<PAGE> 1
1933 Act File No. 2-34038
1940 Act File No. 811-1861
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
-----
Post-Effective Amendment No. 34 [X]
-----
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 34 [X]
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SENTRY FUND, INC.
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(Exact Name of Registrant as Specified in Charter)
1800 North Point Drive, Stevens Point, Wisconsin 54481
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(Address of Principal Executive Offices and Zip Code)
Telephone (715)346-6000
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(Registrant's Telephone Number, Including Area Code)
John A. Stenger
Sentry Fund, Inc.
1800 North Point Drive
Stevens Point, Wisconsin 54481
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(Name and Address of Agent for Service)
COPY TO:
Scott A. Moehrke
Godfrey & Kahn
780 North Water Street
Milwaukee, WI 53202
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on March 1, 1997, pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date), pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Pursuant to Investment Company Act Rule 24f-2 under the Investment Company Act
of 1940, the Registrant has declared that an indefinite number of shares of
beneficial interest has been registered under the Securities Act of 1933. The
Rule 24f-2 Notice for the year ended October 31, 1996, was filed with the
Securities & Exchange Commission on or about December 30, 1996.
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<TABLE>
<CAPTION>
SENTRY FUND, INC. CROSS REFERENCE SHEET
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REGISTRATION STATEMENT PROSPECTUS REGISTRATION STATEMENT STATEMENT OF
Item No. Page Item No. ADDITIONAL
INFORMATION PAGE
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<S> <C> <C> <C>
PART A
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1. Cover Page 1 20. Tax Status B-11, B-12
2. Synopsis 2 21. Underwriters B-9, B-10
3. Condensed Financial 22. Calculation of B-11
Information 3 Performance Data
4. General Description 23. Financial Statements B-13 - B-17
of Registrant 4
5. Management of the Fund 5
5a. Management's Discussion of
Fund Performance N
6. Capital Stock and Other
Securities 10
7. Purchase of Securities
Being Offered 6-8
8. Redemption or Repurchase 8-9
9. Pending Legal Proceedings N
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF
ADDITIONAL
PART B INFORMATION PAGE
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<S> <C>
10. Cover Page B-1
11. Table of Contents B-2
12. General Information N
and History
13. Investment Objectives B-3, B-4, B-5, B-6
14. Management of the B-6, B-7
Registrant
15. Control Persons and Princi- B-7
pal Holders of Securities
16. Investment Advisory B-7, B-8
and Other Services
17. Brokerage Allocation B-8, B-9
and Other Practices
18. Capital Stock and B-12
Other Securities
19. Purchase, Redemption B-10, B-11
and Pricing of Secur-
ities Being Offered
</TABLE>
N signifies omitted either because answer was in the negative or item
inapplicable.
<PAGE> 3
PART A
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SENTRY FUND, INC.
1800 NORTH POINT DRIVE - STEVENS POINT, WISCONSIN 54481
TELEPHONE: (800) 533-7827
PROSPECTUS
MARCH 1, 1997
Sentry Fund, Inc. (the "Fund") is a diversified, open-end management investment
company with the primary investment objective of long-term capital growth. The
Fund is designed for investors who have an investment objective compatible with
that of the Fund. Portfolio assets will usually be invested in selected common
stocks or securities having the principal characteristics of, or are
convertible into, common stocks.
Shares of the Fund are offered to the public without a sales charge on a
continuous basis through representatives of the Underwriter, Sentry Equity
Services, Inc.
This Prospectus concisely sets forth information about the Fund that a
prospective investor ought to know before investing. Please keep this
Prospectus for future reference.
A Statement of Additional Information dated March 1, 1997, incorporated herein
by reference and containing further information about the Fund, has been filed
with the Securities and Exchange Commission. A copy may be obtained at no
charge by calling or writing Sentry Equity Services, Inc., 1800 North Point
Drive, Stevens Point, WI 54481, (800) 533-7827.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, the shares of the Fund in any jurisdiction in which such may not
lawfully be made.
____________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
1
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SUMMARY OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases ....................... None
Maximum Sales Load Imposed on Reinvested Dividends............. None
Deferred Sales Load ........................................... None
Redemption Fees ............................................... None
Exchange Fees ................................................. None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees ............................................... .75%
12b-1 Fees .................................................... None
Other Operating Expenses ...................................... .09%
----
Total Fund Operating Expenses ................................. .84%
EXAMPLE
The following example illustrates the expenses an investor would pay on a
$1,000 investment assuming (1) 5% annual return and (2) redemption at the end of
each time period. As noted in the table above, the Fund does not charge a
redemption fee.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$9 $28 $48 $107
The purpose of the preceding table is to assist the investor in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. The example contained in the table should not be considered a
representation of past or future expenses, and actual expenses may be greater or
less than those shown. The example assumes a 5% annual rate of return
pursuant to the requirements of the Securities and Exchange Commission and is
not intended to be representative of past or future performance of the Fund.
The expenses reflected in the table are based upon expenses incurred during the
fiscal year ended October 31, 1996. For more information concerning expenses,
see "Management of the Fund."
2
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FINANCIAL HIGHLIGHTS
The following annual financial highlights for the Fund have been audited by
Coopers & Lybrand L.L.P., independent accountant. The financial highlights
should be read in conjunction with the Fund's financial statements and related
notes included in the Fund's Annual Report. Additional information about the
Fund's performance is contained in the Fund's Annual Report, which may be
obtained without charge by calling or writing Sentry Equity Services, Inc.,
1800 North Point Drive Stevens Point, Wisconsin 54481, (800) 533-7827. The
following table presents information relating to a share of common stock of the
Fund outstanding for the entire period.
<TABLE>
<CAPTION>
Year Ended October 31
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1996 1995 1994 1993 1992 1991 1990 1989
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period $ 16.29 $ 15.39 $ 15.93 $ 15.17 $ 15.34 $ 12.04 $ 13.72 $ 11.78
-------- -------- -------- -------- -------- -------- -------- --------
Income From Investment Operations
- ---------------------------------
Net Investment Income 0.17 0.18 0.18 0.23 0.29 0.36 0.36 0.37
Net Realized and Unrealized Gains
(Losses) on Investments 3.01 1.65 0.53 1.12 1.03 3.95 (0.92) 2.13
-------- -------- -------- -------- -------- -------- -------- --------
Total from Investment Operations 3.18 1.83 0.71 1.35 1.32 4.31 (0.56) 2.50
Less Distributions
- ------------------
Dividends From Net
Investment Income (0.17) (0.17) (0.22) (0.23) (0.35) (0.36) (0.39) (0.26)
Distributions From Net
Realized Gains (1.11) (0.76) (1.03) (0.36) (1.14) (0.65) (0.73) (0.30)
-------- -------- -------- -------- -------- -------- -------- --------
Total Distributions (1.28) (0.93) (1.25) (0.59) (1.49) (1.01) (1.12) (0.56)
Net Asset Value, End of Period $ 18.19 $ 16.29 $ 15.39 $ 15.93 $ 15.17 $ 15.34 $ 12.04 $ 13.72
======== ======== ======== ======== ======== ======== ======== ========
Total Return 20.60% 12.97% 4.86% 9.17% 9.09% 37.59% - 4.59% 22.18%
Ratios/Supplemental Data
- ------------------------
Net Assets End of Period
(in Thousands) $ 97,154 $ 84,374 $ 79,622 $ 76,315 $ 69,454 $ 60,931 $ 43,866 $ 46,277
Ratio of Expenses to
Average Net Assets 0.84% 0.86% 0.86% 0.87% 0.88% 0.84% 0.69% 0.65%
Ratio of Net Investment Income
to Average Net Assets 0.95% 1.17% 1.19% 1.48% 1.95% 2.65% 2.84% 2.90%
Portfolio Turnover Rate 28.28% 26.54% 16.31% 22.34% 12.58% 2.53% 29.85% 14.56%
Average Commission Rate* $ .0254
<CAPTION>
Year Ended October 31
---------------------
1988 1987
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<S> <C> <C>
Net Asset Value.
Beginning of Period $ 11.97 $ 14.28
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Income From Investment Operations
- ---------------------------------
Net Investment Income 0.22 0.28
Net Realized and Unrealized Gains
(Losses) on Investments 1.29 (1.09)
-------- --------
Total from Investment Operations 1.51 (0.81)
Less Distributions
- ------------------
Dividends From Net
Investment Income (0.23) (0.29)
Distributions From Net
Realized Gains (1.47) (1.21)
-------- --------
Total Distributions (1.70) (1.50)
Net Asset Value, End of Period $ 11.78 $ 11.97
======== ========
Total Return 16.09% -6.64%
Ratios/Supplemental Data
- ------------------------
Net Assets End of Period
(in Thousands) $ 41,758 $ 38,216
Ratio of Expenses to
Average Net Assets 0.66% 0.67%
Ratio of Net Investment Income
to Average Net Assets 1.85% 1.80%
Portfolio Turnover Rate 19.41% 35.32%
Average Commission Rate*
</TABLE>
*Disclosure of the current year only is required.
<PAGE> 7
THE FUND
Sentry Fund, Inc. (the "Fund") is a corporation organized under the laws of
Maryland on May 9, 1969. It is a no-load, diversified, open-end management
investment company, commonly called a "mutual fund." It combines amounts
invested by its shareholders who have similar investment goals, and in turn
invests those amounts by purchasing securities of companies selected by its
investment adviser from a number of different industries.
THE FUND'S INVESTMENT POLICY
Investment Objectives
The primary investment objective of the Fund is to seek long-term capital
growth. Income considerations are secondary to the objective of capital
appreciation in the selection of portfolio investments. The Fund's investment
objective may be changed by vote of the Board of Directors; however, the Fund
expects that the objective would not be changed without the affirmative vote of
a majority of the outstanding voting securities of the Fund. The Fund intends
to diversify its investments among a number of different industries rather than
concentrate in a particular industry or group of industries. However, the
Fund's emphasis is on a continuing, careful selection of industries and
securities of companies within those industries which are thought by the Fund's
investment adviser to have good potential for growth rather than upon wide
diversification. Diversification does not eliminate the risks inherent in any
equity investment.
The Fund invests primarily, and under normal market conditions expects to
invest most of its assets, in common stocks and securities convertible into
common stock (or securities with attached rights or warrants to purchase common
stock), which the Fund's investment adviser believes to offer favorable
long-term growth prospects. The Fund may also, from time to time, invest in
bonds or preferred stocks when the Fund's investment adviser believes it
consistent with the Fund's investment objective. If the Fund's investment
adviser believes that economic or market conditions warrant a defensive
portfolio, the Fund may also invest all or a substantial portion of its assets
in cash and bonds, preferred stocks or other fixed income obligations and
short-term obligations. Fixed income securities purchased by the Fund will
primarily be rated investment-grade or determined to be comparable by the
Fund's investment adviser.
Restrictions
The Fund may borrow money but only from banks as a temporary measure for
extraordinary or emergency purposes and then not in excess of the lesser of 5%
of the current value of the Fund's total assets or 10% of the Fund's gross
assets taken at cost. The Fund will not borrow to increase income (leveraging)
and, therefore, will not make any subsequent investments while loans greater
than 5% of the Fund's assets are outstanding.
The Fund will not invest more than 25% of the current value of its total assets
in a particular industry or group of industries.
The Fund will not invest more than 5% of the current value of its total assets
in the securities of any one issuer (other than United States government
securities) or purchase more than 10% of the outstanding voting securities of
any one class of any one issuer.
The Fund has adopted certain other investment restrictions which are presented
in the Statement of Additional Information and which together with the
investment restrictions outlined above cannot be changed without approval by
the holders of a majority of its outstanding voting shares.
The Fund has also adopted the following restriction which may be changed by the
Board of Directors of the Fund, without shareholder approval. The Fund will
not invest in securities which are not readily saleable by the Fund, including
securities with legal or contractual restrictions on resale if, as a result
thereof, more than 10% of the Fund's total assets (taken at market value at
time of purchase) would be invested in such securities.
The Fund permits investment in securities issued by broker-dealers that
execute the Fund's portfolio
4
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brokerage transactions. The Fund will not invest more than 5% of the value of
its total assets in the securities of any one such issuer nor will the Fund own
more than 5% of a class of such an issuer's equity securities nor more than
10% of the outstanding principal amount of such issuer's debt securities.
Risk
The Fund's investments are subject to market fluctuations and risks inherent
in all securities, and there can be no assurance that the Fund's investment
objective will be realized. The Fund may invest from time to time in small
companies or companies with little operating experience, and these investments
may be subject to greather-than-average risks. For more information, please
see the Statement of Additional Information.
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed under the direction of its
Board of Directors in accordance with the laws of the State of Maryland.
Sentry Investment Management, Inc. (the "Adviser"), the Fund's investment
adviser, manages and directs, subject to the review of the Fund's Board of
Directors, the investment and reinvestment of the Fund's assets including
determining an investment program for the Fund and placing orders for the
purchase and sale of securities for the Fund's portfolio. The Adviser is
located at 1800 North Point Drive, Stevens Point, Wisconsin, and is a
wholly-owned subsidiary of Sentry Insurance a Mutual Company ("Sentry
Insurance"). The Adviser, which has been in the business of rendering
investment advice for over 21 years, also provides investment management
services to Sentry Insurance and other affiliated companies.
Keith E. Ringberg, Senior Portfolio Manager, is primarily responsible for the
day-to-day management of the Fund's portfolio and has been employed by the
Adviser for the past 21 years. Mr. Ringberg has managed the Fund's portfolio
for the past 13 years.
During the fiscal year ended October 31, 1996, the Fund's expenses were .84% of
the Fund's average net assets. If the total expenses of the Fund (excluding
taxes, portfolio brokerage commissions and interest, but including the
investment advisory fee) exceed the sum of 1 1/2% of the first $30,000,000 and
1% of the balance of the average daily net asset value of the Fund in any one
fiscal year, the Adviser will reimburse the Fund for such excess. This expense
limitation is taken into consideration with each payment of the management fee.
For the fiscal year ended October 31, 1996, the fee paid by the Fund to the
Adviser was .75% of the Fund's average net assets.
THE FUND'S UNDERWRITER AND TRANSFER AGENT
Sentry Equity Services, Inc. ("Sentry Equity"), 1800 North Point Drive, Stevens
Point, Wisconsin, a wholly-owned subsidiary of Sentry Insurance, and therefore
affiliated with the Adviser and the Fund, acts as underwriter for the Fund
pursuant to an Underwriter Agreement (the "Agreement"). Sentry Equity, a
member of the National Association of Securities Dealers, Inc., is registered
with the Securities and Exchange Commission as a broker-dealer and is licensed
as a broker-dealer by various state authorities.
5
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The Agreement provides that Sentry Equity is to use its best efforts to offer
to the public on a continuous basis shares of the Fund through its sales
agents. Most sales agents also serve as insurance representatives of the
Sentry Insurance companies. Sales representatives receive a commission from
Sentry Equity of 1% on all sales of Fund shares.
Sentry Equity also serves the Fund under a separate Agency Agreement as
Transfer Agent, Dividend Disbursing Agent and Plan Agent, which includes the
maintenance of shareholder records. For these services, Sentry Equity is paid
an annual fee of $8.50 per account.
NET ASSET VALUE
Shares of the Fund are sold at the net asset value per share next determined
after receipt of the order by Sentry Fund, Inc., in Stevens Point, Wisconsin.
However, orders received by dealers or other financial services firms prior to
the close of trading on the New York Stock Exchange and received by the Fund
prior to the close of its business day will be confirmed at a price based on
the net asset value effective as of the close of the Exchange on that day.
The net asset value per share is computed as of the close of trading
(generally, 4:00 p.m. eastern time) on the New York Stock Exchange each day on
which the Exchange is open for trading or on any other day on which there is a
sufficient degree of trading in the underlying assets of the Fund such that the
Fund's net asset value may be materially affected. The net asset value of the
Fund's shares is determined by dividing the value of its total assets, less its
liabilities, by the total number of shares outstanding, Securities for which
market quotations are not readily available, and other assets of the Fund, are
valued at fair value as determined in good faith by the Fund's Board of
Directors. Portfolio securities which are traded or listed on a national
securities exchange are valued at the last sales price thereof at the time of
computation or, if there has been no sale on that day, at the last bid price.
Securities traded on the over-the-counter market are valued at the mean between
the last quoted bid and asked prices at the time of computation, or in the case
of National Market Issues, the last sales price.
HOW TO PURCHASE SHARES
An investor may purchase shares of the Fund through any Sentry Equity
representative, affiliated dealer or directly from Sentry Equity's office at
1800 North Point Drive, Stevens Point, Wisconsin. The Fund has the right to
reject any application for Fund shares.
THE MINIMUM INITIAL INVESTMENT IS $500 ($200 IF THE PLANNED AUTOMATIC
INVESTMENT DRAFT PLAN OR PAYROLL DEDUCTION PLAN IS SELECTED) AND SHOULD
ACCOMPANY THE APPLICATION. SUBSEQUENT INVESTMENTS MAY BE MADE AT ANY TIME AND
MUST BE AT LEAST $50 ("Open Purchase Plan"). However, if shares are purchased
as part of a Periodic Purchase Plan and a regular schedule of payments totaling
at least $240 per year is adopted, the minimum for subsequent purchases is
$20. See the Application in the center of this Prospectus.
Orders for less than $1,000 worth of shares and orders for a fixed dollar
amount of shares must be accompanied by payment. If full payment does not
accompany any other order, such payment must be received by Sentry Equity
within seven days following acceptance of the order by the Fund.
Orders which would result in the purchaser owning beneficially or of record
more than 4.9% of the Fund's shares will not be accepted unless the purchaser
enters into an agreement with the Fund designed to take into account the
interests of all shareholders. The Fund will redeem shares held in excess of
4.9% of the outstanding shares of the Fund of shareholders, other than
corporate affiliates of Sentry Insurance who do not enter into such agreements.
6
<PAGE> 10
FUND STOCK CERTIFICATES WILL NOT BE ISSUED UNLESS REQUESTED. Sentry Equity
will maintain an account for each shareholder that will record holdings of Fund
shares to three decimal places. Certificates representing full shares are
available without cost upon written request to Sentry Equity.
All distributions of investment income or net realized capital gains will be
paid in shares of the Fund which are added to each shareholder account at net
asset value. See "Distributions to Shareholders and Taxation." However,
participants in the Open Purchase Plan may elect on their Application or by
subsequent written notice to Sentry Equity to receive in cash either all of
their distributions or only those distributions representing investment income.
A written confirmation will be mailed to each shareholder each time a
transaction occurs which changes the number of shares owned. The confirmation
will give details of the transaction and state the number of shares owned
before and after such transaction. The charges for establishing and
maintaining shareholder accounts are paid by the Fund.
SPECIAL SERVICES FOR SHAREHOLDERS
The Fund offers the following privileges and services to shareholders.
Additional information about such services is available by contacting Sentry
Equity at (800) 533-7827. These services are subject to termination or
modification by the Fund.
Participation in any of the Fund's investment programs is entirely voluntary
and may be discontinued or converted to another plan by the shareholder at any
time without penalty.
Payroll Deduction
Employer-sponsored Payroll Deduction Plans are designed for investors who wish
to make purchases of Fund shares at regular intervals. A purchaser may enroll
under this plan by making an initial purchase of $200 or more and completing
the Fund Application.
For payments made under an employer-sponsored payroll deduction plan, the
minimum purchase is $10 per pay period. Purchases are entirely voluntary.
Planned Automatic Investment Draft Plan
Planned Automatic Investment Draft ("PAID") Plan is offered by Sentry Equity to
facilitate the purchase of Fund shares at regular intervals. Based on a
shareholder's authorization, a draft is drawn by Sentry Equity on the
shareholder's bank account each month and Fund shares are purchased
automatically. This assures that the purchase schedule selected by the
shareholder is maintained. There is no extra charge for this service. Contact
Sentry Equity for a PAID Plan Application.
Simultaneous Purchases of Life Insurance and Fund Shares and Single-Check
Payment
Sentry Life Insurance Company and Sentry Life Insurance Company of New York
("Sentry Life") have entered into an arrangement with Sentry Equity whereby a
person who purchases Fund shares and who simultaneously makes an application to
purchase a life insurance policy issued by Sentry Life can arrange for the
payment for Fund shares in conjunction with life insurance.
The purchaser may elect to make stated monthly, quarterly, semi-annual or
annual payments by single checks or money orders made payable to "Sentry
Insurance." This single payment will be divided between life insurance
premiums and Fund share purchases (the single-check privilege is not available
in New York state). Minimum payments of $30 or more will be divided as
directed, provided that at least $20 of each payment will be applied to
purchase Fund shares. Regardless of the period or frequency of payment, at
least $240 annually must be invested in Fund shares.
If Sentry Life does not issue an insurance policy pursuant to the application,
the shareholder will have the option of continuing periodic purchases of Fund
shares according to the selected purchase schedule or of redeeming the initial
purchase of Fund shares at the
7
<PAGE> 11
net asset value next determined after receipt of the redemption request at
Sentry Equity's Stevens Point office.
Systematic Withdrawal Plan
The owner of $5,000 or more of the Fund's shares (which may not be in
certificate form) may provide for the payment from the owner's account
of any requested dollar amount ($50 minimum) to the owner or the owner's
designated payee quarterly. Monthly payments can be made only for those
accounts of $10,000 or more. Ordinarily, sufficient shares will be redeemed
from the shareholder's account for the designated payment on the 20th day of
the month. The check will be mailed to the owner or the owner's designee
within three business days thereafter.
To establish a Systematic Withdrawal Plan, complete the appropriate section of
the Application.
Retirement Plans
The Fund accepts Individual Retirement Accounts (IRA's) as investors. Earnings
accumulate on a tax-deferred basis on annual IRA contributions equal to the
lesser of 100% of compensation received during the year or $2,000 ($4,000 in
the case of a spousal IRA provided certain income requirements are met). The
$2,000 deductible contribution limit is available only to (1) taxpayers who are
not active participants in certain qualified retirement plans and (2) taxpayers
who are active participants in certain qualified plans but have adjusted gross
income below a specified level. Generally, a taxpayer is deemed an active
participant in a qualified retirement plan if, for any part of the plan's
taxable year that ends in the taxpayer's taxable year, such taxpayer or
taxpayer's spouse is an active participant in a qualified pension plan, a
qualified profit sharing or money purchase plan, a 403(b) annuity program, a
simplified employee pension plan or a governmental plan (other than a plan
maintained for state and local employees under Section 457 of the Internal
Revenue Code). A married taxpayer filing a joint return who is an active
participant in a qualified retirement plan may make a deductible IRA
contribution of up to $2,000 ($4,000 in the case of a spousal IRA provided
certain income requirements are met) if the adjusted gross income on the
taxpayer's return is $40,000 or less. Between $40,000 and $50,000, the IRA
deduction is phased out. For single taxpayers who are active participants in a
qualified retirement plan, the $2,000 deductible IRA contribution is phased out
between $25,000 and $35,000 of adjusted gross income. For married taxpayers
filing separate returns, the deductible contribution limit generally is phased
out between $0 and $10,000 of adjusted gross income.
There are substantial penalties for withdrawals from an IRA account before age
59 1/2. An investor considering an IRA should consult his or her tax adviser
with respect to applicable plan requirements, contribution limitations and tax
aspects pertaining to him or her.
HOW SHARES MAY BE REDEEMED
Fund shares will be redeemed at the net asset value per share, subject to any
applicable income tax withholding requirements, next determined after receipt
at Sentry Equity's office in Stevens Point, Wisconsin, of a properly executed
redemption request. The redemption price of shares may be more or less than
the shareholder's cost, depending on the market value of the securities owned
by the Fund at the time of redemption. If shares are not represented by stock
certificates, a redemption request form available through Sentry Equity, or a
letter, may be used for the request. IF SHARES ARE REPRESENTED BY STOCK
CERTIFICATES, THE FORM ON THE BACK OF EACH CERTIFICATE MUST BE USED.
Each redemption request and stock certificate must be signed exactly as the
account is registered. If the redemption request is from a qualified plan,
proper withholding and request for redemption forms must be completed. If the
account is owned jointly, both owners must sign. EACH SIGNATURE MUST BE
GUARANTEED BY A REGISTERED REPRESENTATIVE OF SENTRY EQUITY, A
8
<PAGE> 12
COMMERCIAL BANK, TRUST COMPANY, MEMBER OF A STOCK EXCHANGE, SAVINGS AND LOAN
ASSOCIATION OR SAVINGS BANK OR OTHER ELIGIBLE FINANCIAL INSTITUTION. The
guarantee may be waived by Sentry Equity on redemptions of $5,000 or less.
Under certain circumstances (such as corporate or fiduciary registrations)
Sentry Equity may require additional documents (such as inheritance tax waivers,
death certificates or corporate resolutions, etc.) before the proceeds of a
redemption can be paid.
Payment for shares redeemed and a confirmation will be mailed promptly, but not
later than three business days, after the above requirements have been met,
except that the Fund may suspend the right of redemption and the determination
of net asset value of its shares under the following unusual circumstances:
when the New York Stock Exchange is closed (other than weekends and holidays) or
trading is restricted; when an emergency exists, as determined by the Securities
and Exchange Commission, making disposal of portfolio securities or the
valuation of net assets not reasonably practicable; or during any period when
the Securities and Exchange Commission has by order permitted a suspension of
redemption for the protection of shareholders. In such event, redemption shall
be effected at the net asset value next determined after the suspension has
been terminated unless the shareholder has withdrawn the redemption request.
In addition, if the aggregate value of shares of a shareholder who has been a
shareholder for at least five years does not exceed $200, the Fund reserves the
right to close the account. Before taking such action, the Fund will provide
at least six months' written notice. The Fund also has the right to redeem Fund
shares in whole or in part with portfolio securities. For more information,
please consult the Statement of Additional Information.
DISTRIBUTIONS TO SHAREHOLDERS AND TAXATION
It is the policy of the Fund to distribute substantially all of its net
investment income, if any, and all of its net realized capital gains, if any,
at least annually. Income may be minimal because of the Fund's primary
investment objective of long-term capital growth.
All such dividends or distributions will be reinvested in shares of the Fund on
the payable date at net asset value or, at the written request of a shareholder
participating in the Open Purchase Plan, will be paid to the shareholder in
cash. The Fund intends to declare dividends from net investment income payable
in June and December and to distribute annually any net realized capital gains
with the December dividend.
Any dividends that are declared in October, November or December to
shareholders of record as of a date in one of those months and paid during the
following January are "deemed" to have been received on December 31 of the
calendar year declared.
The Fund intends to continue to qualify as a regulated investment company under
the Internal Revenue Code. If so qualified, the Fund will not be subject to
federal income tax to the extent that its net investment income and net
realized capital gains are distributed to shareholders.
Distributions from the Fund representing net investment income or net
short-term capital gains of the Fund, whether received in shares or cash, will
be taxable to shareholders as ordinary income. Distributions from the Fund
representing net long-term capital gains of the Fund will be taxable to
shareholders as a long-term capital gain whether received in shares or cash and
regardless of the period the shareholder has held the shares. The maximum
federal tax rate on long-term capital gain dividends received by individual
shareholders is 28%. Long-term capital gain dividends received by corporate
shareholders are taxed at the same rate as ordinary income. A portion of the
ordinary income dividends received by corporate shareholders may be eligible
for the dividends received deduction.
A distribution received shortly after the purchase of shares reduces the net
asset value of the shares by the amount of the distribution and, although in
effect a return of capital, will be taxable to the shareholder.
9
<PAGE> 13
The Fund is required by law to withhold 31% of taxable dividends and redemption
proceeds paid to certain shareholders who do not furnish a correct taxpayer
identification number (in the case of individuals, a social security number)
and in certain other circumstances.
The source and federal income tax status of all distributions will be reported
to shareholders annually. See the Statement of Additional Information.
CAPITALIZATION OF THE FUND AND VOTING RIGHTS
Sentry Fund, Inc. has authorized capital of 10,000,000 shares of capital stock,
par value of $1 each. Each share is of the same class and has equal,
non-cumulative rights as to voting (with each full share entitled to one vote),
redemption, dividends and liquidation. Fund shares are fully-paid and
nonassessable upon their issuance and have no preemptive, conversion or
exchange rights, nor is there any liability of shareholders to further calls or
assessment.
Shareholder inquiries should be directed to the Fund at the telephone number or
address shown on page 1 of this Prospectus.
SENTRY INSURANCE
Sentry Insurance a Mutual Company ("Sentry Insurance") is a mutual insurance
company incorporated under the laws of the State of Wisconsin with headquarters
at 1800 North Point Drive, Stevens Point, Wisconsin. It owns a group of
insurance and related companies collectively known as the Sentry Group. These
companies include Sentry Life Insurance Company and Sentry Life Insurance
Company of New York. Sentry Insurance also owns Sentry Investment
Management, Inc., the Fund's investment adviser, and Sentry Equity Services,
Inc., the Fund's underwriter and transfer agent.
As of February 1, 1997, Sentry Insurance and its subsidiary, Sentry Life
Insurance Company, together owned approximately 26% of the Fund's outstanding
shares. Additionally, as of the same date, Bank One Wisconsin Trust Company,
N.A., as trustee of the Sentry 401(k) Plan, held and had the power to vote
approximately 35% of the Fund's outstanding shares on behalf of those employees
in the Sentry Group who are participants in such plan.
PERFORMANCE INFORMATION
From time to time, the Fund may quote average annual total return and
total return figures for the Fund's performance in advertisements and other
materials furnished to present and prospective shareholders. Each of these
figures is based on historical results and is not necessarily representative of
the future performance of the Fund. Average annual total return and total
return figures measure both the net income generated by, and the effect of any
realized or unrealized appreciation or depreciation of, the underlying
investments in the Fund for the period in question, assuming the reinvestment
of all dividends during the period. Thus, these figures reflect the change in
the value of an investment in the Fund during a specified period. Average
annual total return will be quoted for at least one, five, and ten-year periods
ending on a recent calendar quarter. Average annual total return figures are
annualized and, therefore, represent the average annual percentage change over
the period in question. Total return figures are not annualized and represent
the aggregate percentage or dollar value change in the value of a specified
dollar amount invested in the Fund's shares over the period in question. THE
AVERAGE ANNUAL TOTAL RETURN FIGURES FOR THE FUND FOR THE ONE, FIVE, AND
TEN-YEAR PERIODS ENDED OCTOBER 31, 1996, ARE 20.6%, 11.2% AND 11.5%,
RESPECTIVELY. These figures, based upon a $1,000 investment, do not reflect the
8% sales load which was imposed prior to March 1, 1991.
10
<PAGE> 14
SENTRY FUND, INC.
RESULTS OF AN ASSUMED INVESTMENT OF $10,000
MAY 22, 1970 - OCTOBER 31, 1996
The accompanying chart shows the growth in value of an investment in Sentry
Fund. If you had invested $10,000 in Sentry Fund on May 22, 1970, when the Fund
was first publicly offered, and had reinvested all your income dividends and
capital gains distributions, the value of your investment as of October 31,
1996, would have been $193,432. No adjustment has been made for any income taxes
payable by shareholders on income dividends and capital gains distributions.
When first organized in 1970, the Fund applied a sales charge. The Fund's sales
charge was eliminated effective March 1, 1991. These performance results
represent past performance of the Fund but do not reflect sales charges
previously imposed. Had it been reflected, the charge would reduce the
performance quoted. Investment return and principal value of an investment will
fluctuate so that an investor's shares when redeemed may be worth more or less
than their original cost.
[AREA CHART]
<TABLE>
<CAPTION>
FISCAL PERIOD OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
ENDED: 1970 1975 1980 1985 1990 1995 1996
- ------------- ----------- ----------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
VALUE OF SHARES
INITIALLY ACQUIRED $11,677 $11,463 $23,037 $24,192 $24,622 $ 33,313 $ 37,198
VALUE OF REINVESTED
DIVIDENDS 0 1,045 5,677 11,654 19,925 39,021 45,462
VALUE OF REINVESTED
CAPITAL GAINS 0 1,121 3,272 14,407 38,074 88,051 110,772
------- ------- ------- ------- ------- -------- --------
TOTAL VALUE 11,677 13,629 31,986 50,253 82,621 160,385 193,432
======= ======= ======= ======= ======= ======== ========
TOTAL CASH DIV.
REINV. FOR THE PERIOD n/a 1,078 2,284 5,196 8,277 10,583 1,710
TOTAL CASH C.G.
REINV. FOR THE PERIOD n/a 1,487 716 9,890 21,999 31,679 10,965
TOTAL INCOME DIVIDENDS $ 29,128
TOTAL CAPITAL GAINS
DIVIDENDS $ 76,736
</TABLE>
11
<PAGE> 15
(This page left blank intentionally)
<PAGE> 16
INSTITUTIONAL ACCOUNTS ONLY
Please execute the applicable section below (all blanks should be completed
with the requested information and inappropriate alternatives should be deleted
or marked out).
Corporation/Association
I,______________________________ Secretary of ________________________________,
a (corporation) (unincorporated association) organized under the laws of _____
______________________________________________________________________________
(the "Organization"), certify that the following resolutions have been adopted
by the (board of directors) (trustees) (managing body) of said Organization and
are now in full force and effect:
"RESOLVED, that the Organization establish an account in Sentry Fund, Inc. (the
"Fund") and purchase shares in the Fund from time to time and the authorized
signers of this Organization may execute the Application for such account and
select the redemption privileges related to such account in accordance with the
Fund's prospectus, as amended from time to time;
RESOLVED, that any of the authorized signers, as indicated on the Application,
may act for the Organization in connection with the account and the Fund,
Sentry Equity Services, Inc., and their representatives are authorized to honor
as genuine and authorized all redemptions signed by said signers as certified
to the Fund by the Secretary of this Organization without inquiry; and
FURTHER RESOLVED, that these appointments and authorizations shall remain in
effect, and the Fund, Sentry Equity Services, Inc. and their representatives
may act thereon, until a written revocation or modification certified by the
Secretary of this Organization shall be delivered to Sentry Equity Services,
Inc."
I further certify that the signers listed on the Form are authorized to sign
redemptions and are now acting in the capacity listed and that the signatures
of said persons are genuine and authorized.
IN WITNESS WHEREOF, I have set my hand and the seal of this Organization this
________ day of ____________, 19__.
(SEAL) ______________________________
Secretary
13
<PAGE> 17
Partnership/Trust/Fiduciary/Non-Profit Organization
In connection with the establishment of an account in Sentry Fund, Inc. (the
"Fund") under the name ___________________________, the undersigned certify
that they are all of the(partners)(trustee)(fiduciaries)(representatives) under
the (partnership agreement) (trust)(will)(court order)(instrument) described as
follows _______________________________________________________________________
_______________________________________________________________________________
[give detailed description and dates] and certify that they have full power and
authority to establish an account with the Fund, to purchase shares and to
select the expedited redemption privileges in accordance with the Application.
The undersigned agree to be bound by the terms and conditions contained on the
Application and the Fund's prospectus, as amended from time to time. The
undersigned agree that any of the aforesaid persons are authorized to act for
the owner of the account. This certification shall remain in effect, and the
Fund. Sentry Equity Services, Inc. and their representative may act in
reliance thereon until a revocation or modification thereof certified by the
undersigned or their successors is delivered to Sentry Equity Services, Inc.
All certifications and agreements herein are made jointly and severally.
Dated:_____________________________ By ______________________________
By ________________________________ By ______________________________
14
<PAGE> 18
INVESTMENT ADVISER
Sentry Investment Management, Inc.
1800 North Point Drive
Stevens Point, Wisconsin 54481
UNDERWRITER
Sentry Equity Services, Inc.
1800 North Point Drive
Stevens Point, Wisconsin 54481
CUSTODIAN
Citibank, N.A.
399 Park Avenue
New York, New York 10022
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
203 North LaSalle Street
Chicago, Illinois 60601
[SENTRY FUND, INC. LOGO]
Sentry Fund, Inc.
PROSPECTUS AND
APPLICATION
MARCH 1, 1997
30-43 1-97
<PAGE> 19
PART B
<PAGE> 20
STATEMENT OF ADDITIONAL INFORMATION
SENTRY FUND, INC.
1800 North Point Drive
Stevens Point, WI 54481
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT THE FUND'S PROSPECTUS BUT
PROVIDES ADDITIONAL INFORMATION THAT SHOULD BE READ IN CONJUNCTION WITH THE
PROSPECTUS OF THE FUND DATED MARCH 1, 1997, WHICH IS INCORPORATED HEREIN BY
REFERENCE.
THE PROSPECTUS SETS FORTH CONCISELY INFORMATION THAT A PROSPECTIVE INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS, CALL OR WRITE
SENTRY EQUITY SERVICES, INC., 1800 NORTH POINT DRIVE, STEVENS POINT, WI
54481, (800) 533-7827.
Date: March 1, 1997
<PAGE> 21
TABLE OF CONTENTS
Page Page in
Herein Prospectus
------ ----------
General Information and History......................... B-3 4
Investment Objectives and Policies...................... B-3 4
Directors and Executive Officers........................ B-6 -
Principal Shareholders.................................. B-7 -
Investment Adviser and Other Services................... B-7 5
Brokerage Practices..................................... B-8 -
The Fund's Underwriter and Transfer Agent............... B-9 5
Computation of Net Asset Value.......................... B-10 6
Share Redemption........................................ B-10 8
Performance Information................................. B-11 10
Tax Status and Taxation................................. B-11 9
Capitalization of the Fund.............................. B-12 10
Custodian............................................... B-12 -
Independent Accountants................................. B-12 -
Portfolio of Securities and Financial Statements........ B-14 -
Independent Accountants' Report......................... B-19 -
B-2
<PAGE> 22
GENERAL INFORMATION AND HISTORY
Sentry Fund, Inc. is a no-load, diversified, open-end, management investment
company, organized under the laws of Maryland on May 9, 1969.
INVESTMENT OBJECTIVES AND POLICIES
The following information supplements the discussion of the Fund's investment
objectives and policies found in the Prospectus.
Investment Restrictions
It is the Fund's policy not to:
- - Borrow money except from banks as a temporary measure for extraordinary or
emergency purposes and then not in excess of the lesser of 5% of the current
value of the Fund's total assets or 10% of the Fund's gross assets taken at
cost;
- - Pledge or mortgage assets of the Fund with a current value in excess of 15%
of the value of the Fund's net assets taken at cost;
- - Invest more than 25% of the current value of its total assets in a particular
industry or group of industries;
- - Underwrite securities of other issuers;
- - Buy and sell commodities or commodity contracts;
- - Buy and sell puts, calls, straddles, spreads or options;
- - Buy and sell real estate or other interests in real estate which are not
readily convertible into cash;
- - Make loans to other persons except through the purchase of a portion of a
publicly distributed issue of bonds or other marketable obligations;
- - Invest more than 5% of the current value of its total assets in the
securities of any one issuer (other than United States government securities)
or purchase more than 10% of the outstanding voting securities of any one
class of any one issuer;
- - Invest in companies for the purpose of exercising control or influencing
management;
- - Buy securities of any company with a record of less than three years'
continuous operation (including that of predecessors) if such purchase would
cause the current value of the Fund's investments in all such companies to
exceed 5% of the current value of the Fund's total assets;
- - Buy or retain securities issued by any other investment company, except that
securities of closed-end investment companies may be purchased as part of a
plan of merger or through a broker who is paid no more than the usual or
customary brokerage commissions;
- - Buy or retain securities of any issuer if those officers and directors of the
Fund or its investment adviser, who own individually more than 1/2% of the
securities of such issuer, together own beneficially more than 5% of such
securities;
- - Buy securities on margin or sell securities short;
- - Participate on a joint or a joint and several basis in any trading account in
securities;
- - Buy securities if a registration statement would have to be filed under the
Securities Act of 1933 in order to sell the securities to the public at the
time of purchase (such securities are frequently called "letter" or
"restricted" stock); and
- - Invest more than 10% of the value of the Fund's total assets in securities of
foreign issuers.
B-3
<PAGE> 23
Changes in any of the above restrictions require the approval of the holders of
the lesser of (1) 67% or more of the voting securities present at a meeting if
the holders of more than 50% of the outstanding voting securities of the Fund
are present or represented by proxy, or (2) more than 50% of the outstanding
voting securities of the Fund.
In addition, the Fund maintains the following investment restrictions which may
be changed by the Board of Directors without shareholder approval:
- - No investment company shall invest more than 5% of its total assets in
securities of unseasoned issuers, including their predecessors, which have
been in operation for less than three years, and equity securities of
issuers which are not readily marketable.
- - No investment company shall invest any part of its total assets in oil,
gas or other mineral exploration, development or lease programs.
- - No investment company shall pledge, mortgage or hypothecate its assets in
excess of 2% of its net assets taken at market value at the time of any
sale of its shares.
- - No investment company shall invest in warrants exceeding 5% of the value of
its net assets, no more than 2% of which may be warrants not listed on the
New York or American Stock Exchange.
Investment Policies and Techniques
The following information supplements the discussion of the Fund's investment
objectives, policies and techniques that are described in the Prospectus under
the caption "The Fund's Investment Policy."
Short-Term Obligations
In times when Sentry Investment Management, Inc. (the "Adviser") believes that
adverse economic or market conditions justify such action, the Fund may invest
all or a substantial portion of its assets temporarily in short-term
fixed-income securities, including without limitation: U.S. government
securities, including bills, notes and bonds, differing as to maturity and rate
of interest, which are either issued or guaranteed by the U.S. Treasury or by
U.S. governmental agencies or instrumentalities; certificate of deposit issued
against funds deposited in a U.S. bank or savings and loan association; bank
time deposits, which are monies kept on deposit with U.S. banks or savings and
loan associations for a stated period of time at a fixed rate of interest;
bankers' acceptances which are short-term credit instruments used to finance
commercial transactions; repurchase agreements entered into only with respect
to obligations of the U.S. government, its agencies and instrumentalities; or
commercial paper and commercial paper master notes (which are demand
instruments without a fixed maturity bearing interest at rates which are fixed
to known lending rates and automatically adjusted when such lending rates
change) rated investment grade or better.
Fixed Income Obligations
Fixed income obligations in which the Fund may invest for temporary, defensive
purposes will be primarily investment-grade debt obligations or determined to
be comparable by the Adviser. The market value of all debt obligations is
affected by changes in the prevailing interest rates. The market value of such
instruments generally reacts inversely to interest rate changes. If the
prevailing interest rates decline, the market value of debt obligations
generally increases. If the prevailing interest rates increase, the market
value of debt obligations generally decreases. In general, the longer the
maturity of a debt obligation, the greater its sensitivity to changes in
interest rates.
Convertible Securities
The Fund may invest in convertible securities, which are bonds, debentures,
notes, preferred stocks, or other securities that may be converted into or
exchanged for a specified amount of common stock of the same or a different
issuer within a particular period of time at a specified price or formula. A
convertible security entitles the holder to receive interest normally paid or
accrued on debt or the dividend paid on preferred stock until the convertible
security matures
B-4
<PAGE> 24
or is redeemed, converted, or exchanged. Convertible securities have unique
investment characteristics in that they generally (1) have higher yields than
common stocks, but lower yields than comparable non-convertible securities,
(2) are less subject to fluctuation in value than the underlying stock since
they have fixed income characteristics, and (3) provide the potential for
capital appreciation if the market price of the underlying common stock
increases.
The value of a convertible security is a function of its "investment value"
(determined by its yield in comparison with the yields of other securities of
comparable maturity and quality that do not have a conversion privilege) and
its "conversion value" (the security's worth, at market value, if converted
into the underlying common stock). The investment value of a convertible
security is influenced by changes in interest rates with investment value
declining as interest rates increase and increasing as interest rates decline.
The credit standing of the issuers and other factors also may have an effect on
the convertible security's investment value. The conversion value of a
convertible security is determined by the market price of the underlying common
stock. If the conversion value is low relative to the investment value, the
price of the convertible security is governed principally by its investment
value. Generally, the conversion value decreases as the convertible security
approaches maturity. To the extent the market price of the underlying common
stock approaches or exceeds the conversion price, the price of the convertible
security will be increasingly influenced by its conversion value. A
convertible security generally will sell at a premium over its conversion value
by the extent to which investors place on the right to acquire the underlying
common stock while holding a fixed income security.
A convertible security might be subject to redemption at the option of the
issuer at a price established in the convertible security's governing
instrument. If a convertible security held by the Fund is called for
redemption, the Fund will be required to permit the issuer to redeem the
security, convert it into the underlying common stock or sell it to a third
party.
Warrants
The Fund may invest in warrants if after giving effect thereto, not more than
5% of its net assets will be invested in warrants other than warrants acquired
in units or attached to other securities. Of such 5% not more than 2% of the
Fund's net assets at the time of purchase may be invested in warrants that are
not listed on the New York Stock Exchange or the American Stock Exchange.
Investment in warrants is pure speculation in that they have no voting rights,
pay no dividends, and have no rights with respect to the assets of the
corporation issuing them. Warrants basically are the options to purchase
equity securities at a specific price for a specific period of time. They do
not represent ownership of the securities but only the right to buy them. The
prices of warrants do not necessarily move parallel to the prices of the
underlying securities.
Small Companies
The Fund may, from time to time, invest a portion of its assets in small
companies. While smaller companies generally have the potential for rapid
growth, investments in smaller companies often involve greater risks than
investments in larger, more established companies because smaller companies may
lack the management experience, financial resources, product diversification,
and competitive strengths of larger companies. In addition, in many instances
the securities of smaller companies are traded only over-the-counter or on a
regional securities exchange, and the frequency and volume of their trading is
substantially less than is typical of larger companies. Therefore, the
securities of smaller companies may be subject to greater and more abrupt price
fluctuations. When making large sales, the Fund may have to sell portfolio
holdings at discounts from quoted prices or may have to make a series of small
sales over an extended period of time due to the trading volume of smaller
company securities. Investors should be aware that, based on the foregoing
factors, an investment in the Fund may be subject to greater price fluctuations
than an investment in a fund that limits its investments to larger, more
established companies. The Adviser's research efforts may also play a greater
role in selecting securities for the Fund than in a fund that invests in
larger, more established companies.
Portfolio Turnover
Portfolio turnover rate is a measure of the purchase and sales activity of the
securities in the Fund's portfolio during a one-year period. Since the Fund's
primary objective is to purchase securities for long-term appreciation,
securities
B-5
<PAGE> 25
are not purchased with a view to rapid turnover. Therefore, the Fund does not
intend to engage in short-term trading, although purchases and sales of
securities are made whenever the Adviser considers it advisable to do so,
regardless of the period held, if the Adviser believes the possibilities for
long-term appreciation of a security have diminished significantly or the risk
of decline in the market price is too great. For the fiscal years ended
October 31, 1996 and 1995, the Fund's portfolio turnover rates were
approximately 28.3% and 26.5%, respectively.
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Fund and their principal
occupations for at least the last five years are listed below. The address of
each director and executive officer is Sentry Insurance a Mutual Company
("Sentry Insurance") 1800 North Point Drive, Stevens Point, Wisconsin, except
as noted below.
*STEVEN R. BOEHLKE, Age 53, President
Vice President - Investments of Sentry Insurance since November 1991.
Mr. Boehlke also serves as President of the Adviser. Mr. Boehlke has been
President of the Fund since December 1995.
THOMAS R. COPPS, Age 57, Director
2828 WAYNE STREET, STEVENS POINT, WI 54481
Vice President, Public Affairs, of the Copps Corporation, a retail and
wholesale distributor of food products, since May 1979. Mr. Copps has been a
Director of the Fund since 1983.
DAVID W. GRAEBEL, Age 67, Director
401 SOUTH AIRPORT BLVD., AURORA, CO 80017-2122
Chairman of the Board of Graebel Companies, Inc., a moving and storage company,
and its subsidiaries since 1950. Mr. Graebel has been a Director of the Fund
since 1969.
*ALFRED C. NOEL, Age 61, Director
Sr. Vice President-Administration of Sentry Insurance since November 1995.
Mr. Noel served as Sr. Vice President-Human Resources and Corporate Services for
Sentry Insurance from November 1994 to November 1995, and as Vice
President-Human Resources from August 1986 to November 1994. Mr. Noel has been
a Director of the Fund since December 1996.
*WILLIAM M. O'REILLY, Age 42, Secretary
Vice President, General Counsel and Corporate Secretary of Sentry Insurance
since January 1994. Mr. O'Reilly served as Corporate Secretary and Associate
General Counsel from November 1992 to December 1993 and as Associate Counsel
from January 1986 to October 1992 of Sentry Insurance. Mr. O'Reilly also
serves as a Director of the Adviser and has been Secretary of the Fund since
1992.
*DALE R. SCHUH, Age 48, Chairman of the Board
President and Chief Operating Officer of Sentry Insurance since November 1996.
Mr. Schuh served as Executive Vice President and Chief Operating Officer of
Sentry Insurance from November 1995 to November 1996, and as Sr. Vice President
from 1992 to 1995. Mr. Schuh also serves as a Director of the Adviser and has
been Chairman of the Board of the Fund since 1993.
*JOHN A. STENGER, Age 61, Vice President
President of Sentry Equity Services, Inc. since August 1994. Mr. Stenger
served as Vice President of Sentry Equity Services, Inc. from May 1982 to July
1994. Mr. Stenger has been Vice President of the Fund since 1982.
STEVEN J. UMLAND, Age 41, Director
11925 West Lake Park Drive, Milwaukee, WI 53224
Vice President - Finance of SSM Ministry Corporation, a hospital management
service corporation, since 1991. Mr. Umland served in various management
positions with Deloitte & Touche, a public accounting firm, from 1978 to 1991.
Mr. Umland has been a Director of the Fund since 1995.
B-6
<PAGE> 26
* THOMAS H. WEINGARTEN, AGE 46, TREASURER
Director of Insurance Reporting and Analysis of Sentry Insurance since 1988.
Mr. Weingarten also serves as Treasurer of Sentry Equity Services, Inc., Sentry
Life Insurance Company of New York, and Sentry Life Insurance Company.
* "Interested person" of the Fund as defined in the Investment Company Act of
1940, as amended.
As of February 1, 1997, the directors and officers as a group owned less than
1% of the outstanding shares of the Fund.
The Fund pays each director who is not an "interested person" of the Fund $250
quarterly as a retainer fee for his services as a director. These directors
received an aggregate of $3,000 in fees and expenses during the fiscal year
ended October 31, 1996. Officers and directors who are "interested persons" of
the Fund receive no compensation from the Fund for their services as such.
The Bylaws of the Fund provide for the classification of directors into three
categories, one class to be elected each year, each class consisting of
approximately one-third of the total number of directors, the members of each
class to hold office for a term of three years.
PRINCIPAL SHAREHOLDERS
As of February 1, 1997, the following persons owned of record or are known by
the Fund to own of record or beneficially 5% or more of the Fund's outstanding
shares:
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE
- ---------------- ---------------- ----------
<S> <C> <C>
Sentry Insurance a Mutual Company 1,033,110 18%
1800 North Point Drive
Stevens Point, WI 54481
Sentry Life Insurance Company 457,876 8%
1800 North Point Drive
Stevens Point, WI 54481
Bank One Wisconsin Trust Company, N.A. 1,938,392 35%
as Trustee of Sentry 401(k) Plan
601 Main Street
Stevens Point, WI 54481
</TABLE>
As of February 1, 1997, Bank One Wisconsin Trust Company, as Trustee of
the Sentry 401(k) Plan, owned a controlling interest in the Fund. Sentry
Insurance a Mutual Company, combined with the shares owned by its wholly-owned
subsidiary, Sentry Life Insurance Company, also owned a controlling interest
in the Fund as of February 1, 1997.
INVESTMENT ADVISER
AND OTHER SERVICES
Sentry Investment Management, Inc. (the "Adviser") is the Fund's investment
adviser pursuant to an Investment Advisory Agreement (the "Agreement"). The
Adviser is a wholly-owned subsidiary of Sentry Insurance (see "Sentry
Insurance" in the Prospectus). The Fund's principal underwriter, Sentry Equity
Services, Inc., is also a wholly-owned subsidiary of Sentry Insurance and is
therefore affiliated with the Adviser and the Fund.
The directors of the Adviser are Larry C. Ballard, Dale R. Schuh, Steven R.
Boehlke and William M. O'Reilly. Mr. Ballard is also Chairman of the Board of
the Adviser, Chairman of the Board and Chief Executive Officer of Sentry
Insurance and serves as an officer or a director of many of its subsidiaries.
Mr. Schuh is also President and Chief Operating Officer of Sentry Insurance and
serves as an officer or a director of many of its subsidiaries. Mr. Boehlke
is also President of the Adviser and Vice President of Sentry Insurance and
serves as a director of many of its subsidiaries. Mr. O'Reilly is also
Secretary of the Adviser, Vice President, General Counsel and Corporate
Secretary of Sentry Insurance, and serves as an officer or a director of many of
its subsidiaries.
B-7
<PAGE> 27
The Agreement provides that the Adviser will furnish the Fund with office
space, facilities and services; manage the Fund's investments; provide
bookkeeping services; and permit any of the Adviser's officers and employees to
serve without compensation by the Fund as officers and directors of the Fund if
elected to such positions. The Fund has agreed to pay the Adviser a fee for
its services at the following rates:
Net Asset Value Annual Rate
--------------- -----------
First $150,000,000 0.75%
Next $150,000,000 0.60%
Next $200,000,000 0.525%
Amount over $500,000,000 0.45%
The fee is computed and paid quarterly. During the fiscal years ended October
31, 1996, 1995 and 1994, the Adviser's fees for services to the Fund were
$689,374, $609,977 and $577,068, respectively.
If the costs of the underwriter, Sentry Equity Services, Inc., in fulfilling
its obligations to the Fund under the Underwriter Agreement exceed its ability
to operate profitably, the Adviser may reimburse the Underwriter for a portion
of its expenses. See "The Fund's Underwriter and Transfer Agent."
Certain expenses of the Fund, such as taxes, portfolio brokerage commissions,
the cost of state and federal securities registrations, printing stock
certificates and checks, preparation of and postage for shareholders' reports,
costs of preparing and typesetting prospectuses, fees for maintaining
shareholders' records, custodial fees, transfer agent fees, auditors' fees,
general legal fees and unaffiliated directors' fees are paid by the Fund.
If the total expenses of the Fund (excluding taxes, portfolio brokerage
commissions and interest, but including the investment advisory fee) exceed the
sum of 1 1/2% of the first $30,000,000 and 1% of the balance of the average
daily net asset value of the Fund in any one fiscal year, the Adviser will
reimburse the Fund for such excess. This expense limitation is taken into
consideration with each payment of the management fee.
The Agreement will continue from year to year so long as such continuance is
specifically approved at least annually by (1) the vote of a majority of the
directors of the Fund who are not "interested persons" of the Fund or the
Adviser, cast in person at a meeting called for the purpose of voting on such
approval, and (2) the vote of the Board of Directors of the Fund or the vote of
a majority of the outstanding voting securities of the Fund. The Agreement
terminates automatically if assigned. In addition, the Agreement may be
terminated at any time, without the payment of any penalty, by the Board of
Directors of the Fund or by the vote of a majority of the outstanding voting
securities of the Fund, upon at least 60 days' written notice to the Adviser.
The Adviser may terminate the Agreement by giving at least 60 days' written
notice to the Fund. The Agreement may be amended only with the approval of a
majority of the outstanding voting securities of the Fund.
The Agreement provides that the Adviser shall not be liable to the Fund or its
shareholders or any other person for any error of judgment or for any loss
arising out of any investment or for any other act or omission in the
performance by the Adviser of its duties under the Agreement except for a loss
resulting from the Adviser's willful misfeasance, bad faith or gross negligence
in the performance of its duty or reckless disregard of its obligations and
duties under the Agreement.
The name "Sentry" and the minuteman service mark have been adopted with the
permission of Sentry Insurance which has registered these service marks. Their
use is subject to the right of Sentry Insurance to withdraw this permission at
any time. If the investment adviser for the Fund shall cease to be Sentry
Investment Management, Inc. or a corporation controlled by or under common
control with Sentry Insurance, the Fund has agreed to stop using the name
"Sentry" and the minuteman design.
BROKERAGE PRACTICES
In placing purchase and sale orders of portfolio securities for the Fund, it is
the policy of the Adviser to seek the best execution of orders at the most
favorable price taking into account research services which in effect are
provided
B-8
<PAGE> 28
with brokerage commissions, as described in this and the following paragraph.
The determination of what is expected to result in the best execution at the
most favorable price involves a number of largely judgmental considerations.
Among these are the Adviser's evaluation of the broker's efficiency in
executing and clearing transactions, the brokers financial strength and
stability, and the Adviser's previous experience in dealing with the broker. The
most favorable price to the Fund means the best net price without regard to
the mix between purchase or sale price and commission, if any. Primary market
makers are used for transactions in the over-the-counter market except in those
instances where the Adviser believes better execution or a more favorable price
is obtainable elsewhere. The Adviser may also purchase securities listed on
stock exchanges from non-exchange members in transactions off the exchange.
In allocating brokerage business for the Fund, the Adviser takes into
consideration the research, analytical, statistical and other information and
services provided by the broker. Selection of brokers or dealers is not made
pursuant to an agreement or understanding with any of the brokers or dealers.
Even though the Adviser negotiates commissions, the Fund may absorb higher
brokerage commissions than might be available from other brokers if the amount
is believed by the Adviser to be reasonable in relation to the value of the
overall quality of the brokerage and research services provided. Other
advisory clients may indirectly benefit from the availability of these services
to the Adviser, and the Fund may indirectly benefit from services available to
the Adviser as a result of transactions for other clients.
During the fiscal years ended October 31, 1994 and 1995, the Fund paid
brokerage commissions totaling $59,861 and $73,559, respectively, in connection
with portfolio transactions. During the fiscal year ended October 31, 1996,
the Fund paid brokerage commissions of $48,941 on transactions of $52,054,340.
All of these commissions were paid to brokers providing research services.
Neither the Adviser nor any company affiliated with it receives any brokerage
commissions from the Fund.
At times the Adviser may consider purchases or sales of the same securities for
the Fund and for one or more of the other companies advised by it. In such
cases, it will be the practice of the Adviser to allocated purchase and sale
transactions among its clients in such manner as it deems equitable.
THE FUND'S UNDERWRITER
AND TRANSFER AGENT
Sentry Equity Services, Inc. ("Sentry Equity"), 1800 North Point Drive, Stevens
Point, Wisconsin, a wholly-owned subsidiary of Sentry Insurance, acts as
underwriter for the Fund pursuant to an Underwriter Agreement (the
"Agreement"). Sentry Equity, a member of the National Association of Securities
Dealers, Inc., is registered with the Securities and Exchange Commission as a
broker-dealer in securities and is licensed as a securities broker-dealer by
various state authorities.
The Agreement provides that Sentry Equity will use its best efforts to offer to
the public on a continuous basis shares of the Fund through its sales agents.
Most sales agents also serve as insurance representatives of the Sentry
Insurance companies. Sales representatives receive a commission from Sentry
Equity of 1% on all sales of Fund shares. However, since the Fund is a "no
load" fund, no sales commissions are charged on the purchase of fund shares
and, therefore, Sentry Equity receives no commission or other remuneration from
the Fund for its services as underwriter.
Under the Agreement, Sentry Equity has agreed to furnish clerical
administrative personnel and services to the Fund, and provide office space,
facilities and equipment required by such personnel other than such services as
may be furnished by the Adviser.
The Agreement will continue from year to year so long as such continuance is
specifically approved at least annually by (1) the vote of a majority of the
directors of the Fund who are not "interested persons" of the Fund or Sentry
Equity, cast in person at a meeting called for the purpose of voting on such
approval, and (2) the vote of the Fund's Board of Directors or the vote of a
majority of the outstanding voting securities of the Fund. The Agreement
B-9
<PAGE> 29
terminates automatically if assigned. In addition, the Agreement may be
terminated at any time, without the payment of any penalty, by the Fund's Board
of Directors or by the vote of a majority of the outstanding voting securities
of the Fund, upon at least 60 days' written notice to Sentry Equity. Sentry
Equity may terminate the Agreement by giving at least 60 days written notice to
the Fund.
Sentry Equity also serves the Fund under a separate Agency Agreement as
Transfer Agent, Dividend Disbursing Agent and Plan Agent (including the
maintenance of shareholders records). For these services, Sentry Equity is
paid an annual fee of $8.50 per account. During the fiscal year ended October
31, 1996, $24,907 was paid pursuant to the Agency Agreement. To handle these
functions, Sentry Equity has contracted with Sentry Insurance for the use of
its extensive data processing staff and equipment. The Fund believes the
payments by the Fund to Sentry Equity for the services described in this
paragraph are comparable to the charges of other companies performing similar
services.
COMPUTATION OF NET ASSET VALUE
The net asset value per share is computed as of the close of trading
(generally, 4:00 p.m. eastern time) on the New York Stock Exchange each day on
which the Exchange is open for trading or on any other day on which there is a
sufficient degree of trading in the underlying assets of the Fund such that the
Fund's net asset value may be materially affected. The net asset value of the
Fund's shares is determined by dividing the value of its total assets, less its
liabilities, by the total number of shares outstanding. Portfolio securities
which are traded or listed on a national securities exchange are valued at the
last sales price thereof at the time of computation or, if there has been no
sale on that day, at the last bid price. Securities traded on the
over-the-counter market are valued at the mean between the last quoted bid and
asked prices at the time of computation, or in the case of National
Market Issues, the last sales price. Securities for which market quotations
are not readily available, and other assets of the Fund, are valued at fair
value as determined in good faith by the Fund's Board of Directors.
SHARE REDEMPTION
The Fund reserves the right in extraordinary circumstances to pay the redemption
price in whole or in part in portfolio securities if deemed advisable by the
Board of Directors or any executive officer of the Fund. However, this option
to redeem in portfolio securities is limited with respect to each shareholder
during any 90-day period to an amount not in excess of the lesser of $250,000
or 1% of the net asset value of the Fund at the beginning of such period. If
redemption is made in portfolio securities, the shareholder would incur
brokerage expense if he or she sold the securities received. An officer of the
Fund would only make such a decision in cases of extreme urgency where there
was not sufficient time for the Board of Directors to act, and such action
would be subsequently reviewed by the Board of Directors.
The Board of Directors may by resolution, as provided by the Fund's Articles of
Incorporation, establish a redemption fee of not more than 1% of net asset
value for redemption of shares which have been outstanding less than one year.
If such a fee is established, shareholders will be given at least 30 days'
advance notice thereof.
The Fund may, by resolution of the Board of Directors, after giving at least
six months' written notice to the shareholder, redeem pursuant to the Fund's
Articles of Incorporation, all shares owned by any shareholder who (1) has been
a shareholder of record for more than five consecutive years; and (2) does not
own shares the original cost (purchase price) of which exceed $200 in the
aggregate at the time of redemption. For purposes of the foregoing where
multiple purchases and redemptions of shares have occurred and the Fund is
unable to specifically determine the original cost of the shares held by the
shareholder, the Fund shall deem those shares held at the time of such
redemption to be those acquired at the lowest original cost. The Directors
have taken no action on this matter but may consider it from time to time.
Shareholders will be notified if the Board of Directors adopts such a
resolution.
The Fund intends to exercise at all times the right provided in its Articles of
Incorporation to redeem at net asset value any portion of the shares owned
beneficially or of record by any shareholder, except corporate affiliates
B-10
<PAGE> 30
of Sentry Insurance or other shareholders who have entered into agreements with
the Fund designed to take into account the interests of all shareholders, in
excess of 4.9% of the outstanding shares of the Fund. This right will not be
exercised if a shareholder's percentage of ownership exceeds 4.9% of the
outstanding shares as a result of redemptions by other shareholders or the
reinvestment of any dividends or capital gains distributions.
PERFORMANCE INFORMATION
As described in the Prospectus, the Fund's historical performance may be shown
in the form of "average annual total return" and "total return" figures, both of
which measure the income generated by, and the effect of any realized or
unrealized appreciation or depreciation of, the underlying investments of the
Fund.
The Fund's average annual total return quotation is computed in accordance with
a standardized method prescribed by rules of the Securities and Exchange
Commission. The average annual total return for a specific period is found by
first taking a hypothetical $1,000 investment ("initial investment") in the
Fund's shares on the first day of the period and computing the ending
redeemable value ("redeemable value") of that investment at the end of the
period. The redeemable value is then divided by the initial investment, and
this quotient is taken to the Nth root (N representing the number of years in
the period) and 1 is subtracted from the result, which is then expressed as a
percentage. The calculation assumes that all income and capital gain dividends
by the Fund have been reinvested at net asset value on the reinvestment dates
during the period.
The calculation of the Fund's total return is not subject to a standardized
formula. Total return performance for a specific period is calculated by first
taking an investment (assumed in the Prospectus to be an initial investment of
$10,000) in the Fund's shares on the first day of the period and computing the
ending redeemable value ("redeemable value") of that investment at the end of
the period. The total return percentage is then determined by subtracting the
initial investment from the redeemable value and dividing the difference by the
initial investment and expressing the result as a percentage. The calculation
assumes that all income and capital gains dividends by the Fund have been
reinvested at net asset value on the reinvestment dates during the period.
Total return may also be shown as the increased dollar value of the
hypothetical investment over the period.
The Fund's performance quotations are based upon the historical earnings and
are not necessarily representative of future performance. Returns and net asset
value of the shares will fluctuate. Some of the factors affecting the Fund's
performance are general market conditions, operating expenses and investment
management. Shares of the Fund are redeemable at net asset value, which may be
more or less than original cost.
The average annual total return figures for the Fund for the one, five, and
ten-year periods ended October 31, 1996, are 20.6%, 11.2% and 11.5%,
respectively. The total return figures for the same periods ended October 31,
1996, are 20.6%, 70.2% and 195.8%, respectively. These figures do not reflect
the applicable sales load imposed prior to March 1, 1991.
TAX STATUS AND TAXATION
The Fund intends to continue to qualify as a "regulated investment company"
under Subchapter M of the Internal Revenue Code. Accordingly, if all taxable
net investment income and net capital gains are distributed to the
shareholders, the Fund will not be subject to federal income tax.
A 4% excise tax is imposed on the excess of the required distribution for a
calendar year over the distributed amount for such calendar year. The required
distribution generally is the sum of 98% of the Fund's net ordinary income for
the calendar year plus 98% of its net capital gain income for the one year
period ending October 31. The Fund intends to declare or distribute dividends
during the calendar year of an amount sufficient to prevent imposition of the
4% excise tax.
A portion of the ordinary income dividends paid by the Fund may be eligible for
the dividends received deduction available to corporate shareholders. The
aggregate amount eligible for the dividends received deduction may not exceed
the aggregate qualifying dividends received by the Fund for the fiscal year.
B-11
<PAGE> 31
At the time an investor purchases shares of the Fund, a portion of the per share
net asset value may be represented by realized or unrealized appreciation in
the Fund's portfolio or undistributed income of the Fund. Subsequent
distributions (or portions thereof) on such shares may in reality represent a
return of capital but will be taxable to the shareholder even if the net asset
value of the shareholder's Fund shares is, as a result of the distributions,
reduced below the shareholder's cost for such shares. For federal tax
purposes, however, the shareholder's original cost continues as the tax basis
of the shares and, on redemption, capital gain or loss will generally be
recognized on the difference between original cost and the redemption price.
This discussion and the discussion in the Prospectus under "Distributions to
Shareholders and Taxation" relate solely to federal income taxation.
Distributions may also be subject to state taxes.
Any loss recognized on the redemption of Fund shares held six months or less
will be a long-term capital loss to the extent of any long-term capital gain
dividends received on such shares. All or a portion of any loss realized on
the redemption of Fund shares may be suspended for federal income tax purposes
if the shareholder reinvests in shares of the Fund within 30 days before or
after the redemption.
The Fund is required to withhold federal income tax at the rate of 31%
(commonly called "backup withholding") on dividend distributions to certain
types of shareholders and from redemptions from their accounts with the Fund if
(1) the shareholder fails to furnish the Fund with the shareholder's taxpayer
identification number, (2) the Internal Revenue Service ("IRS") notifies the
Fund that the number furnished by the shareholder is incorrect, (3) the IRS
notifies the Fund that the shareholder has failed to report properly certain
income on his or her return, or (4) the shareholder fails to certify that he or
she is not subject to backup withholding when required to do so.
The Fund is also required by law to withhold 20% of the taxable portion of
certain distributions from qualified retirement plans and 403(b) annuities.
This withholding requirement applies to any distribution from a qualified
retirement plan or 403(b) annuity that is eligible to be "rolled over." The
20% withholding requirement does not apply to distributions from IRA's or to
any part of a distribution that is transferred directly from the Fund to
another qualified retirement plan, 403(a) annuity plan or IRA. Shareholders
should consult their tax advisers regarding this 20% withholding requirement.
Shareholders who are non-resident aliens are subject U.S. withholding tax on
ordinary income dividends (whether received in cash or shares) at a rate of 30%
or such lower rate as prescribed in an applicable tax treaty.
CAPITALIZATION OF THE FUND
Sentry Fund, Inc. has an authorized capital of 10,000,000 shares of capital
stock of a par value of $1 each. Each share is of the same class and has
equal, non-cumulative rights as to voting (with each full share entitled to one
vote), redemption, dividends and liquidation. Fund shares are fully-paid and
nonassessable upon their issuance and have no preemptive, conversion or exchange
rights, nor is there any liability of shareholders to further calls or to
assessment.
CUSTODIAN
Citibank, N.A., 399 Park Avenue, New York, New York, is custodian of the Fund's
securities and cash and handles receipts and disbursements for the Fund
pursuant to a Custodian Agreement. The custodian performs no management or
policymaking functions for the Fund. Its compensation is based on the number of
shares in the Fund's portfolio and the number of portfolio transactions.
INDEPENDENT ACCOUNTANT
The Fund's independent accountant, Coopers & Lybrand L.L.P., 203 North LaSalle
Street, Chicago, Illinois, audit and report on the Fund's annual financial
statements, review certain regulatory reports and the Fund's income tax
statements, and perform other professional accounting, auditing, tax and
advisory services when engaged to do so by the Fund.
B-12
<PAGE> 32
SENTRY FUND, INC.
PORTFOLIO OF SECURITIES AND FINANCIAL STATEMENTS
October 31, 1996 and 1995
B-13
<PAGE> 33
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENT SECURITIES -- October 31, 1996 SENTRY FUND, INC.
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
- ------ -------- -------- --------
COMMON STOCKS (98.1%)
---------------------
BUSINESS & CONSUMER SERVICES (14.3%) FOODS & RESTAURANT (10.0%)
<S> <C> <C> <C> <C> <C>
148,500 Analyst Int'l Corp............. $3,712,500 90,000 + Ihop Corp................... 1,980,000
25,000 Deluxe Corp.................... 815,625 45,000 + Int'l Dairy Queen Class A... 866,250
100,000 + Diamond Home Service, Inc...... 2,300,000 65,000 Lancaster Colony Corp....... 2,437,500
67,500 + Fiserv, Inc.................... 2,590,313 100,000 McDonald's Corp............. 4,437,500
25,000 Block (H & R), Inc............. 618,750 MANUFACTURING (6.9%)
75,000 + Jaco Electronics, Inc.......... 590,625 75,000 Applied Power............... 2,700,000
150,000 Richardson Electronics......... 1,125,000 31,400 Belden Inc.................. 902,750
239,500 + Richey Electronics, Inc........ 2,095,625 20,000 + Department 56, Inc.......... 440,000
DRUG & HEALTH CARE (11.3%) 90,000 NN Ball & Roller............ 1,215,000
41,200 Bristol-Myers Squibb Co........ 4,356,900 50,000 + Plexus Corp................. 850,000
50,000 Dentsply International Inc..... 2,106,250 14,500 + Wolverine Rube.............. 578,187
10,000 + Lunar Corp..................... 311,250 RETAIL (5.4%)
40,000 + Steris Corp.................... 1,510,000 140,000 Walgreen Company............ 5,285,000
262,500 + Uromed Corp.................... 2,657,813 TOBACCO (7.4%)
ELECTRICAL EQUIPMENT (3.4%) 50,000 Philip Morris Cos. Inc...... 4,631,250
33,600 General Electric Co............ 3,250,800 90,000 UST, Inc.................... 2,598,750
ELECTRONICS (7.4%) TRANSPORTATION (7.0%)
40,000 Int'l Business Machines Corp... 5,160,000 100,000 + Custom Chrome Inc........... 1,887,500
110,000 + Recoton Corp................... 1,995,000 75,000 Harley-Davidson, Inc........ 3,384,325
ENERGY (11.5%) 114,000 + Starcraft Automotive Corp... 413,250
27,300 Cabot Oil & Gas Corp........... 423,150 66,800 Wabash National Corp........ 1,077,150
83,000 + Coho Energy, Inc............... 581,000 -----------
41,000 + Dawson Production Service...... 497,125 TOTAL COMMON STOCKS 95,228,013
5,000 Eaton Corporation.............. 443,125 (Cost $57,418,507) -----------
100,000 + Marine Drilling Companies...... 1,387,500 PRINCIPAL
30,800 + Nueve Energy Co................ 1,536,150 AMOUNT
60,000 + Oceaneering International, Inc. 1,080,000 ---------
203,000 + Pool Energy Services Co........ 2,994,250 SHORT-TERM SECURITIES (0.3%)
25,000 + Pride Petroleum Services, Inc.. 437,500 COMMERCIAL PAPER - DISCOUNTED
10,000 Texaco, Inc.................... 1,016,250 336,500 Ford Motor Credit Corp.
20,000 USX-Marathon Group............. 437,500 Note due 11/5/96 335,800
12,675 + Weatherford Enterra, Inc....... 367,575 -----------
FINANCIAL (13.5%) TOTAL SHORT-TERM SECURITIES 335,800
50,000 First Financial Corp. (Wisc)... 1,356,250 (COST $335,800) -----------
20,000 Firstar Corp................... 980,000 TOTAL INVESTMENTS (98.4%) 95,563,813
40,400 National City Corp............. 1,752,350 (Cost $57,754,307)
35,000 PMI Group...................... 1,999,375 CASH AND RECEIVABLES
80,000 PNC Bank Corp.................. 2,900,000 LESS LIABILITIES (1.6%) 1,589,713
45,000 Security Capital Corp.......... 2,970,000 -----------
49,500 Washington Federal, Inc........ 1,188,000 NET ASSETS (100%) $97,153,526
===========
</TABLE>
+Non-income producing security during the year ended October 31, 1996.
See accompanying notes to financial statements
B-14
<PAGE> 34
SENTRY FUND, INC.
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at
market value (cost $57,754,307) $95,563,813
Cash 50,559
Receivables:
Investment securities sold 1,660,145
Dividends 67,015
-----------
Total assets $97,341,532
LIABILITIES:
Investment advisory fees 176,129
Transfer agent fees 2,147
Custodian fees 730
Professional services 9,000
-----------
Total liabilities 188,006
-----------
NET ASSETS $97,153,526
===========
ANALYSIS OF NET ASSETS:
Capital shares $54,264,474
Undistributed net investment income 450,827
Undistributed net realized gain on
sales of investments 4,628,719
Unrealized appreciation on investments 37,809,506
-----------
Net assets applicable to outstanding shares $97,153,526
===========
Capital Shares Outstanding 5,340,151
===========
Net Asset Value and
Redemption and Offering Price per Share $18.19
======
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1996
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $1,410,076
Interest 234,966
----------
Total investment income $ 1,645,042
Expenses:
Investment advisory fees 689,374
Transfer agent fees 24,907
Professional services 12,579
Printing, stationery and postage 6,709
Licenses and fees 18,092
Directors' fees 3,000
Other expenses 18,528
----------
Total expenses 773,189
-----------
Net investment income 871,853
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on sales of investments 4,921,007
Increase in unrealized appreciation
of investments 11,259,861
-----------
Net realized and unrealized gain
on investments 16,180,868
-----------
Net increase in net assets resulting
from operations $17,052,721
===========
</TABLE>
See accompanying notes to financial statements
B-15
<PAGE> 35
SENTRY FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended October 31, 1996 and 1995
1996 1995
----------- -----------
OPERATIONS:
Net investment income $ 871,853 $ 950,220
Net realized gain on sales
of investments 4,921,007 5,767,028
Increase in unrealized
appreciation on investments 11,259,861 3,352,885
----------- -----------
Net change in net assets
resulting from operations 17,052,721 10,070,133
----------- -----------
DISTRIBUTIONS:
Dividends from net
investment income (894,861) (891,072)
Distributions of net realized gains (5,784,937) (3,961,557)
----------- -----------
Total distribution to shareholders
(6,679,798) (4,852,629)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 20,647,795 4,714,480
Net asset value of shares issued to
shareholders in reinvestment
of distributions 6,625,630 4,805,308
----------- -----------
27,273,425 9,519,788
Cost of shares redeemed (24,866,512) (9,985,556)
----------- -----------
Increase (Decrease) in net assets
derived from capital share
transactions 2,406,913 (465,768)
----------- -----------
Total increase in net assets 12,779,836 4,751,736
NET ASSETS:
Beginning of year 84,373,690 79,621,954
----------- -----------
End of year (including
undistributed net investment
income of $450,827 and
$473,835, respectively) $97,153,526 $84,373,690
=========== ===========
See accompanying notes to financial statements
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Sentry Fund, Inc. (Fund) is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The following is a
summary of significant accounting policies followed by the Fund in the
preparation of its financial statements.
a. Security Valuation --Securities traded on any national securities
exchange or over-the-counter market are valued at the last
reported sales price; short-term securities are stated at amortized
cost which approximates current value.
b. Federal Income and Excise Taxes -- No provision for Federal income or
excise taxes is considered necessary since the Fund intends to
distribute to its shareholders substantially all of its taxable income,
and to otherwise comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies.
c. Investment Income and Security Transactions--Security transactions are
accounted for on the trade date. Dividend income and distributions to
shareholders are recorded on the ex-dividend date and the record date,
respectively. Interest income is recognized when earned. Realized
gains and losses from securities transactions are determined by
comparing the identified cost of the security lot sold with the net
sales proceeds.
B-16
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS (Continued)
2. CAPITAL SHARES
At October 31, 1996, there were 10,000,000 shares of $1 par value capital
stock authorized. Transactions in capital stock for the years ended October
31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Shares sold 1,259,981 312,285
Shares issued to shareholders in reinvestment of distributions 412,197 345,286
--------- -------
1,672,178 657,571
Shares redeemed 1,511,484 (652,520)
--------- -------
Net increase in shares outstanding 160,694 5,051
========= =======
</TABLE>
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of common stock during the year ended October 31, 1996
aggregated $27,257,657 and $24,796,683, respectively.
4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under terms of its investment advisory agreement with Sentry Investment
Management, Inc., the Fund pays an advisory fee equal to .75% of the average
daily net asset value of the Fund. However, under the terms of the
agreement, if the total annual expenses of the Fund (excluding taxes,
portfolio brokerage commissions and interest, but including investment
advisory fees) exceed 1-1/2% of the first $30,000,000 and 1% of the balance
of the average daily net asset value of the Fund in any one fiscal year, the
investment adviser will reimburse the Fund for such excess. Expenses did
not exceed the applicable limitation for the year ended October 31, 1996.
Sentry Equity Services, Inc., (SESI), as principal underwriter of the Fund,
paid $13,282 in commissions to sales representatives for the year ended
October 31, 1996. In addition, SESI also acts as transfer agent and
receives annual fees from the Fund of $8.50 per shareholder account.
As of October 31, 1996 affiliates of Sentry Insurance and the Sentry 401K
Plan held 27% and 36%, respectively, of the Fund's outstanding capital
stock.
5. DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains from security transactions are distributed to
shareholders by the end of the succeeding year unless there are capital loss
carryovers which may be applied against such realized gains. On December
19, 1995 and June 7, 1996, the Fund distributed $5,514,341 ($1.06 per share)
and $270,596 ($.05 per share) related to net realized capital gains.
Undistributed realized capital gains and net investment income as of October
31, 1996 will be paid out on December 19, 1996. On December 19, 1995, and
June 8, 1996, the Fund distributed $624,265 ($.12 per share) and $270,596
($.05 per share), respectively, from net investment income.
B-17
<PAGE> 37
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. INCOME TAX INFORMATION
Unrealized gains and losses on investment securities for both financial
statement and Federal income tax purposes at October 31, 1996 were as
follows:
Gross unrealized gains $42,411,703
Gross unrealized losses 4,602,197
-----------
Net $37,809,506
===========
The aggregate investment cost for both financial statement and Federal
income tax purposes at October 31, 1996 was $57,754,307.
FINANCIAL HIGHLIGHTS
The following presents information relating to a share of capital stock of
the Fund outstanding for the entire period:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
Net Asset Value, Beginning of Period $16.29 $15.39 $15.93 $15.17 $15.34
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment Income .17 .18 .18 .23 .29
Net Realized and Unrealized Gains
on Investments 3.01 1.65 .53 1.12 1.03
------ ----- ----- ----- -----
Total from Investment Operations 3.18 1.83 .71 1.35 1.32
Less Distributions
Dividends From Net Investment Income (.17) (.17) (.22) (.23) (.35)
Distribution From Net Realized Gains (1.11) (.76) (1.03) (.36) (1.14)
------ ----- ----- ----- -----
Total Distributions (1.28) (.93) (1.25) (.59) (1.49)
Net Asset Value End of Period $18.19 $16.29 $15.39 $15.93 $15.17
====== ====== ====== ====== ======
Total Return 20.60% 12.97% 4.86% 9.17% 9.09%
Net Assets, End of Period (in Thousands) $97,154 $84,374 $79,622 $76,315 $69,454
Ratio of Expenses to Average Net Assets .84% .86% .86% .87% .88%
Ratio of Net Investment Income to
Average Net Assets .95% 1.17% 1.19% 1.48% 1.95%
Portfolio Turnover Rate 28.28% 26.54% 16.31% 22.34% 12.58%
* Average Commission Rate $ .03
</TABLE>
* Disclosure of the current year only is required.
B-18
<PAGE> 38
INDEPENDENT ACCOUNTANTS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF SENTRY FUND, INC.:
We have audited the accompanying statement of assets and liabilities of Sentry
Fund, Inc., including the portfolio of investment securities, as of October 31,
1996, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of October 31, 1996 by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Sentry Fund, Inc. as of October 31, 1996, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Chicago, Illinois
November 22, 1996
1996 FEDERAL INCOME TAX INFORMATION
Long term capital gains are taxable to shareholders as long term
capital gains, regardless of how long a person has been a shareholder. In
order to avoid an excise tax on undistributed amounts, the Fund must declare by
the end of the calendar year a dividend representing 98% of its ordinary income
for the calendar year and 98% of its net capital gains for the period of
November 1 of the previous year through October 31 of the current year.
Capital gains and income distributions declared and made payable to
shareholders of record before the end of the calendar year will be "deemed" to
have been received by the shareholders on December 31 so long as the dividends
are actually paid during January of the following year.
For individual tax information, shareholders should consult their own tax
advisors.
B-19
<PAGE> 39
PART C
<PAGE> 40
PART C
OTHER INFORMATION
ITEM 24
(a) Financial Statements of Sentry Fund, Inc.
Included in Part A:
Financial Highlights
Included in Part B:
Portfolio of Investment Securities, October 31, 1996
Statement of Assets and Liabilities, October 31, 1996
Statement of Operations for the Year Ended October 31, 1996
Statements of Changes in Net Assets for the Years Ended
October 31, 1996 and 1995
Notes to Financial Statements
Financial Highlights
Independent Accountants' Report
All other schedules not included have been omitted as they are not applicable
or the information required is shown elsewhere in the financial statements.
<PAGE> 41
ITEM 24
(b) Exhibits
1. Articles of Incorporation of Registrant
2. (a) Bylaws of Registrant
(b) Rules and Regulations adopted by Board of Directors
3. None
4. Specimen Stock Certificate
5. Investment Advisory Agreement with Sentry Investment
Management, Inc. dated March 1, 1991
6. (a) Underwriter Agreement with Sentry Equity Services, Inc.
dated December 4, 1990
(b) Form of Dealer Agreement
7. None
8. Custodian Agreement with Citibank, N.A. dated May 1, 1989
9. (a) Agency Agreement with Sentry Equity Services, Inc. dated
May 14, 1970
(b) Name Agreement with Hardware Mutual Casualty Company
dated May 9, 1969
(c) Agreement between Sentry Equity Services, Inc. and
Hardware Mutual Casualty Company dated May 14, 1970
10. Opinion and Consent of Vedder, Price, Kaufman & Kammholz,
Counsel for Registrant, dated May 15, 1970
11. Consent of Coopers & Lybrand L.L.P.
12. None
13. Subscription Agreement executed by Sentry Life Insurance
Company dated July 9, 1969
14. (a) Model Keogh Plan, Custodial Agreement and Adoption
Agreement
(b) Model Individual Retirement Custodial Account
(c) Model IRA Disclosure Statement
15. None
16. Performance Computation Schedule
17. Financial Data Schedule*
18. None
* Item 17 is incorporated by reference to such item in the Form N-SAR filing
made by Registrant on December 30, 1996.
ITEM 25. Persons Controlled by or under Common Control with Registrant
The following is a description of all persons who might be considered to be
directly or indirectly controlled by or under common control with the
Registrant:
<PAGE> 42
1. Sentry Insurance a Mutual Company ("Sentry Insurance"), a Wisconsin
corporation, is affiliated with the Registrant, a Maryland corporation.
2. Sentry Insurance is also affiliated with Sentry Insurance Foundation, Inc., a
Wisconsin corporation.
3. Sentry Insurance is also affiliated with Sentry Lloyd's of Texas, a Texas
Lloyd's corporation.
4. The following companies are wholly-owned subsidiaries of Sentry Insurance:
(a) Middlesex Insurance Company ("Middlesex"), a Wisconsin corporation;
(b) Dairyland Insurance Company ("Dairyland"), a Wisconsin corporation;
(c) Sentry Life Insurance Company ("Sentry Life"), a Wisconsin corporation;
(d) Parker Stevens Agency, Inc., a Wisconsin corporation;
(e) Parker Stevens Agency of Mass., Inc., a Massachusetts corporation;
(f) Sentry Investment Management, Inc., a Delaware corporation;
(g) Sentry Equity Services, Inc., a Delaware corporation;
(h) Sentry Services, Inc., a Wisconsin corporation;
(i) Sentry Aviation Services, Inc., a Wisconsin corporation; and
(j) WAULECO, Inc., a Wisconsin corporation.
5. Patriot General Insurance Company, a Wisconsin corporation, is a
wholly-owned subsidiary of Middlesex.
6. Sentry Life Insurance Company of New York, a New York corporation, is a
wholly-owned subsidiary of Sentry Life.
7. Dairyland County Mutual Insurance Company of Texas, a Texas corporation, is
affiliated with Dairyland.
ITEM 26. Number of Holders of Securities (As of January 15, 1997)
Title of Class Number of Record Holders
- -------------- ------------------------
Common Stock, $1.00 par value 2,711
ITEM 27. Indemnification
The Maryland General Corporation Law, Section 2-418 provides for
indemnification of directors, officers, employees and agents. Officers,
directors, employees and agents of the Fund will be indemnified to the fullest
extent allowed by Maryland law.
Article VII, Section "H" of the Registrant's Articles of Incorporation
provides that the Registrant will indemnify its directors and officers against
expenses, judgments, fines and settlements reasonable incurred by them by
reason of their offices, provided that such persons acted in good faith and
subject to other specified conditions. In addition, the same section of the
Articles permits the Registrant to purchase insurance against certain
liabilities of directors and officers.
In accordance with Section 17(h) of the Investment Company Act, this
provision of the Articles shall not protect any person against any liability to
the Registrant or its stockholders to which he or she 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 or her office.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling persons of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the
<PAGE> 43
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The Registrant participates in an insurance policy covering the Registrant
and the Investment Adviser and their respective directors, officers, and
employees against certain liabilities arising out of acts, omissions and
breaches of duty in connection with their offices and employment with such
entities. This insurance policy has limits of $2,500,000 per occurrence and
$10,000,000 in the aggregate.
ITEM 28. Business and Other Connections of Investment Adviser
Sentry Investment Management, Inc., the investment adviser of the Registrant,
also acts as investment adviser to other companies (primarily insurance
companies) affiliated with the adviser.
The following table describes all other business, professions, vocations and
employments of a substantial nature in which each director or officer of the
adviser is, or has been during the past two fiscal years, engaged for his own
account or in the capacity of director, officer, employee, partner or trustee.
The principal business address for the companies listed is 1800 North Point
Drive, Stevens Point, Wisconsin 54481.
<PAGE> 44
Capacity with
Sentry Investment Substantial Business
Name Management, Inc. and Other Connections
---- ----------------- ---------------------
Steven R. Boehlke Director and President of Sentry Fund,
President Inc.; Vice President-
Investments of Sentry
Insurance a Mutual Company
("Sentry Insurance"); and a
director of various other
companies in the Sentry Group
Larry C. Ballard Director (Chairman Chairman of the Board,
of the Board) and Chief Executive Officer
of Sentry Insurance;
Chairman of the Board of
Sentry Life Insurance Company;
and an officer and a director
of various other companies in
the Sentry Group.
William J. Schaars Vice President None
William M. O'Reilly Secretary and Director Vice President, General
Counsel and Corporate
Secretary of Sentry Insurance;
Secretary of Sentry Fund,
Inc.; and an officer and a
director of various other
companies in the Sentry Group.
Thomas H. Weingarten Treasurer Director of Insurance
Accounting, Sentry Insurance,
and Treasurer and Director of
various companies in the
Sentry Group
Dale R. Schuh Director President and Chief Operating
Officer of Sentry Insurance,
and an officer and a director
of various other companies in
the Sentry Group.
ITEM 29. Principal Underwriter
(a) None
(b) The principal business address of each director and officer of the
principal underwriter is 1800 North Point Drive, Stevens Point,
Wisconsin 54481. Other required information is as follows:
(1) (2) (3)
Name Positions and Positions and
Offices with Underwriter Offices with Registrant
------------------------ -----------------------
John A. Stenger President Vice President
David M. Potts Vice President None
Thomas H. Weingarten Treasurer Treasurer
William M. O'Reilly Secretary Secretary
Larry C. Ballard Director (Chairman None
of the Board)
Dale R. Schuh Director Director (Chairman
of the Board)
(c) Inapplicable.
<PAGE> 45
ITEM 30. Location of Accounts and Records
All accounts, books and other documents are maintained at the offices of
Sentry Equity Services, Inc., 1800 North Point Drive, Stevens Point, Wisconsin
54481.
ITEM 31. Management Services
None.
ITEM 32. Undertakings
The Registrant hereby undertakes to furnish each person to whom a Prospectus
is delivered a copy of the Registrant's latest Annual Report to Shareholders,
upon request and without charge.
<PAGE> 46
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that this amendment to its
Registration Statement meets all the requirements for effectiveness of this
Registration pursuant to Rule 485(b) under the Securities Act of 1933, and has
duly caused this amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Stevens
Point, and State of Wisconsin, on February 7, 1997.
SENTRY FUND, INC., Registrant
BY: s/ Steven R. Boehlke
----------------------------
Steven R. Boehlke, President
Pursuant to the requirements of the Securities Act of 1933, this amendment to
the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
Principal Executive Officers and Directors Date
- ------------------------------------------ ----
s/ Dale R. Schuh February 7, 1997
- ------------------------------------------ ----------------------------
Dale R. Schuh, Director and Chairman
of the Board (Principal Executive Officer)
s/ Steven R. Boehlke February 7, 1997
- ------------------------------------------ ----------------------------
Steven R. Boehlke, President
s/ Thomas H. Weingarten February 7, 1997
- ------------------------------------------ ----------------------------
Thomas H. Weingarten, Treasurer
(Principal Financial Officer)
s/ John A. Stenger February 7, 1997
- ------------------------------------------ ----------------------------
John A. Stenger, Vice President
s/ William M. O'Reilly February 7, 1997
- ------------------------------------------ ----------------------------
William M. O'Reilly, Secretary
s/ David W. Graebel February 7, 1997
- ------------------------------------------ ----------------------------
David W. Graebel, Director
s/ Thomas R. Copps February 7, 1997
- ------------------------------------------ ----------------------------
Thomas R. Copps, Director
s/ Steven J. Umland February 7, 1997
- ------------------------------------------ ----------------------------
Steven J. Umland, Director
s/ Alfred C. Noel February 7, 1997
- ------------------------------------------ ----------------------------
Alfred C. Noel, Director
<PAGE> 47
INDEX TO EXHIBITS
Exhibits
1. Articles of Incorporation of Registrant
2. (a) Bylaws of Registrant
(b) Rules and Regulations adopted by Board of Directors
3. None
4. Specimen Stock Certificate
5. Investment Advisory Agreement with Sentry Investment Management, Inc.
dated March 1, 1991
6. (a) Underwriter Agreement with Sentry Equity Services, Inc. dated
December 4, 1990
(b) Form of Dealer Agreement
7. None
8. Custodian Agreement with Citibank, N.A. dated May 1, 1989
9. (a) Agency Agreement with Sentry Equity Services, Inc. dated May 14,
1970
(b) Name Agreement with Hardware Mutual Casualty Company dated May 9,
1969
(c) Agreement between Sentry Equity Services, Inc. and Hardware Mutual
Casualty Company dated May 14, 1970
10. Opinion and Consent of Vedder, Price, Kaufman & Kammholz, Counsel for
Registrant, dated May 15, 1970
11. Consent of Coopers & Lybrand L.L.P.
12. None
13. Subscription Agreement executed by Sentry Life Insurance Company dated
July 9, 1969
14. (a) Model Keogh Plan, Custodial Agreement and Adoption Agreement
(b) Model Individual Retirement Custodial Account
(c) Model IRA Disclosure Statement
15. None
16. Performance Computation Schedule
17. Financial Data Schedule*
18. None
* Item 17 is incorporated by reference to such item in the Form N-SAR filing
made by Registrant on December 30, 1996.
<PAGE> 1
EXHIBIT 1
<PAGE> 2
SENTRY FUND, INC.
ARTICLES OF INCORPORATION
FIRST: Incorporators
I, the subscriber, William O. Petersen, whose post office address
is 39 South LaSalle Street, Chicago, Illinois 60603, being at least
twenty-one (21) years of age, am, under and by virtue of the General Laws
of the State of Maryland authorizing the formation of corporations, forming
a corporation.
SECOND: Name
The name of the corporation (which is hereinafter called the
"Corporation") is
SENTRY FUND, INC.
THIRD: Purposes
The purposes for which the Corporation is formed are as follows:
A. To engage in the business of a diversified, open-end management
investment company as such companies are defined in The Investment Company
Act of 1940.
B. To invest and reinvest in; to buy or otherwise acquire; to hold
for investment or otherwise; to own; to exercise, refuse to exercise or
otherwise deal with the rights, privileges and powers of ownership of; to
sell, exchange or otherwise dispose of:
(1). Securities or interests of all kinds, however evidenced, or
obligations of all kinds, however evidenced, or rights or warrants to
acquire such securities, interests or obligations
<PAGE> 3
(a) of any private or public company, corporation, association,
general or limited partnership, trust or other enterprise or
organization, foreign or domestic,
(b) issued or guaranteed by the United States of America, or
any state, territory or district thereof, or other instrumentalities
or subdivisions, and
(c) issued or guaranteed by foreign national and foreign state
governments, or their instrumentalities or subdivisions;
(2) Deposits at interest in banks, savings banks, trust companies
and savings and loan associations, organized under the laws of the United
States of America or any state, territory or district thereof or of a
foreign jurisdiction; and
(3) Commercial paper, bank acceptances and secured call loans.
C. To conduct research and investigations with respect to securities,
organizations, business and general business conditions in the United States
and elsewhere; to secure information pertaining to the investment and
employment of theassets and funds of the Corporation; and to procure any or all
of the foregoing from others and to pay compensation therefor.
D. To exercise all of its rights as owner of any securities and property
which might be exercised by any
-2-
<PAGE> 4
individual owning such securities and property in his own right.
E. To acquire all or any part of the goodwill, rights, property
and business of any person, firm, association or corporation
heretofore or hereafter engaged in any business similar to any
business which the Corporation has the power to conduct, and to hold,
utilize, enjoy and in any manner dispose of the whole or any part of
the rights, property and business so acquired, and to assume in
connection therewith any liabilities of any such person, firm,
association or corporation.
F. To carry out all or any part of the aforesaid objects and
purposes, and to conduct its business in all or any of its branches,
in any or all states, territories, districts and possessions of the
United States of America and in foreign countries; and to maintain
offices and agencies in any or all states, territories, districts and
possessions of the United States of America and in foreign countries.
The foregoing objects and purposes shall, except when otherwise
expressed, be in no way limited or restricted by reference to, or
interference from, the terms of any other clause of this or any other
article of these Articles of Incorporation or of any amendment thereto, and
shall each be regarded as independent, and construed as powers as well as
objects and purposes.
FOURTH: Maryland Address and Registered Agent
The post office address of the principal office of the
Corporation in the State of Maryland will be c/o The
-3-
<PAGE> 5
Corporation Trust Incorporated, First National Bank Building, Light and Redwood
Streets, Baltimore, Maryland 21202. The name and post office address of the
resident agent of the Corporation in this state are The Corporation Trust
Incorporated, a corporation of this state, First National Bank Building, Light
and Redwood Streets, Baltimore, Maryland 21202.
FIFTH: Capital Stock
A. The total number of shares of stock which the Corporation
has authority to issue is ten million (10,000,000) shares of capital stock of
the par value of One Dollar ($1.00) a share, all of one class, and having an
aggregate par value of Ten Million Dollars ($10,000,000).
B. Each share of capital stock of the Corporation shall be
acquired subject to the provisions of these Articles of Incorporation,
including, not in limitation of the foregoing but in furtherance thereof, the
provisions of Article SEVENTH defining, limiting and regulating the powers of
the Corporation and of the directors and stockholders.
SIXTH: Directors
The number of directors of the Corporation shall be
three (3), which number may be changed pursuant to the bylaws of the
Corporation, but shall never be less than three (3); and the names of the
directors who shall act until the first Annual Meeting of Stockholders or
until their successors are duly chosen and qualified are Donald M. Colby,
Vernon H. Holmes and John Shannon, Jr.
SEVENTH: The following provisions are hereby adopted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the
directors and stockholders:
-4-
<PAGE> 6
A. Issue of Corporation's Shares
(1) Issuance of Shares
The board of directors of the Corporation is hereby empowered
to authorize the issuance from time to time of shares of its stock of
any class whether now or hereafter authorized (including any shares
redeemed or repurchased by the Corporation) for such consideration
not less than par value as said board of directors may deem advisable;
provided, however, that except for the initial issuance of shares by
the Corporation, its shares of capital stock shall not be issued and
sold for a consideration of less than the Net Asset Value of said
shares computed pursuant to the method of computation prescribed
under subsection (8) of Section B of this Article SEVENTH.
(2) Right to Refuse Subscriptions
The Corporation by action of its board of directors shall have
the right to refuse to accept any subscription to its shares at any
time without any cause or reason therefor whatsoever. Without
limiting the foregoing, the Corporation shall have the right not to
accept subscriptions under circumstances or in amounts considered
disadvantageous to existing stockholders and it may from time to time
set minimum and/or maximum amounts which may be invested in shares of
the Corporation's capital stock by a subscriber to the Corporation's
capital stock.
-5-
<PAGE> 7
(3) Time for Determining Sales Price
The time as of which the Net Asset Value shall be determined for the
purpose of selling shares under this Section A shall be:
(a) As of the close of trading upon the New York Stock Exchange
on the day on which the subscription for shares is received by the
Corporation or its duly authorized agent if such receipt takes place
prior to such close of trading on any day (not including Saturday or
Sunday) on which said Exchange is open for trading; or
(b) As of the close of trading upon the New York Stock Exchange
on the first day on which such exchange is open for trading (not
including Saturday or Sunday) next succeeding the day on which the
subscription for shares is received by the Corporation or its duly
authorized agent, if such receipt takes place at any time other than
that specified in (a) above;
provided, however, the board of directors may establish such time or times
other than those set forth in (a) and (b) above in accordance with the
provisions of the Investment Company Act of 1940 and the rules and regulations
thereunder.
(4) When Subscribed for Shares Become Outstanding
Stock subscribed for shall be deemed to be outstanding as of
the time of accept-
-6-
<PAGE> 8
ance of any subscription, the entry thereof on the books of the
Corporation, and the determination of the net price thereof, which
price shall be then deemed to be an asset of the Corporation.
B. Redemption of the Corporation's Shares
(1) Right of Stockholder to Redeem Shares
Each holder of the capital stock of the Corporation may at any time
require the Corporation to redeem all or any part of the shares of
capital stock standing in the name of such holder on the books of the
Corporation at the Net Asset Value of such shares, less such withdrawal
charge on shares of capital stock as have been issued less than one (1)
year of not to exceed one percent (1%) of such Net Asset Value as may
from time to time be established by resolution of the board of directors,
except insofar as such right of redemption may be suspended pursuant to
the provisions of subsection (3) of this Section B.
(2) Time for Determining Redemption Price
The time as of which Net Asset Value shall be determined for the
purpose of redemption of shares under subsection (1) of this Section B
shall be, subject to the exceptions created by subsection (3) of this
Section B:
(a) As of the close of trading upon the New York Stock Exchange
on the day on which
-7-
<PAGE> 9
(i) certificates evidencing such shares, or
(ii) if certificates for such shares have not been issued,
instructions as provided for in paragraph (b) of subsection (5)
of this Section B
are delivered to and received by the Corporation or its duly authorized
agent, if such delivery and receipt takes place prior to the close of
trading on the New York Stock Exchange on any day (not including
Saturday or Sunday) on which said Exchange is open for trading; or
(b) As of the close of trading upon the New York Stock Exchange
on the first day on which said Exchange is open for trading (not
including Saturday or Sunday) next succeeding the day on which
(i) certificates evidencing such shares, or
(ii) if certificates for such shares have not been issued,
instructions as provided for in paragraph (b) of subsection (5)
of this Section B
are delivered and received by the Corporation or its duly authorized
agent, if such delivery and receipt takes place at any time other than
that specified in (a) above;
provided, however, the board of directors may establish such time or times
other than those set forth in (a) and (b) above in accordance with the
-8-
<PAGE> 10
provisions of the Investment Company Act of 1940 and the rules and regulations
thereunder.
(3) Suspension of Right of Redemption
In the event that at any time the New York Stock Exchange shall be
closed or trading thereon restricted for any period of time other than is
customary for weekends or holidays, the provisions of subsections (1) and (2)
of this Section B relative to the redemption of shares of the Corporation and
the price thereof may, in the discretion of an officer of the Corporation or
the board of directors, be suspended and ineffective for the period from the
date of closing or restriction of trading to the date of the reopening of or
unrestricted trading on said Exchange including in such period the day on which
the action is taken for the closing or restriction of trading on said Exchange
and the day on which said Exchange is reopened or trading is again
unrestricted; provided, also, that in such case the Corporation shall not be
required to redeem any shares offered and deposited for redemption during the
day on which the action is taken for closing the said Exchange or restricting
trading thereon; and further provided, that during any period that the
redemption of shares has been suspended pursuant to the provisions of this
subsection any shares on deposit, for which the Net Asset
-9-
<PAGE> 11
Value has not yet been determined, or which may be deposited, may be withdrawn
by the record holder thereof or said shares may be returned to the record
holder thereof by the Corporation; and further provided, that in accordance
with the provisions of The Investment Company Act of 1940 and the rules and
regulations promulgated thereunder by the Securities and Exchange Commission,
the Corporation may, in the discretion of an officer of the Corporation or the
board of directors, suspend such right of redemption (a) for any period during
which trading on the New York Stock Exchange is restricted; (b) for any period
during which an emergency exists as a result of which (i) disposal by the
Corporation of securities owned by it is not reasonably practicable or (ii) it
is not reasonably practicable for the Corporation fairly to determine the value
of its net assets; or (c) for such other period as the Commission may by order
permit for the protection of stockholders of the Corporation.
(4) Right of Corporation to Redeem Stock Holdings in Excess of 4.9% of
Outstanding Shares and Small Record Holdings
All shares of the capital stock of the Corporation now or hereafter
authorized shall be subject to redemption and redeemable at the option of
the Corporation pursuant to the following limitations and provisions:
-10-
<PAGE> 12
(a) Stock Holdings in Excess of 4.9% of Outstanding Shares
The Corporation may at its option (exercised pursuant to a resolution
of the board of directors which may refer to the shares held of record or
beneficially, or both, by a specific stockholder or which sets forth general
criteria or a criterion applicable to all stockholders) redeem as hereinafter
provided any number of its shares of capital stock as may, at the time the
resolution is passed or at such other time or times as are designated in such
resolution, be owned in the aggregate, either of record or beneficially, or
both, by a stockholder in excess of 4.9% of the shares of the Corporation
outstanding at such time or times. The specific shares to be redeemed shall be
chosen in such manner as the board of directors may determine. The Corporation
shall not, when exercising this option, be obligated to apply it uniformly
among all stockholders holding the same, a greater or a lesser number of
shares. The manner of redemption shall be as prescribed in paragraph (c) of
this subsection (4).
(b) Small Record Holdings
The Corporation may at its option (exercised pursuant to a resolution
of the board of directors which may refer to the
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shares held of record by a specific stockholder or which sets forth general
criteria or a criterion applicable to all stockholders) redeem all of its
shares of capital stock as may, at the time the resolution is passed or at such
other time or times as are designated in such resolution, be owned of record by
any stockholder who at that time (i) has been a stockholder of record for more
than five (5) consecutive years and (ii) does not own of record shares which in
the aggregate have a Net Asset Value in excess of Five Hundred Dollars ($500).
The Corporation shall not, when exercising this option, be obligated to apply
it uniformly among all stockholders holding the same, a greater or a lesser
number of shares. The manner of redemption shall be as prescribed in paragraph
(c) of this subsection (4).
(c) Manner of Redemption
A notice shall be given to each registered holder whose shares are to
be redeemed by mailing such notice by prepaid registered mail to the last known
address of such stockholder on the books of the Corporation (or to each
beneficial holder in care of the registered holder in whose name such shares
are registered if the beneficial owner be known) specifying the number of
shares to be redeemed; a
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statement that the price to be paid for such shares will be the Net Asset Value
for shares delivered and received for redemption as of the opening of business
of the Corporation on the first full business day on which shares are
redeemable next succeeding the date on which the redemption notice is mailed;
the specific shares to be redeemed, if applicable; and the place at which the
redemption price of such shares is payable. The price at which the shares
specified in any such notice shall be redeemed shall be the Net Asset Value per
share prevailing for shares received and accepted for redemption as of the
opening of business of the Corporation on the first full business day on which
shares of the Corporation are redeemable next succeeding the date on which the
redemption notice is mailed. The Corporation shall deposit the aggregate
redemption price for a stockholder's shares being redeemed in any banking
institution organized under the laws of the United States of America or any
state thereof not later than one (1) business day after the redemption price of
the shares being redeemed is determined. The amount deposited shall thereafter
be available for payment to the holder of the shares so redeemed upon surrender
of certificates for such shares duly endorsed or accompanied by
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proper instruments of transfer or, if certificates for such shares have not
been issued, upon appropriate instructions by the owners of such shares to
the Corporation to redeem such shares. Upon deposit of the redemption
price as aforesaid, the shares shall be deemed to have been redeemed and
the holder of such shares with respect to which such deposit has been made
shall cease to be a stockholder with respect to such shares so redeemed
and shall have no interest or claim against the Corporation with respect to
such shares, and such shares and the holder thereof as such shall have no
voting or other right against the Corporation or its assets with respect
to such shares except to receive the redemption price (without interest)
from such bank as aforesaid.
(5) "Delivery and Receipt" of Certificates or Instructions (for Uncertified
Shares) by Corporation or its Agent upon Redemption of Shares
(a) Certificated Shares
Certificates evidencing shares tendered for redemption shall be deemed
actually to have been delivered to and received by the Corporation or its
duly authorized agent only when said certificates with proper stock
transfer stamps affixed, if required by law, accompanied
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by duly signed irrevocable instructions in writing in form acceptable to the
Corporation directing the Corporation to redeem the stock represented thereby
at the Net Asset Value thereof as defined herein, less such withdrawal charge,
if any, as may have been established by the board of directors, shall have been
deposited physically at such office, or other place of deposit as the board of
directors may from time to time designate.
(b) Uncertificated Shares
If certificates evidencing shares tendered for redemption have not been
issued, instructions for redemption shall be deemed actually to have been
delivered to and received by the Corporation or its duly authorized agent only
when duly signed irrevocable instructions in writing in form acceptable to the
Corporation directing the Corporation to redeem shares of stock at the Net Asset
Value thereof as defined herein, less such withdrawal charge, if any, as may
have been established by the board of directors, accompanied by sufficient stock
transfer stamps if required by law, shall have been deposited physically at such
office, or other place of deposit as the board of directors may from time to
time designate.
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(6) Payment for Shares Redeemed
Payment of the redemption price for shares redeemed pursuant to
subsection (1) of this Section B shall be made by the Corporation or its
duly authorized agent within seven (7) days after delivery and receipt
of certificates representing such shares or, if certificates representing
such shares have not been issued, upon receipt and delivery of
instructions as prescribed in paragraph (b) of subsection (5) of this
Section B, provided, however, that payment may be postponed during the
period in which the redemption of shares is suspended pursuant to
subsection (3) of this Section B. The Corporation in the discretion of
the board of directors or an officer may pay the redemption price in
whole or in part by a distribution in kind of securities from the
portfolio of the Corporation, in lieu of money, valuing such securities
at their appraised value employed for determining the Net Asset Value
governing such redemption price, and selecting securities in such manner
as the board of directors or an officer of the Corporation may determine
is fair and equitable.
(7) Right of Corporation to Purchase Shares
The Corporation may purchase in the open market or otherwise
acquire from any
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owner or holder thereof any shares of its capital stock, in which case the
consideration paid therefor (in cash or in the securities in which the
funds of the Corporation shall then be invested) shall not exceed the Net
Asset Value thereof, at the time of the purchase or acquisition by the
Corporation thereof less such withdrawal charge, if any, as may have been
established by the board of directors. The Corporation to the extent
necessary may sell or cause to be sold any securities held by it to provide
cash for the purchase of its shares.
(8) Definition of Net Asset Value
The Net Asset Value of each share of the capital stock of the Corporation
as of any particular time shall be the quotient to the nearest cent
obtained by dividing the value, as at such time, of the net assets of the
Corporation (i.e., the value of the assets of the Corporation less its
liabilities exclusive of capital and surplus) by the total number of shares
outstanding at such time, all determined and computed as follows:
(a) The assets of the Corporation shall be deemed to include (i) all
cash on hand or on deposit, including any interest accrued thereon, (ii)
all
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bills and demand notes and accounts receivable, (iii) all bonds, time notes,
shares of stock, subscription rights, and other securities, owned or contracted
for by the Corporation, other than its own shares, (iv) all stock and cash
dividends and cash distributions to be received by the Corporation and not yet
received by it when the Net Asset Value is being determined as of the record
date (or the ex-dividend date if different from the record date) therefor or a
date subsequent thereto, (v) all interest accrued on any interest bearing
securities owned by the Corporation (except interest accrued on securities
which is included in the quoted price), and (vi) all other property of every
kind and nature, including prepaid expenses, the value of such assets to be
determined as follows:
1. The value of any cash on hand or on deposit, bills and demand notes and
accounts receivable, prepaid expenses, cash dividends and interest declared
or accrued as aforesaid and not yet received shall be deemed to be the
full amount thereof unless the board of directors shall have determined
that any such deposit, bill, demand note or account receivable is
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not worth the full amount thereof, in which event the value thereof shall be
deemed to be such value as the board of directors shall deem to be the
reasonable value thereof;
2. The value of any bond, time note, share of stock, subscription right, or
other security which is listed or dealt in upon the New York Stock Exchange
or upon another exchange, foreign or domestic, shall be determined by taking
the last sale price (or lacking any sales, the last bid price) unless it
appears to the board of directors that some other price reflects more
closely the true market value, but in no case shall such other price be
lower than the last bid price or higher than the last asked price at the
time as of which the Net Asset Value is being determined, all as reported
by any means in common use; provided, however, that the board of directors
may by resolution permit over-the-counter rather than stock exchange
quotations to be used when they appear to the board of directors to reflect
more closely the true market value of any particular security in the
portfolio;
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3. The value of any bond, time note, share of stock, subscription right, or
other security which is not listed or dealt in on an exchange, shall be
determined on the basis of over-the-counter quotations or such other
forms of quotations as best reflect its value in the opinion of the
directors;
4. Securities quoted in foreign currency and credits and contractual
obligations payable to or by the Corporation in foreign currency shall be
valued on the basis of the current cable rate of exchange as nearly as
practicable at the time as of which the Net Asset Value is being
determined, unless the board of directors shall determine that some
other rate of exchange better reflects its value in which event that
form of quotation shall be used; and
5. In the case of any bond, time note, share of stock, subscription right,
other security or other property for which no price quotations are
available as above provided, the value thereof shall be the fair value
as determined in good faith from time to time in such manner as the
board of directors shall from time to time prescribe by resolution.
(b) The liabilities of the Corporation shall be deemed to include (i) all
bills and accounts payable, (ii) all administrative expenses payable and/or
accrued, (iii) all contractual obligations for the payment of money or
property, including the amount of
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any unpaid dividends and distributions upon the shares of the
Corporation, declared to stockholders of record at or before the time
as of which the Net Asset Value is being determined, (iv) all reserves
authorized or approved by the board of directors for taxes or
contingencies, including such reserves, if any, for taxes based on any
unrealized appreciation in the value of the assets of the Corporation,
and (v) all other liabilities of the Corporation of whatsoever kind
and nature, except liabilities represented by outstanding shares and
surplus of the Corporation.
(9) How Long Shares Being Redeemed or Purchased are Outstanding
Shares of capital stock surrendered to the Corporation for redemption
by it pursuant to the provisions of subsection (1) of Section B shall be
deemed to be outstanding until the close of business on the date on which
the redemption price thereof is determined pursuant to this article SEVENTH
and thereupon and until paid the price thereof shall be deemed to be a
liability of the Corporation. Capital stock purchased by the Corporation
in the open market shall be deemed to be outstanding until confirmation of
purchase thereof by the Corporation, and thereupon and until paid the
purchase price thereof shall be deemed to be a liability of the
Corporation. Capital stock redeemed by the
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Corporation pursuant to subsection (4) of this Section B shall be deemed to
be outstanding until it is deemed to be redeemed under said subsection (4)
of this Section B. Any and all shares of capital stock redeemed or
purchased by the Corporation under these Articles of Incorporation shall be
deemed retired and shall thereafter have the status of authorized but
unissued stock.
C. Fractional Shares
The Corporation may issue and sell, redeem or repurchase fractions of
shares. Fractional shares shall have pro rata all the rights of full
shares, including without limitation the right to vote and receive
dividends and distributions; provided, however, that the issue redemption
of shares in fractional denominations or certificates therefor shall be
made upon such terms as may be fixed by or under authority of the bylaws.
D. Exercise of Powers by Committees of Board of Directors
Wherever the powers and duties of these Articles of Incorporation may
be exercised and performed by or in the discretion of the board of
directors, said powers and duties may be exercised and performed by a
committee of directors of the Corporation except as limited by the board of
directors or by law, and in so acting, the committee shall be exercising
the authority of the board of directors.
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E. No Preemptive Rights
No holder of shares of the Corporation, whether now or hereafter
authorized, shall have any preemptive right whatever to subscribe for,
purchase or otherwise acquire shares of the Corporation, whether now or
hereafter authorized.
F. Power of Board of Directors to Determine Accounting Matters
The board of directors shall have full power in accordance with
generally accepted accounting practice (a) to determine what receipts or
accruals of the Corporation shall constitute income available for payment
of dividends and net realized gains available for distribution and what
shall constitute principal, and to make such allocation of any particular
receipt or accrual between principal and income or gain as it may deem
proper; and (b) from time to time, in its discretion (i) to determine
whether any and all expenses and other outlays paid or incurred (including
any and all taxes, assessments or governmental charges which the
Corporation may be required to pay or hold under any present or future law
of the United States of America or of any other taxing authority therein or
of any foreign jurisdiction) shall be charged to or paid from principal or
income or both, and (ii) to apportion any and all of said expenses and
outlays, including taxes, between principal and income; and the decision of
the board of directors as to both (a) and (b) aforesaid shall be
conclusively binding upon all stockholders.
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G. Inspection of Records
The board of directors shall have power to determine from time to time
whether and to what extent and at what times and places and under what
conditions and regulations the stock ledger, books, accounts and documents
of the Corporation, or any of them, shall be open to inspection of
stockholders, except as otherwise provided by statute or the bylaws; and,
except as so provided, no stockholder shall have any right to inspect any
stock ledger, book, account or document of the Corporation unless
authorized so to do by resolution of the board of directors.
H. Indemnification and Insurance
(1) Indemnification of Officers and Directors
Each person (including his heirs, executors, administrators and other
personal representatives) shall be indemnified by the Corporation who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or has
been a director or officer of the Corporation, or is or was serving at the
request of the Corporation as a director or officer of another corporation
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually
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and reasonably incurred by him in connection with such action, suit or
proceeding, provided that
(a) such person acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of
the Corporation;
(b) with respect to any criminal action or proceeding he had no
reasonable cause to believe his conduct was unlawful;
(c) with respect to any action, suit or proceeding by the
Corporation or its stockholders, such person's liability was not
occasioned by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office;
(d) unless ordered by a court, indemnification shall be made
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct
set forth in paragraphs (a), (b) and (c) above, such determination to
be made (i) by the board of directors of the Corporation by a majority
vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (ii) if such quorum is not obtainable,
or, even
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if obtainable, if a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the
stockholders of the Corporation, and
(e) in the case of an action or suit by, or in the right of, the
Corporation to procure a judgment in its favor, no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Corporation unless and only to the extent
that the court in which such action or suit is brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, he is fairly and reasonably entitled to
indemnity for such expenses which said court shall deem proper and such
person's liability was not occasioned by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in, or not opposed to,
the best interests of the Corporation,
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or with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the board of directors in
the specific case upon receipt of an undertaking by or on behalf of the
director or officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the Corporation as
authorized in this Article SEVENTH.
The rights to indemnification shall not be exclusive of any other
rights to which directors or officers may be entitled to by law.
(2) Insurance
The Corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director or officer of the Corporation
against any liability asserted against and incurred by him in any such
capacity, or arising out of his status as such if the Corporation would have
the power to indemnify him against such liability under the provisions of
subsection (1) of this Section H.
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I. Use of the name "SENTRY"
The Corporation is adopting its corporate title by permission of
HARDWARE MUTUAL CASUALTY COMPANY, a Wisconsin corporation, and the
Corporation's right to use the name "SENTRY" is subject to the right of
HARDWARE MUTUAL CASUALTY COMPANY or its successors or assigns at any time
to control the usage of the name "SENTRY" by the Corporation and to elect
that the Corporation stop using the name "SENTRY" in any form or
combination as part of its name and service mark, and in any literature or
reference whatsoever. All proprietary interest in the name "SENTRY" shall
remain exclusively the property of HARDWARE MUTUAL CASUALTY COMPANY, and at
the written request of HARDWARE MUTUAL CASUALTY COMPANY or its successors
or assigns, delivered to the Corporation at its registered office in
Stevens Point, Wisconsin, if any, and if none, at its principal office in
the State of Maryland, the Corporation shall forthwith stop using the name
"SENTRY" in accordance with the provisions of such request. The provisions
hereof are binding upon the Corporation, its directors, officers,
stockholders, creditors, successors or assigns, and all other persons
claiming under or through it. The terms of this paragraph do not preclude
the use of the name "SENTRY" by any other person or organization, whether
now existing or hereafter created, to which HARDWARE MUTUAL CASUALTY
COMPANY may grant the right to use such name.
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J. Right to Enter into Underwriting, Investment Advisory and Other Agreements
The Corporation reserves the right to enter into an underwriting
agreement or agreements for the sale of shares of its stock to the public
by an underwriter or underwriters, either as agents of the Corporation or
as purchasers from the Corporation for resale, through dealers or otherwise
at a maximum asked price equivalent to the Net Asset Value thereof
determined in accordance with these Articles of Incorporation, plus a
charge of not to exceed eight and one-half percent (8-1/2%) of the offering
price determined by multiplying said Net Asset Value by 1000/915ths,
provided that the offering price may then be adjusted to the next higher
full cent. Such underwriting agreements shall contain such other terms,
provisions and conditions as the board of directors of the Corporation may
deem advisable.
The Corporation reserves the right to enter into an investment advisory
agreement providing for the management and supervision of the investments
of the Corporation and the furnishing of advice to the Corporation with
respect to the desirability of investing in, purchasing or selling
securities or other property. Such agreement shall contain such other
terms, provisions and conditions as the board of directors of the
Corporation may deem advisable.
The Corporation may enter into an agreement or agreements with agents
to issue, redeem and
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transfer its capital stock, to act as custodian of its assets, to disburse
dividends and to perform other functions and services with respect to the
Corporation and its stockholders. Such agreements may fix the powers,
rights, duties, responsibilities and compensation of such agents and may
contain such other terms, provisions and conditions as the board of
directors of the Corporation may deem advisable.
K. Majority Vote of Shareholders Sufficient
Notwithstanding any provision of law requiring a greater proportion
than a majority of the votes of all classes or of any class of stock
entitled to be cast, to take or authorize any action, the Corporation may
take or authorize such action upon the concurrence of a majority of the
aggregate number of the votes entitled to be cast thereon.
L. Reservation of Right to Amend Articles
The Corporation reserves the right from time to time to make any
amendment of its Articles of Incorporation, now or hereafter authorized by
law, including any amendment which alters the contract rights, as expressly
set forth in its Articles of Incorporation, of any outstanding shares.
EIGHTH: Authority to Exercise Statutory Powers
The Corporation shall be authorized to exercise and enjoy all of the
powers, rights and privileges granted to, or
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conferred upon, corporations of a similar character by the General Laws of the
State of Maryland now or hereafter in force, and the enumeration of the
foregoing powers shall not be deemed to exclude any powers, rights or
privileges so granted or conferred.
NINTH: Miscellaneous
A. Titles of the divisions of these Articles of Incorporation
are for general information only and these Articles are not to be construed by
reference thereto.
B. The term "Articles of Incorporation" as used herein and in
the bylaws of the Corporation shall be deemed to mean these Articles of
Incorporation as from time to time amended and restated.
C. The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation on the
6th day of May, 1969.
/s/ William O. Petersen
-----------------------
William O. Petersen
WITNESS:
/s/ Karl M. Becker
- ------------------------
Karl M. Becker
STATE OF ILLINOIS )
) ss:
COUNTY OF COOK )
I hereby certify that on May 6th, 1969, before me, a notary public of
the State of Illinois in and for the County of Cook, personally appeared
William O. Petersen and he acknowledged the foregoing Articles of Incorporation
to be his act.
Witness my hand and notarial seal the day and year last written above.
/s/ Lucille E. Rath
-------------------
Notary Public
Lucille E. Rath
(notary seal)
My Commission expires
September 23, 1972
- ----------------------
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<PAGE> 1
EXHIBIT 2(a)
<PAGE> 2
Amended 11/20/80
BYLAWS
OF
SENTRY FUND, INC.
ARTICLE I
OFFICES
Section 1.01 Principal Office, Maryland. The principal office of the
corporation shall be located in the City of Baltimore, State of Maryland.
Section 1.02 Registered Office, Wisconsin. The corporation shall also
maintain a registered office at its principal place of business in the City
of Stevens Point, State of Wisconsin.
Section 1.03 Other Offices. The corporation may have offices at such
other places as the board of directors may from time to time determine or
the business of the corporation may require.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 2.01 Place of Meetings. All meetings of the stockholders
shall be held in the City of Stevens Point, State of Wisconsin, at such
place within said city as may be fixed from time to time by the board of
directors, or at such other place within the United States as may be fixed
by the board of directors. If no place if fixed, the place of the meeting
shall be at the registered office of the corporation in the State of
Wisconsin, if any, or, if none, at its principal office in the State of
Maryland.
Section 2.02 Date of Annual Meeting. Unless fixed by the board of
directors at some other time and date in the month of January, an annual
meeting of stockholders, commencing with the year 1971, shall be held on
the third Thursday in January in each year, if not a legal holiday, and if
a legal holiday, then on the first business day following, which is not a
legal holiday, at 10:00 a.m.; at which meeting the stockholders shall elect
directors and may transact such other business as may properly be brought
before the meeting. Any business of the corporation may be transacted at
the annual meeting without being specifically designated in the notice,
except such business as is specifically required by statute to be stated in
the notice.
<PAGE> 3
Section 2.03 Statement of Affairs. The President, a Vice President or
the Treasurer of the corporation shall prepare or cause to be prepared
annually a full and correct statement of the affairs of the corporation,
including a balance sheet and a financial statement of operations for the
preceding fiscal year, which shall be submitted at the annual stockholders
meeting and filed within twenty (20) days thereafter at the principal
office of the corporation in the State of Maryland.
Section 2.04 Special Meetings Called by Officers or Directors.
Special meetings of the stockholders may be called at any time by the board
of directors or the President and shall be called by the Secretary at the
request in writing of a majority of the members of the board of directors.
Section 2.05 Special Meetings Called by Stockholders. Special
meetings of stockholders shall be called by the Secretary upon the written
request of the holders of shares entitled to not less than twenty-five
percent (25%) of all the votes entitled to be cast at such meeting. Such
request shall state the purpose or purposes of such meeting and the matters
proposed to be acted on thereat. The Secretary shall inform such
stockholders of the reasonably estimated cost of preparing and mailing such
notice of the meeting, and upon payment to the corporation of such costs
the Secretary shall give notice stating the purpose or purposes of the
meeting to all stockholders entitled to vote at such meeting. No special
meeting need be called upon the request of the holders of shares entitled
to cast less than a majority of all votes entitled to be cast at such
meeting, to consider any matter which is substantially the same as a matter
voted upon at any special meeting of the stockholders held during the
preceding twelve (12) months.
Section 2.06 Notice of Stockholders' Meetings. Not less than ten (10)
nor more than sixty (60) days before the date of every stockholders'
meeting, except an adjourned meeting pursuant to Section 2.08, the
Secretary shall mail to each stockholder entitled to vote at such meeting,
postage prepaid, written or printed notice stating the time and place of
the meeting and, in the case of a special meeting, the purpose or purposes
for which the meeting is called.
Section 2.07 Business at Special Meetings. Business transacted at all
special meetings shall be confined to the purpose or purposes stated in the
notice.
Section 2.08 Quorum. At any meeting of stockholders, the holders of
record of a majority of the outstanding shares of the stock of the
corporation entitled to vote at the meeting, whether present in person or
by proxy, shall constitute a quorum. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall
have power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a
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quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally notified.
Section 2.09 Majority Vote. A majority of the votes cast at a meeting
of stockholders, duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter which may properly
come before the meeting, unless more than a majority of the votes cast is
required by express provision of the statute, the Charter, or these bylaws,
in which case such express provision shall govern and control.
Section 2.10 Proxies and Voting of Shares. Each outstanding share of
stock having voting power shall be entitled to one vote on each matter
submitted to a vote at a meeting of stockholders and each outstanding
fractional share of stock having voting power shall be entitled to a
corresponding fractional vote on each matter submitted to a vote at a
meeting of stockholders. A stockholder may vote the shares owned of record
by him either in person or by proxy executed in writing by the stockholder
or by his duly authorized attorney-in-fact. No proxy shall be valid after
eleven (11) months from its date, unless otherwise provided in the proxy.
At all meetings of stockholders, unless the voting is conducted by
inspectors, all questions relating to the qualification of voters and the
validity of proxies and the acceptance or rejection of votes shall be
decided by the chairman of the meeting.
Section 2.11 Setting Record Date or Closing Transfer Books. The board
of directors may fix, in advance, a date as the record date for the purpose
of determining stockholders entitled to notice of, or to vote at any
meeting of stockholders, or stockholders entitled to receive payment of any
dividend or the allotment of any rights, or in order to make a
determination of stockholders for any other proper purpose. Such date, in
any case shall not be any more than sixty (60) days, and, in the case of a
meeting of stockholders, not less than ten (10) days prior to the date on
which the particular action requiring such determination of stockholders is
to be taken. In lieu of fixing a record date the board of directors may
provide that the stock transfer books shall be closed for a stated period
but not to exceed, in any case, twenty (20) days. If the stock transfer
books are closed for the purpose of determining stockholders entitled to
notice of or to vote at a meeting of stockholders, such books shall be
closed for at least ten (10) days immediately preceding such meeting.
Section 2.12 Written Consent. Any action required or permitted to be
taken at any meeting of stockholders may be taken without a meeting, if a
consent in writing, setting forth such action, is signed by all the
stockholders entitled to vote on the subject matter thereof and such
written consent is filed with the records of the corporation.
Article III
DIRECTORS
Section 3.01 General Powers. The business and affairs of the
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corporation shall be managed by its board of directors, which may
exercise all of the powers of the corporation, except as such are by law,
by the Charter, or by these bylaws conferred upon or reserved to the
stockholders.
3.02 Number and Qualifications. The number of directors of the
corporation shall be five (5). By a majority vote of the entire board of
directors, the number of directors fixed by the Charter or by these bylaws
may be increased or decreased from time to time to not exceeding eleven
(11) nor less than three (3), provided the tenure of office of a director
shall not be affected by any decrease in the number of directors.
Directors need not be stockholders.
Section 3.03 Classes and Tenure. Effective as of the first annual
meeting of the corporation's stockholders, the board of directors shall be
divided, as determined by the board of directors, into three classes as
nearly equal in number as possible, with a term of office of one class
expiring each year, and at the annual meeting of stockholders in 1971
directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting; directors of the second
class shall be elected to hold office for a term expiring at the second
succeeding annual meeting; and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding annual
meeting. When the number of directors is changed, any newly created
directorships or any decrease in directorships shall be so apportioned
among the classes as to make all classes as nearly equal in number as
possible. When any newly created directorships are filled by the board of
directors, there shall be no classification of the additional directors
until the next annual meeting of stockholders. Subject to the foregoing,
at each annual meeting of stockholders the successors to the class of
directors whose term shall then expire, shall be elected to hold office for
a term expiring at the third succeeding annual meeting.
Section 3.04 Resignation. Any director of the corporation may resign
at any time by giving written notice to the board of directors, the
President or the Secretary of the corporation. Such resignation shall take
effect at the time specified therein, or, if none be specified, at the time
of its receipt, and, unless tendered to take effect upon acceptance
thereof, the acceptance of such resignation shall not be necessary to make
it effective.
Section 3.05 Removal of Directors. 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 a majority of the votes entitled to be
cast thereon, remove any director or directors from office and may elect a
successor or successors to fill any resulting vacancies for the unexpired
term terms of removed directors.
Section 3.06 Vacancies. Vacancies occurring in the board of directors
for any cause other than by reason of an increase in the number of
directors may be filled by a majority of the remaining members of the board
of directors, although such majority is less than a quorum, and vacancies
occurring by reason of an increase in the number of directors may be filled
by action of a majority of the entire board of
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directors, if, immediately after filling any such vacancies, at least
two-thirds of the directors then holding office shall have been elected to
such office by the stockholders; provided, however, that if at any time
less than a majority of the directors holding office at that time were
elected by the stockholders, a meeting of the stockholders shall be held
promptly and in any event within sixty (60) days for the purpose of
electing directors to fill any existing vacancies in the board of
directors, unless the Securities and Exchange Commission shall by order
extend such period under the authority granted to it by Section 16(a) of
the Investment Company Act of 1940. A director elected by the board of
directors to fill a vacancy shall be elected to hold office until the next
annual meeting of stockholders or until his successor has been elected and
qualified.
Section 3.07 First Meeting of New Board. The first meeting of each
newly elected board of directors shall be held at such time and place as
shall be fixed by the consent in writing of all the directors or, if such
consent cannot be obtained at such time and place, not later than
forty-five (45) days after the election of the new board, as shall be fixed
by the President or, in his absence, the Secretary.
Section 3.08 Regular Meetings. Regular meetings of the board of
directors may be held without notice at such time and place as shall from
time to time be designated by the board of directors.
Section 3.09 Special Meetings. Special meetings of the board of
directors may be called at any time by the board of directors or the
executive committee, if one be constituted, by vote at a meeting, or by the
President or by a majority of the directors or a majority of the members of
the executive committee in writing. Special meetings may be held at such
place or places as may be designated from time to time by the board of
directors; in the absence of such designation such meetings shall be held
at such places as may be designated in the call.
Section 3.10 Notice of Special Meeting. Notice of the place and time
of every special meeting of the board of directors shall be given to each
director at least five (5) days before the day on which a special meeting
is to be held, if such notice is given by mail, or at least twenty-four
(24) hours before such meeting, if delivered personally or by telegram,
cable or wireless.
Section 3.11 Quorum. At all meetings of the board, a majority of the
entire board of directors shall constitute a quorum for the transaction of
business and the action of a majority of the directors present at any
meeting at which a quorum is present shall be the action of the board of
directors unless the concurrence of a greater proportion is required for
such action by statute, the Investment Company Act of 1940, the Charter, or
these bylaws. If a quorum shall not be present at any meeting of
directors, the directors present thereat may by a majority vote adjourn the
meeting from to time, without a notice other than announcement at the
meeting, until a quorum shall be present.
Section 3.12 Written Consent. Any action required or permitted to be
taken at any meeting of the board of directors or of any committee
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thereof may 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 such written consent is filed with the minutes of
proceedings of the board or committee.
Section 3.13 Compensation. Directors, as such, shall not receive
stated salary for their services, but, by resolution of the board, a fixed
sum, and expenses of attendance, if any, may be allowed to directors for
attendance at each regular or special meeting of the board of directors, or
of any committee thereof, but nothing herein contained shall be construed
to preclude any director from serving the corporation in any other capacity
and receiving compensation therefor.
Article IV
COMMITTEES
Section 4.01 Appointment and Powers. The board of directors may
appoint from among its members an executive committee and other committees
composed of two or more directors, and may delegate to such committees, in
the intervals between meetings of the board of directors, any or all of the
powers of the board of directors in the management of the business and
affairs of the corporation, except the power to declare dividends, to issue
stock or to recommend to stockholders any action requiring stockholders'
approval. In the absence of any member of any such committee, the members
thereof present at any meeting, whether or not they constitute a quorum,
may appoint a member of the board of directors to act in the place of such
absent member. The board of directors may at any time change the
membership of, fill vacancies in, or dissolve any such committee. Any
action by the committee shall be subject to revision and alteration by the
board of directors, provided that no rights of third persons shall be
affected by any such revision or alteration.
Section 4.02 Record of Proceedings. The committees shall keep minutes
of their proceedings and, when required by the board of directors, shall
report the same to the board of directors.
ARTICLE V
NOTICE TO STOCKHOLDERS AND DIRECTORS
Section 5.01 Notice. Whenever, under the provisions of the statute or
of the Charter or of these bylaws, notice is required to be given to any
director or stockholder, it shall not be construed to mean personal notice,
but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed
to be given at the time when the same shall be deposited in the United
States mail. Notice to directors may also be given by telegram, wireless
or personally.
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Section 5.02 Waiver of Notice. Whenever any notice of the time, place
or purpose of any meeting of stockholders, directors or committee is
required to be given under the provisions of the statute or Charter or
these bylaws, a waiver thereof in writing, signed, whether before or after
the holding of said meeting, by the person or persons entitled to such
notice and filed with the records of the meeting, or actual attendance at
the meeting of stockholders in person or by proxy, or at the meeting of
directors committee in person, shall be deemed equivalent to the giving of
such notice to such person.
ARTICLE VI
OFFICERS
Section 6.01 Number, Title, Election and Qualifications. The officers
of the corporation shall be a President, a Vice President, a Secretary and
a Treasurer. The officers shall be elected by the board of directors at
its first meeting after each annual meeting of stockholders. The board of
directors may also elect a Chairman of the Board, additional Vice
Presidents, and one or more Assistant Secretaries and one or more Assistant
Treasurers. Any two or more offices, except those of President and Vice
President, may be held by the same person but no officer shall execute,
acknowledge or verify any instrument in more than one capacity, if such
instrument is required by law, the Charter or these bylaws to be executed,
acknowledged or verified by two or more officers.
Section 6.02 Appointment of Additional Officers. The board of
directors may appoint such other officers and agents as it shall deem
necessary, who shall hold their offices for such terms and shall have such
authority and perform such duties as shall be determined from time to time
by the board. The board of directors may from time to time authorize any
committee or any officer to appoint subordinate officers and prescribe the
duties thereof.
Section 6.03 Compensation. The salaries, if any, of all officers and
agents of the corporation shall be fixed from time to time by the board of
directors. It may authorize any committee, or any officer on whom the power
of appointing subordinate officers may have been conferred, to fix the
compensation of such subordinate officers.
Section 6.04 Term of Office, Removal and Vacancies. Each officer of
the corporation shall serve for one (1) year and until his successor has
been elected and qualified or until his death, resignation or removal. Any
officer or agent may be removed by the board of directors whenever, in its
judgment, the best interests of the corporation will be served thereby, but
such removal shall be without prejudice to the contractual rights, if any,
of the person so removed. If any office becomes vacant for any reason, the
vacancy shall be filled by the board of directors.
Section 6.05 Resignations. Any officer may resign at any time by
giving written notice to the board of directors or to the President or
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the Secretary of the corporation. Any such resignation shall take
effect at the time specified therein; or, if none be specified, at the time
of its receipt and, unless tendered to take effect upon acceptance thereof,
the acceptance of such resignation shall not be necessary to make it
effective.
Section 6.06 President. The President shall be the chief executive
officer of the corporation; he shall preside at all meetings of the
stockholders, shall preside at all meetings of the directors if there is no
Chairman of the Board or if the Chairman of the Board is absent, shall give
general active management of the business of the corporation, shall see
that all orders and resolutions of the board are carried into effect, and
shall perform all duties and possess all powers incident to the office of
President and have such other powers and perform such other duties as the
board of directors may from time to time prescribe.
Section 6.07 Vice Presidents. The Vice President or Vice Presidents
(in the order designated, or in the absence of any designation, then in the
order of their election) shall, in the President's absence or disability,
perform the duties and exercise the powers of the President. The Vice
President or Vice Presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
Section 6.08 Secretary and Assistant Secretary.
(a) The Secretary shall attend all sessions of the board of directors
and all 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 or any other committee. The
Secretary shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the board of directors, shall perform
all duties commonly incident to his office or provided by law, shall
perform such other duties as may be prescribed from time to time by the
board of directors or the President and shall have such other powers as the
board of directors may from time to time prescribe. He shall keep in safe
custody the seal of the corporation and he, the Treasurer, or an Assistant
Secretary, shall have authority to affix the same to any instrument
requiring it and, when so affixed, it shall be attested by his signature or
the Treasurer's signature or by the signature of such Assistant Secretary.
(b) The Assistant Secretaries, if any, in the order of their election
shall, in the absence of disability of the Secretary, perform the duties
and exercise the powers of the Secretary, and shall perform such other
duties and have such other powers as the board of directors may from time
to time prescribe.
Section 6.09 Treasurer and Assistant Treasurer.
(a) Except as otherwise authorized by the board of directors, the
Treasurer shall have general supervision of the corporate funds, moneys and
securities of the corporation, and of the performance by the Custodian of
its duties with respect thereto. He shall keep regular books of
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account which shall at all times be subject to inspection by and control of
the board of directors, and shall perform such other duties and have such
other powers as are commonly incident to his office or as the board of
directors may from time to time prescribe or as may be imposed upon him by
law or these bylaws.
(b) The Treasurer shall render to the President and directors, at the
regular meetings of the board, or whenever they may require it, an account
of all his transactions as Treasurer and of the financial condition of the
corporation.
(c) The Assistant Treasurers, if any, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of
the Treasurer, and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
Section 6.10 Chairman of the Board. The Chairman of the Board shall
be chosen from among the directors of the corporation and may hold such
office only so long as he continues to be a director. The Chairman of the
Board, if there be such an officer, shall preside at all meetings of the
board of directors and shall have such other powers and perform such other
duties as may be assigned to him from time to time by the board of
directors.
Section 6.11 Bond. If required by the board of directors, any officer
or agent shall give the corporation a bond, at the corporation's expense,
in such sum and with such surety or sureties as shall be satisfactory to
the board for the faithful performance of the duties of his office and for
the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money
and other property of whatever kind in his possession or under his control
belonging to the corporation.
ARTICLE VII
CERTIFICATES OF STOCK AND TRANSFERS OF STOCK
Section 7.01 Certificates. Each stockholder shall be entitled upon
request to a certificate or certificates which shall represent and certify
the number and kind of full shares owned by him in the corporation. No
certificates shall be issued for fractional shares. Each certificate shall
be signed by the President or a Vice President and countersigned by the
Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer and shall be sealed with the corporate seal. If such
certificates are countersigned by a transfer agent or registrar other than
the corporation or an employee of the corporation, the signatures of the
aforementioned officers may be either manual or facsimile or any other form
of seal. In case any officer who has signed or whose facsimile signature
appears on any certificate ceases to be an officer of the corporation
before the certificate is issued, the certificate may nevertheless be
issued by the corporation with the same effect as if the officer had not
ceased to be such officer as of the date of its issue.
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Section 7.02 Uncertificated Shares. The corporation's stock ledger
shall be deemed to represent and certify the number and kind of shares
owned of record by a stockholder who has not requested or received
certificates for said shares.
Section 7.03 Transfers of Stock. The shares of stock of the
corporation shall be transferable on the books of the corporation at the
request of the record holder thereof in person or by a duly authorized
attorney, upon presentation to the corporation or its transfer agent of a
duly executed assignment or authority to transfer, or proper evidence of
succession, and, if certificated, a duly endorsed certificate or
certificates of stock surrendered for cancellation, and with such proof of
the authenticity of the signatures as the corporation or its transfer agent
may reasonably require. The transfer shall be recorded on the books of the
corporation, the old certificates, if any, shall be cancelled, and the new
record holder, upon request, shall be entitled to a new certificate or
certificates.
Section 7.04 Registered Stockholders. The corporation shall be
entitled, in its discretion, 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 on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of the
State of Maryland or its Charter.
Section 7.05 Lost Certificates. The board of directors may direct a
new certificate to be issued in place of any certificate theretofore issued
by the corporation alleged to have been stolen, lost or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate
of stock to be stolen, lost or destroyed. When authorizing such issue of a
new certificate, the board of directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such
stolen, lost or destroyed certificate or his legal representative to give
bond, with sufficient surety, to the corporation to indemnify it against
any loss or claim which may arise by reason of the issuance of a new
certificate.
ARTICLE VIII
CUSTODIAN
Section 8.01 Use of Custodian. All securities owned by the
corporation and all cash representing the proceeds from sales of securities
owned or used by the corporation and payments of principal upon or capital
distributions in respect of securities owned by the corporation shall be
placed with and kept in the custody of a custodian or custodians, which
shall be one or more banks or trust companies, each having capital, surplus
and undivided profits aggregating not less than Five Million Dollars
($5,000,000); provided such a custodian can be found ready and willing to
act. The custodian or custodians shall be employed by the corporation
under a written agreement upon such terms and conditions as the board of
directors shall approve.
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Section 8.02 Replacement of Custodian. The corporation shall, upon
the resignation or inability to serve of the custodian or custodians or
upon the change of custodian:
(a) Use its best efforts to obtain a successor custodian;
(b) Require that the cash and securities owned by the corporation be
delivered directly to the successor custodian; and
(c) In the event that no successor custodian can be found, submit to
the stockholders, before permitting delivery of the cash and securities
owned by the corporation to other than a successor custodian, the question
of whether or not this corporation shall be liquidated or shall function
without a custodian.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01 Dividends. Cash, stock or property dividends upon the
capital stock of the corporation, subject to the provisions of the Charter,
may be declared by the board of directors at any regular or special
meeting, pursuant to law. Whenever dividends are paid from any source
other than the corporation's accumulated undistributed net income, not
including profits and losses realized upon the sale of securities or other
properties, or the corporation's net income so determined for the current
or preceding fiscal year, such fact shall be clearly revealed to
stockholders and the basis of calculation shall be set forth.
Section 9.02 Reserves. Before the payment of any dividend, there may
be set aside out of any funds of the corporation available for dividends
such sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve fund to meeting contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall think
conducive to the interests of the corporation, and the directors may modify
or abolish any such serve in the manner in which it was created.
Section 9.03 Fractional Shares. The board of directors may from time
to time authorize the issuance, redemption or repurchase of shares of the
capital stock of the corporation in fractional denominations, provided that
the transactions in which and the terms upon which shares in fractional
denominations may be issued, redeemed or repurchased may from time to time
be determined and limited by or under the authority of the board of
directors.
Section 9.04 Deposits. All funds not otherwise employed or not
required to be deposited with a custodian may be deposited from time to
time to the credit of the corporation in such banks, trust companies or
other depositories as the board of directors may select.
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Section 9.05 Execution of Instruments. Except as otherwise provided
in Section 9.06, all deeds, mortgages, bonds, contracts, stock power and
other instruments of transfer, reports and other instruments may be
executed on behalf of the corporation by the President or any Vice
President and by the Treasurer or Secretary or an Assistant Treasurer or an
Assistant Secretary, or as the board of directors may otherwise, from time
to time, authorize. Any such authorization may be general or confined to
specific instances.
Section 9.06 Checks, Notes, Drafts, etc. Checks and drafts for the
payment of money by the corporation may be signed in the name of the
corporation by the custodian. Except as otherwise authorized by the board
of directors, all requisitions or orders for the payment of money by the
custodian or for the issue of checks and drafts therefor, all other checks
and drafts, all promissory notes, all assignments of securities standing in
the name of the corporation, and all requisitions or orders for the
assignment of securities standing in the name of the custodian or its
nominee, or for the execution of powers to transfer the same, shall be
signed in the name of the corporation by the President or, if authorized by
the board of directors, a Vice President and by the Treasurer or an
Assistant Treasurer. Promissory notes, checks or drafts payable to the
corporation may be endorsed to the order of the custodian, its nominee or a
bank account established by the corporation, and only by the Treasurer or
President or by such other person or persons as shall be authorized by the
board of directors. Facsimile signatures may be used when authorized by
the board of directors.
Section 9.07 Voting Upon Stocks. Unless otherwise ordered by the
board of directors, the President or any Vice President shall have full
power and authority on behalf of the corporation to attend and act and vote
at any meeting of stockholders of any company in which the corporation may
hold stock and at any such meeting may exercise any and all rights, powers
and privileges incident to the ownership of such stock. The President or
any Vice President of the corporation may execute proxies to vote shares of
stock of other companies standing in the name of the corporation. The
board of directors may by resolution from time to time confer like powers
upon any other person or persons.
Section 9.08 Fiscal Year. The fiscal year of the corporation shall
begin the first day of November in each year and end the 31st day of
October in the following year, except that the first fiscal year shall
begin May 9, 1969 and end October 31, 1969.
Section 9.09 Seal. The corporate seal shall have inscribed thereon
the name of the corporation and the words "Corporate Seal, Maryland." The
seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise. The board of directors may authorize
one or more duplicate seals and provide for the custody thereof.
Section 9.10 Stock Ledger. The corporation shall maintain at its
office in the City of Stevens Point, State of Wisconsin, an original stock
ledger containing the names and addresses of all stockholders and the
number of shares of each class of stock held by each stockholder.
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Such stock ledger may be in written form or any other form capable of being
converted into written form within a reasonable time for visual inspection.
Section 9.11 Corporate Books. The books of the corporation, except
the original stock ledger, may be kept at such place or places as the board
of directors may from time to time determine.
Section 9.12 Accountant. The corporation shall employ an independent
public accountant or firm of independent public accountants as its
accountant to examine the accounts of the corporation and to sign and
certify financial statements filed by the corporation. The accountant's
certificates and reports shall be addressed both to the board of directors
and to the stockholders.
Section 9.13 Officers or Directors of Other Corporations. In any case
where an officer or director of the corporation or of any investment
adviser of the corporation, or a member of any committee of the
corporation, is also an officer or director of another corporation and the
purchase or sale of the securities issued by such other corporation is
under consideration, the officer, director or committee member concerned
will abstain from participating in any decision made on behalf of the
corporation to purchase or sell any securities issued by such other
corporation.
ARTICLE X
AMENDMENTS
Section 10.01 General. Except as provided in Section 10.02, all
bylaws of the corporation, 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
corporation entitled to vote, at any annual or special meeting the notice
or waiver of notice of which shall have specified the proposed amendment,
alteration, repeal or new bylaw; or
(b) The total number of directors then in office, at any regular
meeting, or at any special meeting where the notice of such special meeting
shall have specified the proposed amendment, alteration, repeal, or new
bylaw.
Section 10.02 By Stockholders Only.
(a) No amendment of any section of these bylaws shall be made except by
the stockholders of the corporation if the stockholders shall have provided
in the bylaws that such section may not be amended, altered or repealed
except by the stockholders.
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(b) From and after the issue of any shares of the capital stock of the
corporation, no amendment of this Article X shall be made except by the
stockholders of the corporation.
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EXHIBIT 2(b)
<PAGE> 2
SENTRY FUND, INC.
Rules and Regulations
(Adopted by Resolution of the Board of Directors)
ARTICLE I
Definitions and Interpretations
Section 1.1 Definitions. (a) The abreviation "ICA", as used in these Rules
and Regulations, shall mean the Investment Company Act of 1940, as it has
heretofore or may hereafter be amended.
(b) The abreviation "SEC", as used in these Rules and Regulations,
shall mean the Securities and Exchange Commission or any official or agency of
the United States succeeding to the functions thereof.
Section 1.2 Reference to Investment Company Act. Any question of
interpretation of any term or provision of these Rules and Regulations having a
counterpart in or otherwise derived from a term or provision of the ICA shall be
resolved by reference to the corresponding term or provision of the ICA and to
any definition thereof in said Act or to judicial interpretations thereof, if
any, or, in the absence of any controlling judicial decisions, to rules,
regulations or orders of the SEC validly issued pursuant to said Act.
<PAGE> 3
ARTICLE II
Restrictions on Fund Investments
Section 2.1 One Issuer (Percentage of Fund Assets). The Fund shall not
invest more than 5% of the current value of its total assets in the securities,
other than United States government securities, of any one issuer. (Ohio A(9),
ICA Section 5(b), (c))
Section 2.2 One Issuer (Percentage of Issuer's Securities). The Fund shall
not purchase in excess of 10% of the outstanding voting securities or securities
of any one class of any one issuer. (Ohio A(10))
Section 2.3 New Issuers. The Fund will not buy the securities of any
company with a record of less than three (3) years continuous operation, if such
purchase would cause the current value of the Fund's investments in all such
companies to exceed 5% of the current value of the Fund's total assets. Such
continuous operation may include the operation of any predecessor company or
companies, partnership or individual enterprise if the company whose securities
are to be purchased has come into existence as the result of a merger,
consolidation, reorganization or the purchase of substantially all of the assets
of such predecessor company or companies, partnership or individual enterprise.
(Ohio A(17))
Section 2.4 Restricted Stock. The Fund will not
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purchase securities if a registration statement would have to be filed under
the Securities Act of 1933 in order to sell the securities to the public at the
time of purchase.
Section 2.5 Open-End Investment Companies. The Fund shall not purchase or
retain securities issued by any other open-end investment company. (Cal.
260.140.85(a))
Section 2.6 Closed-End Investment Companies. The Fund may purchase
securities issued by a closed-end investment company only:
(a) As part of a plan of merger or consolidation constituting a
reorganization, or
(b) In the open market where
(i) no commission or profit to a principal underwriter or dealer
results from such purchase other than the customary broker's commission,
and
(ii) as a result of the purchase, the Fund owns in the aggregate
no more than 5% of the voting stock of such other company, if that
company's policy is to concentrate its investments in a particular
industry or group of industries, or 3% of the voting stock if such
company's policy is not such concentration. (ICA Section 12(d); Ohio
A(11))
Section 2.7 Issues Owned by Directors and Officers The Fund shall not buy
or retain the securities of any issuer if those officers or directors of the
Fund or of its investment adviser who own individually more than one-half of 1%
of
-3-
<PAGE> 5
the securities of such issuer, together own beneficially more than 5% of such
securities. (Ohio A(2), (3))
Section 2.8 Cross-Ownership and Circular Ownership. The Fund shall not
purchase any voting securities if, to its knowledge, cross-ownership or circular
ownership exists or will exist between the Fund and the issuer of such security.
Cross-ownership exists between two companies when each company
beneficially owns more than 3% of the outstanding voting securities of the
company.
Circular-ownership exists between two companies if such companies are
included within a group of three or more companies, each of which:
(a) Beneficially owns more than 3% of the outstanding securities
of one or more other companies of the group; and
(b) Has more than 3% of its own outstanding voting securities
beneficially owned by another company, or by each of two or more other
companies of the group. (ICA Section 20(c))
If such cross-ownership or circular ownership between the
-4-
<PAGE> 6
Fund and any other company or companies comes into existence upon the purchase
by the Fund of securities of another company, the Fund shall, within one (1)
year after it first knows of the cross-ownership or circular ownership,
eliminate the same. (ICA Section 20(d))
Section 2.9 Margin. The fund shall not purchase securities on margin.
(ICA Section 12(a)(1); Ohio A(15); Cal. 260.140.85(b))
Section 2.10 Short Sales. The Fund shall not effect short sales of any
security. (ICA Section 12(a)(3); Ohio A(16); Cal. Section 264.140.85(b))
Section 2.11 Control. The Fund shall not invest for the purpose of
influencing management or exercising control.
Section 2.12 Puts, Calls, Straddles or Spreads. The Fund shall not buy or
sell puts, calls, straddles, or spreads. (Cal. Section 264.140.85(b))
Section 2.13 Loans. The Fund shall not make loans to other persons except
through the purchase of a portion of a publicly distributed issue of bonds or
other marketable obligations; provided that no loans shall be made to a person
who controls the Fund, is under common control with the Fund, is the principal
underwriter or manager of the Fund, or is an officer or director of the Fund or
the Fund's principal underwriter or manager. (ICA Section 21(a), (b); Ohio
A(4))
-5-
<PAGE> 7
Section 2.14 Commodities. The Fund shall not buy or sell commodities or
commodity contracts.
ARTICLE III
Restrictions with respect to Affiliates
Section 3.1 Fund, Promoter and Underwriter. Except to the extent that the
SEC may have exempted the transaction, by rule, regulation or order from the
provisions of Section 17(a) of the ICA, the Fund shall not knowingly purchase
securities (other than Fund shares or securities of which the seller is the
issuer and which are part of a general offering to the holders of a class of its
securities) or other property from, or sell securities (other than Fund shares)
or other property to, any affiliated person of the Fund, the promoter of the
Fund, the principal underwriter of the Fund, or any affiliated person or such a
person, promoter or principal underwriter when said affiliated person is acting
as principal. (ICA Section 17(a); ICA-Rules 17a-1, 2, 4, 5, 6, 7)
Section 3.2 Compensation for Sales. The Fund shall not make any purchase
or sale of property for which, to the knowledge of the Fund, an affiliated
person of the Fund, or an affiliated person of such person, acting as agent, is
to accept from any source any compensation (other than a regular salary or wages
from the Fund) for such purchase or sale,
-6-
<PAGE> 8
except in the course of such person's business as an underwriter or broker.
(ICA Section 17(e)(1))
Section 3.3 Brokers. The Fund shall not effect any purchase or sale of
securities through any affiliated person of the Fund, or any affiliated person
of such person, unless said person is a security dealer, who is acting as broker
and whose commission for effecting the transaction does not exceed the customary
brokerage charges. Except where the SEC permits a larger commission, such
customary brokerage charges shall be deemed to be:
(a) The usual and customary broker's commission if the sale is
effected on a securities exchange; or
(b) 2% of the sale price if the sale is effected in connection with a
secondary distribution of such securities; or
(c) 1% of the sale price if the sale is otherwise effected. (ICA
Section 17(e)(2); ICA-Rule 17e-1; Ohio A(1))
Section 3.4 Exceptions. Nothing in Sections 3.1, 3.2 and 3.3 above, shall
prevent any affiliated person
-7-
<PAGE> 9
mentioned therein from acquiring or selling shares issued by the Fund to the
same extent as if such person were not an affiliated person, provided that a
long or short position in the shares of the Fund shall not be taken by any
director or officer of the Fund, or by its principal underwriter or its
investment adviser, or by any officer or director of such principal underwriter
or investment adviser. The foregoing proviso shall not prevent:
(a) The principal underwriter from purchasing such shares from the
Fund provided that orders to purchase from the Fund are entered with the
Fund by the principal underwriter upon receipt by the principal underwriter
of purchase orders for shares of stock of the Fund and provided such
purchases are not in excess of purchase orders received by the principal
underwriter;
(b) The principal underwriter from maintaining a market, in the
capacity of agent for the Fund, for the securities issued by the Fund;
(c) Any officer, director or employee of the fund or of its principal
underwriter or investment adviser from purchasing such
-8-
<PAGE> 10
shares from the Fund at the net asset value and on the conditions described
in the Fund's prospectus in effect at the time of such purchase. (Ohio
A(3); ICA Section 17a(1), (2))
Section 3.5 Purchases from Affiliated Underwriters. The Fund shall not
knowingly purchase or otherwise acquire, during the existence of any
underwriting or selling syndicate, any security (except a security of which such
Fund is the issuer), which has as a principal underwriter an officer, director,
investment adviser of, or employee of the Fund, or a person of which any such
officer, director, investment adviser or employee is an affiliated person,
except to the extent that the SEC by rule, regulation or order has exempted the
transaction from the provisions of Section 10(f) of the ICA. (ICA Section
10(f); ICA-Rules 10(f)-1, 2, 3)
Section 3.6 Joint and Several Participation. The Fund shall not be a joint
or a joint and several participant with any affiliated person of or principal
underwriter for the Fund, or any affiliated person of such person or principal
underwriter in any transaction effected by such person, principal underwriter or
affiliated person as principal, in contravention of such rules and regulations
as the SEC may prescribe for the purpose of limiting or preventing participation
by the Fund on a basis different from or less advantageous than that of such
other participant. (ICA Section 17(d); ICA-Rule 17d-1)
<PAGE> 11
ARTICLE IV
General Restrictions on the Fund
Section 4.1 Borrowing. The Fund may not borrow any money except from banks
as a temporary measure for extraordinary or emergency purposes. Such borrowing
may be accomplished by executing promissory notes or other documents evidencing
the indebtedness, or by pledging, mortgaging or hypothecating assets of the Fund
to secure such indebtedness. The Fund shall not, however:
(a) Borrow amounts in excess of 10% of the Fund's gross assets taken
at cost; and
(b) Borrow amounts in excess of 33-1/3% of the Fund's total assets
taken at market or other fair value less liabilities other than such
borrowing; or
(c) Pledge, mortgage or hypothecate assets of the Fund of a current
value greater than 15% of the net assets of the Fund taken at cost. (ICA
Section 18(f), (g), (h); Ohio A(12), (13))
Section 4.2 Consideration. The Fund shall not issue any of its securities
for services, or for property other than
-10-
<PAGE> 12
cash or securities, except as a dividend or distribution to its security
holders or in connection with a reorganization. (ICA Section 22(g); Cal.
260.140.81)
Section 4.3 Transferability and Negotiability. The Fund shall not
restrict the transferability or negotiability of any security of which it is the
issuer except in conformity with the statements with respect thereto contained
in its registration statement. (ICA Section 22(f); Ohio A(14))
Section 4.4 Acting as a Distributor. The Fund shall not act as a
distributor of securities of which it is the issuer, except through an
underwriter, in contravention of such rules and regulations as the SEC may
prescribe. (ICA Section 12(b))
Section 4.5 Joint Trading Accounts. The Fund shall not participate on a
joint or a joint and several basis in any trading account in securities. (ICA
Section 12(a)(2))
Section 4.6 Options. The Fund shall not issue any options, except short
term options issued to permit the reinvestments of dividends or distributions of
capital gains. (Cal. 260.140.82)
Section 4.7 Underwriting. The Fund shall not underwrite securities of
other issuers.
-11-
<PAGE> 13
Section 4.8 Brokers. The Fund shall not promote the sale of its shares by
agreeing to give dealers, either directly or indirectly, in addition to the
ordinary contractual allowances, any amount of brokerage business.
Section 4.9 Information to Brokers. Neither the Fund, its investment
adviser nor distributor shall inform any dealer or broker not concerned in the
execution of the transaction, either orally or in writing, of any proposed
changes or change in process in the portfolio of the Fund. (Ill. Rule 6; NASA
6)
ARTICLE V
Announcements and Reports
Section 5.1 Announcement of Dividend. The Fund shall not announce prior to
15 days before the ex-dividend or ex-distribution date a declaration of, or an
intent to declare, a dividend from net income, or a distribution of realized
capital gains, where the shareholder has an option to purchase shares of the
Fund with such dividend or distribution. If a shareholder fails to notify the
Fund in writing that he has elected to take a distribution or dividend in cash,
he shall receive shares of the Fund. (Ill. Rule 2(A); NASA 1(A))
The ex-dividend or ex-distribution date for the final
-12-
<PAGE> 14
distribution for the fiscal year shall not be prior to the 15th day of the
month preceding the last month of the fiscal year. (Ill. Rule 2(c); NASA 1(c))
No dividend or distribution shall be referred to as an "extra" dividend or
distribution. (Ill Rule 2(d))
Section 5.2 Reports-- Contents. The Fund shall transmit to its
shareholders, at least semi-annually, reports containing (together with such
other information as shall be required by the ICA and the Rules and Regulations
thereunder) the following information and financial statements or their
equivalent as of a reasonable current date:
(a) Unless a statement of assets, changes in net assets, net asset
value per share and dividends per share pursuant to ICA-Rule 30d-1 is
included, a balance sheet accompanied by a statement of the aggregate value
of investments on the date of such balance sheet;
(b) A list showing the amounts and values of securities owned on the
date of such balance sheet;
(c) A statement of income, for the period covered by the report, which
shall be
-13-
<PAGE> 15
itemized at least with respect to each category of income and expense
representing more than 5% of total income or expense:
(i) Gains and losses from the sale of securities shall be determined
on the "tax basis" (or "average-cost basis"), and a footnote shall
indicate the gains or losses as determined on an "average cost basis" (or
"tax basis");
(ii) Costs of increases in authorized capital stock, stock splitups,
or stock dividends shall be listed either as a separate item of expense
or by way of a footnote;
(d) Unless a statement of assets, changes in net assets, net asset
value per share and dividends per share pursuant to ICA-Rule 30d-1 is
included, a statement of surplus, which shall be itemized at least with
respect to each charge or credit to the surplus account which represents
more than 5% of the total charges or credits during the period covered by
the report;
(e) A statement of the aggregate remuneration paid by the Fund during
the period covered by the report:
-14-
<PAGE> 16
(i) to all directors for regular compensation;
(ii) to each director for special compensation;
(iii) to all officers; and
(iv) to each person of whom any officer or director of the Fund is an
affiliated person;
(f) A statement of the aggregate dollar amounts of purchases and
sales of investment securities, other than Government securities, made
during the period covered by the report. (ICA Section 30(d); ICA-Rule
30d-1; Ohio A(24); Ill. Rule 3, 4)
Section 5.3 Filing of Reports. The Fund shall file with the SEC four
copies of every periodic or interim report or similar communication containing
financial statements and transmitted to the Fund's shareholders within ten (10)
days after such transmission. Copies shall also be filed, when required, with
the state authorities in which the Fund offers its shares. (ICA Section
30(b)(2))
Section 5.4 Reports for the SEC and State Authorities. The Fund shall file
such reports with the SEC and state authorities as shall be required by the laws
and regulations of the Federal Government and the state governments in those
states in which the Fund offers its shares. (ICA Section 30; Ohio A(24))
-15-
<PAGE> 1
EXHIBIT 4
<PAGE> 2
SENTRY FUND, INC.
Incorporated Under the Laws of the State of Maryland
[ ] CUSIP 817300-10-6
CERTIFICATE NO.
NO. OF SHARES
[ ] DATE
This is to certify that the above-named shareholder is the owner of the
indicated number of fully-paid and non-assessable shares, of the par value of
one dollar ($1.00) each, of the capital stock of Sentry Fund, Inc. transferable
on the books of the corporation by the holder hereof in person or by duly
authorized attorney upon surrender of this certificate properly endorsed. This
certificate is not valid unless countersigned by the transfer agent.
Witness the facsimile seal of the corporation and the facsimile signatures of
its duly authorized officers.
COUNTERSIGNED:
SENTRY EQUITY SERVICES, INC. TRANSFER AGENT
BY:_______________________________________
SECRETARY PRESIDENT AUTHORIZED SIGNATURE
CERTIFICATE
<PAGE> 3
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM As tenants in common UNIF GIFT MIN ACT -
TEN ENT As tenants by the entireties
_______________________________CUSTODIAN__________________________________
JT TEN As joint tenants with right of (CUSTODIAN) (MINOR)
survivorship and not as tenants
in common
ADDITIONAL ABBREVIATIONS MAY ALSO BE
USED THOUGH NOT IN THE ABOVE LIST. UNDER UNIFORM GIFTS TO MIN ACT ___________________________________________
(STATE)
REDEMPTION OR ASSIGNMENT FORM
THE UNDERSIGNED TENDERS THIS CERTIFICATE TO THE CORPORATION ---
*A. For the redemption, in accordance with the corporation's charter, of ________________ shares of the corporation's capital
stock represented by this certificate.
*B. And, for value received hereby sells, assigns, and transfers unto
_______________________________________________________________________ Insert social security or other identifying number of
(Full Name of Assignee) person to who the certificate is being assigned.
_______________________________________________________________________
(Address)
_______________________________________________________________________ _____________________________________________________
(City) (State) (Zip)
___________________________________ shares of the stock represented by this certificate and hereby irrevocably constitutes
and appoints
________________________________________________ attorney to transfer the same on the books of the corporation, with full
substitution in the premises. power of substitution in the
premises.
* If redemption, fill in paragraph A and cross out paragraph B. SIGNATURE(S)
If assignment, fill in paragraph B and cross out paragraph A.
If some shares are to be redeemed and other assigned, fill in both _____________________________________________________
paragraphs.
_____________________________________________________
CHECK ONE IF APPLICABLE _____________________________________________________
STREET
/ / A new certificate is to be issued to the undersigned for any _____________________________________________________
balance of shares represented by the certificate and not being CITY STATE ZIP
tendered for redemption or assignment.
/ / Place the balance of shares in uncertified status on my NOTICE: The signatures(s) to this form must
account correspond with the name as written upon the face of
the certificate in every particular, without or
enlargement, or any change whatever.
Signatures(s) Guaranteed By:
_____________________________________________________
Bank or Firm
FOR OFFICE USE By __________________________________________________
Signature(s) must be guaranteed by a bank which is a
member of the Federal Reserve System, by a broker who
is a member of the New York, American, Midwest or
Pacific Coast Stock Exchanges, or by a registered
representative of Sentry Equity Services, Inc.
</TABLE>
<PAGE> 1
EXHIBIT 5
<PAGE> 2
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SENTRY FUND, INC.
AND
SENTRY INVESTMENT MANAGEMENT, INC.
THIS AGREEMENT, made this 1st day of March, 1991, between SENTRY FUND, INC., a
Maryland corporation (hereinafter called the "Fund"), and SENTRY INVESTMENT
MANAGEMENT, INC., a Delaware corporation (hereinafter called the "Adviser").
WITNESSETH:
1. The Fund hereby employs the Adviser to manage and direct the investment and
reinvestment of the assets of the Fund, subject to the control of the Board of
Directors of the Fund, for the period and on the terms set forth in this
Agreement. The Adviser hereby accepts such employment for the compensation
herein provided and agrees during such period, at its own expense, to render
the services and to assume the obligations herein set forth.
2. The Adviser shall for all purposes herein be deemed to be an independent
contractor and except as otherwise expressly provided or authorized, shall have
no authority to act for or represent the Fund in any way or otherwise be deemed
an agent of the Fund.
3. The Fund shall at all times keep the Adviser fully informed as to the
condition of its affairs and has furnished, or will furnish promptly when
effective, the Adviser with the following and all amendments and supplements
thereto from time to time adopted:
(a) Articles of Incorporation of the Fund;
(b) Bylaws of the Fund;
(c) Statement of Rules and Regulations adopted by the Board of
Directors;
(d) Copies of the Fund's Registration Statement filed with the
Securities and Exchange Commission under the Investment
Company Act of 1940;
(e) Copies of the Registration Statement for the Fund's shares filed
with the Securities and Exchange Commission under the
Securities Act of 1933;
(f) Copies of all reports to the Securities and Exchange Commission
and shareholders of the Fund; and
(g) Resolution of the Board of Directors authorizing the execution of
this Agreement by the Fund.
<PAGE> 3
-2-
4. The Adviser shall:
(a) Conduct investment research, obtain and evaluate economic,
statistical and financial data relevant to the investment
policy and the investments of the Fund;
(b) Establish and maintain a complete program, subject to the control
of the Fund's Board of Directors, for the investment of the Fund's
assets in accord with its investment policy;
(c) Implement, execute and supervise the Fund's investment program,
subject to the control of the Fund's Board of Directors, including
the placing of orders for the purchase and sale of securities;
(d) Regularly furnish the Fund, when reasonably requested to do so by
an officer or the Board of Directors, complete reports of all Fund
portfolio transactions and the management of the assets of the
Fund;
(e) Furnish the Fund's Board of Directors, from time to time, if the
Adviser considers it advisable to do so, recommendations regarding
changes in the Fund's investment policy;
(f) Furnish the Fund with office space, facilities and services for
its executive personnel;
(g) Furnish the Fund on a daily basis with a list showing the
quantity, name and value (determined as provided in the Fund's
charter) of the assets in the Fund's portfolio to permit the Fund
to determine net asset value;
(h) Permit such of the Adviser's officers and employees as may be
elected officers and directors of the Fund to serve as such without
expense to the Fund, subject to their individual consent to serve
and to any limitation imposed by law;
(i) Assume and pay or cause to be paid all other expenses incurred by
it in connection with the management of the assets of the Fund; and
(j) Keep all records and books of account which investment advisers
are required to keep under the Investment Company Act of 1940 and
the rules and regulations thereunder.
5. The Adviser agrees to comply with the Fund's Articles of
Incorporation, Bylaws, Rules and Regulations, investment policies as set forth
in the Fund's Registration Statement filed with the Securities and
<PAGE> 4
-3-
Exchange Commission under the Investment Company Act of 1940, now in effect or
as hereafter amended, and all applicable federal or state laws and will, in any
activities undertaken on behalf of the Fund, be subject to any directives of
the Board of Directors or any duly constituted committee thereof or the
President, any Vice President, Secretary or Treasurer of the Fund.
6. Nothing in the previous paragraphs shall require the Adviser to
bear the expense of or to reimburse the Fund for:
(a) The charges of any depositories or custodians appointed by the
Fund for the safekeeping of its cash, securities and other
property;
(b) The charges of any agents for the Fund to issue, redeem and
transfer its shares, to make payment of dividends and for the
performance of other services related to the maintenance of
shareholder records of the Fund;
(c) The charges of independent auditors for the Fund;
(d) All charges for bookkeeping (to the extent that such bookkeeping
services are not rendered by the Adviser in connection with its
management of the assets of the Fund);
(e) Broker's commissions and issue and transfer taxes chargeable to
the Fund in connection with securities transactions to which the
Fund is a party;
(f) All taxes and corporate fees payable by the Fund to federal, state
or other governmental agencies;
(g) The cost of printing and mailing notices and reports to the Fund's
stockholders;
(h) The expenses of printing and mailing stock certificates on any
issue of shares by the Fund;
(i) The expenses (including legal expenses) of registering shares of
the Fund under the Securities Act of 1933 and of preparing and
printing post-effective amendments to the Fund's registration
statements;
(j) The expenses (including legal expenses) of qualifying and
maintaining qualification of the shares of the Fund under state or
other securities laws;
(k) All charges for preparing, printing and mailing of sales
literature;
(l) All expenses of stockholders and directors meetings; and
<PAGE> 5
-4-
(m) The charges and expenses of legal counsel for the Fund in
connection with legal matters relating to the Fund, including
without limitation, legal services rendered in connection with the
Fund's corporate existence, the Fund's corporate and financial
structure and relations with its stockholders and the maintenance
of registrations and qualification of its securities under federal,
state and other governmental laws.
Omission of an item of expense in the foregoing enumeration shall in
no way be construed to include such expense in Section 4 except as to such
expenses as are specifically assumed by the Adviser.
7. The Fund shall pay the Adviser for services rendered hereunder a
quarterly fee computed by using the following annual rates, based on the
average daily net asset value of the Fund during the quarter:
Net Asset Value Annual Rate
--------------- -----------
First $150,000,000 0.75%
Next $150,000,000 0.60%
Next $200,000,000 0.525%
Amount Over $500,000,000 0.45%
The fee for each quarter shall be payable to the Adviser not later than the
fifteenth day following each of the Fund's fiscal quarters.
If this Agreement is terminated as of any date not the last day of the
quarter, such fee shall be based on the average daily net asset value from the
beginning of such quarter to the date of termination and shall be based on the
proportion that the number of business days (i.e., days on which the Fund is
required to accept shares for redemption) in such quarter to the date of
termination bear to the number of such business days in such quarter.
8. If the total expenses of the Fund in any fiscal year (excluding
taxes, portfolio brokerage commissions and interest, but including the fees
paid to the Adviser) exceed the sum of 1 1/2 percent of the first $30,000,000
and 1 percent of any balance of the Fund's average daily net assets for such
year, the Adviser agrees to reimburse the Fund for an amount equal to such
excess within sixty (60) days after the close of each fiscal year. For any
portion of any fiscal year ending on the date of termination of this Agreement,
the amount of reimbursement shall be pro-rated on the basis of the number of
calendar days through the date of termination to the number of calendar days
for the entire fiscal year in question.
9. The Adviser shall not be liable to the Fund or any stockholder
thereof or any other person if it has acted in good faith for any error of
judgment or for any loss suffered by the Fund in connection with the matters to
which this Agreement relates except a loss resulting from the Adviser's willful
misfeasance, bad faith or gross negligence in the performance of its duty, or
reckless disregard of its obligations and duties under this Agreement.
<PAGE> 6
-5-
10. The services of the Adviser to the Fund hereunder are not to be
deemed exclusive, and the Adviser shall be free to render similar or other
services to others so long as its services hereunder are not impaired thereby.
11. It is understood that directors, officers, agents and
stockholders of the Fund are or may be interested in the Adviser as directors,
officers, stockholders, or otherwise, that directors, officers, agents and
stockholders of the Adviser are or may be interested in the Fund as directors,
officers, stockholders, or otherwise, that the Adviser may be interested in the
Fund as a stockholder or otherwise, and that the existence of any such dual
interest shall not affect the validity hereof or of any transactions hereunder
except as otherwise provided by specific provisions of applicable law.
12. This Agreement may be terminated at any time, without the payment
of any penalty, by the Board of Directors of the Fund or by a vote of a
majority of the outstanding voting shares of the Fund upon giving at least
sixty (60) days' written notice to the Adviser. This Agreement may be
terminated by the Adviser at any time upon the giving of at least sixty (60)
days' written notice to the Fund. This Agreement shall terminate automatically
in the event of its assignment.
This Agreement shall, subject to the foregoing, continue in effect so
long as such continuance is specifically approved at least annually by:
(a) The vote of a majority of the Directors of the Fund who are not
interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such
approval; and
(b) The vote of the Board of Directors of the Fund or the vote of a
majority of the outstanding voting shares of the Fund.
13. This Agreement may be amended only with the affirmative vote of a
majority of the outstanding voting shares of the Fund.
14. The terms "interested persons," "vote of the majority of the
outstanding voting shares" and "assignment" shall be construed in accordance
with their respective definitions in Section 2(a) of the Investment Company Act
of 1940.
15. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed registered, postage prepaid to the other party at such
address as such other party may designate for the receipt of such notices.
Until further notice to the other party, it is agreed that the address of the
Fund and that of the Adviser for this purpose shall be 1800 North Point Drive,
Stevens Point, Wisconsin, 54481.
<PAGE> 7
-6-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers the day and year first above written.
ATTEST: SENTRY FUND, INC.
/s/ E. Fleischauer /s/ Peter P. Trapp
- ------------------------ --------------------------
Emil Fleischauer, Jr. Peter P. Trapp
Secretary Chairman of the Board and
President
ATTEST: SENTRY INVESTMENT MANAGEMENT, INC.
/s/ E. Fleischauer /s/ David R. Miller
- ------------------------ --------------------------
Emil Fleischauer, Jr. David R. Miller
Secretary President
<PAGE> 1
EXHIBIT 6(a)
<PAGE> 2
EXHIBIT 6(a)
UNDERWRITER AGREEMENT
BETWEEN
SENTRY FUND, INC.
AND
SENTRY EQUITY SERVICES, INC.
AGREEMENT made this 4th day of December, 1990, between SENTRY FUND, INC., a
Maryland corporation (hereinafter called the "FUND"), and SENTRY EQUITY
SERVICES, INC., a Delaware corporation (hereinafter called the "UNDERWRITER").
ARTICLE I
Appointment of Underwriter
The Fund hereby appoints the Underwriter as agent of the Fund to solicit
subscriptions for shares of the capital stock of the Fund through its own
personnel and through dealers with which the Underwriter may wish to become
associated in its activities. The Underwriter will also provide administrative
services and office facilities (other than such facilities as may be furnished
by the Fund's investment adviser) for the Fund. The Underwriter hereby accepts
its obligations hereunder for the period herein provided and agrees during such
period, at its own expense, to render the services, provide the facilities and
assume the obligations herein set forth.
ARTICLE II
Solicitation of Subscriptions
1. The Underwriter will use its best efforts to solicit and obtain
subscriptions for authorized shares of the capital stock of the Fund through
its own registered representatives, in accordance with the terms and conditions
of this Agreement.
2. The Underwriter may also enter into agreements with dealers on its own
behalf and not as agent for the Fund authorizing such dealers to solicit and
obtain subscriptions for Fund shares.
3. The Fund, upon its acceptance of subscriptions and receipt of payment on
subscriptions, shall sell authorized shares of its capital stock in accordance
with the terms and conditions of this Agreement.
4. No dealer shall be appointed, authorized or used by the Underwriter to
solicit and obtain subscriptions without the Fund's prior written approval,
which may be withheld in the Fund's discretion, of each agreement between the
Underwriter and any such dealer.
5. The Underwriter will require all of its registered representatives and
dealers, if any, authorized under Section 4 of this Article to solicit and
obtain subscriptions to comply with the provisions of this Agreement and all
applicable federal and state laws.
6. The Underwriter shall not make, or authorize any person to make, any short
sale of shares.
<PAGE> 3
-2-
ARTICLE III
Procedure for Handling Subscriptions and Sales of Shares
1. Upon receipt by the Underwriter at its Stevens Point, Wisconsin,
office of a subscription for shares, the Underwriter shall promptly
deliver such subscription and any accompanying moneys to the Fund. Each
subscription shall be time-stamped by the Fund at the time of its receipt by
the Fund. Each such subscription shall be subject to acceptance or rejection
by the Fund in its sole discretion.
2. Each subscription accepted by the Fund shall be confirmed to the
Underwriter at the price (determined as provided in Article IV hereof) in
effect at the time of the Fund's receipt of such subscription at its Stevens
Point, Wisconsin, office.
3. After the Fund has accepted a subscription order and payment
therefor has been received, the Fund shall cause the subscribed for shares
to be issued and recorded in the Fund's stock ledger under such names and in
such amounts as shall be specified in the subscription, and, if certificates
representing such shares have been requested, cause such certificates therefor
to be delivered as designated by the subscriber.
ARTICLE IV
Sales Price and Compensation
1. The offering price of shares shall be the sum of the net asset
value per share adjusted to the nearest full cent. The Underwriter may
make arrangements with each dealer for the dealer's compensation and the Fund
shall have no liability therefor.
2. The net asset value shall be determined as provided in and as of
the time set forth in the Fund's charter, a copy of which has been
furnished to the Underwriter.
3. The Fund will promptly furnish or cause to be furnished to the
Underwriter a statement of the net asset value per share as often as such
net asset value is determined.
ARTICLE V
General Provisions
1. The Fund will use its best efforts:
(a) To register and keep effectively registered under the Securities
Act of 1933 for sale as herein contemplated such shares of
the Fund as the Underwriter shall reasonably request and as the
Securities and Exchange Commission shall permit to be so
registered;
<PAGE> 4
-3-
(b) To register and keep effectively registered
(including the qualification of the Fund as a dealer where
necessary or advisable) in such states and in such amounts
as the Underwriter may reasonably request (it being
understood that the Fund shallnot be required without its
consent to qualify to do business in any jurisdiction or to
comply with any requirement which in its opinion is unduly
burdensome) shares of the Fund for sale as herein
contemplated; and
(c) To obtain shareholder approval to amend the Fund's
charter from time to time to increase the number of
authorized but unissued shares of the Fund as the
Underwriter shall reasonably request.
2. The Underwriter will not, in any event, offer shares for sale (a)
in excess of the number then effectively registered under the Securities Act of
1933, and available for sale by the Fund; (b) in violation of any applicable
law, rule or regulation; or (c) in contravention of the Fund's charter, or of
any fundamental policies or rules adopted by the Fund, notice of which shall
have been given by the Fund to the Underwriter, which in any way require,
limit, restrict, prohibit or otherwise regulate any action on the part of the
Underwriter.
3. The Fund will furnish to the Underwriter from time to time such
information with respect to the Fund and its shares as the Underwriter may
reasonably request for use in connection with the solicitation of
subscriptions. The Underwriter will not use, distribute or authorize the use,
distribution or dissemination by its registered representatives or dealers
authorized to solicit or obtain subscriptions of any literature, advertising or
selling aids, in any form or through any medium, written or oral, without the
prior written approval thereof by the Fund.
4. The rights hereinbefore granted to the Underwriter with respect to
the solicitation of subscriptions for shares of capital stock of the Fund shall
be exclusive; provided, however, that nothing herein contained shall limit the
right of the Fund, in its absolute discretion, to issue or sell shares in
connection with the acquisition of assets or shares or securities of another
corporation or entity or with the merger or consolidation of any other
corporation into or with the Fund, or otherwise or to issue or sell any such
shares directly to shareholders of the Fund, upon such terms and conditions and
for such consideration, if any, as may be determined by the Board of Directors
of the Fund.
5. The Underwriter agrees that the Fund shall have no liability to the
Underwriter for refusing to accept any specific subscription for its shares or
for generally refusing to accept subscriptions to its shares for any period of
time and for any reason deemed satisfactory by the Fund.
<PAGE> 5
-4-
6. The Fund agrees to indemnify, defend and hold the Underwriter, its
officers and directors, and any person who controls the Underwriter within the
meaning of Section 15 of the Securities Act of 1933, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Underwriter, its
officers, directors or any such controlling person may incur under the
Securities Act of 1933, the Securities Acts of the several states of the United
States, or under common law or otherwise, arising out of or based upon any
untrue statement of a material fact contained in the Fund's registration
statement or prospectus or arising out of or based upon any alleged omission to
state a material fact required to be stated in either thereof or necessary to
make the statements in either thereof not misleading, except insofar as such
claims, demands, liabilities or expenses arise out of or are based upon any
such untrue statement or omission or alleged untrue statement or omission made
in reliance and in conformity with information furnished in writing by the
Underwriter to the Fund for use in the Fund's registration statement or
prospectus; provided, however, that this indemnity agreement, to the extent
that it might require indemnity of any person who is also an officer or
director of the Fund or who controls the Fund within the meaning of Section 15
of the Securities Act of 1933, shall not inure to the benefit of such officer,
director or controlling person unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling precedent, that such
result would not be against public policy as expressed in the Securities Act of
1933; and further provided, that in no event shall anything contained herein be
so construed as to protect the Underwriter against any liability to the Fund or
to its security holders to which the Underwriter would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence, in the
performance of its duties, or by reason of its obligations under this
Agreement. The Fund's agreement to indemnify the Underwriter, its officers and
directors and any such controlling person as aforesaid is expressly conditioned
upon the Fund being promptly notified of any action brought against the
Underwriter, its officers or directors, or any such controlling person, such
notification to be given by letter or telegram addressed to the Fund at its
registered business office in Wisconsin. The Fund agrees promptly to notify
the Underwriter of the commencement of any litigation or proceedings in
connection with the issue and sale of any shares of its capital stock.
The Underwriter agrees to indemnify, defend and hold the Fund, its
officers and directors and any person who controls the Fund, if any, within the
meaning of Section 15 of the Securities Act of 1933, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigation or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Fund, its directors or
officers or any such controlling person may incur under the Securities Act of
1933, the Securities Acts of the several states of the United States, or under
<PAGE> 6
-5-
common law or otherwise; but only to the extent that such liability or expense
incurred by the Fund, its directors or officers or such controlling person
resulting from such claims or demands shall arise out of or be based upon any
alleged untrue statement of a material fact contained in information furnished
in writing by the Underwriter to the Fund for use in the Fund's registration
statement or prospectus or shall arise out of or be based upon any alleged
omission to state a material fact in connection with such information required
to be stated in the registration statement or prospectus or necessary to make
such information not misleading. The Underwriter's agreement to indemnify the
Fund, its directors and officers, and any such controlling person as aforesaid
is expressly conditioned upon the Underwriter being promptly notified of any
action brought against the Fund, its officers or directors or any such
controlling person, such notification being given to the Underwriter at its
registered business office in Wisconsin.
ARTICLE VI
Furnishing of Services to the Fund
1. The Underwriter shall furnish:
(a) Adequate office space, facilities and equipment (other
than such space, facilities and equipment as may be
furnished by the Fund's investment adviser) to the Fund;
(b) Adequate clerical personnel, services and supplies to
the Fund (other than those as may be furnished by
the Fund's investment adviser);
(c) Administrative personnel and services for the operation
of the Fund;
(d) Bookkeeping and other necessary financial services for
the Fund, other than those relating to the
maintenance of shareholder records as provided for under
separate agreements which may now or hereafter be in
effect, including sufficient personnel and facilities to
enable the Fund to make a daily determination of the net
asset value of the Fund in accordance with the Fund's
charter at the time or times prescribed in the Fund's
charter; and
(e) Permit such of the Underwriter's officers and employees
as may be elected officers and directors of the
Fund to serve as such without expense to the Fund,
subject to their individual consent to serve and to any
limitation imposed by law.
2. Payment of expenses.
(a) The Fund will pay or cause to be paid:
<PAGE> 7
-6-
(i) Registration fees for registering its shares under the
Securities Act of 1933;
(ii) Printer's expenses for preparing and typesetting all
prospectuses prepared for use in connection with the
offering of shares;
(iii) Expenses incident to preparing amendments to the 1933 Act
registration statement;
(iv) Expenses incident to the issuance of its shares such as
the cost of stock certificates, taxes and fees of the
transfer agent for establishing shareholder record
accounts;
(v) Expenses incident to the preparation and printing of forms
for subscriptions, redemptions, transfers and
confirmations;
(vi) Expenses incident to the preparation and mailing of
reports to its shareholders; and
(vii) The expenses, including counsel fees, of preparing
applications for registration and for registering
Fund shares for sale in such states as are mutually agreed
upon by the Fund and the Underwriter.
(b) The Underwriter will pay or cause to be paid:
(i) The printing costs of all subsequent prospectuses and all
costs of advertising material;
(ii) The entire compensation and expenses of personnel
furnished to the Fund;
(iii) All expenses of the Underwriter as to its
qualification as dealer, broker or otherwise, under
applicable state or federal laws; and
(iv) All expenses (in excess of the annual per account charge
made to the Fund for performing like services under the
Agency Agreement for all accounts) required to administer
the Fund's periodic purchase plan, including the single
check payment arrangement for combination purchases of Fund
shares and life insurance, systematic withdrawal plan
(subject to the Underwriter's right to charge each
participant the service charge per withdrawal reflected in
the prospectus) reinvestments of dividends and other
distribution.
<PAGE> 8
-7-
ARTICLE VII
Validity of Agreement
It is understood that directors, officers, agents and shareholders of
the Fund are or may be interested in the Underwriter as directors, officers,
shareholders, or otherwise, that directors, officers, agents and shareholders
of the Underwriter are or may be interested in the Fund as directors, officers,
shareholders or otherwise, that the Underwriter may be interested in the Fund
as a shareholder or otherwise, and that the existence of any such dual interest
shall not affect the validity hereof or of any transaction hereunder except as
otherwise provided by specific provision of applicable law.
ARTICLE VIII
Duration and Termination of Agreement
This Agreement may be terminated at any time by the Board of Directors
of the Fund or by a vote of a majority of the outstanding shares of the Fund,
upon giving at least 60 days' written notice to the Underwriter. This
Agreement may be terminated by the Underwriter at any time upon the giving of
at least 60 days' written notice to the Fund. This Agreement shall terminate
automatically in the event of its assignment by the Underwriter.
This Agreement shall, subject to the foregoing, continue in effect so
long as such continuance is specifically approved at least annually by:
(a) The vote of a majority of the Directors of the Fund who are not
interested persons of any party to this Agreement, cast in person
at a meeting called for the purpose of voting on such approval; and
(b) The vote of the Board of Directors of the Fund, or the vote of a
majority of the outstanding shares of the Fund.
ARTICLE IX
Amendment
This Agreement may be amended at any time or from time to time by an
instrument in writing executed by the duly authorized officers of the Fund and
the Underwriter, provided that such amendment or amendments are specifically
approved by the Board of Directors of the Fund, including specific approval by
a majority of the Directors who are not interested persons of the Underwriter.
<PAGE> 9
-8-
ARTICLE X
Miscellaneous
The terms "interested persons," "vote of a majority of the outstanding
voting shares" and "assignment" shall be construed in accordance with their
respective definitions in Section 2(a) of the Investment Company Act of 1940.
ARTICLE XI
Notice
Any notice under this Agreement shall be in writing, addressed and
delivered or mailed registered, postage prepaid to the other party at such
address as such other party may designate for the receipt of such notices.
Until further notice to the other party, it is agreed that the address of the
Fund and that of the Underwriter for this purpose shall be 1800 North Point
Drive, Stevens Point, Wisconsin, 54481.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
ATTEST: SENTRY FUND, INC.
/s/ E. Fleischauer /s/ Peter P. Trapp
- -------------------------------- ----------------------------------
Emil Fleischauer, Jr., Secretary Peter P. Trapp, Chairman of the
Board and President
ATTEST: SENTRY EQUITY SERVICES, INC.
/s/ E. Fleischauer /s/ Robert L. Baldwin
- -------------------------------- --------------------------------
Emil Fleischauer, Jr., Secretary Robert L. Baldwin, President
Secretary
<PAGE> 1
EXHIBIT 6(b)
<PAGE> 2
EXHIBIT 6(B)
DEALER AGREEMENT
Sentry Equity Services, Inc.
1800 North Point Drive
Stevens Point, Wisconsin 54481
As Underwriter of the capital stock of the Sentry Fund, Inc. (the "Fund"),
as that term is defined in Article III, Section 26 of the Rules of Fair Practice
of the National Association of Securities Dealers, Inc., we understand that you
are a member of such Association and, on the basis of such understanding, invite
you to become a member of the group of securities dealers (the "Selling Group")
authorized to solicit subscription for shares of the Fund on the following
terms:
1. You and we agree to abide by rules, regulations and procedures that are
now or may become applicable to transactions hereunder, including Article III,
Section 26 of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc.
2. Subscriptions for shares received from you and accepted by the Fund will
be at the net asset value price, established in accordance with the then
effective prospectus of the Fund. The procedure relating to the handling of
subscriptions shall be subject to instructions which we shall forward from time
to time to all members of the Selling Group. All subscriptions are subject to
acceptance by the applicable Fund at its Stevens Point, Wisconsin, office, and
each reserves the rights, in its sole discretion, to reject any subscription.
3. Members of the Selling Group will be allowed concessions equal to 1% of
the applicable purchase amount. Concessions will be paid monthly to the members
of the Selling Group by Sentry Equity Services. The member will be responsible
for any subsequent commission payable to its registered representatives.
4. As a member of the Selling Group, you agree not to purchase shares of
the Fund from any person and will make arrangements to solicit subscriptions for
shares of the Fund only through us, the Fund's agent. You will solicit
subscriptions only from persons other than securities dealers or brokers and
will only enter subscriptions for yourself as a bona fide investment.
5. You agree that you will promptly forward all customer's subscriptions to
us. The Fund will not accept conditional subscriptions.
6. You agree that the price applicable to subscriptions for shares will be
the net asset value price next determined after receipt of properly submitted
subscription applications or subsequent purchases at the Fund's office in
Stevens Point, Wisconsin.
7. Payments for shares purchased in the Fund must be made in accordance
with the provisions of the applicable Fund's prospectus and as contemplated by
the subscription applications submitted. Delivery of shares will be made by
credit to shareholder accounts, or delivery of certificates if such are
requested in writing.
8. If any shares subscribed for under the terms of this agreement are
tendered for redemption under the terms of the Fund's Articles of Incorporation
within seven business days after the date of the Fund's confirmation to you of
an original subscription therefor, you agree to pay forthwith to us the full
amount of the concession, if any, 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 commission, if any, on the
original sale of such shares. We shall notify you of such repurchase or
redemption within ten days of the date on which the redemption request was
received in good order by the Fund.
<PAGE> 3
9. All subscriptions are subject to acceptance by the applicable Fund. The
Fund reserves the right, without notice to you, to suspend sales or withdraw the
offering of shares entirely and to change the sales charge to investors. We
reserve the right to change the concessions to the members of the Selling Group
or to modify, cancel or assign this agreement, which shall be construed in
accordance with the laws of the State of Wisconsin.
10. No person is authorized to make any representations concerning the Fund
or its shares except those contained in an effective prospectus and any such
information as may be authorized by us for use as information supplemental to a
prospectus. In soliciting subscriptions for shares, you shall rely on the
representations contained in an effective prospectus and the supplemental
information above mentioned.
11. Additional copies of any prospectus and any printed information
designated as supplemental to such prospectus will be supplied by us to members
of the Selling Group in reasonable quantities upon request.
12. In no transaction shall you have any authority whatever to act as agent
of the Fund or of ours or of any other member of the Selling Group, and nothing
in this agreement shall constitute either of us the agent of the other or shall
constitute you or the Funds the agent of the other. In all transactions in
shares of the Fund between us we are acting as agent for the Fund and you are
acting as principal or as agent for an undisclosed principal, as the case may
be.
13. All communications to us shall be sent to Sentry Equity Services, Inc.,
1800 North Point Drive, Stevens Point, Wisconsin 54481. Any notice to you shall
be duly given if mailed or telegraphed to at your address as registered from
time to time with the National Association of Securities Dealers, Inc.
Dated: ____________________________ SENTRY EQUITY SERVICES, INC.
By: ________________________________
John A. Stenger, Vice President
The undersigned accepts your invitation to become a member of the Selling
Group and agrees to abide by the foregoing terms and conditions.
____________________________________ TAX I.D. __________________________
(Dealer-please print or type name)
By: ________________________________
____________________________________
(Street)
____________________________________
(City, State, Zip Code)
<PAGE> 1
EXHIBIT 8
<PAGE> 2
CUSTODY AGREEMENT
BETWEEN
SENTRY FUND, INC.
AND
CITIBANK, N.A.
AGREEMENT dated as of May 1, 1989 between Citibank, N.A., a national
banking association, having an office at 111 Wall Street, New York, New York
(the "Bank"), and Sentry Fund, Inc., a corporation organized under the laws of
the State of Maryland, having an office at 1800 North Point Drive, Stevens
Point, Wisconsin (the "Company").
WITNESSETH:
THAT WHEREAS, the Board of Directors of the Company has duly adopted
resolutions which, in part, authorize the Company to open and maintain a
custody account (the "Custody Account") with the Bank to hold certain property
("Property") including but not limited to stock, bonds, or other securities
("Securities"), funds and other property owned or held by the Company, other
than gold and silver coins, and authorize the Company's entry into this
Agreement;
NOW, THEREFORE, in consideration of the premises and of the agreements
hereinafter set forth, the parties hereby agree as follows:
1. APPOINTMENT AND ACCEPTANCE.
The Company hereby appoints the Bank as custodial of the Property, and
the Bank agrees to act as such upon the terms and conditions hereinafter
provided.
<PAGE> 3
-2-
2. DELIVERY; SAFEKEEPING.
The Company has heretofore delivered or will deliver Property to the
Bank, and will deliver or cause to be delivered to the Bank Property hereafter
acquired, which Property the Bank agrees to keep safely as custodian for the
Company. The Bank shall not surrender possession of Property except upon
properly authorized instructions of the Company.
3. IDENTIFICATION AND SEGREGATION OF ASSETS.
With respect to Property in the Custody Account:
(a) The Bank will segregate and identify on its books as belonging to
the Company all Property held by the Bank or any other entity authorized to
hold Property in accordance with Section 6 hereof.
(b) The Bank will supply to the Company from time to time as mutually
agreed upon a written statement with respect to all of the Company's Property
in the Custody Account. The Bank will send to the Company an advice or
notification of any transfers of Property to or from the Custody Account. In
the absence of the Company's filing in writing with the Bank of exceptions or
objections to any such statement within sixty (60) days, the Company shall be
deemed to have approved such statement.
4. STANDARD OF CARE.
The Bank will exercise the due care expected of a professional
custodian for hire with respect to the Securities and other property in its
possession and control. Specifically, the Bank will be liable to
<PAGE> 4
-3-
the Company for any loss of Securities and other Property in the Custody
Account resulting from robbery, theft or burglary, while such Securities and
other Property are in the Bank's possession and control. In addition, the Bank
will be liable to the Company for losses of Securities or other Property in the
Custody Account which result from the Bank's negligence or willful misconduct
or the negligence or willful misconduct of the Bank. The Bank shall have the
burden of proving that it exercised such care in the event of any loss of
Securities and other Property. Under no circumstances, however, will the Bank
incur liability for any loss of Securities or other Property in the Custody
Account resulting from war, insurrection, hurricane, tornado, earthquake,
nuclear fission, fusion or radioactivity.
The Bank is not under any duty to supervise the investments of the
Company, or to advise or make any recommendation to the Company with respect to
the purchase or sale of any of the Securities or the investment of any funds.
5. PERFORMANCE BY THE BANK.
(a) Receipt, Delivery and Disposal of Securities. The Bank shall, or
shall instruct any other entity authorized to hold Property in accordance with
Section 6 hereof to, receive or deliver Securities and credit or debit the
Company's account, in accordance with properly authorized instructions from the
Company. The Bank or such entity shall also receive in custody all stock
dividends, rights and similar
<PAGE> 5
-4-
securities issued in connection with Securities held hereunder, shall surrender
for payment, in a timely manner, all items maturing or called for redemption
and shall take such other action as the Company may direct in properly
authorized instructions.
(b) Trade Execution. The Company may from time to time place orders
with the Bank to buy or sell Securities. The Bank and any entity authorized to
hold Property in accordance with Section 6 hereof may refer each such order to
any broker or sub-agent of its choice, unless otherwise specified, and shall
have no liability or responsibility whatsoever for any error, neglect or
default of any such broker or sub-agent (in the absence of negligence or
willful misconduct by the Bank in the selection of such broker or sub-agent) or
for mutilations, interruptions, omissions, errors or delays occurring in the
mails, or on the part of any telegraph, cable or wireless company, or any
employee of such company, or by reason of any cause beyond its control. In
placing such orders, the Company may from time to time place special orders
with the Bank which will, as agent, undertake the purchase or sale of the
Securities as set out above; provided that if the order is for the purchase or
sale of obligations of the United States Government or its agencies, or state
or municipal bonds, the Bank may act as principal. The Company hereby agrees,
with respect to all purchases, that funds for settlement will be on deposit by
the settlement date. Further, the Company agrees to provide specific
instructions regarding the deposit or delivery of all such Securities to the
Custody Account.
<PAGE> 6
-5-
(c) Registration. Securities held hereunder may be registered in the
name of the Bank, any entity authorized to hold Property in accordance with
Section 6 hereof, or a nominee of the Bank or any such authorized entity, and
the Company shall be informed upon request of all such registrations. The
Securities in registered form will be transferred upon request of the Company
into such names or registrations as it may specify in properly authorized
instructions.
(d) Cash Accounts. All cash received or held by the Bank as interest,
dividends, proceeds from transfer, and other payments for or with respect to
the Securities shall be (i) converted and remitted to the Company at the
Company's risk; (ii) held in a cash account in accordance with properly
authorized instructions received by the Bank; or (iii) if at any future time
made available by the Bank to its customers, held in a cash account and
transferred at the close of each business day to one or more demand accounts
designated by the Company and maintained at the Bank.
(e) Reports, Records, Affidavits and Access. If the Bank has in place
a system for providing telecommunication access or other means of direct access
by customers to the Bank's reporting system for Property in the Custody
Account, then, at the Company's election, the Bank shall provide the Company
with such instructions and passwords as may be necessary in order for the
Company to have such direct access through the Company's terminal device. Such
direct access shall be restricted
<PAGE> 7
-6-
to information relating to the Custody Account. Where direct access to such
terminal system is requested by the Company, the Company agrees to assume full
responsibility for the consequences of the use, including any misuse or
unauthorized use of the terminal device, instructions or passwords referred to
above and agrees to defend and indemnify the Bank and hold the Bank harmless
from and against any and all liabilities, losses, damages, costs, counsel fees,
and other expenses of every nature suffered or incurred by the Bank by reason
of or in connection with such use by the Company or others of such terminal
device, unless such liabilities, losses, damages, costs, counsel fees and other
expenses can be shown to be the result of negligent or wrongful acts of the
Bank, the Bank's employees or the Bank's agents. Further, where the Company
elects to have direct access, the Bank shall provide the Company on each
business day a report of the preceding business day's transactions relating to
such accounts and of the closing or net balances of each business day. If the
Company should not choose to have direct access, the Bank shall provide the
Company with such reports of transactions in the Custody Account by such means
as may be mutually agreed upon.
In the event that the Company is required to complete any annual
report of the Securities and Exchange Commission, the Bank agrees to maintain
records sufficient to verify such information and to furnish the Company, at no
charge, with such affidavits as may be required in connection therewith.
<PAGE> 8
-7-
During the Bank's regular banking hours, upon receipt of reasonable
notice from the Company, any officer or employee of the Company, any
independent accountant(s) selected by the Company and any person designated by
any regulatory authority having jurisdiction over the Company shall be entitled
to examine on the Bank's premises, Property held by the Bank on its premises
and the Bank's records regarding Property held hereunder deposited with
entities authorized to hold Property in accordance with Section 6 hereof, but
only upon the Company's furnishing the Bank with properly authorized
instructions to that effect, provided, such examination shall be consistent
with the Bank's obligations of confidentiality to other parties. The Bank's
costs and expenses in facilitating such examinations and providing reasonably
requested related reports and documents including, but not limited to, the cost
of the Bank of providing personnel in connection with examinations shall be
borne by the persons or agencies making such examinations or receiving such
reports or documents, provided that such costs and expenses shall not be deemed
to include the Bank's costs in providing to the Company; (i) the so-called
"single audit report" of the independent certified public accountants engaged
by the Bank; and (ii) such reports and documents as this Agreement contemplates
that the Bank shall furnish routinely to the Company.
The Bank shall also, subject to restrictions under applicable law,
seek to obtain from any entity with which the Bank maintains the physical
possession of any of the Property in the Custody Account such
<PAGE> 9
-8-
records of such entity relating to the Custody Account as may be required by
the Company or its agents in connection with an internal examination by the
Company of its own affairs. Upon a reasonable request from the Company, the
Bank shall use its best efforts to furnish to the Company such reports (or
portions thereof) of the external auditors of each such entity as relate
directly to such entity's system of internal accounting controls applicable to
its duties under its agreement with the Bank.
The Bank shall supply to the Company from time to time, written
operational procedures which shall govern the day-to-day operations of the
account. Such operating procedures are hereby incorporated herein by
reference.
(f) Voting and Other Action. The Bank will promptly transmit, and
will instruct any entities authorized to hold Property in accordance with
Section 6 hereof to transmit, to the Company all financial reports, stockholder
communications and notices issued by companies whose Securities are retained in
the Custody Account and information relating to exchange or tender offers, from
offerors, and all notices, proxies and proxy soliciting materials with respect
to the Securities in the Custody Account. Such proxies will be executed by the
registered holder if the registered holder is other than the Company, but the
manner in which the Securities are to be voted will not be indicated. Specific
instructions regarding proxies will be provided when necessary. Neither
<PAGE> 10
-9-
the Bank nor any such entity shall vote any of the Securities or authorize the
voting of any Securities or give any consent or take any other action with
respect thereto, except as otherwise provided herein, unless ordered to do so
by the Company.
In the event of tender offers, the Company shall mail instructions to
the Bank as to the action to be taken with respect thereto or telephone such
instructions to its Citibank account administrator at the Bank, designating
such instructions as being related to a tender offer. The Company shall
deliver to the Bank by 5:00 p.m., New York time on the following calendar day,
written confirmation, including telefax, of telephonic instructions provided
such telefax must be on the Company's letterhead, signed by an authorized
person and receipt by the Bank confirmed promptly. The Company shall hold the
Bank harmless from any adverse consequences of the Company's use of any other
method of transmitting instructions relating to a tender offer.
The Company agrees that if it gives an instruction for the performance
of an act on the last permissible date of a period established by the tender
offer or for the performance of such act or that if it fails to provide next
day written confirmation of any oral instruction, the Company shall hold the
Bank harmless from any adverse consequences of failing to follow said
instructions.
The Bank is authorized to accept and open in the Company's behalf all
mail or communications received by it or directed in its care.
<PAGE> 11
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(g) Requirements of S.E.C. The Bank agrees to comply with all
applicable requirements to which it is subject under the U.S. federal
securities laws and the regulations of the Securities and Exchange Commission
as they apply from time to time to custodians of funds and securities of
registered investment companies.
6. AUTHORIZED USE OF U.S. DEPOSITORIES.
(a) The Company authorizes the Bank, for any Securities held
hereunder, to use the services of any United States central securities
depository permitted to perform such services for registered investment
companies and their custodians under Rule 17f-4 under the Act ("U.S.
Depository" or "U.S. Depositories") including, but not limited to, the
Depository Trust Company and the Federal Reserve Book Entry System.
(b) The Bank will deposit Securities with a U.S. Depository only in an
account which includes exclusively the assets held by the Bank for its
customers, and the Bank will cause such account to be designated by such U.S.
Depository as a special custody account for the exclusive benefit of customers
of the Bank.
7. AUTHORIZATIONS.
The Bank is authorized to rely and act upon written, signed
instructions of those persons as named in a list provided to the Bank from time
to time by any two of the Company's officers, listing separately those persons
who may authorize the withdrawal of the Securities free of payment, which list
will be certified and furnished to the Bank by the Company's secretary. The
Company will provide the Bank with authenticated specimen signatures of the
persons so authorized.
<PAGE> 12
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The Bank is further authorized to rely upon any instructions received
by any other means and identified as having been given or authorized by any
person named to the Bank as authorized to give written instructions, regardless
of whether such instructions shall in fact have been authorized or given by any
of such persons, provided that the Bank and the Company shall have agreed upon
the means of transmission and the method of identification for such
instructions. Instructions received by any other means shall include verbal
instructions, provided that any verbal instructions shall be promptly confirmed
in writing. In the event any instructions, notices or other communication
under this Agreement are provided or confirmed via telefax, such telefax must
be on the Company's letterhead, signed by an authorized person and receipt by
the Bank confirmed promptly. In the event verbal instructions are not
subsequently confirmed in writing, as provided above, the Company agrees to
hold harmless and without liability for any claims or losses in connection with
such verbal instructions. Notwithstanding the above, instructions for the
withdrawal of securities "free of payment" shall be sent to you only in
writing, manually signed by any two such authorized persons.
The Company may appoint one or more investment managers ("Investment
Managers") with respect to the Custody Account. The Bank is authorized to act
upon instructions received from any Investment Manager to the same extent that
the Bank would act upon the instructions
<PAGE> 13
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of persons named in the above-mentioned certificate or separate list, provided
that the Bank has received copies of the instruments appointing the Investment
Managers and written confirmation from the Investment Manager evidencing his
acceptance of such appointment.
If the Company should choose to have a telecommunication or other
means of direct access to the Bank's terminal system for Property in the
Custody Account, pursuant to paragraph (e) of Section 5, the Bank is also
authorized to rely and act upon any instructions received by it through a
terminal device, provided that such instructions are accompanied by code words
which the Bank has furnished to the Company, or its delegated personnel, by any
method mutually agreed to by the Bank and the Company, and which the Bank shall
not have then been notified by the Company or any such delegate to cease to
recognize, regardless of whether such instructions shall in fact have been
given or authorized by the Company or any such person. The Company's delegates
shall be named by a certificate provided to the Bank from time to time by the
Company's Secretary or an Assistant Secretary.
8. FEES AND EXPENSES.
Fees and expenses for the services rendered under this Agreement shall
be in accordance with the schedule accepted by the Company and shall be payable
as indicated in said schedule.
9. TAX STATUS.
The Company is a Maryland corporation having its principal place of
business in Wisconsin. Tax Identification Number: 39-1126613.
<PAGE> 14
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10. TERMINATION.
Either party may terminate this Agreement upon sixty
(60) days written notice to the other.
11. CONFIDENTIALITY.
Subject to the foregoing provisions of this Agreement and subject to
any applicable law, the Company and the Bank shall each use best efforts to
maintain the confidentiality of matters concerning Property in the Custody
Account.
12. NOTICES AND MISCELLANEOUS.
All notices and other communications hereunder, except for
instructions and reports relating to the Property which are transmitted through
the Bank's terminal system for Property in the Custody Account, shall be in
writing, telex or telecopy or, if verbal, shall be promptly confirmed in
writing, and shall be hand-delivered, telexed, telecopied or mailed by prepaid
first-class mail (except that notice of termination, if mailed, shall be by
prepaid registered or certified mail) to each party at its address set forth
above, if to the Company, marked "Attention ____________________" and if to the
Bank, marked "Attention _______________________", or at such other address as
each party may give notice of to the other. This Agreement may not be amended
except by writing signed by the party against whom enforcement is sought. This
Agreement shall not be assignable by either party without the written consent
of the other. This Agreement may be executed in several
<PAGE> 15
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counterparts, each of which shall be an original, but all of which shall
constitute one of the same instrument. This Agreement contains the entire
agreement between the Company and the Bank relating to custody of Property and
supersedes all prior agreements on this subject.
The captions of the various sections and subsections of this Agreement
have been inserted only for the purposes of convenience, and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.
This Agreement shall be governed by and construed according to the
laws of the State of New York.
In witness whereof, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized.
CITIBANK, N.A.
Attest: [SIG] By: [SIG]
--------------- ---------------------
Title: Vice President
------------------
SENTRY FUND, INC.
Attest: /s/E. Fleischauer By: /s/Peter P. Trapp
------------------- ---------------------
Peter P. Trapp
Title: Chairman of the
Board and President
<PAGE> 1
EXHIBIT 9(a)
<PAGE> 2
AGENCY AGREEMENT
THIS AGREEMENT, made this 14th day of May, 1970, by and between SENTRY
---- ---------
FUND, INC., a Maryland corporation (hereinafter called the "Fund"), and SENTRY
EQUITY SERVICES, INC., a Delaware corporation (hereinafter called "Services
Inc."),
WITNESSETH:
1. Appointment. Services Inc. is hereby appointed, effective May 14,
1970, as agent for the Fund, to issue, redeem and transfer the Fund's Capital
Stock, $1.00 par value (hereinafter called the "Shares"), to disburse
investment income and capital gains distributions with respect to such Shares,
to administer the Fund's periodic purchase, withdrawal and other plans, to mail
proxy and other materials to the Fund's shareholders upon the terms and
conditions set forth herein, and to perform such other and further duties as
are agreed upon between the parties from time to time.
2. Basic Documents. In connection with the appointment of Services
Inc. as Agent hereunder, the Fund shall file with Services Inc. prior to May
22, 1970, the following documents:
A. A certified copy of the Articles of Incorporation of the
Fund and all amendments thereto;
B. A certified copy of the By-laws of the Fund;
C. A certified copy of the resolution of the Board of
Directors of the Fund authorizing this Agreement;
<PAGE> 3
D. Specimens of all forms of stock certificates as approved by
the Board of Directors of the Fund with a certificate of
the Secretary of the Fund as to such approval;
E. Samples of all account application forms and other
documents relating to shareholders' accounts, including
terms of the Sentry Periodic Purchase Plan, Sentry
Systematic Withdrawal Plan and Letter of Intent;
F. Certified copies of any resolutions of the Board of
Directors authorizing the issue of authorized but unissued
Shares;
G. An opinion of counsel for the Fund with respect to the
validity of the Shares, the number of Shares authorized
and the number of Shares with respect to which a
Registration Statement has been filed and is in effect;
H. A list of all shareholders as of May 14, 1970, showing
names, addresses, number of Shares owned, and taxpayer
identification numbers all certified by the Secretary of
the Fund and shareholder ledger cards showing certificate
numbers and dates of issue;
I. A certificate of incumbency bearing the signatures of the
officers of the Fund who are authorized to sign stock
certificates, to sign checks and to sign written
instructions to Services Inc.
3. Additional Documentation. The Fund will also furnish from time to time the
following documents:
A. Certified copies of each amendment to the Articles of
Incorporation and the By-laws of the Fund;
B. Each Registration Statement filed with the Securities and
Exchange Commission and amendments thereto in effect with
respect to the Shares;
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<PAGE> 4
C. Certified copies of each resolution of the Board of
Directors authorizing officers to give instructions to
Services Inc.;
D. Specimens of all new stock certificates, accompanied by
Board of Directors resolutions approving such forms;
E. Forms and terms with respect to new plans which may be
instituted and such other certificates, documents or
opinions which Services Inc. may from time to time, in its
discretion, deem necessary or appropriate in the proper
performance of its duties.
4. Authorized Shares. The Fund certifies to Services Inc. that as of
the date of this Agreement it has authorized 10,000,000 Shares, and, at the
close of business on May 14, 1970 will deliver to Services Inc. a certificate
setting forth the number of Shares issued and outstanding as of said close of
business.
5. Registration of Shares. Services Inc. shall record issues of
Shares and shall notify the Fund in case any proposed issue of Shares would
result in an over-issue as defined by Section 8-104(2) of the Uniform
Commercial Code (Annotated Code of Md. Art. 95B) and in case any proposed issue
would result in the issuance of more Shares than are registered with the SEC,
and in such instances shall refuse to countersign and issue said Shares which
would result in such over-issuance. Services Inc. shall have no obligation to
the Fund, when countersigning and issuing Shares, whether evidenced by
certificates or in uncertificated form, to take cognizance of any law relating
to the issue and sale of Shares, except as specifically agreed in
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<PAGE> 5
writing between Services Inc. and the Fund, and shall have no obligation to any
shareholder except as specifically provided in Sections 8-205, 8-208 and 8-406
of the Uniform Commercial Code.
6. Stock Certificates. The Fund shall supply Services Inc. with a
sufficient supply of blank stock certificates and from time to time shall renew
such supply upon its request. Such blank stock certificates shall be properly
prepared and signed, manually or by facsimile, if authorized by the Fund, and
shall bear the corporate seal of the Fund or a facsimile thereof; and
notwithstanding the death, resignation or removal of any officer of the Fund
authorized to sign certificates of stock Services Inc. may continue to
countersign certificates which bear the manual or facsimile signature of such
officer until otherwise directed by the Fund.
7. Checks. The Fund shall supply Services Inc. with a sufficient
supply of blank checks for the bank accounts of the Fund in order for Services
Inc. to prepare checks for the payment of dividends, capital gain
distributions, and payments in connection with the redemption of shares in
accordance with this Agreement. Services Inc. is authorized to sign, under the
control and supervision of an authorized officer of the Fund, any such checks
in the name of the Fund with the facsimile signature of the President or any
Vice President and the Treasurer or an Assistant Treasurer of the Fund whose
signature has been certified to Services Inc. until otherwise directed by the
Fund.
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<PAGE> 6
8. Record Keeping. Services Inc. shall maintain records showing for
each shareholder's account the following:
A. Name(s), address, tax identification number, and account
number;
B. Number of Shares held;
C. Historical information regarding the account of the
shareholder, including but not limited to date, price per
share, amount of each purchase and redemption, the amount
of all dividends paid and the date, price per share and
amount of all dividends reinvested;
D. Any stop order placed against the shareholder's account;
E. Information with respect to any withholding;
F. Any special instructions and information furnished by the
Fund, such as source of subscriptions and blue sky data,
and such correspondence relating to the current maintenance
of the shareholder's account as is reasonably requested by
the Fund.
9. Subscriptions and Issuance of Shares. Upon receipt of a
Subscription Application or other subscription order which has been
processed by the Fund, Services Inc. will:
A. Compute the number of Shares to which the subscriber is
entitled according to the price of Fund Shares as provided
by the Fund for purchases made at that time and date;
B. In the case of a new shareholder, establish an account for
each shareholder, including the information specified in
Section 8 hereof;
C. Mail to the shareholder a confirmation of said purchase on
a form approved by the
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<PAGE> 7
Fund, including all information called for thereon, and send
a copy of such confirmation to the Fund;
D. If a certificate is requested by the shareholder, prepare,
countersign, issue and mail, not earlier than 10 days after
a check paying for the Shares has been received by the Fund,
to the shareholder at his address as set forth on said
Subscription Application or other subscription order, a
Share certificate for full Shares.
10. Redemptions. I. Upon receipt from the Fund of a certificate for
Shares delivered for redemption, or of a request for redemption for
uncertificated shares, in either case approved for redemption by the Fund,
Services Inc. will process said redemption as follows:
A. If the certificate or request is in form satisfactory to
Services Inc. it shall process said redemption by computing
the amount due for said Shares in accordance with the price
of Fund Shares as provided by the Fund for redemptions at
that time and date, and promptly confirm such redemption to
the shareholder on the form provided by the Fund, including
all information called for thereon, send a copy of such
confirmation to the Fund and request the Fund to direct the
Custodian to deposit the required monies for said redemption
in the Fund's redemption account;
B. If such certificate or request is not satisfactory to
Services Inc., it shall promptly notify the Fund of such
fact, together with the reason therefor;
C. On or prior to the seventh calendar day succeeding delivery
of a certificate in proper form for redemption or a properly
signed request in the case of an uncertificated account,
Services Inc. shall prepare and mail a check for such
redemption price to the shareholder; and
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<PAGE> 8
D. Services Inc. shall cancel stock certificates on the day
received in proper form for redemption and shall adjust
uncertificated accounts for uncertificated Shares redeemed.
II. Services, Inc. will undertake to redeem stockholdings in excess
of 4.9% and small record holdings in accordance with the written instructions
to it signed by the Fund's President or a Vice President and the Secretary or
an Assistant Secretary, provided said instructions are accompanied by a
certified copy of resolutions of the Board of Directors of the Fund authorizing
the redemption pursuant to subsection (4) of Section B of Article SEVENTH of
the Fund's Charter.
11. Administration of Fund Plans.
I. Periodic Purchase Plan. Upon receipt of a Periodic Purchase Plan
Order Form which has been processed by the Fund, Services Inc. will:
A. Carry out the steps provided for in Section 9, including as
part of the confirmation form a reminder for the next
purchase;
B. Enter into agreement with applicants who also wish to
purchase life insurance issued by Sentry Life Insurance
Company and to pay by means of a single check for said
insurance and for Shares purchased under the Periodic
Purchase Plan; and
C. Perform all other administrative and clerical duties
required for the operation of the Periodic Purchase Plan and
for the operation of the single check payment plan.
II. Withdrawal Plan. Upon receipt of a Withdrawal Plan Application
Form, which has been processed by the Fund, Services Inc. will:
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<PAGE> 9
A. Credit the number of Shares indicated by the Fund to the
shareholder's Withdrawal Plan Account and if additional
shares are being purchased take all other appropriate steps
called for under Section 9(A), (B) and (C);
B. On the 20th day of each month, or, if the 20th day is not a
business day, the nearest business day to the 20th of each
month, compute the number of Shares required to be redeemed
for that month's withdrawal payment and withdrawal fee and
prepare and deliver to the Fund a confirmation of the number
of Shares being redeemed and request the Fund to direct the
Custodian to deposit the required monies for said redemption
and withdrawal fees in the Fund's redemption account;
C. Prepare and mail on or before the seventh day following each
redemption a check for the appropriate amount to each
participant or appropriate designee entitled to a withdrawal
payment and an advice reflecting such transactions;
D. Prepare a check to its own order for the payment of
withdrawal fees; and
E. Perform all other administrative and clerical duties
required for the operation of the Withdrawal Plan.
III. Letters of Intent. Upon receipt of a Letter of Intent Form, which
has been processed by the Fund, Services Inc. will:
A. Carry out the steps provided for in Section 9, and determine
the number of shares to be held in escrow; the confirmation
shall reflect that an indicated number of shares are being
held in escrow;
B. Notify the Fund and the Shareholders when shares are
released from escrow, and, if the shareholder has requested
certificates, prepare, countersign, issue and mail to
shareholder a Share certificate for full shares; and
-8-
<PAGE> 10
C. If the intended purchase is not made within the allotted
period, as determined by Services Inc., redeem the number of
escrowed shares necessary to pay any additional sales
charges which might be due; notify the Fund and request it
to direct the Custodian to deposit the required monies for
said redemption in the Fund's redemption account; prepare
and deliver a check for the appropriate amount to the
Underwriter; notify the Fund and the shareholder that the
remaining shares, if any, have been released from escrow;
and prepare, countersign, issue and mail a certificate for
full shares when requested to do so by the shareholder.
12. Transfer of Shares. Upon delivery by the Fund to Services Inc. of
a Share certificate for transfer, or receipt by it of an order for the transfer
of Shares in the case of uncertificated accounts, in either case with such
endorsements, instruments of assignment or evidence of succession as may be
required by Services Inc. and accompanied by payment of such transfer taxes, if
any, as may be applicable, Services Inc. will verify the balance of Shares in
the account, record the transfer of ownership of the Shares in the stock
records of the Fund in accordance with the instruments of transfer, cancel
certificates for Shares surrendered for transfer, and issue, record,
countersign and mail new certificates for a like number of Shares in the case
of certificated accounts and mail confirmation statements in the case of
uncertificated accounts. Services Inc. shall be responsible for determining
that certificates, orders for transfer, and supporting documents, if any, are
in proper legal form for the transfer of Shares.
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<PAGE> 11
13. Refusal to Redeem or Transfer. Services Inc. reserves the right
to refuse to redeem or transfer Shares until reasonably satisfied that the
endorsement on the certificate or request presented is valid and genuine, and
for such purpose may require where necessary or appropriate a guarantee of
signature. Services Inc. also reserves the right to refuse to redeem or
transfer Shares until satisfied that the requested transfer or redemption is
legally authorized, and it shall incur no liability for the refusal in good
faith to make transfers or redemptions which it, in its judgment, deems
improper or unauthorized. Notwithstanding the foregoing, Services Inc. shall
redeem or transfer Shares even though not satisfied as to the endorsement or
legal authority if the Fund first agrees to indemnify Services Inc. to its
reasonable satisfaction against all expenses and liabilities to which it might,
in its judgment, be subjected by such action.
14. Dividends and Capital Gains Distributions. The Fund will
promptly inform Services Inc. of the declaration of any dividend or other
distribution with respect to the Shares, including the amount of distribution,
record date and payable date. Services Inc. will at least seven days before
the payable date of any such dividend or other distribution provide the Fund
with a list of all accounts entitled to the dividend or distribution, the
amount of dividend or distribution to be received by each account, whether such
dividend or such dis-
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<PAGE> 12
tribution is to be paid in cash or reinvested in Shares and the total amount of
cash required for the payment of such dividend or distribution. Upon
instructions by the Fund, Services Inc. will prepare, and on a day not earlier
than the business day before the payable date will mail to shareholders, where
applicable, checks for such dividend or distribution. For shareholders whose
dividends or distributions are to be reinvested in shares, Services Inc. will
compute for the Fund the number of shares required for the payment of such
dividend or distribution based on the net asset value applicable to
subscriptions renewed prior to noon on the payable date. Upon instructions by
the Fund, Services Inc. will prepare and within five business days after the
payable date will mail, where applicable, confirmation statements and/or stock
certificates for such dividend or distribution.
15. Mailings. Services Inc. shall take all steps required, including
the addressing of envelopes, to make the following mailings to shareholders:
A. Services Inc. shall mail to shareholders the checks,
confirmation statements and stock certificates specified in
Section 14 hereof; investment income dividends shall be
mailed as required by the Fund, either quarterly or
semi-annually, and one of such mailings shall include the
capital gains distribution, unless other arrangements are
made between the parties hereto;
B. Services Inc. shall mail reports furnished by the Fund to
shareholders
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<PAGE> 13
on a quarterly or semi-annual basis as the Fund may request;
C. Services Inc. shall mail to shareholders annually proxy
material for the annual meeting and the current prospectus
of the Fund;
D. Services Inc. shall mail to the shareholders annually the
capital gains letter;
E. Services Inc. shall make the mailings required by other
Sections hereof;
F. Services Inc. shall include in any of the above mailings
such other enclosures as are reasonably requested by the
Fund; and
G. Services Inc. shall make such other mailings upon such terms
and conditions and for such fees as are agreed to by the
parties from time to time.
16. Fees. The Fund shall pay to Services Inc. for its services hereunder
fees computed as set forth in Schedule A hereto.
17. Out-of-Pocket Expenses. The Fund will reimburse Services Inc. for any
and all out-of-pocket expenses and charges incurred in performing services under
this Agreement, including but not limited to, postage (except for postage for
advertising material used by the Underwriter) and the cost of any and all forms
of the Fund and other materials used by Services Inc. in communicating with
shareholders of the Fund.
18. Instructions, Opinion of Counsel and Signatures. At any time Services
Inc. may apply to an officer of the Fund for instructions, and may consult
counsel for the Fund or its own
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<PAGE> 14
counsel, in respect of any matter arising in connection with this Agreement,
and it shall not be liable for any action taken or omitted by it in good faith
in accordance with such instruction or with the advice or opinion of such
counsel. Services Inc. shall be protected in acting upon any such instruction,
advice or opinion and upon any other paper or document delivered by the Fund or
such counsel believed by it to be genuine and to have been signed by the proper
person or persons and shall not be held to have notice of any change of
authority of any officer or agent of the Fund, until receipt of written notice
thereof from the Fund.
19. Tax Information Returns and Reports. Services Inc. will prepare and
file with the Internal Revenue Service and with the appropriate State agencies,
and mail to shareholders; such information returns and reports for reporting
dividends and other distributions paid as are required to be so filed and
mailed, and shall withhold such sums from dividends and distributions to foreign
shareholders as are required to be withheld under applicable Federal income tax
laws, rules and regulations.
20. Information to be Furnished to Fund. Services Inc. shall furnish to
the Fund lists of all issuances, redemptions and transfers of Shares, copies of
all confirmations to shareholders and such other information, including
shareholder lists for the Annual Meeting and other purposes, and statistical in-
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<PAGE> 15
formation in such form and at such times as the Fund may reasonably request,
including (i) a cumulative historical list of all issuances, redemptions and
transfers of shares, (ii) reports by states of shares sold therein specifying
dollar amounts thereof, (iii) a journal of subscriptions receivable and refunds
and redemptions payable, (iv) a list of certificates issued and redeemed by
account and (v) a list of sources of subscriptions.
21. Information to be Furnished to Shareholders. Services Inc. will
prepare and mail to each shareholder, at such time or times and in such form as
is reasonably requested by the Fund, a summary of the purchases, redemptions,
transfers and dividend activity in each such shareholder's account.
22. Disposition of Books, Records and Cancelled Certificates.
Services Inc. will retain all books, documents and records no longer needed for
current purposes and stock certificates which have been cancelled in transfer
or in redemption and safely store such books, documents, records and stock
certificates for future reference for at least ten (10) years after their
preparation or for such period as is required by the Investment Company Act of
1940, or the Rules and Regulations issued thereunder, whichever period is
longer; provided, however, that after three (3) years from their date of
preparation said books, documents, records and stock certificates may be placed
on microfilm and the originals destroyed.
23. Fund's Securities Law Responsibility. The Fund assumes full
responsibility for the preparation, contents and
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<PAGE> 16
distribution of each prospectus of the Fund, and for complying with all
applicable requirements of the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, and any laws, rules and regulations
of government authorities having jurisdiction.
24. Certificate Stop Orders. If Services Inc. receives written
notice from the Fund or a shareholder that the shareholder has lost or has not
received a certificate or that such has been stolen or destroyed, Services Inc.
shall place a "stop" against the certificate so that the certificate will not
be redeemed or transferred without inquiry. Services Inc. shall promptly
forward to the Fund a notice of any such "stop" and from time to time a list of
all stock certificates which have been placed in the stop-order file. Services
Inc. shall remove a "stop" only upon the presentation of evidence satisfactory
to it and the Fund.
25. Replacement of Stock Certificates. Services Inc. may issue a new
certificate in place of a certificate represented as not having been received
or to have been lost, stolen, seized or destroyed upon receiving instructions
from the Fund and indemnity satisfactory to Services Inc. and the Fund, and may
issue a new certificate in exchange for, and upon surrender of, an identifiable
mutilated certificate. Such instructions from the Fund shall be in such form
as has been approved by the Board of Directors of the Fund and shall be in
accordance with the provisions of the By-laws of the Fund governing such matter.
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<PAGE> 17
26. Unclaimed and Undelivered Stock Certificates. Where a stock
certificate is in the possession of Services Inc. for any reason, and has not
been claimed by the record holder or cannot be delivered to the record holder,
Services Inc. shall cancel said certificate and reflect as uncertificated
Shares on the shareholder's account record the Shares represented by said
cancelled certificate.
27. Inspection of Stock Books. In case of any request or demand for
the inspection of the stock books of the Fund, Services Inc. will endeavor to
notify the Fund and to secure instructions as to permitting or refusing such
inspection. Services Inc. reserves the right, however, to exhibit the stock
books to any person in case it is advised by its counsel that it may be held
liable for the failure to exhibit the stock books to such person.
28. Indemnification of Services Inc. The Fund will indemnify and
hold Services Inc. harmless from any and all claims, actions, suits, losses,
costs, damages and expenses, including reasonable expenses for counsel,
incurred by it in connection with its acceptance of this Agreement, any action
or omission by it in the performance of its duties hereunder, or as a result of
acting upon any instruction believed by it to have been executed by a duly
authorized officer of the Fund, provided that this indemnification shall not
apply to actions or omissions of Services Inc. in case of its own misconduct or
negligence which
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<PAGE> 18
shall be construed to include willful misfeasance, bad faith, or gross
negligence in the performance of its duty, or reckless disregard of its
obligations and duties under this Agreement, and further provided, that
Services Inc. shall give the Fund prompt notice and reasonable opportunity to
defend against any such claim or action in its own name or in the name of
Services Inc.
29. Further Assurances. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
30. Dual Interests. It is understood that some person or persons are
or may be directors, officers, agents or shareholders of both the Fund and
Services Inc. and that the existence of any such dual interest shall not affect
the validity hereof or of any transactions hereunder except as otherwise
provided by specific provisions of applicable law.
31. Amendment and Termination. This Agreement may be modified or
amended from time to time by mutual agreement between the parties hereto and
shall continue until terminated by one hundred eighty (180) days' written
notice given by one party to the other. Upon termination hereof, the Fund
shall pay to Services Inc. such compensation as may be due as of the date of
such termination and shall reimburse Services Inc. for its costs, expenses and
disbursements payable under this Agreement to such date. In the event that in
connection with termina-
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<PAGE> 19
tion a successor to any of the duties or responsibilities of Services Inc.
hereunder is designated by the Fund by written notice to Services Inc., it
shall, promptly upon such termination and at the expense of the Fund, transfer
to such successor a certified list of shareholders of the Fund (with name,
address, tax identification number and account number), a record of the account
of each shareholder and the status thereof, and all other relevant books,
records and data established or maintained by Services Inc. under this
Agreement and shall cooperate in the transfer of such duties and
responsibilities, including provision at the expense of the Fund for assistance
from Services Inc. personnel in the establishment of books, records and other
data by such successor.
32. Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or sent by registered mail postage prepaid to the other
party at such address as such other party may designate for the receipt of such
notices. Until further notice to the other party it is agreed that the address
of the Fund and that of Services Inc. for this purpose shall be 1421 Strongs
Avenue, Stevens Point, Wisconsin 54481.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
ATTEST: SENTRY FUND, INC.
/s/ Hamilton P. Viets By /s/ Donald M. Colby
- ------------------------- -----------------------
President
SENTRY EQUITY SERVICES, INC.
ATTEST: By /s/ Charles R. Hoppe
-------------------------
Vice-President
/s/ Hamilton P. Viets
- ------------------------
-18-
<PAGE> 20
SCHEDULE A
This Schedule A is attached to and made a part of the Agency Agreement
("Agreement") dated this 14th day of May, 1970 between Sentry Fund, Inc.
("Fund") and Sentry Equity Services, Inc. ("Services Inc.").
The Fund is to pay Services Inc. a fee of $7.50 per account per
calendar year for the services set forth in the Agreement; provided that the
aggregate of said fee collected from the Fund shall not exceed Services Inc.'s
cost for rendering said services under the Agreement. The fee of $7.50 per
account will be charged with respect to any account in existence during any
part of a calendar year. Said fees shall be payable quarterly at the end of
each calendar quarter and for the calendar year ending December 31, 1970 shall
be paid pro rata for the number of full months from the date hereof to December
31, 1970.
Cost for rendering services under the Agreement shall be determined in
accordance with generally accepted accounting practices consistently applied.
Services Inc. shall determine within 60 days after the end of its
fiscal year if the aggregate fee received hereunder exceeded its cost for
rendering its services under the Agreement and to the extent said fee exceeded
its cost, Services Inc. shall within 90 days after the end of that fiscal year
refund said fee to the Fund.
The Fund or its designated agent shall have the right, at reasonable
times, to examine Services Inc.'s books
<PAGE> 21
-2-
and records in order to verify Services Inc.'s determination of costs
hereunder.
SENTRY FUND, INC.
ATTEST:
/s/ Hamilton P. Viets By:/s/ Donald M. Colby
- -------------------------- ------------------------
President
SENTRY EQUITY SERVICES, INC.
ATTEST:
/s/ Hamilton P. Viets By: /s/ Charles R. Hoppe
- ------------------------ ---------------------------
Vice-President
<PAGE> 22
AMENDMENT
It is hereby agreed that, effective January 1, 1976 Schedule A to the Agency
Agreement dated May 14, 1970 between Sentry Fund, Inc. and Sentry Equity
Services, Inc. is amended so that the second paragraph of Schedule A reads as
follows:
"The Fund is to pay Services, Inc. a fee of $8.50 per account per
calendar year for the services set forth in the Agreement; provided
that the aggregate of said fee collected from the Fund shall not
exceed Services, Inc.'s cost for rendering said services under the
Agreement. The fee of $8.50 per account will be charged with respect
to any account in existence during any part of a calendar year. Said
fees shall be paid quarterly at the end of each calendar quarter."
All other provisions and parts of said Agreement and its Schedule A will remain
unchanged.
This Amendment is made in accordance with paragraph 31 of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers this 20th day of November, 1975.
SENTRY FUND, INC.
ATTEST:
/s/ Hamilton P. Viets By /s/ V. H. Holmes
- ------------------------ -----------------------
Secretary President
SENTRY EQUITY SERVICES, INC.
ATTEST:
/s/ Hamilton P. Viets By /s/ Charles R. Hoppe
- ------------------------ -----------------------
Secretary President
<PAGE> 1
EXHIBIT 9(b)
<PAGE> 2
Agreement
This Agreement dated May 9, 1969, between Hardware Mutual Casualty
Company, a Wisconsin insurance corporation ("Hardware"), and Sentry Fund, Inc.,
a Maryland corporation ("Fund");
Witnesseth that:
Whereas, The Sentry Corporation, an affiliate of Hardware, has caused
the Fund to be organized for the purpose of engaging in business as a
diversified open-end management investment company; and
Whereas, it is anticipated that Sentry Investment Management, Inc.,
("Management Company"), a subsidiary of The Sentry Corporation, is to serve as
investment advisor for the Fund pursuant to an investment advisory agreement
with the Fund; and
Whereas, Hardware is the owner of the service mark Sentry and the
service mark comprising a minuteman design, covered by Registration Numbers
731654 and 742763, respectively, on the Principal Register of the United States
Patent Office, for underwriting all types of insurance; and
Whereas, said marks have been used for a number of years by Hardware,
by The Sentry Corporation, and various other companies in the Sentry group of
companies, and the mark Sentry has been used in the corporate name of the Fund,
and it and the minuteman design will be used by the Fund in advertising, signs,
labels, stationery, printed forms and the like, all with the consent of
Hardware; and
Whereas, the parties hereto desire to enter into this agreement for
the purpose of setting forth the terms and conditions upon which they have
agreed for continued use by the Fund of the name Sentry and the minuteman
design;
<PAGE> 3
Now, therefore, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. Hardware hereby consents to use by the Fund in its corporate
name of the word Sentry and to the use by the Fund of the word
Sentry and the Minuteman design in its advertising and other
printed matter of the Minuteman design.
2. The Fund agrees that its use of the word Sentry and of the
minuteman design shall not prevent Hardware, its successors or
assigns, or any company to which Hardware has granted the
right and license to use such service marks from using or
permitting the use of the word Sentry and of the minuteman
design, alone or with any word or words, for, by, or in
connection with any other entity or business, other than the
Fund or its business, whether or not the same directly or
indirectly competes or conflicts with the Fund or its
business.
3. Notwithstanding the provisions of paragraph 1 above, it is
agreed that all proprietary interest in said service marks
shall remain exclusively the property of Hardware, and control
of their usage shall remain with Hardware, and at the written
request of Hardware, its successors or assigns, delivered to
the Fund at its registered office in Stevens Point, Wisconsin,
or if none, at its principal office in Maryland, the Fund
shall forthwith stop using the said service marks or the Fund
may continue such use only in accordance with provisions
contained in such request.
4. Not in limitation of the provisions of paragraph 3 above, if
the Management Company shall cease to act as investment
advisor for the Fund or shall cease to be controlled by or
under common control
<PAGE> 4
with either Hardware or The Sentry Corporation, or if the Fund
shall not have in effect an investment advisory agreement with
The Sentry Corporation or another corporation controlling,
controlled by or under common control with The Sentry
Corporation, then the right of the Fund to the use of the
service marks Sentry and the minuteman design shall terminate
and the Fund shall take appropriate steps to change its
corporate name and to terminate use of said service marks in
connection with its business.
5. The provisions of this agreement are binding upon the parties,
their directors, officers, stockholders, creditors, successors
or assigns, and all other persons claiming under or through
them.
In witness whereof, the parties hereto have caused this Agreement to
be signed by their duly authorized officers as of the day and year first above
written.
Hardware Mutual Casualty Company
By /s/ John W. Joanis, President
-----------------------------
John W. Joanis, President
Sentry Fund, Inc.
By /s/ Donald M. Colby, President
-----------------------------
Donald M. Colby, President
<PAGE> 1
EXHIBIT 9(c)
<PAGE> 2
AGREEMENT
AGREEMENT made by and between SENTRY EQUITY SERVICES, INC., a Delaware
corporation ("Equity Services"), and HARDWARE MUTUAL CASUALTY COMPANY, a
Wisconsin corporation ("Hardware"), dated May 14, 1970.
WHEREAS, Equity Services has entered into an agreement (the
"Agreement") with SENTRY FUND, INC. (the "Fund"), to provide full shareholder
record keeping, transfer agent, plan agent, dividend disbursing and other
services to the Fund; and
WHEREAS, Hardware has available personnel, data processing and office
equipment and office space which would permit Equity Services to furnish these
services to the Fund as required under the Agreement; and
WHEREAS, Hardware desires to make such services and facilities
available to Equity Services;
NOW, THEREFORE, IT IS AGREED by the parties hereto:
(1) Hardware will furnish personnel, data processing and office
equipment and office space and other services and facilities
as may be required by Equity Services from time to time in
order to enable Equity Services to render the services
required of it under the Agreement with the Fund.
<PAGE> 3
(2) Hardware will bill Equity Services for its costs of providing
such personnel, data processing and office equipment, and
office space and other facilities and services on a periodic
basis to be established by Hardware, the amount of such
billing to be based on Hardware's costs.
THIS AGREEMENT may be terminated by Equity Services on ninety (90)
days written notice to Hardware. This Agreement may be terminated by Hardware
on one hundred eighty (180) days written notice to Equity Services.
IN WITNESS WHEREOF the parties have hereto set their hands and seals
this 14 day of May, 1970.
SENTRY EQUITY SERVICES, INC.
By /s/ Donald M. Colby,
------------------------------
President
ATTEST:
/s/ Hamilton P. Viets,
- ----------------------------
Secretary
HARDWARE MUTUAL CASUALTY COMPANY
By /s/ John W. Joanis,
------------------------------
President
ATTEST:
/s/ Robert P. Hamm,
- ----------------------------
Secretary
<PAGE> 1
EXHIBIT 10
<PAGE> 2
[VEDDER, PRICE, KAUFMAN & KAMMHOLZ LETTERHEAD]
May 15, 1970
Sentry Fund, Inc.
1421 Strongs Avenue
Stevens Point, Wisconsin 54481
Attention: Mr. Donald M. Colby,
President
Gentlemen:
We have acted as counsel for Sentry Fund, Inc. (hereinafter called the
"Fund"), the registrant named in a Form S-5 Registration Statement, File No.
2-34038, in connection with the proposed offering of 5,000,000 shares of
Capital Stock, par value $1.00 per share. As counsel for the Fund, we have
prepared its Articles of Incorporation and have had general legal supervision
of its corporate proceedings.
It is our opinion that the Fund is a corporation duly organized and
existing under the laws of the State of Maryland and that the Fund is authorized
to issue a total of 10,000,000 shares of Capital Stock, par value $1.00 per
share. It is our opinion that when stock certificates representing said
5,000,000 shares of said Capital Stock, par value $1.00 are countersigned by
Sentry Equity Services, Inc. as Transfer Agent and delivered against payment of
the consideration named in said Registration Statement, said certificates will
represent valid, fully-paid and non-assessable shares of the Fund. It is
further our opinion that if a purchaser of Fund shares does not request that a
certificate be issued to evidence his acquisition of any portion of said
5,000,000 shares of said Capital Stock, par value $1.00, and if said shares
which are not represented by certificates are recorded by the corporation's
Transfer Agent on the corporation's stock ledger against payment of the
consideration named in said Registration Statement, said uncertificated shares
will be legally issued, fully-paid and nonassessable.
<PAGE> 3
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
Sentry Fund, Inc.
Attention: Mr. Donald M. Colby
May 15, 1970
Page -2-
We hereby consent to the use of this opinion in connection with said
Registration Statement and the Prospectus included therein relating to said
shares of Capital Stock, par value $1.00 per share. We further consent to the
use of this opinion in connection with registration statements filed with state
authorities under state securities laws which require or permit the use of an
opinion of counsel which has been rendered for use in connection with the
filing of the Form S-5 Registration Statement pursuant to the Securities Act of
1933.
Very truly yours,
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
By: /s/ William O. Peterson
------------------------------
William O. Peterson
WOP:bm
<PAGE> 1
EXHIBIT 11
<PAGE> 2
[COOPERS & LYBRAND LETTERHEAD]
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
of Sentry Fund, Inc.
We consent to the inclusion in Post-Effective Amendment No. 34 to the
Registration Statement of Sentry Fund, Inc. (the "Fund") on Form N-1A (File No.
2-34038) of our report dated November 22, 1996, on our audit of the financial
statements and financial highlights of the Fund, which report is included in
the Registration Statement. We also consent to the reference to our Firm under
the captions "Independent Accountants".
/s/ Coopers & Lybrand L.L.P.
Chicago, Illinois
February 25, 1997
<PAGE> 1
EXHIBIT 13
<PAGE> 2
SENTRY FUND, INC.
SUBSCRIPTION AGREEMENT
The undersigned hereby subscribes for one hundred (100) shares of the
capital stock, par value $1.00 per share, of Sentry Fund, Inc., a Maryland
Corporation. The undersigned agrees to pay in cash for said shares within 5
days after the date hereof.
Dated this 9th day of July, 1969.
SENTRY LIFE INSURANCE COMPANY
/s/ Paul G. Chenault
--------------------------
SIGNATURE
SEAL
<PAGE> 1
EXHIBIT 14(a)
<PAGE> 2
EXHIBIT 14(a)
<TABLE>
<CAPTION>
Internal Revenue Service Department of the Treasury
<S> <C>
Plan Name: Standardized Retirement Plan
FFN: 50270940001-001 Case: 8531760 EIN: 39-1126614 Washington, DC 20224
BPD: 01 Plan: 001 Letter Serial No: C225498a
Person to Contact: Ms. Wiggins
Sentry Equity Services Inc. Telephone Number: (202) 535-4972
1800 North Point Drive Refer Reply to: OP:E:EP:RQ:2:8
Stevens Point WI 54481 Date: 04/25/86
</TABLE>
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit
of their employees. This opinion relates only to the acceptability of the form
of the plan under the Internal Revenue Code. It is not an opinion of the
effect of other Federal or local statutes.
We have determined that the related trust or custodial account under this
master plan is exempt from income tax under Code section 501(a).
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan and
related documents to each Key District Director of Internal Revenue Service in
whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for officers, owners, or highly compensated
employees than for other employees. Except as stated below, the Key District
Director will not issue a termination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of section 7 of Rev. Proc. 84-23, 1984-1 C.B. 457; or
(2) after December 31, 1985, the employer maintains a welfare benefit fund
defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section
419A(d)(3). In such situations, the employer should request a determination as
to whether the plan, considered with all related qualified plans and, if
appropriate, welfare benefit funds, satisfies the requirements of Code section
401(a)(16) as to limitations on benefits and contributions in Code section 415.
This letter does not express an opinion as to whether the form of the plan
provides that alternative forms of benefit are made available to participants
in a manner that precludes employer discretion.
An adopting employer may not rely on this opinion letter either: (1) to extend
the remedial amendment period under section 401(b) of the Code and regulations
thereunder (such period being applicable to the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA) (P.L. 97-248), or (2) to effect retroactive
amendments for TEFRA, the Deficit Reduction Act (P.L. 98-369), or the
Retirement Equity Act (P.L. 98-397), pursuant to section 12 of Rev. Proc.
84-23, 1984-1 C.B. 457.
If you have any questions concerning the IRS processing of this case, please
call the above telephone number. If you write, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
Please advise those adopting the plan to contact you if they have any questions
about the operation of the plan.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
[sig]/
Chief, Employee Plans Rulings and Qualifications Branch
<PAGE> 3
Adoption Agreement
Under
Sentry Equity Services Standardized Retirement Plan
The undersigned Employer hereby certifies that it is eligible to become a
participating Employer under the Sentry Equity Services Standardized Retirement
Plan annexed hereto, which Plan is made a part hereof as fully as if set forth
herein, and that the undersigned has (have) full authority to enter into and
adopt the Plan on behalf of the Employer executing this Adoption Agreement.
The Employer's participation under the Plan shall be subject to all the terms
set forth therein and in this Adoption Agreement.
1. Name of Employer _______________________
2. Social Security or Identification Number _____________________
3. Address of Employer __________________________________________
_____________________________________ Zip Code _______________
4. Business of Employer _________________________
5. Form of Entity (Sole Proprietorship, Partnership or
Corporation) _______________________________________
6. Effective Date _____________________________________
7. Each Employee will be eligible to participate in the Plan in accordance with
Article III of the Plan, except the following:
( ) Employees who have not attained the age of _____ (cannot exceed 20-1/2).
( ) Employees who have not completed ____ year(s) of service (cannot exceed
6 months unless the Plan provides a nonforfeitable right to 100% of the
Participant's account balance derived from Employer contributions after not more
than 2-1/2 years of service in which case up to 2-1/2 years is permissible. If
the year(s) of service selected is or includes a fractional year, an Employee
will not be required to complete any specified number of hours of service to
receive credit for such fractional year.)
-1-
<PAGE> 4
( ) Employees who are nonresident aliens and who receive no earned income
from the Employer which constitutes income from sources within the United
States.
For purposes of this section, the term "Employee" shall include all
Employees of this Employer or any Employer aggregated with this Employer
under section 414(b), (c), or (m) and individuals required to be considered
Employees of any such Employer under section 414(n).
8. Normal Retirement Age shall be the later of the Participant's attainment of
age 65 or the 10th anniversary of the day the Participant began participation.
9. Employer Contributions. Subject to the provisions of Article IV of the
Plan, for the first Plan Year under the Plan and for each Plan Year thereafter
(Fill in chosen percentage).
A. Pension Formula. The Employer shall contribute:
On behalf of each Participant (as defined in the Plan) who is a Participant
in the Plan for such year, an amount equal to ___% (amount must not exceed
25%) of his compensation as defined in the Plan from the Employer's trade
or business as set forth above, but not more than $30,000;
B. Compensation will mean all of each Participant's
( ) earnings for the taxable year ending with or within the Plan Year
which are subject to tax under section 3101(a) of the Internal Revenue Code
without the dollar limitation of Section 3121(a) but not including deferred
compensation other than contributions through a salary reduction agreement
to a cash or deferred Plan under section 401(k) or to a tax deferred
annuity under section 403(b).
( ) W-2 earnings for the taxable year ending with or within the Plan Year
( ) Compensation (as that term is defined for section 415 purposes) for
the limitation year ending with or within the Plan Year
-2-
<PAGE> 5
which is
( ) actually paid, or
( ) accrued
within such year.
For any Plan Year, only the first $200,000 (or such larger amount as may be
prescribed by the Secretary or his delegate) of a Participant's annual
compensation shall be taken into account for purposes of determining
Employer contributions under the Plan.
C. Payment Basis
( ) Quarterly ( ) Semi-Annual ( ) Annual
10. The survivor's annuity will be ___% (not less than 50 nor greater than 100)
of the amount of the annuity payable during the joint lives of the Participant
and the spouse.
11. If you maintain or ever maintained another qualified Plan in which any
Participant in this Plan is (or was) a Participant or could possibly become a
Participant, you must complete this section.
A. If the Participant is covered under another qualified defined
contribution Plan maintained by the Employer, other than a master or
prototype Plan:
( ) The provisions of section 6 through 11 of Article V will apply as if
the other Plan were a master or prototype Plan.
( ) (Provide the method under which the Plans will limit total annual
additions to the maximum permissible amount, and will properly reduce any
excess amounts, in a manner that precludes Employer discretion.)
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
-3-
<PAGE> 6
B. If the Participant is or has ever been a Participant in a defined
benefit Plan maintained by the Employer:
_____________________________
_____________________________
_____________________________
12. The limitation year is the following 12 consecutive month period:_________.
13. The optional retirement date provision of Article IV(5) of the Plan
is elected ( )
is not elected ( )
The Plan excludes those Employees who are included in a unit of Employees
covered by a collective bargaining agreement between the Employer and Employee
representatives, if retirement benefits were the subject of good faith
bargaining. For this purpose, the term "Employee representatives" does not
include any organization more than half of whose members are Employees who are
owners, officers, or executives of the Employer.
14. The adopting Employer may amend the Plan by adding overriding Plan
provisions in this Adoption Agreement in the event of a waiver of the minimum
funding deficiency.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
By signing this Adoption Agreement, the Employer represents:
That neither Sentry nor the Custodian has any authority to answer legal
questions or make computations involved in the administration of the Plans (for
this reason it is particularly advisable to have consulted counsel before
adopting the Plan) and that the Employer will file with the Employer's Federal
Income Tax Returns all information required by applicable Treasury Department
Regulations.
The elections under this Adoption Agreement may be changed by the Employer from
time to time by a written instrument signed by the Employer, but such right may
be exercised only once in each Plan Year. Sentry shall have the right to amend
the Plan from time to time as it may deem necessary or advisable, and by
executing the Adoption Agreement the Employer and the
-4-
<PAGE> 7
Custodian give their consent to any such amendment by Sentry. No amendment
shall increase or alter the duties of the Custodian except with its written
consent nor deprive any Participant of any vested interest hereunder.
The Employer acknowledges that the employer and each Participant has received a
current prospectus of Sentry Fund, Inc. and Sentry Cash Management Fund, Inc.
Each Participant who has made or shall hereafter make a contribution on his own
behalf shall receive a then current prospectus of Sentry Fund, Inc., and Sentry
Cash Management Fund, Inc. as required by the Plan.
Upon execution of the Adoption Agreement by an Employer the Plan shall be
effective with respect to that Employer as of the Effective Date specified
herein provided the Custodian shall thereafter execute this Adoption Agreement
to signify its acceptance of the Custodianship created herein with respect to
the Employer.
An Employer who has ever maintained or who later adopts any Plan (including,
after December 31, 1985, a welfare benefit fund, as defined in section 419(e)
of the Code, which provides post-retirement medical benefits allocated to
separate accounts for key Employees, as defined in section 419A(d)(3)) in
addition to this Plan may not rely on the opinion letter issued by the National
Office of the Internal Revenue Service as evidence that this Plan is qualified
under section 401 of the Internal Revenue Code. If the Employer who adopts or
maintains multiple Plans wishes to obtain reliance that his or her Plan(s) are
qualified, application for a determination letter should be made to the
appropriate Key District Director of Internal Revenue.
This Adoption Agreement may be used only in conjunction with basic Plan
document #_____.
By such acceptance, the Custodian agrees that all contributions to the
Custodial Accounts are to be invested in Investment Company Shares, except that
as provided in Section 6 of Article IV of the Plan they may be held by Sentry
in a special customer bank account until the minimum for investment is
attained. Dividends and capital gains are also to be reinvested in Investment
Company Shares. The purchase of such shares is to be made through Sentry.
The terms defined in the Plan shall have the same meaning in this Agreement.
When necessary to the meaning hereof, either the masculine or the neuter
pronoun shall be deemed to include the masculine, feminine and the neuter, and
the singular shall be deemed to include the plural.
-5-
<PAGE> 8
IMPORTANT NOTE: The Employer's attorney shall be consulted prior to the
adoption of this Plan. The signer hereof hereby certifies that the Employer's
attorney has reviewed the Plan and the Employer has adopted the Plan with his
approval.
Executed at __________________ this __ day of ______, 19___.
__________________________ __________________________
Witness (Employer)
By: _______________________
By:________________________
ACCEPTED at Milwaukee, Wisconsin this ___ day of ______, 19__.
M&I Marshall and Ilsley Bank, Custodian
By:________________________
(Please show title)
-6-
<PAGE> 9
SENTRY EQUITY SERVICES
STANDARDIZED RETIREMENT PLAN AND CUSTODIAL AGREEMENT
TERMS AND CONDITIONS
ARTICLE I - ESTABLISHMENT OF PLAN
1. The Employer hereunder is engaged in the business set forth in the attached
Adoption Agreement. The Employer, by execution of the Adoption
Agreement, has adopted the Sentry Equity Services Standardized Retirement
Plan to provide retirement benefits for its Employees.
2. The Adoption Agreement, Plan and Custodial Agreement and amendments thereto
constitute the Employer's entire retirement plan.
ARTICLE II - DEFINITIONS
As used in this Plan, the following terms shall have the meaning hereinafter
set forth, unless a different meaning is plainly required by the context:
1. "Adoption Agreement" shall mean the document by which the Plan and Custodial
Agreement is adopted by the Employer, and upon such adoption, this
document shall be incorporated into the Plan and Custodial Agreement by
reference.
2. "Custodial Agreement" shall mean the agreement entered into pursuant to
Article IX of this Plan and "Custodian" shall refer to the custodian
under such agreement, as well as any successor thereto.
3. "Disability" means inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment
that can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12 months. The
permanence and degree of such impairment shall be supported by medical
evidence.
4. "Earned Income" shall refer to net earnings from self-employment in the
trade or business with respect to which the Plan is established, for
which personal services of the individual are a material income-producing
factor. Net earnings will be determined without regard to items not included
in gross income and the deductions allocable to such items. Net earnings
are reduced by contributions by the Employer to a qualified plan to the
extent deductible under section 404 of the Code.
-1-
<PAGE> 10
5. "Employee" shall refer to any person employed by the Employer including
Owner-Employees and Self-Employed Individuals, unless otherwise indicated to
the contrary.
6. "Employer" shall refer to the Employer that adopts this Plan, and all
members of a controlled group of corporations (as defined in section 414(b) of
the Internal Revenue Code), all commonly controlled trades or businesses (as
defined in section 414(c)) or affiliated service groups (as defined in section
414(m)) of which the adopting Employer is a part.
7. "Hour of Service" shall refer to:
(A) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours shall be credited
to the Employee for the computation period in which the duties are
performed, and
(B) Each hour for which an Employee is paid, or entitled to payment, by the
Employer on account of a period of time during which no duties are
performed, (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more
than 501 Hours of Service shall be credited under this paragraph for any
single continuous period (whether or not such period occurs in a single
computation period). Hours under this paragraph shall be calculated and
credited pursuant to section 25.30.200b-2 of the Department of Labor
Regulations which are incorporated herein by this reference, and
(C) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer. The same Hours of Service
shall not be credited both under paragraph (A) or paragraph (B), as the case
may be, and under this paragraph (C). These hours shall be credited to the
Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award,
agreement or payment is made.
(D) Hours of Service shall be determined on the basis of actual hours
for which an Employee is paid or entitled to payment.
Hours of Service will be credited for employment with other members of an
affiliated service group (under section 414(m)), a controlled group of
corporations (under section 414(b)), or a group of trades or businesses
under common control (under section 414(c)), of which the adopting Employer
is a member.
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Hours of Service will also be credited for any individual considered an
Employee for purposes of this Plan under section 414(n).
Solely for purposes of determining whether a break in service, as defined
in Article III, for participation and vesting purposes has occurred in a
computation period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or in
any case in which such hours cannot be determined, 8 Hours of Service per
day of such absence. For purposes of this paragraph, an absence for
maternity or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of a birth of a child of the
individual, (3) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or (4)
for purposes of caring for such child for a period beginning immediately
following such birth or placement. The Hours of Service credited under
this paragraph shall be credited (1) in the computation period in which the
absence begins if the crediting is necessary to prevent a break in service
in that period, or (2) in all other cases, in the following computation
period.
8. "Investment Company Shares" shall mean the shares of Sentry Fund, Inc., or
Sentry Cash Management Fund, Inc., which are Maryland corporations.
9. "Owner-Employee" shall refer to a sole proprietor if the Employer is a sole
proprietorship; or, a partner who owns more than ten percent (10%) of either
capital interest or the profit interest if the Employer is a partnership.
10. "Participant" shall refer to any Employee who meets the eligibility
requirements of the Plan and participates in this Plan.
11. "Participant's Account" shall refer to the account created and maintained
by the Employer for each Participant under the Plan.
12. "Plan Year" shall refer to the calendar year unless some other 12
consecutive month period is elected in writing by the Employer.
13. "Self-Employed Individual" means an individual who has earned income for
the taxable year from the trade or business for which the Plan is
established; also, an individual who would have had earned income but for
the fact that the trade or business had no net profits for the taxable year.
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14. "Year of Service" shall refer to a 12-consecutive month period (computation
period) during which the Employee completes at least 1,000 Hours of
Service. The eligibility computation period is the 12-consecutive month
period beginning with the day the Employee first performs an Hour of
Service for the Employer and each anniversary thereof.
15. "Account(s)" shall mean an account(s) established on behalf of a Participant
for the purpose of holding shares of Sentry Fund, Inc. or Sentry Cash
Management Fund, Inc.
16. "Sentry" shall mean Sentry Equity Services, Inc.
17. "Normal Retirement Age" shall be the later of the Participant's attainment
of age 65 or the 10th anniversary of the day the Participant began
participation. The participation commencement date is the first date of
the first Plan Year in which the Participant commenced participation in the
Plan.
ARTICLE III - ELIGIBILITY
1. Each Employee shall become a Participant on the first day of the first Plan
Year provided that he has then completed the period of service set forth in
the Adoption Agreement. If the Employee has not completed the service
requirement set forth in the Adoption Agreement, then he shall become a
Participant on the anniversary date of the Plan next following the date in
which such individual satisfies the number of Years of Service eligibility
requirement selected by the Employer in the Adoption Agreement.
2. In computing an individual's Years of Service for purposes of this Article,
if any Employee has any 1-year break in service before meeting the
eligibility requirements set out in the Adoption Agreement, service before
such break shall not be taken into account under the Plan. An individual
incurs a break in service in any year in which he does not complete more
than 500 Hours of Service. The 12-consecutive month period used to
determine whether the individual has had such a break in service shall
coincide with the 12-consecutive month period used to determine whether the
Employee has completed a Year of Service.
3. In any case in which the Employer maintains a plan of a predecessor
employer, service for such predecessor shall be treated as service for the
Employer.
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ARTICLE IV - CONTRIBUTIONS
1. Employer Contributions.
For each Plan Year beginning on the date set forth in the Adoption Agreement
and for each year thereafter, the Employer shall contribute in cash on the
basis of one of the formula as elected by the Employer in the Adoption
Agreement.
Such contributions shall be made for the account of each Participant with
respect to his Earned Income or Compensation beginning on the date he became
a Participant and continuing until his actual termination of employment with
the Employer.
2. Voluntary Contributions by Participants.
a. Nondeductible Contributions
A Participant may voluntarily contribute a nondeductible amount not to exceed
ten (10%) percent of the Participant's aggregate compensation for all years
since becoming a Plan Participant under this and all other qualified plans of
the Employer. A separate account will be maintained by the Trustee for the
nondeductible Employee contributions of each Participant.
A Participant shall be entitled to withdraw the value of his or her
voluntary contributions at any time with the consent of his or her spouse,
upon thirty (30) days' notice from the Employer to the Custodian. In no
case shall a Participant withdraw more than the amount of such
contributions.
If a Participant makes a voluntary contribution (deductible or
nondeductible), the Employer agrees to promptly furnish him with a current
Prospectus of Sentry Fund, Inc. or Sentry Cash Management Fund, Inc.
b. Deductible Contributions
A Participant may elect to make a voluntary deductible employee contribution
to the Plan. Such Voluntary Deductible Employee Contribution may not exceed
the lesser of $2,000, or 100% of Compensation for the taxable year for which
the contribution is made. Compensation for this purpose means all wages,
salaries, earned income and other amounts received or derived from personal
services actually rendered and includible in gross income, but does not
include amounts derived from or received as earnings or profits from property
or amounts received as a pension or annuity or as deferred compensation.
This limitation applies to all Deductible Employee Contributions made for any
taxable year to all qualified retirement plans maintained by the Employer. A
separate account will be established for such contributions which will be
nonforfeitable at all times.
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No distribution shall be permitted from a Participant's Voluntary Deductible
Employee Contribution prior to the time such Participant attains age 59 1/2,
except in the case of the Participant's death, early retirement due to
disability, termination of employment or termination of the Plan. All
Voluntary Deductible Employee Contributions and earnings thereon shall be fully
vested at all times.
The following conditions also apply to such contributions:
(i) A Voluntary Deductible Employee Contribution will be considered
contributed for the calendar year in which it is actually made. However, if the
Participant makes the contribution on or before April 15, he or she may notify
the Employer at the time the contribution is made that it is made for the
preceding calendar year. A Voluntary Deductible Employee Contribution may only
be made for a calendar year in which the Participant was employed by the
Employer.
(ii) The Employer will not accept Voluntary Deductible Employee
Contributions which exceed the limitation described above.
(iii) Any voluntary contribution made by the Participant will be treated as
a deductible Employee contribution unless the Participant had designated by
April 15 of the calendar year following the year for which the contribution is
made that it is nondeductible.
(iv) No contributions will be accepted for the Voluntary Deductible
Contribution account if the Employee will have attained age 70 1/2 by the end of
the taxable year for which the contribution is made.
(v) No part of the Voluntary Deductible Contributions account will be used
to purchase life insurance.
(vi) The Plan will accept accumulated Voluntary Deductible Employee
Contributions (as defined in section 72(o)(5) of the Internal Revenue Code) that
were distributed from a qualified retirement plan and rolled over pursuant to
sections 402(a)(5), 402(a)(7), 403(a)(4), or 408(d)(3) of the Code. The rolled
over amount will be added to the Voluntary Deductible Contributions account but
will not be taken into account in applying the limitations on Voluntary
Deductible Contributions to this Plan. The Plan will not accept rollovers of
accumulated Deductible Employee Contributions from a plan under which the
Employee was covered as a self-employed individual as described in section
401(c)(1) of the Code.
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The Participant may withdraw any part of the Voluntary Deductible Employee
Contributions account by making a written application to the Employer.
However, if at the time the distribution is received the Participant has
not attained age 59 1/2 and is not disabled, the Participant will be subject to
a federal income tax penalty unless the distribution is rolled over to a
qualified plan or individual retirement plan within 60 days of the date of
distribution.
3. Participant's Accounts.
All contributions made by or on behalf of each Participant, and all
investments made with such contributions and the earnings thereon, shall be
credited to separate Participants' Accounts maintained for each Participant
by the Custodian under the Plan not later than as of the last day of the Plan
Year. Such Participants' Accounts shall be adjusted, as of the last day of
the Plan Year, on a pro rata basis in accordance with the valuation at fair
market value of the securities held by the Custodian on the inventory date,
which shall be the last day of the Plan Year. Within fifteen (15) days after
receipt of the Custodian's report with respect to each Plan Year, the
Employer will furnish each Participant a statement of the amount credited to
his Accounts at the end of such year.
A Participant's interest in all contributions and other amounts held for his
benefit shall immediately become and at all times remain fully vested and
nonforfeitable, and there shall be no assignment of the interest of any
Participant prior to the actual distribution thereof.
4. A Participant must share in Employer contributions regardless of whether he
or she is employed on the allocation date, if that Participant has 1,000
Hours of Service during the Plan Year.
5. With the consent of his Employer, a Participant may continue his employment
after his Normal Retirement Age and contributions shall continue to be made
for the Participant in accordance with the Plan until his actual retirement
but his actual retirement must occur before attainment of age 70 1/2 years.
Such consent shall be exercised by the Employer in a nondiscriminatory
manner. The Employer may elect to have an optional retirement date in
section 13 of the Adoption Agreement.
6. Notwithstanding the foregoing, all contributions, including voluntary
contributions, are to be transmitted by the Employer to the Custodian, and
each such transmittal shall equal the appropriate minimum for investment in
Investment Company Shares: Such minimum applicable for the Sentry Fund,
Inc., will be $60 if on a quarterly payment basis; $120 if on a
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semi-annual payment basis; or $240, if on an annual payment basis.
Such minimum applicable for the Sentry Cash Management Fund, Inc. will be
$100 per subsequent payment. If a transmittal does not equal the applicable
minimum, it will be forwarded by the Custodian to Sentry Equity Services,
Inc. for retention for the Employer in a special customer bank account until
such time as a subsequent transmittal from the Employer results in the
minimum for investment being attained.
7. Any determination or consent made, given or withheld by the Employer will be
done in a uniform and non-discriminatory manner.
8. Any contribution made by the Employer because of a mistake of fact may be
returned to the Employer within one year of the contribution.
Any contribution made by the Employer that is conditional on the Plan's
initial qualification under the Internal Revenue Code may be returned to the
Employer within one year after the date the initial qualification is denied.
Any contribution made by the Employer that is conditioned on the
deductibility of the amount under Section 404 of the Internal Revenue Code
may be returned to the Employer, to the extent of the amount disallowed
within one year after the disallowance of the deduction.
ARTICLE V - LIMITATION ON ALLOCATIONS
1. Employer contributions on behalf of any Participant shall not exceed for any
taxable year the lesser of $30,000 or 25% of such individual's Compensation
for such year.
2. If the Participant does not participate in, and has never participated in
another qualified plan or a welfare benefit fund, as defined in section
419(e) of the Code, maintained by the adopting Employer, the amount of annual
additions which may be credited to the Participant's account for any
limitation year will not exceed the lesser of the maximum permissible amount
or any other limitation contained in this Plan. If the Employer contribution
that would otherwise be contributed or allocated to the Participant's account
would cause the annual additions for the limitation year to exceed the
maximum permissible amount, the amount contributed or allocated will be
reduced so that the annual additions for the limitation year will equal the
maximum permissible amount.
3. Prior to determining the Participant's actual Compensation for the limitation
year, the Employer may determine the maximum permissible amount for a
Participant on the basis of a reasonable estimation of the Participant's
Compensation for the limitation year, uniformly determined for all
Participants similarly situated.
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4. As soon as is administratively feasible after the end of the limitation year,
the maximum permissible amount for the limitation year will be determined on
the basis of the Participant's actual Compensation for the limitation year.
5. If there is an excess amount the excess will be disposed of as follows:
(A) Any nondeductible voluntary Employee contributions, to the extent they
would reduce the excess amount, will be returned to the Participant;
(B) If after the application of paragraph (A) an excess amount still exists,
and the Participant is covered by the Plan at the end of the limitation
year, the excess amount in the Participant's account will be used to
reduce Employer contributions (including any allocation of forfeitures)
for such Participant in the next limitation year, and each succeeding
limitation year if necessary.
(C) If after the application of paragraph (A) an excess amount still exists,
and the Participant is not covered by the Plan at the end of the
limitation year, the excess amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce future
Employer contributions (including allocation of any forfeitures) for all
remaining Participants in the next limitation year, and each succeeding
limitation year if necessary;
(D) If a suspense account is in existence at any time during the limitation
year pursuant to this section, it will not participate in the
allocation of the trust's investment gains and losses.
6. This section applies if, in addition to this Plan, the Participant is
covered under another qualified master or prototype defined contribution
plan or a welfare benefit fund, as defined in section 419(e) of the Code,
maintained by the Employer during any limitation year. The annual additions
which may be credited to a Participant's account under this Plan for any
such limitation year will not exceed the maximum permissible amount reduced
by the annual additions credited to a Participant's account under the other
plans and welfare benefit funds for the same limitation year. If the annual
additions with respect to the Participant under other defined contribution
plans and welfare benefit funds maintained by the Employer are less than the
maximum permissible amount and the Employer contribution that would
otherwise be contributed or allocated to the Participant's account under
this Plan would cause the annual additions for the limitation year to exceed
this limitation, the amount contributed or allocated will be
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reduced so that the annual additions under all such plans and funds for the
limitation year will equal the maximum permissible amount. If the annual
additions with respect to the Participant under such other defined contribution
plans and welfare benefit funds in the aggregate are equal to or greater than
the maximum permissible amount, no amount will be contributed or allocated to
the Participant's account under this Plan for the limitation year.
7. Prior to determining the Participant's actual Compensation for the limitation
year, the Employer may determine the maximum permissible amount for a
Participant in the manner described in subsection 3.
8. As soon as is administratively feasible after the end of the limitation year,
the maximum permissible amount for the limitation year will be determined
on the basis of the Participant's actual Compensation for the limitation
year.
9. If, pursuant to subsection 8, a Participant's annual additions under this
Plan and such other plans would result in an excess amount for a limitation
year, the excess amount will be deemed to consist of the annual additions
last allocated except that annual additions attributable to a welfare
benefit fund will be deemed to have been allocated first regardless of the
actual allocation date.
10. If an excess amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of another plan, the
excess amount attributed to this Plan will be the product of:
(A) the total excess amount allocated as of such date, times
(B) the ratio of (a) the annual additions allocated to the Participant for
the limitation year as of such date to this Plan to (b) the total annual
additions allocated to the Participant for the limitation year as of
such date under this and all the other qualified master or prototype
defined contribution plans.
11. Any excess amount attributed to this Plan will be disposed of in the manner
described in subsection 5.
12. If the Participant is covered under another qualified defined contribution
plan maintained by the Employer which is not a master or prototype plan,
annual additions which may be credited to the Participant's account under
this Plan for any limitation year will be limited in accordance with
subsections 6 through 11 as though the other plan were a master or
prototype plan unless the Employer provides other limitations in section 11
of the Adoption Agreement.
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13. If the Employer maintains, or at any time maintained, a qualified defined
benefit plan covering any Participant in this Plan, the sum of the
Participant's defined benefit plan fraction and defined contribution plan
fraction will not exceed 1.0 in any limitation year. The annual additions
which may be credited to the Participant's account under this Plan for any
limitation year will be limited in accordance with section 11 of the
Adoption Agreement.
14. (Definitions) For purposes of this Article, the following terms shall be
defined as follows:
(A) Annual Addition - the sum of the following amounts credited to a
Participant's account for the limitation year: (a) Employer
contributions; (b) forfeitures; and (c) the lesser of (i) one-half of
the nondeductible Employee contributions, or (ii) the nondeductible
Employee contributions in excess of 6 percent of the Participant's
Compensation for the limitation year.
For this purpose, any excess amount applied under subsection 5 or 11 in this
limitation year to reduce Employer contributions will be considered annual
additions for such limitation year.
Amounts allocated, after March 31, 1984, to an individual medical account, as
defined in section 415(1)(2) of the Code, which is part of a defined benefit
plan maintained by the Employer, are treated as annual additions to a defined
contribution plan. Also, amounts derived from contributions paid or accrued
after December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the separate
account of a key employee, as defined in section 419A(d)(3), under a welfare
benefit fund, as defined in section 419(e), maintained by the Employer, are
treated as annual additions to a defined contribution plan.
(B) Compensation - A Participant's earned income, wages, salaries, and fees
for professional services and other amounts received for
personal services actually rendered in the course of employment with
the Employer maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and
bonuses), and excluding the following:
(a) Employer contributions to a plan of deferred compensation which
are not includible in the Employee's gross income for the
taxable year in which contributed, or Employer contributions under a
simplified Employee pension plan to the extent such contributions are
deductible by the Employee, or any distributions from a plan of
deferred compensation;
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(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to a substantial risk
of forfeiture;
(c) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
(d) Other amounts which received special tax benefits or contributions
made by the Employer (whether or not under a salary reduction agreement)
towards the purchase of an annuity described in section 403(b) of the
Internal Revenue Code (whether or not the amounts are actually excludable
from the gross income of the Employee).
For purposes of applying the limitations of this Article, Compensation for
a limitation year is the compensation actually paid or includible in gross
income during such year.
(C) Defined benefit fraction - A fraction, the numerator of which is the
sum of the Participant's projected annual benefits under all
the defined benefit plans (whether or not terminated) maintained by
the Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation in effect for the limitation year
under section 415(b)(1)(A) of the Internal Revenue Code or 140 percent
of the highest average Compensation.
Notwithstanding the above, if the Participant was a Participant in one
or more defined benefit plans maintained by the Employer which were in
existence on July 1, 1982, the denominator of this fraction will not
be less than 125 percent of the sum of the annual benefits under such
plans which the Participant had accrued as of the later of September
30, 1983, or the end of the last limitation year beginning before
January 1, 1983. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of section 415 as in effect at the end of the 1982
limitation year. For purposes of this paragraph, a master or
prototype plan with an opinion letter issued before January 1, 1983,
which was adopted by the Employer on or before September 30, 1983, is
treated as a plan in existence on July 1, 1982.
(D) Defined contribution fraction - A fraction, the numerator of which is
the sum of the annual additions to the Participant's account
under all the defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior limitation
years
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(including the annual additions attributable to the Participant's
non-deductible Employee contributions to all defined benefit plans,
whether or not terminated, maintained by the Employer, and the annual
additions attributable to all welfare benefit funds, as defined in
section 419(e) of the Code, maintained by the Employer), and the
denominator of which is the sum of the maximum aggregate amounts for
the current and all prior limitation Years of Service with the
Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount in any
limitation year is the lesser of 125 percent of the dollar limitation
in effect under section 415(c)(1)(A) of the Code or 35 percent of the
Participant's Compensation for such year.
If the Employee was a Participant in one or more defined contribution
plans maintained by the Employer which were in existence on July 1,
1982, the numerator of this fraction will be adjusted if the sum of
this fraction and the defined benefit fraction would otherwise exceed
1.0 under the terms of this Plan. Under the adjustment, an amount
equal to the product of (a) the excess of the sum of the fractions
over 1.0 times (b) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed
as of the later of September 30, 1983, or the end of the last
limitation year beginning before January 1, 1983. This adjustment
also will be made if at the end of the last limitation year beginning
before January 1, 1984, the sum of the fractions exceeds 1.0 because
of accruals or additions that were made before the limitations of this
Article became effective to any plans of the Employer in existence on
July 1, 1982. For purposes of this paragraph, a master or prototype
plan with an opinion letter issued before January 1, 1983, which is
adopted by the Employer on or before September 30, 1983, is treated as
a plan in existence on July 1, 1982.
(E) Employer - The Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in section 414(b)
of the Internal Revenue Code as modified by section 415(h)), all
commonly controlled trades or businesses (as defined in section 414(c)
as modified by section 415(h)) or affiliated service groups (as
defined in section 414(m)) of which the adopting Employer is a part.
(F) Excess amount - The excess of the Participant's annual additions for
the limitation year over the maximum permissible amount.
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(G) Highest average compensation - The average Compensation for the three
consecutive Years of Service with the Employer that produces
the highest average. A Year of Service with the Employer is the
12-consecutive month period as defined in Article II of this Plan.
(H) Limitation year - A calendar year, or the 12-consecutive month period
elected by the Employer in section 12 of the Adoption
Agreement. All qualified plans maintained by the Employer must use
the same limitation year. If the limitation year is amended to a
different 12-consecutive month period, the new limitation year must
begin on a date within the limitation year in which the amendment is
made.
(I) Master or prototype plan - A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
(J) Maximum permissible amount - The lesser of $30,000 (or, beginning
January 1, 1988, such larger amount determined by the
Commissioner for the limitation year) or 25 percent of the
Participant's Compensation for the limitation year. If a short
limitation year is created because of an amendment changing the
limitation year to a different 12-consecutive month period, the
maximum permissible amount will not exceed $30,000 multiplied by the
following fraction:
Number of months in the short limitation year
12
(K) Projected annual benefit - The annual retirement benefit (adjusted to
an actuarially equivalent straight life annuity if such benefit
is expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) to which the Participant would be entitled
under the terms of the Plan assuming:
(a) the Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later), and
(b) the Participant's Compensation for the current limitation
year and all other relevant factors used to determine benefits under
the Plan will remain constant for all future limitation years.
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ARTICLE VI - TOP HEAVY PROVISIONS
If the Plan is or becomes top-heavy in any Plan Year beginning after
December 31, 1983, the provisions of this Article VI will supersede any
conflicting provisions in the Plan or Adoption Agreement.
1. Top-Heavy Definitions
(i) Key employee: Any employee or former Employee (and the
beneficiaries of such Employee) who at any time during the determination
period was an officer of the Employer if such individual's annual
compensation exceeds 150 percent of the dollar limitation under section
415(c)(1)(A) of the Code, an owner (or considered an owner under section
318 of the Code) of one of the ten largest interests in the Employer if
such individual's compensation exceeds 100 percent of such dollar
limitation, a 5-percent owner of the Employer, or a 1-percent owner of the
Employer who has an annual compensation of more than $150,000. The
determination period is the Plan Year containing the determination date and
the 4 preceding Plan Years.
The determination of who is a key employee will be made in accordance with
section 416(i)(1) of the Code and the regulations thereunder.
(ii) Determination date: For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first Plan
Year of the Plan, the last day of that year.
2. Minimum Allocation
(i) Except as otherwise provided in (iii) below, the Employer
contributions and forfeitures allocated on behalf of any Participant who is
not a key Employee shall not be less than the lesser of three percent of
such Participant's compensation or in the case where the Employer has no
defined benefit plan which designates this plan to satisfy section 401 of
the Code, the largest percentage of Employer contributions and forfeitures,
as a percentage of the first $200,000 of the key Employee's compensation,
allocated on behalf of any key Employee of that year. The minimum
allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under
other Plan provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the
year because of (i) the Participant's failure to complete 1,000 Hours of
Service (or any equivalent provided in the Plan), or (ii) the Participant's
failure to make mandatory Employee contributions to the Plan, or (iii)
compensation less than a stated amount.
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(ii) For purposes of computing the minimum allocation, compensation
will mean compensation as defined in section 9B of the Adoption Agreement.
(iii) The provision in (i) above shall not apply to any Participant
who was not employed by the Employer on the last day of the Plan Year.
3. Compensation Limitation
For any Plan Year, only the first $200,000 (or such larger amount as may be
prescribed by the Secretary or his delegate) of a Participant's annual
compensation shall be taken into account for purposes of determining
Employer contributions under the Plan.
ARTICLE VII - JOINT AND SURVIVOR ANNUITY REQUIREMENTS
1. The provisions of this Article shall take precedence over any conflicting
provision in this Plan.
The provisions of this Article shall apply to any Participant who is
credited with at least one Hour of Service with the Employer on or after
August 23, 1984, and such other Participants as provided in section 6.
2. Qualified Joint and Survivor Annuity.
Unless an optional form of benefit is selected pursuant to a qualified
election within the 90-day period ending on the date benefit payments would
commence, a married Participant's vested account balance will be paid in
the form of a qualified joint and survivor annuity and an unmarried
Participant's vested account balance will be paid in the form of a life
annuity.
3. Qualified Preretirement Survivor Annuity.
Unless an optional form of benefit has been selected within the election
period pursuant to a qualified election, if a Participant dies before
benefits have commenced then the Participant's vested account balance shall
be applied toward the purchase of an annuity for the life of the surviving
spouse. The surviving spouse may elect to have such annuity distributed
immediately.
4. Definitions.
(A) Election period: The period which begins on the first day of the Plan
Year in which the Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service prior to the
first day
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of the Plan Year in which age 35 is attained, with respect to the account
balance as of the date of separation, the election period shall begin on
the date of separation.
(B) Earliest retirement age: The earliest date on which, under the Plan, the
Participant could elect to receive retirement benefits.
(C) Qualified election: A waiver of a qualified joint and survivor annuity or
a qualified preretirement survivor annuity. The waiver must be in writing
and must be consented to by the Participant's spouse. The spouse's consent
to a waiver must be witnessed by a Plan representative or notary public and
must be limited to a benefit for a specific alternate beneficiary.
Notwithstanding this consent requirement, if the Participant establishes to
the satisfaction of a Plan representative that such written consent may not
be obtained because there is no spouse or the spouse cannot be located, a
waiver will be deemed a qualified election. Any consent necessary under
this provision will not be valid with respect to any other spouse.
Additionally, a revocation of a prior waiver may be made by a Participant
without the consent of the spouse at any time before the commencement of
benefits. The number of revocations shall not be limited. Any new waiver
or change of beneficiary will require a new spousal consent.
(D) Qualified joint and survivor annuity: An annuity for the life of the
Participant with a survivor annuity for the life of the spouse which is not
less than 50 percent and not more than 100 percent of the amount of the
annuity which is payable during the joint lives of the Participant and the
spouse and which is the amount of benefit which can be purchased with the
Participant's vested account balance. The percentage of the survivor
annuity will be as elected by the Participant. If no election has been
made, the percentage will be as specified in the Adoption Agreement.
(E) Spouse (surviving spouse): The spouse or surviving spouse of the
Participant, provided that a former spouse will be treated as the spouse or
surviving spouse to the extent provided under a qualified domestic
relations order as described in section 414(p) of the Code.
5. Notice Requirement.
(A) In the case of a qualified joint and survivor annuity as described in
section 2 of this Article, the Plan administrator shall provide each
Participant within a reasonable period prior to the commencement of
benefits a written explanation of: (i) the terms and conditions of
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a qualified joint and survivor annuity; (ii) the Participant's right to
make and the effect of an election to waive the qualified joint and
survivor annuity form of benefit; (iii) the rights of a Participant's
spouse; and (iv) the right to make, and the effect of, a revocation of a
previous election to waive the qualified joint and survivor annuity.
(B) In the case of a qualified preretirement survivor annuity as described in
section 3 of this Article, the Plan administrator shall provide each
Participant within the period beginning on the first day of the Plan Year
in which the Participant attains age 32 and ending with the close of the
Plan Year in which the Participant attains age 35, a written explanation of
the qualified preretirement survivor annuity in such terms and in such
manner as would be comparable to the explanation provided for meeting the
requirements of section 5A applicable to a qualified joint and survivor
annuity.
If a Participant enters the Plan after the first day of the Plan Year in
which the Participant attained age 32, the Plan administrator shall
provide notice no later than the close of the third Plan Year succeeding
the entry of the Participant in the Plan.
(C) Notwithstanding the other requirements of this section 5, the respective
notices prescribed by this section need not be given to a participant if
his plan "fully subsidizes" the costs of a qualified joint and survivor
annuity or qualified preretirement survivor annuity and the Participant
cannot elect another form of benefit. For purposes of this section 5C, a
plan fully subsidizes the costs of a benefit if under the plan the failure
to waive such benefit by a Participant would not result in a decrease in
any plan benefit with respect to such Participant and would not result in
increased contributions from the Participant.
6. Transitional Rules.
(A) Any living Participant not receiving benefits on August 23, 1984, who would
otherwise not receive the benefits prescribed by the previous sections of
this Article must be given the opportunity to elect to have the prior
sections of this Article apply if such Participant is credited with at
least one Hour of Service under this Plan or a predecessor plan in a Plan
Year beginning on or after January 1, 1976, and such Participant had at
least 10 years of vesting service when he or she separated from service.
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(B) Any living Participant not receiving benefits on August 23, 1984, who was
credited with at least one Hour of Service under this Plan or a predecessor
plan on or after September 2, 1974, and who is not otherwise credited with
any service in a Plan Year beginning on or after January 1, 1976, must be
given the opportunity to have his or her benefits paid in accordance with
section 6D of this Article.
(C) The respective opportunities to elect (as described in sections 6A and 6B
above) must be afforded to the appropriate Participants during the period
commencing on August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
(D) Any Participant who has elected pursuant to section 6B of this Article and
any Participant who does not elect under section 6A or who meets the
requirements of section 6A except that such Participant does not have at
least 10 years of vesting service when he or she separates from service,
shall have his or her benefits distributed in accordance with all of the
following requirements if benefits would have been payable in the form of a
life annuity:
(a) Automatic joint and survivor annuity. If benefits in the form of
a life annuity become payable to a married Participant who:
(1) begins to receive payments under the Plan on or after normal
retirement age; or
(2) dies on or after normal retirement age while still working
for the Employer; or
(3) begins to receive payments on or after the qualified early
retirement age; or
(4) separates from service on or after attaining normal
retirement age (or the qualified early retirement age) and
after satisfying the eligibility requirements for the payment of
benefits under the Plan and thereafter dies before beginning to
receive such benefits;
then such benefits will be received under this Plan in the form of a
qualified joint and survivor annuity, unless the Participant has elected
otherwise during the election period. The election period must begin at
least 6 months before the Participant attains qualified early retirement
age and end not more than 90 days before the commencement of benefits. Any
election hereunder will be in writing and may be changed by the Participant
at any time.
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(b) Election of early survivor annuity. A Participant who is employed
after attaining the qualified early retirement age will be given the
opportunity to elect, during the election period, to have a survivor
annuity payable on death. If the Participant elects the survivor annuity,
payments under such annuity must not be less than the payments which would
have been made to the spouse under the qualified joint and survivor annuity
if the Participant had retired on the day before his or her death. Any
election under this provision will be in writing and may be changed by the
Participant at any time. The election period begins on the later of (1)
the 90th day before the Participant attains the qualified early retirement
age, or (2) the date on which Participation begins, and ends on the date
the Participant terminates employment.
(c) For purposes of this section 6D
(1) Qualified early retirement age is latest of:
(i) the earliest date, under the Plan, on which the Participant
may elect to receive retirement benefits,
(ii) the first day of the 120th month beginning before the
Participant reaches normal retirement age, or
(iii) the date the Participant begins participation.
(2) Qualified joint and survivor annuity is an annuity for the
life of the Participant with a survivor annuity for the life of the
spouse as described in section 4D of this article.
ARTICLE VIII - DISTRIBUTION REQUIREMENTS
1. Except as otherwise provided in Article VII, Joint and Survivor Annuity
requirements, the requirements of this Article shall apply to any
distribution of a Participant's accrued benefit.
If the value of the Employee's vested account balance derived from Employer
and Employee contributions (other than accumulated Deductible Employee
Contributions) exceeds $3,500, the Employee (and his or her spouse) must
consent to any distribution from such account balance in the manner
provided in Article VII(4)(C) hereof.
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2. Limits on Settlement Options. Distribution, if not made in a lump-sum,
may only be made over one of the following periods (or a combination
thereof):
(a) the life of the Participant,
(b) the life of the Participant and a designated beneficiary,
(c) a period certain not extending beyond the life expectancy of the
Participant, or
(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated beneficiary.
3. Minimum Amounts to be Distributed. If the Participant's entire interest is
to be distributed in other than a lump-sum, then the amount to be
distributed each year must be at least an amount equal to the quotient
obtained by dividing the Participant's entire interest by the life
expectancy of the Participant or joint and last survivor expectancy of the
Participant and designated beneficiary. Life expectancy and joint and last
survivor expectancy are computed by the use of the return multiples
contained in section 1.72-9 of the Income Tax Regulations. For purposes of
this computation, a Participant's life expectancy may be recalculated no
more frequently than annually; however, the life expectancy of a nonspouse
beneficiary may not be recalculated. If the Participant's spouse is not
the designated beneficiary, the method of distribution selected must assure
that at least 50 percent of the present value of the amount available for
distribution is paid within the life expectancy of the Participant.
4. A distribution which is to be made by a single sum payment shall be made in
Investment Company Shares at net asset value unless the Employer directs
the Custodian to make such a single sum payment in Investment Company
Shares or in cash or in any combination thereof as directed by the
Employer.
5. If the distribution is to be made in installments, such installments shall
be made in Investment Company Shares or in cash or in any combination
thereof as directed by the Employer and shall be paid in such periodic
amounts and, within the limits set forth above, over such period as the
Employer shall, by notice in writing, direct the Custodian.
6. Commencement of Benefits.
(A) Distributions to 5-percent Owners. The account balance of a 5-percent
owner (as described in section 416(i) of the Code determined with respect
to the Plan Year ending in the calendar year in which such individual
attains age
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70 1/2) must be distributed or commence to be distributed, no later than
the first day of April following the calendar year in which such
individual attains age 70 1/2.
(B) Distributions to Non-5 percent Owners. Distribution to a Participant other
than a 5-percent owner must commence no later than the first day of April
following the calendar year in which the later of termination of employment
or age 70 1/2 occurs.
(C) Disability.
Notwithstanding the foregoing, if a Participant should become disabled, the
amount credited to his account will be distributed to him commencing not
later than the 60th day after the close of the Plan Year in which the
disability occurs. Disability, for purposes of this Plan, is as defined in
Article II(3) hereof.
D. Designation of Beneficiary.
Each participant shall have the right by written notice to the Employer to
designate or to change a beneficiary to receive any benefit to which such
Participant may be entitled in the event of his death prior to the complete
distribution of such benefit. If no such designation is in effect on a
Participant's death, his beneficiary shall be his estate; or, if no
executor or administrator is appointed within six (6) months after the
Participant's death, his beneficiary shall be such one or more of the
Participant's spouse, blood relatives or dependents, as the state may
designate.
7. Death Distribution Provisions.
Upon the death of the Participant, the following distribution provisions shall
take effect:
(A) If the Participant dies after distribution of his or her interest has
commenced, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution being
used prior to the Participant's death.
(B) If the Participant dies before distribution of his or her interest
commences, the Participant's entire interest will be distributed no later
than 5 years after the Participant's death except to the extent that an
election is made to receive distributions in accordance with (a) or (b)
below:
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(a) if any portion of the Participant's interest is payable to a
designated beneficiary, distributions may be made in substantially equal
installments over the life or life expectancy of the designated beneficiary
commencing no later than 1 year after the Participant's death;
(b) if the designated beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in accordance with (a)
above shall not be earlier than the date on which the Participant would
have attained age 70 1/2, and, if the spouse dies before payments begin,
subsequent distributions shall be made as if the spouse had been the
Participant.
(C) For purposes of section 7B above, payments will be calculated by use of
the return multiples specified in section 1.72-9 of the regulations. Life
expectancy of a surviving spouse may be recalculated annually. In the case
of any other designated beneficiary, life expectancy will be calculated at
the time payment first commences and payments for any 12-consecutive month
period will be based on such life expectancy minus the number of whole
years passed since distribution first commenced.
(D) The Employer shall have the responsibility of determining and directing
all distributions hereunder, and all such distributions shall be made in a
uniform and nondiscriminatory manner.
(E) For purposes of this section 7, any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving spouse
if the amount becomes payable to the surviving spouse when the child
reaches the age of majority.
8. Transitional Rule.
(A) Notwithstanding the other requirements of this Article and subject to
the requirements of Article VII, Joint and Survivor Annuity Requirements,
distribution on behalf of any Employee, including a 5-percent owner, may be
made in accordance with all of the following requirements (regardless of
when such distribution commences):
(a) The distribution by the trust is one which would not have
disqualified such trust under section 401(a)(9) of the Internal Revenue
Code as in effect prior to amendment by the Deficit Reduction Act of 1984.
(b) The distribution is in accordance with a method of distribution
designated by the Employee whose interest in the trust is being distributed
or, if the Employee is deceased, by a beneficiary of such Employee.
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(c) Such designation was in writing, was signed by the Employee or the
beneficiary, and was made before January 1, 1984.
(d) The Employee had accrued a benefit under the Plan as of December
31, 1983.
(e) The method of distribution designated by the Employee or the
beneficiary specifies the time at which distribution will commence, the
period over which distributions will be made, and in the case of any
distribution upon the Employee's death, the beneficiaries of the Employee
listed in order of priority.
(B) A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death
of the Employee.
(C) For any distribution which commences before January 1, 1984, but continues
after December 31, 1983, the Employee, or the beneficiary, to whom such
distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in subsections 8A(a) and 8A(e).
(D) If a designation is revoked, any subsequent distribution must satisfy the
requirement of section 401(a)(9) as amended. Any changes in the
designation will be considered to be a revocation of the designation.
However, the mere substitution or addition of another beneficiary (one not
named in the designation) under the designation will not be considered to
be a revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to be made
under the designation, directly or indirectly (for example, by altering the
relevant measuring life).
ARTICLE IX - CUSTODIAL ACCOUNTS
All contributions under the Plan shall be paid over to Custodial Accounts to be
maintained by the Employer with a Custodian. The Custodial Agreement pursuant
to which such accounts are maintained and which shall constitute a part of this
Plan, shall provide as follows:
(a) That the investment of all funds in such accounts, including all earnings,
shall be made solely in Investment Company Shares, except that, as provided
in Section 6 of Article IV, the funds may be held by Sentry Equity
Services, Inc. in a special customer bank account
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until the minimum specified therein for investment is attained, and
(b) That the shareholder of record of all such Investment Company Shares
shall be the Custodian or its nominee.
The Participants shall be the beneficial owners of all such stock held in the
Custodial Accounts.
ARTICLE X - AMENDMENT AND TERMINATION
1. Sentry may at any time and from time to time, amend or terminate the
Plan in whole or in part, including retroactive amendments, by delivering
to the Employer and to the Custodian a signed written copy of such
modification, amendment or termination; provided, however, (a) Sentry shall
have no power to amend or terminate the Plan in any such manner as would
cause or permit any part of the assets in the Custodial Accounts to be
diverted to purposes other than for the exclusive benefit of Participants
or their beneficiaries, or as would cause or permit any portion of such
assets to revert to or to become the property of the Employer, and (b)
Sentry shall not have the right to modify or amend the Plan retroactively
in such a manner as to deprive any Participants, or their beneficiaries of
any benefit to which they were entitled under the Plan by reason of
contributions made by the Employer prior to the modification or amendment,
unless such modification or amendment is necessary to conform the Plan to,
or satisfy the conditions of, any law, governmental regulation or rule, and
to permit the Plan and the Custodial Accounts to meet the requirements of
the Internal Revenue Code, or any similar statutes enacted in lieu thereof
or as a supplement thereto and to maintain qualification of the Plan.
2. If the Plan's vesting schedule is amended, or the Plan is amended in any way
that directly or indirectly affects the computation of the Participant's
nonforfeitable percentage, each Participant with at least 5 years of service
with the Employer may elect, within a reasonable period after the adoption
of the amendment or change, to have the nonforfeitable percentage computed
under the Plan without regard to such amendment or change.
The period during which the election may be made shall commence with the
date the amendment is adopted or deemed to be made and shall end on the
latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
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(3) 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan administrator.
3. No amendment to the Plan shall decrease a Participant's account balance or
eliminate an optional form of distribution. Notwithstanding the preceding
sentence, a Participant's account balance may be reduced to the extent
permitted under section 412(c)(8) of the Code. Furthermore, no amendment
to the Plan shall have the effect of decreasing a Participant's vested
interest determined without regard to such amendment as of the later of the
date such amendment is adopted or the date it becomes effective.
An adopting Employer may amend the Plan by adding overriding Plan language
to the Adoption Agreement where such language is necessary to satisfy
section 415 or 416 because of the required aggregation of multiple plans
under these sections. An adopting Employer may amend the Plan by adding
language to allow the Plan to operate under a waiver of the minimum funding
requirement.
Except for (i) changes to the choice of options in the Adoption Agreement,
(ii) amendments stated in the Adoption Agreement which allow the Plan to
satisfy section 415 or to avoid duplication of minimums under section 416
of the Code because of the required aggregation of multiple plans, or (iii)
amendments stated in the Adoption Agreement which allow the Plan to operate
under a waiver of the minimum funding requirement, if the adopting Employer
amends the Plan or nonelective portions of the Adoption Agreement, it will
no longer participate in the master or prototype plan, but will be
considered to have an individually designed plan.
4. The Employer shall have the right to change any election in the Adoption
Agreement by notice in writing to Sentry but such right may be exercised
only once in each Plan Year. Any other amendment to the Plan by the
Employer will subject the Plan to individual plan qualification, and loss
of qualification under this Plan. If any Employer's Plan becomes thus
disqualified, for this or for any other reason, the funds for his Plan
shall be within 30 days segregated from the funds of any other plans.
5. The Plan shall terminate upon the death of the Employer, if the Employer is a
sole proprietorship, or upon notice of the termination of the partnership if
the Employer is a partnership, unless in either case provision is made by a
successor to the business of the Employer for the continuation of this Plan
and the Custodial Agreement, provided that such continuation is approved by
the Custodian.
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6. Upon the termination of the Plan, the Custodial Agreement shall remain in
full force and effect for whatever period is necessary to complete the
distribution of all assets in each Participant's Account. Subject to the
requirements of Article VII hereof, any and all assets remaining in the
Custodial Accounts shall be distributed by the Custodian to the Participants
in accordance with the amounts credited to their respective accounts as of
the date of such termination. In the event of the termination or partial
termination of the Plan, the account balance of each affected Participant
will be nonforfeitable. Distribution shall be in cash in one or more of the
ways provided by Article VIII, as directed by the Employer. In the absence
of instructions from the Employer as to the manner of distribution, such
distribution shall be made as directed by the Participants, or, in the event
that no such directions are received within six (6) months from the
termination of the Plan, as determined by the Custodian in its sole
discretion. Upon the completion of such distribution, the Custodian shall be
released from all further liability with respect to all amounts so paid.
ARTICLE XI - MISCELLANEOUS
1. Status of Participants.
Neither the establishment of the Plan and the Custodial Agreement nor any
modification thereof nor the creation of any fund or account nor the payment
of any benefits shall be construed as giving to any Participant or other
person any legal or equitable right against the Employer, or the Custodian,
except as herein provided; and in no event shall the terms of employment of
any Employee or Participant be modified or in any way affected hereby.
2. Administration.
(A) The Employer shall be the Plan's named fiduciary and, as such, shall have
the authority and responsibility to control and manage the operation and
administration of the Plan and its assets. The Employer may from time to
time designate other persons to carry out fiduciary responsibilities
under the Plan.
(B) The Employer shall administer the Plan and perform those duties and
responsibilities as expressly set forth in the Plan and any other duties
consistent with the responsibilities of a plan administrator. The
Employer may provide rules and regulations for administration of the
Plan consistent with its terms and provisions.
(C) The Participant's Accounts shall be valued annually within a reasonable
period of time subsequent to the anniversary date of the Plan.
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(D) The Employer shall make reports to the Internal Revenue Service
and the Department of Labor as may be required from time to time.
3. Claims Procedure.
(A) If a claim for benefits is wholly or partially denied, the
Employer shall, within a reasonable period of time, but no later
than 90 days after receipt of the claim, notify the claimant of
the denial. Such denial (i) shall be in writing, (ii) shall be
written in a manner calculated to be understood by the Participant,
and (iii) shall contain the specific reason or reasons for denial
of the claim, a specific reference to the pertinent Plan provisions
upon which the denial is based, a description of any additional
material or information necessary for the Participant to perfect
the claim, along with an explanation of why such material or
information is necessary, and an explanation of the Plan's claim
review procedure.
(B) Within 120 days of receipt by the Participant of the written
notice of denial of the claim, or such later times as shall be
deemed reasonable taking into account the nature of the benefit
subject to the claim and any other attendant circumstances or if
the claim has not been granted within a reasonable period of time,
the Participant may file a written request with the Employer that
he conduct a full and fair review of the denial of the
Participant's claim for benefits, including the holding of a
hearing, if deemed necessary by the reviewing party. In
connection with the Participant's appeal of the denial of his
benefit, the Participant may review pertinent documents and may
submit issues and comments in writing.
(C) The Employer shall deliver to the Participant a written decision
on the claim promptly, but not later than 60 days, after receipt
of the Participant's request for review, except that if there are
special circumstances (such as the need to hold a hearing) which
require an extension of time for processing, the aforesaid 60-day
period shall be extended to 120 days. Such decision shall (i) be
written in a manner calculated to be understood by the Participant,
(ii) include specific reasons for the decision, and (iii) contain
specific references to the pertinent Plan provisions upon which
the decision is based.
4. Allocation of Charges.
Any income taxes or other taxes of any kind whatsoever that may be
levied or assessed upon or in respect of the assets of the Plan,
or the income arising therefrom, any transfer taxes
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incurred in connection with the investment and reinvestment of such
assets, all other administrative expenses incurred by the Custodian in
performance of its duties, including fees for legal services rendered
to the Custodian, and the Custodian's compensation shall be paid and
charged as provided in the Custodial Agreement.
5. Conditions of Plan and Custodial Agreement.
It is a condition of this Plan and the Custodial Agreement, that each
Participant, by participating in the Plan, expressly agrees that the
Participant shall look solely to the assets of the Custodial Accounts
for the payment of any benefit to which he is entitled under the Plan.
6. Inalienability of Benefits.
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily. The
preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order
is determined to be a qualified domestic relations order, as defined
in section 414(p) of the Code, or any domestic relations order entered
before January 1, 1985.
7. Prohibition Against Diversion.
This Plan has been entered into by the Employer for the exclusive
benefit of the Participants and their beneficiaries and it shall be
impossible for any part of the assets of the Plan to be used for any
other purpose.
8. Merger Restrictions.
In the case of any merger or consolidation with, or transfer of assets
or liabilities of this Plan, to any other plan, each Participant will
(if the Plan then terminated) receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater than
the benefit he would have been entitled to receive immediately before
the merger, consolidation, or transfer (if the Plan had then
terminated).
9. Any instrument requiring the signature of the Employer shall be
valid if signed by an authorized officer of the Employer.
10. Governing Law.
The Plan and Custodial Agreement shall be construed, administered and
enforced according to the laws of the State of Wisconsin.
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11. Necessity of Maintaining Qualified Status.
If the plan of a participating Employer fails to retain its qualified
status, the plan will no longer be considered as a master (prototype) plan.
12. Segregation of Assets in a Master Trust.
If the plan of a participating Employer fails to retain its qualified
status, the assets of the Employer's plan must be segregated from the
master trust.
13. Except as provided in Article V, section 14E, all Employees of all
corporations which are members of a controlled group of corporations (as
defined in section 414(b) of the Code) and all Employees of all trades or
businesses (whether or not incorporated) which are under common control (as
defined in section 414(c)) will be treated as employed by a single Employer.
14. All Employees of all members of an affiliated service group (as defined in
section 414(m) of the Code) will be treated as employed by a single
Employer.
15. Any leased Employee shall be treated as an Employee of the recipient
Employer; however, contributions or benefits provided by the leasing
organization which are attributable to services performed for the recipient
Employer shall be treated as provided by the recipient Employer. The
preceding sentence shall not apply to any leased Employee if such Employee
is covered by a money purchase pension plan providing: (1) a nonintegrated
Employer contribution rate of at least 7 1/2 percent of compensation, (2)
immediate participation, and (3) full and immediate vesting. For purposes
of this paragraph, the term "leased employee" means any person (other than
an employee of the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has performed
services for the recipient (or for the employer and related persons
determined in accordance with section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one year and such
services are of a type historically performed by employees in the business
field of the recipient employer.
16. If this Plan provides contributions or benefits for one or more
owner-employees who control both the business for which this Plan is
established and one or more other trades or businesses, this Plan and the
plan established for other trades or businesses must, when looked at as a
single plan, satisfy sections 401(a) and (d) for the Employees of this and
all other trades or businesses.
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If the Plan provides contributions or benefits for one or more
owner-employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan
which satisfies sections 401(a) and (d) and which provides contributions
and benefits not less favorable than provided for owner-employees under
this Plan.
If an individual is covered as an owner-employee under the plans of
two or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or
benefits of the employees under the plan of the trades or businesses
which are controlled must be as favorable as those provided for him
under the most favorable plan of the trade or business which is not
controlled.
For purposes of the preceding paragraphs, an owner-employee, or two or
more owner-employees, will be considered to control a trade or
business if the owner-employee, or two or more owner-employees together:
(1) own the entire interest in an unincorporated trade or
business or;
(2) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the
partnership.
For purposes of the preceding sentence, an owner-employee, or two or
more owner-employees shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership
which such owner-employee, or such two or more owner-employees, are
considered to control within the meaning of the preceding sentence.
17. Any annuity contract distributed herefrom must be nontransferable.
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EXHIBIT 14(b)
<PAGE> 2
<TABLE>
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Form 5305-A Individual Retirement Custodial Account DO NOT File
(Rev. October 1992) with the
Internal
Department of the Treasury (Under Section 408(a) of the Internal Revenue Code) Revenue Service
Internal Revenue Service
Name of depositor Date of birth of depositor Identifying number (see instructions)
Address of depositor Check if Amendment > [ ]
Name of Custodian Address or principal place of business of custodian
Marshall & Ilsley 1000 North Water Street
Trust Company Milwaukee, Wisconsin 53202
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The Depositor whose name appears above is establishing an individual
retirement account under section 408(a) to provide for his or her retirement
and for the support of his or her beneficiaries after death.
The Custodian named above has given the Depositor the disclosure
statement required under Regulations section 1.408-6.
The Depositor assigned the custodial account.............. dollars
($ ............... ) in cash.
The Depositor and the Custodian make the following agreement:
ARTICLE I
The Custodian may accept additional cash contributions on behalf of
the Depositor for a tax year of the Depositor. The total cash contributions
are limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c)(but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8),408(d)(3), or an employer
contribution to a simplified employee pension plan as described in section
408(k).
ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles
(within the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3) which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary,
the distribution of the Depositor's interest in the custodial account shall be
made in accordance with the following requirements and shall otherwise comply
with section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefits provisions of Proposed Regulations section
1.401(a)(9)-2, the provisions of which are incorporated by reference.
2. Unless otherwise elected by the time distributions are required to
begin to the Depositor under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies shall
be recalculated annually. Such election shall be irrevocable as to the
Depositor and the surviving spouse and shall apply to all subsequent years.
The life expectancy of a nonspouse beneficiary may not be recalculated.
3. The Depositor's entire interest in the custodial account must be,
or begin to be, distributed by the Depositor's required beginning date, (April
1 following the calendar year end in which the Depositor reaches age 70 1/2).
By that date, the Depositor may elect, in a manner acceptable to the Custodian,
to have the balance in the custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last survivor lives
of the Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified
period that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified
period that may not be longer than the joint life and last survivor expectancy
of the Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire interest is
distributed to him or her, the entire remaining interest will be distributed as
follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in accordance with
paragraph 3.
(b) If the Depositor dies before distribution of his or her interest
has begun, the entire remaining interest will, at the election of the Depositor
or, if the Depositor has not so elected, at the election of the beneficiary or
beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated beneficiary or beneficiaries starting
by December 31 of the year following the year of the Depositor's death. If,
however, the beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of the year in which
the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced, distributions are treated as having begun on the Depositor's
required beginning date, even though payments may actually have been made
before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
Cat. No. 11820G
30-142 Form 5305-A (Rev. 10-92)
4-96
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5. In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment
for each year, divide the Depositor's entire interest in the Custodial account
as of the close of business on December 31 of the preceding year by the life
expectancy of the Depositor (or the joint life and last survivor expectancy of
the Depositor and the Depositor's designated beneficiary, or the life
expectancy of the designated beneficiary, whichever applies). In the case of
distributions under paragraph 3, determine the initial life expectancy (or
joint life and last survivor expectancy) using the attained ages of the
Depositor and designated beneficiary as of their birthdays in the year the
Depositor reaches age 70 1/2. In the case of a distribution in accordance with
paragraph 4(b)(ii), determine life expectancy using the attained age of the
designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information
necessary for the Custodian to prepare any reports required under section
408(i) and Regulations sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue
Service and the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated,
the provisions of Articles I through III and this sentence will be controlling.
Any additional articles that are not consistent with section 408(a) and the
related regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear below.
Note: The following space (Article VIII) may be used for any other
provisions you want to add. If you do not want to add any other
provisions, draw a line through this space. If you do add provisions,
they must comply with applicable requirements of state law and the
Internal Revenue Code.
ARTICLE VIII
1. The named Beneficiary is:
2. The entire amount contributed is a roll-over from an employee trust
or annuity plan qualified under section 401(a) or 403(a):
[ ] Yes [ ] No
3. Minimum Contribution: $200 initial and $50 subsequent for Sentry
Fund, Inc. (subject to maximums described in General Instructions
below).
4. All contributions will be invested in shares of Sentry Fund, Inc.
5. Custodian fees to be charged per calendar year against each
custodial account:
$5.00 Annual maintenance charge.
$1.00 For each contribution in excess of one per calendar
year.
$5.00 For each distribution from the account, except the
charge will be $1.00 for each installment distribution.
$5.00 For each withdrawal of excess contributions.
Depositor's signature ..................................... Date ..............
Custodian's signature ..................................... Date ..............
Witness ............................................. ........................
(Use only if signature of the Depositor or the Custodian is required to be
witnessed.)
GENERAL INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
Form 5305-A is a model custodial account agreement that meets the requirements
of section 408(a) and has been automatically approved by the IRS. An
individual retirement account (IRA) is established after the form is fully
executed by both the individual (Depositor) and the Custodian and must be
completed no later than the due date of the individual's income tax return for
the tax year (without regard to extensions). This account must be created in
the United States for the exclusive benefit of the Depositor or his or her
beneficiaries.
Individuals may rely on regulations for the Tax Reform Act of 1986
to the extent specified in those regulations.
Do not file Form 5305-A with the IRS. Instead, keep it for your
records.
For more information on IRAs, including the required disclosure you can
get from your custodian, get Pub. 590, Individual Retirement Arrangements
(IRAs).
DEFINITIONS
CUSTODIAN. The Custodian must be a bank or savings and loan association, as
defined in section 408(n), or any person who has the approval of the IRS to act
as custodian.
DEPOSITOR. The Depositor is the person who establishes the custodial account.
IDENTIFYING NUMBER
The depositor's social security number will serve as the identification number
of his or her IRA. An employer identification number is required only for an
IRA for which a return is filed to report unrelated business taxable income.
An employer identification number is required for a common fund created for
IRAs.
IRA FOR NONWORKING SPOUSE
Form 5305-A may be used to establish the IRA custodial account for a nonworking
spouse.
Contributions to an IRA custodial account for a nonworking spouse must be made
to a separate IRA custodial account established by the nonworking spouse.
SPECIFIC INSTRUCTIONS
Article IV. Distributions made under this article may be made in a single sum,
periodic payment, or a combination of both. The distribution option should be
reviewed in the year the Depositor reaches age 70 1/2 to ensure that the
requirements of section 408(a)(6) have been met.
Article VIII. Article VIII and any that follow it may incorporate additional
provisions that are agreed to by the depositor and custodian to complete the
agreement. They may include, for example, definitions, investment powers,
voting rights, exculpatory provisions, amendment and termination, removal of
the custodian, custodian's fees, state law requirements, beginning date of
distributions, accepting only cash, treatment of excess contributions,
prohibited transactions with the depositor, etc. Use additional pages if
necessary and attach them to this form.
Note: Form 5305-A may be reproduced and reduced in size for adoption to
passbook purposes.
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EXHIBIT 14(c)
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SENTRY FUND, INC.
DISCLOSURE STATEMENT
FOR INDIVIDUAL RETIREMENT ACCOUNT
UNDER SECTION 408(A) OF THE INTERNAL REVENUE CODE
On behalf of the Custodian, Marshall & Ilsley Trust Company, for the Individual
Retirement Account ("Account") in which you will be participating, we are
furnishing you this Statement in duplicate which incorporates the attached
Internal Revenue Service Publication 590. IT IS PROVIDED IN ACCORDANCE WITH
SECTION 408(i) OF THE INTERNAL REVENUE CODE. If, after reading this
disclosure, you no longer wish to maintain your Sentry IRA, you may revoke it
by notice in writing. But you must do so within ten (10) days of the date on
this statement. We will consider the postmark on your revocation notice as the
date of mailing. If you choose to revoke your IRA, the initial purchase will
be reversed and the entire amount paid, without any adjustment for such items
as sales commissions, administrative expenses or fluctuation in market value,
will be refunded to you.
Mail or deliver your revocation notice to:
Sentry Equity Services, Inc.
1800 North Point Drive
Stevens Point, WI 54481
Phone (715) 346-6000
Publication 590, gives you an explanation of the requirements of an individual
retirement account, the tax consequences of establishing such an account
(including its tax status, deductibility of contributions and the tax treatment
of distributions) and the limitations and restrictions on the retirement
savings deduction. It also includes the prohibitions against engaging in
prohibited transactions, borrowing on or pledging the Account as security for a
loan, making distributions before age 59 1/2, and making certain accumulations.
The forms used to establish your Individual Retirement Account have been filed
with the Internal Revenue Service and a favorable opinion has been received. A
copy of the IRS opinion letter will be provided to you.
FINANCIAL DISCLOSURE:
(a) Information about Sentry Fund Inc. is shown in the Prospectus which must
preceed or accompany this statement.
(b) There are no sales charges or withdrawal fees on contributions made by you
in the Fund.
(c) Commissions are paid only if your purchase is made through a Sentry
Representative for the personal service provided in this tax-qualified plan.
The commissions paid; if applicable, are 1% of each purchase made.
(d) All dividends are reinvested automatically in additional fund shares
without sales charge.
(e) As with any mutual fund investment, there is no guarantee of principal or
assurance that your account will increase in value. The method of calculating
the Fund's Total Return and Average Annual Total Return can be found in the
Prospectus and Statement of Additional Information.
(f) Custodian fees which will be charged against your Account as appropriate
are:
$5.00 Annual maintenance charge.
$1.00 For each contribution in excess of one per calendar year.
$5.00 For each distribution from the account, except the charge will
be $1.00 for each installment distribution.
$5.00 For each withdrawal of excess contributions.
The initial purchase of Fund shares for your Account will be made immediately
upon acceptance of your subscription by the Fund at its Stevens Point Office.
Form 5305-A, which establishes your Account, is a model trust agreement
provided and approved as to the form of the Account by the IRS, however, such
approval does not represent a determination of the merits of the Account.
I acknowledge receipt of this Statement, a copy of the Fund's current
Prospectus, the IRS Publication 590, and the accompanying copy of Form 5305-A.
I understand and agree that Sentry Fund, Inc. is not responsible for the tax
and legal aspects of my Individual Retirement Account; full responsibility
therefore is assumed by me. I acknowledge having counseled with legal and tax
advisors to the extent I deem necessary.
Depositor:_________________________________ Date:___________________________
Please return the signed and dated copy to: Sentry Equity Services, Inc.
1800 North Point Drive
Stevens Point, WI 54481
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EXHIBIT 16
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EXHIBIT 16
TOTAL RETURN
1. Formula
The total return performance of the Fund for a specified period equals the
change in the value of a hypothetical $10,000 investment ("initial investment")
from the inception of the Fund to the end of the period. It is assumed that
all dividends and capital gain distributions are reinvested. Total return may
be expressed either as a dollar value change or as a percentage change. Total
return information is set forth in the performance information in Parts A and
B.
2. Performance Reflected
The representative total returns calculations reflected in this section are for
the Fund for the period since inception to October 31, 1992.
3. Total Return
The row labeled "Total Value" in the Performance Results chart shows the value
of the shares initially acquired plus the value of the reinvested dividends
plus the value of reinvested capital gains at the end of each October 31 fiscal
year. The total return percentage change is calculated by subtracting the
Initial Investment from the Total Value and then dividing by the Initial
Investment.
Percentage Change = Total Value - Initial Investment x 100
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Initial Investment
Total Value = Total Value at October 31, 1992 = $124,012
Initial Investment = Initial Investment on May 22, 1970 = $10,000
= $124,012 - $10,000 x 100 = 1,140%
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$10,000
The decimal return is multiplied by 100 to convert it to a percentage.
AVERAGE ANNUAL TOTAL RETURN
1. Formula
The average annual total return of the Fund for a specific period is found by
taking a hypothetical $1,000 investment ("Initial Investment") at the beginning
of the period and computing the redeemable value at the end of the period
("Redeemable Value"). The Redeemable Value is then divided by the Initial
Investment, and this quotient is taken to the Nth root (N representing the
number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. Thus, the following formula applies:
Average Annual Total Return = ( Redeemable Value ) 1/N - 1
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Initial Investment
2. Performance Reflected
The representative average annual total return calculation reflected in this
section is for the Fund for the period from October 31, 1991 to October 31,
1992.
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3. Calculation
The $1,000 Initial Investment is divided by the maximum offering price to
determine the shares purchased.
$1,000 - $15.34 = 65.189 shares
The redeemable value is equal to the initial share investment plus the shares
reinvested due to dividends and capital gains multiplied by the net asset value
on the date of redemption.
Initial Shares Purchased 65.189
Shares Reinvested on 12/26/91
from
$.27 Dividend 1.221
$1.14 Capital Gain 5.157
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6.378
Shares Reinvested on 6/2/92
from
$.08 Dividend .393
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Total Shares Owned 10/31/92 71.960
x 15.16 10/31/92 Net Asset Value
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$ 1,090.91
The period covered is from October 31, 1991 to October 31, 1992, or 1 year.
N = number of years in the period = 1
Using the formula provided above, average annual total return for the period
may then be calculated.
The Redeemable Value is divided by the Initial Investment.
1,090.91 / $1,000 = $1.0909
This quotient is taken to the Nth root.
The 1st root of 1.0909 = 1.0909
1 is subtracted from the result.
1.0909 - 1 = .0909
The decimal return is converted to a percentage by multiplying by 100.
.0909 x 100 = 9.09%
