faith in the
reasonable belief that such Covered Person's action was in the best
interests of the Trust or to have been liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
Section 7.6. Indemnification Not Exclusive, etc. The right
of indemnification provided by this Article VII shall not be
exclusive of or affect any other rights to which any Covered Person
may be entitled. Nothing contained in this Article VII shall
affect any rights to indemnification to which personnel of the
Trust, other than Trustees or officers, and other persons may be
entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of any
such person.
Section 7.7. Indemnification of Shareholders. If any
Shareholder or former Shareholder shall be held to be personally
liable solely by reason of being or having been a Shareholder and
not because of such Shareholder's acts or omissions or for some
other reason, the Shareholder or former Shareholder (or his heirs,
executors, administrators or other legal representatives, or in the
case of a corporation or other entity, its corporate or other
general successor) shall be entitled to be held harmless from and
indemnified against all loss and expense arising from such
liability, but only out of the assets of the particular Series of
Shares of which he is or was a Shareholder.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Duration and Termination of Trust. Unless
terminated as provided herein, the Trust shall continue without
limitation of time. The Trust may be terminated at any time by
vote of Shareholders holding a "majority of the outstanding voting
securities" of each Series (as the quoted phrase is defined in the
1940 Act) voting separately by Series, or by the Trustees by
written notice to the Shareholders. Any Series may be terminated
at any time by vote of Shareholders holding "a majority of the
outstanding voting securities" of that Series (as the quoted phrase
is defined in the 1940 Act), or by the Trustees by written notice
to the Shareholders of that Series. Upon termination of the Trust
or of any Series, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or
anticipated, of the Trust or such Series, as the case may be, or as
may be determined by the Trustees, the Trust shall in accordance
with such procedures as the Trustees consider appropriate reduce
the remaining assets of the Trust or belonging to such Series, as
the case may be, to distributable form in cash, securities or other
property, or any combination thereof, and distribute the proceeds
to the Shareholders of the Trust or of such Series, ratably
according to the number of Shares held by the several Shareholders
on the date of termination.
Section 8.2. Reorganization. The Trust or one or more
Series may merge or consolidate with any other corporation
association, trust, or other organization or may sell, lease or
exchange all or substantially all of its assets, including its good
will, upon such terms and conditions and for such consideration, or
may liquidate and dissolve, when and as authorized at any meeting
of Shareholders called for the purpose by the affirmative vote of a
"majority of the outstanding voting securities" (as the quoted
phrase is defined in the 1940 Act) of the Trust or of any affected
Series. Nothing contained herein shall be construed as requiring
approval of Shareholders for any sale of assets in the ordinary
course of business of the Trust.
Section 8.3. Amendments; etc. All rights granted to the
Shareholders under this Declaration of Trust are granted subject to
the reservation of the right to amend this Declaration of Trust as
herein provided, except that no amendment shall repeal or adversely
affect the limitation on personal liability of any Shareholder or
Trustee or the prohibition of assessment except as herein provided
upon the Shareholders without the express consent of each
Shareholder or Trustee involved. Subject to the foregoing, this
Declaration of Trust may be amended at any time by an instrument in
writing signed by a Majority of the Trustees (or by an officer of
the Trust pursuant to the vote of a Majority of the Trustees) when
authorized to do so by vote of Shareholders holding a majority of
the Shares entitled to vote; provided, however, that amendments
having the purpose of establishing and designating one or more
Series of Shares in addition to the Series established in Section
3.6 hereof, of terminating any Series of which there are no Shares
outstanding, of changing the name of the Trust or any Series or of
supplying any omission, curing any ambiguity, or curing, correcting
or supplementing any defective or inconsistent provision contained
herein shall not require authorization by Shareholder vote.
Section 8.4. Filing of Copies. The original or a copy of
this instrument and of each amendment hereto shall be kept at the
office of the Trust where it may be inspected by any Shareholder.
A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of State of The Commonwealth
of Massachusetts and with the Boston City Clerk, as well as with
any other governmental office where such filings may from time to
time be required, but the failure to make any such filing shall not
impair the effectiveness of this instrument or any such amendment.
Anyone dealing with the Trust may rely on a certificate by an
officer of the Trust as to whether or not any such amendments have
been made, as to the identities of the Trustees and officers, and
as to matters in connection with the Trust hereunder, and, with the
same effect as if it were the original, may rely on a copy
certified by an officer of the Trust to be a copy of this
instrument or of any such amendments.
Section 8.5. Applicable Law. This Declaration of Trust is
made in The Commonwealth of Massachusetts, and it is created under
and is to be governed by and construed and administered according
to the laws of said Commonwealth.
Section 8.6. References; Gender; Headings; Counterparts. In
this instrument and in any amendment, references to this
instrument, and all expressions like "herein," "hereof," and
"hereunder" shall be deemed to refer to this instrument as a whole
as the same may be amended or affected by any such amendments. The
masculine gender shall include the feminine and neuter genders.
Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of
which shall be deemed an original.
Section 8.7. Use of the Name "Endeavor". The Endeavor
Management Co. ("Endeavor Management") has consented to the use by
the Trust of the identifying name "Endeavor", which is a property
right of Endeavor Management, in the name of the Trust. Such
consent is conditioned upon the Trust's employment of Endeavor
Management as investment adviser to the Trust. As between Endeavor
Management and the Trust, Endeavor Management shall control the use
of such name insofar as the name of the Trust contains the
identifying name "Endeavor." Endeavor Management may from time to
time use the identifying name "Endeavor" in other connections and
for other purposes, including without limitation in the names of
other investment companies, corporations or businesses that it may
manage, advise, sponsor or own, or in which it may have a financial
interest. Endeavor Management may require the Trust to cease using
the identifying name "Endeavor" in the name of the Trust if they
Trust ceases to employ Endeavor Management, or an affiliate
thereof, as investment adviser.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal, for himself and his assigns, and has thereby accepted the
trusteeship as the Initial Trustee of The Endeavor Series Fund
hereby granted and agreed to the provisions hereof, all as of the
day and year first above written.
_/s/Thomas E. Weesner________
Thomas E. Weesner
The undersigned Settlor of The Endeavor Series Fund hereby
accepts, approves and authorizes the foregoing Agreement and
Declaration of Trust of The Endeavor Series Fund.
Dated: November 18, 1988
_/s/Bryan G. Tyson___________
Bryan G. Tyson<PAGE>
ACKNOWLEDGEMENTS
M A S S A C H U S E T T S
Suffolk, ss. Boston, November 18, 1988
Then personally appeared the above named Thomas E. Weesner and
acknowledged the foregoing instrument to be his free act and deed.
Before me,
____/s/Frances R. DePietr______________________
Notary Public
My commission expires: My Commission Expires
January 22, 1993
M A S S A C H U S E T T S
Suffolk, ss. Boston, November 18, 1988
Then personally appeared the above named Bryan G. Tyson and
acknowledged the foregoing instrument to be his free act and deed.
Before me,
____/s/Frances R. DePietr______________________
Notary Public
My commission expires: My Commission Expires
January 22, 1993
The Endeavor Series Fund
(hereafter "Endeavor Series Trust")
Written Action of the Initial Trustee
November 22, 1988
The undersigned, being the Initial Trustee, and the sole
Trustee of The Endeavor Series Fund, a trust with transferable
shares under Massachusetts law (the "Trust"), established under a
Declaration of Trust dated November 18, 1988 and filed in the
offices of the Secretary of State of the Commonwealth, and of the
City Clerk of the City of Boston, in accordance with the
requirements of Chapter 182 of the General Laws of Massachusetts
(the "Declaration"), acting pursuant to Section 4.2 of the
Declaration, DOES HEREBY ADOPT the following Resolution:
RESOLVED: That the first clause of the first sentence of
Section 1.1 of the Trust's Declaration of Trust is
hereby amended to read, "The name of the Trust shall
be Endeavor Series Trust'", and that all other
references to the name "The Endeavor Series Fund" in
the Declaration of Trust shall be amended
accordingly to reflect the change of the Trust's
name effected hereby.
IN WITNESS WHEREOF, I have hereunto set my hand on the date
set opposite my signature below.
Date: November 22, 1988 /s/Thomas E. Weesner
Thomas E. Weesner
THE ENDEAVOR SERIES TRUST
AMENDMENT NO. 2 TO MASTER TRUST AGREEMENT
(Deletion of Section 4.1(h))
The undersigned, Assistant Secretary of The Endeavor Series
Trust (the "Trust"), does hereby certify that pursuant to Section
8.3 of the Agreement and Declaration of Trust, dated November 18,
1988, as amended, the following votes were duly adopted by at least
a majority of the Trustees of the Trust at a meeting called and
held on April 20, 1992:
VOTED: That pursuant to Section 8.3 of Agreement and
Declaration of Trust of The Endeavor Series Trust,
Article IV of the Agreement and Declaration of Trust
be and hereby is amended to delete Section 4.1(h).
FURTHER
VOTED: That the proper officers of the Trust are each
hereby authorized and empowered to execute all
instruments and documents and to take all actions,
including the filing of an Amendment to the Trust's
Master Trust Agreement with the Secretary of State
of The Commonwealth of Massachusetts and the Clerk
of the City of Boston, Massachusetts, as they or any
one of them in his or her sole discretion deems
necessary or appropriate to carry out the intents
and purposes of the foregoing vote.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand
this 24th day of April, 1992.
/s/Brigid O. Bieber
Brigid O. Bieber
Assistant Secretary
0284J
ENDEAVOR SERIES TRUST
AMENDMENT NO. 3 TO AGREEMENT AND
DECLARATION OF TRUST
(Change of Name of Series of the Trust from Domestic Money Market
Portfolio to Money Market Portfolio and Domestic Managed Asset
Allocation Portfolio to Managed Asset Allocation Portfolio)
The undersigned, Assistant Secretary of Endeavor Series Trust
(the "Trust"), does hereby certify that pursuant to Article VIII,
Section 8.3 of the Trust's Agreement and Declaration of Trust (the
"Declaration of Trust") dated November 18, 1988, as amended, the
following votes were duly adopted by at least a majority of the
Trustees of the Trust through a Written Consent of the Board of
Trustees on April 29, 1993:
VOTED: That the names of the following Series of the Trust
previously established and designated in accordance with
Article III of the Declaration of Trust be changed as
indicated below:
Old Name New Name
Domestic Money Market Portfolio Money Market Portfolio
Domestic Managed Asset Managed Asset Allocation
Allocation Portfolio Portfolio
FURTHER
VOTED: That the proper officers of the Trust are each hereby
authorized and empowered to execute all instruments and
documents and to take all actions, including the filing of
an Amendment to the Trust's Master Trust Agreement with the
Secretary of State of The Commonwealth of Massachusetts and
the clerk of the City of Boston, Massachusetts, as they or
any one of them in his or her sole discretion deems
necessary or appropriate to carry out the intents and
purposes of the foregoing votes.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand
this 5th day of May, 1993.
/s/Brigid O. Bieber
Brigid O. Bieber
Assistant Secretary
endeavor/corresp/amend3mt.doc
ENDEAVOR SERIES TRUST
AMENDMENT NO. 4 TO AGREEMENT AND
DECLARATION OF TRUST
Change of Name of a Series of the Trust from the Global Growth
Portfolio to the T. Rowe Price International Stock Portfolio
The undersigned, Assistant Secretary of Endeavor Series Trust
(the "Trust"), does hereby certify that pursuant to Article VIII,
Section 8.3 of the Trust's Agreement and Declaration of Trust (the
"Declaration of Trust") dated November 18, 1988, as amended, the
following votes were duly adopted by at least a majority of the
Trustees of the Trust at a meeting held on January 23, 1995.
VOTED: That the name of the Trust's Global Growth Portfolio (the
"Portfolio"), previously established and designated in
accordance with Article III of the Declaration of Trust,
be changed to T. Rowe Price International Stock
Portfolio, effective upon approval by the Portfolio's
shareholders of an advisory agreement between Endeavor
Investment Advisers and Rowe Price-Fleming International,
Inc. at a Special Meeting of Shareholders to be held on
March 24, 1995; and further
VOTED: That the proper officers of the Trust be, and each hereby
is, authorized and empowered to execute all instruments
and documents and to take all actions, including the
filing of an Amendment to the Trust's Declaration of
Trust with the Secretary of State of the Commonwealth of
Massachusetts and the Clerk of the City of Boston,
Massachusetts, as they or any one of them in his or her
sole discretion deems necessary or appropriate to carry
out the intents and purposes of the foregoing vote.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand
this 12th day of April, 1995.
/s/Brigid O. Bieber
Brigid O. Bieber
Assistant Secretary
ENDEAVOR SERIES TRUST
AMENDMENT NO. 5 TO AGREEMENT AND
DECLARATION OF TRUST
Change of Names of Series of the Trust from Quest for Value Equity
Income Portfolio to Equity Income Portfolio, Quest for Value Small
Cap Portfolio to Small Cap Portfolio and U.S. Government Securities
Portfolio to Dreyfus U.S. Government Securities Portfolio
The undersigned, Assistant Secretary of Endeavor Series Trust
(the "Trust"), does hereby certify that pursuant to Article VIII,
Section 8.3 of the Trust's Agreement and Declaration of Trust (the
"Declaration of Trust") dated November 18, 1988, as amended, the
following votes were duly adopted by at least a majority of the
Trustees of the Trust at a meeting held on February 13, 1996 with
respect to the Quest for Value Equity and Quest for Value Small Cap
Portfolios and by Unanimous Written Consent dated March 1, 1996
with respect to U.S. Government Securities Portfolio.
VOTED: That the names of the following Series of the Trust
previously established and designated in accordance
with Article III of the Declaration of Trust, be
changed, effective May 1, 1996, as indicated below:
Old Name New Name
Quest for Value Equity Income Portfolio Value Equity Portfolio
Quest for Value Small Cap Portfolio Value Small Cap Portfolio
U.S. Government Securities Portfolio Dreyfus U.S. Government
Securities Portfolio
FURTHER
VOTED: That the proper officers of the Trust be, and each
hereby is, authorized and empowered to execute all
instruments and documents and to take all actions,
including the filing of an Amendment to the Trust's
Declaration of Trust with the Secretary of State of
the Commonwealth of Massachusetts and the Clerk of
the City of Boston, Massachusetts, as they or any
one of them in his or her sole discretion deems
necessary or appropriate to carry out the intents
and purposes of the foregoing vote.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand
this 12th day of March, 1996.
/s/Gail A. Hanson
Gail A. Hanson
Assistant Secretary
ENDEAVOR SERIES TRUST
AMENDMENT NO. 6 TO AGREEMENT AND
DECLARATION OF TRUST
Change of Names of Series of the Trust from Managed Asset
Allocation Portfolio to TCW Managed Asset Allocation Portfolio
and Money Market Portfolio to TCW Money Market Portfolio
The undersigned, Assistant Secretary of Endeavor Series
Trust (the "Trust"), does hereby certify that pursuant to
Article VIII, Section 8.3 of the Trust's Agreement and
Declaration of Trust (the "Declaration of Trust") dated
November 18, 1988, as amended, the following votes were duly
adopted by at least a majority of the Trustees of the Trust by
Unanimous Written Consent dated as of April 12, 1996:
VOTED: That the names of the following Series of the
Trust previously established and designated in
accordance with Article III of the Declaration
of Trust, be changed, effective May 1, 1996, as
indicated below:
Old Name New Name
Managed Asset Allocation TCW Managed Asset
Portfolio Allocation Portfolio
Money Market Portfolio TCW Money Market Portfolio
FURTHER
VOTED: That the proper officers of the Trust be, and
each hereby is, authorized and empowered to
execute all instruments and documents and to
take all actions, including the filing of an
Amendment to the Trust's Declaration of Trust
with the Secretary of the Commonwealth of
Massachusetts and the Clerk of the City of
Boston, Massachusetts, as they or any one of
them in his or her sole discretion deems
necessary or appropriate to carry out the
intents and purposes of the foregoing vote.
IN WITNESS WHEREOF, the undersigned has hereunto set her
hand this 24th day of April, 1996.
/s/Gail A. Hanson
Gail A. Hanson
Assistant Secretary
ENDEAVOR SERIES TRUST
______________________________
By-Laws
______________________________
ENDEAVOR SERIES TRUST
By-Laws
Index
Page
RECITALS................................................. 1
ARTICLE I SHAREHOLDERS AND SHAREHOLDERS'
MEETINGS................................. 1
Section l.l Meetings................................... 1
Section l.2 Presiding Officer; Secretary............... 1
Section l.3 Authority of Chairman of
Meeting to Interpret Declaration
and Bylaws.............................. 1
Section l.4 Voting; Quorum............................. 1
Section l.5 Inspectors................................. 2
Section l.6 Shareholders' Action in Writing............ 2
ARTICLE II TRUSTEES AND TRUSTEES' MEETINGS............. 2
Section 2.l Number of Trustees......................... 2
Section 2.2 Regular Meetings of Trustees............... 2
Section 2.3 Special Meetings of Trustees............... 2
Section 2.4 Notice of Meetings......................... 3
Section 2.5 Quorum..................................... 3
Section 2.6 Participation by Telephone................. 3
Section 2.7 Location of Meetings....................... 3
Section 2.8 Votes...................................... 3
Section 2.9 Rulings of Chairman........................ 4
Section 2.10 Trustees' Action in Writing................ 4
Section 2.11 Resignations............................... 4
ARTICLE III OFFICERS..................................... 4
Section 3.l Officers of the Trust...................... 4
Section 3.2 Time and Terms of Election................. 4
Section 3.3 Resignation and Removal.................... 4
Section 3.4 Fidelity Bond.............................. 5
Section 3.5 Chairman of the Board...................... 5
Section 3.6 President.................................. 5
Section 3.7 Vice-Presidents............................ 5
Section 3.8 Chief Financial Officer (Treasurer)
and Assistant Treasurers.................. 5
Section 3.9 Controller and Assistant
Controllers............................... 6
Section 3.10 Secretary and Assistant
Secretaries.............................. 6
Section 3.11 Substitutions.............................. 6
Section 3.12 Execution of Deeds, etc.................... 6
Section 3.13 Power to Vote Securities................... 7
ARTICLE IV COMMITTEES................................... 7
Section 4.l Power of Trustees to
Designate Committees..................... 7
Section 4.2 Rules for Conduct of
Committee Affairs........................ 7
Section 4.3 Trustees may Alter, Abolish,
etc., Committees......................... 7
Section 4.4 Minutes; Review by Trustees................ 8
ARTICLE V SHARES...................................... 8
Section 5.1 Issuance of Shares......................... 8
Section 5.2 Uncertificated Shares...................... 8
Section 5.3 Share Certificates......................... 8
Section 5.4 Lost, Stolen, etc., Certificates........... 8
Section 5.5 Record Transfer of
Pledged Shares........................... 9
ARTICLE VI SEAL.......................................
ARTICLE VII CUSTODIAN................................... 9
ARTICLE VIII NET ASSET VALUE............................ 10
ARTICLE IX AMENDMENTS.................................. 10
Section 9.l Bylaws Subject to Amendment................ 10
Section 9.2 Notice of Proposal to
Amend Bylaws Required.................... 10
Amended 6/25/90
AMENDED AND RESTATED
BYLAWS OF
ENDEAVOR SERIES TRUST
These ARTICLES are the BYLAWS of Endeavor Series Trust, a
trust with transferable shares established under the laws of The
Commonwealth of Massachusetts (the "Trust"), pursuant to an
Agreement and Declaration of Trust of the Trust (the "Declaration")
made the 18th day of November, 1988, and filed in the office of the
Secretary of the Commonwealth. These Bylaws have been adopted by
the Trustees pursuant to the authority granted by Section 4.2 of
the Declaration.
All words and terms capitalized in these Bylaws, unless
otherwise defined herein, shall have the same meanings as they have
in the Declaration.
ARTICLE I
SHAREHOLDERS AND SHAREHOLDERS' MEETINGS
Section 1.1. Meetings. Meetings of the Shareholders of the
Trust shall be held whenever called by the Trustees and whenever
election of a Trustee or Trustees by Shareholders is required by
the provisions of the 1940 Act. Notice of Shareholders' meetings
shall be given as provided in the Declaration.
Section 1.2. Presiding Officer; Secretary. The Chairman of
the Board, or in his absence or if there is no Chairman of the
Board, the President shall preside at each Shareholders' meeting as
chairman of the meeting, or in the absence of the Chairman of the
Board and President, the Trustees present at the meeting shall
elect one of their number as chairman of the meeting. Unless
otherwise provided for by the Trustees, the Secretary of the Trust
shall be the secretary of all meetings of Shareholders and shall
record the minutes thereof.
Section 1.3. Authority of Chairman of Meeting to Interpret
Declaration and Bylaws. At any Shareholders' meeting the chairman
of the meeting shall be empowered to determine the construction or
interpretation of the Declaration or these Bylaws, or any part
thereof or hereof, and his ruling shall be final.
Section 1.4. Voting; Quorum. At each meeting of
Shareholders, except as otherwise provided by the Declaration,
every holder of record of Shares entitled to vote shall be entitled
to a number of votes equal to the number of Shares standing in his
name on the Share register of the Trust on the record date of the
meeting, which are outstanding at the time such vote is taken.
Shareholders may vote by proxy and the form of any such proxy may
be prescribed from time to time by the Trustees. A quorum shall
exist if the holders of a majority of the outstanding Shares of
the Trust entitled to vote without regard to Series are present in
person or by proxy, but any lesser number shall be sufficient for
adjournments. At all meetings of the Shareholders, votes shall be
taken by ballot for all matters which may be binding upon the
Trustees pursuant to Section 6.1 of the Declaration. On other
matters, votes of Shareholders need not be taken by ballot unless
otherwise provided for by the Declaration or by vote of the
Trustees, or as required by the 1940 Act, but the chairman of the
meeting may in his discretion authorize any matter to be voted upon
by ballot.
Section 1.5. Inspectors. At any meeting of Shareholders, the
chairman of the meeting may appoint one or more inspectors of
election or balloting to supervise the voting at such meeting or
any adjournment thereof. If inspectors are not so appointed, the
chairman of the meeting may, and on the request of any Shareholder
present or represented and entitled to vote shall, appoint one or
more inspectors for such purpose. Each inspector, before entering
upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector of election or
balloting, as the case may be, at such meeting with strict
impartiality and according to the best of his ability. If
appointed, inspectors shall take charge of the polls and, when the
vote is completed, shall make a certificate of the result of the
vote taken and of such other facts as may be required by law.
Section 1.6. Shareholders' Action in Writing. Nothing in
this Article I shall limit the power of the Shareholders to take
any action without a meeting by means of written instruments as
permitted by Section 6.5 of the Declaration.
ARTICLE II
TRUSTEES AND TRUSTEES' MEETINGS
Section 2.1. Number of Trustees. There shall initially be
one Trustee, and the number of Trustees shall thereafter be such
number, authorized by the Declaration, as from time to time shall
be fixed by a vote adopted by a Majority of the Trustees.
Section 2.2. Regular Meetings of Trustees. Regular meetings
of the Trustees may be held without call or notice at such places
and at such times as the Trustees may from time to time determine;
provided, that notice of such determination, and of the time, place
and purposes of the first regular meeting thereafter, shall be
given to each absent Trustee in accordance with Section 2.4 hereof.
Section 2.3. Special Meetings of Trustees. Special meetings
of the Trustees may be held at any time and at any place when
called by the Chairman of the Board, if any is elected, the
President or the Chief Financial Officer or by two or more
Trusttes, or if there shall be fewer than three Trustees, by any
Trustee; provided, that notice of the time, place and purposes
thereof is given to each Trustee in accordance with Section 2.4
hereof by the Secretary or an Assistant Secretary or by the officer
or the Trustees calling the meeting.
Section 2.4. Notice of Meetings. Notice of any regular or
special meeting of the Trustees shall be sufficient if given in
writing to each Trustee, and if sent by mail at least five days, or
by telegram at least twenty-four hours, before the meeting,
addressed to his usual or last known business or residence address,
or if delivered to him in person at least twenty-four hours before
the meeting. Notice of a special meeting need not be given to any
Trustee who was present at an earlier meeting, not more than
thirty-one days prior to the subsequent meeting, at which the
subsequent meeting was called. Notice of a meeting may be waived
by any Trustee by written waiver of notice, executed by him before
or after the meeting, and such waiver shall be filed with the
records of the meeting. Attendance by a Trustee at a meeting shall
constitute a waiver of notice, except where a Trustee attends a
meeting for the purpose of protesting prior thereto or at its
commencement the lack of notice.
Section 2.5. Quorum; Presiding Officer. At any meeting of
the Trustees, a Majority of the Trustees shall constitute a quorum.
Any meeting may be adjourned from time to time by a majority of the
votes cast upon the question, whether or not a quorum is present,
and the meeting may be held as adjourned without further notice.
Unless the Trustees shall otherwise elect, generally or in a
particular case, the Chairman of the Board, shall preside at each
meeting of the Trustees as chairman of the meeting. In the absence
of the Chairman of the Board, or if there is no Chairman of the
Board, the Trustees present at the meeting shall elect one of their
number as chairman of the meeting.
Section 2.6. Participation by Telephone. One or more of the
Trustees may participate in a meeting thereof or of any committee
of the Trustees by means of a telephone conference call or other
communications facility by means of which all individuals
participating in the meeting can hear each other at the same time
and participation by such means shall (except to the extent
required otherwise by the 1940 Act) constitute presence in person
at such meeting.
Section 2.7. Location of Meetings. Trustees' meetings may be
held at any place, within or without Massachusetts.
Section 2.8. Votes. Voting at Trustees' meetings may be
conducted orally, by show of hands, or, if requested by any
Trustee, by written ballot. The results of all voting shall be
recorded by the Secretary in the minute book.
Section 2.9. Rulings of Chairman. All other rules of conduct
adopted and used at any Trustees' meeting shall be determined by
the chairman of such meeting, whose ruling on all procedural
matters shall be final.
Section 2.10. Trustees' Action in Writing. Nothing in this
Article II shall limit the power of the Trustees to take action by
means of a written instrument without a meeting, as provided in
Section 4.2 of the Declaration.
Section 2.11. Resignations. Any Trustee may resign at any
time by written instrument signed by him and delivered to the
Chairman of the Board or the Secretary or to a meeting of the
Trustees. Such resignation shall be effective upon receipt unless
specified to be effective at some other time.
ARTICLE III
OFFICERS
Section 3.1. Officers of the Trust. The officers of the
Trust shall consist of a President, a Chief Financial Officer
(Treasurer) and a Secretary, and may include one or more Vice
Presidents, Assistant Treasurers and Assistant Secretaries, and
such other officers as the Trustees may designate. If the Trustees
shall elect a Chairman of the Board pursuant to Section 3.5, then
the Chairman of the Board shall also be an officer of the Trust.
The Chairman of the Board, if there is one, shall be elected from
among the Trustees, but no other officer need be a Trustee. Any
two or more officers, except those of President and Vice-President,
may be held by the same person.
Section 3.2. Time and Terms of Election. The President, the
Chief Financial Officer (Treasurer), and the Secretary shall be
elected by the Trustees at their first meeting and thereafter at
the annual meeting of the Trustees. Such officers shall hold
office until the next annual meeting of the Trustees and until
their successors shall have been duly elected and qualified, and
may be removed at any meeting by the affirmative vote of a Majority
of the Trustees. All other officers of the Trust may be elected or
appointed at any meeting of the Trustees. Such other officers
shall hold office for any term, or indefinitely, as determined by
the Trustees, and shall be subject to removal, with or without
cause, at any time by the Trustees.
Section 3.3. Resignation and Removal. Any officer may resign
at any time by giving written notice to the Trustees. Such
resignation shall take effect at the time specified therein, and,
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. If the
office of any officer or agent becomes vacant by reason of death,
resignation, retirement, disqualification, removal from office or
otherwise, the Trustees may choose a successor, who shall hold
office for the unexpired term in respect of which such vacancy
occurred. Except to the extent expressly provided in a written
agreement with the Trust, no officer resigning or removed shall
have any right to any compensation for any period following such
resignation or removal, or any right to damages on account of such
removal.
Section 3.4. Fidelity Bond. The Trustees may, in their
discretion, direct any officer appointed by them to furnish at the
expense of the Trust a fidelity bond approved by the Trustees, in
such amount as the Trustees may prescribe.
Section 3.5. Chairman of the Board. When and if the Trustees
shall deem such action to be necessary or appropriate, they may
elect a Chairman of the Board from among the Trustees. The
Chairman of the Board ("Chairman") shall, if present, preside at
all meetings of the Trustees and of the Shareholders, and he shall
have such other powers and duties as may be prescribed by the
Trustees. He may use any one or more of the following titles:
Chairman of the Board or Chairman.
Section 3.6. President. The President of the Trust shall have
general and active management of the business of the Trust, shall
see to it that all orders, policies and resolutions of the Trustees
are carried into effect, and, in connection therewith, shall be
authorized to delegate to any Vice-President of the Trust such of
his powers and duties as President and at such times and in such
manner as he shall deem advisable. In the absence or disability of
the Chairman, or if there is no Chairman, the President shall
preside at all meetings of the Shareholders and of the Trustees;
and he shall have such other powers and perform such other duties
as are incident to the office of a chief executive officer and as
the Trustees may from time to time prescribe.
Section 3.7. Vice-Presidents. The Vice-President, if any,
or, if there is more than one, then the Vice-Presidents of the
Trust, shall assist the President in the management of the business
of the Trust and the implementation of orders, policies and
resolutions of the Trustees at such times and in such manner as the
President may deem to be advisable. If there is more than one
Vice-President, the Trustees may designate one as the Executive
Vice-President, in which case he shall be first in order of
seniority, and the Trustees may also grant to other Vice-Presidents
such titles as shall be descriptive of their respective functions
or indicative of their relative seniority. In the absence or
disability of both the President and the Chairman, or in the
absence or disability of the President if there is no Chairman, the
Vice-President, or, if there is more than one, the Vice-Presidents
in the order of their relative seniority, shall exercise the powers
and perform the duties of those officers; and the Vice-President or
Vice-Presidents shall have such other powers and perform such other
dutieis as from time to time may be prescribed by the President or
by the Trustees.
Section 3.8. Chief Financial Officer (Treasurer) and
Assistant Treasurers. The Chief Financial Officer (Treasurer)
shall have the custody of the Trust's funds and securities, and
shall keep full and accurate accounts of receipts and disbursements
in books belonging to the Trust and shall deposit all moneys and
other valuable effects in the name and to the credit of the Trust
in such depositories as may be designated by the Trustees, taking
proper vouchers for such disbursements, and shall have such other
duties and powers as may be prescribed from time to time by the
Trustees, and shall render to the Trustees, whenever they may
require it, an account of all his transactions as Chief Financial
Officer (Treasurer) and of the financial condition of the Trust.
If no Controller is elected, the Chief Financial Officer
(Treasurer) shall also have the duties and powers of the
Controller, as provided in these Bylaws. Any Assistant Treasurer
shall have such duties and powers as shall be prescribed from time
to time by the Trustees or the Chief Financial Officer (Treasurer),
and shall be responsible to and shall report to the Chief Financial
Officer (Treasurer). In the absence or disability of the Chief
Financial Officer (Treasurer), the Assistant Treasurer or, if
there shall be more than one, the Assistant Treasurers in the order
of their seniority or as otherwise designated by the Trustees,
shall have the powers and duties of the Chief Financial Officer
(Treasurer).
Section 3.9. Controller and Assistant Controllers. If a
Controller is elected, he shall be the chief accounting officer of
the Trust, and shall be in charge of its books of account and
accounting records and of its accounting procedures, and shall have
such duties and powers as are commonly incident to the office of a
controller and such other duties and powers as may be prescribed
from time to time by the Trustees. The Controller shall be
responsible to and shall report to the Trustees, but in the
ordinary conduct of the Trust's business, shall be under the
supervision of the Chief Financial Officer (Treasurer). Any
Assistant Controller shall have such duties and powers as shall be
prescribed from time to time by the Trustees or the Controller, and
shall be responsible and shall report to the Controller. In the
absence or disability of the Controller, the Assistant Controller
or, if there shall be more than one, the Assistant Controllers in
the order of their seniority or as otherwise designated by the
Trustees, shall have the powers and duties of the Controller.
Section 3.10. Secretary and Assistant Secretaries. The
Secretary shall, if and to the extent requested by the Trustees,
attend all meetings of the Trustees, any committee of the Trustees
and/or the Shareholders and record all votes and the minutes of
proceedings in a book to be kept for that purpose, and shall give
or cause to be given notice of all meetings of the Trustees, any
committee of the Trustees and/or the Shareholders, and shall
perform such other duties as may be prescribed by the Trustees.
The Secretary, or in his absence any Assistant Secretary, shall
affix the Trust's seal to any instrument requiring it, and when so
affixed, it shall be attested by the signature of the Secretary or
an Assistant Secretary. The Secretary shall be the custodian of the
Share records and all other books, records and papers of the Trust
(other than financial) and shall see that all books, reports,
statements, certificates and other documents and records required
by law are properly kept and filed. In the absence or disability
of the Secretary, the Assistant Secretary or, if there shall be
more than one, the Assistant Secretaries in the order of their
seniority or as otherwise designated by the Trustees, shall have
the powers and duties of the Secretary.
Section 3.11. Substitutions. In case of the absence or
disability of any officer of the Trust, or for any other reason
that the Trustees may deem sufficient, the Trustees may delegate,
for the time being, the powers or duties, or any of them, of such
officer to any other officer, or to any Trustee.
Section 3.12. Execution of Deeds, etc. Except as the
Trustees may generally or in particular cases otherwise authorize
or direct, all deeds, leases, transfers, contracts, proposals,
bonds, notes, checks, drafts and other obligations made, accepted
or endorsed by the Trust shall be signed or endorsed on behalf of
the Trust by the President, a Vice-President or the Chief Financial
Officer (Treasurer).
Section 3.13. Power to Vote Securities. Unless otherwise
ordered by the Trustees, the Chief Financial Officer (Treasurer)
shall have full power and authority on behalf of the Trust to give
proxies for, and/or to attend and to act and to vote at, any
meeting of stockholders of any corporation in which the Trust may
hold stock, and at any such meeting the Chief Financial Officer
(Treasurer) or his proxy shall possess and may exercise any and all
rights and powers incident to the ownership of such stock which, as
the owner thereof, the Trust might have possessed and exercised if
present. The Trustees, by resolution from time to time, or, in the
absence thereof, the Treasurer, may confer like powers upon any
other person or persons as attorneys and proxies of the Trust.
ARTICLE IV
COMMITTEES
Section 4.1. Power of Trustees to Designate Committees. The
Trustees, by vote of a Majority of the Trustees, may elect from
their number an executive committee and any other committees and
may delegate thereto some or all of their powers except those which
by law, by the Declaration or by these Bylaws may not be delegated;
provided, that no committee shall be empowered to elect the
Chairman of the Board, the President, the Chief Financial Officer
(Treasurer) or the Secretary, to amend the Bylaws, to exercise the
powers of the Trustees under this Section 4.1 or under Section 4.3
hereof, or to perform any act for which the action of a Majority of
the Trustees is required by law, by the Declaration or by these
Bylaws. The members of any such committee shall serve at the
pleasure of the Trustees.
Section 4.2. Rules for Conduct of Committee Affairs. Except
as otherwise provided by the Trustees, each committee elected or
appointed pursuant to this Article IV may adopt such standing rules
and regulations for the conduct of its affairs as it may deem
desirable, subject to review and approval of such rules and
regulations by the Trustees at the next succeeding meeting of the
Trustees, but in the absence of any such action or any contrary
provisions by the Trustees, the business of each committee shall be
conducted, so far as practicable, in the same manner as provided
herein and in the Declaration for the Trustees.
Section 4.3. Trustees May Alter, Abolish, etc., Committees.
The Trustees may at any time alter or abolish any committee, change
the membership of any committee, or revoke, rescind or modify any
action of any committee or the authority of any committee with
respect to any matter or class of matters; provided, that no such
action shall impair the rights of any third parties.
Section 4.4. Minutes; Review by Trustees. Any committee to
which the Trustees delegate any of their powers or duties shall
keep records of its meetings and shall report its actions to the
Trustees.
ARTICLE V
SHARES
Section 5.1. Issuance of Shares. The Trustees may issue
Shares of any or all Series either in certificated or
uncertificated form, they may issue certificates to the holders of
Shares of a Series which was originally issued in uncertificated
form, and if they have issued Shares of any Series in certificated
form, they may at any time discontinue the issuance of the
certificates for such Shares and may, by written notice to such
Shareholders of such Series, require the surrender of their
certificates to the Trust for cancellation, which surrender and
cancellation shall not affect the ownership of Shares of such
Series.
Section 5.2. Uncertificated Shares. For any Series of Shares
issued without certificates, the Trust or its transfer agent may
either issue receipts therefor or may keep accounts upon the books
of the Trust for the record holders of such Shares, who shall in
either case be deemed, for all purposes hereunder, to be the
holders of such Shares as if they had received certificates
therefor and shall be held to have expressly assented and agreed to
the terms hereof and of the Declaration.
Section 5.3. Share Certificates. For any Series of Shares
for which the Trustees shall issue certificates, each Shareholder
of such Series shall be entitled to a certificate stating the
number of Shares owned by him in such form as shall be prescribed
from time to time by the Trustees. Such certificate shall be
signed by the Chairman of the Board, if there is one, the President
or a Vice-President, and by the Chief Financial Officer (Treasurer)
or an Assistant Treasurer, or the Secretary or an Assistant
Secretary, of the Trust. Such signatures may be facsimiles if the
certificate is countersigned by a transfer agent, or by a
registrar, other than a Trustee, officer or employee of the Trust.
In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall cease to be such officer
before such certificate is issued, it may be issued by the Trust
with the same effect as if he were such officer at the time of its
issue.
Section 5.4. Lost, Stolen, etc., Certificates. If any
certificate for Shares shall be lost, stolen, destroyed or
mutilated, the Trustees may authorize the issuance of a new
certificate of the same tenor and for the same number of Shares in
lieu thereof. The Trustees shall require the surrender of any
mutilated certificate in respect of which a new certificate is
issued, and may, in their discretion, before the issuance of a new
certificate, require the owner of a lost, stolen or destroyed
certificate, or the owner's legal representative, to make an
affidavit or affirmation setting forth such facts as to the loss,
theft or destruction as they deem necessary, and to give the Trust
a bond, in such reasonable sum as the Trustees direct, in order to
indemnify the Trust.
Section 5.5. Record Transfer of Pledged Shares. A pledgee of
Shares pledged as collateral security shall be entitled to a new
certificate in his name as pledgee, in the case of certificated
Shares, or to be registered as the holder in pledge of such Shares
in the case of uncertificated Shares; provided, that the instrument
of pledge substantially describes the debt or duty that is intended
to be secured thereby. Any such new certificate shall express on
its face that it is held as collateral security, and the name of
the pledgor shall be stated thereon, and any such registration of
uncertificated Shares shall be in a form which indicates that the
registered holder holds such Shares in pledge. After such issue or
registration, and unless and until such pledge is released, such
pledgee and his successors and assigns shall alone be entitled to
the rights of a Shareholder, and entitled to vote such Shares.
ARTICLE VI
SEAL
The seal of the Trust shall consist of a flat-faced circular
die with the word "Massachusetts", together with the name of the
Trust, the words "Trust Seal", and the year of its organization cut
or engraved thereon, but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its
absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
ARTICLE VII
CUSTODIAN
The Trust shall at all times employ a bank or trust company
having a capital, surplus and undivided profits of at least two
million dollars ($2,000,000) as custodian of the capital assets of
the Trust. The custodian shall be compensated for its services by
the Trust upon such basis as shall be agreed upon from time to time
between the Trust and the custodian.
ARTICLE VIII
NET ASSET VALUE
Net asset value per Share of any Series shall mean the quotent
obtained by dividing the value of all the assets belonging to such
Series, less all liabilities of such Series, by the number of
Shares of that Series outstanding, in each case at the time of each
determination. Except in the event of emergency conditions, the
net asset value per Share of each Series shall be determined no
less frequently than once on each day on which the New York Stock
Exchange is open for trading, at such time that the Trustees set at
least annually. In valuing the portfolio investments for
determination of net asset value per Share of any Series,
securities for which market quotations are readily available shall
be valued at prices which, in the opinion of Trustees or the person
designated by the Trustees to make the determination, most nearly
represent the market value of such securities, and other securities
and assets shall be valued at their fair value as determined by or
pursuant to the direction of the Trustees, which in the case of
debt obligations, commercial paper and repurchase agreements may,
but need not, be on the basis of yields for securities of
comparable maturity, quality and type, or on the basis of amortized
cost. Expenses and liabilities may include such reserves for
taxes, estimated accrued expenses and contingencies as the Trustees
or their designates may in their sole discretion deem fair and
reasonable under the circumstances. No accruals shall be made in
respect of taxes on unrealized appreciation of securities owned
unless the Trustees shall otherwise determine.
ARTICLE IX
AMENDMENTS
Section 9.1. Bylaws Subject to Amendment. These Bylaws may
be altered, amended or repealed, in whole or in part, at any time
by vote of the holders of a majority of the Shares (or whenever
there shall be more than one Series of Shares, of the holders of a
majority of the Shares of each Series) issued, outstanding and
entitled to vote. The Trustees, by vote of a Majority of the
Trustees, may alter, amend or repeal these Bylaws, in whole or in
part, including Bylaws adopted by the Shareholders, except with
respect to any provision hereof which by law, the Declaration or
these Bylaws requires action by the Shareholders. Bylaws adopted
by the Trustees may be altered, amended or repealed by the
Shareholders.
Section 9.2. Notice of Proposal to Amend Bylaws Required. No
proposal to amend or repeal these Bylaws or to adopt new Bylaws
shall be acted upon at a meeting unless either (i) such proposal is
stated in the notice or in the waiver of notice, as the case may
be, of the meeting of the Trustees or Shareholders at which such
action is taken, or (ii) all of the Trustees or Shareholders, as
the case may be, are present at such meeting and all agree to
consider such proposal without protesting the lack of notice.
The foregoing Bylaws were adopted by the Trustees on
June 25, 1990.
______________________________
Secretary
This Specimen Certificate is in landscape position.
################################################################
# #
# NUMBER The Commonwealth of Massachusetts SHARES #
# #
# -0- (There is a picture of the Capitol -0- #
# and an eagle between two pillars here) #
# #
# #
# ENDEAVOR SERIES TRUST
#
# #
# Domestic Money Market Portfolio
#
# #
# no par value
#
# #
# #
#This Certifies That -Specimen- of is the owner of -0-
#Shares in the Domestic Money Market Portfolio of Endeavor
# Series Trust, created by a Declaration of Trust dated November
# 18, 1988 and recorded with the Secretary of State of The
# Commonwealth of Massachusetts which shares are fully paid and
# non-assessable, and subject to the provisions of this Trust, are
transferable by assignment endorsed thereon, and, the surrender of
this certificate.
#
#IN WITNESS WHEREOF, the Trustees hereunto set their hands and
have caused their seal to be affixed hereto this day of #
A.D. 19 . #
# #
# #
# #
#Chairman (There is a Seal Here) Chief Financial Officer#
# (Treasurer) #
# #
# #
# #
# #
################################################################
This Side of The Certificate is in Landscape Position.
#################################################################
# #
# | ENDEAVOR SERIES TRUST| #
# | | #
# | Domestic Money Market #
# | Portfolio | #
# | | #
# | (There is a Torch of | #
# | Fire Here) | #
# | | #
# | Certificate | #
# | for | #
# | | #
# | -0- | #
# | | #
# | ISSUED TO | #
# | | #
# | | #
# | Specimen | #
# | | #
# | DATED | #
# | | #
#-------------------| |------------------#
# #
# #
# #
# #
# (The following Text is Enclosed in the Border #
# to the Left of the Above Text Reading #
# in The Opposite Direction) #
# #
# For Value Received, hereby sell, assign and #
transfer unto Shares of the #
Capital represented by the within Certificate, and do hereby #
irrevocably constitute and appoint Attorney to#
transfer the said Shares on the books of the within named #
Organization with full power of substitution in the premises. #
# #
# Dated 19 . #
# #
# In presence of #
# #
# #
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH #
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY #
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE #
WHATEVER. #
#################################################################
This Specimen Certificate is in landscape position.
################################################################
# #
# NUMBER The Commonwealth of Massachusetts SHARES #
# #
# -0- (There is a picture of the Capitol -0- #
# and an eagle between two pillars here) #
# #
# #
# ENDEAVOR SERIES TRUST #
# #
# Domestic Managed Asset Allocation Portfolio #
# #
# no par value #
# #
# #
#This Certifies That -Specimen- of is the owner of #
-0- Shares in the Domestic Managed Asset Allocation Portfolio of
Endeavor Series Trust, created by a Declaration of Trust dated #
November 18, 1988 and recorded with the Secretary of State of #
The Commonwealth of Massachusetts which shares are fully paid and
non-assessable, and subject to the provisions of this Trust, are
transferable by assignment endorsed thereon, and, the surrender of
this certificate. #
# #
#IN WITNESS WHEREOF, the Trustees hereunto set their hands and #
have caused their seal to be affixed hereto this day of #
A.D. 19 . #
# #
# #
#----------- -----------------------#
#Chairman (There is a Seal Here) Chief Financial Officer#
# (Treasurer) #
# #
# #
# #
# #
################################################################
This Side of The Certificate is in Landscape Position.
#################################################################
# #
# | ENDEAVOR SERIES TRUST| #
# | | #
# | Domestic Managed Asset| #
# | Allocation Portfolio | #
# | | #
# | (There is a Torch of | #
# | Fire Here) | #
# | | #
# | Certificate | #
# | for | #
# | | #
# | -0- | #
# | | #
# | ISSUED TO | #
# | | #
# | | #
# | Specimen | #
# | | #
# | DATED | #
# | | #
#-------------------| |------------------#
# #
# #
# #
# #
# (The following Text is Enclosed in the Border #
# to the Left of the Above Text Reading #
# in The Opposite Direction) #
# #
# For Value Received, hereby sell, assign and #
transfer unto Shares of the #
Capital represented by the within Certificate, and do hereby #
irrevocably constitute and appoint Attorney to#
transfer the said Shares on the books of the within named #
Organization with full power of substitution in the premises. #
# #
# Dated 19 . #
# #
# In presence of #
# #
# #
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH #
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY #
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE #
WHATEVER. #
#################################################################
This Specimen Certificate is in landscape position.
################################################################
# #
# NUMBER The Commonwealth of Massachusetts SHARES
#
# #
# -0- (There is a picture of the Capitol -0- #
# and an eagle between two pillars here) #
# #
# #
# ENDEAVOR SERIES TRUST
#
# #
# Global Growth Portfolio
#
# #
# no par value
#
# #
# #
#This Certifies That -Specimen- of is the owner of -0-#
Shares in the Global Growth Portfolio of Endeavor Series Trust,#
created by a Declaration of Trust dated November 18, 1988 and
recorded with the Secretary of State of The Commonwealth of
Massachusetts which shares are fully paid and non-assessable, and
subject to the provisions of this Trust, are transferable by
assignment endorsed thereon, and, the surrender of this
certificate. #
# #
#IN WITNESS WHEREOF, the Trustees hereunto set their hands and #
have caused their seal to be affixed hereto this day of #
A.D. 19 . #
# #
# #
# #
#Chairman (There is a Seal Here) Chief Financial Officer#
# (Treasurer) #
# #
# #
# #
# #
################################################################
This Side of The Certificate is in Landscape Position.
#################################################################
# #
# | ENDEAVOR SERIES TRUST| #
# | | #
# | Global Growth | #
# | Portfolio | #
# | | #
# | (There is a Torch of | #
# | Fire Here) | #
# | | #
# | Certificate | #
# | for | #
# | | #
# | -0- | #
# | | #
# | ISSUED TO | #
# | | #
# | | #
# | Specimen | #
# | | #
# | DATED | #
# | | #
#-------------------| |------------------#
# #
# #
# #
# #
# (The following Text is Enclosed in the Border #
# to the Left of the Above Text Reading #
# in The Opposite Direction) #
# #
# For Value Received, hereby sell, assign and #
transfer unto Shares of the #
Capital represented by the within Certificate, and do hereby #
irrevocably constitute and appoint Attorney to#
transfer the said Shares on the books of the within named #
Organization with full power of substitution in the premises. #
# #
# Dated 19 . #
# #
# In presence of #
# #
# #
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH #
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY #
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE #
WHATEVER. #
#################################################################
This Specimen Certificate is in landscape position.
################################################################
# #
# NUMBER The Commonwealth of Massachusetts SHARES #
# #
# -0- (There is a picture of the Capitol -0- #
# and an eagle between two pillars here) #
# #
# #
# ENDEAVOR SERIES TRUST #
# #
# Quest for Value Equity Portfolio #
# #
# no par value #
# #
# #
#This Certifies That -Specimen- of is the owner of #
- -0- Shares in the Quest for Value Equity Portfolio of Endeavor #
Series Trust, created by a Declaration of Trust dated November #
18, 1988 and recorded with the Secretary of State of The #
Commonwealth of Massachusetts which shares are fully paid and #
non-assessable, and subject to the provisions of this Trust, are
transferable by assignment endorsed thereon, and, the surrender#
of this certificate. #
# #
#IN WITNESS WHEREOF, the Trustees hereunto set their hands and #
have caused their seal to be affixed hereto this day of #
A.D. 19 . #
# #
# #
# #
#President (There is a Seal Here) Chief Financial Officer#
# (Treasurer) #
# #
# #
# #
# #
################################################################
This Side of The Certificate is in Landscape Position.
#################################################################
# #
# | ENDEAVOR SERIES TRUST | #
# | | #
# | Quest for Value | #
# | Equity Portfolio | #
# | | #
# | (There is a Torch of | #
# | Fire Here) | #
# | | #
# | Certificate | #
# | for | #
# | | #
# | -0- | #
# | | #
# | ISSUED TO | #
# | | #
# | | #
# | Specimen | #
# | | #
# | DATED | #
# | | #
#-------------------| |------------------#
# #
# #
# #
# #
# (The following Text is Enclosed in the Border #
# to the Left of the Above Text Reading #
# in The Opposite Direction) #
# #
# For Value Received, hereby sell, assign and #
transfer unto Shares of the #
Capital represented by the within Certificate, and do hereby #
irrevocably constitute and appoint Attorney to#
transfer the said Shares on the books of the within named #
Organization with full power of substitution in the premises. #
# #
# Dated 19 . #
# #
# In presence of #
# #
# #
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH #
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY #
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE #
WHATEVER. #
#################################################################
This Specimen Certificate is in landscape position.
################################################################
# #
# NUMBER The Commonwealth of Massachusetts SHARES #
# #
# -0- (There is a picture of the Capitol -0- #
# and an eagle between two pillars here) #
# #
# #
# ENDEAVOR SERIES TRUST #
# #
# Quest for Value Small Cap Portfolio #
# #
# no par value #
# #
# #
#This Certifies That -Specimen- of is the owner of #
- -0- Shares in the Quest for Value Small Cap Portfolio of Endeavor
# Series Trust, created by a Declaration of Trust dated November
# 18, 1988 and recorded with the Secretary of State of The
# Commonwealth of Massachusetts which shares are fully paid and
# non-assessable, and subject to the provisions of this Trust,
are transferable by assignment endorsed thereon, and, the #
surrender of this certificate. #
# #
#IN WITNESS WHEREOF, the Trustees hereunto set their hands and #
have caused their seal to be affixed hereto this day of #
A.D. 19 . #
# #
# #
# #
#President (There is a Seal Here) Chief Financial Officer#
# (Treasurer) #
# #
# #
# #
# #
################################################################
This Side of The Certificate is in Landscape Position.
#################################################################
# #
# | ENDEAVOR SERIES TRUST | #
# | | #
# | Quest for Value | #
# | Small Cap Portfolio | #
# | | #
# | (There is a Torch of | #
# | Fire Here) | #
# | | #
# | Certificate | #
# | for | #
# | | #
# | -0- | #
# | | #
# | ISSUED TO | #
# | | #
# | | #
# | Specimen | #
# | | #
# | DATED | #
# | | #
#-------------------| |------------------#
# #
# #
# #
# #
# (The following Text is Enclosed in the Border #
# to the Left of the Above Text Reading #
# in The Opposite Direction) #
# #
# For Value Received, hereby sell, assign and #
transfer unto Shares of the #
Capital represented by the within Certificate, and do hereby #
irrevocably constitute and appoint Attorney to#
transfer the said Shares on the books of the within named #
Organization with full power of substitution in the premises. #
# #
# Dated 19 . #
# #
# In presence of #
# #
# #
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH #
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY #
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE #
WHATEVER. #
#################################################################
This Specimen Certificate is in landscape position.
################################################################
# #
# NUMBER The Commonwealth of Massachusetts SHARES #
# #
# -0- (There is a picture of the Capitol -0- #
# and an eagle between two pillars here) #
# #
# #
# ENDEAVOR SERIES TRUST #
# #
# U.S. Government Securities Portfolio #
# #
# no par value #
# #
# #
#This Certifies That -Specimen- of is the owner of #
- -0- Shares in the U.S. Government Securities Portfolio of
Endeavor Series Trust, created by a Declaration of Trust dated
November 18, 1988 and recorded with the Secretary of State of The
Commonwealth of Massachusetts which shares are fully paid and
non-assessable, and subject to the provisions of this Trust, are
transferable by assignment endorsed thereon, and, the surrender
of this certificate. #
# #
#IN WITNESS WHEREOF, the Trustees hereunto set their hands and #
have caused their seal to be affixed hereto this day of #
A.D. 1993. #
# #
# #
# #
# (There is a Seal Here) #
# #
# #
# #
# #
# #
################################################################
This Side of The Certificate is in Landscape Position.
#################################################################
# #
# | ENDEAVOR SERIES TRUST | #
# | | #
# | U.S. Government | #
# | Securities Portfolio | #
# | | #
# | (There is a Torch of | #
# | Fire Here) | #
# | | #
# | Certificate | #
# | for | #
# | | #
# | -0- | #
# | | #
# | ISSUED TO | #
# | | #
# | | #
# | Specimen | #
# | | #
# | DATED | #
# | | #
#-------------------| |------------------#
# #
# #
# #
# #
# (The following Text is Enclosed in the Border #
# to the Left of the Above Text Reading #
# in The Opposite Direction) #
# #
# For Value Received, hereby sell, assign and #
transfer unto Shares of the #
Capital represented by the within Certificate, and do hereby #
irrevocably constitute and appoint Attorney to#
transfer the said Shares on the books of the within named #
Organization with full power of substitution in the premises. #
# #
# Dated 19 . #
# #
# In presence of #
# #
# #
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH #
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY #
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE #
WHATEVER. #
#################################################################
This Specimen Certificate is in landscape position.
################################################################
# #
# NUMBER The Commonwealth of Massachusetts SHARES #
# #
# -0- (There is a picture of the Capitol -0- #
# and an eagle between two pillars here) #
# #
# #
# ENDEAVOR SERIES TRUST #
# #
# T. Rowe Price Equity Income Portfolio #
# #
# no par value #
# #
# #
#This Certifies That -Specimen- of is the owner of #
- -0- Shares in the T. Rowe Price Equity Income Portfolio of
Endeavor Series Trust, created by a Declaration of Trust dated
November 18, 1988 and recorded with the Secretary of State of The
Commonwealth of Massachusetts which shares are fully paid and
non-assessable, and subject to the provisions of this Trust, are
transferable by assignment endorsed thereon, and, the surrender
of this certificate. #
# #
#IN WITNESS WHEREOF, the Trustees hereunto set their hands and #
have caused their seal to be affixed hereto this day of #
A.D. 19 . #
# #
# #
# #
#President (There is a Seal Here) Chief Financial Officer#
# (Treasurer) #
# #
# #
# #
# #
################################################################
This Side of The Certificate is in Landscape Position.
#################################################################
# #
# | ENDEAVOR SERIES TRUST | #
# | | #
# | T. Rowe Price | #
# |Equity Income Portfolio | #
# | | #
# | (There is a Torch of | #
# | Fire Here) | #
# | | #
# | Certificate | #
# | for | #
# | | #
# | -0- | #
# | | #
# | ISSUED TO | #
# | | #
# | | #
# | Specimen | #
# | | #
# | DATED | #
# | | #
#-------------------| |------------------#
# #
# #
# #
# #
# (The following Text is Enclosed in the Border #
# to the Left of the Above Text Reading #
# in The Opposite Direction) #
# #
# For Value Received, hereby sell, assign and #
transfer unto Shares of the #
Capital represented by the within Certificate, and do hereby #
irrevocably constitute and appoint Attorney to#
transfer the said Shares on the books of the within named #
Organization with full power of substitution in the premises. #
# #
# Dated 19 . #
# #
# In presence of #
# #
# #
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH #
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY #
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE #
WHATEVER. #
#################################################################
This Specimen Certificate is in landscape position.
################################################################
# #
# NUMBER The Commonwealth of Massachusetts SHARES #
# #
# -0- (There is a picture of the Capitol -0- #
# and an eagle between two pillars here) #
# #
# #
# ENDEAVOR SERIES TRUST #
# #
# T. Rowe Price Growth Stock Portfolio #
# #
# no par value #
# #
# #
#This Certifies That -Specimen- of is the owner of #
- -0- Shares in the T. Rowe Price Growth Stock Portfolio of
Endeavor Series Trust, created by a Declaration of Trust dated
November 18, 1988 and recorded with the Secretary of State of The
Commonwealth of Massachusetts which shares are fully paid and
non-assessable, and subject to the provisions of this Trust, are
transferable by assignment endorsed thereon, and, the surrender
of this certificate. #
# #
#IN WITNESS WHEREOF, the Trustees hereunto set their hands and #
have caused their seal to be affixed hereto this day of #
A.D. 19 . #
# #
# #
# #
#President (There is a Seal Here) Chief Financial Officer#
# (Treasurer) #
# #
# #
# #
# #
################################################################
This Side of The Certificate is in Landscape Position.
#################################################################
# #
# | ENDEAVOR SERIES TRUST | #
# | | #
# | T. Rowe Price | #
# | Growth Stock Portfolio | #
# | | #
# | (There is a Torch of | #
# | Fire Here) | #
# | | #
# | Certificate | #
# | for | #
# | | #
# | -0- | #
# | | #
# | ISSUED TO | #
# | | #
# | | #
# | Specimen | #
# | | #
# | DATED | #
# | | #
#-------------------| |------------------#
# #
# #
# #
# #
# (The following Text is Enclosed in the Border #
# to the Left of the Above Text Reading #
# in The Opposite Direction) #
# #
# For Value Received, hereby sell, assign and #
transfer unto Shares of the #
Capital represented by the within Certificate, and do hereby #
irrevocably constitute and appoint Attorney to#
transfer the said Shares on the books of the within named #
Organization with full power of substitution in the premises. #
# #
# Dated 19 . #
# #
# In presence of #
# #
# #
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH #
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY #
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE #
WHATEVER. #
#################################################################
MANAGEMENT AGREEMENT
November 23, 1992
Endeavor Management Co., Managing Partner
Endeavor Investment Advisers
Suite 200
1100 Newport Center Drive
Newport Beach, CA 92660
Dear Sirs:
Endeavor Series Trust (the "Trust"), a Massachusetts
business trust created pursuant to an Agreement and Declaration of
Trust filed with the Secretary of State of The Commonwealth of
Massachusetts, herewith confirms its agreement with Endeavor
Investment Advisers, a California general partnership, (the
"Manager") as follows:
1. Investment Description; Appointment
The Trust desires to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the
limitations specified in its Agreement and Declaration of Trust, as
amended from time to time, and in its registration statement filed
with the Securities and Exchange Commission ("SEC") on Form N-1A,
as amended from time to time (the "Registration Statement"), and in
such manner and to such extent as may from time to time be approved
by the Board of Trustees. The Trust has designated four separate
investment portfolios: Domestic Money Market Portfolio, Domestic
Managed Asset Allocation Portfolio, Global Growth Portfolio and
Global Managed Asset Allocation Portfolio. The Trust may in the
future designate additional separate investment portfolios. Such
existing and future portfolios are hereinafter referred to as the
"Portfolios." Copies of the Registration Statement and the Trust's
Agreement and Declaration of Trust, as amended, have been or will
be submitted to the Manager. The Trust desires to employ the
Manager to act as its investment manager and administrator. The
Trust acknowledges and agrees that the Manager intends to appoint a
person to act as investment adviser ("Adviser") to render
investment advice to each of the Portfolios. Such Adviser shall
make all determinations with respect to the Portfolio's assets for
which it has responsibility. The Manager accepts this appointment
and agrees to furnish the services for the compensation set forth
below.
2. Services as Investment Manager and Administrator
(a) Subject to the supervision and direction of the
Board of Trustees of the Trust, the Manager will have (i) overall
supervisory responsibility for the general management and
investment of the Portfolios' assets, and (ii) full investment
discretion to make all determinations with respect to the
investment of a Portfolio's assets not then managed by an
investment adviser. In connection with its responsibilities set
forth under (i) above, Trust acknowledges and agrees that the
Manager will select a person to act as investment adviser (an
"Adviser") to render investment advice to each of the Portfolios.
Each such Adviser shall make all determinations with respect to the
Portfolio's assets for which it has responsibility. In addition,
the Manager will conduct a program of evaluations of the Advisers'
performance, review the activities of the Advisers for compliance
with the Portfolios' investment objectives and policies and will
keep the Trust informed of developments materially affecting the
Portfolios and shall, on its own initiative, furnish to the Trust
from time to time whatever information the Manager believes
appropriate for this purpose.
(b) Subject to the supervision and direction of the
Board of Trustees of the Trust, the Manager will also (1) supply
the Trust with office facilities (which may be in Manager's own
offices), statistical and research data, data processing services,
clerical, accounting and bookkeeping services, including, but not
limited to, the calculation of the net asset value of shares of the
Trust, internal auditing and legal services, internal executive and
administrative services, and stationery and office supplies; and
(2) prepare reports to shareholders of the Trust, tax returns, and
reports to and filings with the SEC and state blue sky authorities.
The Manager may contract with any other person or persons to
provide to the Trust any of the services contemplated in this
paragraph under such terms as it deems reasonable and shall have
the authority to direct the activities of such other person or
persons in the manner it deems appropriate. In connection with
such administrative services, the Manager shall be responsible for
creating and maintaining all necessary administrative records of
the Trust in accordance with all applicable laws, rules and
regulations, including but not limited to records required by
Section 31(a) of the Investment Company Act of 1940 (the "1940
Act"). All records shall be the property of the Trust and shall be
available for inspection and use by the SEC, the Trust or any
person retained by the Trust. Where applicable, such records shall
be maintained by the Manager for the periods and in the places
required by Rule 31a-2 under the 1940 Act.
The services of the Manager to the Trust hereunder are
not to be deemed exclusive, and the Manager shall be free to render
similar services to others and to engage in other activities, so
long as the services rendered to the Trust are not impaired.
3. Compensation
In consideration of services rendered pursuant to this
Agreement, the Trust will pay the Manager a fee at the respective
annual rates of the value of each Portfolio's average daily net
asset set forth in Schedule A hereto as such schedule may be
amended from time to time. Such fees shall be accrued daily and
paid monthly as soon as practicable after the end of each month.
If the Manager shall serve for less than the whole of any month,
the foregoing compensation shall be prorated. For the purpose of
determining fees payable to the Manager, the value of the
Portfolios' net assets shall be computed at the times and in the
manner specified in the Registration Statement.
4. Expenses
The Trust shall pay all expenses other than those
expressly assumed by the Manager herein, which expenses payable by
the Trust shall include, but are not limited to:
a. Fees to the Manager;
b. Legal and audit expenses;
c. Fees and expenses related to the registration and
qualification of the Trust and its shares for distribution under
federal and state securities laws;
d. Expenses of the Trust's transfer agent, registrar,
custodian, dividend disbursing agent and shareholder servicing
agent;
e. Salaries, fees and expenses of Trustees and
executive officers of the Trust who are not "affiliated persons" of
the Manager or the Advisers within the meaning of the 1940 Act;
f. Taxes (including the expenses related to preparation
of tax returns) and corporate or other fees levied against the
Trust;
g. Brokerage commissions and other expenses associated
with the purchase and sale of portfolio securities for the Trust;
h. Expenses, including interest, of borrowing money;
i. Expenses incidental to meetings of the Trust's
shareholders, Board of Trustees and the maintenance of the Trust's
organizational existence;
j. Expenses of printing certificates representing
shares of the Trust and expenses of preparing, printing and mailing
notices, proxy material, reports to regulatory bodies and reports
to shareholders of the Trust;
k. Expenses of preparing and typesetting of
prospectuses of the Trust;
l. Expenses of printing and distributing prospectuses
to shareholders of the Trust;
m. Association membership dues;
n. Premiums for fidelity insurance, directors and
officers liability insurance and other coverage;
o. Charges of an independent pricing service to value
the Portfolio's assets;
p. Expenses related to the purchase or redemption of
the Trust's shares; and
q. Such nonrecurring expenses as may arise, including
those associated with actions, suits, or proceedings to which the
Trust is a party and arising from any legal obligation which the
Trust may have to indemnify its officers and Trustees with respect
thereto.
5. Reduction of Fee or Reimbursement to the Trust
If in any fiscal year the aggregate expenses of any
Portfolio of the Trust (including fees pursuant to this Agreement
but excluding interest, taxes, brokerage, distribution fees and
extraordinary expenses) exceed the expense limitations of any state
having jurisdiction over the Trust, the Manager will reduce its
fees or reimburse the Portfolio for the amount of such excess,
limited to the amount of its fees hereunder. Such reduction in
fees or expense reimbursement, if any, will be estimated,
reconciled and paid, in the case of reimbursement, on a monthly
basis.
6. Standard of Care
The Manager shall exercise its best judgment in
rendering the services hereunder. The Manager shall not be liable
for any error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the matters to which this
Agreement relates, provided that nothing herein shall be deemed to
protect or purport to protect the Manager against liability to the
Trust or to the shareholders of the Trust to which the Manager
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 Manager's reckless disregard of its
obligations and duties under this Agreement. Any person, even
though an officer, director, employee or agent of the Manager, who
may be or become an officer, Trustee, employee or agent of the
Trust, shall be deemed, when rendering services to the Trust or
when acting on any business of the Trust, to be rendering such
services to or to be acting solely for the Trust and not as an
officer, director, employee or agent, or one under the control or
direction of the Manager, even though paid by it.
7. Term
This Agreement shall continue in effect, unless sooner
terminated as hereinafter provided, for a period of two years from
the date hereof and indefinitely thereafter provided that its
continuance after such two year period as to each Portfolio shall
be specifically approved at least annually by vote of a majority of
the outstanding voting securities of such Portfolio or by vote of a
majority of the Trust's Board of Trustees; and further provided
that such continuance is also approved annually by the vote of a
majority of the Trustees who are not parties to this Agreement or
interested persons of the Trust or the Manager, cast in person at a
meeting called for the purpose of voting on such approval. This
Agreement may be terminated as to any Portfolio at any time,
without payment of any penalty, by the Trust's Board of Trustees or
by a vote of a majority of the outstanding voting securities of
such Portfolio upon 60 days' prior written notice to the Manager,
or by the Manager upon 90 days' prior written notice to the Trust,
or upon such shorter notice as may be mutually agreed upon. This
Agreement may be amended at any time by the Manager and the Trust,
subject to approval by the Trust's Board of Trustees and, if
required by applicable SEC rules and regulations, a vote of a
majority of the Trust's outstanding voting securities. This
Agreement shall terminate automatically and immediately in the
event of its assignment. The terms "assignment" and "vote of a
majority of the outstanding voting securities" shall have the
meaning set forth for such terms in the 1940 Act.
8. Limitation of Trust's Liability
The Manager acknowledges that it has received notice of
and accepts the limitations upon the Trust's liability set forth in
its Agreement and Declaration of Trust. The Manager agrees that
the Trust's obligations hereunder in any case shall be limited to
the Trust and to its assets and that the Manager shall not seek
satisfaction of any such obligation from the shareholders of the
Trust nor from any Trustee, officer, employee or agent of the
Trust.
9. Force Majeure
The Manager shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including
but not limited to acts of civil or military authority, national
emergencies, work stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot, or failure of communication or power
supply. In the event of equipment breakdowns beyond its control,
the Manager shall take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
10. Severability
If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
11. Miscellaneous
This Agreement constitutes the full and complete
agreement of the parties hereto with respect to the subject matter
hereof. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the
purposes hereof. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of
California. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement,
binding on all the parties.
12. Limitation of Liability
A copy of the Declaration of Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts and notice
is hereby given that this Agreement is executed on behalf of the
Trustees of the Trust as trustees and not individually and that the
obligations of this Agreement are not binding upon the Trustees or
holders of shares of the Trust individually but are binding only
upon the assets and property of the 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.
Very truly yours,
ENDEAVOR SERIES TRUST
By __/s/James A. Shepherdson__
Authorized Officer
Accepted:
ENDEAVOR INVESTMENT ADVISERS
By: Endeavor Management Co.,
Managing Partner
By __/s/Vincent J. McGuinness__
Authorized Officer<PAGE>
SCHEDULE A
Domestic Money Market Portfolio .50% of average
daily net assets
Domestic Managed Asset
Allocation Portfolio .75% of average
daily net assets
Global Managed Asset
Allocation Portfolio .90% of average
daily net assets
Global Growth
Portfolio .90% of average
daily net assets
Exhibit (5)(a)(1)
SUPPLEMENT TO MANAGEMENT AGREEMENT
QUEST FOR VALUE EQUITY PORTFOLIO
QUEST FOR VALUE SMALL CAP PORTFOLIO
Endeavor Management Co., Managing Partner Date: April 19, 1993
Endeavor Investment Advisers
Suite 200
1100 Newport Center Drive
Newport Beach, California 92660
Ladies and Gentlemen:
Endeavor Series Trust (the "Trust"), a Massachusetts business
trust created pursuant to an Agreement and Declaration of Trust
filed with the Secretary of State of The Commonwealth of
Massachusetts, herewith supplements its Management Agreement (the
"Agreement") dated November 23, 1992 with Endeavor Investment
Advisers, a California partnership (the "Manager"), as follows:
1. Investment Description; Appointment. Pursuant to Section 1
of the Agreement the Trust hereby notifies the Manager that it has
established two additional investment portfolios (the "New
Investment Portfolios"), namely the QUEST FOR VALUE EQUITY
PORTFOLIO and the QUEST FOR VALUE SMALL CAP PORTFOLIO and that the
New Investment Portfolios should be included as "Portfolios" as
that term is defined in the Agreement.
2. Limitation of Liability. A copy of the Declaration of
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this Agreement is
executed on behalf of the Trustees of the Trust as trustees and not
individually and that the obligations of this Agreement are not
binding upon the Trustees or holders of shares of the Trust
individually but are binding only upon the assets and property of
the 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.
<PAGE>
Very truly yours,
ENDEAVOR SERIES TRUST
By: James A. Shepherdson
Authorized Officer
Accepted:
ENDEAVOR INVESTMENT ADVISERS
By: Endeavor Management Co.,
Managing Partner
By: James A. Shepherdson
Authorized Officer<PAGE>
AMENDMENT TO
SCHEDULE A OF
THE MANAGEMENT AGREEMENT
QUEST FOR VALUE EQUITY PORTFOLIO .80% of average daily net assets
QUEST FOR VALUE SMALL CAP .80% of average daily net
PORTFOLIO assets
ENDEAVOR INVESTMENT ADVISERS ENDEAVOR SERIES TRUST
By: Endeavor Management Co.,
Managing Partner
By: /s/James A. Shepherdson By: /s/James A. Shepherdson
Authorized Officer Authorized Officer
Date: October 27, 1993 Date: October 27, 1993
FORM OF
SUPPLEMENT TO MANAGEMENT AGREEMENT
U.S. GOVERNMENT SECURITIES PORTFOLIO
Endeavor Management Co., Managing Partner Date March 25, 1994
Endeavor Investment Advisers
Suite 200
1100 Newport Center Drive
Newport Beach, California 92660
Ladies and Gentlemen:
Endeavor Series Trust (the "Trust"), a Massachusetts business
trust created pursuant to an Agreement and Declaration of Trust
filed with the Secretary of State of The Commonwealth of
Massachusetts, herewith supplements its Management Agreement (the
"Agreement") dated November 23, 1992 with Endeavor Investment
Advisers, a California general partnership (the "Manager"), as
follows:
1. Investment Description; Appointment. Pursuant to Section
1 of the Agreement the Trust hereby notifies the Manager that it
has established one additional investment portfolio (the "New
Investment Portfolio"), namely U.S. GOVERNMENT SECURITIES PORTFOLIO
and that the New Investment Portfolio should be included as
"Portfolios" as that term is defined in the Agreement.
2. Limitation of Liability. A copy of the Declaration of
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this Agreement is
executed on behalf of the Trustees of the Trust as trustees and not
individually and that the obligations of this Agreement are not
binding upon the Trustees or holders of shares of the Trust
individually but are binding only upon the assets and property of
the Trust.
Endeavor Management co., Managing Partner
Endeavor Investment Advisers
Page 2
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance hereof by signing and returning to
us the enclosed copy hereof.
Very truly yours,
ENDEAVOR SERIES TRUST
By: /s/James A. Shepherdson
Authorized Officer
Accepted:
ENDEAVOR INVESTMENT ADVISERS
By: Endeavor Management Co.,
Managing Partner
By: /s/Vincent J. McGuinness
Authorized Officer
AMENDMENT TO
SCHEDULE A
U.S. GOVERNMENT SECURITIES PORTFOLIO .65% of average daily net
assets
ENDEAVOR INVESTMENT ADVISERS ENDEAVOR SERIES TRUST
By: Endeavor Management Co.,
Managing Partner
By: /s/Vincent J. McGuinness By: /s/James A. Shepherdson
Date: March 25, 1994 Date: March 25, 1994
SUPPLEMENT TO MANAGEMENT AGREEMENT
T. ROWE PRICE EQUITY INCOME PORTFOLIO
T. ROWE PRICE GROWTH STOCK PORTFOLIO
Endeavor Management Co.
Managing Partner Date: December 28, 1994
Endeavor Investment Advisers
Suite 200
1100 Newport Center Drive
Newport Beach, California 92660
Ladies and Gentlemen:
Endeavor Series Trust (the "Trust"), a Massachusetts business
trust created pursuant to an Agreement and Declaration of Trust
filed with the Secretary of State of The Commonwealth of
Massachusetts, herewith supplements its Management Agreement (the
"Agreement") dated November 23, 1992 with Endeavor Investment
Advisers, a California general partnership (the "Manager"), as
follows:
1. Investment Description; Appointment. Pursuant to Section
1 of the Agreement the Trust hereby notifies the Manager that it
has established two additional investment portfolios (the "New
Investment Portfolios"), namely T. ROWE PRICE EQUITY INCOME
PORTFOLIO and T. ROWE PRICE GROWTH STOCK PORTFOLIO and that the New
Investment Portfolios should be included as "Portfolios" as that
term is defined in the Agreement.
2. Limitation of Liability. A copy of the Declaration of
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this Agreement is
executed on behalf of the Trustees of the Trust as trustees and not
individually and that the obligations of this Agreement are not
binding upon the Trustees or holders of shares of the Trust
individually but are binding only upon the assets and property of
the 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.
Very truly yours,
ENDEAVOR SERIES TRUST
By: /s/James A. Shepherdson
Authorized Officer
Accepted:
ENDEAVOR INVESTMENT ADVISERS
By: Endeavor Management Co.,
Managing Partner
By: /s/Vincent J. McGuinness, C.E.O.
Authorized Officer
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 23rd day of November, 1992, by and between
TCW Funds Management, Inc., a California corporation (the
"Adviser"), and Endeavor Investment Advisers, a California general
partnership (the "Manager").
WHEREAS, the Manager has been organized to serve as investment
manager and administrator of Endeavor Series Trust (the "Trust"), a
Massachusetts business trust which has filed a registration
statement under the Investment Company Act of 1940, as amended (the
"1940 Act") and the Securities Act of 1933 (the "Registration
Statement"); and
WHEREAS, the Trust is comprised of several separate investment
portfolios, one of which is the Domestic Money Market Portfolio
(the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the services,
information, advice, assistance and facilities of an investment
adviser to assist the Manager in performing services for the
Portfolio; and
WHEREAS, the Adviser is registered under the Investment
Advisers Act of 1940, as amended, and is engaged in the business of
rendering investment advisory services to investment companies and
desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby employs
the Adviser to manage the investment and reinvestment of the assets
of the Portfolio, subject to the control and direction of the
Trust's Board of Trustees, for the period and on the terms
hereinafter set forth. The Adviser hereby accepts such employment
and agrees during such period to render the services and to assume
the obligations herein set forth for the compensation herein
provided. The Adviser shall for all purposes herein be deemed to
be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Manager, the Portfolio or the
Trust in any way.
2. Obligations of and Services to be Provided by the
Adviser. The Adviser undertakes to provide the following services
and to assume the following obligations:
a. The Adviser shall manage the investment and
reinvestment of the portfolio assets of the Portfolio, all without
prior consultation with the Manager, subject to and in accordance
with the respective objectives and policies of the Portfolio set
forth in the Trust's Registration Statement, as such Registration
Statement may be amended from time to time, and any written
instructions which the Manager or the Trust's Board of Trustees may
issue from time-to-time in accordance therewith. In pursuance of
the foregoing, the Adviser shall make all determinations with
respect to the purchase and sale of portfolio securities and shall
take such action necessary to implement the same. The Adviser
shall render regular reports to the Trust's Board of Trustees and
the Manager concerning the investment activities of the Portfolio.
b. To the extent provided in the Trust's Registration
Statement, as such Registration Statement may be amended from time
to time, the Adviser shall, in the name of the Portfolio, place
orders for the execution of portfolio transactions with or through
such brokers, dealers or banks as it may select and, complying with
Section 28(e) of the Securities Exchange Act of 1934, may pay a
commission on transactions in excess of the amount of commission
another broker-dealer would have charged.
c. In connection with the placement of orders for the
execution of the Portfolio transactions of the Portfolio, the
Adviser shall create and maintain all necessary records pertaining
to the purchase and sale of securities by the Adviser on behalf of
the Portfolio in accordance with all applicable laws, rules and
regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property
of the Trust and shall be available for inspection and use by the
Securities and Exchange Commission ("SEC"), the Trust, the Manager
or any person retained by the Trust. Where applicable, such
records shall be maintained by the Adviser for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
d. The Adviser shall bear its expenses of providing
services pursuant to this Agreement.
3. Compensation of the Adviser. In consideration of
services rendered pursuant to this Agreement, the Manager will pay
the Adviser a fee at the annual rate of the value of the
Portfolio's average daily net assets set forth in Schedule A
hereto. Such fee shall be accrued daily and paid monthly as soon
as practicable after the end of each month. If the Adviser shall
serve for less than the whole of any month, the foregoing
compensation shall be prorated. For the purpose of determining
fees payable to the Adviser, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified
in the Trust's Registration Statement. Commencing two years from
the date of this Agreement, or such earlier date as fees received
by the Manager and not in part paid to the Adviser from all
Portfolios of the Trust advised by the Adviser equals in the
aggregate $350,000, if the Manager is required to reduce its fee or
to reimburse the Trust because the expenses of the Portfolio exceed
applicable state blue sky regulations or are in excess of any
voluntary expense limitation set forth in the Trust's Registration
Statement, the Adviser's fee hereunder shall be reduced by an
amount equal to such excess expense multiplied by the ratio that
the Adviser's fee hereunder bears to the fee paid to the Manager by
the Trust with respect to the Portfolio.
4. Activities of the Adviser. The services of the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others and to engage in other
activities, so long as the services rendered hereunder are not
impaired; provided, however, that with respect to any investment
company other than the Trust whose shares are directed exclusively
for sale to separate variable annuity accounts of insurance
companies, the services of the Adviser hereunder shall be
exclusive.
5. Use of Names. The Manager shall not use the name of the
Adviser in any prospectus, sales literature or other material
relating to the Trust in any manner not approved prior thereto by
the Adviser; provided, however, that the Adviser shall approve all
uses of its name which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state
securities commission; and, provided, further, that in no event
shall such approval be unreasonably withheld. The Adviser shall
not use the name of the Trust or the Manager in any material
relating to the Adviser in any manner not approved prior thereto by
the Manager; provided, however, that the Manager shall approve all
uses of its or the Trust's name which merely refer in accurate
terms to the appointment of the Adviser hereunder or which are
required by the SEC or a state securities commission; and, provided
further, that in no event shall such approval be unreasonably
withheld.
6. Liability of the Adviser. Absent willful misfeasance,
bad faith, gross negligence, or reckless disregard of obligations
of duties hereunder on the part of the Adviser, the Adviser shall
not be liable 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.
7. Limitation of Trust's Liability. The Adviser
acknowledges that it has received notice of and accepts the
limitations upon the Trust's liability set forth in its Agreement
and Declaration of Trust. The Adviser agrees that any of the
Trust's obligations shall be limited to the assets of the Portfolio
and that the Adviser shall not seek satisfaction of any such
obligation from the shareholders of the Trust nor from any Trust
officer, employee or agent of the Trust.
8. Renewal, Termination and Amendment. This Agreement shall
continue in effect, unless sooner terminated as hereinafter
provided, for a period of two years from the date hereof and shall
continue in full force and effect for successive periods of one
year thereafter, but only so long as each such continuance as to
the Portfolio is specifically approved at least annually by vote of
the holders of a majority of the outstanding voting securities of
the Portfolio or by vote of a majority of the Trust's Board of
Trustees; and further provided that such continuance is also
approved annually by the vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of the Adviser,
cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated as to the
Portfolio at any time, without payment of any penalty, by the
Trust's Board of Trustees, by the Manager, or by a vote of the
majority of the outstanding voting securities of the Portfolio upon
60 days' prior written notice to the Adviser, or by the Adviser
upon 150 days' prior written notice to the Manager, or upon such
shorter notice as may be mutually agreed upon. This Agreement
shall terminate automatically and immediately upon termination of
the Management Agreement dated August 15, 1990 between the Manager
and the Trust. This Agreement shall terminate automatically and
immediately in the event of its assignment. The terms "assignment"
and "vote of a majority of the outstanding voting securities" shall
have the meaning set forth for such terms in the 1940 Act. This
Agreement may be amended at any time by the Adviser and the
Manager, subject to approval by the Trust's Board of Trustees and,
if required by applicable SEC rules and regulations, a vote of a
majority of the Portfolio's outstanding voting securities.
9. Confidential Relationship. Any information and advice
furnished by either party to this Agreement to the other shall be
treated as confidential and shall not be disclosed to third parties
except as required by law.
10. Severability. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
11. Miscellaneous. This Agreement constitutes the full and
complete agreement of the parties hereto with respect to the
subject matter hereof. Each party agrees to perform such further
actions and execute such further documents as are necessary to
effectuate the purposes hereof. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the
State of California. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement,
binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
BY: Endeavor Management Co.,
Managing Partner
BY: /s/Vincent J. McGuinness
Authorized Officer
TCW FUNDS MANAGEMENT, INC.
BY: /s/Ronald E. Robison
Authorized Officer<PAGE>
SCHEDULE A
Domestic Money
Market Portfolio .25% of average daily net
assets; provided however for a
period of four months from the
date of this Investment Advisory
Agreement, or until the
Manager's share of Investment
Management Fees received from
all Portfolios of the Trust
advised by the Adviser equals in
the aggregate $350,000,
whichever shall occur earlier,
the fee payable to the Adviser
shall be .125% of the average
net assets
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 23rd day of November, 1992, by and between
TCW Funds Management, Inc., a California corporation (the
"Adviser"), and Endeavor Investment Advisers, a California general
partnership (the "Manager").
WHEREAS, the Manager has been organized to serve as investment
manager and administrator of Endeavor Series Trust (the "Trust"), a
Massachusetts business trust which has filed a registration
statement under the Investment Company Act of 1940, as amended (the
"1940 Act") and the Securities Act of 1933 (the "Registration
Statement"); and
WHEREAS, the Trust is comprised of several separate investment
portfolios, one of which is the Domestic Managed Asset Allocation
Portfolio (the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the services,
information, advice, assistance and facilities of an investment
adviser to assist the Manager in performing services for the
Portfolio; and
WHEREAS, the Adviser is registered under the Investment
Advisers Act of 1940, as amended, and is engaged in the business of
rendering investment advisory services to investment companies and
desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby employs
the Adviser to manage the investment and reinvestment of the assets
of the Portfolio, subject to the control and direction of the
Trust's Board of Trustees, for the period and on the terms
hereinafter set forth. The Adviser hereby accepts such employment
and agrees during such period to render the services and to assume
the obligations herein set forth for the compensation herein
provided. The Adviser shall for all purposes herein be deemed to
be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Manager, the Portfolio or the
Trust in any way.
2. Obligations of and Services to be Provided by the
Adviser. The Adviser undertakes to provide the following services
and to assume the following obligations:
a. The Adviser shall manage the investment and
reinvestment of the portfolio assets of the Portfolio, all without
prior consultation with the Manager, subject to an in accordance
with the respective investment objectives and policies of the
Portfolio set forth in the Trust's Registration Statement, as such
Registration Statement may be amended from time to time, and any
written instructions which the Manager or the Trust's Board of
Trustees may issue from time-to-time in accordance therewith. In
pursuance of the foregoing, the Adviser shall make all
determinations with respect to the purchase and sale of portfolio
securities and shall take such action necessary to implement the
same. The Adviser shall render regular reports to the Trust's
Board of Trustees and the Manager concerning the investment
activities of the Portfolio.
b. To the extent provided in the Trust's Registration
Statement, as such Registration Statement may be amended from time
to time, the Adviser shall, in the name of the Portfolio, place
orders for the execution of portfolio transactions with or through
such brokers, dealers or banks as it may select and, complying with
Section 28(e) of the Securities Exchange Act of 1934, may pay a
commission on transactions in excess of the amount of commission
another broker-dealer would have charged.
c. In connection with the placement of orders for the
execution of the portfolio transactions of the Portfolio, the
Adviser shall create and maintain all necessary records pertaining
to the purchase and sale of securities by the Adviser on behalf of
the Portfolio in accordance with all applicable laws, rules and
regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property
of the Trust and shall be available for inspection and use by the
Securities and Exchange Commission ("SEC"), the Trust, the Manager
or any person retained by the Trust. Where applicable, such
records shall be maintained by the Adviser for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
d. The Adviser shall bear its expenses of providing
services pursuant to this Agreement.
3. Compensation of the Adviser. In consideration of
services rendered pursuant to this Agreement, the Manager will pay
the Adviser a fee at the annual rate of the value of the
Portfolio's average daily net assets set forth in Schedule A
hereto. Such fee shall be accrued daily and paid monthly as soon
as practicable after the end of each month. If the Adviser shall
serve for less than the whole of any month, the foregoing
compensation shall be prorated. For the purpose of determining
fees payable to the he Adviser, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified
in the Trust's Registration Statement. Commencing two years from
the date of this Agreement, or such earlier date as fees received
by the Manager and not in part paid to the Adviser from all
Portfolios of the Trust advised by the Adviser equals in the
aggregate $350,000, if the Manager is required to reduce its fee or
to reimburse the Trust because the expenses of the Portfolio exceed
applicable state blue sky regulations or are in excess of any
voluntary expense limitation set forth in the Trust's Registration
Statement, the Adviser's fee hereunder shall be reduced by an
amount equal to such excess expense multiplied by the ratio that
the Adviser's fee hereunder bears to the fee paid to the Manager by
the Trust with respect to the Portfolio.
4. Activities of the Adviser. The services of the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others and to engage in other
activities, so long as the services rendered hereunder are not
impaired; provided, however, that with respect to any investment
company other than the Trust whose shares are directed exclusively
for sale to separate variable annuity accounts of insurance
companies, the services of the Adviser hereunder shall be
exclusive.
5. Use of Names. The Manager shall not use the name of the
Adviser in any prospectus, sales literature or other material
relating to the Trust in any manner not approved prior thereto by
the Adviser; provided, however, that the Adviser shall approve all
uses of its name which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state
securities commission; and, provided, further, that in no event
shall such approval be unreasonably withheld. The Adviser shall
not use the name of the Trust or the Manager in any material
relating to the Adviser in any manner not approved prior thereto by
the Manager; provided, however, that the Manager shall approve all
uses of its or the Trust's name which merely refer in accurate
terms to the appointment of the Adviser hereunder or which are
required by the SEC or a state securities commission; and, provided
further, that in no event shall such approval be unreasonably
withheld.
6. Liability of the Adviser. Absent willful misfeasance,
bad faith, gross negligence, or reckless disregard of obligations
or duties hereunder on the part of the Adviser, the Adviser shall
not be liable 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.
7. Limitation of Trust's Liability. The Adviser
acknowledges that it has received notice of and accepts the
limitations upon the Trust's liability set forth in its Agreement
and Declaration of Trust. The Adviser agrees that any of the
Trust's obligations shall be limited to the assets of the Portfolio
and that the Adviser shall not seek satisfaction of any such
obligation from the shareholders of the Trust nor from any Trust
officer, employee or agent of the Trust.
8. Renewal, Termination and Amendment. This Agreement shall
continue in effect, unless sooner terminated as hereinafter
provided, for a period of two years from the date hereof and shall
continue in full force and effect for successive periods of one
year thereafter, but only so long as each such continuance as to
the Portfolio is specifically approved at least annually by vote of
the holders of a majority of the outstanding voting securities of
the Portfolio or by vote of a majority of the Trust's Board of
Trustees; and further provided that such continuance is also
approved annually by the vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of the Adviser,
cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated as to the
Portfolio at any time, without payment of any penalty, by the
Trust's Board of Trustees, by the Manager, or by a vote of the
majority of the outstanding voting securities of the Portfolio upon
60 days' prior written notice to the Adviser, or by the Adviser
upon 150 days' prior written notice to the Manager, or upon such
shorter notice as may be mutually agreed upon. This Agreement
shall terminate automatically and immediately upon termination of
the Management Agreement dated August 15, 1990 between the Manager
and the Trust. This Agreement shall terminate automatically and
immediately in the event of its assignment. The terms "assignment"
and "vote of a majority of the outstanding voting securities" shall
have the meaning set forth for such terms in the 1940 Act. This
Agreement may be amended at any time by the Adviser and the
Manager, subject to approval by the Trust's Board of Trustees and,
if required by applicable SEC rules and regulations, a vote of a
majority of the Portfolio's outstanding voting securities.
9. Confidential Relationship. Any information and advice
furnished by either party to this Agreement to the other shall be
treated as confidential and shall not be disclosed to third parties
except as required by law.
10. Severability. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
11. Miscellaneous. This Agreement constitutes the full and
complete agreement of the parties hereto with respect to the
subject matter hereof. Each party agrees to perform such further
actions and execute such further documents as are necessary to
effectuate the purposes hereof. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the
State of California. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement,
binding on all the parties.
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
BY: Endeavor Management Co.,
Managing Partner
BY: /s/Vincent J. McGuinness
Authorized Officer
TCW FUNDS MANAGEMENT, INC.
BY: /s/Ronald E. Robison
Authorized Officer<PAGE>
SCHEDULE A
Domestic Managed Asset
Allocation Portfolio .375% of average daily net
assets; provided however
for a period of four months
from the date of this
Investment Advisory
Agreement, or until the
Manager's share of
Investment Management Fees
received from all
Portfolios of the Trust
advised by the Adviser
equals in the aggregate
$350,000, whichever shall
occur earlier, the fee
payable to the Adviser
shall be .1875% of average
net assets
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 19th day of April, 1993, by and
between Quest for Value Advisors, a Delaware general partnership
(the "Adviser"), and Endeavor Investment Advisers, a California
general partnership (the "Manager").
WHEREAS, the Manager has been organized to serve as
investment manager and administrator of Endeavor Series Trust (the
"Trust"), a Massachusetts business trust which has filed a
registration statement under the Investment Company Act of 1940, as
amended (the "1940 Act") and the Securities Act of 1933 (the
"Registration Statement"); and
WHEREAS, the Trust is comprised of several separate
investment portfolios, one of which is the Quest for Value Small
Cap Portfolio (the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the
services, information, advice, assistance and facilities of an
investment adviser to assist the Manager in performing services for
the Portfolio; and
WHEREAS, the Adviser is registered under the Investment
Advisers Act of 1940, as amended, and is engaged in the business of
rendering investment advisory services to investment companies and
desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and
conditions hereinafter set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby
employs the Adviser to manage the investment and reinvestment of
the assets of the Portfolio, subject to the control and direction
of the Trust's Board of Trustees, for the period and on the terms
hereinafter set forth. The Adviser hereby accepts such employment
and agrees during such period to render the services and to assume
the obligations herein set forth for the compensation herein
provided. The Adviser shall for all purposes herein be deemed to
be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Manager, the Portfolio or the
Trust in any way.
2. Obligations of and Services to be Provided by the
Adviser. The Adviser undertakes to provide the following services
and to assume the following obligations:
a. The Adviser shall manage the investment and
reinvestment of the portfolio assets of the Portfolio, all without
prior consultation with the Manager, subject to and in accordance
with the respective investment objectives and policies of the
Portfolio set forth in the Trust's Registration Statement, as such
Registration Statement may be amended from time to time, and any
written instructions which the Manager or the Trust's Board of
Trustees may issue from time-to-time in accordance therewith. In
pursuance of the foregoing, the Adviser shall make all
determinations with respect to the purchase and sale of portfolio
securities and shall take such action necessary to implement the
same. The Adviser shall render regular reports to the Trust's
Board of Trustees and the Manager concerning the investment
activities of the Portfolio.
b. To the extent provided in the Trust's
Registration Statement, as such Registration Statement may be
amended from time to time, the Adviser shall, in the name of the
Portfolio, place orders for the execution of portfolio transactions
with or through such brokers, dealers or banks as it may select
including affiliates of the Adviser and, complying with Section
28(e) of the Securities Exchange Act of 1934, may pay a commission
on transactions in excess of the amount of commission another
broker-dealer would have charged.
c. In connection with the placement of orders for
the execution of the portfolio transactions of the Portfolio, the
Adviser shall create and maintain all necessary records pertaining
to the purchase and sale of securities by the Adviser on behalf of
the Portfolio in accordance with all applicable laws, rules and
regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property
of the Trust and shall be available for inspection and use by the
Securities and Exchange Commission ("SEC"), the Trust, the Manager
or any person retained by the Trust. Where applicable, such
records shall be maintained by the Adviser for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
d. The Adviser shall bear its expenses of
providing services pursuant to this Agreement.
3. Compensation of the Adviser. In consideration of
services rendered pursuant to this Agreement, the Manager will pay
the Adviser a fee at the annual rate of the value of the
Portfolio's average daily net assets set forth in Schedule A
hereto. Such fee shall be accrued daily and paid monthly as soon
as practicable after the end of each month. If the Adviser shall
serve for less than the whole of any month, the foregoing
compensation shall be prorated. For the purpose of determining
fees payable to the Adviser, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified
in the Trust's Registration Statement.
4. Activities of the Adviser. The services of the
Adviser hereunder are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others and to engage in
other activities, so long as the services rendered hereunder are
not impaired.
5. Use of Names. The Manager shall not use the name of
the Adviser or its parent, Oppenheimer Capital, in any prospectus,
sales literature or other material relating to the Trust in any
manner not approved prior thereto by the Adviser; provided,
however, that the Adviser shall approve all uses of its name and
that of its parent which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state
securities commission; and, provided, further, that in no event
shall such approval be unreasonably withheld. The Adviser shall
not use the name of the Trust or the Manager in any material
relating to the Adviser in any manner not approved prior thereto by
the Manager; provided, however, that the Manager shall approve all
uses of its or the Trust's name which merely refer in accurate
terms to the appointment of the Adviser hereunder or which are
required by the SEC or a state securities commission; and, provided
further, that in no event shall such approval be unreasonably
withheld.
6. Liability of the Adviser. Absent willful
misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be liable 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.
7. Limitation of Trust's Liability. The Adviser
acknowledges that it has received notice of and accepts the
limitations upon the Trust's liability set forth in its Agreement
and Declaration of Trust. The Adviser agrees that any of the
Trust's obligations shall be limited to the assets of the Portfolio
and that the Adviser shall not seek satisfaction of any such
obligation from the shareholders of the Trust nor from any Trust
officer, employee or agent of the Trust.
8. Renewal, Termination and Amendment. This Agreement
shall continue in effect, unless sooner terminated as hereinafter
provided, for a period of two years from the date hereof and shall
continue in full force and effect for successive periods of one
year thereafter, but only so long as each such continuance as to
the Portfolio is specifically approved at least annually by vote of
the holders of a majority of the outstanding voting securities of
the Portfolio or by vote of a majority of the Trust's Board of
Trustees; and further provided that such continuance is also
approved annually by the vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of the Adviser,
cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated as to the
Portfolio at any time, without payment of any penalty, by the
Trust's Board of Trustees, by the Manager, or by a vote of the
majority of the outstanding voting securities of the Portfolio upon
60 days' prior written notice to the Adviser, or by the Adviser
upon 150 days' prior written notice to the Manager, or upon such
shorter notice as may be mutually agreed upon. This Agreement
shall terminate automatically and immediately upon termination of
the Management Agreement dated November 23, 1992 between the
Manager and the Trust. This Agreement shall terminate
automatically and immediately in the event of its assignment. The
terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meaning set forth for such terms
in the 1940 Act. This Agreement may be amended at any time be the
Adviser and the Manager, subject to approval by the Trust's Board
of Trustees and, if required by applicable SEC rules and
regulations, a vote of a majority of the Portfolio's outstanding
voting securities.
9. Confidential Relationship. Any information and
advice furnished by either party to this Agreement to the other
shall be treated as confidential and shall not be disclosed to
third parties except as required by law.
10. Severability. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
11. Miscellaneous. This Agreement constitutes the full
and complete agreement of the parties hereto with respect to the
subject matter hereof. Each party agrees to perform such further
actions and execute such further documents as are necessary to
effectuate the purposes hereof. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the
State of California. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement,
binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
BY: Endeavor Management Co.,
Managing Partner
BY: _/s/Vincent J. McGuinness, C.E.O._
Authorized Officer
QUEST FOR VALUE ADVISORS
BY: _/s/Thomas E. Duggan__
Authorized Officer
SCHEDULE A
Quest for Value Small Cap
Portfolio .40% of average daily net
assets; provided, however
that no fee shall be
payable to the Adviser
until the earlier of the
events specified in (a) or
(b) below:
(a) The net assets of the
Portfolio equal or exceed
$25,000,000;
(b) The Adviser notifies
the Manager that after a
specified date, which date
shall not be earlier than
12 months from the date of
this Investment Advisory
Agreement, the .40% fee
will be due and payable.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 19th day of April, 1993, by and
between Quest for Value Advisors, a Delaware general partnership
(the "Adviser"), and Endeavor Investment Advisers, a California
general partnership (the "Manager").
WHEREAS, the Manager has been organized to serve as
investment manager and administrator of Endeavor Series Trust (the
"Trust"), a Massachusetts business trust which has filed a
registration statement under the Investment Company Act of 1940, as
amended (the "1940 Act") and the Securities Act of 1933 (the
"Registration Statement"); and
WHEREAS, the Trust is comprised of several separate
investment portfolios, one of which is the Quest for Value Equity
Portfolio (the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the
services, information, advice, assistance and facilities of an
investment adviser to assist the Manager in performing services for
the Portfolio; and
WHEREAS, the Adviser is registered under the Investment
Advisers Act of 1940, as amended, and is engaged in the business of
rendering investment advisory services to investment companies and
desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and
conditions hereinafter set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby
employs the Adviser to manage the investment and reinvestment of
the assets of the Portfolio, subject to the control and direction
of the Trust's Board of Trustees, for the period and on the terms
hereinafter set forth. The Adviser hereby accepts such employment
and agrees during such period to render the services and to assume
the obligations herein set forth for the compensation herein
provided. The Adviser shall for all purposes herein be deemed to
be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Manager, the Portfolio or the
Trust in any way.
2. Obligations of and Services to be Provided by the
Adviser. The Adviser undertakes to provide the following services
and to assume the following obligations:
a. The Adviser shall manage the investment and
reinvestment of the portfolio assets of the Portfolio, all without
prior consultation with the Manager, subject to and in accordance
with the respective investment objectives and policies of the
Portfolio set forth in the Trust's Registration Statement, as such
Registration Statement may be amended from time to time, and any
written instructions which the Manager or the Trust's Board of
Trustees may issue from time-to-time in accordance therewith. In
pursuance of the foregoing, the Adviser shall make all
determinations with respect to the purchase and sale of portfolio
securities and shall take such action necessary to implement the
same. The Adviser shall render regular reports to the Trust's
Board of Trustees and the Manager concerning the investment
activities of the Portfolio.
b. To the extent provided in the Trust's
Registration Statement, as such Registration Statement may be
amended from time to time, the Adviser shall, in the name of the
Portfolio, place orders for the execution of portfolio transactions
with or through such brokers, dealers or banks as it may select
including affiliates of the Adviser and, complying with Section
28(e) of the Securities Exchange Act of 1934, may pay a commission
on transactions in excess of the amount of commission another
broker-dealer would have charged.
c. In connection with the placement of orders for
the execution of the portfolio transactions of the Portfolio, the
Adviser shall create and maintain all necessary records pertaining
to the purchase and sale of securities by the Adviser on behalf of
the Portfolio in accordance with all applicable laws, rules and
regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property
of the Trust and shall be available for inspection and use by the
Securities and Exchange Commission ("SEC"), the Trust, the Manager
or any person retained by the Trust. Where applicable, such
records shall be maintained by the Adviser for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
d. The Adviser shall bear its expenses of
providing services pursuant to this Agreement.
3. Compensation of the Adviser. In consideration of
services rendered pursuant to this Agreement, the Manager will pay
the Adviser a fee at the annual rate of the value of the
Portfolio's average daily net assets set forth in Schedule A
hereto. Such fee shall be accrued daily and paid monthly as soon
as practicable after the end of each month. If the Adviser shall
serve for less than the whole of any month, the foregoing
compensation shall be prorated. For the purpose of determining
fees payable to the Adviser, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified
in the Trust's Registration Statement.
4. Activities of the Adviser. The services of the
Adviser hereunder are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others and to engage in
other activities, so long as the services rendered hereunder are
not impaired.
5. Use of Names. The Manager shall not use the name of
the Adviser or its parent, Oppenheimer Capital, in any prospectus,
sales literature or other material relating to the Trust in any
manner not approved prior thereto by the Adviser; provided,
however, that the Adviser shall approve all uses of its name and
that of its parent which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state
securities commission; and, provided, further, that in no event
shall such approval be unreasonably withheld. The Adviser shall
not use the name of the Trust or the Manager in any material
relating to the Adviser in any manner not approved prior thereto by
the Manager; provided, however, that the Manager shall approve all
uses of its or the Trust's name which merely refer in accurate
terms to the appointment of the Adviser hereunder or which are
required by the SEC or a state securities commission; and, provided
further, that in no event shall such approval be unreasonably
withheld.
6. Liability of the Adviser. Absent willful
misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be liable 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.
7. Limitation of Trust's Liability. The Adviser
acknowledges that it has received notice of and accepts the
limitations upon the Trust's liability set forth in its Agreement
and Declaration of Trust. The Adviser agrees that any of the
Trust's obligations shall be limited to the assets of the Portfolio
and that the Adviser shall not seek satisfaction of any such
obligation from the shareholders of the Trust nor from any Trust
officer, employee or agent of the Trust.
8. Renewal, Termination and Amendment. This Agreement
shall continue in effect, unless sooner terminated as hereinafter
provided, for a period of two years from the date hereof and shall
continue in full force and effect for successive periods of one
year thereafter, but only so long as each such continuance as to
the Portfolio is specifically approved at least annually by vote of
the holders of a majority of the outstanding voting securities of
the Portfolio or by vote of a majority of the Trust's Board of
Trustees; and further provided that such continuance is also
approved annually by the vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of the Adviser,
cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated as to the
Portfolio at any time, without payment of any penalty, by the
Trust's Board of Trustees, by the Manager, or by a vote of the
majority of the outstanding voting securities of the Portfolio upon
60 days' prior written notice to the Adviser, or by the Adviser
upon 150 days' prior written notice to the Manager, or upon such
shorter notice as may be mutually agreed upon. This Agreement
shall terminate automatically and immediately upon termination of
the Management Agreement dated November 23, 1992 between the
Manager and the Trust. This Agreement shall terminate
automatically and immediately in the event of its assignment. The
terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meaning set forth for such terms
in the 1940 Act. This Agreement may be amended at any time be the
Adviser and the Manager, subject to approval by the Trust's Board
of Trustees and, if required by applicable SEC rules and
regulations, a vote of a majority of the Portfolio's outstanding
voting securities.
9. Confidential Relationship. Any information and
advice furnished by either party to this Agreement to the other
shall be treated as confidential and shall not be disclosed to
third parties except as required by law.
10. Severability. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
11. Miscellaneous. This Agreement constitutes the full
and complete agreement of the parties hereto with respect to the
subject matter hereof. Each party agrees to perform such further
actions and execute such further documents as are necessary to
effectuate the purposes hereof. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the
State of California. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement,
binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
BY: Endeavor Management Co.,
Managing Partner
BY: /s/Vincent J. McGuinness, C.E.O.
Authorized Officer
QUEST FOR VALUE ADVISORS
BY: _/s/Thomas E. Duggan____
Authorized Officer
SCHEDULE A
Quest for Value Equity
Portfolio .40% of average daily net
assets; provided, however
that no fee shall be
payable to the Adviser
until the earlier of the
events specified in (a) or
(b) below:
(a) The net assets of the
Portfolio equal or exceed
$25,000,000;
(b) The Adviser notifies
the Manager that after a
specified date, which date
shall not be earlier than
12 months from the date of
this Investment Advisory
Agreement, the .40% fee
will be due and payable.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 25th day of March, 1994, by and between
The Boston Company Asset Management, Inc., a Massachusetts
corporation (the "Adviser"), and Endeavor Investment Advisers, a
California general partnership (the "Manager").
WHEREAS, the Manager has been organized to serve as investment
manager and administrator of Endeavor Series Trust (the "Trust"), a
Massachusetts business trust which has filed a registration
statement under the Investment Company Act of 1940, as amended (the
"1940 Act") and the Securities Act of 1933 (the "Registration
Statement"); and
WHEREAS, the Trust is comprised of several separate investment
portfolios, one of which is the U.S. Government Securities
Portfolio (the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the services,
information, advice, assistance and facilities of an investment
adviser to assist the Manager in performing services for the
Portfolio; and
WHEREAS, the Adviser is registered under the Investment
Advisers Act of 1940, as amended, and is engaged in the business of
rendering investment advisory services to investment companies and
other institutional clients and desires to provide such services to
the Manager;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby employs the
Adviser to manage the investment and reinvestment of the assets of
the Portfolio, subject to the control and direction of the Trust's
Board of Trustees, for the period and on the terms hereinafter set
forth. The Adviser hereby accepts such employment and agrees
during such period to render the services and to assume the
obligations herein set forth for the compensation herein provided.
The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, except as expressly provided or
authorized (whether herein or otherwise), have no authority to act
for or represent the Manager, the Portfolio or the Trust in any
way.
2. Obligations of and Services to be Provided by the Adviser.
The Adviser undertakes to provide the following services and to
assume the following obligations:
a. The Adviser shall manage the investment and
reinvestment of the portfolio assets of the Portfolio, all without
prior consultation with the Manager, subject to and in accordance
with the respective investment objectives and policies of the
Portfolio set forth in the Trust's Registration Statement, as such
Registration Statement may be amended from time to time, and any
written instructions which the Manager or the Trust's Board of
Trustees may issue from time-to-time in accordance therewith. In
pursuance of the foregoing, the Adviser shall make all
determinations with respect to the purchase and sale of portfolio
securities and shall take such action necessary to implement the
same. The Adviser shall render regular reports to the Trust's
Board of Trustees and the Manager concerning the investment
activities of the Portfolio.
b. To the extent provided in the Trust's Registration
Statement, as such Registration Statement may be amended from time
to time, the Adviser shall, in the name of the Portfolio, place
orders for the execution of portfolio transactions with or through
such brokers, dealers or banks as it may select including
affiliates of the Adviser and, complying with Section 28(e) of the
Securities Exchange Act of 1934, may pay a commission on
transactions in excess of the amount of commission another
broker-dealer would have charged.
c. In connection with the placement of orders for the
execution of the portfolio transactions of the Portfolio, the
Adviser shall create and maintain all necessary records pertaining
to the purchase and sale of securities by the Adviser on behalf of
the Portfolio in accordance with all applicable laws, rules and
regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property
of the Trust and shall be available for inspection and use by the
Securities and Exchange Commission ("SEC"), the Trust, the Manager
or any person retained by the Trust. Where applicable, such
records shall be maintained by the Adviser for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
d. The Adviser shall bear its expenses of providing
services pursuant to this Agreement.
3. Compensation of the Adviser. In consideration of services
rendered pursuant to this Agreement, the Manager will pay the
Adviser a fee at the annual rate of the value of the Portfolio's
average daily net assets set forth in Schedule A hereto. Such fee
shall be accrued daily and paid monthly as soon as practicable
after the end of each month. If the Adviser shall serve for less
than the whole of any month, the foregoing compensation shall be
prorated. For the purpose of determining fees payable to the
Adviser, the value of the Portfolio's net assets shall be computed
at the times and in the manner specified in the Trust's
Registration Statement.
4. Activities of the Adviser. The services of the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others and to engage in other
activities, so long as the services rendered hereunder are not
impaired.
5. Use of Names. The Manager shall not use the name of the
Adviser in any prospectus, sales literature or other material
relating to the Trust in any manner not approved prior thereto by
the Adviser; provided, however, that the Adviser shall approve all
uses of its name and that of its parent which merely refer in
accurate terms to its appointment hereunder or which are required
by the SEC or a state securities commission; and, provided,
further, that in no event shall such approval be unreasonably
withheld. The Adviser shall not use the name of the Trust or the
Manager in any material relating to the Adviser in any manner not
approved prior thereto by the Manager; provided, however, that the
Manager shall approve all uses of its or the Trust's name which
merely refer in accurate terms to the appointment of the Adviser
hereunder or which are required by the SEC or a state securities
commission; and, provided further, that in no event shall such
approval be unreasonably withheld.
6. Liability of the Adviser. Absent willful misfeasance, bad
faith, gross negligence, or reckless disregard of obligations or
duties hereunder on the part of the Adviser, the Adviser shall not
be liable 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.
Nothing herein shall constitute a waiver of any rights or remedies
which the Trust may have under any federal or state securities.
7. Limitation of Trust's Liability. The Adviser acknowledges
that it has received notice of and accepts the limitations upon the
Trust's liability set forth in its Agreement and Declaration of
Trust. The Adviser agrees that any of the Trust's obligations
shall be limited to the assets of the Portfolio and that the
Adviser shall not seek satisfaction of any such obligation from the
shareholders of the Trust nor from any Trust officer, employee or
agent of the Trust.
8. Renewal, Termination and Amendment. This Agreement shall
continue in effect, unless sooner terminated as hereinafter
provided, for a period of two years from the date hereof and shall
continue in full force and effect for successive periods of one
year thereafter, but only so long as each such continuance as to
the Portfolio is specifically approved at least annually by vote of
the holders of a majority of the outstanding voting securities of
the Portfolio or by vote of a majority of the Trust's Board of
Trustees; and further provided that such continuance is also
approved annually by the vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of the Adviser,
cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated as to the
Portfolio at any time, without payment of any penalty, by the
Trust's Board of Trustees, by the Manager, or by a vote of the
majority of the outstanding voting securities of the Portfolio upon
60 days' prior written notice to the Adviser, or by the Adviser
upon 150 days' prior written notice to the Manager, or upon such
shorter notice as may be mutually agreed upon. This Agreement
shall terminate automatically and immediately upon termination of
the Management Agreement dated November 23, 1992 between the
Manager and the Trust. This Agreement shall terminate
automatically and immediately in the event of its assignment. The
terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meaning set forth for such terms
in the 1940 Act. This Agreement may be amended at any time be the
Adviser and the Manager, subject to approval by the Trust's Board
of Trustees and, if required by applicable SEC rules and
regulations, a vote of a majority of the Portfolio's outstanding
voting securities.
9. Confidential Relationship. Any information and advice
furnished by either party to this Agreement to the other shall be
treated as confidential and shall not be disclosed to third parties
except as required by law.
10. Severability. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
11. Miscellaneous. This Agreement constitutes the full and
complete agreement of the parties hereto with respect to the
subject matter hereof. Each party agrees to perform such further
actions and execute such further documents as are necessary to
effectuate the purposes hereof. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the
State of California. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement,
binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
BY: Endeavor Management Co.,
Managing Partner
BY: _/s/James A. Shepherdson_
Authorized Officer
THE BOSTON COMPANY ASSET MANAGEMENT,
INC.
BY: _/s/_Bill Leech__
Authorized Officer<PAGE>
SCHEDULE A
U.S. Government Securities
Portfolio .15% of average daily net
assets.
TRANSFER AND ASSUMPTION
OF
INVESTMENT ADVISORY AGREEMENT
for
U.S. GOVERNMENT SECURITIES PORTFOLIO
OF
ENDEAVOR SERIES TRUST
TRANSFER AND ASSUMPTION OF INVESTMENT ADVISORY AGREEMENT,
made as of May 1, 1996, by and among Endeavor Series Trust, a
Massachusetts business trust (the "Trust"), Endeavor
Investment Advisers, a California general partnership ("EIA"),
The Boston Company Asset Management, Inc., a Massachusetts
corporation ("Boston Company") and The Dreyfus Corporation, a
New York corporation ("Dreyfus").
WHEREAS, EIA is the Manager of the Trust, which is
registered with the Securities and Exchange Commission as an
open-end management investment company under the Investment
Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Trust consists of several distinct
investment portfolios including the U.S. Government Securities
Portfolio (the "Fund"); and
WHEREAS, EIA, as Manager of the Trust, entered into an
Investment Advisory Agreement with Boston Company on March 25,
1994 (the "Investment Advisory Agreement") under which Boston
Company serves as the investment adviser (the "Adviser") for
the Fund; and
WHEREAS, EIA and Boston Company desire that Boston
Company's interest, rights, responsibilities and obligations
in and under the Investment Advisory Agreement be transferred
to Dreyfus and Dreyfus desires to assume Boston Company's
interest, rights, responsibilities and obligations in and
under the Investment Advisory Agreement; and
WHEREAS, this Agreement does not result in a change of
actual control or management of the Adviser to the Fund and,
therefore, is not an "assignment" as defined in Section
2(a)(4) of the Act nor an "assignment" for purposes of Section
15(a)(4) of the Act.
NOW, THEREFORE, in consideration of the mutual covenants
set forth in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Transfer. Effective as of the date first set forth
above (the "Effective Date"), Boston Company hereby transfers
to Dreyfus all of Boston Company's interest, rights,
responsibilities and obligations in and under the Investment
Advisory Agreement.
2. Assumption and Performance of Duties. As of the
Effective Date, Dreyfus hereby accepts all of Boston Company's
interest and rights, and assumes and agrees to perform all of
Boston Company's responsibilities and obligations in and under
the Investment Advisory Agreement; Dreyfus agrees to be
subject to all of the terms and conditions of said Agreement;
and Dreyfus shall indemnify and hold harmless Boston Company
from any claim or demand made thereunder arising or incurred
after the Effective Date.
3. Representation of Dreyfus. Dreyfus represents and
warrants that: (1) it is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended; and (2)
it is a wholly-owned subsidiary of Mellon Bank, N.A., which,
in turn, is a wholly-owned subsidiary of Mellon Bank
Corporation.
4. Representations of Boston Company. Boston Company
represents that it is an indirect wholly-owned subsidiary of
Mellon Bank Corporation.
5. Consent. The Trust and EIA hereby consent to this
transfer by Boston Company to Dreyfus of Boston Company's
interest, rights, responsibilities and obligations in and
under the Investment Advisory Agreement and to the acceptance
and assumption by Dreyfus of the same. The Trust and EIA
agree, subject to the terms and conditions of said Agreement,
to look solely to Dreyfus for the performance of the Adviser's
responsibilities and obligations under said Agreement from and
after the Effective Date, and to recognize as inuring solely
to Dreyfus the interest and rights heretofore held by Boston
Company thereunder.
6. Use of Name. Dreyfus hereby consents to the name of
the Fund being changed, as of the Effective Date, to "Dreyfus
U.S. Government Securities Portfolio." The Trust and EIA
recognize that from time to time directors, officers and
employees of Dreyfus may serve as directors, trustees,
partners, officers and employees of other corporations,
business trusts, partnerships or other entities (including
other investment companies) and that such other entities may
include the name "Dreyfus" as part of their name, and that
Dreyfus or its affiliates may enter into investment advisory,
administration or other agreements with such other entities.
If Dreyfus ceases to act as the Fund's investment adviser
pursuant to the Investment Advisory Agreement, the Trust
agrees that, at Dreyfus' request, the Trust will take all
necessary action to change the name of the Fund to a name not
including "Dreyfus" in any form or combination of words.
7. Limitation of Liability of Trustees, Officers and
Shareholders. It is expressly agreed that the obligations of
the Trust hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but shall bind only the
trust property of the Trust, as provided in the Agreement and
Declaration of Trust of the Trust. The execution and delivery
of this Agreement have been authorized by the Trustees of the
Trust and signed by the President of the Trust, acting as
such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the
trust property of the Trust as provided in its Agreement and
Declaration of Trust.
8. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto
were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers
hereunto as of the date first above written.
Endeavor Investment Advisers
By: Endeavor Management Co., Managing
Partner
By: /s/Vincent J. McGuinness, C.E.O.
The Boston Company Asset Management Inc.
By:/s/Christopher M. Condron
Christopher M. Condron
Chief Executive Officer
The Dreyfus Corporation
By:/s/William F. Glavin
William F. Glavin
Vice President-Corporate Development
Endeavor Series Trust
By:/s/James A. Shepherdson
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 28th day of December, 1994, by and
between T. Rowe Price Associates, Inc., a Maryland corporation (the
"Adviser"), and Endeavor Investment Advisers, a California general
partnership (the "Manager").
WHEREAS, the Manager has been organized to serve as
investment manager and administrator of Endeavor Series Trust (the
"Trust"), a Massachusetts business trust which has filed a
registration statement under the Investment Company Act of 1940, as
amended (the "1940 Act") and the Securities Act of 1933 (the
"Registration Statement"); and
WHEREAS, the Trust is comprised of several separate
investment portfolios, one of which is the T. Rowe Price Equity
Income Portfolio (the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the
services, information, advice, assistance and facilities of an
investment adviser to assist the Manager in performing services for
the Portfolio; and
WHEREAS, the Adviser is registered under the Investment
Advisers Act of 1940, as amended, and is engaged in the business of
rendering investment advisory services to investment companies and
desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and
conditions hereinafter set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby
employs the Adviser as sub-adviser to manage the investment and
reinvestment of the assets of the Portfolio, subject to the control
and direction of the Trust's Board of Trustees, for the period and
on the terms hereinafter set forth. The Adviser hereby accepts
such employment and agrees during such period to render the
services and to assume the obligations herein set forth for the
compensation herein provided. The Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, except
as expressly provided or authorized (whether herein or otherwise),
have no authority to act for or represent the Manager, the
Portfolio or the Trust in any way.
2. Obligations of and Services to be Provided by the
Adviser. The Adviser undertakes to provide the following services
and to assume the following obligations:
a. The Adviser shall manage the investment and
reinvestment of the portfolio assets of the Portfolio, all without
prior consultation with the Manager, subject to and in accordance
with the respective investment objectives and policies of the
Portfolio set forth in the Trust's Registration Statement, as such
Registration Statement may be amended from time to time, and any
written instructions which the Manager or the Trust's Board of
Trustees may issue from time-to-time in accordance therewith. In
pursuance of the foregoing, the Adviser shall make all
determinations with respect to the purchase and sale of portfolio
securities and shall take such action necessary to implement the
same. The Adviser shall render regular reports as mutually agreed
upon by both parties to the Trust's Board of Trustees and the
Manager concerning the investment activities of the Portfolio.
b. To the extent provided in the Trust's
Registration Statement, as such Registration Statement may be
amended from time to time, the Adviser shall, in the name of the
Portfolio, place orders for the execution of portfolio transactions
with or through such brokers, dealers or banks as it may select
including affiliates of the Adviser and, complying with Section
28(e) of the Securities Exchange Act of 1934, may pay a commission
on transactions in excess of the amount of commission another
broker-dealer would have charged.
c. In connection with the placement of orders for
the execution of the portfolio transactions of the Portfolio, the
Adviser shall create and maintain all necessary records in
accordance with applicable law adequately demonstrating its
compliance with its obligations under this Agreement. All records
shall be the property of the Trust and shall be available for
inspection and use by the Securities and Exchange Commission
("SEC"), the Trust, the Manager or any person retained by the
Trust. Where applicable, such records shall be maintained by the
Adviser for the periods and in the places required by Rule 31a-2
under the 1940 Act.
d. The Adviser shall bear its expenses of
providing services pursuant to this Agreement.
3. Compensation of the Adviser. In consideration of
services rendered pursuant to this Agreement, the Manager will pay
the Adviser a fee at the annual rate of the value of the
Portfolio's average daily net assets set forth in Schedule A
hereto. Such fee shall be accrued daily and paid monthly as soon
as practicable after the end of each month. If the Adviser shall
serve for less than the whole of any month, the foregoing
compensation shall be prorated. For the purpose of determining
fees payable to the Adviser, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified
in the Trust's Registration Statement.
4. Activities of the Adviser. The services of the
Adviser hereunder are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others and to engage in
other activities, so long as the services rendered hereunder are
not impaired.
5. Use of Names. The Manager shall not use the name of
the Adviser in any prospectus, sales literature or other material
relating to the Trust in any manner not approved prior thereto by
the Adviser; provided, however, that the Adviser shall approve all
uses of its name and that of its parent which merely refer in
accurate terms to its appointment hereunder or which are required
by the SEC or a state securities commission; and, provided,
further, that in no event shall such approval be unreasonably
withheld. The Adviser shall not use the name of the Trust or the
Manager in any material relating to the Adviser in any manner not
approved prior thereto by the Manager; provided, however, that the
Manager shall approve all uses of its or the Trust's name which
merely refer in accurate terms to the appointment of the Adviser
hereunder or which are required by the SEC or a state securities
commission; and, provided further, that in no event shall such
approval be unreasonably withheld.
6. Liability of the Adviser. Absent willful
misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be liable 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.
7. Limitation of Trust's Liability. The Adviser
acknowledges that it has received notice of and accepts the
limitations upon the Trust's liability set forth in its Agreement
and Declaration of Trust. The Adviser agrees that any of the
Trust's obligations shall be limited to the assets of the Portfolio
and that the Adviser shall not seek satisfaction of any such
obligation from the shareholders of the Trust nor from any Trust
officer, employee or agent of the Trust.
8. Renewal, Termination and Amendment. This Agreement
shall continue in effect, unless sooner terminated as hereinafter
provided, for a period of two years from the date hereof and shall
continue in full force and effect for successive periods of one
year thereafter, but only so long as each such continuance as to
the Portfolio is specifically approved at least annually by vote of
the holders of a majority of the outstanding voting securities of
the Portfolio or by vote of a majority of the Trust's Board of
Trustees; and further provided that such continuance is also
approved annually by the vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of the Adviser,
cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated as to the
Portfolio at any time, without payment of any penalty, by the
Trust's Board of Trustees, by the Manager, or by a vote of the
majority of the outstanding voting securities of the Portfolio upon
60 days' prior written notice to the Adviser, or by the Adviser
upon 150 days' prior written notice to the Manager, or upon such
shorter notice as may be mutually agreed upon. This Agreement
shall terminate automatically and immediately upon termination of
the Management Agreement dated November 23, 1992 between the
Manager and the Trust. This Agreement shall terminate
automatically and immediately in the event of its assignment. The
terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meaning set forth for such terms
in the 1940 Act. This Agreement may be amended at any time be the
Adviser and the Manager, subject to approval by the Trust's Board
of Trustees and, if required by applicable SEC rules and
regulations, a vote of a majority of the Portfolio's outstanding
voting securities.
9. Confidential Relationship. Any information and
advice furnished by either party to this Agreement to the other
shall be treated as confidential and shall not be disclosed to
third parties except as required by law.
10. Severability. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
11. Miscellaneous. This Agreement constitutes the full
and complete agreement of the parties hereto with respect to the
subject matter hereof. Each party agrees to perform such further
actions and execute such further documents as are necessary to
effectuate the purposes hereof. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the
State of California. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement,
binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
BY: Endeavor Management Co.,
Managing Partner
BY: _/s/James A. Shepherdson_
Authorized Officer
T. ROWE PRICE ASSOCIATES, INC.
BY: _/s/Henry H. Hopkins_____
Authorized Officer<PAGE>
SCHEDULE A
T. Rowe Price Equity Income
Portfolio .40% of average daily
net assets.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 28th day of December, 1994, by and
between T. Rowe Price Associates, Inc., a Maryland corporation (the
"Adviser"), and Endeavor Investment Advisers, a California general
partnership (the "Manager").
WHEREAS, the Manager has been organized to serve as
investment manager and administrator of Endeavor Series Trust (the
"Trust"), a Massachusetts business trust which has filed a
registration statement under the Investment Company Act of 1940, as
amended (the "1940 Act") and the Securities Act of 1933 (the
"Registration Statement"); and
WHEREAS, the Trust is comprised of several separate
investment portfolios, one of which is the T. Rowe Price Growth
Stock Portfolio (the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the
services, information, advice, assistance and facilities of an
investment adviser to assist the Manager in performing services for
the Portfolio; and
WHEREAS, the Adviser is registered under the Investment
Advisers Act of 1940, as amended, and is engaged in the business of
rendering investment advisory services to investment companies and
desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and
conditions hereinafter set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby
employs the Adviser as sub-adviser to manage the investment and
reinvestment of the assets of the Portfolio, subject to the control
and direction of the Trust's Board of Trustees, for the period and
on the terms hereinafter set forth. The Adviser hereby accepts
such employment and agrees during such period to render the
services and to assume the obligations herein set forth for the
compensation herein provided. The Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, except
as expressly provided or authorized (whether herein or otherwise),
have no authority to act for or represent the Manager, the
Portfolio or the Trust in any way.
2. Obligations of and Services to be Provided by the
Adviser. The Adviser undertakes to provide the following services
and to assume the following obligations:
a. The Adviser shall manage the investment and
reinvestment of the portfolio assets of the Portfolio, all without
prior consultation with the Manager, subject to and in accordance
with the respective investment objectives and policies of the
Portfolio set forth in the Trust's Registration Statement, as such
Registration Statement may be amended from time to time, and any
written instructions which the Manager or the Trust's Board of
Trustees may issue from time-to-time in accordance therewith. In
pursuance of the foregoing, the Adviser shall make all
determinations with respect to the purchase and sale of portfolio
securities and shall take such action necessary to implement the
same. The Adviser shall render regular reports as mutually agreed
upon by both parties to the Trust's Board of Trustees and the
Manager concerning the investment activities of the Portfolio.
b. To the extent provided in the Trust's
Registration Statement, as such Registration Statement may be
amended from time to time, the Adviser shall, in the name of the
Portfolio, place orders for the execution of portfolio transactions
with or through such brokers, dealers or banks as it may select
including affiliates of the Adviser and, complying with Section
28(e) of the Securities Exchange Act of 1934, may pay a commission
on transactions in excess of the amount of commission another
broker-dealer would have charged.
c. In connection with the placement of orders for
the execution of the portfolio transactions of the Portfolio, the
Adviser shall create and maintain all necessary records in
accordance with applicable law adequately demonstrating its
compliance with its obligations under this Agreement. All records
shall be the property of the Trust and shall be available for
inspection and use by the Securities and Exchange Commission
("SEC"), the Trust, the Manager or any person retained by the
Trust. Where applicable, such records shall be maintained by the
Adviser for the periods and in the places required by Rule 31a-2
under the 1940 Act.
d. The Adviser shall bear its expenses of
providing services pursuant to this Agreement.
3. Compensation of the Adviser. In consideration of
services rendered pursuant to this Agreement, the Manager will pay
the Adviser a fee at the annual rate of the value of the
Portfolio's average daily net assets set forth in Schedule A
hereto. Such fee shall be accrued daily and paid monthly as soon
as practicable after the end of each month. If the Adviser shall
serve for less than the whole of any month, the foregoing
compensation shall be prorated. For the purpose of determining
fees payable to the Adviser, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified
in the Trust's Registration Statement.
4. Activities of the Adviser. The services of the
Adviser hereunder are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others and to engage in
other activities, so long as the services rendered hereunder are
not impaired.
5. Use of Names. The Manager shall not use the name of
the Adviser in any prospectus, sales literature or other material
relating to the Trust in any manner not approved prior thereto by
the Adviser; provided, however, that the Adviser shall approve all
uses of its name and that of its parent which merely refer in
accurate terms to its appointment hereunder or which are required
by the SEC or a state securities commission; and, provided,
further, that in no event shall such approval be unreasonably
withheld. The Adviser shall not use the name of the Trust or the
Manager in any material relating to the Adviser in any manner not
approved prior thereto by the Manager; provided, however, that the
Manager shall approve all uses of its or the Trust's name which
merely refer in accurate terms to the appointment of the Adviser
hereunder or which are required by the SEC or a state securities
commission; and, provided further, that in no event shall such
approval be unreasonably withheld.
6. Liability of the Adviser. Absent willful
misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be liable 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.
7. Limitation of Trust's Liability. The Adviser
acknowledges that it has received notice of and accepts the
limitations upon the Trust's liability set forth in its Agreement
and Declaration of Trust. The Adviser agrees that any of the
Trust's obligations shall be limited to the assets of the Portfolio
and that the Adviser shall not seek satisfaction of any such
obligation from the shareholders of the Trust nor from any Trust
officer, employee or agent of the Trust.
8. Renewal, Termination and Amendment. This Agreement
shall continue in effect, unless sooner terminated as hereinafter
provided, for a period of two years from the date hereof and shall
continue in full force and effect for successive periods of one
year thereafter, but only so long as each such continuance as to
the Portfolio is specifically approved at least annually by vote of
the holders of a majority of the outstanding voting securities of
the Portfolio or by vote of a majority of the Trust's Board of
Trustees; and further provided that such continuance is also
approved annually by the vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of the Adviser,
cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated as to the
Portfolio at any time, without payment of any penalty, by the
Trust's Board of Trustees, by the Manager, or by a vote of the
majority of the outstanding voting securities of the Portfolio upon
60 days' prior written notice to the Adviser, or by the Adviser
upon 150 days' prior written notice to the Manager, or upon such
shorter notice as may be mutually agreed upon. This Agreement
shall terminate automatically and immediately upon termination of
the Management Agreement dated November 23, 1992 between the
Manager and the Trust. This Agreement shall terminate
automatically and immediately in the event of its assignment. The
terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meaning set forth for such terms
in the 1940 Act. This Agreement may be amended at any time be the
Adviser and the Manager, subject to approval by the Trust's Board
of Trustees and, if required by applicable SEC rules and
regulations, a vote of a majority of the Portfolio's outstanding
voting securities.
9. Confidential Relationship. Any information and
advice furnished by either party to this Agreement to the other
shall be treated as confidential and shall not be disclosed to
third parties except as required by law.
10. Severability. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
11. Miscellaneous. This Agreement constitutes the full
and complete agreement of the parties hereto with respect to the
subject matter hereof. Each party agrees to perform such further
actions and execute such further documents as are necessary to
effectuate the purposes hereof. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the
State of California. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement,
binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
BY: Endeavor Management Co.,
Managing Partner
BY: _/S/James A. Shepherdson__
Authorized Officer
T. ROWE PRICE ASSOCIATES, INC.
BY: _/s/Henry H. Hopkins______
Authorized Officer<PAGE>
SCHEDULE A
T. Rowe Price Growth Stock
Portfolio .40% of average daily
net assets.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of January, 1995, by and
between Rowe Price-Fleming International, Inc., a Maryland
corporation (the "Adviser"), and Endeavor Investment Advisers, a
California general partnership (the "Manager").
WHEREAS, the Manager has been organized to serve as
investment manager and administrator of Endeavor Series Trust (the
"Trust"), a Massachusetts business trust which has filed a
registration statement under the Investment Company Act of 1940, as
amended (the "1940 Act") and the Securities Act of 1933 (the
"Registration Statement"); and
WHEREAS, the Trust is comprised of several separate
investment portfolios, one of which is the Global Growth Portfolio
(the "Portfolio"); and
WHEREAS, the Manager desires to avail itself of the
services, information, advice, assistance and facilities of an
investment adviser to assist the Manager in performing services for
the Portfolio; and
WHEREAS, the Adviser is registered under the Investment
Advisers Act of 1940, as amended, and is engaged in the business of
rendering investment advisory services to investment companies and
desires to provide such services to the Manager;
NOW, THEREFORE, in consideration of the terms and
conditions hereinafter set forth, it is agreed as follows:
1. Employment of the Adviser. The Manager hereby
employs the Adviser as sub-adviser to manage the investment and
reinvestment of the assets of the Portfolio, subject to the control
and direction of the Trust's Board of Trustees, for the period and
on the terms hereinafter set forth. The Adviser hereby accepts
such employment and agrees during such period to render the
services and to assume the obligations herein set forth for the
compensation herein provided. The Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, except
as expressly provided or authorized (whether herein or otherwise),
have no authority to act for or represent the Manager, the
Portfolio or the Trust in any way.
2. Obligations of and Services to be Provided by the
Adviser. The Adviser undertakes to provide the following services
and to assume the following obligations:
a. The Adviser shall manage the investment and
reinvestment of the portfolio assets of the Portfolio, all without
prior consultation with the Manager, subject to and in accordance
with the respective investment objectives and policies of the
Portfolio set forth in the Trust's Registration Statement, as such
Registration Statement may be amended from time to time, and any
written instructions which the Manager or the Trust's Board of
Trustees may issue from time-to-time in accordance therewith. In
pursuance of the foregoing, the Adviser shall make all
determinations with respect to the purchase and sale of portfolio
securities and shall take such action necessary to implement the
same. The Adviser shall render regular reports as mutually agreed
upon by both parties to the Trust's Board of Trustees and the
Manager concerning the investment activities of the Portfolio.
b. To the extent provided in the Trust's
Registration Statement, as such Registration Statement may be
amended from time to time, the Adviser shall, in the name of the
Portfolio, place orders for the execution of portfolio transactions
with or through such brokers, dealers or banks as it may select
including affiliates of the Adviser and, complying with Section
28(e) of the Securities Exchange Act of 1934, may pay a commission
on transactions in excess of the amount of commission another
broker-dealer would have charged.
c. In connection with the placement of orders for
the execution of the portfolio transactions of the Portfolio, the
Adviser shall create and maintain all necessary records in
accordance with applicable law adequately demonstrating its
compliance with its obligations under this Agreement. All records
shall be the property of the Trust and shall be available for
inspection and use by the Securities and Exchange Commission
("SEC"), the Trust, the Manager or any person retained by the
Trust. Where applicable, such records shall be maintained by the
Adviser for the periods and in the places required by Rule 31a-2
under the 1940 Act.
d. The Adviser shall bear its expenses of
providing services pursuant to this Agreement.
3. Compensation of the Adviser. In consideration of
services rendered pursuant to this Agreement, the Manager will pay
the Adviser a fee at the annual rate of the value of the
Portfolio's average daily net assets set forth in Schedule A
hereto. Such fee shall be accrued daily and paid monthly as soon
as practicable after the end of each month. If the Adviser shall
serve for less than the whole of any month, the foregoing
compensation shall be prorated. For the purpose of determining
fees payable to the Adviser, the value of the Portfolio's net
assets shall be computed at the times and in the manner specified
in the Trust's Registration Statement.
4. Activities of the Adviser. The services of the
Adviser hereunder are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others and to engage in
other activities, so long as the services rendered hereunder are
not impaired.
5. Use of Names. The Manager shall not use the name of
the Adviser in any prospectus, sales literature or other material
relating to the Trust in any manner not approved prior thereto by
the Adviser; provided, however, that the Adviser shall approve all
uses of its name and that of its parent which merely refer in
accurate terms to its appointment hereunder or which are required
by the SEC or a state securities commission; and, provided,
further, that in no event shall such approval be unreasonably
withheld. The Adviser shall not use the name of the Trust or the
Manager in any material relating to the Adviser in any manner not
approved prior thereto by the Manager; provided, however, that the
Manager shall approve all uses of its or the Trust's name which
merely refer in accurate terms to the appointment of the Adviser
hereunder or which are required by the SEC or a state securities
commission; and, provided further, that in no event shall such
approval be unreasonably withheld.
6. Liability of the Adviser. Absent willful
misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be liable 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.
7. Limitation of Trust's Liability. The Adviser
acknowledges that it has received notice of and accepts the
limitations upon the Trust's liability set forth in its Agreement
and Declaration of Trust. The Adviser agrees that any of the
Trust's obligations shall be limited to the assets of the Portfolio
and that the Adviser shall not seek satisfaction of any such
obligation from the shareholders of the Trust nor from any Trust
officer, employee or agent of the Trust.
8. Renewal, Termination and Amendment. This Agreement
shall continue in effect, unless sooner terminated as hereinafter
provided, for a period of two years from the date hereof and shall
continue in full force and effect for successive periods of one
year thereafter, but only so long as each such continuance as to
the Portfolio is specifically approved at least annually by vote of
the holders of a majority of the outstanding voting securities of
the Portfolio or by vote of a majority of the Trust's Board of
Trustees; and further provided that such continuance is also
approved annually by the vote of a majority of the Trustees who are
not parties to this Agreement or interested persons of the Adviser,
cast in person at a meeting called for the purpose of voting on
such approval. This Agreement may be terminated as to the
Portfolio at any time, without payment of any penalty, by the
Trust's Board of Trustees, by the Manager, or by a vote of the
majority of the outstanding voting securities of the Portfolio upon
60 days' prior written notice to the Adviser, or by the Adviser
upon 150 days' prior written notice to the Manager, or upon such
shorter notice as may be mutually agreed upon. This Agreement shall terminate
automatically and immediately upon termination of the Management
Agreement dated November 23, 1992 between the Manager and the
Trust. This Agreement shall terminate automatically and
immediately in the event of its assignment. The terms "assignment"
and "vote of a majority of the outstanding voting securities" shall
have the meaning set forth for such terms in the 1940 Act. This
Agreement may be amended at any time be the Adviser and the
Manager, subject to approval by the Trust's Board of Trustees and,
if required by applicable SEC rules and regulations, a vote of a
majority of the Portfolio's outstanding voting securities.
9. Confidential Relationship. Any information and
advice furnished by either party to this Agreement to the other
shall be treated as confidential and shall not be disclosed to
third parties except as required by law.
10. Severability. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
11. Miscellaneous. This Agreement constitutes the full
and complete agreement of the parties hereto with respect to the
subject matter hereof. Each party agrees to perform such further
actions and execute such further documents as are necessary to
effectuate the purposes hereof. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the
State of California. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement,
binding on all the parties.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
BY: Endeavor Management Co.,
Managing Partner
BY: _/s/James A. Shepherdson__
Authorized Officer
ROWE PRICE-FLEMING
INTERNATIONAL, INC.
BY: /s/Henry H. Hopkins____
Authorized Officer<PAGE>
SCHEDULE A
Global Growth Portfolio .75% of average daily net
assets up to $20,000,000;
.60% of average daily net
assets in excess of
$20,000,000 up to
$50,000,000; and .50% of
average daily net assets
in excess of $50,000,000.
At such time as the net
assets of the Portfolio
exceed $200,000,000, the
fee shall be .50% of total
average daily net assets.
PARTICIPATION AGREEMENT
Among
ENDEAVOR SERIES TRUST,
ENDEAVOR MANAGEMENT CO.,
and
PFL LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this 28th day of Feb.,
1991 by and among PFL LIFE INSURANCE COMPANY, an Iowa corporation
(hereinafter the "Company") on its own behalf and on behalf of the
PFL Endeavor Variable Annuity Account, and other segregated asset
accounts of the Company (hereinafter the "Account" or "Accounts"),
and ENDEAVOR SERIES TRUST, a Massachusetts business trust
(hereinafter the "Fund"), and ENDEAVOR MANAGEMENT CO., a California
corporation (hereinafter the "Manager").
WHEREAS, the Fund engages in business as an open-end
management investment company and is available to act as the
investment vehicle for the Account, and may be available for other
separate accounts established for variable life insurance policies
and variable annuity contracts only if the Company so consents; and
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares each designated a "Portfolio" and each
representing the interests in a particular managed pool of
securities and other assets; and
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act") and its shares are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act");
and
WHEREAS, the Manager is duly registered as an investment
adviser under the federal Investment Advisers Act of 1940 and any
applicable state securities law, and will be the Fund's investment
adviser; and
WHEREAS, the Company has registered or will register certain
variable annuity and/or life insurance contracts under the 1933 Act
(hereinafter "Policies"); and
WHEREAS, the Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of
Directors of the Company, to set aside and invest assets
attributable to the aforesaid variable annuity and/or life
insurance contracts that are allocated to the Accounts (the
Policies and Account(s) covered by this Agreement, and the
corresponding Portfolios covered by this Agreement in which the
Account(s) invest(s), are specified in Schedule A attached hereto
as may be modified from time to time); and
WHEREAS, the Company has registered or will register the
Account(s) as a unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the
Portfolios on behalf of the Account(s) to fund the Policies and the
Fund intends to sell such shares to the Account(s) at net asset
value;
NOW, THEREFORE, in consideration of their mutual promises, the
Fund, the Manager, and the Company agree as follows:
ARTICLE I. Sale of Fund Shares
1.1 The Fund and Manager agree to sell to the Company
those shares of the Fund which the Account(s) orders, executing
such orders on a daily basis at the net asset value next computed
after receipt by the Fund or its designee of the order for the
shares of the Fund. For purposes of this Section 1.1, the Company
shall be the designee of the Fund for receipt of such orders from
Policy owners and receipt by such designee shall constitute receipt
by the Fund; provided that the Fund receives notice of such order
by 9:30 a.m. New York time on the next following Business Day.
"Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Fund calculates its
net asset value pursuant to the rules of the Securities and
Exchange Commission.
1.2 The Fund and Manager agree to make Fund shares
available indefinitely for purchase at the applicable net asset
value per share by the Company and the Account on those days on
which the Fund calculates its net asset value pursuant to rules of
the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each day
which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Fund
(hereinafter the "Trustees") may refuse to sell shares of any
Portfolio to the Company and the Account, or suspend or terminate
the offering of shares of any Portfolio if such action is required
by law or by regulatory authorities having jurisdiction or is, in
the sole discretion of the Trustees acting in good faith and in
light of their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders of
such Portfolio.
1.3 The Fund and Manager agree that shares of the Fund
will be sold only to the Company and the Account except that share
of the Fund may be sold to other insurance companies or their
separate accounts with the express written consent of the Company.
Shares will not be sold to the general public or to other
investors. The Account(s) shall invest exclusively in the Fund, or
in other investment vehicles managed or advised by the Manager or
affiliates of the Manager, except with the express written consent
of the Manager.
1.4 The Fund agrees to redeem for cash, on the Company's
request, any full or fractional shares of the Fund held by the
Company, executing such requests on a daily basis at the net asset
value next computed after receipt by the Fund or its designee of
the request for redemption. For purposes of this Section 1.4, the
Company shall be the designee of the Fund for receipt of requests
for redemption from Policy owners and receipt by such designee
shall constitute receipt by the Fund; provided that the Fund
receives notice of such request for redemption by 9:30 a.m. New
York time on the next following Business Day.
1.5 The Company shall pay for the Fund shares on the
next Business Day after an order to purchase shares is made in
accordance with the provisions of Section 1.1 hereof. Payment
shall be in federal funds transmitted by wire or by a credit for
any shares redeemed. For purpose of Section 2.8, upon receipt by
the Fund of the federal funds so wired, such funds shall cease to
be the responsibility of the Company and shall become the
responsibility of the Fund.
1.6 Issuance and transfer of the Fund's shares will be
by book entry only. Stock certificates will not be issued to the
Company or the Account. Shares ordered from the Fund will be
recorded in an appropriate title for the Account or the appropriate
subaccount of the Account.
1.7 The Fund shall furnish same day notice (by wire or
telephone followed by written confirmation) to the Company of any
income, dividends or capital gain distributions payable on the
Fund's shares. The Company hereby elects to receive all such
dividends and distributions as are payable on the Portfolio shares
in additional shares of that Portfolio. The Fund shall notify the
Company of the number of shares so issued as payment of such
dividends and distributions.
1.8 The Fund shall make the net asset value per share
for each Portfolio available to the Company on each Business Day as
soon as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make such net asset
value per share available by 6:30 p.m. New York time.
ARTICLE II. Representations and Warranties
2.1 The Company represents and warrants that the
Policies are or will be registered under the 1933 Act. The Company
further represents and warrants that it is an insurance company
duly organized and in good standing under applicable law and that
it has legally and validly established the Account as a segregated
asset account under Iowa law and has registered or, prior to any
issuance or sale of the Policies, will register the Account(s) as a
unit investment trust in accordance with the provisions of the 1940
Act (unless exempt therefrom) to serve as a segregated investment
account for the Policies.
2.2 The Fund and Manager represent and warrant that Fund
shares sold pursuant to this Agreement shall be registered under
the 1933 Act, duly authorized for issuance and sold in compliance
with the laws of Massachusetts and all applicable federal and state
securities laws and that the Fund is and shall remain registered
under the 1940 Act. The Fund shall amend the Registration
Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering
of its shares. The Fund shall register and qualify the shares for
sale in accordance with the laws of the various states only if and
to the extent deemed advisable by the Fund and Manager.
2.3 The Fund and Manager represent that each Portfolio
of the Fund is currently qualified or will be qualified as a
Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended, (the "Code") and that every
effort will be made to maintain such qualification (under
Subchapter M or any successor or similar provision) and that the
Fund or Manager will notify the Company orally (followed by written
notice) or by wire immediately upon having a reasonable basis for
believing that any Portfolio of the Fund has ceased to so qualify
or that any Portfolio might not so qualify in the future.
2.4 The Fund will not make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or
otherwise. However, if the Fund were authorized to establish a
12b-1 plan, the Fund would undertake to have a board of trustees, a
majority of whom are not interested persons of the Fund, formulate
and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.5 The Fund represents that it will sell and distribute
the Fund shares in accordance with the laws of the State of
California and all applicable state and federal securities laws,
including without limitation the 1933 Act, the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and the 1940 Act.
2.6 The Fund represents that it is lawfully organized
and validly existing under the laws of the State of Massachusetts
and that it does and will comply with the 1940 Act.
2.7 The Manager represents and warrants that it is and
shall remain duly registered under all applicable federal and state
securities laws and that it shall perform its obligations for the
Fund in compliance with any applicable state and federal securities
laws.
2.8 The Fund and Manager each represents and warrants
that all of its directors, trustees, officers, employees,
investment advisers, and other individuals or entities dealing with
the money and/or securities of the Fund are and shall continue to
be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Section 17(g) and Rule
17g-1 of the 1940 Act or related provisions as may be promulgated
from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company.
ARTICLE III. Prospectus and Proxy Statements; Voting
3.1 At least annually, the Fund or the Manager shall
provide the Company, free of charge, with as many copies of the
Fund's current prospectus as the Company may reasonably request for
distribution to both existing Policy owners and prospective
purchasers. If requested by the Company in lieu thereof, the Fund
shall provide such documentation (including a final "camera ready"
copy of the new prospectus as set in type at the Fund's expense)
and other assistance as is reasonably necessary in order for the
parties hereto once each year (or more frequently if the prospectus
for the Fund is supplemented or amended) to have the prospectus for
the Policies and the Fund's prospectus printed together in one
document; the expenses of such printing to be apportioned between
(a) the Company, and (b) the Fund or the Manager, in proportion to
the number of pages of the Policy and Fund Prospectuses, taking
account of other relevant factors affecting the expense of
printing, such as columns, charts, etc.; the Fund or the Manager to
bear the cost of printing the Fund's portion of such document, and
the Company to bear the expenses of printing the Account's portion
of such document.
3.2 The Fund's prospectus shall state that the Statement
of Additional Information for the Fund is available from the Fund
(or a specified affiliate). The Fund or an affiliate, at its
expense, shall print and provide such Statement free of charge to
the Company and to any owner of a Policy or prospective purchaser
who requests such Statement.
3.3 The Fund, at its expense, shall provide the Company
with copies of its proxy material, reports to shareholders and
other communications to shareholders in such quantity as the
Company shall reasonably require for distributing to Policy owners.
3.4 If and to the extent required by law, the Company
shall:
(i) solicit voting instructions from Policy
owners;
(ii) vote the Fund shares in accordance with
instructions received from Policy owners;
and
(iii) vote Fund shares for which no instructions
have been received in the same proportion as
Fund shares of such Portfolio for which
instructions have been received;
so long as and to the extent that the Securities and Exchange
Commission continues to interpret the 1940 Act to require pass-through
voting privileges for variable contract owners. The
Company reserves the right to vote Fund shares held in the Account
in its own right, to the extent permitted by law.
3.5 The process of soliciting Policy owners' voting
instructions, tabulating votes, etc. shall be conducted in
accordance with Schedule B attached hereto.
ARTICLE IV. Sales Material and Information
4.1 The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee, each piece of sales
literature or other promotional material in which the Fund or
Manager is named, at least ten Business Days prior to its use. No
such material shall be used if the Fund or its designee object to
such use within ten Business Days after receipt of such material.
4.2 The Company shall not give any information or make
any representations or statements on behalf of the Fund or
concerning the Fund in connection with the sale of the Policies
other than the information or representations contained in the
registration statement or prospectus for the Fund shares, as such
registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material
approved by the Fund or its designee, except with the permission of
the Fund.
4.3 The Fund and Manager shall furnish, or shall cause
to be furnished, to the Company or its designee, each piece of
sales literature or other promotional material in which the Company
and/or its separate account(s), is named, at least ten Business
Days prior to its use. No such material shall be used if the
Company or its designee object to such use within ten Business Days
after receipt of such material.
4.4 The Fund and Manager shall not give any information
or make any representations on behalf of the Company or concerning
the Company, the Account, or the Policies other than information or
representations contained in a registration statement or prospectus
for the Policies, as such registration statement and prospectus may
be amended or supplemented from time to time, or in reports for the
Account approved by the Company for distribution to Policy owners,
or in sales literature or other promotional material approved by
the Company or its designee, except with the permission of the
Company.
4.5 The Company and Fund will each provide to the other
at least one complete copy of all registration statements,
prospectuses, Statements of Additional Information, reports, proxy
statements, sale literature and other promotional materials,
applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Policies, or
to the Fund or its shares, prior to or contemporaneously with the
filing of such document with the Securities and Exchange Commission
or other regulatory authorities. The Company or Fund shall also
each promptly inform the other of the results of any examination by
the Securities and Exchange Commission (or other regulatory
authorities) that relates to the Policies, the Fund or its shares,
and the party that was the subject of the examination shall provide
the other party with a copy of any "deficiency letter" or other
correspondence or written report regarding any such examination.
4.6 For purposes of this Article IV, the phrase "sales
literature or other promotional material" means advertisements
(such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboard), and sales
literature (such as brochures, circulars, market letters and form
letters), distributed or made generally available to customers or
the public.
ARTICLE V. Fees and Expenses
5.1 The Fund and Manager shall pay no fee or other
compensation to the Company under this agreement, and the Company
shall pay no fee or other compensation to the Fund or Manager;
provided, however, that in accordance with the allocation of
expenses specified in Articles III and V hereof, each party shall
reimburse other parties for expenses initially paid by one party
but allocated to another party.
5.2 Subject to Section 5.4 below, the Fund shall bear
the expenses for the cost of registration and qualification of the
Fund's shares under all applicable federal and state laws,
including preparation and filing of the Fund's registration
statement, and payment of filing fees and registration fees;
preparation and filing of the Fund's proxy materials and reports;
setting in type and printing its prospectus (determined in
accordance with Section 3.1 above); setting in type and printing
the proxy materials and reports to shareholders; the preparation of
all statements and notices required of the Fund by any federal or
state law; all taxes on the issuance or transfer of the Fund's
shares; and the costs of distributing prospectuses and proxy
materials to Policy owners. The Fund shall not bear any expenses
of marketing the Policies.
5.3 The Company shall bear the expenses of distributing
the Fund's prospectus in connection with new sales of the Policies
and of distributing the Fund's shareholder reports to Policy
owners. The Company shall bear all expenses associated with the
registration, qualification, and filing of the Policies under
applicable Federal securities and state insurance laws; the cost of
printing the Policy prospectus; and the cost of preparing and
printing annual individual account statements for Policy owners as
required by state insurance laws.
5.4 The expenses allocated herein to the Fund shall be
paid initially by the Company until such time as the Fund's net
assets are $100,000,000 or higher. The Fund shall then reimburse
the Company for all such expenses paid for by the Company or
accrued as of that date, with such reimbursement to be paid in 36
equal monthly installments over the three year period beginning on
the date when the Fund's net assets reach $100,000,000. After that
date, the Fund shall directly pay its own expenses, as allocated
herein.
ARTICLE VI. Diversification and Related Limitations
6.1 The Fund and Manager represent and warrant that the
Fund will at all times invest its assets in such a manner as to
ensure that the Policies will be treated as annuity, endowment, or
life insurance contracts under the Code and the regulations issued
thereunder. Without limiting the scope of the foregoing, the Fund
will at all times comply with Section 817(h) of the Code and Treas.
Reg. Section 1.817-5, as amended from time to time, and any
Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section
or Regulations.
6.2 Fund shares will not be sold to any person or entity
that would result in the Policies not being treated as annuity,
endowment, or life insurance contracts, in accordance with the
statutes and regulations referred to in the preceding paragraph
(Section 6.1 hereof).
ARTICLE VII. Indemnification
7.1 Indemnification By The Company
7.1(a) The Company agrees to indemnify and hold
harmless the Fund, Manager, and each of their directors, trustees
and officers and each person, if any, who controls the Fund or
Manager within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this
Section 7.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written
consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar
as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale
or acquisition of the Fund's shares or the Policies and:
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of
any material fact contained in the
Registration Statement or prospectus for the
Policies or contained in the Policies or
sales literature for the Policies (or any
amendment or supplement to any of the
foregoing), or arise out of or are based upon
the omission or the alleged omission to state
therein a material fact required to be stated
therein or necessary to make the statements
therein not misleading, provided that this
agreement to indemnify shall not apply as to
any Indemnified Party if such statement or
omission or such alleged statement or
omission was made in reliance upon and in
conformity with information furnished the
Company by or on behalf of the Fund or
Manager for use in the Registration Statement
or prospectus for the Policies or in the
Policies or sales literature (or any
amendment or supplement) or otherwise for use
in connection with the sale of the Policies
or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature of
the Fund not supplied by the Company, or
persons under its control) or wrongful
conduct of the Company or persons under its
control, with respect to the sale or
distribution of the Policies or Fund shares;
or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained
in a Registration Statement, prospectus, or
sales literature of the Fund or any amendment
thereof or supplement thereto or the omission
or alleged omission to state therein a
material fact required to be stated therein
or necessary to make the statements therein
not misleading if such statement or omission
was made in reliance upon information
furnished to the Fund or Manager by or on
behalf of the Company; or
(iv) arise out of or result from any material
breach of any representation and/or warranty
made by the Company in this Agreement or
arise out of or result from any other
material breach of this Agreement by the
Company;
except to the extent provided in Sections 7.1(b) and 7.1(c) hereof.
7.1(b) The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified Party
would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of such Indemnified
Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to the
Fund, whichever is applicable.
7.1(c) The Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified
the Company in writing within a reasonable time after the summons
or other first legal process giving information of the nature of
the claim shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify the Company
of any such claim shall not relieve the Company from any liability
which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the
Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company
also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from
the Company to such party of the Company's election to assume the
defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company
will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently
in connection with the defense thereof other than reasonable costs
of investigation.
7.1(d) The Indemnified Parties will promptly notify
the Company of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Fund
shares or the Policies or the operation of the Fund and the
Indemnified Parties will provide the Company with all relevant
information and documents requested by the Company. For purposes
of this Section 7.1(d), the "commencement" of proceedings shall
include any informal or formal communications from the Securities
and Exchange Commission or its staff (or the receipt of information
from any other persons or entities) indicating that enforcement
action by said Commission or staff may be contemplated or
forthcoming; this includes any information to the effect that any
matter(s) has been referred to the SEC's Division of Enforcement,
or that any matter(s) is being discussed with that Division.
7.2 Indemnification by the Fund and Manager
7.2(a) The Fund and Manager, jointly and severally,
agree to indemnify and hold harmless the Company and each of its
directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this
Section 7.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written
consent of the Manager) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under
any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of
the Fund's shares or the Policies and:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the Registration
Statement or prospectus or sales literature
of the Fund (or any amendment or supplement
to any of the foregoing), or arise out of or
are based upon the omission or the alleged
omission to state therein a material fact
required to be stated therein or necessary to
make the statements therein not misleading,
provided that this agreement to indemnify
shall not apply as to any Indemnified Party
if such statement or omission or such alleged
statement or omission was made in reliance
upon and in conformity with information
furnished to the Manager or Fund by or on
behalf of the Company for use in the
Registration Statement or prospectus for the
Fund or in sales literature (or any amendment
or supplement) or otherwise for use in
connection with the sale of the Policies or
Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Registration
Statement, prospectus or sales literature for
the Policies not supplied by the Fund or
Manager, or persons under their control) or
wrongful conduct of the Fund or Manager or
persons under their control, with respect to
the sale or distribution of the Policies or
Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained
in a Registration Statement, prospectus, or
sale literature covering the Policies, or any
amendment thereof or supplement thereto, or
the omission or alleged omission to state
therein a material fact required to be stated
therein or necessary to make the statement or
statements therein not misleading, if such
statement or omission was made in reliance
upon information furnished to the Company by
or on behalf of the Fund or Manager; or
(iv) arise out of or result from any material
breach of any representation and/or warranty
made by the Fund or Manager in this Agreement
or arise out of or result from any other
material breach of this Agreement by the Fund
or Manager (including a failure, whether
unintentional or in good faith or otherwise,
to comply with the requirements specified in
Article VI of this Agreement);
except to the extent provided in Sections 7.2(b) and 7.2(c) hereof.
7.2(b) The Fund and Manager shall not be liable under
this indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company or the Account.
7.2(c) The Fund and Manager (Indemnifiers" for
purposes of this Section 7.2) shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified
the Indemnifier in writing within a reasonable time after the
summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified
Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the
Indemnifier of any such claim shall not relieve the Indemnifier
from any liability which they may have to the Indemnified Party
against whom such action is brought otherwise than on account of
this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Indemnifiers will be entitled
to participate, at their own expense, in the defense thereof. The
Indemnifier also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After
notice from the Indemnifier to such party of their election to
assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of additional counsel retained by it, and the
Indemnifier will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
ARTICLE VIII. Applicable Law
8.1 This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of Iowa.
8.2 This Agreement shall be subject to the provisions of
the 1933, 1934 and 1940 Acts, and the rules and regulations and
rulings thereunder, including such exemptions from those statues,
rules and regulations as the Securities and Exchange Commission may
grant and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE IX. Termination
9.1 This Agreement shall terminate with respect to the
Account, or one, some, or all Portfolios:
(a) at the option of any party upon six month's
advance written notice to the other parties; or
(b) at the option of the Company to the extent that
shares of Portfolios are not reasonably available to meet the
requirements of the Policies or are not "appropriate funding
vehicles" for the Policies, as determined by the Company reasonably
and in good faith. Without limiting the generality of the
foregoing, shares of a Portfolio would not be "appropriate funding
vehicles" if, for example, such shares did not meet the
diversification or other requirements referred to in Article VI
hereof; or if the Portfolio did not qualify under Subchapter M of
the Code, as referred to in Section 2.3 hereof; or if the
investments or investment policies, objectives, and/or limitations
of the portfolio would impose unanticipated risks on the Company;
or if the Company would be permitted to disregard policy owner
voting instructions pursuant to Rules 6e-2 or 6e-3(T) under the
1940 Act; etc. Prompt notice of the election to terminate for such
cause and an explanation of such cause shall be furnished by the
Company.
9.2 The notice shall specify the Portfolio(s) and
Policy(s) as to which the Agreement is to be terminated, or that
the Agreement is to be terminated as to the Account.
9.3 It is understood and agreed that the right of any
party hereto to terminate this Agreement pursuant to Section 9.1(a)
may be exercised for cause or for no cause.
9.4 Effect of Termination. Notwithstanding any
termination of this Agreement, the Fund and Manager shall, at the
option of the Company, continue to make available additional shares
of the Portfolios pursuant to the terms and conditions of this
Agreement, for all Policies in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing
Policies"). Specifically, without limitation, the owner of the
Existing Policies shall be permitted to transfer or reallocate
investments under the Policies, redeem investments in the Fund
and/or invest in the Fund upon the making of additional purchase
payments under the Existing Policies.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by
registered or certified mail to the other party at the address of
such party set forth below or at such other address as such party
may from time to time specify in writing to the other party.
If to the Fund:
Endeavor Series Trust
1100 Newport Center, Suite 200
Newport Beach, California 92660
Attention: James A. Shepherdson
If to the Manager:
Endeavor Management Co.
1100 Newport Center, Suite 200
Newport Beach, California 92660
Attention: Vincent J. McGuinness
If to the Company:
PFL Life Insurance Company
4333 Edgewood Rd., N.E.
Cedar Rapids, Iowa 52499
Attention: Craig Vermie, Esq.
ARTICLE XI. Miscellaneous
11.1 Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential
the names and addresses of the owners of the Policies and all
information reasonably identified as confidential in writing by any
other party hereto and, except as permitted by this Agreement,
shall not disclose, disseminate or utilize such names and addresses
and other confidential information without the express written
consent of the affected party until such time as it may come into
the public domain.
11.2 The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any
of the provisions hereof or otherwise affect their construction or
effect.
11.3 This Agreement may be executed simultaneously in two
or more counterparts, each of which taken together shall constitute
one and the same instrument.
11.4 If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of the Agreement shall not be affected thereby.
11.5 The Schedules attached hereto, as modified from time
to time, are incorporated herein by references and are part of this
Agreement.
11.6 Each party hereto shall cooperate with each other
party and all appropriate governmental authorities (including
without limitation the Securities and Exchange Commission, the
National Association of Securities Dealers, and state insurance
regulators) and shall permit such authorities reasonable access to
its books and records in connection with any investigation or
inquiry relating to this Agreement or the transactions contemplated
hereby.
11.7 The rights, remedies and obligations contained in
this Agreement are cumulative and are in addition to any and all
rights, remedies and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed in its name and on its behalf by its
duly authorized representative and its seal to be hereunder affixed
hereto as of the date specified below.
Company:
PFL LIFE INSURANCE COMPANY
By its authorized officer,
By: /s/William J. Busler
Title: Exec. V.P.
Date: 2-28-91
Fund:
ENDEAVOR SERIES TRUST
By its authorized officer,
By: /s/James A. Shepherdson
Title: President
Date: 2/27/91
Manager:
ENDEAVOR MANAGEMENT CO.
By its authorized officer,
By: /s/Vincent J. McGuinness
Title: C.E.O.
Date: 3/1/91
CUSTODY AGREEMENT
AGREEMENT dated as of March 28, 1991, between ENDEAVOR SERIES TRUST
(the "Trust"), a Massachusetts business trust, having its principal
office and place of business at 1100 Newport Center Drive, Suite
200, Newport Beach, California 92660 and BOSTON SAFE DEPOSIT AND
TRUST COMPANY (the "Custodian"), a Massachusetts trust company with
its principal place of business at One Boston Place, Boston,
Massachusetts 02108.
W I T N E S S E T H:
That for and in consideration of the mutual promises
hereinafter set forth, the Trust and the Custodian agree as
follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to
this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
(a) "Authorized Person" shall be deemed to include the
President, and any Vice President, the Secretary, the
Treasurer, or any other person, whether or not any such person
is an officer or employee of the Trust, duly authorized by the
Board of Trustees of the Trust to give Oral Instructions and
Written Instructions on behalf of the Trust and listed in the
certification as may be received by the Custodian from time to
time;
(b) "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and
Federal agency Securities, its successor or successors and its
nominee or nominees;
(c) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this
Agreement, other than Written Instructions, to be given to the
Custodian, which is actually received by the Custodian and
signed on behalf of the Trust by an officer of the Trust;
(d) "Declaration of Trust" shall mean the Declaration of
Trust of the Trust dated November 18, 1988 as the same may be
amended from time to time;
(e) "Depository" shall mean The Depository Trust Company
("DTC") or any clearing agency registered with the Securities
and Exchange Commission under Section 17(A) of the Securities
Exchange Act of 1934, as amended, any successor or successors
and its nominee or nominees, in which the Custodian is hereby
specifically authorized to make deposits. The term
"Depository" shall further mean and include any other person
to be named in a Certificate authorized to act as a depository
under the 1940 Act, its successor or successors and its
nominee or nominees;
(f) "Money Market Security" shall be deemed to include,
without limitation, short-term debt obligations issued or
guaranteed as to interest and principal by the Government of
the United States or agencies or instrumentalities thereof,
commercial paper, bank certificates of deposit, bankers'
acceptances and short-term corporate obligations, where the
purchase or sale of such securities normally requires
settlement in federal funds on the same day as such purchase
or sale, and repurchase and reverse repurchase agreements with
respect to any of the foregoing types of securities;
(g) "Oral Instructions" shall mean any instructions, other
than Written Instructions, actually received by the Custodian
from an Authorized Person or a person reasonably believed by
the Custodian to be an Authorized Person;
(h) "Prospectus" shall mean the Trust's current prospectus and
statement of additional information relating to the
registration of the Trust's Shares under the Securities Act of
1933, as amended;
(i) "Series" refers to the Domestic Money Market Portfolio,
Domestic Managed Asset Allocation Portfolio, Global Managed
Asset Allocation Portfolio or Global Growth Portfolio or any
such other separate and distinct series as may from time to
time be created and designated by the Trust in accordance with
the provisions of the Declaration of Trust;
(j) "Shares" refers to the shares of beneficial interest of
each Series of the Trust;
(k) "Security" or "Securities" shall be deemed to include
bonds, debentures, notes, stocks, shares, evidences of
indebtedness, and other securities and investments from time
to time owned by each Series;
(l) "Transfer Agent" shall mean the person that performs the
transfer agent, dividend disbursing agent and shareholder
servicing agent functions for the Trust;
(m) "Written Instructions" shall mean a written communication
actually received by the Custodian from a person reasonably
believed by the Custodian to be an Authorized Person by any
system whereby the receiver of such communication is able to
verify through codes or otherwise with a reasonable degree of
certainty the authenticity of the sender of such
communication; and
(n) The "1940 Act" refers to the Investment Company Act of
1940, and the Rules and Regulations thereunder, all as amended
from time to time.
2. Appointment of Custodian.
(a) The Trust hereby constitutes and appoints the Custodian
as custodian of all the Securities and moneys at the time
owned by or in the possession of the Trust during the period
of this Agreement.
(b) The Custodian hereby accepts appointment as such
custodian for each Series and agrees to perform the duties
thereof as hereinafter set forth.
3. Compensation.
(a) The Trust will compensate the Custodian for its services
rendered under this Agreement in accordance with the fees set
forth in the Fee Schedule annexed hereto as Schedule A and
incorporated herein for the existing Series. Such Fee
Schedule does not include out-of-pocket disbursements of the
Custodian for which the Custodian shall be entitled to bill
separately. Out-of-pocket disbursements shall include, but
shall not be limited to, the items specified in the Schedule
of Out-of-Pocket charges annexed hereto as Schedule B and
incorporated herein, which schedule may be modified by the
Custodian upon not less than thirty days prior written notice
to the Trust.
(b) The parties hereto will agree upon the compensation for
acting as custodian for any Series hereafter established and
designated, and at the time that the Custodian commences
serving as such for said Series, such agreement shall be
reflected in a Fee Schedule for that Series, dated and signed
by an officer of each party hereto, which shall be attached to
Schedule A of this Agreement.
(c) Any compensation agreed to hereunder may be adjusted from
time to time by attaching to Schedule A of this Agreement a
revised Fee Schedule, dated and signed by a duly authorized
officer of the Trust and a duly authorized officer of the
Custodian.
(d) The Custodian will bill the Trust for each Series as soon
as practicable after the end of each calendar month, and said
billings will be detailed in accordance with the Fee Schedule
and Schedule of Out-of-Pocket charges for each Series. The
Trust on behalf of the Series will promptly pay to the
Custodian the amount of such billing.
4. Custody of Cash and Securities.
(a) Receipt and Holding of Assets. The Trust will deliver or
cause to be delivered to the Custodian all Securities and
moneys owned by it at any time during the period of this
Agreement and shall specify the Series to which the Securities
and moneys are to be specifically allocated. The Custodian
will not be responsible for such Securities and moneys until
actually received by it. The Trust shall instruct the
Custodian from time to time in its sole discretion, by means
of Written Instructions, or, in connection with the purchase
or sale of Money Market Securities, by means of Oral
Instructions or Written Instructions, as to what amounts
Securities and moneys of a Series are to be specifically
allocated on the books of the Custodian to such Series;
provided, however, that prior to the deposit of Securities of
a Series in the Book-Entry System or the Depository, including
a deposit in connection with the settlement of a purchase or
sale, the Custodian shall have received a Certificate
specifically approving such deposits by the Custodian in the
Book-Entry System or the Depository.
(b) Accounts and Disbursements. The Custodian shall
establish and maintain a separate account for each Series and
shall credit to the separate account of each Series all moneys
received by it for the account of such Series and shall
disburse the same only:
1. In payment for Securities purchased for such Series,
as provided in Section 5 hereof;
2. In payment of dividends or distributions with
respect to the Shares of such Series, as provided in
Section 7 hereof;
3. In payment of original issue or other taxes with
respect to the Shares of such Series, as provided in
Section 8 hereof;
4. In payment for Shares which have been redeemed by
such Series, as provided in Section 8 hereof;
5. Pursuant to Written Instructions, or with respect to
Money Market Securities, Oral Instructions or Written
Instructions, setting forth the name of such Series, the
name and address of the person to whom the payment is to
be made, the amount to be paid and the purpose for which
payment is to be made;
6. In payment of fees and in reimbursement of the
expenses and liabilities of the Custodian attributable to
such Series, as provided in Section 11(h) hereof; and
7. For the payment of any expenses or liability
incurred by the Trust or any Series, including, but not
limited to, the following payments for the account of the
Trust or any Series: interest, taxes, management,
accounting, transfer agent and legal fees and operating
expenses of the Trust or any Series, whether or not such
expenses are, in whole or in part, to be capitalized or
treated as deferred expenses.
(c) Confirmation and Statements. Promptly after the close of
business of each day, the Custodian shall furnish the Trust
with confirmations and a summary of all transfers to or from
the account of each Series during said day. Where securities
purchased by a Series are in a fungible bulk of securities
registered in the name of the Custodian (or its nominee) or
shown on the Custodian's account on the books of the
Depository or the Book-Entry System, the Custodian shall by
book entry or otherwise identify the quantity of those
securities belonging to such Series. At least monthly, the
Custodian shall furnish the Trust with a detailed statement of
the Securities and moneys held for each Series under this
Agreement.
(d) Registration of Securities and Physical Separation. All
Securities held for a Series which are issued or issuable only
in bearer from, except such Securities as are held in the
Book-Entry System, shall be held by the Custodian in that
form; all other Securities held for a Series may be registered
in the name of that Series, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from
time to time determine, or in the name of the Book-Entry
System or the Depository or their successor or successors, or
their nominee or nominees. The Trust reserves the right to
instruct the Custodian as to the method of registration and
safekeeping of the Securities of each Series. The Trust
agrees to furnish to the Custodian appropriate instruments to
enable the Custodian to hold or deliver in proper form for
transfer, or to register in the name of its registered nominee
or in the name of the Book-Entry System or the Depository, any
Securities which it may hold for the account of a Series and
which may from time to time be registered in the name of a
Series. The Custodian shall hold all such Securities
specifically allocated to a Series which are not held in the
Book-Entry System or the Depository in a separate account for
such Series in the name of such Series physically segregated
at all times from those of any other person or persons.
(e) Collection of Income and Other Matters Affecting
Securities. Unless otherwise instructed to the contrary by
Written Instructions, the Custodian by itself, or through the
use of the Book-Entry System or the Depository with respect to
Securities therein deposited, shall with respect to all
Securities held for a Series in accordance with this
Agreement:
1. Collect all income due or payable;
2. Present for payment and collect the amount payable
upon all Securities which may mature or be called,
redeemed or retired, or otherwise become payable.
Notwithstanding the foregoing, the Custodian shall have
no responsibility to the Trust or the Series for
monitoring or ascertaining any call, redemption or
retirement dates with respect to put bonds which are
owned by the Trust or the Series and held by the
Custodian or its nominees. Nor shall the Custodian have
any responsibility or liability to the Trust or the
Series for any loss by the Trust or the Series for any
missed payments or other defaults resulting therefrom;
unless the Custodian received timely notification from
the Trust specifying the time, place and manner for the
presentment of any such put bond owned by the Trust or
the Series and held by the Custodian or its nominee. The
Custodian shall not be responsible and assumes no
liability to the Trust or the Series for the accuracy or
completeness of any notification the Custodian may
furnish to the Trust with respect to put bonds;
3. Surrender Securities in temporary form for
definitive Securities;
4. Execute any necessary declarations or certificates
of ownership under the Federal income tax laws or the
laws or regulations of any other taxing authority now or
hereafter in effect; and
5. Hold directly, or through the Book-Entry System or
the Depository with respect to Securities therein
deposited, for the account of each Series all rights and
similar Securities issued with respect to any Securities
held by the Custodian hereunder for each Series.
(f) Delivery of Securities and Evidence of Authority. Upon
receipt of Written Instructions and not otherwise, except for
subparagraphs 5, 6, 7, and 8 Written Instructions or Oral
Instructions and confirmed by Written Instructions, the
Custodian, directly or through the use of the Book-Entry
System or the Depository, shall:
1. Execute and deliver or cause to be executed and
delivered to such persons as may be designated in such
Written Instruction proxies, consents, authorizations,
and any other instruments whereby the authority of the
Trust as owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held
for a Series in exchange for other Securities or cash
issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of
any conversion privilege;
3. Deliver or cause to be delivered any Securities held
for a Series to any protective committee, reorganization
committee or other person in connection with the
reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any corporation,
and receive and hold under the terms of this Agreement in
the separate account for each Series such certificates of
deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such
delivery;
4. Make or cause to be made such transfers or exchanges
of the assets specifically allocated to the separate
account of a Series and take such other steps as shall be
stated in said Written Instruction to be for the purpose
of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization
of the Trust;
5. Deliver Securities owned by any Series upon sale of
such Securities for the account of such Series pursuant
to Section 5;
6. Delivery Securities owned by any Series upon the
receipt of payment in connection with any repurchase
agreement related to such Securities entered into by such
Series;
7. Delivery Securities owned by any Series to the
issuer thereof or its agent when such Securities are
called, redeemed, retired or otherwise become payable;
provided, however, that in any such case the cash or
other consideration is to be delivered to the Custodian.
Notwithstanding the foregoing, the Custodian shall have
no responsibility to the Trust or the Series for
monitoring or ascertaining any call, redemption or
retirement dates with respect to the put bonds which are
owned by the Trust or the Series and held by the
Custodian or its nominee. Nor shall the Custodian have
any responsibility or liability to the Trust or the
Series for any loss by the Trust or the Series for any
missed payment or other default resulting therefrom;
unless the Custodian received timely notification from
the Trust specifying the time, place and manner for the
presentment of any such put bond owned by the Trust or
the Series and held by the Custodian or its nominee. The
Custodian shall not be responsible and assume no
liability to the Trust or the Series for the accuracy or
completeness of any notification the Custodian may
furnish to the Trust with respect to put bonds;
8. Deliver Securities owned by any Series in connection
with any loans of securities made by such Series but only
against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Trust which
may be in the form of cash or obligations issued by the
United States government, its agencies or
instrumentalities;
9. Deliver Securities owned by any Series as security
in connection with any borrowings by such series
requiring a pledge of Series assets, but only against
receipt of amounts borrowed;
10. Deliver Securities owned by any Series upon receipt
of instructions from such Series to the Transfer Agent or
to the holders of Shares in connection with distributions
in kind, as may be described from time to time in the
Trust's Prospectus, in satisfaction of requests by
holders of Shares for repurchase or redemption; and
11. Deliver Securities owned by any Series for any other
proper business purpose, but only upon receipt of, in
addition to Written Instructions, a certified copy of a
resolution of the Board of Trustees signed by an
Authorized Person and certified by the Secretary of the
Trust, specifying the Securities to be delivered, setting
forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper business purpose,
and naming the person or persons to whom delivery of such
Securities shall be made.
(g) Endorsement and Collection of Checks, Etc. The Custodian
is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received by the
Custodian for the account of a Series.
5. Purchase and Sale of Investments of the Series.
(a) Promptly after each purchase of Securities for a Series,
the Trust shall deliver to the Custodian (i) with respect to
each purchase of Securities which are not Money Market
Securities, Written Instructions, and (ii) with respect to
each purchase of Money Market Securities, either a Written or
Oral Instruction, in either case specifying with respect to
each purchase: (1) the name of the Series to which such
Securities are to specifically allocated; (2) the name of the
issuer and the title of the Securities; (3) the number of
shares or the principal amount purchased and accrued interest,
if any; (4) the date of purchase and settlement; (5) the
purchase price per unit; (6) the total amount payable upon
such purchase; (7) the name of the person from whom or the
broker through whom the purchase was made, if any. The
Custodian shall receive all Securities purchased by or for a
Series and upon receipt of such Securities shall pay out of
the moneys held for the account of such Series the total
amount payable upon such purchase, provided that the same
conforms except for an amount not in excess of $50.00 to the
total amount payable as set forth n such Written or Oral
Instruction.
(b) Promptly after each sale of Securities of a Series, the
Trust shall deliver to the Custodian (i) with respect to each
sale of Securities which are not Money Market Securities,
Written Instruction, and (ii) with respect to each sale of
Money Market Securities, either Written or Oral Instruction,
in either case specifying with respect to such sale: (1) the
name of the Series to which the Securities sold were
specifically allocated; (2) the name of the issuer and the
title of the Securities; (3) the number of shares or principal
amount sold, and accrued interest, if any; (4) the date of
sale; (5) the sale price per unit; (6) the total amount
payable to the Series upon such Sale; and (7) the name of the
broker through whom or the person to whom the sale was made;
The Custodian shall deliver or cause to be delivered the
Securities to the broker or other person designated by the
Trust upon receipt of the total amount payable to such Series
upon such sale, provided that the same conforms except for an
amount not in excess of $50.00 to the total amount payable to
such Series as set forth in such Written or Oral Instruction.
Subject to the foregoing, the Custodian may accept payment in
such form as shall be satisfactory to it, and may deliver
Securities and arrange for payment in accordance with the
customs prevailing among dealers in Securities.
6. Lending of Securities.
If any Series is permitted by the terms of the
Declaration of Trust and as disclosed in its Prospectus to
lend Securities specifically allocated to that Series, within
24 hours after each loan of Securities, the Trust shall
deliver to the Custodian Written Instruction specifying with
respect to each such loan: (1) the Series to which the loaned
Securities are specifically allocated; (2) the name of the
issuer and the title of the Securities; (3) the number of
shares or the principal amount loaned; (4) the date of loan
and delivery; (5) the total amount to be delivered to the
Custodian, and specifically allocated to such Series against
the loan of the Securities, including the amount of cash
collateral and the premium, if any, separately identified; and
(6) the name of the broker, dealer or financial institution to
which the loan was made.
Promptly after each termination of a loan of Securities
specifically allocated to a Series, the Trust shall deliver to
the Custodian Written Instruction specifying with respect to
each such loan termination and return of Securities: (1) the
name of the Series to which such loaned Securities are
specifically allocated; (2) the name of the issuer and the
title of the Securities to be returned; (3) the number of
shares or the principal amount to be returned; (4) the date of
termination; (5) the total amount to be delivered by the
Custodian (including the cash collateral for such Securities
minus any offsetting credits as described in said Written
Instructions); and (6) the name of the broker, dealer or
financial institution from which the Securities will be
returned. The Custodian shall receive all Securities returned
from the broker, dealer or financial institution to which such
Securities were loaned and upon receipt thereof shall pay, out
of the moneys specifically allocated to such Series, the total
amount payable upon such return of Securities as set forth in
such Written Instruction. Securities returned to the
Custodian shall be held as they were prior to such loan.
7. Payment of Dividends or Distributions.
(a) The Trust shall furnish to the Custodian the resolution
of the Board of Trustees of the Trust certified by the
Secretary (i) authorizing the declaration of dividends with
respect to a Series on a specified periodic basis and
authorizing the Custodian to rely on Oral or Written
Instructions specifying the date of the declaration of such
dividend or distribution, the date of payment thereof, the
record date as of which shareholders entitled to payment shall
be determined, the amount payable per share to the
shareholders of record as of the record date and the total
amount payable to the Transfer Agent on the payment date, or
(ii) setting forth the date of the declaration of any dividend
or distribution by a Series, the date of payment thereof, the
record date as of which shareholders entitled to payment shall
be determined, the amount payable per share to the
shareholders of record as of the record date and the total
amount payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such resolution, Oral
Instruction, or Written Instruction, as the case may be, the
Custodian shall pay out the moneys specifically allocated to
and held for the account of the appropriate Series the total
amount payable to the Transfer Agent of the Trust.
8. Sale and Redemption of Shares of the Series.
(a) Whenever the Trust shall sell any Shares of a Series, the
Trust shall deliver or cause to be delivered to the Custodian
Written Instruction duly specifying:
1. The name of the Series whose Shares were sold;
2. The number of Shares sold, trade date, and price;
and
3. The amount of money to be received by the Custodian
for the sale of such Shares and specifically allocated to
such Series.
(b) Upon receipt of such money from the Transfer Agent, the
Custodian shall credit such money to the separate account of
the Series specified in the Written Instruction specified in
subparagraph (1) of paragraph (a) of this Section 8.
(c) Upon issuance of any Shares of a Series in accordance
with the foregoing provisions of this Section 8, the Custodian
shall pay, out of the moneys specifically allocated and held
for the account of such Series, all original issue or other
taxes required to be paid in connection with such issuance
upon the receipt of Written Instruction specifying the amount
to be paid.
(d) Except as provided hereafter, whenever any Shares of a
Series are redeemed, the Trust shall cause the Transfer Agent
to promptly furnish to the Custodian written notice,
specifying:
1. The name of the Series whose Shares were redeemed;
2. The number of Shares redeemed; and
3. The amount to be paid for the Shares redeemed.
(e) Upon receipt from the Transfer Agent of written notice
setting forth the number of Shares of a Series received by the
Transfer Agent for redemption and that such Shares are valid
and in good from for redemption, the Custodian shall make
payment to the Transfer Agent out of the moneys specifically
allocated to and held for the account of the Series specified
in subparagraph (1) of paragraph (d) of this Section 8 of the
total amount specified in the Written Instruction issued
pursuant to paragraph (d) of this Section 8.
(f) Notwithstanding the above provisions regarding the
redemption of Shares, whenever such Shares are redeemed
pursuant to any check redemption privilege which may from time
to time be offered by the Trust, the Custodian, unless
otherwise instructed by a Written Instruction shall, upon
receipt of advice from the Trust or its agent stating that the
redemption is in good form for redemption in accordance with
the check redemption procedure, honor the check presented as
part of such check redemption privilege out of the moneys
specifically allocated to the Series in such advice for such
purpose.
9. Indebtedness.
(a) The Trust will cause to be delivered to the Custodian by
any bank from which the Trust borrows money for temporary
administrative or emergency purposes using Securities as
collateral for such borrowings, a notice or undertaking in the
form currently employed by any such bank setting forth the
amount which such bank will loan to the Trust against delivery
of a stated amount of collateral. The Trust shall promptly
deliver to the Custodian Written Instruction stating with
respect to each such borrowing: (1) the name of the Series for
which the borrowing is to be made; (2) the name of the bank;
(3) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory
note, duly endorsed by the Trust, or other loan agreement; (4)
the time and date, if known, on which the loan is to be
entered into (the "Borrowing Date"); (5) the date on which the
loan becomes due and payable; (6) the total amount payable to
the Trust for the separate account of the Series on the
Borrowing Date; (7) the market value of Securities to be
delivered as collateral for such loan, including the name of
the issuer, the title and the number of shares or the
principal amount of any particular Securities; and (8) a
statement that such loan is in conformance with the 1940 Act
and the Trust's Prospectus.
(b) Upon receipt of the Written Instruction referred to in
subparagraph (a) above, the Custodian shall deliver on the
Borrowing Date the specified collateral and the executed
promissory note, if any, against delivery by the lending bank
of the total amount of the loan payable provided that the same
conforms to the total amount payable as set forth in the
Written Instruction. The Custodian may, at the option of the
lending bank, keep such collateral in its possession, but such
collateral shall be subject to all rights therein given the
lending bank by virtue of any promissory note or loan
agreement. The Custodian shall deliver as additional
collateral in the manner directed by the Trust from time to
time such Securities specifically allocated to such Series as
may be specified in the Written Instruction to collateralize
further any transaction described in this Section 9. The
Trust shall cause all Securities released from collateral
status to be returned directly to the Custodian, and the
Custodian shall receive from time to time such return of
collateral as may be tendered to it. In the event that the
Trust fails to specify in Written Instruction all of the
information required by this Section 9, the Custodian shall
not be under any obligation to deliver any Securities.
Collateral returned to the Custodian shall be held hereunder
as it was prior to being used as collateral.
10. Persons Having Access to Assets of the Series.
(a) No Trustee, officer, employee or agent of the Trust, and
no officer, director, employee or agent of the Trust's
investment adviser, shall have physical access to the assets
of the Trust held by the Custodian or be authorized or
permitted to withdraw any investments of the Trust, nor shall
the Custodian deliver any assets of the Trust to any such
person. No officer, director, employee or agent of the
Custodian who holds any similar position with the Trust or the
investment adviser shall have physical access to the assets of
the Trust.
(b) Nothing in this Section 10 shall prohibit any officer,
employee or agent of the Trust, or any officer, director,
employee or agent of the investment adviser, from giving Oral
Instructions or Written Instructions to the Custodian or
executing a Certificate so long as it does not result in
delivery of or access to assets of the Trust prohibited by
paragraph (a) of this Section 10.
11. Concerning the Custodian.
(a) Standard of Conduct. Except as otherwise provided
herein, neither the Custodian nor its nominee shall be liable
for any loss or damage, including counsel fees, resulting from
its action or omission to act or otherwise, except for any
such loss or damage arising out of its own negligence or
willful misconduct. The Custodian may, with respect to
questions of law, apply for and obtain the advice and opinion
of counsel to the Trust or of its own counsel, at the expense
of the Trust, and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity
with such advice or opinion. The Custodian shall be liable to
the trust for any loss or damage resulting from the use of the
Book-Entry System or the Depository arising by reason of any
negligence, misfeasance or misconduct on the part of the
Custodian or any of its employees or agents.
(b) Limit of Duties. Without limiting the generality of the
foregoing, the Custodian shall be under no duty or obligation
to inquire into, and shall not be liable for:
1. The validity of the issue of any Securities
purchased by any Series, the legality of the purchase
thereof, or the propriety of the amount paid therefor;
2. The legality of the sale of any Securities by any
Series, or the propriety of the amount for which the same
are sold;
3. The legality of the issue or sale of any Shares, or
the sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
dividend or other distribution of any Series;
6. The legality of any borrowing for temporary or
emergency administrative purposes.
(c) No Liability Until Receipt. The Custodian shall not be
liable for, or considered to be the Custodian of, any money,
whether or not represented by any check, draft, or other
instrument for the payment of money, received by it on behalf
of any Series until the Custodian actually receives and
collects such money directly or by the final crediting of the
account representing the Trust's interest in the Book-Entry
System or the Depository. The Custodian shall exercise
diligence consistent with industry practice in pursuing
payment on any such instrument, or any dividend, interest or
other receivable of the Trust.
(d) Amounts Due from Transfer Agent. The Custodian shall not
be under any duty or obligation to take action to effect
collection of any amount due to any Series from the Transfer
Agent nor to take any action to effect payment or distribution
by the Transfer Agent of any amount paid by the Custodian to
the Transfer Agent in accordance with this Agreement.
(e) Collection Where Payment Refused. The Custodian shall
not be under any duty or obligation to take action to effect
collection of any amount, if the Securities upon which such
amount is payable are in default, or if payment is refused
after due demand or presentation, unless and until (a) it
shall be directed to take such action by a Certificate and (b)
it shall be assured to its satisfaction of reimbursement of
its cost and expenses in connection with any such action.
(f) Appointment of Agents and Sub-Custodians. The Custodian
may appoint one or more banking institutions, including but
not limited to banking or other qualified institutions located
in foreign countries, to act as Depository or Depositories or
as Sub-Custodian or as Sub-Custodians of Securities and moneys
at any time owned by any Series, upon terms and conditions
specified in a Certificate; provided that any such appointment
shall have been approved by a vote of the Trustees of the
Trust. The Custodian shall use reasonable care in selecting a
Depository and/or Sub-Custodian located in a country other
than the United States ("Foreign Sub-Custodian"), and shall
oversee the maintenance of any Securities or moneys of a
Series by any Foreign Sub-Custodian. Any selection of and
form of contract with a Foreign Custodian shall be subject to
approval by the Trust that such selection and contract are
consistent with the requirements of Rule 17f-5 (and Rule 17f-4,
if applicable) under the 1940 Act, and such arrangement
shall, among other things, provide that:
(i) the Trust will be adequately indemnified and its
assets adequately insured in the event of loss;
(ii) the Trust's assets will not be subject to any
right, charge, security interest, lien or claim of any
kind in favor of the eligible Foreign Custodian or Sub-Custodian
or its creditors except for a claim of payment
for their safe custody or administration;
(iii) beneficial ownership of the Trust's assets will be
freely transferable without the payment or value other
than for safe custody or administration;
(iv) adequate records will be maintained identifying
the assets as belonging to the Trust;
(v) the Trust's independent public accountants will be
given access to those records or confirmation of the
contents of those records, and
(vi) The Trust will receive periodic reports with
respect to the safekeeping of its assets, including, but
not necessarily limited to notification of any transfer
to or from the Trust's account.
(g) No Duty to Ascertain Authority. The Custodian shall not
be under any duty or obligation to ascertain whether any
Securities at any time delivered to or held by it for the
Trust and specifically allocated to a Series are such as may
properly be held by the Trust and specifically allocated to
such Series under the provisions of the Declaration of Trust
and the Prospectus.
(h) Compensation of the Custodian. The Custodian shall be
entitled to receive, and the Trust agrees to pay on behalf of
each Series to the Custodian, such compensation as may be
agreed upon from time to time between the Custodian and the
Trust. The Custodian may charge against any moneys
specifically allocated to a Series such compensation and any
expenses incurred by the Custodian in the performance of its
duties pursuant to such agreement with respect to such Series.
The Custodian shall also be entitled to charge against any
money held by it and specifically allocated to a Series the
amount of any loss, damage, liability or expense incurred with
respect to such Series, including counsel fees, for which it
shall be entitled to reimbursement under the provisions of
this Agreement.
The expenses which the Custodian may charge against such
account include, but are not limited to, the expenses of Sub-Custodians
and foreign branches of the Custodian incurred in
settling transactions outside of Boston, Massachusetts or New
York City, New York involving the purchase and sale of
Securities of any Series.
(i) Reliance on Certificates and Instructions. The Custodian
shall be entitled to rely upon any Certificate, notice or
other instrument in writing received by the Custodian and
reasonably believed by the Custodian to be genuine. The
Custodian shall be entitled to rely upon any Written
Instructions or Oral Instructions actually received by the
Custodian pursuant to the applicable Sections of this
Agreement and reasonably believed by the Custodian to be
genuine and to be given by an Authorized Person. The Trust
agrees to forward to the Custodian Written Instructions from
an Authorized Person confirming such Oral Instructions in such
manner so that such Written Instructions are received by the
Custodian, whether by hand delivery, telex or otherwise, by
the close of business on the same day that such Oral
Instructions are given to the Custodian. The Trust agrees
that the fact that such confirming instructions are not
received by the Custodian shall in no way affect the validity
of the transactions or enforceability of the transactions
hereby authorized by the Trust. The Trust agrees that the
Custodian shall incur no liability to the Trust in acting upon
Oral Instructions given to the Custodian hereunder concerning
such transactions provided such instructions reasonably appear
to have been received from a Authorized Person.
(j) Inspection of Books and Records. The Custodian shall
create and maintain all records relating to its activities and
obligations under this Agreement in such manner as will meet
the obligations of the Trust under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and
31a-2 thereunder, applicable federal and state tax laws and
any other law or administrative rules or procedures which may
be applicable to the Trust. All such records shall be the
property of the Trust and shall be open to inspection and
audit at reasonable times by officers and auditors employed by
the Trust and by employees of the Securities and Exchange
Commission.
The Custodian shall provide the Trust with any report
obtained by the Custodian on the system of internal accounting
control of the Book-Entry System or the Depository and with
such reports on its own systems of internal accounting control
as the Trust may reasonably request from time to time.
12. Term and Termination.
(a) This Agreement shall become effective on the date first
set forth above and shall continue in effect thereafter from
year to year unless terminated pursuant to Section 12(b) of
this Agreement.
(b) Either of the parties hereto may terminate this Agreement
with respect to any Series by giving to the other party a
notice in writing specifying the date of such termination,
which shall be not less than 30 days after the date of receipt
of such notice. In the event such notice is given by the
Trust, it shall be accompanied by a certified resolution of
the Board of Trustees of the Trust, electing to terminate this
Agreement with respect to any Series and designating a
successor custodian or custodians, which shall be a person
qualified to so act under the 1940 Act. In the event such
notice is given by the Custodian, the Trust shall, on or
before the termination date, deliver to the Custodian a
certified resolution of the Board of Trustees of the Trust,
designating a successor custodian or custodians. In the
absence of such designation by the Trust, the Custodian may
designate a successor custodian, which shall be a person
qualified to so act under the 1940 Act. If the Trust fails to
designate a successor custodian for any Series, the Trust
shall upon the date specified in the notice of termination of
this Agreement and upon delivery by the Custodian of all
Securities (other than Securities held in the Book-Entry
System which cannot be delivered to the Trust) and money and
then owned by such Series be deemed to be its own custodian
and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the
duty with respect to Securities held in the Book-Entry System
which cannot be delivered to the Trust.
(c) Upon the date set forth in such notice under paragraph
(b) of this Section 12, this Agreement shall terminate to the
extent specified in such notice, and the Custodian shall upon
receipt of a notice of acceptance by the successor custodian
on that date deliver directly to the successor custodian all
Securities and moneys then held by the Custodian and
specifically allocated to the Series specified, after
deducting all fees, expenses and other amounts for the payment
or reimbursement of which it shall then be entitled with
respect to the Series and otherwise cooperate in the transfer
of its duties and responsibilities hereunder.
13. Miscellaneous.
(a) Annexed hereto as Appendix A is a certification signed by
the Secretary of the Trust setting forth the names and the
signatures of the present Authorized Persons. The Trust
agrees to furnish to the Custodian a new certification in
similar form in the event that any such present Authorized
Person ceases to be such an Authorized Person. Until such new
certification shall be received, the Custodian shall be fully
protected in acting under the provisions of this Agreement
upon Oral Instructions or signatures of the present Authorized
Persons as set forth in the last delivered certification.
(b) Annexed hereto as Appendix B is a certification signed by
the Secretary of the Trust setting forth the names and the
signatures of the present officers of the Trust. The Trust
agrees to furnish to the Custodian a new certification in
similar form in the event any such present officer ceases to
be an officer of the Trust. Until such new certification
shall be received, the Custodian shall be fully protected in
acting under the provisions of this Agreement upon the
signature of the officers as set forth in the last delivered
certification.
(c) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, shall
be sufficiently given if addressed to the Custodian and mailed
or delivered to it at its offices at One Boston Place, Boston,
Massachusetts 02108 Attn: Mert Thompson, or at such other
place as the Custodian may from time to time designate in
writing.
(d) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Trust, shall be
sufficiently given if addressed to the Trust and mailed or
delivered to it at its offices at 1100 Newport Center Drive,
Suite 200, Newport Beach, California 92660, Attention Jamie
Shepherdson or at such other place as the Trust may from time
to time designate in writing.
(e) This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties
with the same formality as this Agreement, and as may be
permitted or required by the 1940 Act.
(f) This Agreement shall extend to and shall be binding upon
the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be
assignable by the Trust without the written consent of the
Custodian, or by the Custodian without the written consent of
the Trust authorized or approved by a resolution of the Board
of Trustees of the Trust, and any attempted assignment without
such written consent shall be null and void. Should the
California Department of Insurance (the "Department") succeed
to control of Pacific Fidelity Life Insurance Company's assets
in the event of an impairment or insolvency, the Custodian
will recognize the Department's succession to Pacific Fidelity
Life Insurance Company's rights under this Agreement as
shareholder of the Trust, and accordingly will accept
instructions from the Department in the same manner as from
Pacific Fidelity Life Insurance Company to the extent
consistent with this Agreement and applicable law.
(g) This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts.
(h) It is expressly agreed to that the obligations of the
Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents, or employees of the
Trust, personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust.
The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust and signed by a duly
authorized officer of the Trust, acting as such, and neither
such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the
Trust as provided in its Declaration of Trust.
(i) The captions of the Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
(j) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunder duly
authorized as of the day and year first above written.
ENDEAVOR SERIES TRUST
BY: /s/James A. Shepherdson
BOSTON SAFE DEPOSIT AND TRUST COMPANY
BY: s/
2951G
APPENDIX A
I, Pamela Shelton, Secretary of ENDEAVOR SERIES TRUST, a
Massachusetts business trust (the "Trust"), do hereby certify that:
The following individuals have been duly authorized as
Authorized Persons to give Oral Instructions and Written
Instructions on behalf of the Trust and the signatures set forth
opposite their respective names are their true and correct
signatures:
Name Signature
Kyle Moran /s/Kyle Moran
Roseann Sullivan /s/Roseann Sullivan
Susan Yanchak /s/Susan Yanchak
Elizabeth McSurdy /s/Elizabeth McSurdy
Jill Conroy /s/Jill E. Conroy
Chris Hennessy /s/Christopher R. Hennessy
2951G
APPENDIX B - OFFICERS
I, Pamela Shelton, Secretary of ENDEAVOR SERIES TRUST, a
Massachusetts business trust (the "Trust"), do hereby certify that:
The following individuals serve in the following positions
with the Trust and each individual has been duly elected or
appointed to each such position and qualified therefor in
conformity with the Trust's Declaration of Trust and the signatures
set forth opposite their respective names are their true and
correct signatures:
Name Position Signature
James A. Shepherdson III President /s/James A. Shepherdson
Ronald E. Robison Vice President /s/Ronald E. Robison
James Goldberg Vice President /s/James Goldberg
Glen Weirick Vice President /s/Glen Weirick
Keith Wood Vice President /s/Keith Wood
Richard Muckart Vice President /s/Richard S. Muckart
Eric V. Retzlaff Chief Financial /s/Eric V. Retzlaff
Officer
Pamela Shelton Secretary /s/Pamela Shelton
Richard H. Rose Assistant /s/Richard H. Rose
Treasurer
Brigid O. Bieber Assistant /s/Brigid O. Bieber
Secretary
/s/Pamela Shelton
Secretary
FEE SCHEDULE
SCHEDULE A
ENDEAVOR SERIES TRUST
1. Safekeeping
A. Domestic Assets Annual Fee
All domestic assets .02 of 1%
B. International Assets Annual Fee
All international assets .15 of 1%
2. Portfolio Transactions
Type Per Transaction
DTC/Fed Book Entry $12
Repurchase Agreement -
depository eligible 12
GNMA Paydown 12
Repurchase Agreement -
non-depository 17
Options/Futures 25
Physical Settlement 30
Commercial Paper 30
Euro CD's (London) 30
Foreign Securities 40
3743m
CUSTODY AGREEMENT
OUT-0F-POCKET EXPENSES
SCHEDULE B
Reimbursable out-of-pocket expenses will be added to each
monthly invoice and will include, but not limited to, such
customary items as telephone, wire charges ($5.50 per wire)
postage, insurance, pricing services, courier services and
duplicating charges.
2951G
SUPPLEMENT TO CUSTODY AGREEMENT
April 19, 1993
Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts 02108
Ladies and Gentlemen:
ENDEAVOR SERIES TRUST, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (the
"Trust"), hereby supplements its agreement with BOSTON SAFE DEPOSIT
AND TRUST COMPANY, a trust company organized under the laws of the
Commonwealth of Massachusetts (the "Custodian"), as follows:
1. Compensation. Pursuant to Section 3(b) of the Custody
Agreement dated March 28, 1991 (the "Agreement"), the Trust and the
Custodian hereby agree that the Quest for Value Equity Portfolio
and the Quest for Value Small Cap Portfolio (the "Portfolios"), two
new portfolio series of the Trust, created and designated in
accordance with the Trust's Master Trust Agreement, shall be
considered Portfolios of the Trust under the terms of the
Agreement, and that the Domestic and Global Fee Schedules currently
in effect, and as may be amended from time to time under the
Agreement, shall apply to the Portfolios as of the date and year
first written above.
2. Limitation of Liability. The term "Endeavor Series
Trust" means and refers to the Trustees from time to time serving
under the Agreement and Declaration of Trust dated November 18,
1988, as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon any of
the Trustees, shareholders, nominees, officers, agents or employees
of the Trust, personally, but bind only the trust property of the
Trust, as provided in the Agreement and Declaration of Trust. The
execution and delivery of this Agreement have been authorized by
the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose
any liability on any of them personally, but shall bind only the
trust property of the Trust as provided in its Agreement and
Declaration of Trust.
If the foregoing is acceptable to you, kindly indicate your
acceptance by signing and returning the enclosed copy of this
Supplement.
Very truly yours,
ENDEAVOR SERIES TRUST
By: /s/James A. Shepherdson
JAMES A. SHEPHERDSON
Title: PRESIDENT
Accepted and Agreed to:
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By: /s/Merton E. Thompson
Merton E. Thompson
Senior Vice President
endcust.doc
SUPPLEMENT TO CUSTODY AGREEMENT
December 30, 1994
Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts 02108
Ladies and Gentlemen:
ENDEAVOR SERIES TRUST, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (the
"Trust"), hereby supplements its agreement with BOSTON SAFE DEPOSIT
AND TRUST COMPANY, a trust company organized under the laws of the
Commonwealth of Massachusetts (the "Custodian"), as follows:
1. Compensation. Pursuant to Section 3(b) of the Custody
Agreement dated March 28, 1991 (the "Agreement"), the Trust and the
Custodian hereby agree that the T. Rowe Price Equity Income
Portfolio and T. Rowe Price Growth Stock Portfolio (the
"Portfolios"), two new portfolio series of the Trust, created and
designated in accordance with the Trust's Agreement and Declaration
of Trust, shall be, considered Portfolios of the Trust under the
terms of the Agreement, and that the Domestic and Global Fee
Schedules currently in effect, and as may be amended from time to
time, under the Agreement shall apply to the Portfolios, as of the
date and year first written above.
2. Limitation of Liability. The term "Endeavor Series
Trust" means and refers to the Trustees from time to time serving
under the Agreement and Declaration of Trust dated November 18,
1988, as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon any of
the Trustees, shareholders, nominees, officers, agents or employees
of the Trust, personally, but bind only the trust property of the
Trust, as provided in the Agreement and Declaration of Trust. The
execution and delivery of this Agreement have been authorized by
the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose
any liability on any of them personally, but shall bind only the
trust property of the Trust as provided in its Agreement and
Declaration of Trust.
If the foregoing is acceptable to you, kindly indicate your
acceptance by signing and returning the enclosed copy of this
Supplement.
Very truly yours,
ENDEAVOR SERIES TRUST
By: /s/James A. Shepherdson
JAMES A. SHEPHERDSON
Title: PRESIDENT
Accepted and Agreed to:
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By: /s/Merton E. Thompson
Senior Vice President
CUSTODY AGREEMENT
OUT-OF-POCKET EXPENSES
SCHEDULE B
Reimbursable out-of-pocket expenses will be added to each
monthly invoice and will include, but not limited to, such
customary items as telephone, wire charges ($5.50 per wire)
postage, insurance, pricing services, courier services and
duplicating charges.
SUPPLEMENT TO CUSTODY AGREEMENT
Date: March 25, 1994
Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts 01208
Ladies and Gentlemen:
ENDEAVOR SERIES TRUST, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (the
"Trust"), hereby supplements its agreement with BOSTON SAFE DEPOSIT
AND TRUST COMPANY, a trust company organized under the laws of the
Commonwealth of Massachusetts (the "Custodian"), as follows:
1. Compensation. Pursuant to Section 3(b) of the Custody
Agreement dated March 28, 1991 (the "Agreement"), the Trust and the
Custodian hereby agree that the U.S. GOVERNMENT SECURITIES
PORTFOLIO (the "Portfolio"), a new portfolio series of the Trust,
created and designated in accordance with the Trust's Master Trust
Agreement, shall be considered a Portfolio of the Trust under the
terms of the Agreement, and that the Domestic and Global Fee
Schedules currently in effect, and as may be amended from time to
time under the Agreement, shall apply to the Portfolio, as of the
date and year first written above.
2. Limitation of Liability. The term "Endeavor Series
Trust" means and refers to the Trustees from time to time serving
under the Agreement and Declaration of Trust dated November 18,
1988, as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the
obligations of the Trust hereunder shall not be binding upon any of
the Trustees, shareholders, nominees, officers, agents or employees
of the Trust, personally, but bind only the trust property of the
Trust, as provided in the Agreement and Declaration of Trust. The
execution and delivery of this Agreement have been authorized by
the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose
any liability on any of them personally, but shall bind only the
trust property of the Trust as provided in its Agreement and
Declaration of Trust.
If the foregoing is acceptable to you, kindly indicate your
acceptance by signing and returning the enclosed copy of this
Supplement.
Very truly yours,
ENDEAVOR SERIES TRUST
By: /s/ James A. Shepherdson
James A. Shepherdson
Title: President
Accepted and Agreed to:
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By: /s/Merton E. Thompson
Merton E. Thompson III
Senior Vice President
endeavoragreements\custody\custsupp.doc
Schedule A
Portfolio and General Ledger Accounting
Daily Pricing of all Securities
Daily valuation and N.A.V. Calculation
Daily, Monthly, and Year-to-Date Reporting
Monthly Compliance Testing
Preparation and Printing of Financial Statements
Providing Shareholder Tax Information to Transfer Agent
Producing Drafts of IRS and State Tax Returns
Blue Sky Registration and Monitoring
Treasury Services including:
Expense Accrual Monitoring
Determination of Dividends
Tax and Financial Counsel
Legal Services including:
Review of Form N-SAR
Review and Filing of Annual and Semi-Annual Financial Reports
Assistance in Preparation of Fund Registration Statements
Review of all Sales Material and Advertising
I. Asset Based Charges
Annual Fee is equal to .15 of 1% calculated on total net
assets and paid monthly.
II. Out-of-Pocket Expenses
All reasonable Out-of-Pocket expenses to include, but not
limited to, such items as telephone, wire charges, courier
services, etc.
Please Note: Because most securities are held by more than one
client our pricing charges are passed through to our clients
on a prorated basis.
III. Minimum Fee
Subject to annual minimum fees of $40,000 per portfolio.
TRANSFER AGENCY AND REGISTRAR AGREEMENT
AGREEMENT, dated as of March 28, 1991, between THE ENDEAVOR
SERIES TRUST, (the "Fund"), a business trust organized under the
laws of Massachusetts and having its principal place of business at
1100 Newport Center Drive, Suite 200, Newport Beach, California
92660, and THE SHAREHOLDER SERVICES GROUP, INC. (MA) (the "Transfer
Agent"), a Massachusetts corporation with principal offices at One
Exchange Place, 53 State Street, Boston, Massachusetts 02109.
W I T N E S S E T H
That for and in consideration of the mutual covenants and
promises hereinafter set forth, the Fund and the Transfer Agent
agree as follows:
1. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires,
shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles
of Incorporation, Declaration of Trust, Partnership Agreement, or
similar organizational document as the case may be, of the Fund as
the same may be amended from time to time.
(b) "Authorized Person" shall be deemed to include any
person, whether or not such person is an officer or employee of the
Fund, duly authorized to give Oral Instructions or Written
Instructions on behalf of the Fund as indicated in a certificate
furnished to the Transfer Agent pursuant to Section 4(c) hereof as
may be received by the Transfer Agent from time to time.
(c) "Board of Directors" shall mean the Board of
Directors, Board of Trustees or, if the Fund is a limited
partnership, the General Partner(s) of the Fund, as the case may
be.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Custodian" refers to any custodian or subcustodian
of securities and other property which the Fund may from time to
time deposit, or cause to be deposited or held under the name or
account of such a custodian pursuant to a Custodian Agreement.
(f) "Fund" shall mean the entity executing this
Agreement, and if it is a series fund, as such term is used in the
1940 Act, such term shall mean each series or portfolio of the Fund
hereafter created, except that appropriate documentation with
respect to each series must be presented to the Transfer Agent
before this Agreement shall become effective with respect to each
such series or portfolio; provided, however, that for purposes of
the Transfer Agency Fee set forth on Schedule A hereto, "Fund"
shall include each series or portfolio of the Fund hereafter
created.
(g) "1940 Act" shall mean the Investment Company Act of
1940.
(h) "Oral Instructions" shall mean instructions, other
than Written Instructions, actually received by the Transfer Agent
from a person reasonably believed by the Transfer Agent to be an
Authorized Person;
(i) "Prospectus" shall mean the most recently dated Fund
Prospectus and Statement of Additional Information, including any
supplements thereto if any, which has become effective under the
Securities Act of 1933 and the 1940 Act.
(j) "Shares" refers collectively to such shares of
capital stock, beneficial interest or limited partnership
interests, as the case may be, of the Fund as may issued from time
to time and, if the Fund is a closed-end or a series fund, as such
terms are used in the 1940 Act any other classes or series of
stock, shares of beneficial interest or limited partnership
interests that may be issued from time to time.
(k) "Shareholder" shall mean a holder of shares of
capital stock, beneficial interest or any other class or series,
and also refers to partners of limited partnerships.
(l) "Written Instructions" shall mean a written
communication signed by a person reasonably believed by the
Transfer Agent to be an Authorized Person and actually received by
the Transfer Agent. Written Instructions shall include manually
executed originals and authorized electronic transmissions,
including telefacsimile of a manually executed original or other
process.
2. Appointment of the Transfer Agent. The Fund hereby
appoints and constitutes the Transfer Agent as transfer agent,
registrar and dividend disbursing agent for Shares of the Fund and
as shareholder servicing agent for the Fund. The Transfer Agent
accepts such appointments and agrees to perform the duties
hereinafter set forth.
3. Compensation.
(a) The Fund will compensate or cause the Transfer Agent
to be compensated for the performance of its obligations hereunder
in accordance with the fees set forth in the written schedule of
fees annexed hereto as Schedule A and incorporated herein. The
Transfer Agent will transmit an invoice to the Fund as soon as
practicable after the end of each calendar month which will be
detailed in accordance with Schedule A, and the Fund will pay to
the Transfer Agent the amount of such invoice within fifteen (15)
days after the Fund's receipt of the invoice.
In addition, the Fund agrees to pay, and will be
billed separately for, out-of-pocket expenses incurred by the
Transfer Agent in the performance of its duties hereunder. Out-of-pocket
expenses shall include, but shall not be limited to, the
items specified in the written schedule of out-of-pocket charges
annexed hereto as Schedule B and incorporated herein. Schedule B
may be modified by the Transfer Agent upon not less than 30 days'
prior written notice to the Fund. Unspecified out-of-pocket
expenses shall be limited to those out-of-pocket expenses
reasonably incurred by the Transfer Agent in the performance of its
obligations hereunder. Reimbursement by the Fund for expenses
incurred by the Transfer Agent in any month shall be made as soon
as practicable but no later than 15 days after the receipt of an
itemized bill from the Transfer Agent.
(b) Any compensation agreed to hereunder may be adjusted
from time to time by attaching to Schedule A, a revised fee
schedule executed and dated by the parties hereto.
4. Documents. In connection with the appointment of the
Transfer Agent the Fund shall deliver or cause to be delivered to
the Transfer Agent the following documents on or before the date
this Agreement goes into effect, but in any case within a
reasonable period of time for the Transfer Agent to prepare to
perform its duties hereunder:
(a) If applicable, specimens of the certificates for
Shares of the Fund;
(b) All account application forms and other documents
relating to Shareholder accounts or to any plan, program or service
offered by the Fund;
(c) A signature card bearing the signatures of any
officer of the Fund or other Authorized Person who will sign
Written Instructions or is authorized to give Oral Instructions.
(d) A certified copy of the Articles of Incorporation,
as amended;
(e) A certified copy of the By-laws of the Fund, as
amended;
(f) A copy of the resolution of the Board of Directors
authorizing the execution and delivery of this Agreement;
(g) A certified list of Shareholders of the Fund with
the name, address and taxpayer identification number of each
Shareholder, and the number of Shares of the Fund held by each,
certificate numbers and denominations (if any certificates have
been issued), lists of any accounts against which stop transfer
orders have been placed, together with the reasons therefore, and
the number of Shares redeemed by the Fund; and
(h) An opinion of counsel for the Fund with respect to
the validity of the Shares and the status of such Shares under the
Securities Act of 1933, as amended.
5. Further Documentation. The Fund will also furnish the
Transfer Agent with copies of the following documents promptly
after the same shall become available:
(a) each resolution of the Board of Directors
authorizing the issuance of Shares;
(b) any registration statements filed on behalf of the
Fund and all pre-effective and post-effective amendments thereto
filed with the Commission;
(c) a certified copy of each amendment to the Articles
of Incorporation or the By-laws of the Fund;
(d) certified copies of each resolution of the Board of
Directors or other authorization designating Authorized Persons;
and
(e) such other certificates, documents or opinions as
the Transfer Agent may reasonably request in connection with the
performance of its duties hereunder.
6. Representations of the Fund. The Fund represents to the
Transfer Agent that all outstanding Shares are validly issued,
fully paid and non-assessable. When Shares are hereafter issued in
accordance with the terms of the Articles of Incorporation and its
Prospectus, such Shares shall be validly issued, fully paid and
non-assessable by the Fund.
7. Distributions Payable in Shares. In the event that the
Board of Directors of the Fund shall declare a distribution payable
in Shares, the Fund shall deliver or cause to be delivered to the
Transfer Agent written notice of such declaration signed on behalf
of the Fund by an officer thereof, upon which the Transfer Agent
shall be entitled to rely for all purposes, certifying (i) the
identity of the Shares involved, (ii) the number of Shares
involved, and (iii) that all appropriate action has been taken.
8. Duties of the Transfer Agent. The Transfer Agent shall
be responsible for administering and/or performing those functions
typically performed by a transfer agent; for acting as service
agent in connection with dividend and distribution functions; and
for performing shareholder account and administrative agent
functions in connection with the issuance, transfer and redemption
(including coordination with the Custodian) of Shares in accordance
with the terms of the Prospectus and applicable law. The operating
standards and procedures to be followed shall be determined from
time to time by agreement between the Fund and the Transfer Agent
and shall initially be described in Schedule C attached hereto. In
addition, the Fund shall deliver to the Transfer Agent all notices
issued by the Fund with respect to the Shares in accordance with
and pursuant to the Articles of Incorporation or By-laws of the
Fund or as required by law and shall perform such other specific
duties as are set forth in the Articles of Incorporation including
the giving of notice of any special or annual meetings of
shareholders and any other notices required thereby.
9. Record Keeping and Other Information. The Transfer Agent
shall create and maintain all records required of it pursuant to
its duties hereunder and as set forth in Schedule C in accordance
with all applicable laws, rules and regulations, including records
required by Section 31(a) of the 1940 Act. All records shall be
available during regular business hours for inspection and use by
the Fund. Where applicable, such records shall be maintained by
the Transfer Agent for the periods and in the places required by
Rule 31a-2 under the 1940 Act.
Upon reasonable notice by the Fund, the Transfer Agent shall
make available during regular business hours such of its facilities
and premises employed in connection with the performance of its
duties under this Agreement for reasonable visitation by the Fund,
or any person retained by the Fund as may be necessary for the Fund
to evaluate the quality of the services performed by the Transfer
Agent pursuant hereto.
10. Other Duties. In addition to the duties set forth in
Schedule C, the Transfer Agent shall perform such other duties and
functions, and shall be paid such amounts therefor, as may from
time to time be agreed upon in writing between the Fund and the
Transfer Agent. The compensation for such other duties and
functions shall be reflected in a written amendment to Schedule A
or B and the duties and functions shall be reflected in an
amendment to Schedule C, both dated and signed by authorized
persons of the parties hereto.
11. Reliance by Transfer Agent; Instructions
(a) The Transfer Agent will have no liability when
acting upon Written or Oral Instructions believed to have been
executed or orally communicated by an Authorized Person and will
not be held to have any notice of any change of authority of any
person until receipt of a Written Instruction thereof from the Fund
pursuant to Section 4(c). The Transfer Agent will also have no
liability when processing Share certificates which it reasonably
believes to bear the proper manual or facsimile signatures of the
officers of the Fund and the proper countersignature of the
Transfer Agent.
(b) At any time, the Transfer Agent may apply to any
Authorized Person of the Fund for Written Instructions and may seek
advice from legal counsel for the Fund, or its own legal counsel,
with respect to any matter arising in connection with this
Agreement, and it shall not be liable for any action taken or not
taken or suffered by it in good faith in accordance with such
Written Instructions or in accordance with the opinion of counsel
for the Fund or for the Transfer Agent. Written Instructions
requested by the Transfer Agent will be provided by the Fund within
a reasonable period of time. In addition, the Transfer Agent, its
officers, agents or employees, shall accept Oral Instructions or
Written Instructions given to them by any person representing or
acting on behalf of the Fund only if said representative is an
Authorized Person. The Fund agrees that all Oral Instructions
shall be followed within one business day by confirming Written
Instructions, and that the Fund's failure to so confirm shall not
impair in any respect the Transfer Agent's right to rely on Oral
Instructions. The Transfer Agent shall have no duty or obligation
to inquire into, nor shall the Transfer Agent be responsible for,
the legality of any act done by it upon the request or direction of
a person reasonably believed by the Transfer Agent to be an
Authorized Person.
(c) Notwithstanding any of the foregoing provisions of
this Agreement, the Transfer Agent shall be under no duty or
obligation to inquire into, and shall not be liable for: (i) the
legality of the issuance or sale of any Shares or the sufficiency
of the amount to be received therefor; (ii) the legality of the
redemption of any Shares, or the propriety of the amount to be paid
therefor; (iii) the legality of the declaration of any dividend by
the Board of Directors, or the legality of the issuance of any
Shares in payment of any dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares.
12. Acts of God, etc. The Transfer Agent will not be liable
or responsible for delays or errors by acts of God or by reason of
circumstances beyond its control, including acts of civil or
military authority, national emergencies, labor difficulties,
mechanical breakdown, insurrection, war, riots, or failure or
unavailability of transportation, communication or power supply,
fire, flood or other catastrophe.
13. Duty of Care and Indemnification. The Fund will
indemnify the Transfer Agent against and hold it harmless from any
and all losses, claims, damages, liabilities or expenses of any
sort or kind (including reasonable counsel fees and expenses)
resulting from any claim, demand, action or suit or other
proceeding (a "Claim") unless such Claim has been judicially
determined to have resulted from a negligent failure to act or
omission to act or bad faith of the Transfer Agent in the
performance of its duties hereunder. In addition, the Fund will
indemnify the Transfer Agent against and hold it harmless from any
Claim that is a result of: (i) any action taken in accordance with
Written or Oral Instructions, or any other instructions, or share
certificates reasonably believed by the Transfer Agent to be
genuine and to be signed, countersigned or executed, or orally
communicated by an Authorized Person; (ii) any action taken in
accordance with written or oral advice reasonably believed by the
Transfer Agent to have been given by counsel for the Fund or its
own counsel; or (iii) any action taken as a result of any error or
omission in any record (including but not limited to magnetic
tapes, computer printouts, hard copies and microfilm copies)
delivered, or caused to be delivered by the Fund to the Transfer
Agent in connection with this Agreement.
In any case in which the Fund may be asked to indemnify or
hold the Transfer Agent harmless, the Fund shall be advised of all
pertinent facts concerning the situation in question. The Transfer
Agent will notify the Fund promptly after identifying any situation
which it believes presents or appears likely to present a claim for
indemnification against the Fund although the failure to do so
shall not prevent recovery by the Transfer Agent. The Fund shall
have the option to defend the Transfer Agent against any Claim
which may be the subject of this indemnification, and, in the event
that the Fund so elects, such defense shall be conducted by counsel
chosen by the Fund and satisfactory to the Transfer Agent, and
thereupon the Fund shall take over complete defense of the Claim
and the Transfer Agent shall sustain no further legal or other
expenses in respect of such Claim. The Transfer Agent will not
confess any Claim or make any compromise in any case in which the
Fund will be asked to provide indemnification, except with the
Fund's prior written consent. The obligations of the parties
hereto under this Section shall survive the termination of this
Agreement.
14. Consequential Damages. In no event and under no
circumstances shall either party under this Agreement be liable to
the other party for consequential or indirect loss of profits,
reputation or business or any other special damages under any
provision of this Agreement or for any act or failure to act
hereunder.
15. Term and Termination.
(a) This Agreement shall be effective on the date first
written above and shall continue for successive annual periods
ending on the anniversary of the date first written above, provided
that it may be terminated by either party upon written notice given
at least 90 days prior to such anniversary date.
(b) In the event a termination notice is given by the
Fund, it shall be accompanied by a resolution of the Board of
Directors, certified by the Secretary of the Fund, designating a
successor transfer agent or transfer agents. Upon such termination
and at the expense of the Fund, the Transfer Agent will deliver to
such successor a certified list of shareholders of the Fund (with
names and addresses), and all other relevant books, records,
correspondence and other Fund records or data in the possession of
the Transfer Agent, and the Transfer Agent will cooperate with the
Fund and any successor transfer agent or agents in the substitution
process.
16. confidentiality. Both parties hereto agree that nay non
public information obtained hereunder concerning the other party is
confidential and may not be disclosed to any other person without
the consent of the other party, except as may be required by
applicable law or at the request of the Commission or other
governmental agency. The parties further agree that a breach of
this provision would irreparably damage the other party and
accordingly agree that each of them is entitled, without bond or
other security, to an injunction or injunctions to prevent breaches
of this provision.
17. Amendment. This Agreement may only be amended or
modified by a written instrument executed by both parties.
18. Subcontracting. The Fund agrees that the Transfer Agent
may, in its discretion, subcontract for certain of the services
described under this Agreement or the Schedules hereto; provided
that the appointment of any such Transfer Agent shall not relieve
the Transfer Agent of its responsibilities hereunder.
19. Miscellaneous.
(a) Notices. Any notice or other instrument authorized
or required by this Agreement to be given in writing to the Fund or
the Transfer Agent, shall be sufficiently given if addressed to
that party and received by it at its office set forth below or at
such other place as it may from time to time designate in writing.
To the Fund:
Endeavor Series Trust
1100 Newport Center Drive, Suite 200
Newport Beach, California 92660
Attention: President
To the Transfer Agent:
The Shareholder Services Group
One Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Robert F. Radin, President
with a copy to TSSG Counsel
(b) Successors. This Agreement shall extend to and
shall be binding upon the parties hereto, and their respective
successors and assigns, provided, however, that this Agreement
shall not be assigned to any person other than a person
controlling, controlled by or under common control with the
assignor without the written consent of the other party, which
consent shall not be unreasonably withheld.
(c) Governing Law. This Agreement shall be governed
exclusively by the laws of the Commonwealth of Massachusetts
without reference to the choice of law provisions thereof. Each
party hereto hereby agrees that (i) Massachusetts Superior Court
shall have exclusive jurisdiction over any and all disputes arising
hereunder; (ii) hereby consents to the personal jurisdiction of
such court over the parties hereto, hereby waiving any defense of
lack of personal jurisdiction; and (iii) appoints the person to
whom notices hereunder are to be sent as agent for service of
process.
(d) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original; but such counterparts shall, together, constitute only
one instrument.
(e) Captions. The captions of this Agreement are
included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their
construction or effect.
(f) Use of Transfer Agent's Name. The Fund shall not
use the name of the Transfer Agent in any Prospectus, Statement of
Additional Information, shareholders' report, sales literature or
other material relating to the Fund in a manner not approved prior
thereto in writing; provided, that the Transfer Agent need only
receive notice of all reasonable uses of its name which merely
refer in accurate terms to its appointment hereunder or which are
required by any government agency or applicable law or rule.
Notwithstanding the foregoing, any reference to the Transfer Agent
shall include a statement to the effect that it is an indirect,
wholly owned subsidiary of American Express Company.
(g) Use of Fund's Name. The Transfer Agent shall not
use the name of the Fund or material relating to the Fund on any
documents or forms for other than internal use in a manner not
approved prior thereto in writing; provided, that the Fund need
only receive notice of all reasonable uses of its name which merely
refer in accurate terms to the appointment of the Transfer Agent or
which are required by any government agency or applicable law or
rule.
(h) Independent Contractors. The parties agree that
they are independent contractors and not partners or co-venturers.
(i) Entire Agreement; Severability. This Agreement and
the Schedules attached hereto constitute the entire agreement of
the parties hereto relating to the matters covered hereby and
supersede any previous agreements. If any provision is held to be
illegal, unenforceable or invalid for any reason, the remaining
provisions shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers, as of
the day and year first above written.
ENDEAVOR SERIES TRUST
By: /s/James A. Shepherdson
Title: President
THE SHAREHOLDER SERVICES
GROUP, INC.
By: /s/
Title: Treasurer
Transfer Agent Fee
Schedule A
The Fund shall pay the Transfer Agent an annualized fee of
$9,000. Such fee shall be billed by the Transfer Agent monthly in
arrears on a prorated basis of 1/12 of the annualized fee.
Schedule B
OUT-OF-POCKET EXPENSES
The Fund shall reimburse the Transfer Agent monthly for
applicable out-of-pocket expenses, including, but not limited to
the following items:
- postage and mailing, including third party labor
charges
- forms
- incoming and outgoing wire charges
- telephone; including all lease, maintenance and
line costs
- third party audit reviews
- overtime and temporary employees as requested by
the Fund
- Federal Reserve charges for check clearance
- if applicable, magnetic tape and freight
- retention of records
- microfilm/microfiche
- stationery
- representation at annual shareholder meeting
- insurance
- if applicable, terminals, transmitting lines and
any expenses incurred in connection with such
terminals and lines
- all conversion costs: including System start up
costs
- all Systems enhancements after the conversion at
the rate of $87.00 per hour
- all other miscellaneous expenses reasonably
incurred by the Agent
The Fund agrees that postage and mailing expenses will be paid
on the day of or prior to mailing as agreed with the Transfer
Agent. In addition, the Fund will promptly reimburse the Transfer
Agent for any other unscheduled expenses incurred by the Transfer
Agent whenever the Fund and the Transfer Agent mutually agree that
such expenses are not otherwise properly borne by the Transfer
Agent as part of its duties and obligations under the Agreement.
Expenses incurred in connection with the initial offering of
the Fund will be billed as out-of-pocket expenses pursuant to the
above schedule. These expenses will include, but are not limited
to:
* bulk certificate printing and delivery at the time of the
closing
* representation at the preclosing and closing.
Schedule C
DUTIES OF THE TRANSFER AGENT
1. Shareholder Information. The Transfer Agent or its agent
shall maintain a record of the number of Shares held by each holder
of record which shall include name, address, taxpayer
identification and which shall indicate whether such Shares are
held in certificates or uncertificated form.
2. Shareholder Services. The Transfer Agent or its agent
will investigate all inquiries from shareholders of the Fund
relating to Shareholder accounts and will respond to all
communications from Shareholders and others relating to its duties
hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Transfer Agent and the Fund.
3. Share Certificates.
(a) At the expense of the Fund, it shall supply the
Transfer Agent or its agent with an adequate supply of blank share
certificates to meet the Transfer Agent or its agent's requirements
therefor. Such Share certificates shall be properly signed by
facsimile. The Fund agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund whose signature
appears on such certificates, the Transfer Agent or its agent may
continue to countersign certificates which bear such signatures
until otherwise directed by Written Instructions.
(b) The Transfer Agent or its agent shall issue
replacement Share certificates in lieu of certificates which have
been lost, stolen or destroyed, upon receipt by the Transfer agent
or its agent of properly executed affidavits and lost certificate
bonds, in form satisfactory to the Transfer Agent or its agent,
with the Fund and the Transfer Agent or its agent as obligees under
the bond.
(c) The Transfer Agent or its agent shall also maintain
a record of each certificate issued, the number of Shares
represented thereby and the holder of record. With respect to
Shares held in open accounts or uncertificated form, i.e., no
certificate being issued with respect thereto, the Transfer Agent
or its agent shall maintain comparable records of the record
holders thereof, including their names and addresses. The Transfer
Agent or its agent shall further maintain a stop transfer record on
lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials.
The Transfer Agent or its agent will address and mail to
Shareholders of the Fund, all reports to Shareholders, dividend and
distribution notices and proxy material for the Fund's meetings of
Shareholders. In connection with meetings of Shareholders, the
Transfer Agent or its Agent will prepare Shareholder lists, mail
and certify as to the mailing of proxy materials, process and
tabulate returned proxy cards, report on proxies voted prior to
meetings, act as inspector of election at meetings and certify
Shares voted at meetings.
5. Sales of Shares
(a) Suspension of Sale of Shares. The Transfer Agent or
its agent shall not be required to issue any Shares of the Fund
where it has received a Written Instruction from the Fund or
official notice from any appropriate authority that the sale of the
Shares of the Fund has been suspended or discontinued. The
existence of such Written Instructions or such official notice
shall be conclusive evidence of the right of the Transfer Agent or
its agent to rely on such Written Instructions or official notice.
(b) Returned Checks. In the event that any check or
other order for the payment of money is returned unpaid for any
reason, the Transfer Agent or its agent will: (i) give prompt
notice of such return to the Fund or its designee; (ii) place a
stop transfer order against all Shares issued as a result of such
check or order; and (iii) take such actions as the Transfer Agent
may from time to time deem appropriate.
6. Transfer and Redemption
(a) Requirements for Transfer or Redemption of Shares.
The Transfer Agent or its agent shall process all requests to
transfer or redeem Shares in accordance with the transfer or
redemption procedures set forth in the Fund's Prospectus.
The Transfer Agent or its agent will transfer or redeem
Shares upon receipt of Oral or Written Instructions or otherwise
pursuant to the Prospectus and Share certificates, if any, properly
endorsed for transfer or redemption, accompanied by such documents
as the Transfer Agent or its agent reasonably may deem necessary.
The Transfer Agent or its agent reserves the right to
refuse to transfer or redeem Shares until it is satisfied that the
endorsement on the instructions is valid and genuine. The Transfer
Agent or its agent also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers or redemptions
which the Transfer Agent or its agent, in its good judgement, deems
improper or unauthorized, or until it is reasonably satisfied that
there is no basis to any claims adverse to such transfer or
redemption.
(b) Notice to Custodian and Fund. When Shares are
redeemed, the Transfer Agent or its agent shall, upon receipt of
the instructions and documents in proper form, deliver to the
Custodian and the Fund or its designee a notification setting forth
the number of Shares to be redeemed. Such redeemed shares shall be
reflected on appropriate accounts maintained by the Transfer Agent
or its agent reflecting outstanding Shares of the Fund and Shares
attributed to individual accounts.
(c) Payment of Redemption Proceeds. The Transfer Agent
or its agent shall, upon receipt of the moneys paid to it by the
Custodian for the redemption of Shares, pay such moneys as are
received from the Custodian, all in accordance with the procedures
described in the written instruction received by the Transfer Agent
or its agent from the Fund.
The Transfer Agent or its agent shall not process or
effect any redemption with respect to Shares of the Fund after
receipt by the Transfer Agent or its agent of notification of the
suspension of the determination of the net asset value of the Fund.
7. Dividends
(a) Notice to Agent and Custodian. Upon the declaration
of each dividend and each capital gains distribution by the Board
of Directors of the Fund with respect to Shares of the Fund, the
Fund shall furnish or cause to be furnished to the Transfer Agent
or its agent a copy of a resolution of the Fund's Board of
Directors certified by the Secretary of the Fund setting forth the
date of the declaration of such dividend or distribution, the ex-dividend
date, the date of payment thereof, the record date as of
which shareholders entitled to payment shall be determined, the
amount payable per Share to the shareholders of record as of that
date, the total amount payable to the Transfer Agent or its agent
on the payment date and whether such dividend or distribution is to
be paid in Shares of such class at net asset value.
On or before the payment date specified in such
resolution of the Board of Directors, the Custodian of the Fund
will pay to the Transfer Agent sufficient cash to make payment to
the shareholders of record as of such payment date.
(b) Insufficient Funds for Payments. If the Transfer
Agent or its agent does not receive sufficient cash from the
Custodian to make total dividend and/or distribution payments to
all shareholders of the Fund as of the record date, the Transfer
Agent or its agent will, upon notifying the Fund, withhold payment
to all Shareholders of record as of the record date until
sufficient cash is provided to the Transfer Agent or its agent.
Exhibit 1
to
Schedule C
Summary of Services
The services to be performed by the Transfer Agent or its
agent shall be as follows:
A. DAILY RECORDS
Maintain daily the following information with respect to
each Shareholder account as received:
* Name and Address (Zip Code)
* Class of Shares
* Taxpayer Identification Number
* Balance of Shares held by Agent
* Beneficial owner code: i.e., male, female, joint
tenant, etc.
* Dividend code (reinvestment)
* Number of Shares held in certificate form
B. OTHER DAILY ACTIVITY
* Answer written inquiries relating to Shareholder
accounts (matters relating to portfolio management,
distribution of Shares and other management policy
questions will be referred to the Fund).
* Process additional payments into established
Shareholder accounts in accordance with Written
Instruction from the Agent.
* Upon receipt of proper Written or Oral instructions
and all required documentation, process requests for
redemption of Shares.
* Identify redemption requests made with respect to
accounts in which Shares have been purchased within
an agreed-upon period of time for determining
whether good funds have been collected with respect
to such purchase and process as agreed by the Agent
in accordance with written instructions set forth by
the Fund.
* Examine and process all transfers of Shares,
ensuring that all transfer requirements and legal
documents have been supplied.
* Issue and mail replacement checks.
* Open new accounts and maintain records of exchanges
between accounts.
C. DIVIDEND ACTIVITY
* Calculate and process Share dividends and
distributions as instructed by the Fund.
* Compute, prepare and mail all necessary reports to
Shareholders or various authorities as requested by
the Fund. Report to the Fund reinvestment plan
share purchases and determination of the
reinvestment price.
D. MEETINGS OF SHAREHOLDERS
* Cause to be mailed proxy and related material for
all meetings of Shareholders. Tabulate returned
proxies (proxies must be adaptable to mechanical
equipment of the Agent or its agents) and supply
daily reports when sufficient proxies have been
received.
* Prepare and submit to the Fund an Affidavit of
Mailing.
* At the time of the meeting, furnish a certified list
of Shareholders, hard copy, microfilm or microfiche
and, if requested by the Fund, Inspection of
Election.
E. PERIODIC ACTIVITIES
* Cause to be mailed reports, Prospectuses, and any
other enclosures requested by the Fund (material
must be adaptable to mechanical equipment of Agent
or its agents).
* Receive all notices issued by the Fund with respect
to the Preferred Shares in accordance with and
pursuant to the Articles of Incorporation and the
Indenture and perform such other specific duties as
are set forth in the Articles of Incorporation
including a giving of notice of a special meeting
and notice of redemption in the circumstances and
otherwise in accordance with all relevant provisions
of the Articles of Incorporation.
ENDEAVOR SERIES TRUST LICENSE AGREEMENT
This LICENSE AGREEMENT ("Agreement") dated June 25, 1990
between Endeavor Management Co., a California corporation, and
Endeavor Series Trust ("Licensee"), a Massachusetts business trust
registered as an open-end management investment company.
W I T N E S S E T H:
WHEREAS, Licensor owns certain rights in and to the
trade name and service mark "Endeavor" (such trade name and service
mark being collectively referred to as the "Service Mark"), which
Service Mark is owned by Licensor and has been registered with the
United States Patent and Trademark Office (Registration No.
1567525);
NOW, THEREFORE, in consideration of the mutual
agreements and covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1. Existing Rights. Licensee acknowledges and agrees
that Licensor owns and has the right to use the Service Mark.
Licensor acknowledges and agrees that Licensee owns and has the
right to use its trust name during the term of and subject to the
provisions of this Agreement.
2. Grant of Limited License. Subject to the rights
reserved in Section 3 below, for and during the term of this
Agreement, Licensor grants Licensee the limited worldwide right and
license (the "License") to use on a royalty-free basis the Service
Mark, alone or with other designs and logos, solely as a part of
Licensee's name and as a part of the name of any series or
portfolio of Licensee, all subject to the terms and conditions
stated herein. It is understood and agreed, however, that Licensee
shall not use the Service Mark in connection with the sale or
distribution of any mutual fund securities other than through
arrangements established by Licensor.
3. Reservation of Rights. Licensee acknowledges that
Licensor reserves for itself certain rights to use the Service
Mark, alone or with other designs and logos, and to license others
to so use the Service Mark, as and to the extent permitted in the
License Agreement between Licensor and Pacific Fidelity Life
Insurance Company.
4. Registration of Service Mark.
(a) Licensee acknowledges that the Service Mark has not
been registered for use in areas of principal underwriters or
transfer agents and Licensor makes no warranties or
representations with respect to such use.
(b) Licensee shall promptly give notice in writing to
Licensor of any infringement of the Service Mark which shall come
to the knowledge of Licensee. Licensor shall promptly after
receipt of such notice take all reasonable steps to bring such
infringement to an end. Licensee agrees to cooperate with Licensor
in taking such steps at the cost of Licensor and at no cost to
Licensee. If Licensor shall not have commenced to take all
reasonable steps to bring such infringement to an end within ninety
(90) days from the receipt of the aforesaid notice and does not
diligently pursue such steps to bring such infringement to an end,
Licensee shall have the right, at the sole cost of Licensee, to
take such steps in Licensee's own name or in the name of Licensor
including legal proceedings to bring such infringement to an end.
In the event that such legal proceedings are instituted by
Licensee, any monetary recovery therefrom shall be retained by
Licensee as compensation for its costs or loss. Licensor shall
cooperate with Licensee in taking such steps. Licensee shall pay
for the reasonable expenses of Licensor incurred in the taking of
such steps.
5. Use of Service Mark.
(a) The Service Mark shall not be used by Licensee in
any manner which tends to reflect improperly upon the Service Mark.
(b) Whenever Licensee uses the Service Mark, such use
shall be in conjunction with the registered service mark
designation.
(c) Upon Licensor's request, Licensee shall permit
Licensor, at reasonable times, to review and inspect all materials
on which Licensee uses the Service Mark.
6. Modification of Service Mark. Licensee shall not
change or modify the Service Mark without the prior written consent
of Licensor. Nothing contained in this Agreement shall give
Licensee any interest in the Service Mark except as specifically
and expressly contained herein.
7. Effectiveness, Term and Termination.
(a) Effectiveness. This Agreement is effective, valid
and binding on and as of the date hereof and shall remain in effect
until December 31, 2039 or until earlier terminated in accordance
with the provisions of Section 7(b).
(b) Term and Termination. This Agreement and the
License may be terminated:
(i) by Licensee at any time upon thirty days
written notice to Licensor;
(ii) by Licensor in the event of a termination of
any then current Management Agreement between Licensor
and Licensee;
(iii) by Licensor if Licensee contests in any
manner whatsoever the validity of Licensor's Service
Mark; or
(iv) by Licensor in the event of the occurrence of
a Bankruptcy Event (below defined) with respect to
Licensee.
For purposes of this Paragraph 7(b)(iv), a "Bankruptcy
Event" with respect to Licensee shall be deemed to have occurred if
any one or the more of the following occurs and is continuing:
(A) Licensee shall (i) file, or consent to
the filing against it of, a petition for relief
under any bankruptcy or insolvency laws, (ii) make
an assignment for the benefit of creditors, or
(iii) consent to the appointment of a receiver,
liquidator, assignee, custodian, trustee,
sequestrator or other official with similar powers
over a substantial part of its property; or
(B) A court having jurisdiction over Licensee
or of any of the property of Licensee shall enter a
decree or order for relief in respect thereof in an
involuntary case under any bankruptcy or insolvency
law, or shall appoint a receiver, liquidator,
assignee, custodian, trustee, sequestrator or
official with similar powers over a substantial
part of the property of Licensee, or shall order
the winding-up, liquidation or rehabilitation of
the affairs of Licensee, and such order or decree
shall continue in effect for a period of 90
consecutive days.
(c) Survival. The provisions of Section 8 shall
survive any termination of this Agreement and the License.
8. Transition Period. Upon termination of this
Agreement in accordance with Section 7(a) or clause (ii) of Section
7(b), Licensee shall have the right to continue to use the Service
Mark for a period of ninety days following the effective date of
the termination either (i) to exhaust supplies of materials which
bear the Service Mark or (ii) to allow Licensee to effect a
transition from use of the Service Mark to use of Licensee's own
marks.
9. Miscellaneous.
(a) Notices. Any and all notices or other
communications provided for herein shall be given in writing and
shall be delivered by hand or overnight courier, mailed by
registered or certified mail, postage and other charges prepaid, or
given by telex or facsimile transmission, addressed:
(i) in the case of Licensor, to Endeavor
Management Co., 1100 Newport Center Drive, Suite 200,
Newport Beach, CA 92660.
(ii) in the case of Licensee, to Endeavor Series
Trust, c/o Endeavor Management Co.
provided, however, that either party may from time to time, by
notice to the other party given in the manner provided herein,
change the address for notices or other communications to such
party, in which case any such notices or other communications shall
be sent, by the means prescribed above, to such party at the
address last so specified. Except as otherwise provided in this
Agreement, each notice or other communication shall be deemed given
at the time it is received, and all notices shall be effective only
upon actual receipt.
(b) Amendment. This Agreement constitutes the entire
agreement with respect to the subject matter hereof and supersedes
all prior written and oral understandings with respect thereto.
(c) Severability. In case any one or more of the
provisions or parts of any one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect in any jurisdiction, such
invalidity, illegality or unenforceability shall be deemed not to
affect the validity, legality or enforceability of such provision
or part of a provision in any other jurisdiction or any other
provision or part of a provision of this Agreement, but this
Agreement shall be reformed and construed in such jurisdiction as
if such provision or part of a provision held to be invalid or
illegal or unenforceable had never been contained herein and such
provision or part reformed so that it would be valid, legal and
enforceable in such jurisdiction to the maximum extent possible.
(d) Further Assurances. Each of the parties hereto
agrees to execute all such further instruments and documents and to
take all such further action as the other party may reasonably
require in order to effectuate the terms and purposes of this
Agreement. The parties shall act in good faith in the performance
of their obligations under this Agreement.
(e) Waiver. No failure or delay on the part of either
party hereto in exercising any right, power or privilege hereunder,
and no course of dealing between the parties hereto, shall operate
as a waiver thereof nor shall any single or partial exercise of any
right, power or privilege hereunder preclude the simultaneous or
later exercise of any other right, power or privilege. No notice
to or demand on either party in any case shall entitle such party
to any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the other
party to take any other or further action in any circumstances
without notice or demand.
(f) Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
(g) Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of
California.
(h) Assignment. Subject to the right of Licensor to
license others to use the Service Mark in accordance with the
provisions hereof, Licensee may not assign this Agreement or any
rights hereunder without the express written consent of the other.
(i) Benefit and Binding Effect. This Agreement shall
be binding upon, enforceable against and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns.
(j) Limitation of Liability. A copy of the Declaration
of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts and notice is hereby given that this Agreement is
executed on behalf of the Trustees of the Trust as trustees and not
individually and that the obligations of this Agreement are not
binding upon the Trustees or holders of shares of the Trust
individually but are binding only upon the assets and property of
the Trust.
IT WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
"Licensor"
ENDEAVOR MANAGEMENT CO.
By:
______________________________
Authorized Officer
"Licensee"
ENDEAVOR SERIES TRUST
By:
_______________________________
Authorized Officer
AMENDMENT NO. 1
TO
ENDEAVOR SERIES TRUST LICENSE AGREEMENT
This Amendment No. 1 to the Endeavor Series Trust License
Agreement dated November 23, 1992 (the "License Agreement") is
entered by and between Endeavor Management Co., a California
corporation and Endeavor Series Trust, a Massachusetts business
trust.
Endeavor Management Co. and Endeavor Series Trust hereby agree
that Section 7(b)(ii) of the License Agreement is hereby amended to
read in whole as follows:
7. Effectiveness, Term and Termination
---
(b) Term and Termination. This Agreement and the
License may be terminated.
---
(ii) by Licensor in the event of termination of any
then current Management Agreement between Licensor
or any partnership in which Licensor is the managing
partner and Licensee;
IN WITNESS WHEREOF, the parties have caused this Amendment to
be signed on their behalf of their authorized representatives this
23rd day of November, 1992.
ENDEAVOR SERIES TRUST
BY: /s/James A. Shepherdson
ENDEAVOR MANAGEMENT CO.
BY: /s/Vincent J. McGuinness
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made as of , 1990, by
and between Endeavor Management Co., a California corporation (the
"Company"), and The Boston Company Advisors, Inc., a Massachusetts
corporation ("Boston Advisors").
W I T N E S S E T H:
WHEREAS, Endeavor Series Trust (the "Trust") and the Company
have entered into a management agreement pursuant to which the
Company has agreed to provide certain administrative services to
the Trust; and
WHEREAS, the Company wishes to retain Boston Advisors to
provide certain administrative services with respect to the four
investment portfolios (collectively, the "Series") of the Trust
managed by the Company, and the Boston Advisors is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties as
follows:
1. Appointment. The Company hereby appoints Boston Advisors
to provide certain administrative services required by the Trust
for each Series for the period and on the terms set forth in this
Agreement; provided that this Agreement shall not be effective
until approved by the Board of Trustees of the Trust. Boston
Advisors accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as
provided in Paragraph 4 of this Agreement. In the event that the
Company decides to retain Boston Advisors to act as administrator
hereunder with respect to one or more portfolios other than the
Series, the Company shall notify Boston Advisors in writing. If
Boston Advisors is willing to render such services, it shall notify
the Company in writing whereupon such portfolio shall become a
Series hereunder.
2. Delivery of Documents. The Company has furnished Boston
Advisors with copies properly certified or authenticated of each of
the following:
(a) Resolutions of the Board of Trustees of the Trust
authorizing the appointment of the Company as Manager of the Trust
and the Company's appointment of Boston Advisors to provide certain
administrative services to the Trust and approving this Agreement;
(b) The Trust's Declaration of Trust filed with the
Commonwealth of Massachusetts on November 18, 1988 (the
"Declaration of Trust");
(c) The Trust's By-Laws and all amendments thereto (the
"By-Laws");
(d) The Management Agreement between the Company and the
Trust dated as of , 1990 and the Investment Advisory
Agreements between TCW Funds Management, Inc., and Ivory & Sime
International, Inc. (the "Advisers") and the Company with respect
to each Series dated as of , 1990;
(e) The Participation Agreement among Pacific Fidelity
Life Insurance Company ("PFL"), the Company and the Trust dated as
of , 1990;
(f) The Custodian Agreement between Boston Safe Deposit
and Trust Company (the "Custodian") and the Trust dated as of
, 1990 (the "Custodian Agreement");
(g) The Transfer Agency Agreement between The
Shareholder Services Group, Inc. (the "Transfer Agent") and the
Trust dated as of , 1990;
(h) The Trust's Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and
under the 1940 Act (File Nos. 33-27352 and 811-5780), as filed with
the Securities and Exchange Commission on March 7, 1989 relating to
shares of beneficial interest of the Trust no par value (the
"Shares"), and all amendments thereto; and
(i) The Trust's most recent prospectus and statement of
additional information and all amendments and supplements thereto
(the "Prospectus");
The Company will furnish Boston Advisors from time to time
with copies, properly certified or authenticated, of all amendments
of or supplements to the foregoing, if any. Furthermore, the
Company will provide Boston Advisors any other documents that
Boston Advisors may reasonably request and are necessary for it to
perform its obligations and duties under this Agreement and that
are necessary for it to perform its obligations and duties under
this Agreement and will notify Boston Advisors as soon as possible
of any matter materially affecting the performance by Boston
Advisors of its services under this Agreement.
3. Services and Duties. Subject to the supervision and
control of the Company, Boston Advisors, as Administrator, will
assist in supervising various aspects of the Trust's administrative
operations, and undertakes to do the following specific services:
(a) Maintaining office facilities (which may be in the
offices of Boston Advisors or a corporate affiliate);
(b) Furnishing statistical and research data, data
processing services, clerical services, internal executive and
administrative services and stationery and office supplies in
connection with the foregoing;
(c) At the request of the Company and in conjunction
with outside counsel of the Trust, preparing and filing with the
Securities and Exchange Commission routine Post-Effective
Amendments to the Trust's Registration Statement, Notices of Annual
or Special Meetings of Shareholders and routine Proxy materials
relating to such Meetings; accumulating information for and,
subject to approval by the Trust's Treasurer, preparing reports to
the Trust's shareholders of record and the Securities and Exchange
Commission including, but not necessarily limited to: Semi-Annual
Reports on From N-SAR and the preparation and filing of Notices
pursuant to Rule 24f-2, excluding legal opinions filed therewith;
(d) Preparing and filing various reports or other
documents required by federal, state and other applicable laws and
regulations other than those required to be filed by the Trust's
Custodian or Transfer Agent;
(e) At the request of the Company, reviewing and
providing advice on all sales literature (i.e. advertisements,
brochures and shareholder communications) with respect to each of
the Series; provided, however that Boston Advisors shall not be
responsible for the filing of such sales literature with any
regulatory agency nor shall Boston Advisors be liable to the
Company or the Trust for the content of such sales literature
reviewed by it;
(f) Performing corporate secretarial duties which will
include, among other things, assisting the Trust in maintaining the
necessary corporate records and good standing status of the Trust
in all states in which it is qualified to do business, preparation
of all agendas, notices and minutes for meetings of the Trust's
Board of Trustees and shareholders, preparation of all resolutions
to be voted upon by the Board of Trustees, and preparation of
supporting information for such meetings with regard to the duties
of Boston Advisors under this Agreement, and collection and
distribution of supporting information for such meetings with
respect to the duties performed by other persons who provide
services to the Trust;
(g) At the request of the Company, assisting the Trust's
Advisers, in developing and monitoring compliance procedures for
each Series concerning, among other matters, adherence of each
Series to its investment objectives, policies, restrictions, tax
matters and applicable laws and regulations;
(h) Preserving for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule
31a-1 under said Act. Boston Advisors further agrees that all such
records which it maintains for the Trust are the property of the
Trust and shall be open to inspection and audit at reasonable times
by officers and auditors of the Trust and by employees of the
Securities and Exchange Commission. Boston Advisors further agrees
to surrender promptly to the Trust such records upon the Trusts
request;
(i) At the request of the Company, providing legal
support services to the Trust with respect to regulatory matters
including: monitoring regulatory and legislative developments which
may affect the Trust and informing the Trust of such developments
to the extent requested; assisting the Trust in routine regulatory
examinations or investigations of the Trust, and working closely
with outside counsel to the Trust in response to any litigation or
non-routine regulatory matters;
(j) Valuing the assets of each Series and calculating
the net asset value of the Shares of each Series at the close of
trading on each day the New York Stock Exchange is open for
trading; and
(k) Providing internal auditing services for each
Series.
In performing its duties under this Agreement, Boston Advisors
(a) will act in accordance with the Declaration of Trust, By-Laws,
Prospectus and with the instructions and directions of the Company
and will conform to and comply with the requirements of the 1940
Act and all other applicable federal or state laws and regulations
and (b) will consult with legal counsel to the Trust, as necessary
and appropriate. Furthermore, Boston Advisors shall not have or be
required to have any authority to supervise the investment or
reinvestment of the securities or other properties which comprise
the assets of the Trust or any of its Series and shall not provide
any investment advisory services to the Trust or any of its Series.
4. Compensation and Allocation of Expenses.
(a) The Company shall compensate Boston Advisors for its
services rendered pursuant to this Agreement in accordance with the
fees set forth in the Fee Schedule, annexed hereto and incorporated
herein. Such fees do not include out-of-pocket disbursements of
the Boston Advisors for which the Boston Advisors shall be entitled
to bill separately. Out-of-pocket disbursements shall include, but
shall not be limited to, the items specified in Schedule A, annexed
hereto and incorporated herein, which schedule may be modified by
the Boston Advisors upon not less than thirty days' prior written
notice to the Company.
(b) Boston Advisors shall not be required to pay any of
the following expenses incurred by the Trust: custodial expenses;
membership dues in the Investment Company Institute or any similar
organization; transfer agency expenses; investment advisory
expenses; costs of printing and mailing stock certificates,
prospectuses, reports and notices; interest on borrowed money;
brokerage commissions; taxes and fees payable to Federal, state and
other governmental agencies; fees of Trustees of the Trust who are
not affiliated with Boston Advisors; outside auditing expenses;
outside legal expenses; or other expenses not specified in this
Article 4 which may be properly payable by the Trust or the
Company.
(c) Boston Advisors will bill the Company as soon as
practicable after the end of each calendar month, and said billings
will be detailed in accordance with the Fee Schedule and schedule
of out-of-pocket charges. The Company will promptly pay to Boston
Advisors the amount of such billing.
(d) The fee for the period from the date of the Trust's
initial registration statement is declared effective by the
Securities and Exchange Commission to the end of the month shall be
prorated according to the proportion that such period bears to the
full month period. Upon any termination of this Agreement before
the end of any month, the fee for such period shall be prorated
according to the proportion which such period bears to the full
month period. For purposes of determining fees payable to Boston
Advisors, the value of each Series' net assets shall be computed at
the time and in the manner specified in the Trust's most recent
Prospectus.
(e) Boston Advisors will from time to time employ or
associate with itself such person or persons as Boston Advisors may
believe to be particularly suited to assist it in performing
services under this Agreement. Such person or persons may be
officers and employees who are employed by both Boston Advisors and
the Trust. The compensation of such person or persons shall be
paid by Boston Advisors and no obligation shall be incurred on
behalf of the Trust in such respect.
5. Limitation of Liability.
Boston Advisors, its directors, officers, employees,
shareholders and agents shall not be liable for any error of
judgement or mistake of law or for any loss suffered by the Company
or the Trust or a Series in connection with the performance of this
Agreement, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of Boston Advisors in the
performance of its obligations and duties under this Agreement.
The Company shall indemnify and hold harmless Boston Advisors, its
directors, officers, employees, shareholders and agents from and
against any and all claims, demands, expenses (except legal
expenses) and liabilities (whether with or without basis in fact or
law) of any and every nature which Boston Advisors may sustain or
incur or which may be asserted against Boston Advisors by any
person by reason of, or as a result of (i) any action taken or
omitted to be taken by Boston Advisors in good faith hereunder,
(ii) in reliance upon any certificate, instrument, order or stock
certificate or other document reasonably believed by it to be
genuine and to be signed, countersigned or executed by any duly
authorized person, upon the oral instructions or written
instructions of an authorized person of the Company and the Trust
or upon the opinion of legal counsel for the Company or the Trust
or its own counsel; or (ii) any action taken or omitted to be taken
in reliance upon any law, act, regulation or interpretation of the
same even though the same may thereafter have been altered,
changed, amended or repealed. However, indemnification under this
subparagraph shall not apply to actions or omissions of Boston
Advisors or its directors, officers, employees, shareholders or
agents in cases of its or their own negligence, willful misconduct,
bad faith, or reckless disregard of its or their own duties
hereunder.
6. Termination of Agreement.
(a) This Agreement shall become effective on the date
first set forth above and shall remain in force unless terminated
pursuant to the provisions of subsection (b) of this Section 6.
(b) This Agreement may be terminated at any time without
payment of any penalty, upon 30 days' written notice by the Company
or by Boston Advisors and shall automatically terminate upon
termination of the Management Agreement between the Trust and the
Company.
7. Amendment to this Agreement. No provision of this
Agreement may be changed, discharged or terminated orally, but only
by an instrument in writing signed by the party against which
enforcement of the change, discharge or termination is sought.
8. Miscellaneous.
(a) Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Company,
the Trust or Boston Advisors shall be sufficiently given if
addressed to that party and received by it at its office set forth
below or at such other place as it may from time to time designate
in writing.
To the Company or The Trust:
Endeavor Management Co.
1100 Newport Centre Drive, Suite 200
Newport Beach, California 92660
Attention: Jamie A. Shepherdson
To Boston Advisors:
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
Attention:
(b) This Agreement shall extend to and shall be binding
upon the parties hereto and their respective successors and
assigns; provided, however, that this Agreement shall not be
assignable without the written consent of the other party.
(c) This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts.
(d) This Agreement may be executed in any number of
counterparts each of which shall be deemed to be an original and
which collectively shall be deemed to constitute only one
instrument.
(e) The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or
effect.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed and delivered by their duly
authorized officers as of the date, first written above.
THE BOSTON COMPANY ADVISORS, INC.
By: /s/Martin T. Conroy
Martin T. Conroy
Executive Vice President
ENDEAVOR MANAGEMENT COMPANY
By:
The Trust hereby agrees to indemnify Boston Advisors to the
extent provided in paragraph 5 to this Agreement, provided,
however, that Boston Advisors will seek indemnification first from
the Company and secondarily the Trust.
ENDEAVOR SERIES TRUST
By:
FEE SCHEDULE
SCHEDULE A
ENDEAVOR SERIES TRUST
Annual Fee
Per portfolio: .20 of 1%
Domestic Money Market
Domestic Managed Asset Allocation
Global Growth
Global Managed Asset Allocation
* Minimum annual fee of $136,000
Out-of-Pocket Expenses
I. Out-of-pocket expenses include, but are not limited to, the
following:
- Postage (including overnight covering services)
- Telephone
- Telecommunications charges (including FAX)
- Duplicating
- Pricing services
- Forms and supplies
- Travel (including all expenses incurred in meeting
with representatives or Trustees of the Trust
outside the City of Boston, MA)
SUPPLEMENT TO ADMINISTRATION AGREEMENT
April 19, 1993
Endeavor Investment Advisers, a California general partnership
(the "Company"), hereby supplements its agreement with The Boston
Company Advisors, Inc., a Massachusetts corporation ("Boston
Advisors"), as follows:
1. Appointment. Pursuant to Section 1 of the Administration
Agreement dated as of March 28, 1991 (the "Agreement"), the Company
and Boston Advisors hereby agree that the Quest for Value Equity
Portfolio and the Quest for Value Small Cap Portfolio, two new
portfolio series of the Endeavor Series Trust (the "Trust"),
created and designated in accordance with the Trust's Agreement and
Declaration of Trust, shall be considered "Series" of the Trust
under the terms of the Agreement.
2. Compensation. The Company shall compensate Boston
Advisors for its services rendered to the Company.
.20% of average daily net assets
subject to a minimum annual fee of $170,000 relating to the Trust's
Money Market Portfolio, Managed Asset Allocation Portfolio, Global
Growth Portfolio, Quest for Value Equity Portfolio and Quest for
Value Small Cap Portfolio. Boston Advisors agrees to reduce the
minimum annual fee to $134,000 through January 31, 1994.
Such fees do not include out-of-pocket disbursements of Boston
Advisors for which Boston Advisors shall be entitled to bill
separately. Out-of-pocket disbursements shall include, but shall
not be limited to the items specified in Schedule A to the
Agreement, which Schedule may be modified by Boston Advisors upon
not less than thirty days' prior written notice to the Company.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed and delivered by their duly
authorized officers as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
By: Endeavor Management Co.,
Managing Partner
/s/James A. Shepherdson
Title: JAMES A. SHEPHERDSON
VICE CHAIRMAN & C.O.O.
THE BOSTON COMPANY ADVISORS,
INC.
/s/Alan D. Greene
Title: Alan D. Greene
Executive Vice
President
ENDEAVOR SERIES TRUST
/s/James A. Shepherdson
Title: JAMES A. SHEPHERDSON
PRESIDENT
The Shareholder Services Group, Inc.
Exchange Place
Boston, Massachusetts 02109
Gentlemen:
This letter acknowledges the consent of Endeavor Series Trust
to the assignment of the Administration Agreement dated March 28,
1991 between The Boston Company Advisors, Inc. ("Boston Advisors"),
Endeavor Investment Advisers and Endeavor Series Trust, as amended
(collectively, the "Agreement") to The Shareholder Services Group,
Inc. ("TSSG"). This acknowledgment will be effective upon the
consummation of the proposed acquisition of The Boston Company
Inc.'s third party mutual fund administration business by TSSG (the
"Proposed Transaction"). We understand that, effective upon the
completion of the Proposed Transaction, TSSG will assume all of
Boston Advisors' rights and obligations under the Agreement
accruing after that date and that The Boston Company, Inc. and its
affiliates, including Boston Advisors, will no longer be liable
under the Agreement or responsible for any acts or omissions of
TSSG occurring after that time.
Sincerely,
Endeavor Series Trust
By: /s/James A. Shepherdson
Title: President
Date: May 4, 1994
SUPPLEMENT TO ADMINISTRATION AGREEMENT
Date: October 24, 1994
Endeavor Investment Advisers, a California general partnership
(the "Company"), hereby supplements its agreement with The
Shareholder Services Group, Inc., a Massachusetts corporation
("TSSG"), as follows:
1. Appointment. Pursuant to Section 1 of the Administration
Agreement dated as of March 28, 1991 (the "Agreement"), the Company
and TSSG hereby agree that the T. ROWE PRICE EQUITY INCOME
PORTFOLIO AND T. ROWE PRICE GROWTH STOCK PORTFOLIO, new portfolio
series of the Endeavor Series Trust (the "Trust"), created and
designated in accordance with the Trust's Agreement and Declaration
of Trust, shall be considered "Series" of the Trust under the terms
of the Agreement.
2. Compensation. The Company shall compensate TSSG for its
services rendered to the Company:
.15% of average daily net assets
subject to a minimum annual fee of $320,000 relating to the Trust's
Money Market Portfolio, Managed Asset Allocation Portfolio, Global
Growth Portfolio, Quest for Value Equity Portfolio, Quest for Value
Small Cap Portfolio, U.S. Government Securities Portfolio, T. Rowe
Price Equity Income Portfolio and T. Rowe Price Growth Stock
Portfolio.
Such fees do not include out-of-pocket disbursements of TSSG
for which TSSG shall be entitled to bill separately. Out-of-pocket
disbursements shall include, but shall not be limited to the items
specified in Schedule A to the Agreement, which Schedule may be
modified by TSSG upon not less than thirty days' prior written
notice to the Company.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed and delivered by their duly
authorized officers as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
By: Endeavor Management Co.,
Managing Partner
/s/Vincent J. McGuinness
Title: Chairman and CEO,
General Partner
THE SHAREHOLDER SERVICES GROUP,
INC.
/s/Richard W. Ingram
Title
ENDEAVOR SERIES TRUST
/s/James A. Shepherdson
PRESIDENT
Title
FEE SCHEDULE
SCHEDULE A
ENDEAVOR SERIES TRUST
1. Safekeeping
A. Domestic Assets Annual Fee
All domestic assets .02 of 1%
B. International Assets Annual Fee
All international assets .15 of 1%
2. Portfolio Transactions
Type Per Transaction
DTC/Fed Book Entry $12
Repurchase Agreement -
depository eligible 12
GNMA Paydown 12
Repurchase Agreement - non-depository 17
Options Futures 25
Physical Settlement 30
Commercial Paper 30
Euro CD's (London) 30
Foreign Securities 40
CUSTODY AGREEMENT
OUT-OF-POCKET EXPENSES
SCHEDULE B
Reimbursable out-of-pocket expenses will be added to each
monthly invoice and will include, but are not limited to, such
customary items as telephone, wire charge ($5.50 per wire),
postage, insurance, pricing services, courier services and
duplicating charges.
SUPPLEMENT TO ADMINISTRATION AGREEMENT
Date: March 25, 1994
Endeavor Investment Advisers, a California general partnership
(the "Company"), hereby supplements its agreement with The Boston
Company Advisors, Inc., a Massachusetts corporation ("Boston
Advisors"), as follows:
1. Appointment. Pursuant to Section 1 of the Administration
Agreement dated as of March 28, 1991 (the "Agreement"), the Company
and Boston Advisors hereby agree that the U.S. GOVERNMENT
SECURITIES PORTFOLIO, a new portfolio series of the Endeavor Series
Trust (the "Trust"), created and designated in accordance with the
Trust's Agreement and Declaration of Trust, shall be considered
"Series" of the Trust under the terms of the Agreement.
2. Compensation. The Company shall compensate Boston
Advisors for its services rendered to the Company:
.20% of average daily net assets
subject to a minimum annual fee of $204,000 relating to the Trust's
Money Market Portfolio, Managed Asset Allocation Portfolio, Global
Growth Portfolio, Quest for Value Equity Portfolio, Quest for Value
Small Cap Portfolio and U.S. Government Securities Portfolio.
Such fees do not include out-of-pocket disbursements of Boston
Advisors for which Boston Advisors shall be entitled to bill
separately. Out-of-pocket disbursements shall include, but shall
not be limited to the items specified in Schedule A to the
Agreement, which Schedule may be modified by Boston Advisors upon
not less than thirty days' prior written notice to the Company.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed and delivered by their duly
authorized officers as of the date first written above.
ENDEAVOR INVESTMENT ADVISERS
By: Endeavor Management Co.,
Managing Partner
/s/Vincent J. McGuinness
Title: Vincent J. McGuinness,
Chairman, Chief
Executive Officer &
President
THE BOSTON COMPANY ADVISORS,
INC.
/s/Francis J. McNamara
Title: SENIOR VICE PRESIDENT
AND GENERAL COUNSEL
ENDEAVOR SERIES TRUST
/s/James A. Shepherdson
Title: James A. Shepherdson,
President
EXHIBIT A
Out-of-Pocket Expenses
Administration Agreement
I. Out-of-pocket expenses include, but are not limited to, the
following:
* Postage (including overnight covering services)
* Telephone
* Telecommunications charges (including FAX)
* Duplicating
* Pricing services
* Forms and supplies
* Travel (including all expenses incurred in meeting with
representatives or Trustees of the Trust outside the City of
Boston, Massachusetts)
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions
"Financial Highlights" and "Independent Auditors" in the
Endeavor Series Trust Prospectus and "Financial Statements" in
the Endeavor Series Trust Statement of Additional Information,
and to the incorporation by reference, in Post-Effective
Amendment Number 14 to the Registration Statement (Form N-1A
No. 33-27352) of Endeavor Series Trust, of our report dated
February 9, 1996 on Endeavor Series Trust.
ERNST & YOUNG LLP
Boston, Massachusetts
April 25, 1996
SUBSCRIPTION AGREEMENT
March 10, 1989
Endeavor Series Trust
1101 Bayside Drive, Suite 100
Corona del Mar, California 92625
Dear Sirs:
Endeavor Series Trust (the "Trust") proposes to issue and sell
shares of beneficial interest without par value (the "Shares") of
five separate Portfolios to certain separate accounts of Pacific
Fidelity Life Insurance Company, pursuant to a registration
statement on Form N-1A (the "Registration Statement") filed with
the Securities and Exchange Commission. In order to provide the
Trust with a net worth of at least $100,000 as required by Section
14 of the Investment Company Act of 1940, as amended, we hereby
offer to purchase two days prior to the effective date of the
Registration Statement (or such earlier date as may be agreed upon)
100,000 shares of the Domestic Money Market Portfolio at a price of
$1.00 per share, 10,000 shares of the Finite Time Portfolio at a
price of $10 per share, 10,000 shares of the Domestic Managed Asset
Allocation Portfolio at a price of $10 per share, 10,000 shares of
the Global Managed Asset Allocation Portfolio at a price of $10 per
share and 10,000 shares of the Global Growth Portfolio at a price
of $10 per share.
We will make payment for the Share of each of the Portfolios
by delivery of a certified or official bank check payable to the
order of the respective Portfolios of the Trust at least two
business days prior to the date specified by the Trust as the
proposed effective date of the Registration Statement.
We represent and warrant that the Shares of each of the
Portfolios are being acquired by us for investment and not with a
view to the resale or further distribution thereof and that we have
no present intention to redeem the Shares.
Please confirm that the foregoing correctly sets forth our
agreement with the Trust.
Very truly yours,
PACIFIC FIDELITY LIFE INSURANCE COMPANY
By: /s/William L. Busler
William L. Busler
Vice President
Confirmed, as of the date
first above mentioned.
ENDEAVOR SERIES TRUST
By: /s/James A. Shepherdson
James A. Shepherdson
Vice Chairman
POWER OF ATTORNEY
I, the undersigned, hereby constitute and appoint Robert N.
Hickey my true and lawful attorney and agent, with full power to
him to sign for myself, and in my name and in the capacity
indicated below, any and all Registration Statements on Form N-1A
of Endeavor Series Trust, and any and all amendments thereto, and
to file the same, with all exhibits thereto and other documents in
connection thereunder with the Securities and Exchange Commission,
granting unto said attorney and agent full power and authority to
do and perform each and every act and thing requisite or necessary
to be done in connection therewith as fully to all intents and
purposes as I might or could do in person, with full power of
substitution and revocation; and I do hereby ratify and confirm all
that said attorney and agent may lawfully do or cause to be done by
virtue of this power of attorney.
WITNESS my hand as of the 30th day of January, 1995
/s/Alan J. Schryer
Alan J. Schryer
Chief Financial Officer (Treasurer)
(principal financial and accounting officer)
POWER OF ATTORNEY
I, the undersigned, hereby constitute and appoint Robert N.
Hickey my true and lawful attorney and agent, with full power to
him to sign for myself, and in my name and in the capacity
indicated below, any and all Registration Statements on Form N-1A
of Endeavor Series Trust, and any and all amendments thereto, and
to file the same, with all exhibits thereto and other documents in
connection thereunder with the Securities and Exchange Commission,
granting unto said attorney and agent full power and authority to
do and perform each and every act and thing requisite or necessary
to be done in connection therewith as fully to all intents and
purposes as I might or could do in person, with full power of
substitution and revocation; and I do hereby ratify and confirm all
that said attorney and agent may lawfully do or cause to be done by
virtue of this power of attorney.
WITNESS my hand as of the 15th day of April, 1996
/s/James R. McInnis
James R. McInnis
President (Chief Executive Officer)
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> ENDEAVOR SERIES DOMESTIC MONEY M
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 27,552,970
<INVESTMENTS-AT-VALUE> 27,552,970
<RECEIVABLES> 79,584
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 13,751
<TOTAL-ASSETS> 27,646,305
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 95,138
<TOTAL-LIABILITIES> 95,138
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27,551,382
<SHARES-COMMON-STOCK> 27,551,382
<SHARES-COMMON-PRIOR> 20,764,351
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (215)
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 27,551,167
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,401,697
<OTHER-INCOME> 0
<EXPENSES-NET> 139,888
<NET-INVESTMENT-INCOME> 1,261,809
<REALIZED-GAINS-CURRENT> 18
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,261,827
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,263,251)
<DISTRIBUTIONS-OF-GAINS> (1,442)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 30,419,863
<NUMBER-OF-SHARES-REDEEMED> (24,895,941)
<SHARES-REINVESTED> 1,263,109
<NET-CHANGE-IN-ASSETS> 6,785,607
<ACCUMULATED-NII-PRIOR> 1,442
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (233)
<GROSS-ADVISORY-FEES> 117,465
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 139,888
<AVERAGE-NET-ASSETS> 23,493,001
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> ENDEAVOR SERIES MANAGED ASSET AL
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 161,734,468
<INVESTMENTS-AT-VALUE> 197,905,319
<RECEIVABLES> 2,854,306
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 13,591
<TOTAL-ASSETS> 200,773,216
<PAYABLE-FOR-SECURITIES> 1,648,632
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 248,894
<TOTAL-LIABILITIES> 1,897,526
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 167,771,935
<SHARES-COMMON-STOCK> 12,218,921
<SHARES-COMMON-PRIOR> 12,792,012
<ACCUMULATED-NII-CURRENT> 3,944,143
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (9,011,239)
<ACCUM-APPREC-OR-DEPREC> 36,170,851
<NET-ASSETS> 198,875,690
<DIVIDEND-INCOME> 1,543,065
<INTEREST-INCOME> 3,938,183
<OTHER-INCOME> 0
<EXPENSES-NET> 1,559,376
<NET-INVESTMENT-INCOME> 3,921,872
<REALIZED-GAINS-CURRENT> (4,595,305)
<APPREC-INCREASE-CURRENT> 38,153,355
<NET-CHANGE-FROM-OPS> 37,479,922
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,105,304)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,296,208
<NUMBER-OF-SHARES-REDEEMED> (2,086,757)
<SHARES-REINVESTED> 217,458
<NET-CHANGE-IN-ASSETS> 26,426,491
<ACCUMULATED-NII-PRIOR> 3,115,924
<ACCUMULATED-GAINS-PRIOR> (4,404,283)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,388,652
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,559,376
<AVERAGE-NET-ASSETS> 185,153,581
<PER-SHARE-NAV-BEGIN> 13.48
<PER-SHARE-NII> 0.33
<PER-SHARE-GAIN-APPREC> 2.72
<PER-SHARE-DIVIDEND> (0.25)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 16.28
<EXPENSE-RATIO> 0.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> ENDEAVOR SERIES QUEST VALUE EQUI
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 58,635,063
<INVESTMENTS-AT-VALUE> 70,684,400
<RECEIVABLES> 550,233
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 108,258
<TOTAL-ASSETS> 71,342,891
<PAYABLE-FOR-SECURITIES> 2,640,870
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 71,587
<TOTAL-LIABILITIES> 2,712,457
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 54,391,333
<SHARES-COMMON-STOCK> 4,822,570
<SHARES-COMMON-PRIOR> 3,066,053
<ACCUMULATED-NII-CURRENT> 773,265
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,416,509
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12,049,327
<NET-ASSETS> 68,630,434
<DIVIDEND-INCOME> 636,939
<INTEREST-INCOME> 562,355
<OTHER-INCOME> 0
<EXPENSES-NET> 427,127
<NET-INVESTMENT-INCOME> 772,167
<REALIZED-GAINS-CURRENT> 1,415,693
<APPREC-INCREASE-CURRENT> 11,560,772
<NET-CHANGE-FROM-OPS> 13,748,632
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (311,416)
<DISTRIBUTIONS-OF-GAINS> (141,867)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,222,471
<NUMBER-OF-SHARES-REDEEMED> (504,238)
<SHARES-REINVESTED> 38,284
<NET-CHANGE-IN-ASSETS> 35,853,956
<ACCUMULATED-NII-PRIOR> 312,553
<ACCUMULATED-GAINS-PRIOR> 142,644
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 395,205
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 427,127
<AVERAGE-NET-ASSETS> 49,400,561
<PER-SHARE-NAV-BEGIN> 10.69
<PER-SHARE-NII> 0.15
<PER-SHARE-GAIN-APPREC> 3.52
<PER-SHARE-DIVIDEND> (0.09)
<PER-SHARE-DISTRIBUTIONS> (0.04)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.23
<EXPENSE-RATIO> 0.86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> ENDEAVOR SERIES QUEST VALUE SMAL
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 49,984,368
<INVESTMENTS-AT-VALUE> 52,082,091
<RECEIVABLES> 440,432
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 225,676
<TOTAL-ASSETS> 52,748,199
<PAYABLE-FOR-SECURITIES> 95,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 56,369
<TOTAL-LIABILITIES> 151,369
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 47,592,095
<SHARES-COMMON-STOCK> 4,303,847
<SHARES-COMMON-PRIOR> 3,276,027
<ACCUMULATED-NII-CURRENT> 669,355
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,237,657
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,097,723
<NET-ASSETS> 52,596,830
<DIVIDEND-INCOME> 443,342
<INTEREST-INCOME> 589,645
<OTHER-INCOME> 0
<EXPENSES-NET> 370,721
<NET-INVESTMENT-INCOME> 662,266
<REALIZED-GAINS-CURRENT> 2,255,743
<APPREC-INCREASE-CURRENT> 2,796,456
<NET-CHANGE-FROM-OPS> 5,714,465
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (330,888)
<DISTRIBUTIONS-OF-GAINS> (596,287)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,595,481
<NUMBER-OF-SHARES-REDEEMED> (653,036)
<SHARES-REINVESTED> 85,375
<NET-CHANGE-IN-ASSETS> 16,630,508
<ACCUMULATED-NII-PRIOR> 333,146
<ACCUMULATED-GAINS-PRIOR> 578,201
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 339,672
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 370,721
<AVERAGE-NET-ASSETS> 42,459,059
<PER-SHARE-NAV-BEGIN> 10.98
<PER-SHARE-NII> 0.15
<PER-SHARE-GAIN-APPREC> 1.36
<PER-SHARE-DIVIDEND> (0.10)
<PER-SHARE-DISTRIBUTIONS> (0.17)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.22
<EXPENSE-RATIO> 0.87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> ENDEAVOR SERIES T.ROWE PRICE EQU
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 20,387,377
<INVESTMENTS-AT-VALUE> 22,573,695
<RECEIVABLES> 220,402
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 63,609
<TOTAL-ASSETS> 22,857,706
<PAYABLE-FOR-SECURITIES> 718,752
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 228,460
<TOTAL-LIABILITIES> 947,212
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19,314,379
<SHARES-COMMON-STOCK> 1,678,722
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 286,763
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 123,163
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,186,189
<NET-ASSETS> 21,910,494
<DIVIDEND-INCOME> 259,644
<INTEREST-INCOME> 128,184
<OTHER-INCOME> 0
<EXPENSES-NET> 101,656
<NET-INVESTMENT-INCOME> 286,172
<REALIZED-GAINS-CURRENT> 121,433
<APPREC-INCREASE-CURRENT> 2,186,189
<NET-CHANGE-FROM-OPS> 2,593,794
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,809,529
<NUMBER-OF-SHARES-REDEEMED> (130,807)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 21,910,494
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 70,664
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 101,656
<AVERAGE-NET-ASSETS> 8,906,219
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.34
<PER-SHARE-GAIN-APPREC> 2.71
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.05
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> ENDEAVOR SERIES T. ROWE PRICE GR
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 20,369,390
<INVESTMENTS-AT-VALUE> 22,201,608
<RECEIVABLES> 72,909
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 103,115
<TOTAL-ASSETS> 22,377,632
<PAYABLE-FOR-SECURITIES> 692,836
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 33,511
<TOTAL-LIABILITIES> 726,347
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19,200,930
<SHARES-COMMON-STOCK> 1,577,707
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 34,311
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 584,849
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,831,195
<NET-ASSETS> 21,651,285
<DIVIDEND-INCOME> 117,803
<INTEREST-INCOME> 66,915
<OTHER-INCOME> 0
<EXPENSES-NET> 119,311
<NET-INVESTMENT-INCOME> 65,407
<REALIZED-GAINS-CURRENT> 551,432
<APPREC-INCREASE-CURRENT> 1,831,195
<NET-CHANGE-FROM-OPS> 2,448,034
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,804,168
<NUMBER-OF-SHARES-REDEEMED> (226,461)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 21,651,285
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 75,681
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 119,311
<AVERAGE-NET-ASSETS> 9,538,502
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 3.64
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.72
<EXPENSE-RATIO> 1.26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> ENDEAVOR SERIES T. ROWE PR
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
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<NAME> ENDEAVOR SERIES US GOVT SECURITI
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