As filed with the Securities and Exchange Commission on March 31, 1999
Securities Act File No. 33-43616
Investment Company Act File No. 811-6449
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. 9 x
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 x
Amendment No. 9 x
(Check appropriate box or boxes)
--------------------------
FRONTIER FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
101 West Wisconsin Avenue
Pewaukee, Wisconsin 53072
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (414) 691-1196
Name and Address of Agent for Service: Copies of Communications to:
CSC-Lawyers Incorporating Service Robert J. Philipp, Esq.
100 Light Street, 6th Floor Kranitz & Philipp
Baltimore, Maryland 21202 2230 East Bradford Avenue
Milwaukee, Wisconsin 53211
Approximate Date of Proposed Public Offering:
As soon as practical after the effective date of this Registration Statement
It is proposed that the filing will become effective (check appropriate box):
immediately upon filing pursuant to paragraph (b)
on ------(date)------ pursuant to paragraph (b)
x 60 days after filing pursuant to paragraph (a)(i)
on ------(date)------ pursuant to paragraph (a)(i)
75 days after filing pursuant to paragraph (a)(2)
on ------(date)------ pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Pursuant to Rule 24f-2(a)(1) under the Investment Company Act of 1940,
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933. Registrant filed a Rule 24f-2 Notice for its most
recent fiscal year ended September 30, 1998 on March 5, 1999.
FRONTIER FUNDS, INC.
CROSS REFERENCE SHEET
(pursuant to Rule 495)
FORM N-1A ITEM LOCATION
-------------- --------
PART A PROSPECTUS CAPTION
------------------
Item l. Front and Back Cover Pages Front Cover Page; Back Cover
Page
Item 2. Risk/Return Summary; Investments, Basic Information About the
Risks and Performance Fund; Past Performance; More
About Investment Strategies
and Objectives
Item 3. Risk/Return Summary: Fee Table Fees and Expenses
Item 4. Investment Objectives, Principal Basic Information About the
Investment Strategies and Fund; More About Investment
Related Risks Strategies and Objectives
Item 5. Management's Discussion of Not Applicable
Fund Performance
Item 6. Management, Organization and Investment Adviser; For
Capital Structure More Information
Item 7. Shareholder Information Pricing and Distribution of
the Fund; Purchasing Shares;
Redeeming Shares; Dividends
Capital Gains Distributions
and Taxes
Item 8. Distribution Arrangements Fees and Expenses; Pricing and
Distribution of the Fund
Item 9. Financial Highlights Information Financial Highlights
PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
-------------------------------------------
Item 10. Cover Page and Table of Contents Front Cover Page
Item 11. Fund History General Information and
History
Item 12. Description of the Fund and Investment Objective and
Its Investment Risks Policies; Investment
Restrictions
Item 13. Management of the Fund Management of Frontier and the
Fund
Item 14. Control Persons and Principal Management of Frontier
Holders of Securities and the Fund
Item 15. Investment Advisory and Other Services Investment Adviser;
Administrator, Transfer Agent
and Dividend Disbursing Agent;
Distribution; Custodian,
Counsel and Independent
Auditors
Item 16. Brokerage Allocation and Portfolio Transactions
Other Practices
Item 17. Capital Stock and Other Securities General Information and
History
Item 18. Purchase, Redemption and Purchase, Redemption and
Pricing of Shares Determination of Net Asset
Value
Item 19. Taxation of the Fund Dividends, Distributions and
Their Taxation
Item 20. Underwriters Distribution
Item 21. Calculations of Performance Data Performance Measures
Item 22. Financial Statements Financial Statements
PART C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
FRONTIER FUNDS, INC.
FORM N-1A
PART A
THE
FRONTIER
EQUITY FUND
A SERIES OF
(FRONTIER FUNDS, INC. LOGO)
PROSPECTUS
MARCH , 1999
PROSPECTUS MARCH , 1999
THE FRONTIER EQUITY FUND
a series of
(FRONTIER FUNDS, INC. LOGO)
101 West Wisconsin Avenue
Pewaukee, Wisconsin 53072-3433
(800) 759-6598 or (414) 691-1196
The FRONTIER EQUITY FUND seeks long-term capital appreciation through
investment primarily in the common stock and other equity securities of U.S.
companies.
TABLE OF CONTENTS
Basic Information About the Fund ......................... 2
Past Performance ......................................... 4
Fees and Expenses ........................................ 5
More About Investment Strategies and Objectives .......... 6
Investment Adviser ....................................... 7
Pricing and Distribution of the Fund ..................... 7
Purchasing Shares ........................................ 8
Redeeming Shares ......................................... 9
Dividends, Capital Gains Distributions and Taxes ......... 11
Financial Highlights ..................................... 12
For More Information ..............................Back Cover
AS WITH ALL MUTUAL FUNDS, NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY
OTHER FEDERAL OR STATE REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED WHETHER OR NOT THIS PROSPECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
BASIC INFORMATION ABOUT OF THE FUND
INVESTMENT OBJECTIVE
O The primary investment objective of the Frontier Equity Fund ("Fund")
is long-term capital appreciation. Production of current income is
incidental to this objective.
PRINCIPAL INVESTMENTS
O Freedom Investors Corp. ("Adviser") anticipates that, except for
temporary periods of defensive investing (as described below), at
least 75% of the Fund's assets will be invested in equity securities
of U.S. companies. While the Fund may invest in small, medium and
large capitalization companies, the Fund will invest primarily in
securities of companies having a market capitalization of less than
$1 billion (small-cap). The Fund may invest up to 25% of its assets
in securities of foreign companies and/or debt securities which are
not convertible into common stock or other equity securities.
O Equity securities include exchange-traded and over-the-counter (OTC)
common and preferred stocks, warrants, rights, convertible debt
securities, trust certificates, partnership interests and equity
participations.
SELECTION OF THE FUND'S INVESTMENTS
O The Fund invests primarily in common stocks of U.S. companies which
the Adviser believes have the potential for significant earnings
and/or revenue growth over a three-year to five-year period. The
Adviser bases its investment decisions on factors which are unique
to a specific company, not upon general economic or market
conditions. The Fund may invest in companies of widely varying
sizes and in any industry. At any given time, the Fund is likely to
hold both "growth" stocks and "value" stocks. While Fund
investments are not determined by any single standard or set of
criteria, the Adviser will look for the following characteristics,
among others, in selecting companies:
o above-average growth prospects
o excellent management
o leading position or product in a rapidly-growing industry
o adequate capitalization.
O In response to adverse market, economic or political conditions, the
Fund may take temporary defensive positions in debt securities. The
Fund may be unable to achieve its goal of capital appreciation while
defensively invested. The Adviser will not resort to defensive
investing unless it believes that such action is necessary to
minimize losses.
PRINCIPAL INVESTMENT RISKS
O The Fund will invest primarily in common stocks. While common stocks
have historically outperformed other classes of assets over the long
term, they tend to fluctuate in price more dramatically over the
shorter term. This price volatility may result from various factors
which affect individual companies, certain industries or the
securities market as a whole. Because the Fund's investment
portfolio is comprised primarily of common stocks, the value of an
investment in the Fund will go up and down and investors will make
or lose money with these fluctuations.
O The Fund will generally focus on smaller companies. As compared to
larger companies, smaller and less seasoned companies often have
more potential for rapid growth. However, they often involve
greater risk than larger companies. Smaller companies may not have
the management experience, financial resources, product
diversification and competitive strengths of larger companies.
While these risks cannot be entirely eliminated, the Adviser will
try to minimize them by diversifying the Fund's investment portfolio
-- spreading the risk by investing in a broad range of stocks.
O Smaller company stocks tend to be bought and sold less often and in
smaller amounts than larger company stocks. Because of this, if the
Fund wants to sell a large quantity of a smaller company stock, it
may have to sell at a lower price than it would like, or have to
sell in smaller quantities over a period of time. The Adviser
attempts to minimize this risk by investing in stocks that are
easily bought and sold at the time of purchase.
O Different types of investments shift in and out of favor depending on
market and economic conditions. At various times, stocks will be
more or less favored than bonds, and small company stocks will be
more or less favored than large company stocks. For any given
period of time, the performance of the Fund will be better or worse
than other types of funds depending on what is in "favor" during
that period.
INVESTOR SUITABILITY
O The Fund may be suitable for those investors:
o seeking growth of capital
o who have long-term investment goals and no need for current
income
o willing to accept stock market risk in exchange for the
opportunity to achieve higher long-term returns.
O An investment in the Fund is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any
other governmental agency. An investor in the Fund may lose money.
PAST PERFORMANCE
The bar chart and table below show the Fund's annual returns and long-term
performance. The bar chart gives an indication of the risks of investing in the
Fund by showing how the performance of the Fund has varied from year to year (on
a calendar year basis). Results shown on the chart do not include sales
charges. If sales charges were reflected, returns would be less than those
shown. The table shows how the Fund's average annual returns compare to those
reported by the Standard & Poor's Composite Index of 500 Stocks ("S&P 500") and
the Russell 2000 Index ("Russell 2000"), both of which are widely-recognized
measures of stock performance. Both the chart and the table assume reinvestment
of all dividends and capital gain distributions. AS WITH ALL MUTUAL FUNDS, THE
PAST PERFORMANCE OF THE FUND IS NOT A PREDICTION OR GUARANTEE OF ITS FUTURE
RESULTS.
TOTAL RETURN AS OF DECEMBER 31
1992 1<F1> 1993 1994 1995 1996 1997 1998
----------- ---- ---- ---- ---- ---- ----
3.61% -24.80% -12.77% -1.26% -17.66% -39.53% -28.53%
- ---------------
1<F1> Annualized.
During the period shown on the bar chart above, the Fund's highest total
return for a quarter was 41.14%, for the quarter ended December 31, 1998, and
the lowest total return for a quarter was -33.33%, for the quarter ended
September 30, 1998.
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1998
SINCE INCEPTION
OF THE FUND
1 YEAR 5 YEARS (APRIL 1, 1992)
------ ------ ----------------
The Frontier Equity Fund...........-34.22% -22.36% -20.21%
S&P 500 1<F2>...................... 28.58% 23.81% 20.72
Russell 2000 2<F3>................. -2.55% 11.87% 11.44
- -------------------------
1<F2> The S&P 500 is an unmanaged index of 500 common stocks which are
considered by Standard & Poor's Corporation to represent the performance
of the U.S. stock market in general. The S&P 500 assumes the
reinvestment of all dividends and/or other income.
2<F3> The Russell 2000 is an unmanaged index of 2,000 publicly-traded common
stocks of small capitalization U.S. companies. The Russell 2000 assumes
the reinvestment of all dividends and/or other income. The results
reported by the Russell 2000 have been included to show the performance
of small-cap stocks such as those generally held by the Fund.
FEES AND EXPENSES
The table below describes the fees and expenses that you may pay if you buy
and hold shares of the Fund.
SHAREHOLDER TRANSACTION FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)...................... 8.00%
Maximum Deferred Sales Charge (Load)........................ None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends. None
Redemption Fee.............................................. None
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
Management Fees............................................. 1.00%
Distribution (12b-1) and/or Service Fees................... None
Other Expenses.............................................. 19.72%
-------
Total Annual Operating Costs1<F4>........................... 20.72%
- -------------------
1<F4>For the Fund's most recent fiscal year, actual total annual operating
expenses were less than the percentage shown above due to certain waivers
of fees and/or expense reimbursements. These waivers of fees and expense
reimbursements were granted voluntarily by the Adviser. Although these
waivers can be revoked at any time, the Adviser presently anticipates that
this arrangement will continue for the Fund's current fiscal year ending
September 30, 1999. After giving effect to waivers by the Adviser of fees
and expense reimbursements, the Fund's actual total annual operating
expenses for its last fiscal year were 19.72% of average daily net assets.
EXAMPLE
This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds.
The Example assumes that:
o You invest $10,000 in the Fund for the time periods indicated;
o Your investment has a 5% return each year;
o The Fund's operating expenses remain the same; and
o You redeem your investment at the end of each period.
Although your actual costs may be higher or lower, under these assumptions,
your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------ -------- --------
$2,556 $5,284 $7,222 $9,955
MORE ABOUT INVESTMENT STRATEGIES AND OBJECTIVES
INVESTMENT GOAL
The Fund cannot change its investment goal, which is long-term capital
appreciation, without the approval of its shareholders. The Fund might not
succeed in achieving its goal.
DEFENSIVE INVESTING
In response to adverse market, economic or political conditions, the Fund may
take temporary defensive positions. This means that the Fund will invest in
nonconvertible debt securities, including money market instruments (such as U.S.
Treasury Bills and commercial paper). These debt securities may be of any
maturity and may be issued by the U.S. government or any of its agencies,
foreign governments, supranational entities (such as the World Bank) and U.S.
and foreign companies. Defensive investing may prevent the Fund from achieving
its goal of capital growth. Even when it is not investing defensively, the Fund
will hold some cash and/or money market instruments in order to pay its
expenses, fund redemptions or take advantage of investment opportunities.
PORTFOLIO TURNOVER
The Fund does not intend to engage in frequent short-term trading to achieve
its goal. However, if circumstances warrant, securities will be bought and sold
without regard to the length of time held. The Adviser does not anticipate that
the Fund's annual portfolio turnover rate will exceed 100%. (An annual portfolio
turnover rate of 100% would occur if the Fund replaced securities valued at 100%
of average total net assets within a one-year period.) Turnover rate may vary
from year to year. Higher turnover (100% or more) will increase transaction
costs and may increase short-term capital gains. Payment of these transaction
costs will reduce total return. Any distributions to Fund shareholders of
short-term capital gains will be taxed at ordinary income rates for federal
income tax purposes, not at lower capital gains rates.
ADDITIONAL INVESTMENT RISKS
The Fund could lose money or underperform for the reasons previously
described in this section or in the "Basic Information About the Fund" section,
or for the following additional reasons:
O Adviser risk. The Adviser's judgments about the value, attractiveness and/or
potential appreciation of particular investments proves to be wrong.
O Foreign investment risk. Prices of the Fund's foreign securities may go down
due to unfavorable changes in currency exchange rates, government actions,
political instability or the more limited availability of information about
foreign issuers.
O Interest rate risk. If interest rates go up, bond prices and the value of
the Fund's fixed income securities will go down.
O Credit risk. An issuer of a debt security could default on its obligation to
pay principal or interest, or its credit rating could be downgraded.
O Liquidity and valuation risks. Securities that were liquid when purchased by
the Fund may become temporarily illiquid and difficult to value, particularly in
declining markets.
YEAR 2000
The Fund would be adversely affected if the computer systems used by the
Adviser, Distributor, Custodian and/or Transfer Agent were unable to recognize
dates after 1999 ("Year 2000 Problems"). The Fund has no application systems of
its own, and is entirely dependent on its service providers' systems and
software. The Adviser and the other service providers have advised the Fund
that they are taking action to prevent, and do not expect the Fund to suffer
from, significant Year 2000 Problems. In addition, the companies in which the
Fund invests may have Year 2000 Problems. The value of their securities could
go down if they do not remedy these problems in time or if fixing them proves to
be unusually expensive.
INVESTMENT ADVISER
Freedom Investors Corp., the Adviser, provides continuous investment advice
and other portfolio management services to the Fund. Under the supervision of
the Fund's Board of Directors, the Adviser makes the Fund's day-to-day
investment decisions, arranges for the execution of portfolio transactions and
generally manages the Fund's investments.
Freedom Investors Corp., a registered investment adviser, was established in
1988 and has been the Fund's only investment adviser. The address of the
Adviser is:
101 West Wisconsin Avenue
Pewaukee, Wisconsin 53072-3433
The Adviser is a wholly-owned subsidiary of Freedom Financial, Inc. James R.
Fay, the majority shareholder of Freedom Financial, Inc., is also the President
of the Adviser (his principal occupation since 1988) and is responsible for the
day-to-day management of the Fund's investment portfolio. Neither the Adviser
nor Mr. Fay has advised any other mutual fund.
The Fund has agreed to pay the Adviser a monthly advisory fee at the
annual rate of 1.00% of the Fund's average daily net assets. The Adviser has
voluntarily waived payment of its advisory fee since the inception of the Fund.
Although this waiver can be revoked at any time, the Adviser plans to continue
this arrangement for the Fund's current fiscal year ending September 30, 1999.
The Adviser may, if it chooses to do so, pay any operating expenses of the
Fund which are in excess of the 1.00% advisory fee. These expenses must be the
responsibility of the Fund and may include taxes, interest, governmental charges
and fees (including the cost of registering the Fund and/or its shares with the
Securities and Exchange Commission and the various States), brokerage costs,
dues, and all extraordinary costs (including expenses arising out of anticipated
or actual litigation or administrative proceedings). Any such expense payments
on behalf of the Fund are reimbursable to the Adviser by the Fund. To date, the
Adviser has chosen not to accrue or seek reimbursement from the Fund for the
payment of any operating expenses.
PRICING AND DISTRIBUTION OF THE FUND
CALCULATION OF NET ASSET VALUE
The Fund's net asset value ("NAV") per share is determined by subtracting
from the Fund's total assets any liabilities and then dividing into this amount
the total outstanding shares as of the date of the calculation.
The NAV per share is computed once daily, Monday through Friday, at 3:00 p.m.
(Central Time) on days when the Fund is open for business (generally the same
days that the New York Stock Exchange is open for trading). Holidays when both
the New York Stock Exchange and the Fund are closed are listed in the Fund's
Statement of Additional Information.
Each security owned by the Fund that is listed on an exchange is valued at
its last sale price on that exchange on the date as of which assets are valued.
In the event that the security is listed on more than one exchange, the Fund
will use the price on that exchange which it generally considers to be the
principal exchange on which the stock is traded. If there are no sales, the
security is valued by the Fund at its last reported sale price. An unlisted
security for which over-the-counter market quotations are readily available is
valued by the Fund at the mean between the last current bid and asked prices.
When market quotations are not readily available, any security or other asset is
valued at its fair value as determined in good faith by the Board of Directors
of the Fund.
DISTRIBUTION OF THE FUND
Shares of the Fund are offered for sale through authorized investment
dealers. Freedom Investors Corp., the Adviser, is also the principal
underwriter and national distributor ("Distributor") for the Fund. In addition
to being a registered investment adviser, Freedom Investors Corp. is a
registered broker-dealer and member of the National Association of Securities
Dealers, Inc. The Distributor selects brokers and other financial professionals
to sell shares of the Fund and coordinates their marketing efforts.
The "offering price" of each share of the Fund includes a sales charge, as
follows:
Sales Charge As a Sales Charge As a
Percentage of the Percentage of the
Offering Price Net Amount Invested
--------------- --------------------
8.00% 8.70%
Neither dividend reinvestments nor redemptions are subject to the sales charge.
The sales charge is paid by the Fund to the Distributor. The Distributor may in
turn pay (reallow) all or part of the sales charge to the investment dealer that
makes the sale.
PURCHASING SHARES
HOW TO PURCHASE FUND SHARES
THE FUND WILL PROCESS PURCHASE ORDERS THAT IT RECEIVES PRIOR TO THE CLOSE OF
REGULAR TRADING ON A DAY THAT THE NEW YORK STOCK EXCHANGE IS OPEN AT THE NET
ASSET VALUE DETERMINED LATER THAT DAY, PLUS THE APPLICABLE SALES CHARGE. THE
FUND WILL PROCESS PURCHASE ORDERS THAT IT RECEIVES AFTER THE CLOSE OF TRADING AT
THE NET ASSET VALUE DETERMINED AT THE CLOSE OF REGULAR TRADING ON THE NEXT DAY
THAT THE NEW YORK STOCK EXCHANGE IS OPEN.
O Read this Prospectus carefully.
O Determine how much you want to invest, subject to the following minimums:
o New accounts $500
o Subsequent investments $50
O Complete the share purchase application in this Prospectus, unless the shares
are being purchased by a Fund-sponsored IRA. Purchase applications for use
by Fund-sponsored IRAs are available from the Fund or your authorized dealer.
If you have any questions concerning the purchase of shares (including
purchases by retirement plans) or would like to receive an IRA purchase
application, please contact the Fund at (800) 759-6598 for assistance.
O Make your check payable to THE FRONTIER EQUITY FUND. All checks must be
drawn on U.S. banks. The Fund will not accept cash or third party checks.
Star Bank, N.A., the Fund's Custodian, will charge a $20 service fee against
the account of any shareholder whose check is returned for insufficient
funds. The shareholder will also be responsible for any losses suffered by
the Fund as a result.
O Send the application and check to:
FOR FIRST CLASS MAIL
The Frontier Equity Fund
c/o Frontier Funds, Inc.
Post Office Box 68
Pewaukee, Wisconsin 53072-0068
FOR OVERNIGHT COURIER OR
REGISTERED MAIL
The Frontier Equity Fund
c/o Frontier Funds, Inc.
101 West Wisconsin Avenue
Pewaukee, Wisconsin 53072-3433
PLEASE DO NOT SEND YOUR SHARE PURCHASE APPLICATION BY OVERNIGHT COURIER
SERVICE OR REGISTERED MAIL TO THE POST OFFICE BOX ADDRESS.
O If you wish to open an account by wire, please call (800) 759-6598 prior to
wiring funds in order to obtain a confirmation number and to ensure prompt
and accurate handling of funds.
Funds should be wired to:
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
ABA 042000013
Credit:
The Frontier Equity Fund
Account 8512162
Further Credit:
The Frontier Equity Fund
(shareholder account name as registered)
(shareholder account number)
You should then promptly send a properly signed share purchase application to
either of the mailing addresses listed above. Please remember that Star Bank,
N.A. must receive your wired funds prior to the close of regular trading on the
New York Stock Exchange for you to receive same day pricing.
The Fund and Star Bank, N.A. are not responsible for the consequences of any
delays resulting from the banking or Federal Reserve Wire system, or from
incorrect or incomplete wiring instructions.
OTHER INFORMATION ABOUT
PURCHASING FUND SHARES
The Fund may reject any share purchase applications for any reason. The Fund
will not accept purchase orders made by telephone, unless they are from an
authorized dealer which has an agreement with the Fund. The Fund will not issue
certificates evidencing shares purchased. The Fund will send investors a
written confirmation for all purchases of shares.
The Fund offers an automatic investment plan allowing shareholders to make
purchases on a regular and convenient basis. The Fund also offers the following
retirement plans:
o Traditional IRA
o Roth IRA
o Education IRA
Investors can obtain further information about the automatic investment plan
and the IRAs offered by the Fund by calling the Fund at (800) 759-6598. The
Fund may be an appropriate investment for retirement plans other than the IRAs
offered by it (such as 401(k) plans). However, the Fund does not currently
sponsor any plans other than the IRAs listed above. ANY RETIREMENT PLAN OTHER
THAN A FUND-SPONSORED IRA SHOULD USE THE PURCHASE APPLICATION INCLUDED IN THIS
PROSPECTUS. Please consult with a competent financial and tax advisor and
contact the Fund regarding investment by retirement plans.
REDEEMING SHARES
THE FUND WILL PROCESS REDEMPTION ORDERS THAT IT RECEIVES PRIOR TO THE CLOSE
OF REGULAR TRADING ON A DAY THAT THE NEW YORK STOCK EXCHANGE IS OPEN AT THE NET
ASSET VALUE DETERMINED LATER THAT DAY. THE FUND WILL PROCESS REDEMPTION ORDERS
THAT IT RECEIVES AFTER THE CLOSE OF TRADING AT THE NET ASSET VALUE DETERMINED AT
THE CLOSE OF REGULAR TRADING ON THE NEXT DAY THAT THE NEW YORK STOCK EXCHANGE IS
OPEN.
HOW TO REDEEM SHARES BY MAIL
O Prepare a letter of instructions containing
o account number(s)
o the amount of money or number of shares being redeemed
o the names on the account
o daytime phone number
o additional information that the Fund may require for redemptions by
corporations, executors, trustees, guardians, or others who hold shares in
a fiduciary or representative capacity.
Contact the Fund in advance at (800) 759-6598 or (414) 691-1196 if you have
any questions.
O Sign the letter of instructions exactly as the shares are registered. Joint
ownership accounts must be signed by all owners.
O Have the signatures guaranteed by a commercial bank or trust company in the
United States, a member firm of the New York Stock Exchange or other eligible
guarantor institution in the following situations:
o The redemption proceeds are to be sent to a person other than the person
in whose name the shares are registered.
o The redemption proceeds are to be sent to an address other than the
address of record, or the redemption is requested within 30 days following
a change of address.
o The redemption proceeds exceed $5,000.
A notarized signature is not an acceptable substitute for a signature
guarantee.
O Send the letter of instructions to:
FOR FIRST CLASS MAIL
The Frontier Equity Fund
c/o Frontier Funds, Inc.
Post Office Box 68
Pewaukee, Wisconsin 53072-0068
FOR OVERNIGHT COURIER OR
REGISTERED MAIL
The Frontier Equity Fund
c/o Frontier Funds, Inc
101 West Wisconsin Avenue
Pewaukee, Wisconsin 53072-3433
PAYMENT OF REDEMPTION PROCEEDS
The redemption price per share you receive is the next determined net asset
value after The Fund receives your written request in proper form with all
required information. The Fund (or its transfer agent) will mail you a check in
the amount of the redemption proceeds no later than the seventh day after the
Fund receives the written request in proper form with all required information.
SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan option may be activated if you have a minimum
of $10,000 in your Fund account. This option allows you to redeem a specific
dollar amount from your account on a regular basis. You may vary the amount or
frequency of the withdrawal payments or temporarily discontinue them. For
additional information or to request the appropriate form to establish a
Systematic Withdrawal Plan, please contact the Fund at (800) 759-6598 or (414)
691-1196.
OTHER REDEMPTION CONSIDERATIONS
When redeeming shares, Fund shareholders should consider the following:
O The redemption may result in a taxable gain.
O Shareholders who redeem shares that are held in an IRA must indicate on their
redemption request whether or not to withhold federal income taxes. If not,
these redemptions, as well as redemptions by other retirement plans not
involving a direct rollover to an eligible plan, will be subject to federal
income tax withholding.
O The Fund may delay the payment of redemption proceeds for up to seven days in
all cases.
O If you purchased shares by check, the Fund may delay the payment of
redemption proceeds until it is reasonably satisfied the check has cleared
(which may take up to 15 days from the date of purchase).
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
General. The Fund pays distributions to its shareholders from its net
investment income and from any net capital gains that it has realized on the
sale of securities. These distributions will be declared annually by the Fund,
on or before December 31.
Your distributions will be automatically reinvested in additional shares of
the Fund, unless you have elected on your original application, or by written
instructions filed with the Fund, to have them paid in cash. THERE ARE NO FEES
OR SALES CHARGES ON REINVESTMENTS.
Dividends from net investment income or net short-term gains will be taxable
(for investors subject to income taxes) as ordinary income, whether paid in cash
or in additional shares. Whether paid in cash or additional shares, and
regardless of the length of time Fund shares have been owned by the shareholder,
distributions from long-term capital gains are taxable to shareholders as such,
but are not eligible for the dividends-received deduction for corporations.
Also, if purchases of shares in a Fund are made shortly before a record date for
a dividend or capital gains distribution, a portion of the investment will be
returned as a taxable distribution (for investors subject to tax).
Distributions declared in October, November or December and made payable to
shareholders of record in such a month are deemed to have been received by
shareholders on December 31 of such year, so long as the distributions are
actually paid before February 1 of the following year. You will be notified
each January as to the federal tax status of distributions paid by the Fund.
Such distributions may also be subject to state and local taxes.
Taxes on Transactions. Redemptions of Fund shares are taxable events for
federal income tax purposes. Any loss incurred on a sale of the Fund's shares
held for six months or less will be treated as a long-term capital loss to the
extent of capital gains received with respect to such shares. Starting January
1, 2001, sales of certain securities held for more than five years will be taxed
at special lower rates. You may also be subject to state and municipal taxes on
such redemptions.
Dividends-Received Deduction for Corporations. Dividends from net investment
income and short-term capital gains will generally qualify in part for the 70%
dividends-received deduction for corporations. The Fund will send to
shareholders a statement each year advising the amount of the dividend income
which qualifies for such treatment.
Withholding. You must certify on your purchase application, or on a separate
form supplied by us, that your Social Security or Taxpayer Identification Number
provided is correct and that you are not currently subject to backup
withholding, or that you are exempt from backup withholding. Otherwise, we are
required by federal law to withhold 31% of reportable payments paid to you.
BECAUSE EVERYONE'S TAX SITUATION IS UNIQUE, ALWAYS CONSULT YOUR TAX
PROFESSIONAL ABOUT FEDERAL, STATE AND LOCAL TAX CONSEQUENCES.
FINANCIAL HIGHLIGHTS
The financial highlights table below is intended to help you understand the
Fund's financial performance for the past five years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the Fund (assuming reinvestment of all dividends and distributions
and excluding sales charges). This information has been audited by McCurdy &
Associates CPA's, Inc., independent auditors, whose report, along with the
Fund's financial statements, is included in the Fund's Annual Report to
Shareholders, which is available upon request.
<TABLE>
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
FOR THE YEARS ENDED SEPTEMBER 30,
------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 4.28 $ 6.61 $ 8.06 $ 7.59 $ 8.68
------ ------ ------ ------ ------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment loss (0.58) (0.59) (0.51) (0.47) (0.77)
Net realized and unrealized
gain on investments (2.12) (1.74) (0.94) 0.94 0.13
------ ------ ------ ------ ------
Total from investment
operations (2.70) (2.33) (1.45) 0.47 (0.64)
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- -- -- -- --
Distribution from realized gains
from security transactions -- -- -- -- (0.27)
Distributions in excess of
book realized gains -- -- -- -- (0.18)
------ ------ ------ ------ ------
Total distributions -- -- -- -- (0.45)
Net asset value, end of period $ 1.58 $ 4.28 $ 6.61 $ 8.06 $ 7.59
======= ======= ======= ======= =======
Total return**<F5> (63.08%) (35.25%) (17.99%) 6.19% (7.23%)
Ratios/Supplemental Data:
Net assets end of period (in 000's) 256 856 1,445 1,557 1,188
Ratio of expenses to
average net assets 20.72% 13.29% 8.29% 8.08% 9.61%
Ratio of net expenses
to average net assets 19.72% 12.29% 7.29% 7.08% 9.55%
Ratio of net investment
income (loss) to average net assets (19.58%) (12.29%) (7.26%) (7.06%) (9.40%)
Portfolio turnover rate 47.78% 74.85% 133.42% 100.80% 121.48%
**<F5> Based on net asset value per share. The Fund's sales charge is not reflected in total return in this table.
</TABLE>
(THE FRONTIER EQUITY FUND)
PURCHASE APPLICATION
--- This is a follow-up application to an investment by wire transfer.
Mail to:
The Frontier Equity Fund
c/o Frontier Funds, Inc.
Post Office Box 68
Pelwaukee, WI 53072-0068
Overnight Express Mail to:
The Frontier Equity Fund
c/o Frontier Funds, Inc.
101 West Wisconsin Avenue
Pelwaukee, WI 53072-3433
Use this form for individual, custodial, trust, profit-sharing or pension plan
accounts. THIS FORM CANNOT BE USED TO ESTABLISH AN INDIVIDUAL RETIREMENT
ACCOUNT (IRA). For additional information, or to obtain an IRA application,
please call 1-800-759-6598 or 1-414-961-1196.
- ------------------------------------------------------------------------------
A. INVESTMENT Please indicate the amount you wish to invest $ -----------
($500 MINIMUM)
- --- By check enclosed payable to THE FRONTIER EQUITY FUND.
- --- By wire (call first): 1-800-759-6598 or 1-414-691-1196 for instructions.
Indicate total amount and date of wire $ --------------- Date ---------------
- ------------------------------------------------------------------------------
B. REGISTRATION
- --- Individual
- ---------------- ---------------- CITIZENT OF -- U.S. -- OTHER -------------
NAME SOCIAL SECURITY# BIRTHDATE
(Mo/Dy/Yr)
- --- Joint Owner*<F6> (cannot be a minor)
- ---------------- ---------------- CITIZENT OF -- U.S. -- OTHER -------------
NAME SOCIAL SECURITY# BIRTHDATE
(Mo/Dy/Yr)
*<F6>Registration will be Joint Tenancy with Rights of Survivorship (JTWROS)
unless otherwise specified.
- --- Gift to Minors
- ------------------------------------------ ---- --------------------------
CUSTODIAN'S FIRST NAME (ONLY ONE PERMITTED) M.I. LAST NAME
- --------------------------------------- ---- -----------------------------
MINOR'S FIRST NAME (ONLY ONE PERMITTED) M.I. LAST NAME
- -------------------------- ---------------------------- ------------------
MINOR'S SOCIAL SECURITY # MINOR'S BIRTHDATE (Mo/Dy/Yr) STATE OF RESIDENCE
- --- Corporation**<F7> (including Corporate Pension Plans),**<F7> Trust, Estate
or Guardianship ***<F8>
- ------------------------------------------------------------------------------
NAME OF TRUSTEE(S) (IF TO BE INCLUDED IN REGISTRATION)***<F8>
- --- Partnership***<F8>
- ------------------------------------------------------------------------------
NAME OF TRUST/CORPORATION**<F7>/PARTNERSHIP
- --- Other Entity***<F7>
- ---------------------------------------- -----------------------------------
SOCIAL SECURITY #/TAX ID # DATE OF AGREEMENT (Mo/Dy/Yr)
**<F7>Corporate Resolution is required. ***<F8>Additional documentation and
certification may be requested.
- ------------------------------------------------------------------------------
C. MAILING ADDRESS
- -------------------------------------- -------------------------------------
STREET APT/SUITE
- -------------------------------------- ------- ---------------------------
CITY STATE ZIP
- --------------------------------------- ------------------------------------
DAYTIME PHONE # EVENING PHONE #
- --- Duplicate Confirmation to:
- ------------------------------ ---- --------------------------------------
FIRST NAME M.I. LAST NAME
- -------------------------------------- -------------------------------------
STREET APT/SUITE
- -------------------------------------- ------- ---------------------------
CITY STATE ZIP
- ------------------------------------------------------------------------------
D. DISTRIBUTION OPTIONS
Capital gains & dividends will be reinvested if no option is selected.
--- Capital Gains & Dividends Reinvested
--- Capital Gains & Dividends in Cash
If the distribution is to be paid in cash, specify payment method below:
--- Send check to mailing address in Section C.
--- Automatic deposit to my bank account via Electronic Funds Transfer
("EFT"). May take up to 3 business days to reach your bank account
(complete bank information following).
Your signed Application must be received at least 15 business days prior to
initial transaction.
An unsigned voided check (for checking accounts) or a savings account deposit
slip is required with your Application.
- ------------------------------------------------------------------------------
NAME(S) ON BANK ACCOUNT
- ---------------------------------- -----------------------------------------
BANK NAME ACCOUNT NUMBER
- ------------------------------------------------------------------------------
BANK ADDRESS
To ensure proper crediting of your bank account, please attach a voided check
or a deposit slip.
- ------------------------------------------------------------------------------
E. INVESTMENT DEALER FOR COMPLETION BY YOUR INVESTMENT DEALER
I hereby authorize and direct Freedom Investors Corp. to act as agent for the
dealer named below (Dealer) in connection with transactions under the account of
the Investor in accordance with the following representations, terms and
conditions: The Dealer guarantees the signature(s) of the applicant(s) below
(Investor). To the best of the Dealer's knowledge and belief, the Investor is of
full age and is legally competent; and the Dealer may lawfully sell securities
in the state which the Investor has designated in such Application as his/her/
its mailing address. The Dealer represents that he/she/it has entered into a
Selected Dealer Agreement with Freedom Investors Corp., the principal
underwritter of the Fund, and appoints American Data Services, Inc. as his/her/
its agent to execute the purchase transactions in accordance with the terms of
the Fronties Equity Fund Purchase Application executed by the Investor and to
conform each purchase to the Investor and to the Dealer. American Data Servies,
Inc. will remit monthly to the Dealer the amount of concessions/sales charges
payable to such Dealer.
- --------------------------------------------------------------------------------
Firm Name Address
- --------------------------------------------------------------------------------
Dealer Number Branch Number
- --------------------------------------------------------------------------------
Branch Name Authorized Signature
- ------------------------ ----------------------------------------------------
Representative Number Represntative Last Name First Name M.I.
- --------------------------------------------------------------------------------
F. SIGNATURE AND CERTIFICATION REQUIRED BY THE INTERNAL REVENUE SERVICE
Neither the Fund nor its transfer agent will be responsible for the
authenticity of transaction instructions received by telephone, provided that
reasonable security procedures have been followed.
UNDER THE PENALTY OF PERJURY, I CERTIFY THAT (1) THE SOCIAL SECURITY NUMBER OR
TAXPAYER IDENTIFICATION NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER
IDENTIFICATION NUMBER, AND (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER AS
A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR THE IRS HAS
NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. THE IRSDOES NOT
REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
- ---------------------------- -----------------------------------------------
DATE (Mo/Dy/Yr) SIGNATURE OF OWNER*<F9>
- ---------------------------- -----------------------------------------------
DATE (Mo/Dy/Yr) SIGNATURE OF CO-OWNER, if any
*<F9>If shares are to be registered in (1) joint names, both persons should
sign, (2) a custodian for a minor, the custodian should sign, (3) a trust, the
trustee(s) should sign, or (4) a corporation or other entity, an officer should
sign and print name and title on space provided below.
- ------------------------------------------------------------------------------
PRINT NAME AND TITLE OF OFFICER SIGNING FOR A CORPORATION OR OTHER ENTITY
The a series of
FRONTIER Frontier Funds, Inc.
EQUITY 101 West Wisconsin Avenue
FUND Pewaukee, Wisconsin 53072-3433
(414) 691-1196
FOR MORE INFORMATION
The following documents contain more information about the Fund and are
available free upon request:
O Annual and Semi-annual Reports to Shareholders
Additional information about the Fund's investments is available in the
Fund's Annual and Semi-annual Reports to Shareholders. These Reports contain
a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
O Statement of Additional Information (SAI)
The SAI provides more detailed information about the Fund and is incorporated
into this Prospectus by reference.
The SAI and the Annual and Semi-annual Reports may be obtained by contacting:
THE FRONTIER EQUITY FUND
C/O FRONTIER FUNDS, INC.
101 WEST WISCONSIN AVENUE
POST OFFICE BOX 68
PEWAUKEE, WISCONSIN 53072
(800) 759-6598 OR (414) 691-1196
Prospective investors and shareholders who have questions about the Fund may
call or write to the Fund at the above telephone number or address.
You may review and copy information about the Fund (including the Fund's SAI and
Reports to Shareholders at the Public Reference Room of the Securities and
Exchange Commission. Information on the operation of the Public Reference Room
may be obtained by calling (800) SEC-0330. Text only copies are available:
O For a fee, by writing to the Public Reference Room of the Commission,
Washington, D.C. 20549-6009.
O Free from the Commission's Internet website at http://www.sec.gov.
Investment Company Act File No. 811-6449
FRONTIER FUNDS, INC.
FORM N-1A
PART B
The a series of
FRONTIER Frontier Funds, Inc.
EQUITY 101 West Wisconsin Avenue
FUND Pewaukee, Wisconsin 53072-3433
(414) 691-1196
STATEMENT OF ADDITIONAL INFORMATION
March , 1999
This Statement of Additional Information is not a Prospectus, but
expands upon and supplements the information contained in the Prospectus of the
Frontier Equity Fund ("Fund"), a series of Frontier Funds, Inc. ("Frontier"),
dated March , 1999. The Statement of Additional Information should be read in
conjunction with the Fund's Prospectus. The Fund's Prospectus and Annual Report
to Shareholders may be obtained free of charge by writing to the Fund at Post
Office Box 68, Pewaukee, Wisconsin 53072-0068, or by telephoning the Fund toll
free at (800) 759-6598 or in the Milwaukee area 691-1196. Certain information
from the Fund's Annual Report to Shareholders is incorporated by reference into
this Statement.
TABLE OF CONTENTS
Investment Objective and Policies............................... 2
Investment Restrictions......................................... 5
Portfolio Transactions.......................................... 6
Investment Adviser.............................................. 7
Administrator, Transfer Agent and Dividend Disbursing Agent..... 8
Distribution.................................................... 8
Performance Measures............................................ 9
Purchase, Redemption and Determination of Net Asset Value....... 10
Purchase of Shares.......................................... 10
Redemption of Shares........................................ 11
Net Asset Value............................................. 11
Management of Frontier and the Fund............................. 12
Directors and Officers...................................... 12
Compensation Table.......................................... 12
Ownership of Management and Principal Shareholders.......... 12
Dividends, Distributions and Their Taxation..................... 13
General Information and History................................. 14
Custodian, Counsel and Independent Auditors..................... 15
Financial Statements............................................ 15
Additional Information.......................................... 15
No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information and the Prospectus of the Fund, dated March , 1999, and, if given
or made, such information or representations may not be relied upon as having
been authorized by Frontier or by the Fund.
INVESTMENT OBJECTIVE AND POLICIES
The Frontier Equity Fund ("Fund") is a separate series of Frontier Funds,
Inc. ("Frontier"), an open-end, diversified investment management company
registered under the Investment Company Act of 1940 ("1940 Act"). This
Statement of Additional Information pertains to the Fund only. The Fund's
investment objective is long-term growth of capital. The Fund seeks to achieve
its investment objective primarily by investing in equity securities of smaller
capitalization (less than $1 billion) U.S. companies. The following
considerations supplement the information concerning the Fund's investment
objective and policies appearing in the Prospectus.
FIXED INCOME SECURITIES
The value of fixed income securities, including U.S. government securities,
varies inversely with changes in interest rates. When interest rates decline,
the value of fixed income securities tends to rise. When interest rates rise,
the value of fixed income securities tends to decline. The market prices of
zero coupon, delayed coupon and payment-in-kind securities are affected to a
greater extent by interest rate changes and tend to be more volatile than the
market prices of securities providing for regular cash interest payments. In
addition, fixed income securities are subject to the risk that the issuer may
default on its obligation to pay principal and interest. The value of fixed
income securities may also be reduced by the actual or perceived deterioration
in an issuer's credit-worthiness, including credit rating downgrades.
Fixed income securities may be subject to both call (prepayment) risk and
extension risk. Call risk is the risk that an issuer of a security will
exercise its right to pay principal on an obligation earlier than scheduled.
Early principal payments tend to be made during periods of declining interest
rates. This forces the Fund to reinvest the unanticipated cash flow in lower
yielding securities. Extension risk is the risk that an issuer will exercise
its right to pay principal later than scheduled. This typically happens during
periods of rising interest rates and prevents the affected Fund from reinvesting
in higher yielding securities. Unscheduled principal prepayments and delays in
payment can both reduce the value of an affected security. Unlike most
conventional fixed income securities, mortgage-backed and asset-backed
securities are generally subject to both call (prepayment) risk and extension
risk.
Money Market Instruments. The Fund may invest in money market instruments,
including obligations issued or guaranteed by the United States government, its
agencies or instrumentalities; certificates of deposit, time deposits and
bankers' acceptances issued by or maintained at U.S. and foreign banks; and
commercial paper.
High Yield Securities. The Fund will not invest directly more than 5% of its
total assets in high yield, high-risk, lower-rated securities, commonly known as
"junk bonds." Junk bonds are securities rated below the top four bond rating
categories of Standard & Poor's Ratings Group, Moody's Investors Service, Inc.
or another nationally recognized statistical rating organization or, if unrated,
determined by the investment adviser to be of comparable credit quality. The
foregoing percentage limitation is not considered fundamental and may be changed
by the Fund without shareholder approval.
The high yield, high risk market is at times subject to substantial
volatility. An economic downturn or increase in interest rates may have a more
significant effect on the high yield, high risk securities in the Fund's
portfolio and their markets, as well as on the ability of securities, issuers to
repay principal and interest. Issuers of high yield, high risk securities may
be of low credit-worthiness and the high yield, high risk securities may be
subordinated to the claims of senior lenders. During periods of economic
downturn or rising interest rates, the issuers of high yield, high risk
securities may have greater potential for insolvency and a higher incidence of
high yield, high risk bond defaults may be experienced.
The prices of high yield, high risk securities may be more or less sensitive
to interest rate changes than higher-rated investments but are more sensitive to
adverse economic changes or individual corporate developments. During an
economic downturn or substantial period of rising interest rates, highly
leveraged issuers may experience financial stress that would adversely affect
their ability to service their principal and interest payment obligations, to
meet projected business goals, and to obtain additional financing. If the
issuer of a high yield, high risk security owned by the Fund defaults, the Fund
may incur additional expenses in seeking recovery. Periods of economic
uncertainty and changes can be expected to result in increased volatility of
market prices of high yield, high risk securities and the Fund's net asset
value. Yields on high yield, high risk securities will fluctuate over time.
Furthermore, in the case of high yield, high risk securities structured as zero
coupon or pay-in-kind securities, their market prices are affected to a greater
extent by interest rate changes and thereby tend to be more volatile than market
prices of securities which pay interest periodically and in cash.
The secondary market may at times become less liquid or respond to adverse
publicity or investor perceptions, making it more difficult for the Fund to
accurately value high yield, high risk securities or dispose of them. To the
extent the Fund owns or may acquire illiquid or restricted high yield, high risk
securities, these securities may involve special registration responsibilities,
liabilities and costs, and liquidity difficulties, and judgment will play a
greater role in valuation because there is less reliable and objective data
available.
RESTRICTED AND ILLIQUID SECURITIES
The Fund may invest in illiquid securities, including certain restricted and
private placement securities. It may be difficult to dispose of illiquid
securities quickly or at a price that fully reflects their fair value.
Restricted securities that are eligible for resale in reliance on Rule 144A
under the Securities Act of 1933 ("1933 Act"), and commercial paper offered
under Section 4(2) of the 1993 Act are not subject to the Fund's 5% limit on
illiquid investments, if they are determined to be liquid.
PORTFOLIO SECURITIES LOANS
The Fund may lend its portfolio securities as long as: (1) the loan is
continuously secured by collateral consisting of U.S. government securities or
cash or cash equivalents maintained on a daily mark-to-market basis in an amount
at least equal to the current market value of the securities loaned; (2) the
Fund may at any time call the loan and obtain the securities loaned; (3) the
Fund will receive any interest or dividends paid on the loaned securities; and
(4) the aggregate market value of the securities loaned will not at any time
exceed one-third of the total assets of the Fund. The Fund may pay fees in
connection with securities loans. Freedom Investors Corp. ("Adviser") will
evaluate the credit-worthiness of prospective institutional borrowers and
monitor the adequacy of the collateral to reduce the risk of default by
borrowers. Lending portfolio securities involves risk of delay in the recovery
of the loaned securities and in some cases, the loss of rights in the collateral
if the borrower fails.
REPURCHASE AGREEMENTS
The Fund may invest in securities subject to repurchase agreements. A
repurchase agreement involves the sale of securities to the Fund with the
concurrent agreement by the seller to repurchase the securities at the Fund's
cost plus interest at an agreed rate upon demand or within a specified time,
thereby determining the yield during the purchaser's period of ownership. The
result is a fixed rate of return insulated from market fluctuations during such
period. Under the 1940 Act, repurchase agreements are considered loans by the
Fund. The use of repurchase agreements involves certain risks. For example, if
the seller of the agreement defaults on its obligation to repurchase the
underlying securities at a time when the value of these securities has declined,
the Fund may incur a loss upon disposition of them. If the seller of the
agreement becomes insolvent and subject to liquidation or reorganization under
the Bankruptcy Code or other laws, disposition of the underlying securities may
be delayed pending court proceedings. Finally, it is possible that the Fund may
not be able to perfect its interest in the underlying securities. While the
Fund's management acknowledges these risks, it is expected that they can be
controlled through stringent security selection criteria and careful monitoring
procedures.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND LEVERAGE
The Fund may borrow money from banks or through reverse repurchase agreements
for emergency and/or leverage purposes. Using the cash proceeds of reverse
repurchase agreements to finance the purchase of additional investments is a
form of leverage. Leverage magnifies the sensitivity of the Fund's net asset
value to changes in the market prices of the Fund's portfolio securities.
However, the Fund will borrow solely for temporary or emergency (and not for
leverage) purposes. The aggregate amount of such borrowings and reverse
repurchase agreements may not exceed one-third of the Fund's total assets.
Under the 1940 Act, the Fund is required to maintain continuous asset
coverage of 300% with respect to such borrowings and to sell (within three days)
sufficient portfolio holdings in order to restore such coverage if it should
decline to less than 300% due to market fluctuation or otherwise. Such sale
must occur even if disadvantageous from an investment point of view. Leveraging
aggregates the effect of any increase or decrease in the value of portfolio
securities on the underlying net asset value. In addition, money borrowed is
subject to interest costs (which may include commitment fees and/or the cost of
maintaining minimum average balances) which may or may not exceed the income and
gains from the securities purchased with borrowed funds.
FOREIGN SECURITIES
The Fund may invest a portion of its assets in securities of foreign issuers.
These investments may be in the form of American Depositary Receipts ("ADRs") or
similar securities representing interests in an underlying foreign security.
ADRs are not necessarily denominated in the same currency as the underlying
foreign securities. If an ADR is not sponsored by the issuer of the underlying
foreign security, the institution issuing the ADR may have reduced access to
information about the issuer.
Investments in foreign securities involve special risks and considerations
that are not present when the Fund invests in domestic securities. These risks
include less publicly-available financial and other information about foreign
companies; less rigorous securities regulation; the potential imposition of
currency controls, foreign withholding and other taxes; and war, expropriation
or other adverse governmental actions. Foreign equity markets may be less
liquid than United States markets and may be subject to delays in the settlement
of portfolio transactions. Brokerage commissions and other transaction costs in
foreign markets tend to be higher than in the United States. The value of
foreign securities denominated in a foreign currency will vary in accordance
with changes in currency exchange rates, which can be very volatile. In
addition, the value of foreign fixed income investments will fluctuate in
response to changes in U.S. and foreign rates.
Exchange Rates. Since the Fund may purchase securities denominated in
foreign currencies, changes in foreign currency exchange rates will affect the
value of the assets from the perspective of U.S. investors. Changes in foreign
currency exchange rates may also affect the value of dividends and interest
earned, gains and losses realized on the sale of securities and net investment
income and gains, if any, to be distributed to the investor by a mutual fund.
The rate of exchange between the U.S. dollar and other currencies is determined
by the forces of supply and demand in foreign exchange markets. These forces
are affected by the international balance of payments and other economic and
financial conditions, government intervention, speculation and other factors.
The Fund may seek to protect itself against the adverse effects of currency
exchange rate fluctuations by entering into currency-forward or swaps contracts.
Hedging transactions will not, however, always be fully effective in protecting
against adverse exchange rate fluctuations. Furthermore, hedging transactions
involve transaction costs and the risk that the Fund will lose money, either
because exchange rates move in an unexpected direction, because another party to
a hedging contract defaults, or for other reasons.
Exchange Controls. The value of foreign investments and the investment
income derived from them may also be affected (either favorably or unfavorably)
by exchange control regulations. It is expected that the Fund 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. However,
there is no assurance that currency controls will not be imposed after the time
of investment.
Limitations of Foreign Markets. There is often less information publicly-
available about a foreign issuer than about a U.S. issuer. Foreign issuers are
not generally subject to accounting, auditing, and financial reporting standards
and practices comparable to those in the United States. The securities of some
foreign issuers are less liquid and at times more volatile than securities of
comparable U.S. issuers. Foreign brokerage commissions, custodial expenses, and
other fees are also generally higher than for securities traded in the United
States. Foreign settlement procedures and trade regulations may involve certain
risks (such as delay in payment or delivery of securities or in the recovery of
the Fund's assets held abroad) and expenses not present in the settlement of
domestic investments. A delay in settlement could hinder the ability of the
Fund to take advantage of changing market conditions, with a possible adverse
effect on net asset value. There may also be difficulties in enforcing legal
rights outside the United States.
Foreign Laws, Regulations and Economies. There may be a possibility of
nationalization or expropriation of assets, imposition of currency exchange
controls, confiscatory taxation, political or financial instability, and
diplomatic developments that could affect the value of the Fund's investments in
certain foreign countries. Legal remedies available to investors in certain
foreign countries may be more limited than those available with respect to
investments in the United States or in other foreign countries. The laws of
some foreign countries may limit the Fund's ability to invest in securities of
certain issuers located in those countries. Moreover, individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth or gross national product, inflation rate, capital
reinvestment, resource self-sufficiency and balance of payment positions.
Foreign Tax Considerations. Income (possibly including, in some cases,
capital gains) received by the Fund 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 in some cases. Any such taxes paid by the Fund will reduce
the net income of the Fund available for distribution. Special tax
considerations apply to foreign securities.
Foreign Currency Transactions. The Fund may enter into forward contracts to
purchase or sell an agreed-upon amount of a specific currency at a future date
that may be any fixed number of days from the date of the contract agreed upon
by the parties at a price set at the time of the contract. Under such an
arrangement, the Fund could, at the time it enters into a contract to acquire a
foreign security for a specified amount of currency, purchase with U.S. dollars
the required amount of foreign currency for delivery at the settlement date of
the purchase; the Fund could enter into similar forward currency transactions in
connection with the sale of foreign securities. The effect of such transactions
would be to fix a U.S. dollar price for the security to protect against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the particular foreign currency during the period between the
date the security is purchased or sold and the date on which payment is made or
received (usually 3 to 14 days). These contracts are traded in the interbank
market between currency traders (usually large commercial banks and other
financial institutions) and their customers. A forward contract usually has no
deposit requirement and no commissions are charged for trades. While forward
contracts tend to minimize the risk of loss due to a decline in the value of the
currency involved, they also tend to limit any potential gain that might result
if the value of such currency were to increase during the contract period.
INVESTMENT RESTRICTIONS
The Fund's principal investment objective and the following investment
restrictions are fundamental and cannot be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities (defined in
the 1940 Act as the lesser of (a) more than 50% of the outstanding shares or
(b) 67% or more of the shares represented at a meeting at which more than 50% of
the outstanding shares are represented). All other investment policies or
practices are considered by the Fund not to be fundamental and accordingly may
be changed without stockholder approval. If a percentage restriction on
investment or use of assets set forth below is adhered to at the time a
transaction is effected, later changes in percentage resulting from changing
market values or total assets of the Fund will not be considered a deviation
from policy.
The Fund may not (1) with respect to 75% of its total assets, invest more
than 5% of the value of its total assets (taken at market value at time of
purchase) in the outstanding securities of any one issuer or own more than 10%
of the outstanding voting securities of any one issuer, in each case other than
securities issued or guaranteed by the U.S. Government or any agency or
instrumentality thereof; (2) invest 25% or more of the value of its total assets
in any one industry; (3) issue senior securities (including borrowing money on
margin, entering into reverse repurchase agreements or otherwise) in excess of
5% of its total assets (including the amount of senior securities issued but
excluding any liabilities and indebtedness not constituting senior securities),
except that the Fund may borrow up to an additional 5% of its total assets for
temporary purposes, or pledge its assets other than to secure such issuances or
in connection with hedging transactions, when-issued and forward commitment
transactions and similar investment strategies (the Fund's obligations under the
foregoing types of transactions and investment strategies not constituting
senior securities); (4) make loans of money or property to any person, except
through loans of portfolio securities, the purchase of fixed income securities
consistent with the Fund's investment objective and policies or the acquisition
of securities subject to repurchase agreements; (5) underwrite the securities of
other issuers, except to the extent that, in connection with the disposition of
portfolio securities or the sale of its own shares, the Fund may be deemed to be
an underwriter; (6) invest for the purpose of exercising control over management
of any company; (7) purchase real estate or interests therein other than
mortgage-backed securities and similar instruments; (8) purchase or sell
commodities or commodity contracts; (9) invest more than 5% of its total assets
in restricted and illiquid securities and security units that may not be offered
or sold to the public without registration under the Securities Act of 1933;
(10) make any short sale of securities, excluding short selling against the box;
(11) invest more than 5% of its total assets in the securities of unseasoned
issuers, to include equity securities of issuers which are not readily
marketable; (12) invest in puts, calls, straddles, spreads, and any combination
thereof; (13) invest in oil, gas, or other mineral exploration or development
programs; or (14) invest more than 10% of its total assets in the securities of
one or more investment companies or in one or more real estate investment
trusts.
PORTFOLIO TRANSACTIONS
Under the supervision of the Fund's Board of Directors, Freedom Investors
Corp., the Adviser, is responsible for decisions to buy and sell securities for
the Fund and for the placement of the Fund's portfolio business and negotiation
of commissions, if any, paid on these transactions. Portfolio turnover will be
no more than is necessary to meet the Fund's investment objectives. Under
normal circumstances, it is anticipated that the Fund's portfolio turnover will
not exceed 100%.
In instances where securities are purchased on a commission basis, the
Fund will seek competitive and reasonable commission rates based on
circumstances of the trade involved and to the extent that they do not detract
from the quality of the execution. The Fund, in purchasing and selling
portfolio securities, will seek the best available combination of execution and
overall price (which shall include the cost of the transaction) consistent with
the circumstances which exist at the time. The Fund does not intend to solicit
competitive bids on each transaction.
The Fund believes it is in its best interest and that of its shareholders
to have a stable and continuous relationship with a diverse group of financially
strong and technically qualified broker-dealers who will provide quality
executions at competitive rates. Broker-dealers meeting these qualifications
also will be selected for their demonstrated loyalty to the Fund, when acting on
its behalf, as well as for any research or other services provided to the Fund.
Substantially all of the portfolio transactions are through brokerage firms
which are members of the New York Stock Exchange which is typically the most
active market in the size of the Fund's transactions and for the types of
securities predominant in the Fund's portfolio. When buying securities in the
over-the-counter market, the Fund will select a broker who maintains a primary
market for the security unless it appears that a better combination of price and
execution may be obtained elsewhere. The Fund normally will not pay a higher
commission rate to broker-dealers providing benefits or services to it than it
would pay to broker-dealers who do not provide it such benefits or services.
However, the Fund reserves the right to do so within the principles set out in
Section 28(e) of the Securities Exchange Act of 1934 when it appears that this
would be in the best interests of the shareholders.
No commitment is made to any broker or dealer with regard to placing of
orders for the purchase or sale of Fund portfolio securities, and no specific
formula is used in placing such business. Allocation is reviewed regularly by
Board of Directors of the Fund It is not the Fund's practice to allocate
brokerage or principal business on the basis of sales of its shares which may be
made through broker-dealer firms. However, it may place portfolio orders with
qualified broker-dealers who recommend the Fund to other clients, or who act as
agents in the purchase of the Fund's shares for their clients.
Research services furnished by broker-dealers may be useful to the Adviser
in serving other clients, as well as the Fund. Conversely, the Fund may benefit
from research services obtained by the Adviser from the placement of portfolio
brokerage on behalf of other clients.
When it appears to be in the best interests of its shareholders, the Fund
may join with other clients of the Adviser in acquiring or disposing of a
portfolio holding. Securities acquired or proceeds obtained will be equitably
distributed between the Fund and other clients participating in the transaction.
In some instances, this investment procedure may affect the price paid or
received by the Fund or the size of the position obtained by the Fund.
INVESTMENT ADVISER
As set forth in the Prospectus under the caption "Investment Adviser," the
investment adviser to the Fund is Freedom Investors Corp. ("Adviser"). Pursuant
to an investment advisory agreement between the Fund and the Adviser ("Advisory
Agreement"), the Adviser furnishes continuous investment advisory and portfolio
management services to the Fund. The Adviser is controlled by James R. Fay, who
owns approximately 88% of the outstanding capital stock of Freedom Financial,
Inc., a holding company which owns 100% of the outstanding capital stock of the
Adviser. Mr. Fay is also President, Treasurer and a director of Frontier and
the Fund.
Under the Advisory Agreement, the Adviser, at its own expense and without
reimbursement from the Fund, will furnish office space and all necessary office
facilities, equipment and executive personnel for making the investment
decisions necessary for managing the Fund and maintaining its organization. As
compensation for the foregoing services, the Adviser is entitled to receive a
monthly fee of 1/12 of 1.00% (1.00% per annum) of the daily net assets of the
Fund.
The Adviser has voluntarily waived payment of its advisory fee since the
inception of the Fund. Although this waiver can be revoked at any time, the
Adviser presently anticipates that this arrangement will continue for the Fund's
current fiscal year ending September 30, 1999.
The Fund will pay all of its expenses not assumed by the Adviser
including, but not limited to, the costs of preparing and printing its
registration statements required under the 1933 Act and the 1940 Act and any
amendments thereto, the expenses of registering its shares with the Securities
and Exchange Commission and in the various states, the printing and distribution
cost of prospectuses mailed to shareholders, the cost of director and officer
liability insurance, reports to shareholders, reports to government authorities
and proxy statements, interest charges, brokerage commissions, and expenses
incurred in connection with portfolio transactions. The Fund will also pay the
fees of directors who are not affiliated with the Fund, salaries of
administrative and clerical personnel, association membership dues, auditing and
accounting services, fees and expenses of any custodian or trustees having
custody of Fund assets, expenses of calculating the net asset value of Fund
shares and repurchasing and redeeming such shares, and charges and expenses of
dividend disbursing agents, registrars, and share transfer agents, including the
cost of keeping all necessary shareholder records and accounts and handling any
problems relating thereto.
The Adviser has undertaken to reimburse the Fund to the extent that the
aggregate annual operating expenses, including the investment advisory fee but
excluding interest, taxes, brokerage commissions and extraordinary items, exceed
that percentage of the average net assets of the Fund for such year (as
determined by valuations made each business day of the year) which is the most
restrictive expense limitation imposed by the laws of the various states in
which the Fund's shares are qualified for sale. As of the date of this
Statement of Additional Information, the shares of the Fund are not qualified
for sale in any state that limits expenses.
The Adviser may, at its own discretion, pay any additional expenses of the
Fund which are in excess of the 1.00% advisory fee. These expenses must be (i)
reasonable and legitimate and (ii) the responsibility and obligation of the
Fund, not of the Adviser or any other party. Any such expense payments on
behalf of the Fund are reimbursable to the Adviser by the Fund. To date, the
Adviser has chosen not to accrue or seek reimbursement from the Fund for the
payment of any operating expenses.
The Advisory Agreement will remain in effect for as long as its
continuance is specifically approved at least annually by (i) the directors of
the Fund, or by the vote of a majority (as defined in the 1940 Act) of the
outstanding shares of the Fund, and (ii) by the vote of a majority of the
directors of the Fund who are not parties to the Advisory Agreement or
interested persons of the Adviser, cast in person at a meeting called for the
purpose of voting on such approval. The Advisory Agreement provides that it may
be terminated at any time without the payment of any penalty, by the directors
of the Fund or by vote of a majority of the Fund's shareholders, on sixty days'
written notice to the Adviser, and by the Adviser on the same notice to the
Fund, and that it shall be automatically terminated if it is assigned. The
Advisory Agreement provides that the Adviser shall not be liable to the Fund or
its shareholders for anything other than willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties.
ADMINISTRATOR, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
ADMINISTRATOR
The administrator of the Fund is American Data Services, Inc.
("Administrator"), 150 Motor Parkway, Suite 109, Hauppauge, New York 11788.
Under administrative services and fund accounting agreements with the Fund
(collectively, the "Administration Agreement"), the Administrator provides
services necessary for the operation of the Fund, including, among other things,
(i) preparation of shareholder reports and communications, (ii) preparation of
certain reports and filings with the Securities and Exchange Commission and with
state securities administrators and (iii) general supervision of the operation
of the Fund, including coordination of the services performed by the Transfer
Agent, Custodian, independent accountants, legal counsel and others. Services
rendered by the Administrator do not include investment advisory or portfolio
management services. For its services under the Adminstration Agreement, the
Administrator receives a monthly fee (based upon the Fund's average daily net
assets), as follows: $2,268 on average net assets under $5 million; $2,750 from
$5 million to $10 million; $3,500 from $10 million to $20 million; and the
greater of $5,000 or 1/12 of 0.0145% of average net assets in excess of $20
million. In addition, the Administrator is reimbursed by the Fund for
reasonable out-of-pocket expenses. For the fiscal years ended September 30,
1998, 1997 and 1996, the amounts of $29,963, $28,568 and $25,560 were paid,
respectively, to the Administrator by the Fund, pursuant to the Administration
Agreement.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
American Data Services also serves as the Fund's transfer agent and
dividend disbursing agent ("Transfer Agent") and performs other shareholder
services, pursuant to an agreement with the Fund ("Transfer Agency and Service
Agreement"). For its services rendered under the Transfer Agency and Service
Agreement, the Transfer Agent receives a monthly fee of approximately $1,418.
In addition, the Transfer Agent is reimbursed by the Fund for reasonable out-of-
pocket expenses.
The Administration Agreement and the Transfer Agency and Service Agreement
will each remain in effect for three (3) years commencing March 17, 1999, unless
earlier terminated by either party upon 90 days' written notice to the other.
The Administration Agreement and the Transfer Agency and Service Agreement
provide, respectively, that the Administrator and/or Transfer Agent, as the case
may be, shall not be liable to the Fund or its shareholders for any conduct
other than willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations or duties.
DISTRIBUTION
As described in the Prospectus under the caption "Pricing and Distribution
of the Fund," the Adviser, Freedom Investors Corp., is also the also the Fund's
principal underwriter and national distributor ("Distributor"). Pursuant to an
agreement with the Fund ("Distribution Agreement"), the Distributor, as agent,
offers the Fund's shares for sale on a continuous basis. The Distributor has
agreed to use its "best efforts" to sell Fund shares but is not obligated to
sell any specified number or amount of shares. The Distribution Agreement will
continue in effect from year to year as long as its renewal is approved at least
annually in the same manner as the Advisory Agreement discussed above under the
caption "Investment Adviser."
As compensation for its services rendered and related expenses borne
pursuant to the Distribution Agreement, the Distributor receives the sales
charges imposed on shares of the Fund and in turn pays (reallows) a portion of
such charges to brokers or dealers that have sold the shares (including the
Distributor functioning as a dealer). The sales charge reallowed to brokers or
dealers that sell shares of the Fund is equal to 7.50% of the offering price
(ie., net asset value plus sales charge) per share. Sales charges paid by the
Fund totaled $4,234, $3,782 and $25,896 for its fiscal years ended September 30,
1998, 1997 and 1996, respectively. Sales charges retained by the Distributor as
underwriter's fees and dealer's selling commissions were, respectively, $324 and
$3910 for fiscal 1998; $227 and $3,525 for fiscal 1997; and $1,699 and $23,988
for fiscal 1996. The remaining sales charges for such years were paid to
brokers and dealers not affiliated with the Fund or the Distributor.
PERFORMANCE MEASURES
The Fund may advertise "average annual total return" over various periods
of time. Such total return figures show the average percentage change in value
of an investment in the Fund from the beginning date of the measuring period to
the end of the measuring period. These figures reflect changes in the price of
the Fund's shares and assume that any income dividends and/or capital gains
distributions made by the Fund during the period were reinvested in shares of
the Fund. Figures will be given for recent one-, five- and ten-year periods (if
applicable), and may be given for other periods as well (such as from
commencement of the Fund's operations, or on a year-by-year basis). When
considering "average" total return figures for periods longer than one year, it
is important to note that a Fund's annual total return for any one year in the
period might have been greater or less than the average for the entire period.
PERFORMANCE COMPARISONS
In advertisements or in reports to shareholders, the Fund may compare its
performance to that of other mutual funds with similar investment objectives and
to stock or other relevant indices. For example, it may compare its performance
to rankings prepared by Lipper Analytical Services, Inc. (Lipper), a widely
recognized independent service which monitors the performance of mutual funds.
The Fund may compare its performance to that of the Standard & Poor's 500 Stock
Index (S&P 500), an index of unmanaged groups of common stocks, the Dow Jones
Industrial Average, a recognized unmanaged index of common stocks of 30
industrial companies listed on the New York Stock Exchange, the Russell 2000
Index, a small company stock index, or the Consumer Price Index. Performance
information, rankings, ratings, published editorial comments and listings as
reported in national financial publications such as Kiplinger's Personal Finance
Magazine, Business Week, Morningstar Mutual Funds, Investor's Business Daily,
Institutional Investor, The Wall Street Journal, Mutual Fund Forecaster, Money,
Forbes, Fortune and Barron's may also be used in comparing performance of the
Fund. Performance comparisons should not be considered as representative of the
future performance of any Fund.
Performance rankings, recommendations, published editorial comments and
listings reported in Money, Barron's, Kiplinger's Personal Finance Magazine,
Financial World, Forbes, U.S. News & World Report, Business Week, The Wall
Street Journal, Investors Business Daily, USA Today, Fortune and Stanger's may
also be cited (if the Fund is listed in any such publication) or used for
comparison, as well as performance listings and rankings from Morningstar Mutual
Funds, Personal Finance, Income and Safety, The Mutual Fund Letter, United
Mutual Fund Selector, Louis Rukeyser's Wall Street newsletter, Donoghue's Money
Letter, CDA Investment Technologies, Wiesenberger Investment Companies Service
and Donoghue's Mutual Fund Almanac.
TOTAL RETURN
The Fund's "average annual total return" figures described and shown below
are computed according to a formula prescribed by the Securities and Exchange
Commission. The formula can be expressed as follows:
n
P (1 + T) = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the redeemable value at the end
of the period of a $1,000 payment made at the beginning of the period). All
total return figures will reflect the deduction of Fund expenses (net of certain
expenses reimbursed by the Adviser) on an annual basis and will (i) assume that
all dividends and distributions are reinvested and (ii) reflect the maximum
applicable sales charge.
The table below shows the average total return for the Fund for the
specified periods.
Period Average Total Return
------ --------------------
One Year - October 1, 1997 through
September 30, 1998 ............................... -65.43%
Five Years - October 1, 1993 through
September 30, 1998 ............................... -29.09%
Commencement of Operations (April 1, 1992)
through September 30, 1998 ..................... -25.95%
PURCHASE, REDEMPTION AND DETERMINATION OF NET ASSET VALUE
Detailed information concerning the purchase and redemption of Fund shares
is included in the Prospectus.
The Fund reserves the right to:
O Waive or change the minimum investment requirements
and/or sales charge with respect to any person or class
of persons.
O Begin a telephone/telegraph redemption service at any
time.
O Begin charging a fee for any telephone/telegraph
redemption service and to cancel or change any such
service upon at least 15 days' written notice to
shareholders.
O Waive signature guarantee requirements in certain
instances where it appears reasonable to do so and will
not unduly affect the interests of other shareholders.
O Require signature guarantees if there appears to be a
pattern of redemptions designed to avoid the signature
guarantee requirement, or if the Fund has other reason
to believe that this requirement would be in the best
interests of the Fund and its shareholders.
PURCHASE OF SHARES
The Fund will not be responsible for the consequences of delays, including
delays in the banking or Federal Reserve wire systems. The Fund cannot process
transaction requests that are not complete and in good order. Each order
accepted will be fully invested in whole and fractional shares, unless the
purchase of a certain number of whole shares is specified, at the net asset
value per share next effective after the order is received by the Fund. Each
investment is confirmed by a year-to-date statement which provides the details
of the immediate transaction, plus all prior transactions in your account during
the current year. This includes the dollar amount invested, the number of
shares purchased or redeemed, the price per share, and the aggregate shares
owned. A transcript of all activity in your account during the previous year
will be furnished each January.
Normally, the shares that an investor purchases are held by the Fund in an
open account, thereby relieving the investor of the responsibility of providing
for the safekeeping of a negotiable share certificate. Should an investor want
a certificate, one will be issued on request for all or a portion of the whole
shares in the account. There is no charge for the first certificate issued. A
charge of $5.00 will be made for any replacement certificates issued. In order
to protect the interests of the other Fund shareholders, share certificates will
be sent to those shareholders who request them only after the Fund has
determined that unconditional payment for the shares represented by the
certificate has been received in full by its custodian, Star Bank, N.A.
If an order to purchase shares must be canceled due to non-payment, the
purchaser will be responsible for any loss incurred by the Fund arising out of
such cancellation. To recover any such loss, the Fund reserves the right to
redeem shares owned by any purchaser whose order is canceled, and such purchaser
may be prohibited or restricted in the manner of placing further orders.
The Fund reserves the right in its sole discretion to withdraw all or any
part of the offering made by the Prospectus or to reject purchase orders when,
in the judgment of management, such withdrawal or rejection is in the best
interest of the Fund and its shareholders.
The Fund reserves the right to refuse to accept orders for Fund shares
unless accompanied by payment, except when a responsible person acceptable to
the Fund has indemnified the Fund in writing against losses resulting from the
failure of investors to make payment.
REDEMPTION OF SHARES
The Fund will not be responsible for the consequences of delays, including
delays in the banking or Federal Reserve Wire systems. The Fund cannot process
transaction requests that are not complete and in good order. In addition to
other conditions under which signature guarantees are required (as described in
the Prospectus under the caption "Redeeming Shares"), the Fund must receive an
endorsed share certificate with a signature guarantee where a certificate has
been issued.
The right of redemption may be suspended, or the date of payment postponed
beyond the normal three-day period by the Fund's Board of Directors under the
following conditions authorized by the 1940 Act: (1) for any period (a) during
which the New York Stock Exchange is closed, other than customary weekend and
holiday closing, or (b) during which trading on the New York Stock Exchange is
restricted; (2) for any period during which an emergency exists as a result of
which (x) disposal by the Fund of securities owned by it is not reasonably
practicable or (y) it is not reasonably practicable for the Fund to determine
the fair value of its net assets; or (3) for such other periods as the
Securities and Exchange Commission may by order permit.
The Fund has elected to be governed by Rule 18f-1 under the 1940 Act,
pursuant to which the Fund is obligated to redeem shares solely in cash up to
the lesser of $250,000 or 1% of the Fund's net asset value during any 90-day
period for any one shareholder. Should redemptions by any shareholder exceed
such limitation, the Fund may redeem the excess in kind. If shares are redeemed
in kind, the redeeming shareholder may incur brokerage costs in converting the
assets to cash. The method of valuing securities used to make redemptions in
kind will be the same as the method of valuing portfolio securities described in
the Prospectus under the caption "Pricing and Distribution of the Fund --
Calculation of Net Asset Value" or in this section, and such valuation will be
made as of the same time the redemption price is determined.
NET ASSET VALUE
The Fund's net asset value ("NAV") per share is determined by subtracting
from the value of the Fund's total assets the amount of the Fund's liabilities
and dividing the remainder by the number of outstanding Fund shares. Each
security owned by the Fund is valued as described in the Prospectus under the
caption "Pricing and Distribution of the Fund -- Calculation of Net Asset Value"
or in this section.
The Fund computes the NAV of its shares once daily on days when the Fund
is open for business (generally the same days that the New York Stock Exchange
is open for trading). The holidays on which the New York Stock Exchange is
scheduled to be closed currently are: New Year's Day, Martin Luther King's
Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. Additionally, if any of the foregoing
holidays falls on a Saturday, the New York Stock Exchange will not be open for
trading on the preceding Friday, and when any such holiday falls on a Sunday,
the New York Stock Exchange will not be open for trading on the succeeding
Monday. However, the New York Stock Exchange will not close for trading on the
Friday preceding or the Monday following a holiday if unusual business
conditions exist on the Friday or Monday scheduled for closing (such as the end
of a monthly, quarterly or yearly accounting period). If the New York Stock
Exchange closes early, the time of computing the NAV and the deadlines for
purchasing and redeeming shares will be accelerated to the earlier closing time.
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. Foreign securities quoted in foreign
currencies are translated into U.S. dollars at the current rate of 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 Fund'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 Board of Directors of the Fund.
In addition, short-term investments are carried at amortized cost, which
approximates market value. Income, expenses and fees, including the advisory
and administration fees, are accrued daily and taken into account for the
purpose of determining the net asset value of the Fund's shares.
MANAGEMENT OF FRONTIER AND THE FUND
DIRECTORS AND OFFICERS
The officers of Frontier manage the Fund's day-to-day operations, subject
to the control and supervision of the Board of Directors. The directors and
officers of Frontier, their ages, their principal business occupations during
the past five years and their affiliations, if any, with the Adviser are shown
below. Directors deemed to be "interested persons" of Frontier for purposes of
the 1940 Act are indicated by an asterisk.
* James R. Fay, age 43, 101 West Wisconsin Avenue, Pewaukee, Wisconsin
53072, is the President, the Treasurer and a director of Frontier (since 1992);
the Adviser, Freedom Investors Corp. (since 1989); and Freedom Financial, Inc.
(since 1986).
* Amy L. Siesennop, age 39, 101 West Wisconsin Avenue, Pewaukee, Wisconsin
53072, is a Vice President, the Secretary and a director of Frontier (since
1999); since 1996, she has been employed in various administrative positions by
Frontier and as a registered general securities principal and representative of
the Adviser, Freedom Investors Corp. Prior to 1996, Ms. Siesennop taught
business courses at Stratton College (1995) and Santa Barbara Business College
(1988 to 1994).
Kenneth W. Coshun, age 66, 224 Lake Street, Pewaukee, Wisconsin 53072, is
a director of Frontier (since 1992). Mr. Coshun is a registered pharmacist. In
1997, he retired as President and a director of Lake Pharmacy of Pewaukee, Inc.,
positions he had held since 1958.
Jeffrey S. Ackley, age 35, 285 Forest Grove Drive, Pewaukee, Wisconsin
53072, is a director of Frontier (since 1992). Mr. Ackley is a certified public
accountant and owner of Ackley & Associates, CPAs (since 1991).
Matthew G. Drew, age 38, 1275 East Wisconsin Avenue, Pewaukee, Wisconsin
53072, is a director of Frontier (since 1999). Mr. Drew is the owner of Taylor
Systems, a manufacturer's representative (since 1995). From 1984 to 1995, he
was a sales representative for Professional Office Services, Inc.
Frontier pays each director who is not an officer or employee of the
Adviser or an affiliated company ("Disinterested Directors") an annual fee of
$1,000 and $500 for each meeting of the Board of Directors attended by the
director, and reimburses directors for certain travel and other out-of-pocket
expenses incurred by them in connection with attending such meetings. Directors
and officers of Frontier who are employed by the Adviser or an affiliated
company receive no compensation or expense reimbursement from Frontier.
Frontier does not maintain any pension or other retirement plan for its
directors, officers or employees.
COMPENSATION TABLE
The following table shows the amounts paid by Frontier to Disinterested
Directors for the fiscal year ended September 30, 1998:
Aggregate Compensation
From Frontier For the Year Ended
Name of Person, Position September 30, 1998
------------------------ ------------------
Kenneth W. Coshun, Director........................$3,000
Jeffrey S. Ackley, Director........................$3,000
OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The officers and directors of Frontier as a group (5 persons) own less
than 1% of the shares of the Fund. As of February 28, 1999, no person was known
by Frontier to own beneficially or of record 5% or more of the outstanding
shares of the Fund.
DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION
Election to be Taxed as a Regulated Investment Company. The Fund has
elected to be treated as a regulated investment company under Subchapter M of
the Internal Revenue Code ("Code"), has qualified as such for its most recent
fiscal year, and intends to so qualify during the current fiscal year. The
directors reserve the right not to maintain the qualification of the Fund as a
regulated investment company if they determine such course of action to be
beneficial to shareholders. In such case, the Fund will be subject to federal,
and possibly state, corporate taxes on its taxable income and gains, and
distributions to shareholders will be taxed as ordinary dividend income to the
extent of the Fund's available earnings and profits.
All or a portion of any loss realized upon the redemption of Fund shares
will be disallowed to the extent that the redeeming shareholder purchases other
shares of the Fund (through reinvestment of dividends or otherwise) within 30
days before or after such redemption. Any loss disallowed under these rules
will be added to the tax basis in the new shares purchased.
U.S. Government Obligations. Many states grant tax-free status to
dividends paid from interest earned on direct obligations of the U.S.
Government, subject in some states to minimum investment requirements that must
be met by the Fund. Investments in GNMA/FNMA securities, bankers, acceptances,
commercial paper and repurchase agreements collateralized by U.S. Government
securities do not generally qualify for tax-free treatment.
At the end of each calendar year, the Fund will provide its shareholders
with the percentage of any dividends paid that may qualify for tax-free
treatment on their personal income tax returns. INVESTORS SHOULD CONSULT WITH
THEIR OWN TAX ADVISORS TO DETERMINE THE APPLICATION OF STATE AND LOCAL LAWS TO
THESE DISTRIBUTIONS. BECAUSE THE RULES ON EXCLUSION OF THIS INCOME ARE
DIFFERENT FOR CORPORATIONS, CORPORATE SHAREHOLDERS SHOULD CONSULT WITH THEIR
CORPORATE TAX ADVISORS ABOUT WHETHER ANY OF THEIR DISTRIBUTIONS MAY BE EXEMPT
FROM CORPORATE INCOME OR FRANCHISE TAXES.
Dividends-Received Deduction for Corporations. Corporate shareholders
should note that a percentage of the dividends paid by the Fund for its most
recent calendar year qualified for the dividends-received deduction. In some
circumstances, corporate shareholders will be permitted to deduct these
qualified dividends, thereby reducing the tax that they would otherwise be
required to pay on these dividends.
The dividends-received deduction will be available only with respect to
dividends designated by the Fund as eligible for such treatment. Dividends so
designated by the Fund must be attributable to dividends earned by the Fund from
U.S. corporations that were not debt-financed.
The amount that the Fund may designate as eligible for the dividends-
received deduction will be reduced or eliminated if the shares on which the
dividends were earned by the Fund were debt-financed or held by the Fund for
less than a 46-day period during a 90-day period beginning 45 days before the
ex-dividend date of the corporate stock. Similarly, if Fund shares are debt-
financed or held for less than this same 46-day period, then the dividends-
received deduction may also be reduced or eliminated. Even if designated as
dividends eligible for the dividends-received deduction, all dividends
(including the deducted portion) must be included in a shareholder's alternative
minimum taxable income calculation.
Conversion Transactions. Gains realized by the Fund from transactions
that are considered to be "conversion transactions" under the Code, and that
would otherwise produce capital gain may be recharacterized as ordinary income
to the extent that such gain does not exceed an amount defined as the
"applicable imputed income amount." A conversion transaction is any transaction
in which substantially all of the Fund's expected return is attributable to the
time value of the Fund's net investment in such transaction, and any one of the
following criteria are met:
(1) there is an acquisition of property with a
substantially contemporaneous agreement to sell the
same or substantially identical property in the future;
(2) the transaction was marketed or sold to the Fund on the
basis that it would have the economic characteristics
of a loan but would be taxed as capital gain; or
(3) the transaction is one of those specified in U.S.
Treasury regulations to be promulgated in the future.
The applicable imputed income amount, which represents the deemed return
on the conversion transaction based upon the time value of money, is computed
using a yield equal to 120% of the applicable federal rate, reduced by any prior
recharacterizations under this provision or the provisions of Section 263(g) of
the Code dealing with capitalized carrying costs.
Stripped Preferred Stock. Occasionally, the Fund may purchase "stripped
preferred stock" that is subject to special tax treatment. Stripped preferred
stock is defined as certain preferred stock issues where ownership of the stock
has been separated from the right to receive dividends that have not yet become
payable. The stock must have a fixed redemption price, must not participate
substantially in the growth of the issuer and must be limited and preferred as
to dividends. The difference between the redemption price and purchase price of
such stock is taken into Fund income over the term of the instrument as if it
were original issue discount. The amount that must be included in income for
each period generally depends on the original yield to maturity, adjusted for
any prepayments of principal.
Defaulted Obligations. The Fund may be required to accrue income on
defaulted obligations and to distribute such income even though it is not
currently receiving interest or principal payments on such obligations. In order
to generate cash to satisfy these distribution requirements, the Fund may be
required to dispose of portfolio securities that it otherwise would have
continued to hold or to use cash flows from other sources such as the sale of
Fund shares.
GENERAL INFORMATION AND HISTORY
The Fund is a separate series of stock of Frontier. Frontier was
incorporated under the laws of Maryland on October 24, 1991 and has an
authorized capitalization of 200,000,000 shares of $0.01 par value common stock.
Frontier's Board of Directors is empowered to divide the authorized shares into
one or more series and to fix the number of shares in each such series.
80,000,000 shares have been allocated to the Fund.
On certain matters, such as the election of directors, the shares of all
series vote together. On other matters affecting a particular series, such as
its fundamental policies, only shares of the affected series are entitled to
vote. Except for the election of directors (which requires a plurality), a
majority of the shares entitled to vote is required for the approval of any
matter submitted to a vote of shareholders. A "majority" (as defined in the
1940 Act) is the lesser of (1) 67% of the shares represented at a meeting at
which more than 50% of the outstanding shares are present in person or by proxy
or (2) more than 50% of the outstanding shares. Shares of all series, when
issued and outstanding, have equal voting, dividend, distribution and redemption
rights. All shares of Frontier have noncumulative voting rights. This means
that the holders of more than 50% of the shares can elect 100% of the directors
if the holders choose to do so; in that event, the holders of the remaining
shares will not be able to elect any directors. All shares when issued are
fully paid and non-assessable, and no shares have pre-emptive or conversion
rights. Frontier may create other series of stock but will not issue any senior
securities.
The Maryland General Corporation Law permits registered investment
companies, such as Frontier, to operate without an annual meeting of
shareholders under specified circumstances if an annual meeting is not required
by the 1940 Act. Frontier will hold annual stockholder meetings only in the
years in which directors are required to be elected. Special meetings of the
stockholders will be held for the consideration of proposals requiring
stockholder approval by law (such as changing fundamental policies) or upon the
written request of at least 25% of the shares outstanding. The Frontier Board
of Directors will promptly call a meeting of stockholders to consider the
removal of a director or directors when requestyed in writing to do so by the
record holders of not less than 10% of all outstanding Frontier shares, and
stockholders will receive communication assistance in connection with calling
such a meeting, as required by Section 16(c) of the 1940 Act.
CUSTODIAN, COUNSEL AND INDEPENDENT AUDITORS
CUSTODIAN
The Fund's assets are held for safekeeping by an independent custodian,
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio ("Custodian"). This means
the bank, rather than the Fund, has possession of the Fund's cash and
securities. The Custodian is not responsible for the Fund's investment
management or administration. But, as directed by the Fund's officers, it
delivers cash to those who have sold securities to the Fund in return for such
securities, and to those who have purchased portfolio securities from the Fund,
it delivers such securities in return for their cash purchase price. The
Custodian also collects income directly from issuers of securities owned by the
Fund and holds this for payment to shareholders after deduction of the Fund's
expenses.
COUNSEL
Kranitz & Philipp, Milwaukee, Wisconsin, are legal counsel to the Fund.
INDEPENDENT AUDITORS
The Fund's financial statements are audited annually by independent
auditors approved by the Board of Directors each year, and in years in which an
annual meeting is held the directors may submit their selection of independent
auditors to the shareholders for ratification. McCurdy & Associates CPAs, Inc.,
27955 Clemens Road, Westlake, Ohio 44145, are the Fund's present independent
auditors.
FINANCIAL STATEMENTS
The following audited financial statements of the Fund are incorporated
herein by reference to the Fund's 1998 Annual Report to Shareholders, as filed
with the Securities and Exchange Commission on December 11, 1998:
Report of Independent Accountants
Schedule of Investments as of September 30, 1998
Statement of Assets and Liabilities as of September 30, 1998
Statement of Operations for the year ended September 30, 1998
Statements of Changes in Net Assets for the years ended September 30, 1998
and 1997
Financial Highlights for the years ended September 30, 1998, 1997, 1996,
1995 and 1994
Notes to Financial Statements
ADDITIONAL INFORMATION
Statements contained in the Prospectus and this Statement of Additional
Information as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Fund's registration
statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
PART C: OTHER INFORMATION
ITEM 23. EXHIBITS.
Exhibit
Number Description
------ ------------
(a)(1) Articles of Incorporation of the Registrant
(a)(2) Articles of Amendment of the Registrant
(b) Bylaws of the Registrant
(c) None
(d) Investment Advisory Agreement between the Registrant
and Freedom Investors Corp.
(e) Distribution Agreement between the Registrant
and Freedom Investors Corp.
(f) None
(g) Custody Agreement between the Registrant and Star Bank, N.A.
(h)(1) Transfer Agency and Service Agreement between
the Registrant and American Data Services, Inc.
(h)(2) Form of Selected Dealer Agreement
(h)(3) Administrative Services Agreement between the Registrant
and American Data Services, Inc.
(h)(4) Fund Accounting Service Agreement between the Registrant
and American Data Services, Inc.
(i) Opinion and Consent of Kranitz & Philipp, counsel to the Registrant
(j) Consent of McCurdy & Associates CPAs, independent
accountants to the Registrant
(k) None
(l) None
(m) None
(n) None
(o) None
(p) Power of Attorney (included at Page C-3)
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
Freedom Financial, Inc., a Wisconsin corporation, is a holding company
owned approximately 88% by James R. Fay, its President, Treasurer and sole
director. Freedom Financial, Inc. owns 100% of the outstanding capital stock of
Freedom Investors Corp., which is a Wisconsin corporation and the Fund's Adviser
and Distributor. Mr. Fay is the President, Treasurer and a director of the
Registrant; he holds the same positions with Freedom Investors Corp. Amy L.
Siesennop is a Vice President, the Secretary and a director of the Registrant;
she is also employed as a registered general securities principal and
representative of Freedom Investors Corp.
ITEM 25. INDEMNIFICATION.
Under the terms of the Maryland General Corporation Law and the
Registrant's By-Laws, the Registrant shall indemnify any person who was or is a
director, officer, or employee of the Registrant to the maximum extent permitted
by the Maryland General Corporation Law; provided however, that any such
indemnification (unless ordered by a court) shall be made by the Registrant only
as authorized in the specific case upon a determination that indemnification of
such person is proper in the circumstances. Such determination shall be made
(i) by the Board of Directors by a majority vote of a quorum which consists of
the directors who are neither "interested persons" of the Registrant as defined
in Section 2(a)(19) of the 1940 Act, nor parties to the proceedings, or (ii) if
the required quorum is not obtainable or if a quorum of such directors directs,
by written opinion of independent legal counsel. No indemnification will be
provided by the Registrant to any director or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of duty.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.
Freedom Investors Corp. serves as investment adviser to the Fund. For
information as to its business, profession, vocation or employment of a
substantial nature, reference is made to the Form ADV of Freedom Investors
Corp., as filed under the Investment Advisers Act of 1940 (File No. 801-39223).
Also see "Investment Adviser" in the Prospectus and "Management of Frontier and
the Fund" in the Statement of Additional Information.
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) The principal underwriter of the Fund is Freedom Investors Corp.,
the Distributor. The Distributor is not a distributor or underwriter for any
other investment company at this time. Occasionally, the Distributor could be
considered an underwriter for other investment companies when other distributors
of other investment companies pay the Distributor 100% of the sales charge on
the other unaffiliated investment companies.
(b) James R. Fay, 101 West Wisconsin Avenue, Pewaukee, Wisconsin 53072,
is the President, Treasurer and a director of both the Registrant and the
Adviser, Freedom Investors Corp.
(c) Not applicable. The Registrant's only principal underwriter is
Freedom Investors Corp., an affiliated person of the Registrant.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, and Rules 31a-1 through 31a-3 promulgated
thereunder, are in the physical possession of the Fund's Transfer Agent,
American Data Services, Inc., located at 150 Motor Parkway, Hauppauge, New York
11788, or the Fund's Adviser, Freedom Investors Corp., located at 101 West
Wisconsin Avenue, Pewaukee, Wisconsin 53072.
ITEM 29. MANAGEMENT SERVICES.
There are no management-related service contracts not discussed in Part A
or Part B.
ITEM 30. UNDERTAKINGS.
(a) The Registrant undertakes to provide its Annual Report to
Shareholders without charge to any recipient of its Prospectus who requests the
information.
(b) The Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the question of the removal of a director or directors
when requested in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares and in connection with such meeting to comply
with the provisions of Section 16(c) of the Investment Company Act of 1940
relating to shareholder communications.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, in the Village of
Pewaukee, State of Wisconsin, on March 26, 1999.
FRONTIER FUNDS, INC.
/s/ JAMES R. FAY
By: ---------------------------
James R. Fay, President
POWER OF ATTORNEY
Each person whose signature appears below on this Registration Statement
hereby constitutes and appoints James R. Fay and Kenneth W. Coshun, and each of
them, with full power to act without the other, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary fully to all intents and purposes as
he or she might or could do in person thereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them, or their, his or her
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
<TABLE>
SIGNATURE TITLE DATE
---------- ----- -----
<S> <C> <C>
/s/ JAMES R. FAY President, Treasurer March 26, 1999
- ---------------------------------------- (Principal Executive, Financial
James R. Fay and Accounting Officer)
and Director
/s/ AMY L. SIESENNOP Vice President, Secretary March 26, 1999
- ---------------------------------------- and Director
Amy L. Siesennop
/s/ KENNETH W. COSHUN Director March 26, 1999
- ----------------------------------------
Kenneth W. Coshun
/s/ JEFFREY S. ACKLEY Director March 26, 1999
- ----------------------------------------
Jeffrey S. Ackley
/s/ MATTHEW G. DREW Director March 26, 1999
- ----------------------------------------
Matthew G. Drew
</TABLE>
FRONTIER FUNDS, INC.
FORM N-1A
INDEX TO EXHIBITS
Exhibit
Number Description
------ ------------
(a)(1) Articles of Incorporation of the Registrant
(a)(2) Articles of Amendment of the Registrant
(b) Bylaws of the Registrant
(c) None
(d) Investment Advisory Agreement between the Registrant
and Freedom Investors Corp.
(e) Distribution Agreement between the Registrant
and Freedom Investors Corp.
(f) None
(g) Custody Agreement between the Registrant and Star Bank, N.A.
(h)(1) Transfer Agency and Service Agreement between
the Registrant and American Data Services, Inc.
(h)(2) Form of Selected Dealer Agreement
(h)(3) Administrative Services Agreement between the Registrant
and American Data Services, Inc.
(h)(4) Fund Accounting Service Agreement between the Registrant
and American Data Services, Inc.
(i) Opinion and Consent of Kranitz & Philipp, counsel to the Registrant
(j) Consent of McCurdy & Associates CPAs, independent
accountants to the Registrant
(k) None
(l) None
(m) None
(n) None
(o) None
(p) Power of Attorney (included at Page C-3)
EXHIBIT (a)(1)
ARTICLES OF INCORPORATION
OF
FREEDOM CAPITAL PORTFOLIO FUNDS, INC.
ARTICLE FIRST
I, the incorporator, Ulice Payne, Jr., whose post office address is c/o
Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c., 111 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202, being at least eighteen years of age, do,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations, form a corporation.
ARTICLE SECOND
Name
----
The name of the corporation (which is hereinafter called the "Corporation")
is Freedom Capital Portfolio Funds, Inc.
ARTICLE THIRD
Purposes
--------
The purposes for which the Corporation is formed are to act as an open-end
investment company of the management type registered as such with the Securities
and Exchange Commission pursuant to the Investment Company Act of 1940 (the
"1940 Act") and to exercise and generally to enjoy all of the powers, rights and
privileges granted to, or conferred upon, corporations by the General Laws of
the State of Maryland now or hereafter in force. In the event the Corporation
shall cease to be registered under the 1940 Act, it shall have all of the powers
to invest and reinvest its assets which it would have if so registered, but
without the restrictions on such powers imposed by or under the 1940 Act or by
any "fundamental policy" (as that term is used in the 1940 Act) adopted by the
Corporation pursuant to the 1940 Act. In the event the Corporation shall cease
to be so registered, all references in these Articles of Incorporation or in the
Corporation's By-Laws which limit the powers of the Corporation yursuant to or
under the 1940 Act or which affect the manner in which action may be taken by
the Board of Directors or stockholders shall cease to be in effect.
ARTICLE FOURTH
Address in Maryland
-------------------
The resident agent for the Corporation is CSC- Lawyers Incorporating
Service Company, c/o James E. Baker, Esq., located at 100 Light Street, Sixth
Floor, Baltimore, Maryland, 21202. Said resident agent is a corporation of the
State of Maryland. The address of the place at which the principal office of the
Corporation in the State of Maryland is c/o CSC-Lawyers Incorporating Service
Company, 100 Light Street, Sixth Floor, Baltimore, Maryland 21202.
ARTICLE FIFTH
Capital Stock
-------------
Section 1. The total number of shares of stock which the Corporation shall
have authority to issue is 200,000,000 shares of common capital stock ("Shares")
of the par value of $.01 each, having an aggregate par value of $2,000,000 (and
class(es) of Shares from time to time created by the Board of Directors being
herein referred to individually as a "Class" and collectively as "Classes" which
may be referred to in other documents as "Portfolios" or "Funds" or "Series").
The Board of Directors of the Corporation shall have the power and
authority to designate one or more classes of common stock, to fix the number of
shares in any such class and to further classify or reclassify any unissued
Shares with respect to such class, from time to time by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemptions of such unissued Shares, including, without limitation, the power to
reclassify unissued Shares of any Class as authorized shares of any other Class.
The aforesaid power shall include the power to create, by classifying or
reclassifying unissued shares in the aforesaid manner, one or more Classes in
addition to those initially designated as named below. Subject to the aforesaid
power, the Board of Directors has initially designated one Class of Shares of
common stock of the Corporation. The name of such Class and number of Shares of
common stock initially classified and allocated to this Class are as follows:
Name of Class Number of Shares of Common
------------- Stock Classified and Allocated
------------------------------
Equity Fund Portfolio 80,000,000
Section 2. A description of the relative preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption of all Classes is as follows, unless
otherwise set forth in the Articles Supplementary filed with the Maryland State
Department of Assessments and Taxation describing any further Class or Classes
from time to time created by the Board of Directors:
Assets/Income
-------------
(a) All consideration received by the Corporation for the issue or sale
of Shares of a particular Class, together with all assets in which such
consideration is invested or reinvested all income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any funds or payments derived from any
reinvestment of such proceeds in whatever from the same may be, shall
irrevocably belong to that Class for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books of account of
the Corporation. Such consideration, assets, income, earnings, profits and
proceeds, including any proceeds derived from the sale, exhange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may be, together
with any General Items (as hereinafter defined) allocated to that Class as
provided in the following sentence, are herein referred to as "assets
belonging to" that Class. In the event that there are any assets, income,
earnings, profits or proceeds thereof, funds or payments which are not
readily identifiable as belonging to any particular Class (collectively
"General Items"), the Board of Directors shall allocate such General Items
to and among any one or more of the Classes created from time to time in
such manner and on such basis as it, in its sole discretion, deems fair and
equitable; and any General Items so allocated to a particular Class shall
belong to that Class. Each such allocation by the Board of Directors shall
be conclusive and binding upon the stockholders of all Classes for all
purposes.
Liabi1ities
-----------
(b) The assets belonging to any particular Class shall be charged with
the liabilities of the Corporation in respect of that Class and with all
expenses, costs, charges and reserves attributable to that Class, and shall
be so recorded upon the books of account of the Corporation. Such
liabilities, expenses, costs, charges and reserves, together with any
General Items (as hereinafter defined) allocated to that Class, are herein
referred to as "liabilities belonging to" that Class. In the event there
are any general liabilities, expenses, costs, charges or reserves of the
Corporation which are not readily identifiable as belonging to any
particular Class (collectively "General Items"), the Board of Directors
shall allocate such General Items to and among any one or more of the
Classes created from time to time in such manner and on such basis as it,
in its sole discretion, deems fair and equitable; and any General Items so
allocated to a particular Class shall belong to that Class. Each such
allocation by the Board of Directors shall be conclusive and binding upon
the stockholders of all Classes for all purposes.
Dividends
---------
(c) Dividends or distributions on Shares of a particular Class, whether
payable in Shares or cash, may be paid to the holders of Shares of that
Class at such times, in such manner and from such of the income and capital
gains, accrued or realized, from the assets belonging to that Class, after
providing for actual and accrued liabilities belonging to that Class, as
the Board of Directors may determine.
Liquidation
-----------
(d) In the event of the liquidation or dissolution of the Corporation,
the stockholders of each Class that has been created shall be entitled to
receive, as a Class, when and as declared by the Board of Directors, the
excess of the assets belonging to that Class over the liabilities belonging
to that Class. The assets so distributable among such stockholders in
proportion to the number of Shares of that Class held by them and recorded
on the books of the Corporation.
Voting
------
(e) On each matter submitted to vote of the stockholders, each
stockholder of a Share shall be entitled to one vote for each Share
standing in such holder's name on the books of the Corporation,
irrespective of the Class thereof, and all Shares of all Classes shall vote
as a single class ("Single Class Voting"); provided, however, that (i) as
to any matter with respect to which a separate vote of any Class is
required by the 1940 Act and/or Maryland law, such requirements as to a
separate vote by that Class shall apply in lieu of Single Class Voting as
described above; (ii) in the event that the separate vote requirements
referred to in (i) above apply with respect to one or more Classes, then,
subject to (iii) below, the Shares of all other Classes shall vote as a
single Class; and (iii) as to any matter which does not affect the interest
of a particular Class, including, but not limited to, any proposal to
liquidate any other Class, only the holders of Shares of the one or more
affected Classes shall be entitled to vote.
(f) All Shares of each particular Class shall represent an equal and
proportionate interest in the assets belonging to that Class (subject to
the liabilities belonging to that Class), and each Share of any particular
Class shall be equal to each other Share of that Class; but the provisions
of this sentence shall not restrict any distinctions permissible pursuant
to subsection (c) of Section 2 of this Article or otherwise under these
Articles of Incorporation that may exist with respect to stockholder
elections to receive dividends or distributions in cash or Shares of the
same Class or that may otherwise exist with respect to dividends and
distributions on Shares of the same Class.
Pre-emptive Rights
------------------
Section 3. No holder of Shares shall be entitled as such, as a matter of
right, to purchase or subscribe for any part of any new or additional issue of
Shares or securities of the Corporation.
Redemption
----------
Section 4. All Shares now or hereafter authorized, and of any Class, shall
be "sub ject to redemption" and " redeemable", in the sense used in the General
Laws of the State of Maryland authorizing the formation of corporations as
amended from time to time (the "Maryland Corporation Law"), at the redemption or
repurchase price for Shares of that Class, determined in the manner set out in
these Articles of Incorporation or in any amendment thereto. In the absence of
any contrary specif ication as to the purpose for which Shares are repurchased
by it, all Shares so repurchased shall be deemed to be "retired automatically"
in the sense contemplated by the Maryland Corporation Law. Shares retired by
repurchase or retired by redemption shall thereafter have the status of
authorized but unissued Shares of the Corporation.
Section 5. All persons who shall acquire Shares shall acquire the same
subject to the provisions of these Articles of Incorporation.
ARTICLE SIXTH
Directors
----------
The initial number of Directors of the Corporation shall be three, and the
names of those who shall act as such until the first meeting of stockholders at
which Directors are to be elected and until their successors are duly elected
and qualify are as follows:
James R. Fay
William T. Duero
Kenneth Coshun
However, the By-Laws of the Corporation may f ix the number of Di rectors
at a number other than three and may authorize the Board of Directors, to
increase or decrease the number of Directors within a limit specified in the By-
Laws, provided that in no case shall the number of Directors be less than three,
and to fi11 the vacancies created by any such increase in the number of
Directors. Unless otherwise provided by the By-Laws of the Corporation, the
Directors of the Corporation need not be stockholders.
ARTICLE SEVENTH
Provisions for Definina, Limiting and Regulating the Powers
-----------------------------------------------------------
of the Corporation, Directors and Shareholders
----------------------------------------------
Section 1. The Board of Directors shall have the general management and
control of the business and property of the Corporation, and may exercise all
the powers of the Corporation, except such as are by statute or by these
Articles of Incorporation or by the By-Laws conferred upon or reserved to the
stockholders. In furtherance and not in limitation of the powers conferred by
statute, and Board of Directors is hereby empowered:
(a) To authorize the issuance and sale, from time to time, of Shares
of any Class whether for cash at not less than the par value thereof or for
such other consideration as the Board of Directors may deem advisable, in
the manner and to the extent now or hereafter permitted by the laws of
Maryland; provided, however, the consideration (or the value thereof as
determined by the Board of Directors) per Share to be received by the
Corporation upon the sale of Shares of any Class (including treasury
Shares) shall not be less than the net asset value (determined as provided
in Article NINTH hereof) per Share of that Class outstanding at the time
(determined by the Board of Directors) as of which the computation of such
net asset value shall be made.
(b) To specify, in instances in which it may be desirable, that Shares
of any Class repurchased by the Corporation are not acquired for retirement
and to specify the purposes for which such Shares are repurchased.
(c) To increase or decrease the aggregate number of Shares of stock or
the number of Shares of stock of any Class that the Corporation has
authority to issue.
(d) To make, amend, and repeal the By-Laws of the Corporation.
The Corporation may in its By-Laws confer powers on the Board of Directors
in addition to the powers expressly conferred by statute.
Section 2. The presence in person or by proxy of the holders of one-third
of the Shares of all Classes issued and outstanding and entitled to vote thereat
shall constitute a quorum for the transaction of any business at all meetings of
the stockholders except as otherwise provided by law or in these Articles of
Incorporation and except that where the holders of the Shares of any Class are
entitled to a separate vote as a Class (a "Separate Class") or where the holders
of Shares of two or more (but not all) Classes are required to vote as a single
Class (a "Combined Class"), the presence in person or by proxy of the holders of
one-third of the Shares of that Separate Class or Combined Class, as the case
may be, issued and outstanding and entitled to vote thereat shall constitute a
quorum for such vote. If, however, a quorum with respect to all Classes, a
Separate Class or a Combined Class, as the case may be, shall not be present or
represented at any meeting of the stockholders, the holders of a majority of the
Shares of all Classes, such Separate Class or such Combined Class, as the case
may be, present in person or by proxy and entitled to vote shall have power to
adjourn the meeting from time to time as to all Classes, such Separate Class or
such Combined Class, as the case may be, without notice other than announcement
at the meeting, until the holders of a requisite number of Shares entitled to
vote as such meeting shall be present in person or by proxy. As such adjourned
meeting at which the requisite number of Shares entitled to vote thereat shall
be represented, any business may be transacted which might have been transacted
at the meeting as originally notified. The absence from any meeting of
stockholders of the number of Shares in excess of one-third of the Shares of all
Classes or of the affected Class or Classes, as the case may be, which may be
required by the laws of the State of Maryland, the 1940 Act, any other
applicable law or these Articles of Incorporation, for action upon any given
matter shall not prevent action of such meeting upon any other matter or matters
which may properly come before the meeting, if there shall be present thereat,
in person or by proxy, holders of the number of Shares required for action in
respect of such other matter or matters. Notwithstanding any provision of law
requiring any action to be taken or authorized by the holders of a greater
proportion than majority of the Shares of all Classes or of the Shares of a
particular Class or Classes, as the case may be, entitled to vote thereon, such
action shall be valid and effective if taken or authorized by the affirmative
vote of the holders of a majority of the Shares of all Classes or of such Class
or Classes, as the case may be, outstanding and entitled to vote thereon.
Section 3. The By-Laws of the Corporation may divide the Directors of the
Corporation into classes and prescribe the term of office of the several
classes, but the term of office of a Director may not be longer than five years,
or, except in the case of an initial or substitute Director, shorter than the
period between meetings of stockholders at which Directors are to be elected,
and the term of office of at least one class shall expire each year.
Section 4. The Corporation is not required to hold an annual meeting in any
year in which the election of directors is not required to be acted upon under
the Investment Company Act of 1940.
Section 5. The holders of Shares of any Class of the Corporation shall have
only such rights to inspect the records, documents, accounts and books of the
Corporation as are provided by the Maryland Corporation Law, subject to
reasonable regulations of the Board of Directors, not contrary to the Maryland
Corporation Law, as to whether and to what extent, and at what times and places,
and under what conditions and regulations such rights shall be exercised.
Section 6. Any officer elected or appointed by the Board of Directors or by
any committee of said Board or by the stockholders or otherwise, may be removed
at any time with or without cause, in such lawful manner as may be provided in
the By-Laws of the Corporation.
Section 7. If the By-Laws so provide, the Board of Directors of the
Corporation shall have power to hold its meetings, to have an office or offices
and, subject to the provisions of the Maryland Corporation Law, to keep the
books of the Corporation outside of said State at such places as may from time
to time be designated by the Directors.
Section 8. Subject to the provisions of 1940 Act, any Director, officer or
employee individually, or any partnership of which any Director, officer or
employee may be a member, or any corporation or association of which any
Director, officer or employee may be an officer, director, trustee, employee or
stockholder, may be a party to, or may be pecuniarily or otherwise interested
in, any contract or transaction of the Corporation, and in the absence of fraud
no contract or other transaction shall be thereby affected or invalidated;
provided that in case a Director, or a partnership, corporation or association
of which a Director is a member, officer, director, trustee, employee or stock
holder is so interested, such fact shall be disclosed or shall have been known
to the Board of Directors, or a majority thereof; and any Director of the
Corporation who is so interested, or who is also a director, officer, trustee,
employee or stockholder of such other corporation or association or a member of
such partnership which is so interested, may be counted in determining the
existence of a quorum at any meeting of the Board of Directors of the
Corporation which shall authorize any such contract or transaction, and may vote
thereat to authorize any such contract or transaction, any may vote thereat to
authorize any such contract or transaction, with like force and effect as if he
were not such director, officer, trustee, employee or stockholder of such other
corporation or association or not so interested or a member of a partnership so
interested.
Section 9. Specifically, but without limitation of the foregoing, the
Corporation may enter into management or investment advisory contracts or
underwriting contracts and other contracts with, and may otherwise do business
with, any manager or investment adviser for the Corporation and/or principal
underwriter of the Shares of the Corporation or any subsidiary or affiliate of
any such manager or investment adviser and/or principal underwriter and may
permit any such firm or corporation to enter into any contracts or other
arrangements with any other firm or corporation relating to the Corporation
notwithstanding that the Board of Directors of the Corporation may be composed
in part of partners, directors, officers or employees of any such firm or
corporation, and officers of the Corporation may have been or may be or become
partners, directors, officers or employees of any such firm or corporation, and
in the absence of fraud the Corporation any such firm or corporation may deal
freely with each other, and not such contract or transaction between the
Corporation and any such firm or corporation shall be invalidated or in any wise
affected thereby, nor shall any Director of officer of the Corporation be liable
to the Corporation or to any stockholder or creditor thereof or to any other
person for any loss incurred by it or his solely because of the existence of any
such contract or transaction; provided that, so long as the Corporation is
registered under the 1940 ACt, nothing herein shall protect any Director or
officer of the Corporation against any liability to the Corporation or to its
security hclders 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.
ARTICLE EIGHTH
Redemptions and Repurchase
--------------------------
Section 1. The Corporation shall under some circumstances redeem, and may
under other circumstances repurchased or redeem, Shares as follows:
(a) Each holder of Shares of any Class shall be entitled at such
holder's option to require the Corporation to redeem all or any part of the
Shares of that Class owned by such holder, upon written or telegraphic
request to the Corporation or its designated agent, or such other form of
re~uest as is determined by the Board of Directors, accompanied by
surrender of the certificate or certificates for such Shares, or such other
evidence of ownership as shall be specified by the Board of Directors, for
the proportionate interest per Share in the assets of the Corporation
belonging to that Class, or the cash equivalent thereof (being the ~et
asset value per Share of that Class determined as provided in Article NINTH
hereof), subject to and in accordance with the provisions of Section 2 of
this Article.
(b) In addition, the Board of Directors may, from time to time in its
discretion, authorize the Corporation to require the redemption of all or
any part of the outstanding Shares of any Class, for the proportionate
interest per Share in the assets of the Corporation belonging to that
Class, or the cash equivalent thereof (being the net asset value per Share
of that Class determined as provided in Article NINTH hereof), subject to
and in accordance with the provisions of Section 2 of this Article, upon
the sending of written notice thereof to each stockholder any of whose
Shares are so redeemed and upon such terms and conditions as the Board of
Directors shall deem advisable.
(c) In addition, the Board of Directors may, from time to time in its
discretion, authorize the officers of the Corporation to repurchase Shares
of any Class, either directly or through an agent, subject to and in
accordance with the provisions of Section 2 of this Article. The price to
be paid by the Corporation upon any such repurchase shall be determined in
accordance with any provision of the 1940 ACt or any rule or regulation
thereunder, including any rule or regulation made or adopted pursuant to
Section 22 of the 1940 Act by the Securities and Exchange Commission or any
securities association registered under the Securities Exchange Act of
1934.
(d) Notwithstanding the foregoing, the Board of Directors of the
Corporation may suspend the right of the holders of Shares of any or all
Classes to require the Corporation to redeem such Shares or may suspend any
voluntary repurchase of such Shares:
(i) for any period (A) during which the New York Stock Exchange
is closed other than customary weekend and holiday closings, or (B)
during which trading on the New York Stock Exchange is restricted;
(ii) for any period during which an emergency, as defined by the
rules of the Securities and Exchange Commission or any successor
thereto, exists as a result of which (A) disposal by the Corporation
of securities owned by it and belonging to the affected Class or
Classes is not reasonably practicable, or (B) it is not reasonably
practicable for the Corporation fairly to determine the value of the
net assets of the affected Class or Classes; or
(iii) for such periods as the Securities and Exchange Commission
or any successor thereto may be order permit for the protection of
security holders of the Corporation.
Section 2. The following provisions shall be applicable with respect to
redemptions and repurchases of Shares of any Class pursuant to Section 1 hereof.
(a) The days on which and time as of which the net asset per Share of
a particular Class applicable to any redemption pursuant to Section 1 of
this Article shall be computed shall be such days and time as may be
determined by or pursuant to the direction cf the Board of Directors (which
days and time may differ from Class to Class).
(b) Certificates, if any, for Shares of any Class to be redeemed or
repurchased shall be surrendered in proper form for transfer, or such other
form as the Board of Directors may determine, together with such proof, if
any, of the authenticity of signatures as may be required by the Board of
Directors.
(c) Payment of the redemption or repurchase price by the Corporation
or its designated agent shall be made within seven days after the time used
for determination of the redemption or repurchase price, plus such
additional period as may be permitted by or under the 1940 ACt, but in no
event prior to delivery to the Corporation or its designated agent of the
certificate or certificates for the Shares of the particular Class so
redeemed or repurchased, or of such other evidence of ownership as shall be
specified by the Board of Directors; except that any payment may be made in
whole or in part in securities or other assets of the Corporation belonging
to that Class if, the Board of Directors shall determine that payment in
cash would be prejudicial to the best interests of the remaining
stockholders of that Class. In making any such payment in whole or in part
in securities or other assets of the Corporation prejudicial to the best
interests of the remaining stockholders of that Class. In making any such
payment in whole or in part in securities or other assets of the
Corporation belonging to that Class, the Corporation shall, as nearly as
may be practicable, deliver securities or other assets of a gross value
(determined in the manner provided in Article NINTH hereof) representing
the same proportionate interest in the securities and other assets of the
Corporation belonging to that Class as is represented by the Shares of that
Class so to be paid for. Delivery of the securities included in any such
payment shall be made as promptly as any necessary transfers on the books
of the several corporation whose securities are to be delivered may be
made.
(d) The right of the holder of Shares of any Class redeemed or
repurchased by the Corporation as provided in this Article to receive
dividends thereon and all other rights of such holder with respect to such
Shares shall forthwith cease and terminate from and after the time as of
which the redemption or repurchase price of such Shares has been determined
(except as otherwise determined by the Board of Directors and except for
the right of such holder to receive (a) the redemption or repurchase price
of such Shares from the Corporation or its designated agent, in cash and/or
in securities or other assets of the Corporation belonging to that Class,
and (b) any dividend to which such holder had previously become entitled as
the record holder of such Shares on the record date for such dividend, and,
with respect to Shares otherwise entitled to vote, except for the right of
such holder to vote at a meeting of stockholders such Shares owned of
record by him on the record date for such meeting).
ARTICLE NINTH
Determination of Net Asset Value
--------------------------------
Section 1. Such net asset value per Share of each Class on any day shall be
computed as follows:
(a) The net asset value per Share of each Class shall be the quotient
obtained by dividing the "net value of the assets" of the Corporation
belonging to that Class by the total number of Shares of that Class at the
time deemed to be outstanding (including Shares sold whether paid for and
issued or not, and excluding Shares redeemed or repurchased on the basis of
previously determined values, whether paid for, received and held in
treasury or not).
(b) The "net value of the assets" of the Corporation belonging to a
particular Class shall be the "gross value" of the assets belonging to that
Class after deducting the amount of all expenses incurred and accrued and
unpaid belonging to that Class, such reserves belonging to that Class as
may be set up to cover taxes and any other liabilities, and such other
deduction and unpaid belonging to that Class, such reserves belonging to
that Class as may be set up to cover taxes and any other liabilities, and
such other deductions belonging to that Class as in the opinion of the
officers of the Corporation are in accordance with accepted accounting
practices.
(c) The "gross value" of the assets belonging to a particular Class
shall be the amount of all cash and receivables and the market value of all
securities and other assets held by the Corporation and belonging to that
Class at the time as of which the determination is made. Securities held
shall be valued at market value or, in the absence of readily available
market quotations, at fair value, both as determined pursuant to methods
approved by the Board of Directors and in accordance with applicable
statutes and regulations.
Section 2. The Board of Directors is empowered, in its absolute discretion,
to establish other methods for determining such net asset value whenever such
other methods are deemed by it to be necessary or desirable and are consistent
with the provisions of the 1940 Act and the rules and regulations thereunder.
ARTICLE TENTH
Indemnification
---------------
The Corporation shall indemnify to the full extent permitted by law each
person who has served at any time as director or officer of the Corporation, and
his heirs, administrators, successors and assigns, against any and all
reasonable expenses, including counsel fees, amounts paid upon judgments, and
amounts paid in settlement (before or after suit is commenced) actually incurred
by such person in connection with the defense or settlement of any claim,
action, suit or proceeding in which he is made a party, or which may be asserted
agalnst him, by reason of being or having been a director or officer of the
Corporation. Such indemnification shall be in addition to any other rights to
which such person may be entitled under any law, By-Law, agreement, vote of
stGckholders, or otherwise. Notwithstanding the foregoing, no officer or
director of the Corporation shall be indemnified against any liability, whether
or not there is an adjudication of liability, arising by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of duties within
the meaning of section 17 (and the interpretations thereunder) of the 1940 Act.
Any determination to indemnify under this Article Tenth shall be made by
"reasonable and fair means" within the meaning of section 17 and shall otherwise
comply with the 1940 Act and interpretations thereunder.
ARTICLE ELEVENTH
Determination Binding
---------------------
Any determination made by or pursuant to the directors of the Board of
Directors in good faith, and so far as accounting matters are involved in
accordance with accepted accounting practice, as to the amount of the assets,
obligations or liabilities of the Corporation belonging to any Class, as to the
amount of the net income of the Corporation belonging to any Class for any
period or amounts that are any time legally available for the payment of
dividends of Shares of any Class, as to the amount of any reserves or charges
set up with respect to any Class and the propriety thereof as to the time of or
purpose for creating any reserves or charges with respect to any Class, as to
the use, alteration or cancellation of any reserves or charges with respect to
any Class (whether or not any obligation or liability for which such reserves or
charges shall have been created shall have been paid for or discharges or shall
be then or thereafter required to be paid or discharged), as to the price or the
closing bid or asked price of any security owned or held by the Corporation and
belonging to any Class, as to the market value of any security or fair value of
any other asset owned by the Corporation and belonging to any Class, as to the
number of Shares of any Class outstanding or deemed to be outstanding, as to the
impracticability or impossibility of liquidating securities in orderly fashion,
as to the extent to which it is practicable to deliver the proportionate
interest in the securities and other assets of the Corporation belonging to any
Class represented by any Shares belonging to any Class redeemed or repurchased
in payment for any such Shares, as to the method of payment for any such Shares
redeemed or repurchased, or as to any other matters relating to the issue, sale,
redemption, repurchase and/or other acquisition or disposition of securities or
Shares of the Corporation shall be final and conclusive and shall be binding
upon the Corporation and all holders of Shares of all Classes past, present and
future, and Shares of all Classes are issued and sold on the condition and
understanding that any and all such determinations shall be binding as
aforesaid. No provision of these Articles of Incorporation shall be effective to
bind any person to waive compliance with any provision of the Securities Act of
1933 (the "1933 Act") or the 1940 ACt or of any valid rule, regulation or order
of the Securities and Exchange Commission thereunder.
ARTICLE TWELFTH
Miscellaneous
-------------
Section 1. In the event that any person advances the organizational
expenses of the Corporation of any Class, such advances shall become an
obligation of the Corporation or such Class, subject to such terms and
conditions as may be fixed by, or on a date fixed by, or determined in
accordance with criteria fixed by the Board of Directors, to be amortized over a
period or periods to be fixed by the Board and allocated to such lass or Classes
as may be determined by the Board of Directors.
Section 2. Whenever any action is taken under these Articles of
Incorporation under any authorization to take action which is permitted by the
1940 Act, such action shall be deemed to have been properly taken if such action
is in accordance with the construction of the 1940 Act then in effect as
expressed in "no action" letters of the staff of the Securities and Exchange
Commission or any release, rule, regulation or order under the 1940 Act or any
decision of a court of competent jurisdiction notwithstanding that any of the
foregoing shall later be found to be invalid or otherwise reversed or modified
by any of the foregoing.
Section 3. Each prospectus of the Corporation (which term "prospectus" as
used herein shall include any related statement of additional information) which
is in effect from time to time relating to its Shares under the 1933 Act and
each proxy statement of the Corporation shall be considered as part of the
minutes of the proceedings of the Board of Directors of the Corporation and as
reflective of action required or permitted to be taken by such Board under these
Articles of Incorporation or by the By-Laws of the Corporation, whether or not
copies of such prospectus or proxy statement are included in the minute books of
the Corporation.
Section 4. Whenever under these Articles of Incorporation, the Board of
Directors of the Corporation is permitted or required to place a value on assets
of the Corporation, such action may be delegated by the Board, and/or determined
in accordance with a formula determined by the Board, to the extent permitted by
the 1940 Act.
Section 5. The Corporation shall have the right, at any time and without
prior notice to the stockholder in question, to redeem Shares of any Class held
in any account registered in the name of such stockholder for their current net
asset value, if and to the extent that such redemption is necessary to reimburse
either the Corporation or its principal underwriter for any loss either
sustained by reason of (i) the failure of such stockholder to make timely and
good payment for Shares (whether of the same Class or any other Class or
Classes) purchased or subscribed for by such stockholder, regardless of whether
such stock holder or was a stockholder at the time of such purchase or
subscription; and/or (ii) the cancellation by such stockholder of a redemption
or repurchase order; and/or (iii) the failure of such stockholder to provide
necessary and timely documentation as to a redemption or repurchase order,
necessitating the cancellation of the same; subject in each case to and upon
such terms and conditions as the Board of Directors may from time to time
prescribe.
ARTICLE THIRTEENTH
Amendments
-----------
The Corporation reserves the right to take any lawful action and to make
any amendment of these Articles of Incorporation, including the right to make
any amendment which changes the terms of any Shares of any Class now or
hereafter authorized by classification, reclassification, or otherwise, and to
make any amendment authorizing any sale, lease, exchange or transfer of the
property and assets of the Corporation or belonging to any Class or Classes as
an entirety, or substantially as an entirety, with or without its good will and
franchise, if the holders of the majority of all the Shares of all Classes or of
the affected Class or Classes, as the case may be, at the time issued and
outstanding and entitled to vote, vote in favor of any such action or amendment,
or consent thereto in writing, and reserves the right to make any amendment of
these Articles of Incorporation in any form, manner or substance now or
hereafter authorized or permitted by law.
I acknowledge this document to be may act, and state under the penalties of
perjury that with respect to all matters and facts therein, to the best of my
knowledge, information and belief such matters and facts are true in all
material respects and that this statement is made under the penalties of
perjury.
Date: October 23, 1991 /s/ Ulice Payne, Jr.
------------------------
Ulice Payne, Jr.
STATE OF WISCONSIN )
) ss:
COUNTY OF MILWAUKEE)
This is to certify that on this 23rd day of October, 1991, before me, the
subscriber, a Notary Public of the State of Wisconsin, personally appeared Ulice
Payne, Jr., and he acknowledged the foregoing Articles of Incorporation to be
his act.
Witness my hand and Notarial Seal the day and year above written.
/s/ Nadine T. Hansohn
---------------------------------------
Nadine T. Hansohn, Notary Public
My commission expires: 10/04/92.
EXHIBIT (a)(2)
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
FREEDOM CAPITAL PORTFOLIO FUNDS, INC.
The undersigned, James R. Fay and William T. Duero, hereby certify that
they are, and at all times herein mentioned have been the duly elected and
acting President and Secretary, respectively, of Freedom Capital Portfolio
Funds, Inc., a Maryland corporation (the "Corporation"), and further certify
that:
ARTICLE I
The name of the Corporation is Freedom Capital Portfolio Funds, Inc.
ARTICLE II
The amendment adopted related to Article First of the Articles of
Incorporation. After amendment, said Article First shall read in its entirety as
follows:
Article First. The name of the corporation ("which is hereinafter called
the Corporation") so Frontier Funds, Inc. In all other respects, the Article of
Incorporation shall remain the same.
ARTICLE III
The foregoing Amendment to the Articles of Incorporation of the Corporation
was unanimously consented to in writing by the Board of Directors of the
Corporation and that no stock entitled to be voted on the matter was outstanding
or subscribed for at the time of approval.
ARTICLE IV
The effective time of the foregoing amendment shall be the time of filing
of these Articles of Amendment.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment to the Articles of Incorporation, in duplicate, at Pewaukee, Wisconsin
this 18th day of December, 1991.
THE UNDERSIGNED, President and Secretary of FREEDOM CAPITAL PORTFOLIO
FUNDS, INC., who executed on behalf of said Corporation, the foregoing Articles
of Amendment, of which this certificate is made apart, hereby acknowledges, in
the name and on behalf of said Corporation, the foregoing Articles of Amendment
to be the corporate act of said corporation and further certifies that, to the
best of his knowledge, information and belief, the matters and facts set forth
therein with respect to me approval thereof are true in all material respects,
under the penalties of perjury.
FREEDOM CAPITAL PORTFOLIO FUNDS, INC.
BY: /s/ James R. Fay, President
-----------------------------------
James R. Fay, President
Attest:
/s/ William T. Duero, Secretary
----------------------------------------
William T. Duero, Secretary
This document was drafted by Ulice Payne, Jr.
EXHIBIT (b)
BY LAWS
--------
OF
--
FREEDOM CAPITAL PORTFOLIO FUNDS, INC.
-------------------------------------
BYLAW ONE: NAME OF COMPANY. LOCATION OF OFFICES AND SEAL.
---------------------------------------------------------
Article 1.1. Name. The name of the Company is Freedom Capital Portfolio
------------ ----
Funds, Inc.
Article 1.2. Principal Offices. The principal and registered office of the
----------- -----------------
Company in the State of Maryland shall be located in Baltimore, Maryland. The
Company may, in addition, establish and maintain such other offices and places
of business within or outside the State of Maryland as the Board of Directors
may from time to time determine.
Article 1.3. Seal. The corporate seal of the Company shall be circular in
----------- ----
form and shall bear the name of the Company, the year of its incorporation and
the words "Corporate Seal, Maryland." The form of the seal shall be subject to
alteration by the Board of Directors and the seal may be used by causing it or a
facsimile to be impressed or affixed or printed or otherwise reproduced. Any
Officer or Director of the Company shall have authority to affix the corporate
seal of the Company to any document requiring the same. In lieu of affixing the
corporate seal to any document, it shall be sufficient to meet the requirements
of any law, rule or regulation relating to a corporate seal to affix the word
"Seal" adjacent to the signature of the authorized Officer of the corporation.
BYLAW TWO: STOCKHOLDERS.
- ------------------------
Article 2.1. Place of Meetings. All meetings of the Stockholders shall be
----------- -----------------
held at such place within the United States, whether within or outside the State
of Maryland, as the Board of Directors shall determine, which shall be stated in
the notice of the meeting or in a duly executed waiver of notice thereof.
Article 2.2. Annual Meeting. The Company shall not be required to hold an
----------- --------------
annual meeting of the Stockholders in any year in which the election of
directors is not required by the Investment Company Act of 1940 to be acted upon
by the holders of any class or series of stock of the Company. The use of the
term "annual meeting" wherever found in these Bylaws, shall not be construed to
imply a requirement that a Stockholders meeting be held annually. In the event
that the Company shall be required by the Investment Company Act of 1940 to
hold an annual meeting of the Stockholders to elect directors, such meeting
shall be held at a date and time set by the Board of Directors in accordance
with the Investment Company Act (but in no event later than 120 days after the
occurrance of the event requiring the election of directors). Any annual
meeting that is not required by the Investment Company Act of 1940 shall be
held on a date and time during the third month following the Company's fiscal
year, as set by the Board of Directors. At any annual meeting, the
Stockholders shall elect a Board of Directors and shall transact any other
business within the powers of the Company.
Article 2.3. Special Meetings. Special meetings of the Stockholders for any
------------ ----------------
purpose or purposes, unless otherwise prescribed by statute or by the Articles
of Incorporation, may be called by resolution of the Board of Directors or by
the President, and shall be called by the Secretary at the request of a majority
of the Board of Directors or at the request, in writing, of Stockholders owning
at least 25% of the votes entitled to be cast at the meeting upon payment by
such Stockholders to the Company of the reasonably estimated cost of preparing
and mailing a notice of the meeting (which estimated cost shall be provided to
such Stockholders by the Secretary of the Company). Notwithstanding the
foregoing, unless requested by Stockholders entitled to cast a majority of the
votes entitled to be cast at the meeting, a special meeting of the Stockholders
need not be called at the request of the Stockholders to consider any matter
that is substantially the same as a matter voted on at any special meeting of
the Stockholders held during the preceding 12 months. A written request shall
state the purpose or purposes of the proposed meeting.
Article 2.4. Notice. Written notice of every meeting of Stockholders,
------------ -------
stating the purpose or purposes for which the meeting is called, and the time
when and the place where it is to be held, shall be served, either personally or
by mail, not less than ten nor more than ninety days before the meeting, upon
each Stockholder who is entitled to notice of or to vote at such meeting as of
the record date fixed for the meeting. If mailed (i) such notice shall be
directed to a Stockholder at his address as it shall appear on the books of the
Company (unless he shall have filed with the Transfer Agent of the Company a
written request that notices intended for him be mailed to some other address,
in which case it shall be mailed to the address designated in such request) and
(ii) such notice shall be deemed to have been given as of the date when it is
deposited in the United States mail with first-class postage thereon prepaid.
Article 2.5. Notice of Stockholder Business. At any annual or special
------------ -------------------------------
meeting of the Stockholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before an
annual or special meeting, the business must be (i) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (ii) otherwise properly brought before the meeting by or at the
direction of the Board of Directors as permitted by applicable law, or (iii)
otherwise properly brought before the meeting by a Stockholder.
For business to be properly brought before an annual or special meeting by
a Stockholder, the Stockholder must have given timely notice thereof in writing
to the Secretary of the Company. To be timely, any such notice must be delivered
to or mailed and received at the principal executive offices of the Company not
later than 60 days prior to the date of the meeting; provided, however, that if
less than 70 days notice or prior public disclosure of the date of the meeting
is given or made to Stockholders, any such notice by a Stockholder to be timely
must be so received not later than the close of business on the 10th day
following the day on which notice of the date of the annual or special meeting
was given or such public disclosure was made.
Any such notice by a Stockholder shall set forth as to each matter the
Stockholder proposes to bring before the annual or special meeting (i) a brief
description of the business desired to be brought before the annual or special
meeting and the reasons for conducting such business at the annual or special
meeting, (ii) the name and address, as they appear on the Company's books, of
the Stockholder proposing such business, (iii) the class and number of shares of
the capital stock of the Company which are beneficially owned by the
Stockholder, and (iv) any material interest of the Stockholder in such business.
Notwithstanding anything in these Bylaws to the contrary, no business shall
be conducted at any annual or special meeting except in accordance with the
procedures set forth in this Article 2.5. The chairman of the annual or special
meeting shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in accordance with the
provisions of this Article 2.5, and, if he should so determine, he shall so
declare to the meeting that any such business not properly brought before the
meeting shall not be considered or transacted.
Article 2.6. Quorum. The holders of a majority of the stock issued and
------------ ------
outstanding and entitled to vote, present in person or represented by proxy,
shall be requisite and shall constitute a quorum at all meetings of the
Stockholders for the transaction of business except as otherwise provided by
statute, by the Articles of Incorporation or by these Bylaws. If a quorum shall
not be present or represented, the Stockholders entitled to vote thereat,
present in person or represented by proxy, shall have the power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, to a date not more than 120 days after the original record date, until
a quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business which might have been
transacted at the original meeting may be transacted.
Article 2.7. Voting of the Meeting. When a quorum is present or represented
------------ ---------------------
at any meeting, the vote of the holders of a majority of the stock entitled to
vote thereat present in person or represented by proxy shall decide any question
properly brought before such meeting, unless the question is one upon which, by
express provisions of applicable statutes, of the Articles of Incorporation or
of these Bylaws, a different vote is required, in which case such express
provisions shall govern and control the decision of such question.
Article 2.8. Voting Rights of Stockholders. Each Stockholder of record
------------ ------------------------------
having the right to vote shall be entitled at every meeting of the Stockholders
of the Company to one vote for each share of stock having voting power standing
in the name of such Stockholder on the books of the Company on the record date
fixed in accordance with Article 6.5 of these Bylaws and such votes may be cast
either in person or by written proxy. At all meetings of Stockholders, unless
the voting is conducted by inspectors, all questions relating the qualifications
of voters and the validity of proxies and the acceptance or rejections of votes
shall be decided by the Chairman of the meeting.
Article 2.9. Organization. At every meeting of the Stockholders, the
------------ -------------
Chairman of the Board, or in his absence or inability to act, a chairman chosen
by the Stockholders, shall act as chairman of the meeting. The Secretary, or in
his absence or inability to act, a person appointed by the chairman of the
meeting, shall act as secretary of the meeting and keep the minutes of the
meeting.
Article 2.10. Proxies. Every proxy must be executed in writing by the
------------ -------
Stockholder or by his duly authorized attorney-in-fact. No proxy shall be valid
after the expiration of eleven months from the date of its execution unless it
shall have specified therein its duration. Every proxy shall be revocable at the
pleasure of the person executing it or of his personal representatives or
assigns. Proxies shall be delivered prior to the meeting to the Secretary of the
Company or to the person acting as Secretary of the meeting before being voted.
A proxy with respect to stock held in the name of two or more persons shall be
valid if executed by one of them unless, at or prior to exercise of such proxy,
the Company 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 Stockholder shall
be deemed valid unless challenged at or prior to its exercise.
Article 2.11. Stock Ledger and List of Stockholders. It shall be the duty
------------ --------------------------------------
of the Secretary or Assistant Secretary of the Company to cause an original or
duplicate stock ledger to be maintained at the office of the Company's Transfer
Agent.
Article 2.12. Action without Meeting. Any action to be taken by
------------- ----------------------
Stockholders may be taken without a meeting if (l) all Stockholders entitled to
vote on the matter consent to the action in writing, (2) all Stockholders
entitled to notice of the meeting but not entitled to vote at it sign a written
waiver of any right to dissent and (3) said consents and waivers are filed with
the records of the meetings of Stockholders. Such consent shall be treated for
all purposes as a vote at a meeting.
BYLAW-THREE: BOARD OF DIRECTORS.
- ------------ -------------------
Article 3.1. General Powers. Except as otherwise provided in the Articles
------------ ---------------
of Incorporation, the business and affairs of the Company shall be managed under
the direction of the Board of Directors. All powers of the Company may be
exercised by or under authority of the Board of Directors except as conferred on
or reserved to the Stockholders by law, by the Articles of Incorporation or by
these Bylaws.
Article 3.2. Board of Three to Nine Directors. The Board of Directors shall
----------- --------------------------------
consist of not less than four nor more than seven Directors, as determined by
the Board of Directors. By a vote of a majority of the existing Board of
Directors, the number of Directors may be increased or decreased from time to
time to a number not exceeding seven nor less than four, but the tenure of
office of a Director shall not be affected by any decrease in the number of
Directors so made by the Board. If the number of Directors is increased, the
additional Directors may be elected by a majority of the Directors in office at
the time of the increase. If such additional Directors are not so elected by the
Directors in office at the time they increase the number of places on the Board
or if the additional Directors are elected by the existing Directors prior to
the first meeting of the Stockholders of the Company, then in either of such
events the additional Directors shall be elected or reelected by the
Stockholders at their next annual meeting or at an earlier special meeting
called for that purpose. At the first annual meeting of Stockholders and at each
annual meeting thereafter, the Stockholders shall elect Directors to hold office
until the next annual meeting or until their successors are elected and
qualified. A plurality of all votes cast at an annual meeting at which a quorum
is present shall be required to elect Directors of the Company. Each Director,
upon his election, shall qualify by accepting the office of Director, and his
attendance at, or his written approval of the minutes of, any meeting of the
newly-elected directors shall constitute his acceptance of such office, or he
may execute such acceptance by a separate writing, which shall be placed in the
records of the Company. Directors need not be Stockholders.
Article 3.3. Director Nominations.
----------- --------------------
(a) Only persons who are nominated in accordance with the procedures
set forth in this Article 3.3 shall be eligible for election or re-election as
Directors. Nominations of persons for election or re-election to the Board of
Directors of the Company may be made at a meeting of Stockholders by or at the
direction of the Board of Directors or by any Stockholder of the Company who is
entitled to vote for the election of such nominee at the meeting and who
complies with the notice procedures set forth in this Article 3.3.
(b) Such nominations, other than those made by or at the direction of
the Board of Directors, shall be made pursuant to timely notice delivered in
writing to the Secretary of the Company. To be timely, any such notice by a
Stockholder must be delivered to or mailed and received at the principal
executive offices of the Company not later than 60 days prior to the meeting;
provided, however, that if less than 70 days' notice or prior public disclosure
of the date of the meeting is given or made to Stockholders, any such notice by
a Stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which notice of the date of the
meeting was given or such public disclosure was made.
(c) Any such notice by a Stockholder shall set forth (i) as to each
person whom the Stockholder proposes to nominate for election or re-election as
a Director, (A) the name, age, business address and residence address of such
person, (B) the principal occupation or employment of such person, (C) the class
and number of shares of the capital stock of the Company which are beneficially
owned by such person and (D) any other information relating to such person that
is required to be disclosed in solicitations of proxies for the election of
Directors pursuant to Regulation 14A under the Securities Exchange Act of 1934
or any successor regulation thereto (including without limitation such person's
written consent to being named in the proxy statement as a nominee and to
serving as a Director if elected and whether any person intends to seek
reimbursement from the Company of the expenses of any solicitation of proxies
should such person be elected a Director of the Company); and (ii) as to the
Stockholder giving the notice (A) the name and address, as they appear on the
Company's books, of such Stockholder and (B) the class and number of shares of
the capital stock of the Company which are beneficially owned by such
Stockholder. At the request of the Board of Directors, any person nominated by
the Board of Directors for election as a Director shall furnish to the Secretary
of the Company that information required to be set forth in a Stockholder's
notice of nomination which pertains to the nominee.
(d) If a notice by a Stockholder is required to be given pursuant to
this Article 3.3, no person shall be entitled to receive reimbursement from the
Company of the expenses of a solicitation of proxies for the election as a
director of a person named in such notice unless such notice states that such
reimbursement will be sought from the Company. The Chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with the procedures prescribed by the
Bylaws, and, if he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded for all purposes.
Article 3.4. Vacancies. Subject to the provisions of the Investment Company
----------- ----------
Act of 1940, as amended, if the office of any Director or Directors becomes
vacant for any reason (other than an increase in the number of Directors), the
Directors in office, although less than a quorum, shall continue to act and may
choose a successor or successors, who shall hold office until the next election
of Directors, or any vacancy may be filled by the Stockholders at any meeting
thereof.
Article 3.5. Removal. At any meeting of Stockholders duly called and at
----------- -------
which a quorum is present, the Stockholders may, by the affirmative vote of the
holders of at least three-fourths of the votes entitled to be cast thereon,
remove any Director of Directors from office, with or without cause, and may
elect a successor or successors to fill any resulting vacancies for the
unexpired term of the removed Director.
Article 3.6. Resignation. A Director may resign at any time by giving
----------- -----------
written notice of his resignation to the Board of Directors or the Chairman of
the Board or the Secretary of the Company. Any resignation shall take effect at
the time specified in it or, should the time when it is to become effective not
be specified in it, immediately upon its receipt. Acceptance of a resignation
shall not be necessary to make it effective unless the resignation states
otherwise.
Article 3.7. Place the Meetings. The Directors may hold their meetings at
----------- ------------------
the principal office of the Company or at such other places, either within or
outside the State of Maryland, as they may from time to time determine.
Article 3.8. Regular Meetings. Regular meetings of the Board may be held at
----------- ----------------
such date and time as shall from time to time be determined by resolution of the
Board.
Article 3.9. Special Meetings. Special meetings of the Board of Directors
----------- ----------------
may be called at any time by the Board of Directors, the President or by a
majority of the Directors. Special meetings may be held at such place or places
within or without the State of Maryland as may be designated from time to time
by the Board of Directors. In the absence of such designation such meeting shall
be held at such places as may be designated in the notice for the meeting.
Notice of the place and time of every special meeting of the Board of Directors
shall be served on each Director or sent to him by telegraph, telegram, cable or
facsimile, or by leaving the same at his residence or usual place of business,
at least three days before the date of the meeting, or by mail at least seven
days before the date of the meeting. If mailed, such notice shall be deemed to
be given when deposited in the United States mail addressed to the Director at
his address as it appears on the records of the Company, with postage thereon
prepaid.
Article 3.10. Quorum. At all meetings of the Board, the presence of
------------ ------
one-third of the number of Directors then in office (but not less than two
Directors) shall be necessary to constitute a quorum and sufficient for the
transaction of business, and any act of a majority present at a meeting at which
there is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by statute, by the Articles of Incorporation or
by these Bylaws. If a quorum shall not be present at any meeting of Directors,
the Directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Article 3.11. Organization. The Board of Directors shall designate one of
------------ ------------
its members to serve as Chairman of the Board. The Chairman of the Board shall
preside at each meeting of the Board. In the absence or inability of the
Chairman of the Board to act another Director chosen by a majority of the
Directors present, shall act as chairman of the meeting and preside at the
meeting. The Secretary (or, in his absence or inability to act, any person
appointed by the chairman) shall act as secretary of the meeting and keep the
minutes of the meeting.
Article 3.12. Informal Action by Directors and Committees. Any action
------------ -------------------------------------------
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may, except as otherwise required by statute, be taken
without a meeting if a written consent to such action is signed by all members
of the Board, or of such committee, as the case may be, and filed with the
minutes of the proceedings of the Board or committee. Subject to the Investment
Company Act of 1940, as amended, members of the Board of Directors or a
committee thereof may participate in a meeting by means of a conference
telephone or similar communications equipment if all persons participating in
the meeting can hear each other at the same time and participation in a meeting
by that means shall constitute presence in person at such meeting.
Article 3.13. Executive Committee. There may be an Executive Committee of
------------ -------------------
two or more Directors appointed by the Board who may meet at stated times or on
notice to all by any of their own number. The Executive Committee shall consult
with and advise the Officers of the Company in the management of its business
and exercise such powers of the Board of Directors as may be lawfully delegated
by the Board of Directors. Vacancies shall be filled by the Board of Directors
at any regular or special meeting. The Executive Committee shall keep regular
minutes of its proceedings and report the same to the Board when required.
Article 3.14. Audit Committee. There shall be an Audit Committee of two or
------------ ---------------
more Directors who are not "interested persons" of the Company (as defined in
the Investment Company Act of 1940, as amended) appointed by the Board who may
meet at stated times or on notice to all by any of their own number. The
Committee's duties shall include reviewing both the audit and other work of the
Company's independent accountants recommending to the Board of Directors the
independent accountants to be retained, and reviewing generally the maintenance
and safekeeping of the Company's records and documents.
Article 3.15. Other Committees. The Board of Directors may appoint other
------------ ----------------
committees which shall in each case consist of such number of members (but not
less than two) and shall have and may exercise, to the extent permitted by law,
such powers as the Board may determine in the resolution appointing them. A
majority of all members of any such committee may determine its action, and fix
the time and place of its meetings, unless the Board of Directors shall
otherwise provide. The Board of Directors shall have power at any time to change
the members and, to the extent permitted by law, to change the powers of any
such committee, to fill vacancies and to discharge any such committee.
Article 3.16. Compensation of Directors. The Board may, by resolution,
------------ -------------------------
determine what compensation and reimbursement of expenses of attendance at
meetings, if any, shall be paid to Directors in connection with their service on
the Board. Nothing herein contained shall be construed to preclude any Director
from serving the Company in any other capacity or from receiving compensation
therefor.
BYLAW-FOUR: OFFICERS.
- ---------- --------
Article 4.1. Officers. The Officers of the Company shall be fixed by the
----------- --------
Board of Directors and shall include a President, one or more Vice Presidents,
Secretary and Treasurer. Any two offices may be held by the same person except
the offices of President and Vice President. A person who holds more than one
office in the Company may not act in more than one capacity to execute,
acknowledge or verify an instrument required by law to be executed, acknowledged
or verified by more than one officer.
Article 4.2. Appointment of Officers. The Directors shall appoint the
----------- -----------------------
Officers, who need not be members of the Board.
Article 4.3. Additional Officers. The Board may appoint such other Officers
----------- -------------------
and agents as it shall deem necessary who shall exercise such powers and perform
such duties as shall be determined from time to time by the Board.
Article 4.4. Salaries of Officers. The salaries of all Officers of the
----------- --------------------
Company shall be fixed by the Board of Directors.
Article 4.5. Term, Removal, Vacancies. The Officers of the Company shall
----------- ------------------------
serve at the pleasure of the Board of Directors and hold office for one year and
until their successors are chosen and qualify in their stead. Any Officer
elected or appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Directors. If the office of any Officer
becomes vacant for any reason, the vacancy shall be filled by the Board of
Directors.
Article 4.6. President. The President shall be the chief executive officer
----------- ---------
of the Company, shall, subject to the supervision of the Board of Directors,
have general responsibility for the management of the business of the Company
and shall see that all orders and resolutions of the Board are carried into
effect.
Article 4.7. Vice President. The Vice President shall, in the absence or
----------- --------------
disability of the President, perform the duties and exercise the powers of the
President and shall perform such other duties as the Board of Directors shall
prescribe.
Article 4.8. Treasurer. The Treasurer shall have the custody of the
----------- ---------
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Company and shall deposit
all moneys and other valuable effects in the name to the credit of the Company
in such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the Company as may be ordered by the Board, taking proper
vouchers for such disbursements, and shall render to the Chairman of the Board
and Directors at the regular meetings of the Board, or whenever they may require
it, an account of the financial condition of the Company.
Any Assistant Treasurer may perform such duties of the Treasurer as the
Treasurer or the Board of Directors may assign, and, in the absence of the
Treasurer, may perform all the duties of the Treasurer.
Article 4.9. Secretary. The Secretary shall attend meetings of the Board
----------- ---------
and meetings of the Stockholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose, and shall perform like duties
for the Executive Committee of the Board when required. He shall give or cause
to be give notice of all meetings of Stockholders and special meetings of the
Board of Directors and shall perform such other duties as may be prescribed by
the Board of Directors. He shall keep in safe custody the seal of the Company
and affix it to any instrument when authorized by the Board of Directors.
Any Assistant Secretary, in the order determined by the Board of Directors,
may perform such duties of the Secretary as the Secretary or the Board of
Directors may assign, and, in the absence of the Secretary, may perform all the
duties of the Secretary.
Article 4.10. Subordinate Officers. The Board of Directors from time to
------------ --------------------
time may appoint such other officers or agents as it may deem advisable, each of
whom shall serve at the pleasure of the Board of Directors and have such title,
hold office for such period, have such authority and perform such duties as the
Board of Directors may determine. The Board of Directors from time to time may
delegate to one or more officers or agents the power to appoint any such
subordinate officers or agents and to prescribe their respective rights, terms
of office, authorities and duties.
Article 4.11. Surety Bonds. The Board of Directors may require any officer
------------ ------------
or agent of the Company to execute a bond (including, without limitation, any
bond required by the Investment Company Act of 1940, as amended, and the rules
and regulations of the Securities and Exchange Commission) to the Company in
such sum and with such surety of sureties as the Board of Directors may
determine, conditioned upon the faithful performance of his duties to the
Company, including responsibility for negligence and for the accounting of any
of the Company's property, funds or securities that may come into his hands.
BYLAW-FIVE: GENERAL PROVISIONS.
- ---------- ------------------
Article 5.1. Waiver of Notice. Whenever the Stockholders or the Board of
----------- ----------------
Directors are authorized by statute, the provisions of the Articles of
Incorporation or these Bylaws to take any action at any meeting after notice,
such notice may be waived (i) in writing, before or after the holding of the
meeting, by the person or persons entitled to such notice, or, in the case of a
Stockholder, by his duly authorized attorney-in-fact or (ii) if such person is
present in person at the meeting, if the meeting in question is of the Board of
Directors or a committee or, if the meeting is of the Stockholders, if such
person in present either in person or by proxy.
Article 5.2. Indemnity.
----------- ----------
(a) The Company shall indemnify its directors to the fullest extent
that indemnification of directors is permitted by the Maryland General
Corporation Law. The Company shall indemnify its officers to the same extent as
its directors and to such further extent as is consistent with law. The Company
shall indemnify its directors and officers who, while serving as directors or
officers, also serve at the request of the Company as a director, officer,
partner, trustee, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust, other enterprise or employee benefit plan to
the fullest extent consistent with law. The indemnification and other rights
provided by this Article shall continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. This Article shall not protect any such person
against any liability to the Company or any Stockholder thereof to which such
person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office ("disabling conduct").
(b) Any current or former director or officer of the Company seeking
indemnification within the scope of this Article shall be entitled to advances
from the Company for payment of the reasonable expenses incurred by him in
connection with the matter as to which he is seeking indemnification in the
manner and to the fullest extent permissible under the Maryland General
Corporation Law. The person seeking indemnification shall provide to the Company
a written affirmation of his good faith belief that the standard of conduct
necessary for indemnification by the Company has been met and a written
undertaking to repay any such advance if it should ultimately be determined that
he standard of conduct has not been met. In addition, at least one of the
following additional conditions shall be met: (i) the person seeking
indemnification shall provide a security in form and amount acceptable to the
Company for his undertaking; (ii) the Company is insured against losses arising
by reason of the advance; or (iii) a majority of a quorum of directors of the
Company who are neither "interested persons" as defined in Section 2(a)(19) of
the Investment Company Act of 1940, as amended, nor parties to the proceeding
("disinterested non-party directors"), or independent legal counsel, in a
written opinion, shall have determined, based on a review of facts readily
available to the Company at the time the advance is proposed to be made, that
there is reason to believe that the person seeking indemnification will
ultimately be found to be entitled to indemnification.
(c) At the request of any person claiming indemnification under this
Article, the Board of Directors shall determine, or cause to be determined, in a
manner consistent with the Maryland General Corporation Law, whether the
standards required by this Article have been met. Indemnification shall be made
only following: (i) a final decision on the merits by a court or other body
before whom the proceeding was brought that the person to be indemnified was not
liable by reason of disabling conduct or (ii) in the absence of such a decision,
a reasonable determination, based upon a review of the facts, that the person to
be indemnified was not liable by reason of disabling conduct by (i) the vote of
a majority of a quorum of disinterested non-party directors or (ii) an
independent legal counsel in a written opinion.
(d) Employees and agent who are not officers or directors of the
Company may be indemnified, and reasonable expense may be advanced to such
employees or agents, as may be provided by action of the Board of Directors or
by contract, subject to any limitations imposed by the Investment Company Act of
1940.
(e) The Board of Directors may make further provision consistent with
law for indemnification and advance of expenses to directors, officers,
employees and agents by resolution, agreement or otherwise. The indemnification
provided by this Article shall not be deemed exclusive of any other right, with
respect to indemnification or otherwise, to which those seeking indemnification
may be entitled under any insurance or other agreement or resolution of
stockholders or disinterested directors or otherwise.
(f) References in this Article are to the Maryland General Corporation
Law and to the Investment Company Act of 1940, as from time to time amended. No
amendment of these Bylaws shall affect any right of any person under this
Article based on any event, omission or proceeding prior to the amendment.
Article 5.3. Insurance. The Company may purchase and maintain insurance
----------- ---------
behalf of any person who is or was a director, officer, employee or agent of the
Company or who, while a director, officer, employee or agent of the Company, is
or was serving at the request of the Company as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, other enterprise or employee benefit plan,
against any liability asserted against and incurred by such person in any such
capacity or arising out of such person's position; provided that no insurance
--------
may be purchased by the Company on behalf of any person against any liability to
the Company or to its Stockholders 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.
Article 5.4. Checks. All checks or demands for money and notes of the
----------- ------
Company shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Article 5.5. Fiscal Year. The fiscal year of the Company shall be
----------- -----------
determined by resolution of the Board of Directors.
BYLAW-SIX: CERTIFICATES OF STOCK.
- --------------------------------
Article 6.1. Certificates of Stock. Except as otherwise provided in these
----------- ---------------------
Bylaws, the interest of each Stockholder of the Company shall be evidenced by
certificates for shares of stock in such form as the Board of Directors may from
time to time prescribe. The certificates shall be numbered and entered in the
books of the Company as they are issued. They shall exhibit the holder's name
and the number of whole shares and no certificate shall be valid unless it has
been signed by the President, Vice President or Chairman and the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary and bears the
corporate seal. Such seal may be a facsimile, engraved or printed. Where any
such certificate is signed by a Transfer Agent or by a Registrar, the signatures
of any such officer may be facsimile, engraved or printed. In case any of the
officers of the Company whose manual or facsimile signature appears on any stock
certificate delivered to a Transfer Agent of the Company shall cease to be such
Officer prior to the issuance of such certificate, the Transfer Agent may
nevertheless countersign and deliver such certificate as though the person
signing the same or whose facsimile signature appears thereon had not ceased to
be such officer, unless written instructions of the Company to the contrary are
delivered to the Transfer Agent.
Article 6.2. Lost, Stolen or Destroyed Certificates. The Board of
----------- --------------------------------------
Directors, or the President together with the Treasurer or Secretary, may direct
a new certificate to be issued in place of any certificate theretofore issued by
the Company, alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed, or by his legal representative. When authorizing such
issue of a new certificate, the Board of Directors, or the President and
Treasurer or Secretary, may, in its or their discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his legal representative, to advertise the same in
such manner as it or they shall require and/or give the Company a bond in such
sum and with such surety or sureties as it or they may direct as indemnity
against any claim that may be made against the Company with respect to the
certificate alleged to have been lost, stolen or destroyed for such newly issued
certificate.
Article 6.3. Transfer of Stock. Shares of the Company shall be transferable
----------- -----------------
on the books of the Company by the holder thereof in person or by his duly
authorized attorney or legal representative upon surrender and cancellation of a
certificate or certificates for the same number of shares of the same class,
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, with such proof of the authenticity of the signature as
the Company by its agents may reasonably require. The shares of stock of the
Company may be freely transferred, and the Board of Directors may, from time to
time, adopt rules and regulations with reference to the method of transfer of
the shares of stock of the Company.
Article 6.4. Registered Holder. The Company shall be entitled to treat the
----------- -----------------
holder of record of any share or shares of stock as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other person whether
or not is shall have express or other notice thereof, except as expressly
provided by statute.
Article 6.5. Record Date. The Board of Directors may fix a time not less
----------- -----------
than 10 nor more than 90 days prior to the date of any meeting of Stockholders
or prior to the last day on which the consent or dissent of Stockholders may be
effectively expressed for any purpose without a meeting, as the time as of which
Stockholders entitled to notice of, and to vote at, such a meeting or whose
consent or dissent is required or may be expressed for any purpose, as the case
may be, shall be determined; and all such persons who were holders of record of
voting stock at such time, and no other, shall be entitled to notice of, and to
vote at, such meeting or to express their consent or dissent, as the case may
be. If no record date has been fixed, the record date for the determination of
Stockholders entitled to notice of, or to vote at, a meeting of Stockholders
shall be the later of the close of business on the day on which notice of the
meeting is mailed or the thirtieth day before the meeting, or, if notice is
waived by all Stockholders, at the close of business on the tenth day next
preceding the day on which the meeting is held. The Board of Directors may also
fix a time not exceeding g0 days preceding the date fixed for the payment of any
dividend or the making of any distribution, or for the delivery of evidences of
rights, or evidences of interests arising out of any change, conversion or
exchange of capital stock, as a record time for the determination of the
Stockholder entitled to receive any such dividend, distribution, rights or
interests.
Article 6.6. Stock Ledgers. The stock ledgers of the Company, containing
----------- -------------
the names and addresses of the Stockholders and the number of shares held by
them respectively, shall be kept at the principal offices of the Company or at
the offices of the Transfer Agent of the Company or at such other location as
may be authorized by the Board of Directors from time to time.
Article 6.7. Transfer Agents and Registrars. The Board of Directors may
----------- ------------------------------
from time to time appoint or remove Transfer Agents and/or Registrars of
transfers (if any) of shares of stock of the Company, and it may appoint the
same person as both transfer Agent and Registrar. Upon any such appointment
being made, all certificates representing shares of capital stock thereafter
issued shall be countersigned by one of such Transfer Agents or by one of such
Registrars of transfers (if any) or by both and shall not be valid unless so
countersigned. If the same person shall be both Transfer Agent and Registrar,
only one countersignature by such person shall be required.
Article 6.8. Issuance of Shares Without Certificates. The Board of
----------- ---------------------------------------
Directors, by resolution, may at any time authorize the issuance without
certificates of some or all of the shares of one or more of the classes or
series of the Company's stock. Such issuances without certificates shall be made
in accordance with the requirements therefor set forth in the Maryland General
Corporation Law and the Maryland Commercial Law (or any successor statutes).
Such authorization will not affect shares already represented by certificates
until such shares are surrendered to the Company for transfer, cancellation or
other disposition.
BYLAW-SEVEN: AMENDMENTS.
- -----------------------
Article 7.1. General. Except as provided in the next succeeding sentence
----------- -------
and in the Articles of Incorporation, all Bylaws of the Company, whether adopted
by the Board of Directors or the Stockholders, shall be subject to amendment,
alteration or repeal, and new Bylaws may be made, by the affirmative vote of a
majority of either: (a) the holders of record of the outstanding shares of stock
of the Company entitled to vote at any annual or special meeting, the notice or
waiver of notice of which shall have specified or summarized the proposed
amendment, alteration, repeal or new Bylaw; or (b) the Directors at any regular
or special meeting, the notice or waiver of notice of which shall have specified
or summarized the proposed amendment, alteration, repeal or new Bylaw. The
provisions of Articles 2.5, 3.2, 3.3 and 8.1 of these Bylaws shall be subject to
amendment, alteration or repeal by the affirmative vote of either: (i) the
holders of record of 75% of the outstanding shares of stock of the Company
entitled to vote at any annual or special meeting, the notice of waiver of
notice of which shall have specified or summarized the proposed amendment,
alteration or repeal or (ii) 75% of the Continuing Directors (as such term is
defined in Article VII of the Company's Articles of Incorporation), at any
regular or special meeting, the notice or waiver of notice of which shall have
specified or summarized the proposed amendment, alteration or repeal.
BYLAW-EIGHT: SPECIAL PROVISIONS.
- -------------------------------
Article 8.1. Actions Relating to Discount in Price of the Company's Shares.
----------- -------------------------------------------------------------
In the event that at any time following the initial public offering of shares of
the Company's Common Stock such shares publicly trade for a substantial period
of time at a substantial discount from the Company's then current net asset
value per share, the Board of Directors shall consider, at its next regularly
scheduled meeting, taking various actions designed to eliminate the discount.
The actions considered by the Board of Directors may include periodic
repurchases by the Company of its shares of Common Stock or an amendment to the
Company's Articles of Incorporation to make the Company's Common Stock a
"redeemable security" (as such term is defined in the Investment Company Act of
1940), subject in all events to compliance with all applicable provisions of the
Company's Articles of Incorporation, these Bylaws, the Maryland General Company
Law and the Investment Company Act of 1940.
EXHIBIT (d)
INVESTMENT ADVISORY AGREEMENT
FRONTIER FUNDS, INC., a Maryland Corporation ("Frontier "), and FREEDOM
INVESTORS CORP., a Wisconsin corporation (the "Adviser"), agree that:
1. Engagement of the Adviser. The Adviser shall manage the investment and
-------------------------
reinvestment of the assets of the Equity Fund Portfolio, (the "Equity Fund"), of
Frontier , subject to the supervision of the Board of Directors of Frontier ,
for the period and on the terms set forth in this Agreement. The Adviser shall
give due consideration to the investment policies and restrictions and the other
statements concerning the Equity Fund in Frontier 's Articles of Incorporation,
By-Laws and registration statements under the Investment Company Act of 1940
(the "1940 Act") and the Securities Act of 1933, and to the provisions of
Subchapter M and all other applicable sections of the Internal Revenue Code
applicable to Frontier as a regulated investment company. The Adviser shall be
deemed for all purposes to be an independent contractor and not an agent of the
Equity Fund or Frontier, and unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Equity Fund or Frontier in
any way.
The Adviser is authorized to make the decisions to buy and sell securities
of the Equity Fund, to place the Equity Fund's portfolio transactions with
registered securities broker- dealers, and to negotiate the terms of such
transactions, including brokerage commissions on brokerage transactions, on
behalf of the Equity Fund. The adviser is authorized to exercise discretion
within the Equity Fund's policy concerning allocation of its portfolio
brokerage, as permitted by law, including, but not limited to, section 28(e) of
the Securities Exchange Act of 1934, and in so doing shall not be required to
make any reduction in its investment advisory fees.
2. Compensation of the Adviser. For the services to be rendered and the
---------------------------
charges and expenses to be paid by the Adviser hereunder, the Equity Fund shall
pay to the Adviser an annual fee of 1% of the average daily net asset value of
the Equity Fund payable monthly, as determined by the average of valuations made
as of the close of business on each day that the Equity Fund calculates its net
asset value, which fee shall be payable monthly on or before the 15th day of the
succeeding month.
3. Expenses to be paid by the Adviser. The Adviser shall furnish, at its
----------------------------------
own expense, office space to the Equity Fund and all necessary office
facilities, equipment and personnel for managing the assets of the Equity Fund.
The Adviser shall also assume and pay all other expenses incurred by it in
connection with managing the assets of the Equity Fund. The Adviser is obligated
to reimburse to the Equity Fund any amount up to the amount of its advisory fee,
by which its aggregate expenses, including advisory fees payable to the Adviser
(but excluding interest, taxes, brokerage commissions, extraordinary expenses
and any other expenses not subject to the applicable expense limitation), during
the portion of any fiscal year in which the Agreement is in effect, exceed the
most restrictive expense limitation imposed by the securities law of any
jurisdiction in which the shares of the Equity Fund are registered or qualified
for sale.
The Adviser, at its own discretion, may pay any additional expenses above
the advisory fee of 1% of the Equity Fund it deems necessary and appropriate for
the operation of the Equity Fund. The Equity Fund may reimburse the Adviser for
any additional expenses in excess of 1% as the Board of Directors of Frontier
deem appropriate and in accordance with applicable law.
4. Expenses to be paid by the Equity Fund. The Equity Fund shall pay all
--------------------------------------
charges of depositories, custodians and other agencies for the safekeeping and
servicing of its cash, securities and other property and of its transfer agents,
registrars and its dividend disbursing and redemption agents, if any; all
charges of legal counsel and of independent auditors; all expenses in
determination of price computations, placement of securities orders and related
bookkeeping; all compensation of directors other than those affiliated with the
Adviser and all expenses incurred in connection with their services to the
Equity Fund; all expenses of publication of notices and reports to its
stockholders; all expenses of proxy solicitations of the Equity Fund's
stockholders or Frontier's Board of Directors; all taxes and corporate fees
payable to federal, state or other governmental agencies, domestic or foreign;
all stamp or other transfer taxes; all expenses of printing and mailing
certificates for shares of the Equity Fund; and all expenses of bond and
insurance coverage required by law or deemed advisable by Frontier's Board of
Directors. In addition to the payment of expenses, the Equity Fund shall also
pay all brokers' commissions and other charges relative to the purchase and sale
of portfolio securities, interest charges and litigation and other extraordinary
expenses, if any.
5. Services of the Adviser not Exclusive. The services of the Adviser to
-------------------------------------
the Equity Fund hereunder are not to be deemed exclusive, and the Adviser shall
be free to render similar services to others so long as its services under this
Agreement are not impaired by such other activities.
6. Services other than as the Adviser. The Adviser or its affiliates may
----------------------------------
not act as broker for the Equity Fund in connection with the purchase or sale of
securities by or to the Equity Fund. Such brokerage services are not within the
scope of the duties of the Adviser under this Agreement, and, within the limits
permitted by law and the Board of Directors of Frontier. Within the limits
permitted by law, the Adviser may receive compensation from the Equity fund for
other services performed by it for the Equity Fund which are not within the
scope of the duties of the Adviser under this Agreement.
7. Limitation of Liability of the Adviser. The Adviser shall not be liable
--------------------------------------
to the Equity Fund or its stockholders for any loss suffered by the Equity Fund
or its stockholders from or as a consequence of any act or omission of the
Adviser, or of any of the directors, officers, employees or agents of the
Adviser, in connection with or pursuant to this Agreement, except by reason of
willful misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or by reason of reckless disregard by the Adviser
of its obligations and duties under this Agreement.
8. Duration and Renewal. This Agreement shall continue in effect until two
--------------------
years from the date of its execution, and thereafter from year to year only so
long as such continuance is specifically approved at least annually by the Board
of Directors of the Adviser and by (a) a majority of those directors of Frontier
who are not "interested persons" (as defined in section 2(a)(19) of the 1940
Act) of Frontier or the Adviser, voting in person at a meeting called for the
purpose of voting on such approval; and (b) either the Board of Directors of
Frontier or by vote of the holders of a "majority of the outstanding shares of
the Equity Fund" (which term as used throughout this Agreement shall be
construed in accordance with the definition of "vote of a majority of the
outstanding voting securities of a company" in section 2(a)(42) of the 1940
Act).
9. Termination. This Agreement may be terminated at any time, without
-----------
payment of any penalty, by the Board of Directors of Frontier, or by a vote of
the holders of a majority of the outstanding shares of the Equity Fund, upon 60
days' written notice to the Adviser. This Agreement may be terminated by the
Adviser at any time upon 60 days' written notice to the Equity Fund. This
Agreement shall terminate automatically in the event of its assignment (as
defined in section 2(a)(4) of the 1940 Act).
10. Amendment. This Agreement may not be amended without the affirmative
---------
vote of (a) a majority of those directors of Frontier who are not "interested
persons" as defined in section 2(a)(19) of the 1940 Act) of Frontier or the
Adviser, voting in person at a meeting called for the purpose of voting on such
approval; and (b) the holders of a majority of the outstanding shares of the
Equity Fund.
11. Miscellaneous.
-------------
(a) This Agreement shall be construed in accordance with the laws of
the State of Wisconsin, provided that nothing herein shall be construed in a
manner inconsistent with the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, or any rule or order of the Securities and
Exchange Commission under such Acts or any rule of the National Association of
Securities Dealers, Inc.
(b) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
Dated this 2 day of March, 1992.
FRONTIER FUNDS, INC.
BY /s/ James R. Fay
---------------------------------
James R. Fay, President
FREEDOM INVESTOR CORP.
BY /s/ William T. Duero
---------------------------------
William T. Duero,
Vice President
EXHIBIT (e)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into on this 2 day of March, 1992 ,
between FRONTIER FUNDS, INC., a Maryland corporation ("Frontier"), and FREEDOM
INVESTORS CORP., a Wisconsin corporation (the "Distributor") .
RECITALS
A. The Distributor is a registered broker-dealer under state and federal
laws and regulations and is a member of the National Association of Securities
Dealers, Inc.
B. Frontier desires to utilize the Distributor to offer and sell shares of
the Equity Fund Portfolio of Frontier (the "Equity Fund Shares") for a
continuous offering of the Equity Fund Shares on a best effort basis in certain
states.
AGREEMENTS
In consideration of the recitals and the mutual agreements contained
herein, the parties agree as follows:
1. Appointment of Distributor. Frontier hereby appoints the Distributor as
--------------------------
its exclusive agent for the distribution of the Equity Fund Shares for a
continuous offering of the Equity Fund Shares on a best effort basis, in
jurisdictions wherein Frontier deems it necessary or advisable to offer and sell
the Equity Fund Shares by means of a registered broker-dealer. The Equity Fund
Shares shall be offered and sold only pursuant to, and on the terms contained
in, the Prospectus of Frontier dated March 2, 1991, as amended and supplemented
from time to time .
2. Acceptance: Services of Distributor. The Distributor hereby accepts
-----------------------------------
appointment as agent for the distribution of the Equity Fund Shares as provided
in section 1.
3. Expenses Borne by Distributor. The Distributor will pay all expenses
-----------------------------
incurred by it in connection with the offer and sale of the Equity Fund Shares
hereunder, including, without limitation, accounting, legal, clerical and office
expenses, rent, printing and postage expenses, reasonable and necessary travel
expenses and fees for the performance of administrative services.
4. Fee. The Distributor shall be entitled to the fees, commissions or
---
discounts in connection with its duties hereunder, as described in the current
Prospectus for Frontier.
5. Repurchase of Shares. The Distributor may act as agent for Frontier in
--------------------
connection with the repurchase and redemption of Equity Fund Shares by Frontier
upon on the terms and conditions of the then current Prospectus of Frontier or
as Frontier may otherwise direct. The Distributor may employ such subagents,
including one or more participating brokers, for this purpose as the
Distributor, in its sole discretion, shall deem to be advisable or desirable.
6. Basis of Purchase and Sales of Shares. The Distributors obligation to
-------------------------------------
sell shares hereunder shall be on a best efforts basis only and the Distributor
shall not be obligated to sell any specific number of shares.
7. Duration and Termination. This Agreement shall remain in effect until
------------------------
one year from the date of this Agreement and shall renew from year to year
thereafter so long as continuance of the Agreement is approved annually by
Frontier's Board of Directors or by the holders of a majority of the outstanding
securities of Equity Fund, and in either case, by a majority of the directors
who are not interested persons of Frontier or the Distributor. This Agreement
may be terminated at any time, without payment of any penalty, on not more than
60 days' nor less than 30 days' written notice to the other party.
6. Notice. Any notice under this Agreement shall be in writing, addressed
------
and delivered or mailed, postage prepaid, to the other party at such address as
such other party may from time to time designate for the receipt of such notice.
7. Assignment. This Agreement shall neither be assignable nor subject to
----------
pledge or hypothecation and in the event of assignment, pledge or hypothecation
this Agreement shall automatically terminate. For purposes of determining
whether an "assignment" has occurred, the definition of "assignment" in section
202(a)(1) of the Investment Advisers Act of 1940, as amended, shall control.
8. Miscellaneous.
-------------
(a) This Agreement shall be construed in accordance with the laws of
the State of Wisconsin, provided that nothing herein shall be construed in a
manner inconsistent with the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, or any rule or order of the Securities and
Exchange Commission under such Acts or any rule of the National Association of
Securities Dealers, Inc.
(b) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
FRONTIER FUNDS, INC.
BY /s/ William T. Duero
--------------------------------
William T. Duero,
Vice President
FREEDOM INVESTORS CORP.
BY /s/ James R. Fay
--------------------------------
James R. Fay President
EXHIBIT (g)
CUSTODY AGREEMENT
-----------------
Agreement made as of the 6th day of MARCH, 1992, between FRONTIER FUNDS,
INC., (the "CORPORATION"), a corporation organized under the laws OF THE STATE
OF MARYLAND and having its office at 101 WEST WISCONSIN AVENUE, PEWAUKEE, WI
53072 acting for and on behalf of THE EQUITY FUND (the "Fund"), which is
operated and maintained by the Trust for the benefit of the holders of shares of
the Fund, and Star Bank, N.A. (the "Custodian"), a national banking association
having its principal office and place of business at Star Bank Center, 425
Walnut Street, Cincinnati, Ohio 45202, which Agreement provides for the
furnishing of custodian services to the Fund.
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth
the Trust, on behalf of the Fund, and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
-----------
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
1. "Authorized Person" shall be deemed to include the Chairman, President,
Secretary, Treasurer, Controller, and the Senior Vice President, or any other
person, whether or not any such person is an officer or employee of the Trust,
duly authorized by the Board of Directors of the Trust to give Oral Instructions
and Written Instructions on behalf of the Fund and listed in the Certificate
annexed hereto as Appendix A or such other Certificate as may be received by the
Custodian from time to time, subject in each case to any limitations on the
authority of such person as set forth in Appendix A or any such Certificate.
2. "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, provided the Custodian has received a
certified copy of a resolution of Board of Directors of the Corporation
specifically approving deposits in the Book-Entry System.
3. "Certificate" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to the Custodian
which is signed on behalf of the Fund by an officer of the Trust and is actually
received by the Custodian.
4. "Depository" shall mean The Depository Trust Company ("DTC"), a clearing
agency registered with the Securities and Exchange Commission, its successor or
successors and its nominee or nominees. The term "Depository" shall further mean
and include any other person or clearing agency authorized to act as a
depository under the Investment Company Act of 1940, its successor or successors
and its nominee or nominees, provided that the Custodian has received a
certified copy of a resolution of the Board of Directors of the Trust
specifically approving such other person or clearing agency as a depository.
5. "Dividend and Transfer Agent" shall mean the dividend and transfer agent
active, from time to time, in such capacity pursuant to a written agreement with
the Fund, changes in which the Trust shall immediately report to the Custodian
in writing.
6. "Money Market Security" shall be deemed to include, without limitation,
debt obligations issued or guaranteed as to principal and/or interest by the
government of the United States or agencies or instrumentalities thereof,
commercial paper, obligations (including certificates of deposit, bankers'
acceptances, repurchase and reverse repurchase agreements with respect to the
same) and bank time deposits of domestic banks that are members of Federal
Deposit Insurance Corporation, and short-term corporate obligations where the
purchase and sale of such securities normally require settlement in federal
funds or their equivalent on the same day as such purchase or sale.
7. "Officers" shall be deemed to include the Chairman, the President, the
Secretary, the Treasurer, the Controller, and Senior Vice President of the
Corporation listed in the Certificate annexed hereto as Appendix A or such other
Certificate as may be received by the Custodian from time to time.
8. "Oral Instructions" shall mean oral instructions actually received by
the Custodian from an Authorized Person (or from a person which the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions from Authorized Persons in such manner so that such Written
Instructions are received by the Custodian on the next business day.
9. "Prospectus" shall mean the Fund's currently effective prospectus and
statement of additional information, as filed with and declared effective by the
Securities and Exchange Commission.
10. "Security or Securities" shall mean Money Market Securities, common or
preferred stocks, options, bonds, debentures, corporate debt securities, notes,
mortgages or other obligations, and any certificates, receipts, warrants or
other instruments representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interest therein, or any
property or assets.
11. "Written Instructions" shall mean communication actually received by
the Custodian from one Authorized Person or from one person which the Custodian
reasonably believes in good faith to be an Authorized Person in writing or by
telex or any other such system whereby the receiver of such communication is
able to verify by codes or otherwise with a reasonable degree of certainty the
authenticity of the senders of such communication.
ARTICLE II
APPOINTMENT OF CUSTODIAN
------------------------
1. The Corporation, acting for and on behalf of the Fund, hereby
constitutes and appoints the Custodian as custodian of all the Securities and
monies at any time owned by the Fund during the period of this Agreement (the
"Fund Assets").
2. The Custodian hereby accepts appointment as such Custodian and agrees to
perform the duties thereof as hereinafter set forth.
ARTICLE III
DOCUMENTS TO BE FURNISHED BY THE CORPORATION
--------------------------------------------
The Trust hereby agrees to furnish to the Custodian the following
documents:
1. A copy of its Articles of Incorporation (the "Declaration of
Corporation") certified by its Secretary.
2. A copy of its By-Laws certified by its Secretary.
3. A copy of the resolution of its Board of Directors appointing the
Custodian certified by its Secretary.
4. A copy of the most recent Prospectus of the Corporation.
5. A Certificate of the President and Secretary setting forth the names and
signatures of the present officers of the Corporation.
ARTICLE IV
CUSTODY OF CASH AND SECURITIES
------------------------------
1. The Corporation will deliver or cause to be delivered to the Custodian
all Fund Assets, including cash received for the issuance of its shares, at any
time during the period of this Agreement. The Custodian will not be responsible
for such Fund Assets until actually received by it. Upon such receipt, the
Custodian shall hold in safekeeping and physically segregate at all times from
the property of any other persons, firms or corporations all Fund Assets
received by it from or for the account of the Fund. The Custodian will be
entitled to reverse any credits made on the Fund's behalf where such credits
have been previously made and monies are not finally collected within 90 days of
the making of such credits. The Custodian is hereby authorized by the
Corporation, acting on behalf of the Fund, to actually deposit any Fund Assets
in the Book-Entry System or in a Depository, provided, however, that the
Custodian shall always be accountable to the Corporation for the Fund Assets so
deposited. Fund Assets deposited in the Book-Entry System or the Depository will
be represented in accounts which include only assets held by the Custodian for
customers, including but not limited to accounts in which the Custodian acts in
a fiduciary or representative capacity.
2. The Custodian shall credit to a separate account or accounts in the name
of the Fund all monies received by it for the account of the Fund, and shall
disburse the same only:
(a) In payment for Securities purchased for the account of the Fund,
as provided in Article V;
(b) In payment of dividends or distributions, as provided in Article
VI hereof;
(c) In payment of original issue or other taxes, as provided in
Article VII hereof;
(d) In payment for shares of the Fund redeemed by it, as provided in
Article VII hereof;
(e) Pursuant to Certificates (i) directing payment and setting forth
the name and address of the person to whom the payment is to be made, the amount
of such payment and the purpose for which payment is to be made (the Custodian
not being required to question such direction) or (ii) if reserve requirements
are established for the Fund by law or by valid regulation, directing the
Custodian to deposit a specified amount of collected funds in the form of U.S.
dollars at a specified Federal Reserve Bank and stating the purpose of such
deposit; or
(f) In reimbursement of the expenses and liabilities of the Custodian,
as provided in paragraph 10 of Article IX hereof.
3. Promptly after the close of business on each day the fund is open and
valuing its portfolio. The Custodian shall furnish the Corporation with a
detailed statement of monies held for the Fund under this Agreement and with
confirmations and a summary of all transfers to or from the account of the Fund
during said day. Where Securities are transferred to the account of the Fund
without physical delivery, the Custodian shall also identify as belonging to the
Fund a quantity of Securities 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 Book-Entry System or the Depository. At least monthly and from
time to time, the Custodian shall furnish the Corporation with a detailed
statement of the Securities held for the Fund under this Agreement.
4. All Securities held for the Fund, which are issued or issuable only in
bearer form, 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 the Fund
may be registered in the name of the Fund, 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 Corporation 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 the Fund and which may from
time to time be registered in the name of the Fund. The Custodian shall hold all
such Securities which are not held in the Book-Entry System by the Depository or
a Sub-Custodian in a separate account or accounts in the name of the Fund
segregated at all times from those of any other fund maintained and operated by
the Corporation and from those of any other person or persons.
5. Unless otherwise instructed to the contrary by a Certificate, the
Custodian shall with respect to all Securities held for the Fund in accordance
with this Agreement:
(a) Collect all income due or payable to the Fund with respect to the
Fund Assets;
(b) Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed, or retired, or otherwise
become payable;
(c) Surrender Securities in temporary form for definitive Securities;
(d) Execute, as Custodian, any necessary declarations or certificates
of ownership under the Federal income tax laws or the laws or regulations of any
other taxing authority, including any foreign taxing authority, now or hereafter
in effect; and
(e) Hold directly, or through the Book-Entry System or the Depository
with respect to Securities therein deposited, for the account of the Fund all
rights and similar securities issued with respect to any Securities held by the
Custodian hereunder.
6. Upon receipt of a Certificate and not otherwise, the Custodian directly
or through the use of the Book-Entry System or the Depository shall:
(a) Execute and deliver to such persons as may be designated in such
Certificate proxies, consents, authorizations, and any other instruments whereby
the authority of the Fund as owner of any Securities may be exercised;
(b) Deliver any Securities held for the Fund 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;
(c) Deliver any Securities held for the account of the Fund to any
protective committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery; and
(d) Make such transfers or exchanges of the assets of the Fund and
take such other steps as shall be stated in said Certificate to be for the
purpose of effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund.
7. The Custodian shall promptly deliver to the Corporation all notices,
proxy material and executed but unvoted proxies pertaining to shareholder
meetings of Securities held by the Fund. The Custodian shall not vote or
authorize the voting of any Securities or give any consent, waiver or approval
with respect thereto unless so directed by a Certificate or Written Instruction.
8. The Custodian shall promptly deliver to the Corporation all material
received by the Custodian and pertaining to Securities held by the Fund with
respect to tender or exchange offers, calls for redemption or purchase,
expiration of rights, name changes, stock splits and stock dividends, or any
other activity involving ownership rights in such Securities.
ARTICLE V
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
--------------------------------------------
1. Promptly after each purchase of Securities by the Fund, the Corporation
shall deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, a Certificate or Written Instructions,
and (ii) with respect to each purchase of Money Market Securities, Written
Instructions, a Certificate or Oral Instructions, specifying with respect to
each such purchase: (a) the name of the issuer and the title of the Securities,
(b) the principal amount purchased and accrued interest, if any, (c) the date of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable upon such purchase and (f) the name of the person from whom or the
broker through whom the purchase was made. The Custodian shall upon receipt of
Securities purchased by or for the Fund, pay out of the monies held for the
account of the Fund the total amount payable to the person from whom or the
broker through whom the purchase was made, provided that the same conforms to
the total amount payable as set forth in such Certificate, Written Instructions
or Oral Instructions.
2. Promptly after each sale of Securities by the Corporation for the
account of the Fund, the Corporation shall deliver to the Custodian (i) with
respect to each sale of Securities which are not Money Market Securities, a
Certificate or Written Instructions, and (ii) with respect to each sale of Money
Market Securities, Written Instructions, a Certificate or Oral Instructions,
specifying with respect to each such sale: (a) the name of the issuer and the
title of the Security, (b) the principal amount sold, and accrued interest, if
any, (c) the date of sale, (d) the sale price per unit, (e) the total amount
payable to the Fund upon such sale and (f) the name of the broker through whom
or the person to whom the sale was made. The Custodian shall deliver the
Securities upon receipt of the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable as set forth in such
Certificate, Written Instructions or Oral Instructions. 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.
3. Promptly after the time as of which the Corporation, on behalf of the
Fund, either
(a) writes an option on Securities or writes a covered put option in
respect of a Security, or
(b) notifies the Custodian that its obligations in respect of any put
or call option, as described in the Trust's Prospectus, require that the Fund
deposit Securities or additional Securities with the Custodian, specifying the
type and value of Securities required to be so deposited, or
(c) notifies the Custodian that its obligations in respect of any
other Security, as described in the Fund's Prospectus, require that the Fund
deposit Securities or additional Securities with the Custodian, specifying the
type and value of Securities required to be so deposited, the Custodian will
cause to be segregated or identified as deposited, pursuant to the Fund's
obligations as set forth in the Prospectus, Securities of such kinds and having
such aggregate values as are required to meet the Fund's obligations in respect
thereof.
The Corporation or its properly appointed Transfer Agent/Fund Accountant
will provide to the Custodian, as of the end of each trading day, the market
value of the Fund's option liability and the market value of its portfolio of
common stocks.
4. On contractual settlement date, the account of the Fund will be charged
for all purchases settling on that day, regardless of whether or not delivery is
made. On contractual settlement date, sale proceeds will likewise be credited to
the account of the Fund irrespective of delivery.
In the case of "sale fails", the Custodian may request the assistance of
the Fund in making delivery of the failed Security.
ARTICLE VI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
-------------------------------------
1. The Corporation shall furnish to the Custodian a copy of the resolution
of the Board of Directors, certified by the Secretary, either (i) setting forth
the date of the declaration of any dividend or distribution in respect of shares
of the Fund, the date of payment thereof, the record date as of which Fund
shareholders entitled to payment shall be determined, the amount payable per
share to Fund shareholders of record as of that date and the total amount to be
paid by the Dividend and Transfer Agent of the Fund on the payment date, or (ii)
authorizing the declaration of dividends and distributions in respect of shares
of the Fund on a daily basis and authorizing the Custodian to rely on Written
Instructions or a Certificate setting forth the date of the declaration of any
such dividend or distribution, the date of payment thereof, the record date as
of which Fund shareholders entitled to payment shall be determined, the amount
payable per share to Fund shareholders of record as of that date and the total
amount to be paid by the Dividend and Transfer Agent on the payment date.
2. Upon the payment date specified in such resolution, Written Instructions
or Certificate, as the case may be, the Custodian shall arrange for such
payments to be made by the Dividend and Transfer Agent out of monies held for
the account of the Fund.
ARTICLE VII
SALE AND REDEMPTION OF SHARES OF THE FUND
-----------------------------------------
1. The Custodian shall receive and credit to the account of the Fund such
payments for shares of the Fund issued or sold from time to time as are received
from the distributor for the Fund's shares, from the Dividend and Transfer Agent
of the Fund, or from the Corporation.
2. Upon receipt of Written Instructions, the Custodian shall arrange for
payment of redemption proceeds to be made by the Dividend and Transfer Agent out
of the monies held for the account of the Fund in the total amount specified in
the Written Instructions.
3. Notwithstanding the above provisions regarding the redemption of any
shares of the Fund, whenever shares of the Fund are redeemed pursuant to any
check redemption privilege which may from time to time be offered by the Fund,
the Custodian, unless otherwise subsequently instructed by Written Instructions
shall, upon receipt of any Written Instructions setting forth 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 money held in the account of the Fund for such purposes.
ARTICLE VIII
INDEBTEDNESS
------------
In connection with any borrowings, the Corporation, on behalf of the Fund,
will cause to be delivered to the Custodian by a bank or broker (including the
Custodian, if the borrowing is from the Custodian), requiring Securities as
collateral for such borrowings, a notice or undertaking in the form currently
employed by any such bank or broker setting forth the amount which such bank or
broker will loan to the Fund against delivery of a stated amount of collateral.
The Corporation shall promptly deliver to the Custodian a Certificate specifying
with respect to each such borrowing: (a) the name of the bank or broker, (b) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the Corporation, acting
on behalf of the Fund, or other loan agreement, (c) the date and time, if known,
on which the loan is to be entered into, (d) the date on which the loan becomes
due and payable, (e) the total amount payable to the Fund on the borrowing date,
(f) the market value of Securities collateralizing the loan, including the name
of the issuer, the title and the number of shares or the principal amount of any
particular Securities and (g) a statement that such loan is in conformance with
the Investment Company Act of 1940 and the Fund's then current Prospectus. The
Custodian shall deliver on the borrowing date specified in a Certificate the
specified collateral and the executed promissory note, if any, against delivery
by the lending bank or broker of the total amount of the loan payable provided
that the same conforms to the total amount payable as set forth in the
Certificate. The Custodian may, at the option of the lending bank or broker,
keep such collateral in its possession, but such collateral shall be subject to
all rights therein given the lending bank or broker, by virtue of any promissory
note or loan agreement. The Custodian shall deliver in the manner directed by
the Corporation from time to time such Securities as additional collateral as
may be specified in a Certificate to collateralize further any transaction
described in this paragraph. The Corporation 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 Corporation fails to specify in a
Certificate or Written Instructions the name of the issuer, the title and number
of shares or the principal amount of any particular Securities to be delivered
as collateral by the Custodian, the Custodian shall not be under any obligation
to deliver any Securities. The Custodian may require such reasonable conditions
with respect to such collateral and its dealings with third-party lenders as it
may deem appropriate.
ARTICLE IX
CONCERNING THE CUSTODIAN
------------------------
1. Except as otherwise provided herein, the Custodian shall not 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 Corporation, on behalf of the Fund
and only from Fund Assets (or insurance purchased by the Corporation with
respect to its liabilities on behalf of the Fund hereunder), shall defend,
indemnify and hold harmless the Custodian and its directors, officers, employees
and agents with respect to any loss, claim, liability or cost (including
reasonable attorneys' fees) arising or alleged to arise from or relating to the
Corporation's duties with respect to the Fund hereunder or any other action or
inaction of the Corporation or its Directors, officers, employees or agents as
to the Fund, except such as may arise from the negligent action, omission or
willful misconduct of the Custodian, its directors, officers, employees or
agents. The Custodian shall defend, indemnify and hold harmless the Corporation
and its Directors, officers, employees or agents with respect to any loss,
claim, liability or cost (including reasonable attorneys' fees) arising or
alleged to arise from or relating to the Custodian's duties with respect to the
Fund hereunder or any other action or inaction of the Custodian or its
directors, officers, employees, agents, nominees or Sub-Custodians as to the
Fund, except such as may arise from the negligent action, omission or willful
misconduct of the Corporation, its Directors, officers, employees or agents. The
Custodian may, with respect to questions of law apply for and obtain the advice
and opinion of counsel to the Corporation at the expense of the Fund, or of its
own counsel at its own expense, and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with the advice or
opinion of counsel to the Corporation, and shall be similarly protected with
respect to anything done or omitted by it in good faith in conformity with
advice or opinion of its counsel, unless counsel to the Fund shall, within a
reasonable time after being notified of legal advice received by the Custodian,
have a differing interpretation of such question of law. The Custodian shall be
liable to the Corporation for any proximate loss or damage resulting from the
use of the Book-Entry System or any Depository arising by reason of any
negligence, misfeasance or misconduct on the part of the Custodian or any of its
employees, agents, nominees or Sub-Custodians but not for any special,
incidental, consequential, or punitive damages; provided, however, that nothing
contained herein shall preclude recovery by the Corporation, on behalf of the
Fund, of principal and of interest to the date of recovery on, Securities
incorrectly omitted from the Fund's account or penalties imposed on the
Corporation, in connection with the Fund, for any failures to deliver
Securities.
In any case in which one party hereto may be asked to indemnify the other
or hold the other harmless, the party from whom indemnification is sought (the
"Indemnifying Party") shall be advised of all pertinent facts concerning the
situation in question, and the party claiming a right to indemnification (the
"Indemnified Party") will use reasonable care to identify and notify the
Indemnifying Party promptly concerning any situation which presents or appears
to present a claim for indemnification against the Indemnifying Party. The
Indemnifying Party shall have the option to defend the Indemnified Party against
any claim which may be the subject of the indemnification, and in the event the
Indemnifying Party so elects, such defense shall be conducted by counsel chosen
by the Indemnifying Party and satisfactory to the Indemnified Party and the
Indemnifying Party will so notify the Indemnified Party and thereupon such
Indemnifying Party shall take over the complete defense of the claim and the
Indemnifying Party shall sustain no further legal or other expenses in such
situation for which indemnification has been sought under this paragraph, except
the expenses of any additional counsel retained by the Indemnified Party. In no
case shall any party claiming the right to indemnification confess any claim or
make any compromise in any case in which the other party has been asked to
indemnify such party (unless such confession or compromise is made with such
other party's prior written consent).
The obligations of the parties hereto under this paragraph shall survive
the termination of this Agreement.
2. Without limiting the generality of the foregoing, the Custodian, acting
in the capacity of Custodian hereunder, shall be under no obligation to inquire
into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased by or for
the account of the Fund, the legality of the purchase thereof, or the propriety
of the amount paid therefor;
(b) The legality of the sale of any Securities by or for the account
of the Fund, or the propriety of the amount for which the same are sold;
(c) The legality of the issue or sale of any shares of the Fund, or
the sufficiency of the amount to be received therefor;
(d) The legality of the redemption of any shares of the Fund, or the
propriety of the amount to be paid therefor;
(e) The legality of the declaration or payment of any dividend by the
Corporation in respect of shares of the Fund;
(f) The legality of any borrowing by the Corporation, on behalf of the
Fund, using Securities as collateral;
(g) The sufficiency of any deposit made pursuant to a Certificate
described in clause (ii) of paragraph 2(e) of Article IV hereof,
3. The Custodian shall not be liable for any money or collected funds in
U.S. dollars deposited in a Federal Reserve Bank in accordance with a
Certificate described in clause (ii) of paragraph 2(e) of Article IV hereof, nor
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 the Fund until the Custodian actually receives and
collects such money directly or by the final crediting of the account
representing the Fund's interest at the Book-Entry System or Depository.
4. The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount due to the Fund from the Dividend and
Transfer Agent of the Fund nor to take any action to effect payment or
distribution by the Dividend and Transfer Agent of the Fund of any amount paid
by the Custodian to the Dividend and Transfer Agent of the Fund in accordance
with this Agreement.
5. Income due or payable to the Fund with respect to Fund Assets will be
credited to the account of the Fund as follows:
(a) Dividends will be credited on the first business day following
payable date irrespective of collection.
(b) Interest on fixed rate municipal bonds and debt securities issued
or guaranteed as to principal and/or interest by the government of the United
States or agencies or instrumentalities thereof (excluding securities issued by
the Government National Mortgage Association) will be credited on payable date
irrespective of collection.
(c) Interest on fixed rate corporate debt securities will be credited
on the first business day following payable date irrespective of collection.
(d) Interest on variable and floating rate debt securities and debt
securities issued by the Government National Mortgage Association will be
credited upon the Custodian's receipt of funds.
(e) Proceeds from options will be credited upon the Custodian's
receipt of funds.
6. Notwithstanding paragraph 5 of this Article IX, 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 (i) it
shall be directed to take such action by a Certificate and (ii) it shall be
assured to its satisfaction of reimbursement of its costs and expenses in
connection with any such action or, at the Custodian's option, prepayment.
7. The Custodian may appoint one or more financial or banking institutions,
as Depository or Depositories or as Sub-Custodian or Sub-Custodians, including,
but not limited to, banking institutions located in foreign countries, of
Securities and monies at any time owned by the Fund, upon terms and conditions
approved in a Certificate. Current Depository(s) and Sub-Custodian(s) are noted
in Appendix B. The Custodian shall not be relieved of any obligation or
liability under this Agreement in connection with the appointment or activities
of such Depositories or Sub-Custodians.
8. 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 account of
the Fund are such as properly may be held by the Fund under the provisions of
the Articles of Incorporation and the Corporation's By-Laws.
9. The Custodian shall treat all records and other information relating to
the Corporation, the Fund and the Fund Assets as confidential and shall not
disclose any such records or information to any other person unless (a) the
Corporation shall have consented thereto in writing or (b) such disclosure is
compelled by law.
10. The Custodian shall be entitled to receive and the Corporation agrees
to pay to the Custodian, for the Fund's account from Fund Assets or from the
Funds; Advisor, such compensation as shall be determined pursuant to Appendix C
attached hereto, or as shall be determined pursuant to amendments to such
Appendix approved by the Custodian and the Corporation, on behalf of the Fund.
The Custodian shall be entitled to charge against any money held by it for the
account of the Fund the amount of any loss, damage, liability or expense,
including counsel fees, for which it shall be entitled to reimbursement under
the provisions of this Agreement as determined by agreement of the Custodian and
the Corporation or by the final order of any court or arbitrator having
jurisdiction and as to which all rights of appeal shall have expired. The
expenses which the Custodian may charge against the account of the Fund include,
but are not limited to, the expenses of Sub-Custodians incurred in settling
transactions involving the purchase and sale of Securities of the Fund.
11. The Custodian shall be entitled to rely upon any Certificate. The
Custodian shall be entitled to rely upon any Oral Instructions and any Written
Instructions actually received by the Custodian pursuant to Article IV or V
hereof. The Corporation agrees to forward to the Custodian Written Instructions
from Authorized Persons confirming Oral Instructions in such manner so that such
Written Instructions are received by the Custodian, whether by hand delivery,
telex or otherwise, on the first business day following the day on which such
Oral Instructions are given to the Custodian. The Corporation 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 Corporation. The Corporation agrees that
the Custodian shall incur no liability to the Fund in acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions.
12. The Custodian will (a) set up and maintain proper books of account and
complete records of all transactions in the accounts maintained by the Custodian
hereunder in such manner as will meet the obligations of the Fund under the
Investment Company Act of 1940, with particular attention to Section 31 thereof
and Rules 31 a-l and 31 a-2 thereunder, and (b) preserve for the periods
prescribed by applicable Federal statute or regulation all records required to
be so preserved. The books and records of the Custodian shall be open to
inspection and audit at reasonable times and with prior notice by Officers and
auditors employed by the Corporation.
13. The Custodian and its Sub-Custodians shall promptly send to the
Corporation, for the account of the Fund, any report received on the systems of
internal accounting control of the Book-Entry System or the Depository and with
such reports on their own systems of internal accounting control as the
Corporation may reasonably request from time to time.
14. The Custodian performs only the services of a custodian and shall have
no responsibility for the management, investment or reinvestment of the
Securities from time to time owned by the Fund. The Custodian is not a selling
agent for shares of the Fund and performance of its duties as a custodial agent
shall not be deemed to be a recommendation to the Custodian's depositors or
others of shares of the Fund as an investment.
ARTICLE X
TERMINATION
-----------
1. Either of the parties hereto may terminate this Agreement for any reason
by giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving of such notice. If such notice is given by the Corporation, on behalf of
the Fund, it shall be accompanied by a copy of a resolution of the Board of
Directors of the Corporation, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement and designating a successor
custodian or custodians, each of which shall be a bank or trust company having
not less than $2,000,000 aggregate capital, surplus and undivided profits. In
the event such notice is given by the Custodian, the Corporation shall, on or
before the termination date, deliver to the Custodian a copy of a resolution of
its Board of Directors, certified by the Secretary, designating a successor
custodian or custodians to act on behalf of the Fund. In the absence of such
designation by the Corporation, the Custodian may designate a successor
custodian which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus, and undivided profits. Upon the date set forth in
such notice this Agreement shall terminate, and the Custodian, provided that it
has received a notice of acceptance by the successor custodian, shall deliver,
on that date, directly to the successor custodian all Securities and monies then
owned by the Fund and held by it as Custodian. Upon termination of this
Agreement, the Corporation shall pay to the Custodian on behalf of the Fund such
compensation as may be due as of the date of such termination. The Corporation
agrees on behalf of the Fund that the Custodian shall be reimbursed for its
reasonable costs in connection with the termination of this Agreement.
2. If a successor custodian is not designated by the Corporation, on behalf
of the Fund, or by the Custodian in accordance with the preceding paragraph, or
the designated successor cannot or will not serve, the Corporation shall upon
the delivery by the Custodian to the Corporation of all Securities (other than
Securities held in the Book-Entry System which cannot be delivered to the
Corporation) and monies then owned by the Fund, other than monies deposited with
a Federal Reserve Bank pursuant to a Certificate described in clause (ii) of
paragraph 2(e) of Article IV, be deemed to be the custodian for the Fund, 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 Corporation to hold
such Securities hereunder in accordance with this Agreement.
ARTICLE XI
MISCELLANEOUS
-------------
1. Appendix A sets forth the names and the signatures of all Authorized
Persons. The Corporation agrees to furnish to the Custodian, on behalf of the
Fund, a new Appendix A in form similar to the attached Appendix A, if any
present Authorized Person ceases to be an Authorized Person or if any other or
additional Authorized Persons are elected or appointed. Until such new Appendix
A 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 Appendix A.
2. No recourse under any obligation of this Agreement or for any claim
based thereon shall be had against any organizer, shareholder, Officer,
Director, past, present or future as such, of the Corporation or of any
predecessor or successor, either directly or through the Corporation or any such
predecessor or successor, whether by virtue of any constitution, statute or rule
of law or equity, or be the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that this Agreement and the
obligations thereunder are enforceable solely against Fund Assets, and that no
such personal liability whatever shall attach to, or is or shall be incurred by,
the organizers, shareholders, Officers, Directors of the Corporation or of any
predecessor or successor, or any of them as such, because of the obligations
contained in this Agreement or implied therefrom and that any and all such
liability is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
3. The obligations set forth in this Agreement as having been made by the
Corporation have been made by the Directors of the Corporation, acting as such
Directors for and on behalf of the Fund, pursuant to the authority vested in
them under the laws of the State of Maryland, the Articles of Incorporation and
the By-Laws of the Corporation. This Agreement has been executed by Officers of
the Corporation as officers, and not individually, and the obligations contained
herein are not binding upon any of the Directors, Officers, agents or holders of
shares, personally, but bind only the Corporation and then only to the extent of
Fund Assets.
4. Such provisions of the Prospectus of the Fund and any other documents
(including advertising material) specifically mentioning the Custodian (other
than merely by name and address) shall be reviewed with the Custodian by the
Corporation.
5. 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 Star
Bank Center, 425 Walnut Street, Mail Location 6118, Cincinnati, Ohio 45202,
attention Custody Services Department, or at such other place as the Custodian
may from time to time designate in writing.
6. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Corporation shall be sufficiently given when
delivered to the Corporation or on the second business day following the time
such notice is deposited in the U.S. mail postage prepaid and addressed to the
Corporation at its office at 101 West Wisconsin Avenue, Pewaukee, WI 53072, or
at such other place as the Corporation may from time to time designate in
writing.
7. This Agreement with the exception of Appendices A & B may not be amended
or modified in any manner except by a written agreement executed by both parties
with the same formality as this Agreement, and authorized and approved by a
resolution of the Board of Directors of the Corporation.
8. 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 Corporation or by the Custodian,
and no attempted assignment by the Corporation or the Custodian shall be
effective without the written consent of the other party hereto.
9. This Agreement shall be construed in accordance with the laws of the
State of Ohio.
10. 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, thereunto duly authorized as of the day
and year first above written.
ATTEST: Frontier Funds, Inc.
Equity Portfolio
/s/ William T. Duero By: /s/James R. Fay, Pres.
- ---------------------------------- -------------------------------------
ATTEST: Star Bank, N.A.
/s/ Joseph D. Fanning By:/s/ Lynnette C. Gibson, Senior
- ---------------------------------- Trust Officer
APPENDIX A
OFFICERS
--------
AUTHORIZED PERSONS SPECIMEN SIGNATURES
------------------ -------------------
President: James R. Fay /s/ James R. Fay
---------------------- --------------------------
Secretary: Amy L. Siesennop /s/ Amy L. Siesennop
---------------------- --------------------------
Treasurer: ---------------------- --------------------------
Controller: ---------------------- --------------------------
Adviser Employees:*<F11>---------------- --------------------------
*<F11>---------------- --------------------------
*<F11>---------------- --------------------------
*<F11>Authority restricted; does not include: (i) authority to sign checks on
Fund accounts or make other withdrawals or distributions of Fund monies or
(ii) such other authority as may be withheld or limited by a Certificate or
Written Instructions signed by two Officers of the Trust and delivered to
the Custodian.
APPENDIX B
The following Depository(s) and Sub-Custodian(s) are employed currently by Star
Bank, N.A. for securities processing and control . . .
The Depository Trust Company (New York)
7 Hanover Square
New York, NY 10004
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
16 Wall Street
New York, NY 10005
CUSTODY COMPENSATION SCHEDULE
EXHIBIT C
STAR BANK, N.A. AS CUSTODIAN, WILL RECEIVE MONTHLY COMPENSATION FOR SERVICES
ACCORDING TO THE TERMS OF THE FOLLOWING SCHEDULE:
1. PORTFOLIO TRANSACTION FEES:
a) For each repurchase agreement transaction $ 7.00
b) For each portfolio transaction processed through 11.00
DTC or Federal Reserve
c) For each portfolio transaction processed through 25.00
our New York custodian
d) For each GNMA/Amortized Security Purchase 40.00
e) For each GNMA Print/Int Paydowns, GNMA Sales 8.00
f) For each option/future contract written, exercised 25.00
or expired
g) For Each Disbursement 5.00
(Fund expenses only)
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange.
2) MONTHLY BASE FEE - PER FUND $400
3) OUT-OF-POCKET EXPENSES
The only out-of-pocket expenses charged to your account will
be shipping fees or transfer fees.
EARNINGS CREDITS
On a monthly basis any excess earnings credits for uninvested custody
balances will be applied against transaction fees (as referenced in item #l
above).
Earnings credits are based on the floating 3-month average T-bill rate on
the investable balance.
All custody compensation is payable monthly
This fee schedule will be guaranteed for a period of two years from the
inception date.
CASH MANAGEMENT
COMPENSATION SCHEDULE
EXHIBIT C
SERVICES UNIT COST
- -------- ---------
Account Maintenance $8.50
Deposits .25
Deposited Items .075
Checks Paid .012
Balance Reporting 50.00
ACH 50
Deposited Items
Returned 2.50
NSF 17.50
Data Transmission 110.00
*<F12>Lockbox Maintenance 37.00
Lockbox items Processed
(with copy of check) .246
Lockbox Items Processed
(without copy of check) .186
Wires - Outgoing (Repetitive) 10.00
- Incoming (with notification) 8.00
Stop Payments 17.50
**<F13>Uncollected Charge Star Bank Prime
Rate as of first of
month plus 2%
*<F12>With the use of lockbox, the collected balance in the demand doposit
account will be significantly increased and therefore earnings to offset
services will be maximized.
**<F13>Fees for uncollected balances are figured on the monthly average.
EARNINGS CREDITS:
Earnings credits are based on the floating 3-month average T-bill rate on the
investable balance.
We carry earnings credits forward and you have the option of paying your cash
management fees monthly or annually.
This fee schedule will remain in effect for a period of two years from the
inception date.
EXHIBIT (h)(1)
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
FRONTIER FUNDS, INC.
AND
AMERICAN DATA SERVICES, INC.
INDEX
-----
1. TERMS OF APPOINTMENT; DUTIES OF ADS..................................... 3
2. FEES AND EXPENSES....................................................... 4
3. REPRESENTATIONS AND WARRANTIES OF ADS................................... 4
4. REPRESENTATIONS AND WARRANTIES OF THE FUND ............................. 5
5. INDEMNIFICATION ........................................................ 5
6. COVENANTS OF THE FUND AND ADS........................................... 6
7. TERMINATION OF AGREEMENT................................................ 6
8. ASSIGNMENT.............................................................. 7
9. AMENDMENT............................................................... 7
10. NEW YORK LAWS TO APPLY................................................. 7
11. MERGER OF AGREEMENT.................................................... 7
12. NOTICES................................................................ 7
FEE SCHEDULE............................................................... 8
- ------------
(A) ACCOUNT MAINTENANCE CHARGE: ........................................... 8
(B) TRANSACTION FEES:...................................................... 8
(C) 24 HOUR AUTOMATED VOICE RESPONSE ...................................... 9
(D) FUND/SERV.............................................................. 9
FEE INCREASES ........................................................... 9
-------------
(E) IRA PLAN FEES:......................................................... 9
(F) EXPENSES:.............................................................. 10
(G) SPECIAL REPORTS........................................................ 10
(H) SERVICE DEPOSIT........................................................ 10
(I) CONVERSION CHARGE: (EXISTING FUNDS ONLY, NEW FUNDS PLEASE IGNORE)...... 10
SCHEDULE A ................................................................ 11
- ----------
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
AGREEMENT made the 17th day of March 1999, by and between Frontier Funds,
Inc. (the "Fund"), and American Data Services, Inc., a New York corporation
having its principal office and place of business at the Hauppauge Corporate
Center, 150 Motor Parkway, Suite 109, Hauppauge, New York 11788 ("ADS").
WHEREAS, the Fund desires to appoint ADS as its transfer agent, dividend
disbursing agent and agent in connection with certain other activities, and ADS
desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. TERMS OF APPOINTMENT; DUTIES OF ADS
1.01 Subject to the terms and conditions set forth in this agreement, the
Fund hereby employs and appoints ADS to act as, and ADS agrees to act as its
transfer agent for the Fund's authorized and issued shares of its common stock,
("Shares"), dividend disbursing agent and agent in connection with any
accumulation, open-account or similar plans provided to the shareholders of the
fund ("Shareholders") set out in the currently effective Prospectus and
statement of additional information ("Prospectus") of the Fund.
1.02 ADS agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and ADS, ADS shall:
(i) receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation therefore
to the Custodian of the Fund authorized by the Board of Directors
of the Fund (the "Custodian");
(ii) pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder
account;
(iii) receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation therefore to
the Custodian;
(iv) at the appropriate time as and when it receives monies paid to it
by the Custodian with respect to any redemption, pay over or
cause to be paid over in the appropriate manner such monies as
instructed by the redeeming Shareholders;
(v) effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
(vi) prepare and transmit payments for dividends and distributions
declared by the Fund;
(vii) maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and
(viii) record the issuance of shares of the Fund and maintain pursuant
to Rule 1 7Ad- 1 0(e) under the Securities Exchange Act of 1934 a
record of the total number of shares of the Fund which are
authorized, based upon data provided to it by the Fund, and
issued and outstanding. ADS shall also provide the Fund on a
regular basis with the total number of shares which are
authorized and issued and outstanding and shall have no
obligation, when recording the issuance of shares, to monitor the
issuance of such shares or to take cognizance of any laws
relating to the issue or sale of such shares, which functions
shall be the sole responsibility of the Fund.
(b) In addition to and not in lieu of the services set forth in the above
paragraph (a), ADS shall:
(i) perform all of the customary services of a transfer agent,
dividend disbursing agent, including but not limited to:
maintaining all Shareholder accounts, preparing Shareholder
meeting lists, mailing proxies, receiving and tabulating proxies,
mailing Shareholder reports and Prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident
alien accounts, preparing and filing U.S. Treasury Department
Forms 1099 and other appropriate forms required with respect to
dividends and distributions by federal authorities for all
Shareholders, preparing and mailing confirmation forms and
statements of account to Shareholders for all purchases
redemption's of Shares and other confirmable transactions in
Shareholder accounts, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information;
and
(ii) provide a system and reports which will enable the Fund to
monitor the total number of Shares sold in each State.
(c) In addition, the Fund shall
(i) identify to ADS in writing those transactions and shares to be
treated as exempt from blue sky reporting for each State and
(ii) verify the establishment of such transactions for each state on
the system prior to activation and thereafter monitor the daily
activity for each State as provided by ADS. The responsibility of
ADS for the Fund's blue sky State registration status is solely
limited to the initial establishment of transactions subject to
blue sky compliance by the Fund and the reporting of such
transactions to the Fund as provided above.
Procedures applicable to certain of these services may be established from
time to time by agreement between the Fund and ADS.
2. FEES AND EXPENSES
2.01 For performance by ADS pursuant to this Agreement, the Fund agrees to
pay ADS an annual maintenance fee for each Shareholder account and transaction
fees for each portfolio or class of shares serviced under this Agreement, as set
out in the fee schedule attached hereto. Such fees and out-of pocket expenses
and advances identified under Section 2.02 below may be changed from time to
time subject to mutual written agreement between the Fund and ADS.
2.02 In addition to the fee paid under Section 2.01 above, the Fund agrees
to reimburse ADS for out-of-pocket expenses or advances incurred by ADS for the
items set out in the fee schedule attached hereto. In addition, any other
expenses incurred by ADS at the request or with the consent of the Fund, will be
reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses within five
days following the receipt of the respective billing notice. Postage for mailing
of dividends, proxies, Fund reports and other mailings to all shareholder
accounts shall be advanced to ADS by the Fund at least seven (7) days prior to
the mailing date of such materials.
3. REPRESENTATIONS AND WARRANTIES OF ADS
ADS represents and warrants to the Fund that:
3.01 It is empowered under applicable laws and by its charter and by-laws
to enter into and perforrn this Agreement.
3.02 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.03 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
3.04 ADS is duly registered as a transfer agent under the Securities
Exchange Act of 1934 and shall continue to be registered throughout the
remainder of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to ADS that:
4.01 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.02 All proceedings required by said Articles of Incorporation and By-Laws
have been taken to authorize it to enter into and perform this Agreement.
4.03 It is an open-end management investment company registered under the
Investment Company Act of 1940 ("1940 Act").
4.04 A registration statement under the Securities Act of 1933 is currently
or will become effective and will remain effective, and appropriate state
securities law filings as required, have been or will be made and will continue
to be made, with respect to all Shares of the Fund being offered for sale.
5. INDEMNIFICATION
5.01 ADS shall not be responsible for, and the Fund shall indemnify and
hold ADS harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable
to:
(a) All actions of ADS or its agents or subcontractors required to be taken
pursuant to this Agreement, provided that such actions are taken in good
faith and without gross negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack good faith, gross
negligence or willful misconduct or which arise out of the breach of any
representation or warranty of the Fund hereunder.
(c) The reliance on or use by ADS or its agents or subcontractors of
information, records and documents which (i) are received by ADS or its
agents or subcontractors and furnished to it by or on behalf of the Fund,
and (ii) have been prepared and/or maintained by the Fund or any other
person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by ADS or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in
such state.
5.02 ADS shall indemnify and hold the Fund harmless from and against any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to any action or failure or omission to
act by ADS as a result of ADS's lack of good faith, gross negligence or willful
misconduct.
5.03 At any time ADS may apply to any officer of the Fund for instructions,
and may consult with legal counsel with respect to any matter arising in
connection with the services to be performed by ADS under this Agreement, and
ADS and its agents or subcontractors shall not be liable and shall be
indemnified by the Fund for any action taken or omitted by it in reliance upon
such instructions or upon the opinion of such counsel. ADS, its agents and
subcontractors shall be protected and indemnified in acting upon any paper or
document furnished by or on behalf of the Fund, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided ADS or its agents
or subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. ADS, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the of ficers of the Fund, and
the proper countersignature of any former transfer agent or registrar, or of a
co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any act or
failure to act hereunder.
5.06 In order that the indemnification provisions contained in this Article
5 shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party of seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6. COVENANTS OF THE FUND AND ADS
6.01 The Fund shall promptly furnish to ADS a certified copy of the
resolution of the Board of Directors of the Fund authorizing the appointment of
ADS and the execution and delivery of this Agreement.
6.02 ADS hereby agrees to establish and maintain facilities and procedures
reasonably acceptable to the Fund for safekeeping of stock certificates, check
forms and facsimile signature imprinting devices, if any; and for the
preparation or use, and for keeping account of, such certificates, forms and
devices.
6.03 ADS shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act and the Rules thereunder, ADS agrees that
all such records prepared or maintained by ADS relating to the services to be
performed by ADS hereunder are the property of the Fund and will be preserved,
maintained and made available in accordance with such Section and Rules, and
will be surrendered promptly to the Fund on and in accordance with its request.
6.04 ADS and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person, except
as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, ADS will endeavor to notify the Fund and to
secure instructions from an authorized of ficer of the Fund as to such
inspection. ADS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person, and shall
promptly notify the Fund of any unusual request to inspect or copy the
shareholder records of the Fund or the receipt of any other unusual request to
inspect, copy or produce the records of the Fund.
7. TERMINATION OF AGREEMENT
7.01 This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement upon ninety
(90) days prior written notice.
7.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, ADS reserves the right to charge for any other
reasonable expenses associated with such termination.
8. ASSIGNMENT
8.01 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the written consent of the other party.
8.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
9. AMENDMENT
9.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Directors of the Fund.
10. NEW YORK LAWS TO APPLY
10.01 The provisions of this Agreement shall be construed and interpreted
in accordance with the laws of the State of New York as at the time in effect
and the applicable provisions of the 1940 Act. To the extent that the applicable
law of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
11. MERGER OF AGREEMENT
11.01 This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
12. NOTICES.
All notices and other communications hereunder shall be in writing, shall
be deemed to have been given when received or when sent by telex or facsimile,
and shall be given to the following addresses (or such other addresses as to
which notice is given):
To the Fund: To the Administrator:
James R. Fay Michael Miola
President President
Frontier Funds, Inc. American Data Services, Inc.
101 W. Wisconsin Avenue 150 Motor Parkway, Suite 109
Pewaukee, WI 53072 Hauppauge, NY 11788
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
FRONTIER FUNDS, INC. AMERICAN DATA SERVICES, INC.
/s/ James R. Fay /s/ Michael Miola
By:------------------------------ By:------------------------------
James R. Fay, President Michael Miola, President
FEE SCHEDULE
For the services rendered by ADS in its capacity as transfer agent, the
Fund shall pay ADS, within ten (10) days after receipt of an invoice from ADS at
the beginning of each month, a fee, calculated as a combination of account
maintenance charges plus transaction charges as follows:
(a) ACCOUNT MAINTENANCE CHARGE:
The greater of (No prorating for partial months):
(l) Minimum maintenance charge per portfolio/class $1,417.98/ month
OR,
(2) Based upon the total of all open/closed accounts (1)<F14> per portfolio/
class upon the following annual rates billed monthly):
FUND TYPE:
- ----------
Dividend calculated and
paid annually, semi-annually, quarterly...........$ 9.00 per account
Dividend calculated and paid monthly..............$10.50 per account
Dividend accrued daily and paid monthly ..........$14.00 per account
Closed accounts ......$ 2.00 per account (2)<F15>
(1)<F14> All accounts closed during a month will be considered as open accounts
for billing purposes in the month the account is closed.
(2)<F15> Closed accounts remain on the shareholder files until all 1099's and
5498's have been distributed to the shareholders and send via mag-
media to the IRS.
PLUS,
TRANSACTION FEES:
Trade Entry (purchase/liquidation) and
maintenance transactions ................................ $ 1.50 each
New account set-up ........................................ $ 3.00 each
Customerservice calls ..................................... $ 1.25 each
Correspondence/ information requests ...................... $ 1.75 each (2)<F15>
Check preparation ......................................... $ .50 each
Liquidation's paid by wire transfer ....................... $ 3.00 each
ACH charge ................................................ $ .45 each
SWP ....................................................... $ 1.00 each
(c) 24 HOUR AUTOMATED VOICERESPONSE:
Initial set-up (one-time) charge per portfolio - $750.00
Monthly maintenance charge per portfolio - $50.00
All calls processed through automated voice response will be billed as a
customer service call listed above.
(D) FUND/SERV
All portfolios processed through Fund/SERV will be subject to an additional
monthly charge of $250.00
All transactions processed through Fund/SERV will be billed at the transaction
fee rates listed in (b) above.
FEE INCREASES
-------------
On each annual anniversary date of this Agreement, the fees enumerated
above will be increased by the change in the Consumer Price Index for the
Northeast region (CPI) for the twelve month period ending with the month
preceding such annual anniversary date.
(e) IRA PLAN FEES:
The following fees will be charged directly to the shareholder account:
Annual maintenance fee ............................ $15.00/account *<F16>
Incoming transfer from prior custodian ............ $12.00
Distribution to a participant ..................... $15.00
Refund of excess contribution ..................... $15.00
Transfer to successor custodian ................... $15.00
Automatic periodic distributions .................. $15.00/year per account
*<F16> Includes $8.00 Bank Custody Fee.
(F) EXPENSES:
The Fund shall reimburse ADS for any out-of-pocket expenses, exclusive of
salaries, advanced by ADS in connection with but not limited to the costs for
printing fund documents, (i.e. printing of confirmation forms, shareholder
statements, redemption/dividend checks, envelopes, financial statements, proxy
statement, fund Prospectus, etc.) proxy solicitation and mailing expenses,
travel requested by the Fund, telephone toll charges, 800line costs and fees,
facsimile and data transmission costs, stationery and supplies (related to Fund
records), record storage, postage (plus a $0.085 service charge for all
mailings), pro-rata portion of annual SAS-70 audit letter, telex and courier
charges incurred in connection with the perforrnance of its duties hereunder.
ADS shall provide the Fund with a monthly invoice of such expenses and the Fund
shall reimburse ADS within fifteen (15) days after receipt thereof.
(G) SPECIAL REPORTS:
All reports and/or analyses requested by the Fund that are not included in
the fee schedule, shall be subject to an additional charge, agreed upon in
advance, based upon the following rates:
Labor: Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $45.00/hr.
(H) SERVICE DEPOSIT:
The Fund will remit to ADS upon execution of this Agreement a security
deposit of equal to one ( l) month's shareholder service fee. The service
deposit computation will be based either on the total number of shareholder
accounts (open and closed) of each portfolio to be serviced or the minimum fee,
whichever is greater, as of the execution date of this Agreement. The Fund will
have the option to have the security deposit applied to the last month's service
fee, or applied to any new contract between the Fund and ADS.
However, if the Fund elects or is forced to terminate this Agreement for
any reason what-so-ever other than a material breach by ADS (including, but not
limited to, the voluntary or involuntary termination of the Fund, liquidation of
the Fund's assets, the sale or merger of the Fund or it's assets to any
successor entity) prior to the termination date of this Agreement as specified
in Paragraph 7 of this Agreement, the Fund will forfeit the Security Deposit
paid to ADS upon execution of this Agreement
(I) CONVERSION CHARGE: (EXISTING FUNDS ONLY, NEW FUNDS PLEASE IGNORE)
There will be a charge to convert the Fund's shareholder accounting records
on to the ADS stock transfer system. In addition, ADS will be reimbursed for all
out-of-pocket expenses, enumerated in paragraph (b) above and data media
conversion costs, incurred during the conversion process.
The conversion charge will be estimated and agreed upon in advance by the
Fund and ADS. The charge will be based upon the quantity of records to be
converted and the condition of the previous service agents records.
SCHEDULE A
----------
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT
EQUITY PORTFOLIO
EXHIBIT (h)(2)
FREEDOM INVESTORS CORP.
101 WEST WISCONSIN AVENUE
PEWAUKEE, WISCONSIN 53072-3433
414-691-1196
SELECTED DEALERS AGREEMENT
Freedom Investors Corp. ("Freedom") as the Distributor of the shares of
each series (each "Portfolio") of Frontier Funds, Inc. (the "Fund"), understands
that you are a member in good standing of the National Association of Securities
Dealers, Inc. (your signature below shall constitute a representation of such
membership in good standing) and, on the basis of such understanding, invites
you to become a Selected Dealer to distribute any or all shares of each
Portfolio of the Fund in those states in which you and the shares are currently
qualified for sale, on the following terms:
1. You and ourselves agree to abide by the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. ("NASD") and all other federal
and state rules and regulations that are now or may become applicable to
transactions hereunder. Your expulsion or suspension from the NASD will
automatically terminate this Agreement without notice. Either of us may
terminate this Agreement at any time upon notice to the other.
2. Orders for shares received from you and accepted by us will be at the
public offering price applicable to each order, as established by the then
effective prospectus of the Fund and Portfolio. The procedure relating to the
handling of orders shall be subject to instructions which we will forward from
time to time to all Selected Dealers. All orders are subject to acceptance by us
at 101 West Wisconsin Avenue, Pewaukee, Wisconsin 53072-3433, and we reserve the
right in our sole discretion to reject any order. we also reserve the right to
establish minimum orders for individual purchasers as well as for Selected
Dealers.
3. Selected Dealers will be allowed the concessions from the public
offering price as set forth in the then current prospectus of the Fund and
Portfolio, or as may be determined by Freedom. The sales charge and dealer
concession may be changed at our discretion and we will advise you of any such
change.
4. You agree that your transactions in shares of the Fund will be limited
to the purchase of shares from us for resale to your customers at the public
offering price then in effect or for your bona fide investment and to
repurchases which are made in accordance with the procedures set forth in the
then current prospectus of the Fund and Portfolio or in instructions which we
forward to the Selected Dealers.
5. Except for sales pursuant to plans established by the Fund with an agent
bank and providing for the periodic investment of new monies, orders will not be
accepted for less than the number of shares or dollar amount set forth in the
then current prospectus of the Fund and Portfolio.
6. You agree that you will not withhold placing customers' orders so as to
profit yourself as a result of such withholding.
7. You agree to sell shares only to your customers at the applicable public
offering price or to the Fund or us as Distributor for the Fund at net asset
value, in each case determined as set forth in the then current prospectus of
the Fund and Portfolio.
8. Settlement shall be made within five business days after our acceptance
of the order. If payment is not so received or made, we reserve the right
forthwith to cancel the sale, or, at our option, to sell the shares at the then
prevailing net asset value in which latter case you agree to be responsible for
any loss resulting to any Portfolio of the Fund or to us from your failure to
make payments as aforesaid,, including loss of profit suffered by us and/or the
Fund.
9. If shares sold to you under the terms of this Agreement are redeemed by
the Fund or repurchased for the account of the Fund or are tendered to the Fund
for redemption or repurchase within seven business days after the date of our
confirmation to you of your original purchase order therefor, you agree to pay
forthwith to us the full amount of the concession allowed to you on the original
sale and we agree to pay such amount to the Fund when received by us. We also
agree to pay to the Fund the amount of our share of the sales charge on the
original sale of such shares.
10. If any shares are repurchased from you by the Fund, or by us for the
account of the Fund, such shares shall be tendered in good order within ten
business days. If shares are not tendered within such time period, the right is
reserved to cancel, at any subsequent time, the repurchase order, or, at our
option, to reacquire such number of shares at the net asset value next computed,
in which latter case you will agree to be responsible for any loss resulting
from your failure to deliver such shares.
11. All sales will be subject to receipt of shares by us from the Fund. We
reserve the right in our discretion without notice to you to suspend sales or
withdraw any offering of shares entirely or to change the offering prices as
provided in the Fund's prospectus or, upon notice, to amend or cancel this
Agreement, which shall be construed in accordance with the laws of the State of
Wisconsin. You agree that any order to purchase shares of any Portfolio of the
Fund placed by you after notice of any such amendment has been sent to you shall
constitute your agreement to any such amendment.
12. No person is authorized to make any representation concerning the Fund
or the shares of any Portfolio except those contained in the Fund's effective
prospectus and any such information as may be officially designated as
information supplemental to the prospectus. In purchasing shares from you shall
rely solely on the representations contained in the effective prospectus and
supplemental information above mentioned.
13. We will supply to Selected Dealers additional copies of the then
effective prospectus in reasonable quantities upon request. All expenses
incurred in connection with your activities under this Agreement shall be borne
by you.
14. In no transaction shall you have any authority whatever to act as agent
of the Fund or of us or of any other Selected Dealer, and nothing in this
Agreement shall constitute either of us the agent of the other or shall
constitute you or the Fund the agent of the other. Except as otherwise indicated
herein, all transactions in these shares between you and us are as principal,
each for his own account. This Agreement shall not be assignable by you.
15. Any notice to you shall be duly given if mailed or telegraphed to you
at your address as registered from time to time with the NASD. Any notice to
Freedom shall be sent to 101 West Wisconsin Avenue, Pewaukee, Wisconsin 53072.
16. This Agreement constitutes the entire agreement between Freedom and the
undersigned Selected Dealer and supersedes all prior oral or written agreements
between the parties hereto. This Agreement may be amended by addendum thereto
which need not be executed by the Selected Dealer.
Such addendum may be used, for example, to add additional Portfolios to the
Fund, and shall be effective as to each Selected Dealer upon making a trade in
the shares of any Portfolio of the Fund.
Sincerely,
FREEDOM INVESTORS CORP.
BY------------------------------
The undersigned accepts your invitation to become a Selected Dealer and agrees
to abide by the foregoing terms and conditions.
Signed --------------, 19---
----------------------------------
(Selected Dealer)
BY--------------------------------
(Authorized Signature)
----------------------------------
(Print Name and Title)
PLEASE PRINT OR TYPE:
----------------------------------
Selected Dealer
----------------------------------
Address
----------------------------------
City State Zip
----------------------------------
Area Code Telephone Number
EXHIBIT (h)(3)
ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN
FRONTIER FUNDS, INC.
AND
AMERICAN DATA SERVICES, INC.
INDEX
- -----
1. DUTIES OF THE ADMINISTRATOR.......................................... 3
2. COMPENSATION OF THE ADMINISTRATOR.................................... 4
3. RESPONSIBILITY AND INDEMNIFICATION................................... 4
4. REPORTS.............................................................. 5
5. ACTIVITIES OF THE ADMINISTRATOR...................................... 5
6. RECORDS.............................................................. 5
7. CONFIDENTIALITY...................................................... 5
8. DURATION AND TERMINATION OF THE AGREEMENT............................ 5
9. ASSIGNMENT........................................................... 5
10. NEW YORK LAWS TO APPLY.............................................. 6
11. AMENDMENTS TO THIS AGREEMENT........................................ 6
12. MERGER OF AGREEMENT ................................................ 6
13. NOTICES............................................................. 6
SCHEDULE A.............................................................. 7
- ----------
(A) ADMINISTRATIVE SERVICE FEE: ........................................ 7
FEE INCREASES.......................................................... 7
-------------
(B) EXPENSES............................................................ 7
(c) STATE REGISTRATION (BLUE SKY) SURCHARGE ............................ 8
(D) SPECIAL REPORTS..................................................... 8
(E) SERVICE DEPOSIT .................................................... 8
SCHEDULE B.............................................................. 9
- ----------
ADMINISTRATIVE SERVICES AGREEMENT
----------------------------------
AGREEMENT made the 17th day of March 1999, by and between Frontier Funds,
Inc. (the "Fund"), and American Data Services, Inc., a New York corporation
having its principal office and place of business at the Hauppauge Corporate
Center, 150 Motor Parkway, Suite 109, Hauppauge, New York 11788 (the
"Administrator").
BACKGROUND
WHEREAS, the Fund is a diversified open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the " 1940 Act"); and
WHEREAS, the Administrator is a corporation experienced in providing
administrative services to mutual funds and possesses facilities sufficient to
provide such services; and
WHEREAS, the Fund desires to avail itself of the experience, assistance and
facilities of the Administrator and to have the Administrator perform for the
Fund certain services appropriate to the operations of the Fund and the
Administrator is willing to furnish such services in accordance with the terms
hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the Fund and the Administrator hereby agree to the
following:
1. DUTIES OF THE ADMINISTRATOR.
The Administrator will provide the Fund with the necessary office space,
communication facilities and personnel to perform the following services for the
Fund:
(a) Monitor all regulatory (1940 Act and IRS) and prospectus restrictions
for compliance;
(b) Prepare and coordinate the printing of semi-annual and annual financial
statements;
(c) Prepare selected management reports for performance and compliance
analyses as agreed upon by the Fund and Administrator from time to
time;
(d) Prepare selected financial data required for directors' meetings as
agreed upon by the Fund and the Administrator from time to time and
coordinate directors meeting agendas with outside legal counsel to the
Fund;
(e) Determine income and capital gains available for distribution and
calculate distributions required to meet regulatory, income, and
excise tax requirements, to be reviewed by the Fund's independent
public accountants;
(f) Prepare the Fund's federal, state, and local tax returns to be reviewed
by the Fund's independent public accountants;
(g) Prepare and maintain the Fund's operating expense budget to determine
proper expense accruals to be charged to the Fund in order to
calculate it's daily net asset value;
(h) 1940 Act filings -
In conjunction with the Fund's outside legal counsel the Administrator
will:
(i) Prepare the Fund's Form N-SAR reports;
(ii) Update all financial sections of the Fund's Statement of
Additional Information and coordinate its completion;
(iii) Update all financial sections of the Fund's prospectus and
coordinate its completion;
(iv) Update all financial sections of the Fund's proxy statement and
coordinate its completion;
(v) Prepare an annual update to Fund's 24f-2 filing (if
applicable);
(i) Monitor services provided by the Fund's custodian bank as well as any
other service providers to the Fund;
(j) Provide appropriate financial schedules (as requested by the Fund's
independent public accountants or SEC examiners), coordinate the
Fund's annual or SEC audit, and provide office facilities as may be
required;
(k) Attend management and board of directors meetings as requested;
(l) The preparation and filing (filing fee to be paid by the Fund) of
applications and reports as necessary to register or maintain the
Funds registration under the securities or "blue sky" laws of the
various states selected by the Fund or its Distributor.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
2. COMPENSATION OF THE ADMINISTRATOR.
In consideration of the services to be performed by the Administrator as
set forth herein for each portfolio listed on Schedule B, the Administrator
shall be entitled to receive compensation and reimbursement for all reasonable
out-of-pocket expenses. The Fund agrees to pay the Administrator the fees and
reimbursement of out-of-pocket expenses as set forth in the fee schedule
attached hereto as Schedule A.
3. RESPONSIBILITY AND INDEMNIFICATION.
(a) The Administrator shall be held to the exercise of reasonable care in
carrying out the provisions of the Agreement, but shall be without liability to
the Fund for any action taken or omitted by it in good faith without gross
negligence, bad faith, willful misconduct or reckless disregard of its duties
hereunder. It shall be entitled to rely upon and may act upon the accounting
records and reports generated by the Fund, advice of the Fund, or of counsel for
the Fund and upon statements of the Fund's independent accountants, and shall be
without liability for any action reasonably taken or omitted pursuant to such
records and reports or advice, provided that such action is not, to the
knowledge of the Administrator, in violation of applicable federal or state laws
or regulations, and provided further that such action is taken without gross
negligence, bad faith, willful misconduct or reckless disregard of its duties.
(b) The Administrator shall not be liable to the Fund for any error of
judgment or mistake of law or for any loss arising out of any act or omission by
the Administrator in the performance of its duties hereunder except as
hereinafter set forth. Nothing herein contained shall be construed to protect
the Administrator against any liability to the Fund or its security holders to
which the Administrator shall otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its duties on
behalf of the Fund, reckless disregard of the Administrator's obligations and
duties under this Agreement or the willful violation of any applicable law.
(c) Except as may otherwise be provided by applicable law, neither the
Administrator nor its stockholders, officers, directors, employees or agents
shall be subject to, and the Fund shall indemnify and hold such persons harmless
from and against, any liability for and any damages, expenses or losses incurred
by reason of the inaccuracy of information furnished to the Administrator by the
Fund or its authorized agents or in connection with any error in judgment or
mistake of law or any act or omission in the course of, connected with or
arising out of any services to be rendered hereunder, except by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties, by reason of reckless disregard of the Administrator's obligations and
duties under this Agreement or the willful violation of any applicable law.
REPORTS.
(a) The Fund shall provide to the Administrator on a quarterly basis a
report of a duly authorized officer of the Fund representing that all
information furnished to the Administrator during the preceding quarter was
true, complete and correct to the best of its knowledge. The Administrator shall
not be responsible for the accuracy of any information furnished to it by the
Fund, and the Fund shall hold the Administrator harmless in regard to any
liability incurred by reason of the inaccuracy of such information.
(b) The Administrator shall provide to the Board of Directors of the Fund,
on a quarterly basis, a report, in such a form as the Administrator and the Fund
shall from time to time agree, representing that, to its knowledge, the Fund was
in compliance with all requirements of applicable federal and state law,
including without limitation, the rules and regulations of the Securities and
Exchange Commission and the Internal Revenue Service, or specifying any
instances in which the Fund was not so in compliance. Whenever, in the course of
performing its duties under this Agreement, the Administrator determines, on the
basis of information supplied to the Administrator by the Fund, that a violation
of applicable law has occurred, or that, to its knowledge, a possible violation
of applicable law may have occurred or, with the passage of time, could occur,
the Administrator shall promptly notify the Fund and its counsel of such
violation.
5. ACTIVITIES OF THE ADMINISTRATOR.
The Administrator shall be free to render similar services to others so
long as its services hereinunder are not impaired thereby.
6. RECORDS.
The records maintained by the Administrator shall be the property of the
Fund, and shall be surrendered to the Fund, at the expense of the Fund, promptly
upon request by the Fund, provided that all service fees and expenses charged by
the Administrator in the performance of its duties hereunder have been fully
paid to the satisfaction of the Administrator, in the form in which such
accounts and records have been maintained or preserved. The Administrator agrees
to maintain a back-up set of accounts and records of the Fund (which back-up set
shall be updated on at least a weekly basis) at a location other than that where
the original accounts and records are stored. The Administrator shall assist the
Fund's independent auditors, or, upon approval of the Fund, any regulatory body,
in any requested review of the Fund's accounts and records. The Administrator
shall preserve the accounts and records as they are required to be maintained
and preserved by Rule 3 la-l under the 1940 Act.
7. CONFIDENTIALITY.
The Administrator agrees that it will, on behalf of itself and its officers
and employees, treat all transactions contemplated by this Agreement, and all
other information germane thereto, as confidential and such information shall
not be disclosed to any person except as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THE AGREEMENT.
This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, upon
ninety (90) days' prior written notice. Should the Fund exercise its right to
terminate, all out-of-pocket expenses associated with the movement of records
and material will be borne by the Fund. Additionally, the Administrator reserves
the right to charge for any other reasonable expenses associated with such
termination.
9. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties hereto
and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the prior written consent
of the Administrator, or by the Administrator without the prior written consent
of the Fund.
10. NEW YORK LAWS TO APPLY
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such amendment
is in writing and signed by both parties.
12. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof
whether oral or written.
13. NOTICES.
All notices and other communications hereunder shall be in writing, shall
be deemed to have been given when delivered in person or by certified mail,
return receipt requested, and shall be given to the following addresses (or such
other addresses as to which notice is given):
To the Fund: To the Administrator:
James R. Fay Michael Miola
President President
Frontier Funds, Inc American Data Services, Inc.
101 W. Wisconsin Avenue 150 Motor Parkway, Suite 109
Pewaukee, WI 53072 Hauppauge, NY 11788
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
FRONTIER FUNDS, INC. AMERICAN DATA SERVICES, INC.
/s/ James R. Fay /s/ Michael Miola
By:------------------------------- By:-------------------------------
James R. Fay, President Michael Miola, President
SCHEDULE A
(a) ADMINISTRATIVE SERVICE FEE:
For the services rendered by the Administrator in its capacity as
administrator and fund accounting agent, as specified in Paragraph 1. DUTIES OF
THE ADMINISTRATOR., and Paragraph 1. DUTIES OF ADS of the Fund Accounting
Services Agreement executed herewith, the Fund shall pay the Administrator
within ten (10) days after receipt of an invoice from the Administrator at the
beginning of each month, a fee equal to the greater of:
NOTE: The following fees are per portfolio serviced.
MINIMUM FEE:
CALCULATED FEE WILL BE BASED UPON PRIOR MONTH AVERAGE NET ASSETS:
(No prorating partial months)
Each Portfolio
--------------
Under $5 million ..............................$2,268
From $5 million to $10 million.................2,750
From $10 million to $20 million................3,500
From $20 million on............................5,000
OR,
NET ASSET CHARGE:
1/12th of 0.0145% ( 14.5 basis points) of average net assets of portfolio for
month.
FEE INCREASES
-------------
On each annual anniversary date of this Agreement, the fees enumerated
above will be increased by the change in the Consumer Price Index for the
Northeast region (CPI) for the twelve-month period ending with the month
preceding such annual anniversary date.
(b) EXPENSES.
The Fund shall reimburse the Administrator for any out-of-pocket expenses,
exclusive of salaries, advanced by the Administrator in connection with but not
limited to the printing or filing of documents for the Fund, travel, telephone,
quotation services, facsimile transmissions, stationery and supplies, record
storage, postage, telex, and courier charges, incurred in connection with the
performance of its duties hereunder. The Administrator shall provide the Fund
with a monthly invoice of such expenses and the Fund shall reimburse the
Administrator within fifteen (15) days after receipt thereof.
(c) STATE REGISTRATION (BLUE SKY) SURCHARGE:
The fees enumerated in paragraph (a) above include the initial state
registration, renewal and maintenance of registrations (as detailed in Paragraph
1(1) DUTIES OF THE ADMINISTRATOR) for three (3) states. Each additional state
registration requested will be subject to the following fees:
Initial registration .................$295.00
Registration renewal .................$150.00
Sales reports (if required) ..........$ 25.00
(d) SPECIAL REPORTS.
All reports and /or analyses requested by the Fund, its auditors, legal
counsel, portfolio manager, or any regulatory agency having jurisdiction over
the Fund, that are not in the normal course of fund administrative activities as
specified in Section 1 of this Agreement shall be subject to an additional
charge, agreed upon in advance, based upon the following rates:
Labor: Senior staff - $150.00 hr.
Junior staff - $ 75.00 hr.
Computer time - $45.00/hr.
(e) SERVICE DEPOSIT.
The Fund will remit to the Administrator upon execution of this Agreement a
security deposit equal to one (l) month's minimum fee under this Agreement,
computed in accordance with the number of portfolios listed in Schedule B of
this Agreement. The Fund will have the option to have the security deposit
applied to the last month's service fee, or applied to any new contract between
the Fund and the Administrator.
However, if the Fund elects or is forced to terminate this Agreement for
any reason whatsoever (including, but not limited to, the voluntary or
involuntary termination of the Fund, liquidation of the Fund's assets, the sale
or merger of the Fund or it's assets to any successor entity) prior to the
termination date of this Agreement as specified in Paragraph 8 of this
Agreement, the Fund will forfeit the Security Deposit paid to the Administrator
upon execution of this Agreement
SCHEDULE B
----------
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
Equity Portfolio
EXHIBIT (h)(4)
FUND ACCOUNTING SERVICE AGREEMENT
BETWEEN
FRONTIER FUNDS, INC.
AND
AMERICAN DATA SERVICES, INC.
INDEX
-----
1. DUTIES OF ADS.................................................. 3
2. COMPENSATION OF ADS............................................ 4
3. LIMITATION OF LIABILITY OF ADS................................. 4
4. REPORTS........................................................ 4
5. ACTIVITIES OF ADS.............................................. 5
6. ACCOUNTS AND RECORDS........................................... 5
7. CONFIDENTIALITY................................................ 5
8. DURATION AND TERMINATION OF THIS AGREEMENT..................... 5
9. ASSIGNMENT..................................................... 5
10. NEW YORK LAWS TO APPLY........................................ 5
11. AMENDMENTS TO THIS AGREEMENT.................................. 5
12. MERGER OF AGREEMENT........................................... 5
13. NOTICES....................................................... 6
SCHEDULE A........................................................ 7
- ----------
(A) FUND ACCOUNTING SERVICE FEE .................................. 7
FEE INCREASES.................................................... 7
-------------
(B) EXPENSES...................................................... 7
(C) SPECIAL REPORTS. ............................................. 7
(D) SERVICE DEPOSIT............................................... 7
(E) CONVERSION CHARGE ............................................ 8
SCHEDULE B:....................................................... 9
- ----------
FUND ACCOUNTING SERVICE AGREEMENT
AGREEMENT made the 17th day of March 1999, by and between Frontier Funds,
Inc. (the "Fund"), and American Data Services, Inc., a New York corporation
having its principal office and place of business at the Hauppauge Corporate
Center, 150 Motor Parkway, Suite 109, Hauppauge, New York 11788 ("ADS").
BACKGROUND
WHEREAS, the Fund is a diversified, open-end management investment company
registered with the United States Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, ADS is a corporation experienced in providing accounting services
to mutual funds and possesses facilities sufficient to provide such services;
and
WHEREAS, the Fund desires to avail itself of the experience, assistance and
facilities of ADS and to have ADS perform for the Fund certain services
appropriate to the operations of the Fund, and ADS is willing to furnish such
services in accordance with the terms hereinafter set forth.
TERMS
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the Fund and ADS hereby agree as follows:
1. DUTIES OF ADS.
ADS will provide the Fund with the necessary office space, communication
facilities and personnel to perform the following services for the Fund:
(a) Timely calculate and transmit to NASDAQ the Fund's daily net asset
value and communicate such value to the Fund and its transfer agent;
(b) Maintain and keep current all books and records of the Fund as required
by Rule 3 la-l under the 1940 Act, as such rule or any successor rule
may be amended from time to time ("Rule 31a-1"), that are applicable to
the fulfillment of ADS's duties hereunder, as well as any other
documents necessary or advisable for compliance with applicable
regulations as may be mutually agreed to between the Fund and ADS.
Without limiting the generality of the foregoing, ADS will prepare and
maintain the following records upon receipt of information in proper
form from the Fund or its authorized agents:
(i) Cash receipts journal
(ii) Cash disbursements journal
(iii) Dividend record
(iv) Purchase and sales - portfolio securities journals
(v) Subscription and redemption journals
(vi) Security ledgers
(vii) Broker ledger
(viii) General ledger
(ix) Daily expense accruals
(x) Daily income accruals
(xi) Securities and monies borrowed or loaned and collateral
therefore
(xii) Foreign currency journals
(xiii) Trial balances
(c) Provide the Fund and its investment adviser with daily portfolio
valuation, net asset value calculation and other standard operational
reports as requested from time to time.
(d) Provide all raw data available from our fund accounting system (PAIRS)
for management's or the administrators preparation of the following:
(i) Semi-annual financial statements;
(ii) Semi-annual form N-SAR;
(iii) Annual tax returns;
(iv) Financial data necessary to update Form N-1 A; and
(v) Annual proxy statement.
(e) Provide facilities to accommodate annual audit and any audits or
examinations conducted by the Securities and Exchange Commission or any
other governmental or quasi-governmental entities with jurisdiction.
ADS shall for all purposes herein be deemed to be an independent contractor
and shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Fund in any way or otherwise be deemed an agent of
the Fund.
2. COMPENSATION OF ADS.
In consideration of the services to be performed by ADS as set forth herein
for each portfolio listed on Schedule B, ADS shall be entitled to receive
compensation and reimbursement for all reasonable out-of-pocket expenses. The
Fund agrees to pay ADS the fees and reimbursement of out-of-pocket expenses as
set forth in the fee schedule attached hereto as Schedule A.
3. LIMITATION OF LIABILITY OF ADS.
(a) ADS shall be held to the exercise of reasonable care in carrying out
the provisions of this Agreement, but shall be without liability to the Fund for
any action taken or omitted by it in good faith without gross negligence, bad
faith, willful misconduct or reckless disregard of its duties hereunder. It
shall be entitled to rely upon and may act upon the accounting records and
reports generated by the Fund, advice of the Fund, or of counsel for the Fund
and upon statements of the Fund's independent accountants, and shall be without
liability for any action reasonably taken or omitted pursuant to such records
and reports or advice, provided that such action is not, to the knowledge of
ADS, in violation of applicable federal or state laws or regulations, and
provided further that such action is taken without gross negligence, bad faith,
willful misconduct or reckless disregard of its duties.
(b) Nothing herein contained shall be construed to protect ADS against any
liability to the Fund or its security holders to which ADS shall otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence in the
performance of its duties on behalf of the Fund, reckless disregard of ADS'
obligations and duties under this Agreement or the willful violation of any
applicable law.
(c) Except as may otherwise be provided by applicable law, neither ADS nor
its stockholders, officers, directors, employees or agents shall be subject to,
and the Fund shall indemnify and hold such persons harmless from and against,
any liability for and any damages, expenses or losses incurred by reason of the
inaccuracy of information furnished to ADS by the Fund or its authorized agents.
4. REPORTS.
(a) The Fund shall provide to ADS on a quarterly basis a report of a duly
authorized officer of the Fund representing that all information furnished to
ADS during the preceding quarter was true, complete and correct in all material
respects. ADS shall not be responsible for the accuracy of any information
furnished to it by the Fund or its authorized agents, and the Fund shall hold
ADS harmless in regard to any liability incurred by reason of the inaccuracy of
such information.
(b) Whenever, in the course of performing its duties under this Agreement,
ADS determines, on the basis of information supplied to ADS by the Fund or its
authorized agents, that a violation of applicable law has occurred or that, to
its knowledge, a possible violation of applicable law may have occurred or, with
the passage of time, would occur, ADS shall promptly notify the Fund and its
counsel of such violation.
5. ACTIVITIES OF ADS.
The services of ADS under this Agreement are not to be deemed exclusive,
and ADS shall be free to render similar services to others so long as its
services hereunder are not impaired thereby.
6. ACCOUNTS AND RECORDS.
The accounts and records maintained by ADS shall be the property of the
Fund, and shall be surrendered to the Fund, at the expense of the Fund, promptly
upon request by the Fund, provided that all service fees and expenses charged by
ADS in the performance of its duties hereunder have been fully paid to the
satisfaction of ADS, in the form in which such accounts and records have been
maintained or preserved. ADS agrees to maintain a back-up set of accounts and
records of the Fund (which back-up set shall be updated on at least a weekly
basis) at a location other than that where the original accounts and records are
stored. ADS shall assist the Fund's independent auditors, or, upon approval of
the Fund, any regulatory body, in any requested review of the Fund's accounts
and records. ADS shall preserve the accounts and records as required by Rule 3
la-1 under the 1940 Act.
7. CONFIDENTIALITY.
ADS agrees that it will, on behalf of itself and its officers and
employees, treat all transactions contemplated by this Agreement, and all other
information germane thereto, as confidential and not to be disclosed to any
person except as may be authorized by the Fund.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective as of the date hereof and shall
remain in force for a period of three (3) years, provided however, that both
parties to this Agreement have the option to terminate the Agreement, without
penalty, upon ninety (90) days' prior written notice.
Should the Fund exercise its right to terminate, all out-of-pocket expenses
associated with the movement of records and material will be borne by the Fund.
Additionally, ADS reserves the right to charge for any other reasonable expenses
associated with such termination.
9. ASSIGNMENT.
This Agreement shall extend to and shall be binding upon the parties hereto
and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the prior written consent
of ADS, or by ADS without the prior written consent of the Fund.
10. NEW YORK LAWS TO APPLY
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the 1940 Act. To the extent that the applicable law
of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
11. AMENDMENTS TO THIS AGREEMENT.
This Agreement may be amended by the parties hereto only if such amendment
is in writing and signed by both parties.
12. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof
whether oral or written
12. NOTICES.
All notices and other communications hereunder shall be in writing, shall
be deemed to have been given when received or when sent by telex or facsimile,
and shall be given to the following addresses (or such other addresses as to
which notice is given):
To the Fund: To the Administrator:
James R. Fay Michael Miola
President President
Frontier Funds, Inc. American Data Services, Inc.
101 W. Wisconsin Avenue 150 Motor Parkway, Suite 109
Pewaukee, WI 53072 Hauppauge, NY 11788
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
FRONTIER FUNDS, INC. AMERICAN DATA SERVICES, INC.
/s/ James R. Fay /s/ Michael Miola
By:--------------------------- By:---------------------------
James R. Fay, President Michael Miola, President
SCHEDULE A
(a) FUND ACCOUNTING SERVICE FEE:
MONTHLY FUND ACCOUNTING SERVICE FEE IS INCLUDED IN ADMINISTRATIVE SERVICE
FEE CONTAINED IN THE ADMINISTRATIVE SERVICES AGREEMENT EXECUTED HEREWITH
FEE INCREASES
-------------
On each annual anniversary, date of this Agreement, the fees enumerated
above will be increased by the change in the Consumer Price Index for the
Northeast region (CPI) for the twelve month period ending with the month
preceding such annual anniversary date.
(b) EXPENSES.
The Fund shall reimburse ADS for any out-of-pocket expenses, exclusive of
salaries, advanced by ADS in connection with but not limited to the printing or
filing of documents for the Fund, travel, telephone, quotation services
(currently (1)<F17> $0.12 per equity valuation, $0.60 per bond valuation, and
1.50 for each foreign quotation or manual quote insertion), facsimile
transmissions, stationery and supplies, record storage, NASDAQ insertion fee
($22 (1)<F17> per month), prorata portion of annual SAS 70 review, postage,
telex, and courier charges, incurred in connection with the performance of its
duties hereunder. ADS shall provide the Fund with a monthly invoice of such
expenses and the Fund shall reimburse ADS within fifteen (15) days after receipt
thereof.
(l)<F17> Rate subject to change on 30 days' written notice.
(c) SPECIAL REPORTS.
All reports and /or analyses requested by the Fund, its auditors, legal
counsel, portfolio manager, or any regulatory agency having jurisdiction over
the Fund, that are not in the normal course of fund accounting activities as
specified in Section 1 of this Agreement shall be subject to an additional
charge, agreed upon in advance, based upon the following rates:
Labor: Senior staff - $150.00/hr.
Junior staff - $ 75.00/hr.
Computer time - $45.00/hr.
(d) SERVICE DEPOSIT.
The Fund will remit to ADS upon execution of this Agreement a security
deposit equal to one (1) month's minimum fee under this Agreement, computed in
accordance with the number of portfolios listed in Schedule B of this Agreement.
The Fund will have the option to have the security deposit applied to the last
month's service fee, or applied to any new contract between the Fund and ADS.
However, if the Fund elects or is forced to terminate this Agreement for
any reason what-so-ever other than a material breach by ADS (including, but not
limited to, the voluntary or involuntary termination of the Fund, liquidation of
the Fund's assets, the sale or merger of the Fund or it's assets to any
successor entity) prior to the termination date of this Agreement as specified
in Paragraph 8 of this Agreement, the Fund will forfeit the Security Deposit
paid to ADS upon execution of this Agreement.
(e) CONVERSION CHARGE.
NOTE: FOR EXISTING FUNDS ONLY (new funds please ignore):
There will be a charge to convert the Fund's portfolio accounting records
on to the ADS fund accounting system (PAIRS). In addition, ADS will be
reimbursed for all out-of-pocket expenses, enumerated in paragraph (b) above,
incurred during the conversion process.
The conversion charge will be estimated and agreed upon in advance by the
Fund and ADS. The charge will be based upon the quantity of records to be
converted and the condition of the previous service agents records.
SCHEDULE B:
-----------
PORTFOLIOS TO BE SERVICED UNDER THIS AGREEMENT:
EQUITY PORTFOLIO
EXHIBIT (i)
KRANITZ
& PHILIPP 1238 Twelfth Avenue
Attorneys at Law Grafton, Wisconsin 53024
Facsimile (414) 375-0775
Telephone (414) 375-0625
March 26, 1999
Frontier Funds, Inc.
101 West Wisconsin Avenue
Pewaukwee, Wisconsin 53072-3433
Gentlemen:
We have acted as counsel to Frontier Funds, Inc. ("Fund"), a
corporation organized under the laws of Maryland, in connection with the
preparation and filing of an amendment to the registration statement of the
Fund on Form N-1A ("Registration Statement"), relating to the sale by the
Fund of its common stock, par value $0.01 per share ("Shares").
We have examined, in each case as amended to date, (i) the Articles
of Incorporation ("Articles") and By-Laws of the Fund; (ii) the
Notification of Registration filed by the Fund under the Investment Company
Act of 1940, as amended ("Investment Company Act"); and (iii) the
Registration Statement, as filed by the Fund under the Investment Company
Act and the Securities Act of 1933, as amended ("Securities Act"). We have
also examined such other proceedings, documents and records as we have
deemed necessary to enable us to render this opinion.
The Fund is authorized by the Articles to issue 200,000,000 Shares
and currently issues Shares representing a single portfolio of investments.
The Registration Statement, as filed with the Securities and Exchange
Commission under the Securities Act, is deemed to register an indefinite
number of Shares pursuant to the provisions of Section 24(f) of the
Investment Company Act. The Fund has advised us that it has filed, and
each year hereafter will timely file, a Notice pursuant to Rule 24f-2 under
the Investment Company Act ("Rule 24f-2"), perfecting the registration of
the Shares sold by the Fund during each fiscal year that such registration
of an indefinite number of Shares remains in effect.
The Fund has also informed us that the Shares have been, and will
continue to be, sold in accordance with the Fund's usual method of
distributing its registered Shares, as contemplated by the Registration
Statement, pursuant to which prospectuses are made available for delivery
to offerees and purchasers of such Shares in accordance with Section 5(b)
of the Securities Act.
Based upon the foregoing information and examinations, so long as the
Fund remains a valid and subsisting entity under the laws of its state of
organization, and the registration of an indefinite number of Shares
remains in effect, the authorized Shares of the Fund, when sold as
contemplated in the Registration Statement and subject to compliance with
Rule 24f-2, will be legally outstanding, fully-paid, and non-assessable
Shares, and the holders of such Shares will have all the rights provided
for with respect to such holding by the Articles and the laws of the State
of Maryland.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and the applications, registration statements or
notice filings, and amendments thereto, filed in accordance with the
securities laws of the several states in which Shares of the Fund are
offered, and we further consent to the reference to us in the Registration
Statement. In giving this consent, we do not admit that we are experts
within the meaning of Section 11 of the Securities Act, or within the
category of persons whose consent is required by Section 7 of such Act.
Very truly yours,
/s/ KRANITZ & PHILIPP
KRANITZ & PHILIPP
RJP/fh
EXHIBIT (j)
(McCurdy & Associates CPA's, Inc. Logo)
27955 Clements Road
Westlake, Ohio 44145
Phone: (440) 835-8500
Faz: (440) 835-1093
CONSENT OF INDEPENDENT PUBLIC ACCOUNTNATS
We consent to all references made to us in this Post-Effective Amendment No. 9
to Frontier Fund Inc.'s Registration Statement on Form N1-A.
/s/ McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
March 22, 1999
