<PAGE> 1
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 No. 9 / X /
---- -----
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
OF 1940 -----
Amendment No. 10 / X /
---- -----
(Check appropriate box or boxes.)
JOHNSON MUTUAL FUNDS TRUST
File Nos. 33-52970 and 811-7254
3777 West Fork Road, Cincinnati, Ohio 45247
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (513) 661-3100
----------------------------
Dianna J. Rosenberger, 3777 West Fork Road, Cincinnati, Ohio 45247
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate date of proposed public offering: May 1, 1998
-----------------------------------
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b)
- -----
/ X / on May 1, 1998 pursuant to paragraph (b)
- -----
/ / 60 days after filing pursuant to paragraph (a)
- -----
/ / 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. Title of securities being registered:
Shares
<PAGE> 2
JOHNSON MUTUAL FUNDS TRUST
CROSS REFERENCE SHEET
FORM N-1A
ITEM SECTION IN EACH PROSPECTUS
- ---- --------------------------
1 Cover Page
2 Fund Expenses
3 Financial Highlights
4 Operation of the Funds,
Investment Objectives and
Strategies, Investment
Policies and Techniques,
Investment Limitations,
General Information
5 Operation of the Funds
5A Investment Performance
6 Operation of the Funds,
Cover Page, Dividends and
Distributions, Taxes,
General Information
7 Operation of the Funds,
How to Buy, Sell, or Exchange
Shares in Each Fund, How to
Buy Shares, How to Exchange
Shares, Share Price
Calculation
8 How to Sell Shares
9 None
15 General Information
20 Taxes
ITEM SECTION IN STATEMENT OF
- ---- ADDITIONAL INFORMATION
----------------------
10 Cover Page
11 Table of Contents
12 None
13 Additional Information About
Fund Investments, Investment
Limitations, State
Restrictions
14 Trustees and Officers
15 Trustees and Officers
16 The Investment Adviser,
Custodian and Transfer Agent,
Accountants
17 Portfolio Transactions
and Brokerage
18 Description of the Trust
19 Determination of Share Price
20 None
21 Not Applicable
22 Investment Performance
23 Report of Independent Public
Accounts, Financial
Statements
<PAGE> 3
Johnson Logo
PROSPECTUS MAY 1, 1998
<TABLE>
<S> <C>
JOHNSON GROWTH FUND
JOHNSON OPPORTUNITY FUND
JOHNSON FIXED INCOME FUND
JOHNSON MUNICIPAL INCOME FUND
</TABLE>
JOHNSON MUTUAL FUNDS TRUST
3777 WEST FORK ROAD
CINCINNATI, OH 45247
(513) 661-3100
(800) 541-0170
FAX (513) 661-4901
<PAGE> 4
JOHNSON MUTUAL FUNDS MAY 1,1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FUND EXPENSES............................................... 2
FINANCIAL HIGHLIGHTS........................................ 3
INVESTMENT OBJECTIVES AND STRATEGIES........................ 4
HOW TO BUY, SELL OR EXCHANGE SHARES IN EACH FUND............ 6
HOW TO BUY SHARES........................................... 6
HOW TO SELL SHARES.......................................... 7
HOW TO EXCHANGE SHARES...................................... 9
SHARE PRICE CALCULATION..................................... 9
DIVIDENDS AND DISTRIBUTIONS................................. 10
TAXES....................................................... 10
OPERATION OF THE FUNDS...................................... 11
INVESTMENT POLICIES AND TECHNIQUES.......................... 12
GENERAL INFORMATION......................................... 16
INVESTMENT PERFORMANCE...................................... 16
</TABLE>
<PAGE> 5
JOHNSON MUTUAL FUNDS TRUST PROSPECTUS DATED MAY 1, 1998
This Prospectus gives you information about the Johnson Mutual Funds Trust
that you should be aware of before investing. Please read and retain this
Prospectus for future reference. Additional information is included in the
Statement of Additional Information dated May 1, 1998, and filed with the
Securities and Exchange Commission. It is incorporated into this Prospectus by
reference. To obtain a copy without charge, call or write the Funds at the phone
number or address listed throughout this prospectus.
The Johnson Mutual Funds Trust is a family of five no-load mutual funds
which means there are no sales charges or commissions to buy, sell or exchange
Fund shares. This prospectus covers four of the five Johnson Mutual Funds, but
does not include the JOHNSON REALTY FUND. To receive a prospectus and additional
information on the JOHNSON REALTY FUND, please call or write the Funds. The
minimum initial investment for each Fund is $2,000.
THE JOHNSON GROWTH FUND
The investment objective of the Growth Fund is long term capital growth.
The Fund invests primarily in common stocks of larger-sized companies believed
by its Adviser, Johnson Investment Counsel, Inc., to have above average
prospects for appreciation.
THE JOHNSON OPPORTUNITY FUND
The investment objective of the Opportunity Fund is long term capital
growth. The Fund invests primarily in common stocks of small to medium-sized
companies, believed by its Adviser to have above average prospects for
appreciation.
THE JOHNSON FIXED INCOME FUND
The investment objective of the Fixed Income Fund is a high level of income
over the long term, consistent with preservation of capital. The Fund invests
primarily in intermediate term investment grade fixed income securities,
including government and corporate bonds.
THE JOHNSON MUNICIPAL INCOME FUND
The investment objective of the Municipal Income Fund is a high level of
federally tax-free income over the long term, consistent with preservation of
capital. The Fund invests primarily in investment grade municipal fixed income
securities. It is anticipated that the majority of these securities will be Ohio
municipal bonds, notes and short term obligations which provide income that is
exempt from both Ohio personal income tax and regular federal income tax. THE
MUNICIPAL INCOME FUND IS A NON-DIVERSIFIED SERIES AND THEREFORE MAY INVEST MORE
THAN 5% OF ITS TOTAL ASSETS IN MUNICIPAL FIXED INCOME SECURITIES ISSUED BY ONE
ISSUER.
- --------------------------------------------------------------------------------
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 passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
- --------------------------------------------------------------------------------
Johnson Mutual Funds Trust, 3777 West Fork Road, Cincinnati, Ohio 45247, (513)
661-3100
<PAGE> 6
FUND EXPENSES
The purpose of the table below is to assist shareholders in understanding
the costs and expenses that shareholders in each Fund will bear directly or
indirectly. The expense information for the Funds is based on operating expenses
incurred during the most recent fiscal year. The expenses are expressed as a
percentage of average net assets.
Shareholders should be aware that the Funds are no-load funds and,
accordingly, a shareholder does not pay any front or back end loads or
commission to buy, sell or exchange shares of the Funds. In addition, the Funds
do not have a 12b-1 Plan. Unlike most other mutual funds, the Funds do not pay
separately for transfer agency, fund accounting, pricing, custodial, auditing or
legal services, nor do they pay separately general administrative or other
operating expenses. The Adviser pays all of the expenses of each Fund except
brokerage, taxes, interest and extraordinary expenses.
<TABLE>
<CAPTION>
FIXED MUNICIPAL
GROWTH OPPORTUNITY INCOME INCOME
SHAREHOLDER TRANSACTION EXPENSES: ------ ----------- ------ ---------
<S> <C> <C> <C> <C>
Maximum Front End Load............................... NONE NONE NONE NONE
Deferred Load........................................ NONE NONE NONE NONE
Redemption Fee(1).................................... NONE NONE NONE NONE
Exchange Fee......................................... NONE NONE NONE NONE
Annual Fund Operating Expenses (as a percentage of average net assets)(2)
- ------------------------------
Management Fees (after fee waiver)(2)................ .95% .95% .85% .65%
12b-1 Fees........................................... NONE NONE NONE NONE
Total Fund Operating Expenses (after fee
waiver)(2)......................................... .95% .95% .85% .65%
</TABLE>
(1) A processing fee of $10 will be deducted from any wire sales proceeds and
paid to the Custodian.
(2) Each Fund's total operating expenses are equal to the management fee paid to
the Adviser. The Adviser is authorized to charge the Growth Fund and the
Opportunity Fund a management fee of 1.30%, and the Fixed Income Fund and
the Municipal Income Fund a management fee of 1.15% of the average daily net
assets of the applicable Fund. The expenses shown in the above fee table
reflect the fee waiver for each Fund for the year ending December 31, 1998.
The Adviser intends these fee waivers to be permanent, although the Adviser
reserves the right to remove them at any time after December 31, 1998.
Example
- ------
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) sale of your shares at the end of each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Growth Fund................... $10 $30 $52 $116
Opportunity Fund.............. $10 $30 $52 $116
Fixed Income Fund............. $ 9 $27 $47 $106
Municipal Income Fund......... $ 7 $21 $37 $ 82
</TABLE>
The Example should not be considered a representation of past or future
expenses, and each Fund's actual expenses may be more or less than those shown.
-2-
<PAGE> 7
FINANCIAL HIGHLIGHTS
The following financial information for the periods ended December 31,
1997, 1996, 1995, 1994, 1993 is derived from the audited financial statements of
the Johnson Mutual Funds Trust and has been certified by the independent public
accountants for the Funds. Additional performance information and the audited
financial statements of the Funds are included in the Trust's annual report
dated December 31, 1997, which is available on request.
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD:
<TABLE>
<CAPTION>
GROWTH FUND OPPORTUNITY FUND
---------------------------------------- ----------------------------------
YEAR ENDED DECEMBER 31 YEAR ENDED DECEMBER 31
---------------------------------------- ----------------------- 5/16/94-
1997 1996 1995 1994 1993 1997 1996 1995 12/31/94
---------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period.... $ 21.16 18.86 14.82 15.71 15.00 22.65 19.42 15.70 15.00
OPERATIONS:
Net Investment
Income................ $ 0.16 0.19 0.24 0.24 0.18 0.03 0.06 0.08 0.05
Net Gains (Losses) on
Securities (Realized &
Unrealized)........... 7.01 2.98 4.41 (0.89) 0.71 6.13 4.43 3.89 0.70
------- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL OPERATIONS....... $ 7.17 3.17 4.65 (0.65) 0.89 6.16 4.49 3.97 0.75
DISTRIBUTIONS:
Dividends from Net
Investment Income..... $ (0.16) (0.19) (0.24) (0.24) (0.18) (0.03) (0.06) (0.08) (0.05)
Distributions from Net
Realized Capital
Gains................. (2.79) (0.68) (0.37) 0.00 0.00 (2.34) (1.20) (0.17) 0.00
------- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS.... $ (2.95) (0.87) (0.61) (0.24) (0.18) (2.37) (1.26) (0.25) (0.05)
Net Asset Value End of
Period................. $ 25.38 21.16 18.86 14.82 15.71 26.44 22.65 19.42 15.70
Total Return............ 33.96% 16.85% 31.61% -4.22% 5.93% 27.26% 23.10% 25.27% 4.99%
Net Assets, End of
Period (Millions)...... $ 31.90 21.42 14.87 9.30 6.58 35.06 22.09 15.19 6.29
RATIOS AFTER FEE
WAIVERS:(1)
Ratio of Expenses to
Average Net
Assets(2)............. 0.97% 1.00% 1.00% 1.00% 1.00% 0.97% 1.00% 1.00% 1.00%
Ratio of Net Income to
Average Net
Assets(3)............. 0.65% 0.99% 1.42% 1.65% 1.38% 0.11% 0.28% 0.59% 1.01%
Portfolio Turnover
Rate................... 54.44% 26.78% 52.91% 30.38% 23.57% 55.05% 46.43% 62.15% 58.73%
Average Commission Rate
(cents per share)...... $0.0676 0.0799 0.0721 0.0876
<CAPTION>
FIXED INCOME FUND MUNICIPAL INCOME FUND
------------------------------------- ----------------------------------
YEAR ENDED DECEMBER 31 YEAR ENDED DECEMBER 31
------------------------------------- ----------------------- 5/16/94-
1997 1996 1995 1994 1993 1997 1996 1995 12/31/94
------------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period.... 15.45 15.84 14.20 15.80 15.00 15.57 15.68 14.73 15.00
OPERATIONS:
Net Investment
Income................ 0.88 0.86 0.83 0.80 0.60 0.64 0.63 0.63 0.39
Net Gains (Losses) on
Securities (Realized &
Unrealized)........... 0.39 (0.39) 1.64 (1.60) 0.83 0.32 (0.11) 0.96 (0.27)
----- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL OPERATIONS....... 1.27 0.47 2.47 (0.80) 1.43 0.96 0.52 1.59 0.12
DISTRIBUTIONS:
Dividends from Net
Investment Income..... (0.88) (0.86) (0.83) (0.80) (0.60) (0.64) (0.63) (0.63) (0.39)
Distributions from Net
Realized Capital
Gains................. 0.00 0.00 0.00 0.00 (0.03) (0.01) 0.00 (0.01) 0.00
----- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS.... (0.88) (0.86) (0.83) (0.80) (0.63) (0.65) (0.63) (0.64) (0.39)
Net Asset Value End of
Period................. 15.84 15.45 15.84 14.20 15.80 15.88 15.57 15.68 14.73
Total Return............ 8.44% 3.11% 17.70% -5.14% 9.51% 6.23% 3.43% 10.88% 0.81%
Net Assets, End of
Period (Millions)...... 18.87 16.14 15.97 12.46 10.08 3.90 2.81 2.28 1.49
RATIOS AFTER FEE
WAIVERS:(1)
Ratio of Expenses to
Average Net
Assets(2)............. 0.85% 0.85% 0.85% 0.85% 0.85% 0.63% 0.75% 0.68% 0.01%
Ratio of Net Income to
Average Net
Assets(3)............. 5.67% 5.56% 5.54% 5.53% 5.08% 4.19% 4.18% 4.28% 5.46%
Portfolio Turnover
Rate................... 29.33% 14.04% 4.95% 0.04% 10.14% 9.95% 6.25% 7.81% 0.00%
Average Commission Rate
(cents per share)......
</TABLE>
(1) The Adviser waived 0.33% of the management fee during 1997 for the Growth
Fund and Opportunity Fund, 0.30% for the Fixed Income Fund and 0.52% for the
Municipal Income Fund. The Adviser intends that these fee waivers to be
permanent, (0.50% on the Municipal Income Fund) although the Adviser retains
the right to remove the waives after 12/31/98. As of 12/31/97, assuming no
waiver of management fee expenses, the ratios would have been:
<TABLE>
<CAPTION>
GROWTH OPPORTUNITY FIXED MUNICIPAL
------ ----------- ----- ---------
<S> <C> <C> <C> <C>
Expenses to Average Net Assets.............................. 1.30% 1.30% 1.15% 1.15%
Net income to Average Net Assets............................ .35% -0.17% 5.37% 3.67%
</TABLE>
(2) The Advisor waived 1.14% of the fee on the Municipal Income Fund in 1994,
0.47% in 1995, 0.40% in 1996, and 0.52% in 1997.
(3) Ratios were annualized in 1994 for the Opportunity Fund and the Municipal
Income Fund.
-3-
<PAGE> 8
INVESTMENT OBJECTIVES AND STRATEGIES
The descriptions that follow are designed to help you choose the Fund that
best fits your investment objectives.
THE JOHNSON GROWTH FUND
The investment objective of the Johnson Growth Fund (the "Growth Fund") is
long term capital growth. The Fund invests primarily in equity securities of
larger-sized companies (those with a market capitalization above $5 billion)
which the Fund's Adviser, Johnson Investment Counsel, Inc. (the "Adviser"),
believes have above average prospects for appreciation, based on certain
fundamental and technical standards of selection. The Adviser generally intends
to stay fully invested in such securities (subject to liquidity requirements),
regardless of the movement of stock prices. The Fund purchases securities
primarily of those companies that have a record of at least three years'
continuous operation, whose securities, in the opinion of the Adviser, are
generally marketable. Most equity securities in the Fund's portfolio are listed
on major stock exchanges or traded over-the-counter.
The Fund normally will invest primarily in common stocks of large,
established U.S. companies. The Fund will emphasize common stocks of high
quality growth companies which tend to have strong performance records, solid
market positions and reasonable financial strength. The Fund may also invest up
to 30% of its assets in foreign securities. Ordinarily, the Fund will invest in
common stocks, but it may invest in convertible securities, preferred stocks,
bonds, and corporate debt securities when the Adviser believes that these
securities offer opportunities for capital appreciation. Current income will not
be a substantial factor in the selection of securities.
THE JOHNSON OPPORTUNITY FUND
The investment objective of the Johnson Opportunity Fund (the "Opportunity
Fund") is long term capital growth. The Fund invests primarily in equity
securities of small to medium-sized companies (those with a market
capitalization under $5 billion) which the Fund's Adviser believes have above
average prospects for appreciation, based on certain fundamental and technical
standards of selection. The Adviser generally intends to stay fully invested in
such securities (subject to liquidity requirements), regardless of the movement
of stock prices. The Fund purchases securities primarily of those companies that
have a record of at least three years' continuous operation, whose securities,
in the opinion of the Adviser, are generally marketable. Most equity securities
in the Fund's portfolio are traded over-the-counter or are listed on major stock
exchanges.
Although the investment objective of the Fund is identical to that of the
Growth Fund, the Fund normally will invest primarily in common stocks of
smaller, less well-known companies which, in the opinion of the Adviser, offer
special opportunities for capital appreciation. A special opportunity may arise
when, in the opinion of the Adviser, the securities of a particular company have
significant potential to appreciate in value due to dynamic business changes,
including changing consumer demands and lifestyles, or specific company
developments such as new product or technological breakthrough, new channels of
distribution, revitalized management or industry competitive position, or any
other similar new opportunity. In addition, a situation may arise when the
securities of a particular company may have been overlooked by the market,
presenting, in the opinion of the Adviser, a favorable opportunity for
investment.
The Opportunity Fund may invest in stocks that present certain risks
including dependence on a limited product line, market, financial resources or
management group. In addition, many small to medium-sized company stocks trade
less frequently and have smaller volume than exchange listed stocks which may
cause the Fund to experience difficulty in establishing or liquidating positions
in these stocks. The value of these stocks may fluctuate more sharply than
larger, more established company stocks. Yet in the opinion of the Adviser, the
potential for capital appreciation in these stocks may be greater than average.
The Fund may invest up to 30% of its assets in foreign securities.
Ordinarily, the Fund will invest in common stocks, but it may invest in
convertible securities, preferred stocks, bonds, and corporate debt securities
when the Adviser believes that these securities offer opportunities for capital
appreciation. Current income will not be a factor in the selection of
securities.
-4-
<PAGE> 9
THE JOHNSON FIXED INCOME FUND
The investment objective of the Johnson Fixed Income Fund (the "Fixed
Income Fund") is a high level of income over the long term consistent with
preservation of capital. The Fund invests primarily in a broad range of
investment grade fixed income securities. The Fund may invest in fixed income
securities which are unrated if the Adviser determines that they are of
comparable quality to securities rated investment grade. See "Corporate Debt
Securities" for a discussion of such securities. Under normal circumstances, at
least 65% of the total assets of the Fund will be invested in fixed income
securities, including bonds, notes, convertible bonds, mortgage-backed
securities, including collateralized mortgage obligations (CMOs), domestic and
foreign corporate and government securities, municipal securities, zero coupon
bonds and short term obligations (such as commercial paper and repurchase
agreements).
THE JOHNSON MUNICIPAL INCOME FUND
The investment objective of the Johnson Municipal Income Fund (the
"Municipal Income Fund") is a high level of federally tax-free income over the
long term consistent with preservation of capital. The Fund invests primarily in
investment grade municipal securities issued by or on behalf of states,
territories and possessions of the United States, the District of Columbia and
other political subdivisions, agencies, instrumentalities and authorities, as
well as other qualifying issuers (including U.S. Virgin Islands, Puerto Rico and
Guam), the income from which is exempt from regular federal income tax. It is
anticipated that the majority of the investments in the Municipal Income Fund
will be Ohio municipal bonds, notes, and short term obligations which provide
income that is exempt from both Ohio personal income tax and regular federal
income tax.
The Fund may invest in municipal securities which are unrated if the
Adviser determines that they are of comparable quality to securities rated
investment grade. See "Municipal Debt Securities" for a discussion of such
securities. Under normal market conditions, at least 80% of the total assets of
the Fund will be invested in municipal bonds, notes, and short term obligations
which provide income that is exempt from regular federal income tax, including
the alternative minimum tax.
The Fund is a non-diversified fund under the Investment Company Act of
1940. Thus, its portfolio may be invested in securities of fewer issuers than
the portfolio of a diversified fund. This concentration may cause greater
fluctuation in the Fund's net asset value and may make the Fund more susceptible
to any single economic, political or regulatory occurrence than a diversified
fund. There also are risks of reduced diversification because the Fund invests
primarily in securities of issuers within the State of Ohio. If either Ohio or
any of its local governmental entities were to be unable to meet their financial
obligations, the income derived by the Fund, its net asset value or liquidity
and the ability to preserve or realize appreciation of the Fund's capital could
be adversely affected.
Political and economic factors affecting Ohio could affect the
creditworthiness and the value of the securities in its portfolio. The Ohio
economy, while diversifying more into the service and other non-manufacturing
areas, continues to rely in part on durable goods manufacturing largely
concentrated in motor vehicles and equipment, steel, rubber products and
household appliances. As a result, general economic activity in Ohio, as in many
other industrially developed states, tends to be more cyclical than in some
other states and in the nation as a whole. Economic problems, including high
unemployment, have had and may have varying effects on the different geographic
areas of the state and its political subdivisions. In line with national trends,
the state has experienced budget short falls due to weak revenue results and
higher-than-budgeted human service expenditures. Future national, regional or
statewide economic difficulties, and the resulting impact on state or local
government finances generally, could adversely affect the market value of Ohio
municipal securities held in the portfolio of the Fund or the ability of
particular obligors to make timely payments of debt service on those
obligations.
GENERAL
For temporary defensive purposes, any Fund may hold all or a portion of its
assets in money market instruments, securities of other no-load mutual funds or
repurchase agreements. If a Fund invests in shares of another mutual fund, the
shareholders of the Fund generally will be subject to duplicative management
fees. See "Investment Policies and Techniques" for a more detailed discussion of
each Fund's investment practices.
-5-
<PAGE> 10
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, no Fund can give any assurance that its investment objective will
be achieved. Current yields or rates of total return quoted by a Fund may be
higher or lower than past quotations, and there can be no assurance that any
current yield or rate of total return will be maintained.
HOW TO BUY, SELL
OR EXCHANGE SHARES
IN EACH FUND
The Funds and their transfer agent, Johnson Financial Services, Inc., can
be contacted at the same mailing address and telephone numbers. If you need
additional information on how to buy, sell or exchange shares in a Fund, please
contact:
FUNDS:
Johnson Mutual Funds Trust
3777 West Fork Road
Cincinnati, Ohio 45247
(513)-661-3100
(800)-541-0170
FAX: (513) 661-4901
TRANSFER AGENT:
Johnson Financial, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
(513) 661-3100
(800) 541-0170
FAX: (513) 661-4901
HOW TO BUY SHARES
The minimum initial investment for each Fund is $2,000, and $100 for each
subsequent investment. You may diversify your investments by choosing a
combination of any of the Funds for your investment program.
INITIAL PURCHASE
BY MAIL - You may purchase shares of any Fund by following these steps:
Complete and sign an application; Draft a check made payable to: Johnson Mutual
Funds; Identify on the check and on the application the Fund(s) in which you
would like to invest; Mail the application, check and any letter of instruction
to the Transfer Agent.
BY WIRE - You may purchase shares of any Fund by wiring Federal Funds from
your bank, which may charge you a fee for doing so. If money is to be wired for
a newly established account, you must call the Funds and provide the following
information:
Name(s) in which account is to be registered;
Address;
Social security or tax identification number;
Amount being wired;
Name of the Fund(s) you wish to invest in;
Name of the wiring bank;
Name and telephone number of a contact person at the bank initiating the wire.
The Funds or the Transfer Agent will provide you with your account number
and your bank must then wire the specified amount according to the following
instructions:
The Provident Bank/Cincinnati,
Johnson Mutual Funds
ABA #042000424
Account #0198-483
For Further Credit to:
Name of The Johnson Mutual Fund or Funds
- ------------------------------------------------------
Shareholder Account Name - _________
Shareholder Account Number - ____ (4 digit)
You must mail a completed application to Johnson Mutual Funds after opening
an account by wire transfer. If a completed application is not received or your
social security or tax identification number is not certified with a Form W-9,
your account will be subject to back-up withholding within 60 days.
Wire orders will be accepted only on a day on which the Funds and the
custodian bank are open for business. A wire
-6-
<PAGE> 11
purchase will not be considered made until the wired money is received and the
purchase is accepted by the Funds. Any delays which may occur in wiring money,
including delays which may occur in processing by the banks, are not the
responsibility of the Funds or the custodian bank. There is presently no fee for
the receipt of wired funds, but the Funds reserve the right to charge
shareholders for this service.
ADDITIONAL PURCHASES
You may buy additional shares of any Fund at any time (minimum of $100) by
mail or by bank wire. Each additional purchase request must contain:
Name of your account(s);
Account number(s);
Fund(s) in which you wish to invest.
Checks should be made payable to "Johnson Mutual Funds" and should be sent
to Johnson Mutual Funds at the address indicated throughout this prospectus. A
bank wire should be sent as outlined above. ACH (Automatic Clearing House)
transactions should be established in advance.
AUTOMATIC INVESTMENT OPTION
You may arrange to make additional investments ($100 minimum) automatically
on a monthly basis by transfers from your checking account. You must complete
the "Optional Automatic Investment Plan" section of the application and provide
the Trust with a voided check for the account you wish to use for the automatic
investment. You may terminate this automatic investment program at any time. You
may also establish the Automatic Investment Option at a later date.
OTHER PURCHASE INFORMATION
You may exchange securities that you own for shares of any of the Funds,
provided the securities meet the Fund's investment criteria and the Adviser
deems them to be a desirable investment for the Fund. Any exchange will be a
taxable event and you may incur certain transaction costs relating to the
exchange. Contact the Funds for additional information.
If an order, with payment in proper form, is received before the close of
trading on the New York Stock Exchange (currently 4:00 p.m. Eastern Time) by the
Funds or the Custodian, Fund shares will be purchased at the net asset value
determined as of the close of trading on that day. Otherwise, Fund shares will
be purchased at the net asset value determined as of the close of trading on the
New York Stock Exchange on the next business day.
The Funds do not issue share certificates. All shares are held in
non-certificate form registered on the books of the Fund's Transfer Agent for
the account of the shareholder. The rights to limit the amount of purchases and
to refuse to sell to any person are reserved by each Fund. If your check or wire
does not clear, you will be responsible for any loss incurred. If you are
already a shareholder, the Fund can sell shares from any identically registered
account in any of the Funds as reimbursement for any loss incurred. You may be
prohibited or restricted from making future purchases in any Fund.
HOW TO SELL SHARES
You may sell shares in any of your Funds by mail or telephone, without a
charge. Shares will be sold at the next share price (net asset value) calculated
after receipt of your properly completed request for a sale, or telephone call.
BY MAIL - All sales will be made at the net asset value (NAV) determined
after the sale request has been received by the Transfer Agent in proper order.
The proceeds of the sale may be more or less than the purchase price of your
shares, depending on the market value of the Fund's securities at the time of
your sale. Your request should be addressed to Johnson Mutual Funds. "Proper
order" means your request for a sale must include:
Letter of instruction;
Fund name;
Account number(s);
Account name(s);
Dollar amount or the number of shares you wish to sell.
This request must be signed by all registered share owner(s) in the exact
name(s) and any special capacity in which they are registered. For joint
accounts with right of survivorship, only one signature is required for
withdrawal.
-7-
<PAGE> 12
For sales in excess of $50,000, the Funds may require that signatures be
guaranteed by a bank or member firm of a national securities exchange. Signature
guarantees are for the protection of shareholders. At the discretion of the
Funds or the custodian bank, a shareholder may be required to furnish additional
legal documents to insure proper authorization. If you are not certain of the
requirements for a sale, please call the Transfer Agent at the number indicated
throughout this prospectus.
Each of the Funds, at its discretion and with shareholder consent, may use
securities from a Fund's portfolio to pay you for your shares, provided that the
Adviser deems that such a distribution of securities will not adversely affect
the Fund's portfolio. Any such transfer of securities to you will be a taxable
event and you may incur certain transaction costs relating to the transfer.
Contact the Funds for additional information.
BY TELEPHONE - Telephone redemption privileges are automatically available
to all shareholders. Shareholders may sell shares on any business day the New
York Stock Exchange is open by calling the Transfer Agent before 4:00 p.m.
Eastern Time. The Funds will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Such procedures will include
requiring a form of personal identification from the caller. Sale proceeds will
be mailed or wired at the shareholder's direction to the designated account. The
minimum amount that may be wired is $1,000 (wire charges of $10 will be deducted
from sales proceeds).
By using the telephone redemption and exchange privileges, a shareholder
authorizes the Funds to act upon the instruction of any person by telephone to
sell shares from the account and transfer the proceeds to the bank account
designated or effect an exchange into another Fund. The Funds and the Transfer
Agent are not liable for following instructions communicated by telephone that
they reasonably believe to be genuine. However, if they do not employ reasonable
procedures to confirm that telephone instructions are genuine, they may be
liable for any losses due to unauthorized or fraudulent instructions. The Funds
may change, modify or terminate the telephone redemption or exchange privilege
at any time.
BY SYSTEMATIC WITHDRAWAL PROGRAM - Shareholders may request that a
predetermined amount be sent by check or wired to them periodically, each month
or calendar quarter. A shareholder's account must have Fund shares with a value
of at least $10,000 in order to start a Systematic Withdrawal Program, and the
minimum amount that may be withdrawn each month or quarter under the Systematic
Withdrawal Program is $100. This program may be terminated by a shareholder or
the Funds at any time without charge or penalty and will become effective five
business days following receipt of your instructions.
In order to facilitate the delivery of the checks as close as possible to
the end of the month, shares will be sold on the 24th day of the month or the
last business day prior to the 24th day if the 24th falls on a holiday or
weekend. A withdrawal under the Systematic Withdrawal Program involves a sale of
shares, and may result in a gain or loss for federal income tax purposes. In
addition, if the amount withdrawn exceeds the dividends credited to the
shareholder's account, the account ultimately may be depleted.
ADDITIONAL INFORMATION - Sale requests specifying a certain date or share
price cannot be accepted and will be returned. If you invest by wire, you may
sell your shares on the first business day following such purchase. However, if
you invest by a personal, corporate, cashier's or government check, or through
any of our telephone services, the sales proceeds will not be paid until the
first business day after the 10th calendar day following receipt of payment by
the Fund. Exchanges into any of the other Funds are, however, permitted without
the ten day waiting period.
We will mail or wire the proceeds to you on or before the 5th business day
following the sale. Also, when the New York Stock Exchange is closed (or when
trading is restricted) for any reason other than its customary weekend or
holiday closing or under any emergency circumstances, as determined by the
Securities and Exchange Commission, we may suspend sales of Fund shares or
postpone payment dates. If you are unable to accomplish your transaction by
telephone (for example, during times of unusual market activity), consider
sending your order by express mail to the Funds, or facsimile to (513) 385-8947.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, each Fund reserves the right to require any shareholder to sell all of
his or her shares in the Fund on 30 days' written notice if the value of his or
her shares in the Fund is less than $2,000 due to sales of Fund shares, or such
-8-
<PAGE> 13
other minimum amount as the Fund may determine from time to time. An involuntary
sale will create a capital gain or a capital loss, which may have tax
consequences about which you should consult your tax adviser. A shareholder may
increase the value of his or her shares in the Fund to the minimum amount within
the 30 day period. Each share of each Fund is subject to a sale at any time if
the Board of Trustees determines in its sole discretion that failure to sell may
have materially adverse consequences to all or any of the shareholders of the
Trust or any Fund of the Trust.
HOW TO EXCHANGE SHARES
As a shareholder in any Fund, you may exchange shares valued at $1,000 or
more for shares of any other Fund in the Johnson Mutual Fund Trust. You may make
an exchange by telephone or by written request.
BY TELEPHONE - Shareholders may call the Transfer Agent to exchange shares.
An exchange may also be made by written request signed by all registered owners
of the account mailed to the Transfer Agent. Requests for exchanges received
prior to close of trading on the New York Stock Exchange (currently 4:00 p.m.
Eastern Time) will be processed at the next determined net asset value as of the
close of business on the same day.
An exchange is made by selling shares of one Fund and using the proceeds to
buy shares of another Fund, with the NAV for the sale and the purchase
calculated on the same day. See "How to Sell Shares. An exchange results in a
sale of shares for federal income tax purposes. If you make use of the exchange
privilege, you may realize either a long term or short term capital gain or loss
on the shares sold.
Before making an exchange, you should consider the investment objective of
the Fund to be purchased. If your exchange creates a new account, you must
satisfy the requirements of the Fund in which shares are being purchased. You
may make an exchange to a new account or an existing account; however, the
account ownership must be identical. Exchanges may be made only in states where
an exchange may legally be made. The Funds reserve the right to terminate or
modify the exchange privilege in the future upon 60 days prior notice to the
shareholders.
SHARE PRICE CALCULATION
The value of an individual share in a Fund, the net asset value, (NAV) is
calculated by dividing the total value of a Fund's investments and other assets
(including accrued income), less any liabilities (including estimated accrued
expenses), by the number of shares outstanding, rounded to the nearest cent. Net
asset value per share is determined as of the close of the New York Stock
Exchange (4:00 p.m. Eastern Time) on each day that the exchange is open for
business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of each Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price of the day.
Lacking a last sale price, a security is valued at its last bid price except
when, in the Adviser's opinion, the last bid price does not accurately reflect
the current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at their
last bid price. When market quotations are not readily available, or when the
Adviser determines the last bid price does not accurately reflect the current
value or when restricted securities are being valued, such securities are valued
as determined in good faith by the Adviser, in conformity with guidelines
adopted by and subject to review of the Board of Trustees of the Trust.
Fixed income securities may be valued on the basis of prices furnished by a
pricing service when the Adviser believes such prices accurately reflect the
fair market value of such securities. A pricing service utilizes electronic data
processing techniques to determine prices for normal institutional-size trading
units of debt securities without regard to sale or bid prices. When prices are
not readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within
-9-
<PAGE> 14
60 days of maturity, are valued by using the amortized cost method of valuation.
DIVIDENDS AND
DISTRIBUTIONS
The Growth Fund, the Fixed Income Fund and the Municipal Income Fund intend
to distribute substantially all of their net investment income as dividends to
shareholders on a quarterly basis. The Opportunity Fund intends to distribute
substantially all of its net investment income as dividends to shareholders on
an annual basis at year end. Each Fund intends to distribute its net short-term,
net mid-term and net long-term capital gains once a year, at year end.
Dividends and capital gain distributions are automatically reinvested in
additional shares at the net asset value per share on the distribution date. An
election to receive a cash payment of dividends and/or capital gain
distributions may be made in the application to purchase shares or by separate
written notice to the Transfer Agent. Shareholders will receive a confirmation
statement reflecting the payment and reinvestment of dividends and summarizing
all other transactions. If cash payment is requested, a check normally will be
mailed within five business days after the payable date. If you withdraw your
entire account, all dividends accrued to the time of withdrawal, including the
day of withdrawal, will be paid at that time. Distributions of less than $10 and
distributions on shares purchased within the last 30 days, however, will not be
paid in cash and will be reinvested. You may elect to have distributions on
shares held in IRA's and 403(b) plans paid in cash only if you are 59 1/2 years
old or permanently and totally disabled or if you otherwise qualify under the
applicable plan.
TAXES
Each Fund intends to qualify each year as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended. By so qualifying, a Fund
will not be subject to federal income taxes to the extent that it distributes
substantially all of its net investment income and any net realized capital
gains.
For federal income tax purposes, each Fund is treated as a separate entity
for the purpose of computing taxable net income and net realized capital gains
and losses. Dividends paid by each Fund from ordinary taxable income are taxable
to shareholders as ordinary income, but may be eligible in part for the
dividends received deduction for corporations. Pursuant to the Tax Reform Act of
1986, all distributions of net capital gains to individuals are taxed at the
same rate as ordinary income. All distributions of net capital gains to
corporations are taxed at regular corporate rates. Any distributions designated
as being made from net realized long term capital gains are taxable to
shareholders as long term capital gains regardless of the holding period of the
shareholder. The tax consequences described in this section apply whether
distributions are taken in cash or reinvested in additional shares.
Shareholders are not required to pay federal regular income tax on any
dividends received from a Fund that represent net interest on tax-exempt
municipal bonds. However, under the Tax Reform Act of 1986, dividends
representing net interest earned on some municipal bonds may be included in
calculating the federal individual alternative minimum tax or the federal
alternative minimum tax for corporations.
The alternative minimum tax, currently equal to 24% of alternative minimum
taxable income for individuals, and 20% for corporations, applies when it
exceeds the regular tax for the taxable year. Alternative minimum taxable income
is equal to the regular taxable income of the taxpayer increased by certain "tax
preference" items not included in regular taxable income and reduced by only a
portion of the deductions allowed in the calculation of the regular tax.
The Tax Reform Act of 1986 treats interest on certain "private activity"
bonds issued after August 7, 1986, as a tax preference item for both individuals
and corporations. Unlike traditional governmental purpose municipal bonds, which
finance roads, schools, libraries, prisons and other public facilities, private
activity bonds provide benefits to private parties. The Municipal Income Fund
may purchase all types of municipal bonds, including private activity bonds.
Thus, should it purchase any such bonds, a
-10-
<PAGE> 15
portion of the Fund's dividends may be treated as a tax
preference item.
Each Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their tax
advisers regarding specific questions as to federal, state or local taxes, the
tax effect of distributions and withdrawals from a Fund and the use of the
Exchange Privilege.
Unless a shareholder of a Fund furnishes his or her certified taxpayer
identification number (social security number for individuals) and certifies
that he or she is not subject to backup withholding, the Fund will be required
to withhold and remit to the U.S. Internal Revenue Service 31% of the dividends,
distributions and sales proceeds payable to the shareholder. Shareholders should
be aware that, under Internal Revenue Service regulations, a Fund may be fined
$50 annually for each account for which a certified taxpayer identification
number is not provided. In the event that such a fine is imposed with respect to
a specific shareholder account in any year, the Fund will make a corresponding
charge against the shareholder account.
OPERATION OF THE FUNDS
The Johnson Growth Fund and Johnson Fixed Income Fund were organized as
series of the Johnson Mutual Funds Trust (the "Trust") on September 30, 1992,
and commenced operations on January 4, 1993. The Johnson Opportunity Fund and
the Johnson Municipal Income Fund were organized as series of the Trust on
February 15, 1994, and commenced operations on May 16, 1994. The Johnson Realty
Fund was organized as a series of the Trust on October 17, 1997 and commenced
operation on January 2, 1998. To obtain a separate prospectus for the Johnson
Realty Fund, please contact the Funds at the address listed throughout this
prospectus.
The Growth Fund, Opportunity Fund, and Fixed Income Fund are diversified
series, and the Municipal Income Fund is a non-diversified series, of Johnson
Mutual Funds Trust, an open-end management investment company organized as an
Ohio business trust on September 30, 1992. The Board of Trustees supervises the
business activities of the Trust. Like other mutual funds, the Trust retains
various organizations to perform specialized services. It retains Johnson
Investment Counsel, Inc., 3777 West Fork Road, Cincinnati, Ohio 45247 (the
"Adviser") to manage the Trust's investments and its business affairs. The
Adviser is a Cincinnati-based company of which Timothy E. Johnson is the
controlling shareholder. Since its inception in 1965, it has grown to become the
largest independent investment advisory firm in the Cincinnati area. The Adviser
has over $2.1 billion of assets under management with services extending to a
wide range of clients, including businesses, individuals, foundations, and
institutional endowments. Johnson Investment Counsel, Inc. solely provides
investment management, through individually managed portfolios and has no
commission-based affiliations from the sale of products. The investment
decisions for each Fund are made by a committee of the Adviser, which is
responsible for the day-to-day management of the portfolio of each Fund.
The Growth Fund and the Opportunity Fund are each authorized to pay the
Adviser a fee equal to an annual average rate of 1.30% of its average daily net
assets, although the Adviser has committed to limit its fee to 0.95% of such
assets. The Fixed Income Fund and the Municipal Income Fund are each authorized
to pay the Adviser a fee equal to 1.15% of its average daily net assets,
although the Adviser has committed to limit its fee to 0.85% of such assets in
the Fixed Income Fund and 0.65% of such assets in the Municipal Income Fund. The
Adviser intends that these fee limitations will be permanent, although the
Adviser reserves the right to remove them at any time after December 31, 1998 .
The Adviser pays all of the expenses of each Fund except brokerage, taxes,
interest and extraordinary expenses. It should be noted that most investment
companies pay their own operating expenses directly, while each Fund's expenses
except those specified above, are paid by the Adviser.
The Trust retains Johnson Financial, Inc. to serve as transfer agent and
dividend paying agent. Johnson Financial, Inc. is a wholly owned subsidiary of
Adviser and thus it and the Adviser may be deemed to be under common control.
Johnson Financial, Inc. operates under separate contractual agreements with the
Trust.
-11-
<PAGE> 16
INVESTMENT POLICIES AND
TECHNIQUES
This section contains general information about various types of securities
and investment techniques. Each Fund may invest in any security or employ any
investment technique described in this section unless specifically noted
otherwise.
EQUITY SECURITIES
Each Fund may invest in equity securities, which includes common stocks,
preferred stocks, convertible preferred stocks, convertible debentures, rights
and warrants. Convertible preferred stock is preferred stock that can be
converted into common stock pursuant to its terms. Convertible debentures are
debt instruments that can be converted into common stock pursuant to their
terms. Warrants are options to purchase equity securities at a specified price
valid for a specific time period. Rights are similar to warrants, but normally
have shorter durations. A Fund may not invest more than 5% of its net assets at
the time of purchase in rights and warrants.
FIXED INCOME SECURITIES
Fixed income securities include corporate debt securities, U.S. government
securities, mortgage-backed securities, zero coupon bonds, asset-backed and
receivable-backed securities and participation interests in such securities.
Preferred stock and certain common stock equivalents may also be considered to
be fixed income securities. Fixed income securities are generally considered to
be interest rate sensitive, which means that their value will generally decrease
when interest rates rise and increase when interest rates fall. Securities with
shorter maturities, while offering lower yields, generally provide greater price
stability than longer term securities and are less affected by changes in
interest rates.
CORPORATE DEBT SECURITIES - Corporate debt securities are long and short
term debt obligations issued by companies (such as publicly issued and privately
placed bonds, notes and commercial paper). The Adviser considers corporate debt
securities to be of investment grade quality if they are rated BBB or higher by
Standard & Poor's Corporation ("S&P"), Baa or higher by Moody's Investors
Services, Inc. ("Moody's"), or if unrated, determined by the Adviser to be of
comparable quality. Investment grade debt securities generally have adequate to
strong protection of principal and interest payments. In the lower end of this
category, credit quality may be more susceptible to potential future changes in
circumstances and the securities have speculative elements. If the rating of a
security by S&P or Moody's drops below investment grade, the Adviser will
dispose of the security as soon as practicable (depending on market conditions)
unless the Adviser determines based on its own credit analysis that the security
provides the opportunity of meeting the Fund's objective without presenting
excessive risk. No Fund will invest more than 5% of the value of its net assets
in securities that are below investment grade. If, as a result of a downgrade, a
Fund holds more than 5% of the value of its net assets in securities rated below
investment grade, the Fund will take action to reduce the value of such
securities below 5%.
MUNICIPAL SECURITIES - Municipal securities are long and short term debt
obligations issued by or on behalf of states, territories and possessions of the
United States, the District of Columbia and their political subdivisions,
agencies, instrumentalities and authorities, as well as other qualifying issuers
(including the U.S. Virgin Islands, Puerto Rico and Guam), the income from which
is exempt from regular federal income tax and exempt from state tax in the state
of issuance.
Municipal bonds are issued to provide funding for various public purposes,
including general purpose financing for state and local governments (general
obligation bonds) as well as financing for specific projects or facilities.
Municipal bonds may be backed by the issuer's pledge of its faith, credit and
full taxing power for payment of both interest and principal, or by the revenues
generated from a specific project, or the credit of a private organization. Some
municipal bonds are insured by private insurance companies while others are
supported by letters of credit furnished by domestic or foreign banks. The Funds
may invest in other municipal securities such as variable rate demand
instruments. The Funds may also invest in municipal notes, which are generally
used to provide short term capital needs and have maturities of one year or
less, as well as tax-exempt commercial paper. Municipal notes include tax
anticipation notes, revenue anticipation notes, bond anticipation notes and
construction loan
-12-
<PAGE> 17
notes. Tax exempt commercial paper typically represents short term, unsecured
negotiable promissory notes.
The Municipal Income Fund may invest 25% or more of its assets in
tax-exempt obligations issued by municipal governments or political subdivisions
of governments within a particular segment of the bond market, such as housing
agency bonds, hospital revenue bonds or airport bonds. It is possible that
economic, business or political developments or other changes affecting one bond
may also affect other bonds in the same segment in the same manner, thereby
potentially increasing the risk of such investments. In addition, from time to
time, the Municipal Income Fund may invest more than 25% of the value of its
total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. However, the Fund will not invest more
than 25% of its assets in securities backed by non-governmental users which are
in the same industry.
It is the Municipal Income Fund's intent to minimize the purchase of
municipal securities that are subject to alternative minimum tax. Fund
distributions from interest on municipal securities that are subject to
alternative minimum tax, such as certain private activity bonds, will be a
preference item for purposes of calculating individual and corporate alternative
minimum taxes, depending on the shareholders' particular situation. In addition,
state and local tax may apply, depending on the shareholders' state and local
tax laws.
The Adviser considers municipal securities to be of investment grade
quality if they are rated BBB or higher by S&P, Baa or higher by Moody's, or if
unrated, determined by the Adviser to be of comparable quality. Investment grade
debt securities generally have adequate to strong protection of principal and
interest payments. In the lower end of this category, credit quality may be more
susceptible to potential future changes in circumstances and the securities have
speculative elements. If the rating of a security by S&P or Moody's drops below
investment grade, the Adviser will dispose of the security as soon as
practicable (depending on market conditions) unless the Adviser determines based
on its own credit analysis that the security provides the opportunity of meeting
the Fund's objective without presenting excessive risk. No Fund will invest more
than 5% of the value of its net assets in securities that are below investment
grade. If, as a result of a downgrade, a Fund holds more than 5% of the value of
its net assets in securities rated below investment grade, the Fund will take
action to reduce the value of such securities below 5%.
U.S. GOVERNMENT SECURITIES - U.S. government securities may be backed by
the credit of the government as a whole or only by the issuing agency. U.S.
Treasury bonds, notes, and bills and some agency securities, such as those
issued by the Federal Housing Administration and the Government National
Mortgage Association (GNMA), are backed by the full faith and credit of the U.S.
government as to payment of principal and interest and are the highest quality
government securities. Other securities issued by U.S. government agencies or
instrumentalities, such as securities issued by the Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are supported only by the credit of
the agency that issued them, and not by the U.S. government. Securities issued
by the Federal Farm Credit System, the Federal Land Banks, and the Federal
National Mortgage Association (FNMA) are supported by the agency's right to
borrow money from the U.S. Treasury under certain circumstances, but are not
backed by the full faith and credit of the U.S. government.
MORTGAGE-BACKED SECURITIES - represent an interest in a pool of mortgages.
These securities, including securities issued by FNMA and GNMA, provide
investors with payments consisting of both interest and principal as the
mortgages in the underlying mortgage pools are repaid. Unscheduled or early
payments on the underlying mortgages may shorten the securities' effective
maturities. The average life of securities representing interests in pools of
mortgage loans is likely to be substantially less than the original maturity of
the mortgage pools as a result of prepayments or foreclosures of such mortgages.
Prepayments are passed through to the registered holder with the regular monthly
payments of principal and interest, and have the effect of reducing future
payments. To the extent the mortgages underlying a security representing an
interest in a pool of mortgages are prepaid, a Fund may experience a loss (if
the price at which the respective security was acquired by the Fund was at a
premium over par, which represents the price at which the security will be sold
upon prepayment). In addition, prepayments of such securities held by a Fund
will reduce the share price of the Fund
-13-
<PAGE> 18
to the extent the market value of the securities at the time of prepayment
exceeds their par value. Furthermore, the prices of mortgage-backed securities
can be significantly affected by changes in interest rates. Prepayments may
occur with greater frequency in periods of declining mortgage rates because,
among other reasons, it may be possible for mortgagors to refinance their
outstanding mortgages at lower interest rates. In such periods, it is likely
that any prepayment proceeds would be reinvested by a Fund at lower rates of
return.
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS) - Securities collateralized by
mortgages or mortgage-backed securities. CMOs are issued with a variety of
classes or series, which have different maturities and are often retired in
sequence. CMOs may be issued by governmental or non-governmental entities such
as banks and other mortgage lenders. Non-government securities may offer a
higher yield but also may be subject to greater price fluctuation than
government securities. Investments in CMOs are subject to the same risks as
direct investments in the underlying mortgage and mortgage-backed securities. In
addition, in the event of a bankruptcy or other default of an entity who issued
the CMO held by a Fund, the Fund could experience both delays in liquidating its
position and losses.
ZERO COUPON BONDS - Zero coupon bonds do not make regular interest
payments. Instead they are sold at a deep discount from their face value. Each
Fund will accrue income on such bonds for tax and accounting purposes, in
accordance with applicable law. This income will be distributed to shareholders.
Because no cash is received at the time such income is accrued, the Fund may be
required to liquidate other portfolio securities to satisfy its distribution
obligations. Because a zero coupon bond does not pay current income, its price
can be very volatile when interest rates change. In calculating its dividend,
the funds take into account as income a portion of the difference between a zero
coupon bond's purchase price and its face value. Certain types of CMOs pay no
interest for a period of time and therefore present risks similar to zero coupon
bonds.
The Federal Reserve creates STRIPS (Separate Trading of Registered Interest
and Principal of Securities) by separating the coupon payments and the principal
payment from an outstanding Treasury security and selling them as individual
securities. A broker-dealer creates a derivative zero by depositing a Treasury
security with a custodian for safekeeping and then selling the coupon payments
and principal payment that will be generated by this security separately.
Examples are Certificates of Accrual on Treasury Securities (CATs), Treasury
Investment Growth Receipts (TIGRs) and generic Treasury Receipts (TRs). These
derivative zero coupon obligations are not considered to be government
securities unless they are part of the STRIPS program. Original issue zeros are
zero coupon securities issued directly by the U.S. government, a government
agency, or by a corporation.
FOREIGN SECURITIES - The Funds may invest in foreign equity securities
through the purchase of American Depository Receipts. American Depository
Receipts are certificates of ownership issued by a U.S. bank as a convenience to
the investors in lieu of the underlying shares which it holds in custody. The
Funds may also invest in dollar denominated foreign fixed-income securities
issued by foreign companies, foreign governments or international organizations
and determined by the Adviser to be comparable in quality to investment grade
domestic securities. Neither Fund will invest in a foreign security if,
immediately after a purchase and as a result of the purchase, the total value of
foreign securities owned by the Fund would exceed 30% of the value of the total
assets of the Fund. To the extent that a Fund does invest in foreign securities,
such investments may be subject to special risks, such as changes in
restrictions on foreign currency transactions and rates of exchange, and changes
in the administrations or economic and monetary policies of foreign governments.
REPURCHASE AGREEMENTS - A repurchase agreement is a short term investment
in which the purchaser acquires ownership of a U.S. Government security (which
may be of any maturity) and the seller agrees to repurchase the obligation at a
future time at a set price, thereby determining the yield during the purchaser's
holding period (usually not more than seven days from the date of purchase). Any
repurchase transaction in which a Fund engages will require full
collateralization of the seller's obligation during the entire term of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller, a Fund could experience both delays in liquidating the underlying
security and losses in value. However, the Funds intend to enter into repurchase
agreements only with the Trust's custodian, other banks with assets of $1
billion or more and registered securities
-14-
<PAGE> 19
dealers determined by the Adviser (subject to review by the Board of Trustees)
to be creditworthy. The Adviser monitors the creditworthiness of the banks and
securities dealers with which a Fund engages in repurchase transactions, and a
Fund will not invest more than 15% of its net assets in illiquid securities,
including repurchase agreements maturing in more than seven days.
WHEN ISSUED SECURITIES AND FORWARD COMMITMENTS
Each Fund may buy and sell securities on a when-issued or delayed delivery
basis, with payment and delivery taking place at a future date. The price and
interest rate that will be received on the securities are each fixed at the time
the buyer enters into the commitment. A Fund may enter into such forward
commitments if they hold, and maintain until the settlement date in a separate
account at the Fund's Custodian, cash or U.S. government securities in an amount
sufficient to meet the purchase price. The Funds will not invest more than 25%
of their respective total assets in forward commitments. Forward commitments
involve a risk of loss if the value of the security to be purchased declines
prior to the settlement date. Any change in value could increase fluctuations in
a Fund's share price and yield. Although a Fund will generally enter into
forward commitments with the intention of acquiring securities for its
portfolio, a Fund may dispose of a commitment prior to the settlement if the
Adviser deems it appropriate to do so.
OPTIONS TRANSACTIONS
Each Fund may write (sell) covered call options on individual securities
and on stock indices and engage in related closing transactions. A covered call
option on a security is an agreement to sell a particular portfolio security if
the option is exercised at a specified price, or before a set date. An option on
a stock index gives the option holder the right to receive, upon exercising the
option, a cash settlement amount based on the difference between the exercise
price and the value of the underlying stock index. Risks associated with writing
covered options include the possible inability to effect closing transactions at
favorable prices and an appreciation limit on the securities set aside for
settlement. There is no assurance of liquidity in the secondary market for
purposes of closing out covered call option positions.
Each Fund may purchase put and call options on individual securities and on
stock indices for the purpose of hedging against the risk of unfavorable price
movements adversely affecting the value of the Fund's securities or securities
the Fund intends to buy. Each Fund may also sell put and call options in closing
transactions.
GENERAL
Each Fund may engage in short sales if, at the time of the short sale, the
Fund owns or has the right to obtain an equal amount of the security being sold
short at no additional cost. Each Fund may also borrow money for liquidity
purposes in an amount not exceeding 5% of the Fund's total assets at the time
the borrowing is made. Assets of a Fund may be pledged in connection with
borrowings. See "Investment Limitations" in the Statement of Additional
Information.
-15-
<PAGE> 20
GENERAL INFORMATION
FUNDAMENTAL POLICIES
The investment limitations set forth in the Statement of Additional
Information as fundamental policies may not be changed without the affirmative
vote of the majority of the outstanding shares of the applicable Fund. The
investment objective of each Fund may be changed without the affirmative vote of
a majority of the outstanding shares of the Fund.
PORTFOLIO TURNOVER
Each of the Funds does not intend to purchase or sell securities for short
term trading purposes. Each Fund will, however, sell any portfolio security
(without regard to the length of time it has been held) when the Adviser
believes that market conditions, creditworthiness factors or general economic
conditions warrant such action. It is anticipated that the Growth Fund, the
Fixed Income Fund and the Municipal Income Fund will have portfolio turnover
rates of less than 50%. It is anticipated that the Opportunity Fund will have a
portfolio turnover rate of less than 100%.
SHAREHOLDER RIGHTS
Any Trustee of the Trust may be removed by vote of the shareholders holding
not less than two-thirds of the outstanding shares of the Trust. The Trust does
not hold an annual meeting of shareholders. When matters are submitted to
shareholders for a vote, each shareholder is entitled to one vote for each whole
share he owns and fractional votes for fractional shares he owns. All shares of
a Fund have equal voting rights and liquidation rights.
The beneficial ownership, either directly or indirectly, of more than 25%
of the voting securities of a Fund creates a presumption of control of the Fund
under Section 2(a)(9) of the Investment Company Act of 1940. As of March 31,
1998, the Johnson Investment Counsel, Inc. Profit Sharing Plan, discretionary
advisory accounts of Johnson Investment Counsel, Inc., and other accounts which
officers and/or employees may control, may be deemed to have owned in the
aggregate more than 25% of the shares of the Growth Fund, the Opportunity Fund,
the Fixed Income Fund and the Municipal Income Fund.
INVESTMENT PERFORMANCE
Each Fund may periodically advertise "average annual total return." The
"total return" of a Fund refers to the dividends and distributions generated by
an investment in the Fund plus the change in the value of the investment from
the beginning of the period to the end of the period. The "average annual total
return" of a Fund refers to the rate of total return for each year of the period
which would be equivalent to the cumulative total return for the period. All
dividends and distributions earned on the investment are assumed to be
reinvested.
Each Fund may also periodically advertise its total return and cumulative
total return over various periods in addition to the value of a $10,000
investment (made on the date of the initial public offering of the Fund's
shares) as of the end of a specified period. The "total return" and "cumulative
total return" for each Fund are calculated as indicated above for "total
return."
The Fixed Income Fund and Municipal Income Fund may each periodically
advertise its yield for a thirty day or one month period. The "yield" of a Fund
refers to the income generated by an investment in the Fund over the period,
calculated on a per share basis (using the net asset value per share on the last
day of the period and the average number of shares outstanding during the
period). A Fund's yield quotation will always be accompanied by the Fund's
average annual total return information described above. In addition, the
Municipal Income Fund may advertise together with its "yield" a tax-equivalent
yield which reflects the yield which would be required of a taxable investment
at a stated income tax rate in order to equal the Fund's "yield".
All Funds may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Morningstar or Lipper Analytical Services). Performance information may
be quoted numerically or may be presented in a table, graph or other
illustration. In addition, Fund performance
-16-
<PAGE> 21
may be compared to well-known indices of market performance including the
Standard & Poor's (S&P) 500 Index, S&P MidCap 400 Index, S&P/BARRA Growth and
Value Indices, the Dow Jones Industrial Average, or the Lehman Brothers Indices.
The Trust's annual report contains additional performance information that will
be made available upon request and without charge.
The advertised performance data of each Fund is based on historical
performance and is not intended to indicate future performance. Yields and rates
of total return quoted by a Fund may be higher or lower than past quotations,
and there can be no assurance that any yield rate of total return will be
maintained. The principal value of an investment in each Fund will fluctuate so
that a shareholder's shares, when sold, may be worth more or less than the
shareholder's original investment.
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the sale of these Funds. Representations other than those contained in this
Prospectus must not be relied upon as being authorized by any Fund. This
Prospectus does not constitute an offer by any Fund to sell its shares in any
state to any person to whom it is unlawful to make such offer in such state.
Johnson Mutual Funds Trust, 3777 West Fork Road, Cincinnati, Ohio 45247, (513)
661-3100
-17-
<PAGE> 22
INVESTMENT ADVISER
Johnson Investment Counsel, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
TRUSTEES AND OFFICERS
<TABLE>
<C> <S>
Timothy E. Johnson Trustee, President
John W. Craig Trustee
Ronald H. McSwain Trustee
Kenneth S. Shull Trustee
Dale H. Coates Vice President
Richard T. Miller Vice President
Dianna J. Rosenberger CFO, Treasurer
David C. Tedford Secretary
</TABLE>
TRANSFER AGENT AND FUND ACCOUNTANT
Johnson Financial, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
CUSTODIAN
The Provident Bank
Three East Fourth Street
Cincinnati, Ohio 45202
AUDITORS
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, Ohio 44145
Johnson Mutual Funds Trust, 3777 West Fork Road, Cincinnati, Ohio 45247, (513)
661-3100
<PAGE> 23
JOHNSON
MUTUAL FUNDS
STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1998
JOHNSON GROWTH FUND
JOHNSON OPPORTUNITY FUND
JOHNSON FIXED INCOME FUND
JOHNSON MUNICIPAL INCOME FUND
JOHNSON MUTUAL FUNDS TRUST
3777 WEST FORK ROAD
CINCINNATI, OH 45247
(513) 661-3100
(800) 541-0170
FAX (513) 661-4901
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the Prospectus of Johnson Mutual Funds dated May 1, 1998. A
copy of the Prospectus can be obtained by writing the Trust at 3777 West Fork
Road, Cincinnati, Ohio 45247, or by calling the Trust at (513) 661-3100.
<PAGE> 24
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
JOHNSON MUTUAL FUNDS TRUST
3777 WEST FORK ROAD
CINCINNATI, OHIO 45247
TABLE OF CONTENTS
-----------------
PAGE
----
DESCRIPTION OF THE TRUST................................................. 3
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS............................ 3
INVESTMENT LIMITATIONS................................................... 6
STATE RESTRICTIONS........................................................ 7
TRUSTEES AND OFFICERS......................................................8
THE INVESTMENT ADVISER................................................... 10
PORTFOLIO TRANSACTIONS AND BROKERAGE..................................... 11
DETERMINATION OF SHARE PRICE............................................. 12
INVESTMENT PERFORMANCE................................................... 12
CUSTODIAN ............................................................... 13
TRANSFER AGENT........................................................... 13
ACCOUNTANTS.............................................................. 13
FINANCIAL STATEMENTS..................................................... 13
2
<PAGE> 25
DESCRIPTION OF THE TRUST
Johnson Mutual Funds Trust (the "Trust"), formerly Johnson Investment
Mutual Funds Trust, is an open-end investment company established under the laws
of Ohio by an Agreement and Declaration of Trust dated September 30, 1992 (the
"Trust Agreement"). The Trust Agreement permits the Trustees to issue an
unlimited number of shares of beneficial interest of separate series without par
value. Shares of four series have been authorized, which shares constitute the
interests in the Johnson Growth Fund, the Johnson Opportunity Fund, the Johnson
Fixed Income Fund, and the Johnson Municipal Income Fund.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the officers of the Trust, subject to
the review and approval of the Board of Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his express consent.
Upon sixty days prior written notice to shareholders, a Fund may make
redemption payments in whole or in part in securities or other property if the
Trustees determine that existing conditions make cash payments undesirable. For
other information concerning the purchase and redemption of shares of the Funds,
see "How to Buy, Sell, or Exchange Shares in Each Fund," "How to Buy Shares,"
"How to Sell Shares" and "How to Exchange Shares" in the Prospectus. For a
description of the methods used to determine the share price and value of each
Fund's assets, see "Share Price Calculation" in the Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS
This section contains a more detailed discussion of some of the
investments a Fund may make and some of the techniques it may use, as described
in the Prospectus (see "Investment Objectives and Strategies" and "Investment
Policies and Techniques").
A. CORPORATE DEBT SECURITIES. Corporate debt securities are bonds or
notes issued by corporations and other business organizations, including
business trusts, in order to finance their credit needs. Corporate debt
securities include commercial paper which consists of short term (usually from
one to two hundred seventy days) unsecured promissory notes issued by
corporations in order to finance their current operations.
B. MUNICIPAL SECURITIES. Municipal securities are issued to obtain
funds to construct, repair or improve various public facilities such as
airports, bridges, highways, hospitals, housing, schools, streets and water and
sewer works, to pay general operating expenses or to refinance outstanding
debts. They also may be issued to finance various private activities, including
the lending of funds to public or private institutions for construction of
housing, educational or medical facilities or the financing of privately owned
or operated facilities. Municipal securities consist of tax exempt bonds, tax
exempt notes and tax exempt commercial paper. Tax exempt notes generally are
used to provide short term capital needs and generally have maturities of one
year or less. Tax exempt commercial paper typically represents short term,
unsecured, negotiable promissory notes.
The two principal classifications of municipal securities are
"general obligations" and "revenue" bonds. General obligation bonds are backed
by the issuer's full credit and taxing power. Revenue bonds are backed by the
revenues of a specific project, facility or tax. Industrial development revenue
bonds are a specific type of revenue bond backed by the credit of the private
issuer of the facility, and therefore investments in these bonds have more
potential risk that the issuer will not be able to meet scheduled payments of
principal and interest.
C. ZERO COUPON AND PAY IN KIND BONDS. Corporate debt securities and
municipal obligations include so-called "zero coupon" bonds and "pay-in-kind"
bonds. Zero coupon bonds are issued at a significant discount from their
principal amount in lieu of paying interest periodically. Pay-in-kind bonds
allow the issuer, at its option, to make current interest payments on the bonds
either in cash or in additional bonds. The value of zero coupon bonds and
pay-in-kind bonds is subject to greater fluctuation in response to changes in
market interest rates than bonds which make regular payments of interest. Both
of these types of bonds allow an issuer to avoid the need to generate cash to
meet current interest payments. Accordingly, such bonds may involve greater
credit risks than bonds which make regular payment of interest. Even though zero
coupon bonds and pay-in-kind bonds do not pay current interest in cash, the
applicable Fund is required to accrue interest income on such investments and to
distribute such amounts at least annually to shareholders. Thus, a
3
<PAGE> 26
Fund could be required at times to liquidate other investments in order to
satisfy its dividend requirements. No Fund will invest more than 5% of its net
assets in pay-in-kind bonds.
D. FINANCIAL SERVICE INDUSTRY OBLIGATIONS. Financial service industry
obligations include among others, the following:
(1) CERTIFICATES OF DEPOSIT. Certificates of deposit are negotiable
certificates evidencing the indebtedness of a commercial bank or a savings and
loan association to repay funds deposited with it for a definite period of time
(usually from fourteen days to one year) at a stated or variable interest rate.
(2) TIME DEPOSITS. Time deposits are non-negotiable deposits
maintained in a banking institution or a savings and loan association for a
specified period of time at a stated interest rate. Time Deposits are considered
to be illiquid prior to their maturity.
(3) BANKERS' ACCEPTANCES. Bankers' acceptances are credit
instruments evidencing the obligation of a bank to pay a draft which has been
drawn on it by a customer, which instruments reflect the obligation both of the
bank and of the drawer to pay the face amount of the instrument upon maturity.
E. ASSET-BACKED AND RECEIVABLE-BACKED SECURITIES. Asset-backed
and receivable-backed securities are undivided fractional interests in pools of
consumer loans (unrelated to mortgage loans) held in a trust. Payments of
principal and interest are passed through to certificate holders and are
typically supported by some form of credit enhancement, such as a letter of
credit, surety bond, limited guaranty, or senior/subordination. The degree of
credit enhancement varies, but generally amounts to only a fraction of the
asset-backed or receivable-backed security's par value until exhausted. If the
credit enhancement is exhausted, certificateholders may experience losses or
delays in payment if the required payments of principal and interest are not
made to the trust with respect to the underlying loans. The value of these
securities also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the loan pool, the originator of the
loans or the financial institution providing the credit enhancement.
Asset-backed and receivable-backed securities are ultimately dependent upon
payment of consumer loans by individuals, and the certificateholder generally
has no recourse against the entity that originated the loans. The underlying
loans are subject to prepayments which shorten the securities' weighted average
life and may lower their return. As prepayments flow through at par, total
returns would be affected by the prepayments: if a security were trading at a
premium, its total return would be lowered by prepayments, and if a security
were trading at a discount, its total return would be increased by prepayments.
No Fund will invest more than 5% of its net assets in asset-backed or
receivable-backed securities.
F. FORWARD COMMITMENTS AND REVERSE REPURCHASE AGREEMENTS. Each Fund
will direct its Custodian to place cash or U.S. government obligations in a
separate account of the Trust in an amount equal to the commitments of the Fund
to purchase or repurchase securities as a result of its forward commitment or
reverse repurchase agreement obligations. With respect to forward commitments to
sell securities, the Trust will direct its Custodian to place the securities in
a separate account. When a separate account is maintained in connection with
forward commitment transactions to purchase securities or reverse repurchase
agreements, the securities deposited in the separate account will be valued
daily at market for the purpose of determining the adequacy of the securities in
the account. If the market value of such securities declines, additional cash or
securities will be placed in the account on a daily basis so that the market
value of the account will equal the amount of the Fund's commitments to purchase
or repurchase securities. To the extent funds are in a separate account, they
will not be available for new investment or to meet redemptions. Reverse
repurchase agreements constitute a borrowing by the Fund and will not represent
more than 5% of the net assets of either Fund. No Fund will invest more than 25%
of its total assets in forward commitments.
Securities purchased on a forward commitment basis, securities
subject to reverse repurchase agreements and the securities held in each Fund's
portfolio are subject to changes in market value based upon the public's
perception of the creditworthiness of the issuer and changes in the level of
interest rates (which will generally result in all of those securities changing
in value in the same way, i.e., all those securities experiencing appreciation
when interest rates decline and depreciation when interest rates rise).
Therefore, if in order to achieve a higher level of income, the Fund remains
substantially fully invested at the same time that it has purchased securities
on a forward commitment basis or entered into reverse repurchase transactions,
there will be a possibility that the market value of the Fund's assets will have
greater fluctuation.
With respect to 75% of the total assets of each Fund, the value of
the Fund's commitments to purchase or repurchase the securities of any one
issuer, together with the value of all securities of such issuer owned by the
Fund, may not exceed 5% of the value of the Fund's total assets at the time the
commitment to purchase or repurchase such securities is made; provided, however,
that this restriction does not apply to U.S. government obligations or
repurchase agreements with respect thereto. In addition, each Fund will maintain
an asset coverage of 300% for all of its borrowings and reverse repurchase
agreements. Subject to the foregoing restrictions, there is no limit on the
percentage of the Fund's total assets which may be committed to such purchases
or repurchases.
4
<PAGE> 27
G. RESTRICTED SECURITIES. Restricted securities are securities the
resale of which is subject to legal or contractual restrictions. Restricted
securities may be sold only in privately negotiated transactions, in a public
offering with respect to which a registration statement is in effect under the
Securities Act of 1933 or pursuant to Rule 144 or Rule 144A promulgated under
such Act. Where registration is required, the Fund may be obligated to pay all
or part of the registration expense, and a considerable period may elapse
between the time of the decision to sell and the time such security may be sold
under an effective registration statement. If during such a period adverse
market conditions were to develop, the Fund might obtain a less favorable price
than the price it could have obtained when it decided to sell. No Fund will
invest more than 5% of its net assets in restricted securities.
H. OPTION TRANSACTIONS. The Fund may engage in option transactions
involving individual securities and market indexes. An option involves either
(a) the right or the obligation to buy or sell a specific instrument at a
specific price until the expiration date of the option, or (b) the right to
receive payments or the obligation to make payments representing the difference
between the closing price of a market index and the exercise price of the option
expressed in dollars times a specified multiple until the expiration date of the
option. Options are sold (written) on securities and market indexes. The
purchaser of an option on a security pays the seller (the writer) a premium for
the right granted but is not obligated to buy or sell the underlying security.
The purchaser of an option on a market index pays the seller a premium for the
right granted, and in return the seller of such an option is obligated to make
the payment. A writer of an option may terminate the obligation prior to
expiration of the option by making an offsetting purchase of an identical
option. Options are traded on organized exchanges and in the over-the-counter
market. Options on securities which the Fund sells (writes) will be covered or
secured, which means that it will own the underlying security in the case of a
call option. When the Fund writes options, it may be required to maintain a
margin account, to pledge the underlying securities or U.S. government
obligations or to deposit assets in escrow with the Custodian.
The purchase and writing of options involves certain risks. The
purchase of options limits the Fund's potential loss to the amount of the
premium paid and can afford the Fund the opportunity to profit from favorable
movements in the price of an underlying security to a greater extent than if
transactions were effected in the security directly. However, the purchase of an
option could result in the Fund losing a greater percentage of its investment
than if the transaction were effected directly. When the Fund writes a covered
call option, it will receive a premium, but it will give up the opportunity to
profit from a price increase in the underlying security above the exercise price
as long as its obligation as a writer continues, and it will retain the risk of
loss should the price of the security decline. In addition, there can be no
assurance that the Fund can effect a closing transaction on a particular option
it has written.
I. LOANS OF PORTFOLIO SECURITIES. Each Fund may make short and long
term loans of its portfolio securities. Under the lending policy authorized by
the Board of Trustees and implemented by the Adviser in response to requests of
broker-dealers or institutional investors which the Adviser deems qualified, the
borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be serious. With respect to
loans of securities, there is the risk that the borrower may fail to return the
loaned securities or that the borrower may not be able to provide additional
collateral. No loan of securities will be made if, as a result, the aggregate
amount of such loans would exceed 5% of the value of the Fund's net assets.
INVESTMENT LIMITATIONS
FUNDAMENTAL. The investment limitations described below have been
adopted by the Trust with respect to each Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the applicable Fund. As used in the
Prospectus and this Statement of Additional Information, the term "majority" of
the outstanding shares of the Trust (or of any series) means the lesser of (1)
67% or more of the outstanding shares of the Trust (or the applicable series)
present at a meeting, if the holders of more than 50% of the outstanding shares
of the Trust (or applicable series) are present or represented at such meeting;
or (2) more than 50% of the outstanding shares of the Trust (or the applicable
series). Other investment practices which may be changed by the Board of
Trustees without the approval of shareholders to the extent permitted by
applicable law, regulation or regulatory policy are considered non-fundamental
("Non-Fundamental").
1. BORROWING MONEY. The Funds will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude a Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
5
<PAGE> 28
2. SENIOR SECURITIES. The Funds will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and this
Statement of Additional Information.
3. UNDERWRITING. The Funds will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. REAL ESTATE. The Funds will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-backed securities or investing in
companies engaged in the real estate business.
5. COMMODITIES. The Funds will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts or from investing in securities or other instruments backed by
commodities.
6. LOANS. The Funds will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. CONCENTRATION. A Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
NON-FUNDAMENTAL. The following limitations have been adopted by the
Trust with respect to each Fund and are Non-Fundamental.
i. PLEDGING. The Funds will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. BORROWING. The Funds will not purchase any security while
borrowings (including reverse repurchase agreements) representing more than 5%
of its total assets are outstanding.
iii. MARGIN PURCHASES. The Funds will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. SHORT SALES. The Funds will not effect short sales of securities
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short.
v. OPTIONS. The Funds will not purchase or sell puts, calls, options or
straddles except as described in the Prospectus and this Statement of Additional
Information.
6
<PAGE> 29
vi. ILLIQUID INVESTMENTS. A Fund will not invest more than 15% of its
net assets in securities for which there are legal or contractual restrictions
on resale and other illiquid securities.
STATE RESTRICTIONS
To comply with the current blue sky regulations of the State of Ohio,
each Fund presently intends to observe the following restrictions, which may be
changed by the Board of Trustees without shareholder approval. Each Fund will
not purchase or retain securities of any issuer if the Trustees and officers of
the Trust or of the Adviser, who individually own beneficially more than 0.5% of
the outstanding securities of such issuer, together own beneficially more than
5% of such securities. Each Fund will not purchase securities issued by other
investment companies except by purchase in the open market where no commission
or profit to a sponsor or dealer results from such purchase other than customary
broker's commission or except when such purchase is part of a plan of merger,
consolidation, reorganization or acquisition. Each Fund will not borrow (other
than by entering into reverse repurchase agreements), pledge, mortgage or
hypothecate more than one-third of its total assets. In addition, each Fund will
engage in borrowing (other than reverse repurchase agreements) only for
emergency or extraordinary purposes and not for leverage. Each Fund will not
invest more than 15% of its total assets in securities of issuers which,
together with any predecessors, have a record of less than three years
continuous operation or securities of issuers which are restricted as to
disposition. Each Fund will not purchase the securities of any issuer if such
purchase at the time thereof would cause more than 10% of the voting securities
of any issuer to be held by the Fund.
7
<PAGE> 30
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Trust and their principal
occupations during the last five years are set forth below. Each Trustee who is
an "interested person" of the Trust, as defined in the Investment Company Act of
1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
NAME (AGE) POSITIONS HELD PRINCIPAL OCCUPATIONS
- ---- ----- -------------- ---------------------
<S> <C> <C> <C>
Timothy E. Johnson (55)* President and Trustee President and a Director of Johnson Investment
3777 West Fork Road Counsel, Inc., the Trust's Adviser and
Cincinnati, Ohio 45247 Professor of Finance at the University of
Cincinnati. President and Director of Johnson
Financial, Inc. (a)
John W. Craig (64) Trustee Retired director of Corporate Affairs at
5813 Twin Oak Drive R.A. Jones & Co., Inc. a manufacturing and
Cincinnati, Ohio 45224 packaging company, and the Chairman and Chief
Executive Officer of CP&I, Inc., a real estate
property development and management company.
Ronald H. McSwain (55) Trustee President of McSwain Carpets, Inc. and a
765 Hedgerow Lane partner of P&R Realty, a real estate
Cincinnati, Ohio 45246 development partnership.
Kenneth S. Shull (68) Trustee Retired plant engineer at The Procter &
2145 Bluebell Drive Gamble Company.
Cincinnati, Ohio 45224
Dale H. Coates (39) Vice President Portfolio Manager of the Trust's Adviser.
3777 West Fork Road
Cincinnati, Ohio 45247
Richard T. Miller (52) Vice President Portfolio Manager of the Trust's Adviser.
3777 West Fork Road
Cincinnati, Ohio 45247
Dianna J. Rosenberger (33) Chief Financial Officer Portfolio Manager of the Trust's Adviser.
3777 West Fork Road and Treasurer Chief Operating Officer of Johnson Financial,
Cincinnati, Ohio 45247 Inc. (a) a financial servicing company.
David C. Tedford (44) Secretary Office Administrator of the Trust's Adviser.
3777 West Fork Road
Cincinnati, Ohio 45247
</TABLE>
(a) Johnson Financial, Inc. is a wholly owned subsidiary of Johnson Investment
Counsel, Inc., the Adviser.
8
<PAGE> 31
The compensation paid to the Trustees of the Trust for the
year ended December 31, 1997 is set forth in the following table:
<TABLE>
<CAPTION>
TOTAL COMPENSATION
FROM TRUST (THE TRUST IS
NAME NOT IN A FUND COMPLEX) (1)
------------------------- ----------------------------
<S> <C>
Timothy E. Johnson $0
John W. Craig $3,000
Ronald H. McSwain $3,000
Kenneth S. Shull; $3,000
<FN>
(1) Trustee fees are Trust expenses. However, because the management
agreement obligates the Adviser to pay all of the operating expenses of
the Trust (with limited exceptions), the Adviser makes the actual
payment.
</TABLE>
As of March 31, 1998, the following persons may be deemed to
beneficially own five percent (5%) or more of the outstanding shares of each of
the Funds:
GROWTH FUND:
- ------------
Client accounts held at Johnson Investment Counsel, Inc., with full advisory
discretion - 13.95%;
Johnson Investment Counsel, Inc. Employee Profit Sharing Plan - 8.80%;
The Covenant Foundation, 5807 McCray Court, Cincinnati, Ohio 45224 - 7.68%.
The Covenant Foundation is an entity which may be deemed to be controlled by
officers and/or employees of Johnson Investment Counsel, Inc.
OPPORTUNITY FUND:
- -----------------
Client accounts held at Johnson Investment Counsel, Inc., with full advisory
discretion -- 75.35%;
The Oakmont Trust, 3777 West Fork Road, Cincinnati, Ohio 45247 - 5.37%.
The Oakmont Trust is an entity which may be deemed to be controlled by officers
and/or employees of Johnson Investment Counsel, Inc
FIXED INCOME FUND:
- ------------------
Client accounts held at Johnson Investment Counsel, Inc., with full advisory
discretion -- 18.82%;
The Covenant Foundation - 11.20%;
Johnson Investment Counsel, Inc. Employee Profit Sharing Plan -- 8.53%.
MUNICIPAL INCOME FUND:
- ----------------------
The Oakmont Trust- 18.31%;
Client accounts held at Johnson Investment Counsel, Inc., with full advisory
discretion - 56.72%;
The Bahr Family Trust, 6019 Gothic Place, Dayton, Ohio 45459 - 8.54%;
As a result of the above described beneficial ownership, Johnson
Investment Counsel, Inc., Johnson Investment Counsel, Inc. Profit Sharing Plan,
discretionary accounts of Johnson Investment Counsel, Inc., and other accounts
which its officers and/or employees may control, may have the power to invest
and/or may have the power to vote more than twenty-five percent (25%) of the
shares of the Growth Fund, the Opportunity Fund, the Fixed Income Fund and the
Municipal Income Fund, and may be deemed to control those Funds.
In addition to the applicable beneficial ownership described above, the
officers and Trustees as a group beneficially owned as of March 31, 1998, the
following percent of the outstanding shares of each of the Funds:
<TABLE>
<CAPTION>
<S> <C> <C>
Growth Fund: 4.99% Opportunity Fund: 5.07%
Fixed Income Fund: 0.66% Municipal Income Fund: 0.0%
</TABLE>
9
<PAGE> 32
THE INVESTMENT ADVISER
The Trust's investment adviser is Johnson Investment Counsel, Inc.,
3777 West Fork Road, Cincinnati, Ohio 45247. Timothy E. Johnson may be deemed to
be a controlling person and an affiliate of the Adviser due to his ownership of
its shares and his position as the President and a director of the Adviser. Mr.
Johnson, because of such affiliation, may receive benefits from the management
fees paid to the Adviser.
Under the terms of the Management Agreement, the Adviser manages the
Funds' investments subject to approval of the Board of Trustees and pays all of
the expenses of the Funds except brokerage, taxes, interest and extraordinary
expenses. As compensation for its management services and agreement to pay the
Funds' expenses, the Funds are obligated to pay the Adviser a fee computed and
accrued daily and paid monthly at an annual rate of 1.30% of the average daily
net assets of each of the Growth Fund and the Opportunity Fund, 1.15% of the
average daily net assets of each of the Fixed Income Fund and the Municipal
Income Fund. However, the Adviser has committed to limit its fee to 0.95% of
such assets for the Growth Fund and Opportunity Fund, 0.85% of such assets for
the Fixed Income Fund and 0.65% of such assets for the Municipal Income Fund.
The Adviser intends that these fee limitations will be permanent, although the
Adviser reserves the right to remove them at any time after December 31, 1998.
For the fiscal years indicated below, the following advisory fees were
paid, and the following voluntary fee waivers were implemented.
Advisory Fees Paid:
<TABLE>
<CAPTION>
1997 1996 1995 1994*
---- ---- ---- -----
<S> <C> <C> <C> <C>
Growth Fund $263,695 $189,616 $123,983 $ 83,474
Fixed Income Fund $148,777 $134,800 $127,084 $100,011
Opportunity Fund $285,002 $193,372 $106,227 $ 19,142
Municipal Income Fund $ 21,597 $ 18,132 $ 13,328 $ 83
</TABLE>
Voluntary Fee Reductions that otherwise would have been payable to the Adviser
by the Funds respectively:
<TABLE>
<CAPTION>
1997 1996 1995 1994*
---- ---- ---- -----
<S> <C> <C> <C> <C>
Growth Fund $89,711 $56,885 $37,195 $25,042
Fixed Income Fund $52,510 $47,576 $44,853 $35,298
Opportunity Fund $96,959 $58,012 $31,868 $ 5,743
Municipal Income Fund $17,821 $ 9,670 $ 8,892 $ 8,736
</TABLE>
* The Opportunity Fund and the Municipal Income Fund date of inception was May
16, 1994, thus fees indicated are total fees incurred or voluntarily reduced for
the year, but only for a partial year from May 16, 1994 through December 31,
1994.
The Adviser retains the right to use the name "Johnson" in connection
with another investment company or business enterprise with which the Adviser is
or may become associated. The Trust's right to use the name "Johnson"
automatically ceases thirty days after termination of the Management Agreement
and may be withdrawn by the Adviser on thirty days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Funds believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Funds believes that there would be no material impact on the Funds or their
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Funds may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Funds, no preference will be shown for such
securities.
10
<PAGE> 33
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Trust's portfolio decisions and the placing
of the Trust's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for the Trust, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Trust and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Trust effects securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Trust. Although research services and other information are useful to the Trust
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser of performing its duties to the Trust
under the Management Agreement. For the twelve months ended December 31, 1997,
due in part to research services provided by brokers, the Growth Fund directed
to brokers $25,682,509 of brokerage transactions (on which the commissions were
$35,290), and the Opportunity Fund directed to brokers $26,833,075 of brokerage
transactions (on which the commissions were $57,043).
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to market makers may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be allocated
using the following rules: (1) All client accounts would have their entire order
filled or receive no shares at all, unless the account's purchase would exceed
$50,000. In that case, filling part of the order for that account would be
acceptable. (2) The orders would be filled beginning with the account least
invested in that security type, relative to its goal, and proceed through the
list with the last order filled for the account most invested in that security
type, relative to its goal. Based on rule 1, some accounts may be skipped to
meet the exact number of shares purchased. For the sale of a security, the
orders would be filled beginning with the most fully invested account moving to
the least fully invested.
For the fiscal years ended indicated below, the following brokerage
commissions were paid by the Funds:
<TABLE>
<CAPTION>
1997 1996 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Growth Fund $35,290 $26,430 $35,424 $20,503
Opportunity Fund $57,043 $36,852 $50,549 $29,137
Fixed Income Fund none none none none
Municipal Income Fund none none none none
</TABLE>
11
<PAGE> 34
DETERMINATION OF SHARE PRICE
The prices (net asset values) of the shares of each Fund are determined
as of the close of trading of the New York Stock Exchange (4:00 P.M., Eastern
time) on each day the Trust is open for business and on any other day on which
there is sufficient trading in the Fund's securities to materially affect the
net asset value. The Trust is open for business on every day except Saturdays,
Sundays and the following holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas. For a description of the methods used to determine
the net asset value (share price), see "Share Price Calculation" in the
Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return (over the one and five year periods and the period from initial public
offering through the end of a Fund's most recent fiscal year) that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
A Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Funds
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the appropriate
Fund or considered to be representative of the stock market in general or the
fixed income securities market in general. The Growth Fund will use the Standard
& Poor's 500 Stock Index and the Dow Jones Industrial Average. The Opportunity
Fund will use the Standard & Poor's MidCap 400 Index, which is a
capitalization-weighed index that measures the performance of the mid-range of
the medium-sized U.S. companies market. The median market capitalization of the
companies in the Index is approximately $700 million. The Index was developed
with a base level of 100 as of December 31, 1990. The Index contains companies
chosen by committee at Standard & Poor's for their size and industry
characteristics. None of the companies in the S&P MidCap 400 Index are included
in the S&P 500 Stock Index. However, some of the companies in the S&P MidCap 400
Index are larger than some in the S&P 500 Stock Index, which is a function of
the normal drift that takes place in any index as the stock prices of some
companies appreciate while the stock prices of others depreciate.
The Fixed Income Fund will use the Lehman Intermediate Government/Corporate Bond
Index. The Lehman Intermediate Government/Corporate Bond Index measures the
price, income and total return of a group of fixed income securities maturing in
one to ten years. It contains all public obligations of the U.S. Treasury
(excluding flower bonds and foreign-targeted issues), all publicly traded debt
of agencies of the U.S. Government, quasi-federal corporations and corporate
debt guaranteed by the U.S. Government, and all public, fixed rate,
non-convertible, investment grade, domestic corporate debt. The Index does not
include mortgage-backed securities or collateralized mortgage obligations. The
Municipal Income Fund will use the Lehman 5 Year General Obligation Index. The
Lehman 5 Year General Obligation Index measures price, income and total return
on state and local general obligation bonds maturing in four to six years. It
contains all general obligations within this maturity range that were part of an
issue with a credit rating of Baa or higher, original issue size of at least $50
million, and has at least $3 million of the issue still outstanding. The Index
does not contain bonds subject to an alternative minimum tax or bonds with
floating or zero coupons. The investment performance figures for the Funds and
the indices will include reinvestment of dividends and capital gains
distributions.
12
<PAGE> 35
In addition, the performance of the Funds may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the applicable Fund. Performance rankings and
ratings reported periodically in national financial publications such as
Barron's may also be used.
<TABLE>
<CAPTION>
Total Return Average Annual Average Annual
One Year Period Total Return Total Return
Ending 12/31/97 1/4/93 - 12/31/97 5/16/94 - 12/31/97
--------------- ----------------- ------------------
<S> <C> <C> <C>
Growth Fund 33.96% 15.90% not applicable
Fixed Income Fund 8.44% 6.47% not applicable
Municipal Income Fund 6.23% not applicable 5.84%
Opportunity Fund 27.26% not applicable 22.10%
</TABLE>
CUSTODIAN
The Provident Bank, One East Fourth Street, Cincinnati, Ohio is the
current custodian of the Funds' investments. The Custodian acts as each Fund's
depository, holds its portfolio securities in safekeeping, collects all income
and other payments with respect thereto, disburses funds at the Fund's request
and maintains records in connection with its duties.
TRANSFER AGENT
Johnson Financial, Inc. 3777 West Fork Road, Cincinnati, Ohio acts as
each Fund's transfer agent and, in such capacity, maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of the Fund's shares, acts as
dividend and distribution disbursing agent and performs other accounting and
shareholder service functions.
ACCOUNTANTS
The firm of McCurdy & Associates CPA's, Inc. of Westlake, Ohio has been
selected as independent public accountants for the Trust for the fiscal year
ending December 31, 1998.
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to
be included in this Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the period ended
December 31, 1997. The Funds will provide the Annual Report without charge at
written request or request by telephone.
13
<PAGE> 36
JOHNSON MUTUAL FUNDS TRUST
PART C. OTHER INFORMATION
-----------------
(a) Financial Statements
Included in Part A:
Financial Highlights for Growth Fund, Opportunity Fund,
Fixed Income Fund and Municipal Income Fund.
Included in Part B: The following documents are
incorporated by reference to the Johnson Mutual Funds
Trust 1997 Annual Report to Shareholders:
Report of Independent Public Accountant.
Schedule of Investments, December 31, 1997.
Statement of Assets and Liabilities, December 31, 1997.
Statement of Operations for year ended December 31,
1997.
Statement of Changes in Net Assets for the years ended
December 31, 1997, 1996.
Financial Highlights for the years ended December 31,
1997, 1996, 1995, 1994 and 1993 for the Growth Fund and
the Fixed Income Fund.
Financial Highlights for the year ended December 31,
1997, 1996, 1995 and the period from May 16, 1994
through December 31, 1994 for the Opportunity Fund and
the Municipal Income Fund.
Notes to Financial Statements, December 31, 1997.
(b) Exhibits
(1) (i) Copy of Registrant's Declaration of Trust, is
filed herewith.
(ii) Copy of Amendment No. 1 to Registrant's
Declaration of Trust, is filed herewith.
(2) Copy of Registrant's By-Laws, is filed herewith.
(3) Voting Trust Agreements - None.
(4) Specimen of Share Certificates -None
(5) (i) Copy of Registrant's Management Agreement with
its Adviser, Johnson Investment Counsel, Inc.,
for the Johnson Growth Fund and Johnson Fixed
Income Fund, is filed herewith.
(ii) Copy of Registrant's Management Agreement with
its Adviser, Johnson Investment Counsel, Inc.,
for the Johnson Opportunity Fund and Johnson
Municipal Income Fund, is filed herewith.
(iii) Copy of Registrant's Management Agreement with
Johnson Investment Counsel, Inc. for the Johnson
Realty Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 8, is
hereby incorporated by reference.
(6) Underwriting or Distribution Contracts and
Agreements with Principal Underwriters and Dealers
- None.
(7) Bonus, Profit Sharing, Pension or Similar
Contracts for the benefit of Directors or Officers
- None.
<PAGE> 37
(8) (i) Copy of Registrant's Agreement with the
Custodian, The Provident Bank, is filed
herewith.
(ii) Copy of Registrant's Amended Schedule of
Custodian fees, which was filed as an
Exhibit to Registrant's Post Effective
Amendment No. 7, is hereby incorporated by
reference.
(9) None.
(10) Opinion and Consent of Brown, Cummins & Brown Co.,
L.P.A., which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 7, is
hereby incorporated by reference.
(11) Consent of McCurdy & Associates, CPA's, Inc. is
filed herewith.
(12) Financial Statements Omitted from Item 23 - None.
(13) (i) Copy of Letter of Initial Stockholder
for the Growth Fund and the Fixed Income
Fund, is filed herewith.
(ii) Copy of Letter of Initial Stockholder for
the Opportunity Fund and the Municipal
Income Fund, is filed herewith.
(14) Model Plan used in establishment of any Retirement
Plan-None.
(15) 12b-1 Distribution Expense Plan - None.
(16) Schedule for Computation of Each Performance
Quotation, is filed herewith.
(17) Financial Data Schedule - None.
(18) Rule 18f-3 Plan - None.
(19) (i) Power of Attorney for Registrant and
Certificate with respect thereto,which were
filed as an exhibit to Registrant's
Post-Effective Amendment No. 7 are hereby
incorporated by reference.
(ii) Powers of Attorney for Trustees and
Officers of Registrant which were filed as
an exhibit to Registrant's Post Effective
Amendment No. 7 are hereby incorporated by
reference.
Item 25. Persons Controlled by or Under Common Control with the
- -------- ------------------------------------------------------
Registrant
----------
As of March 31, 1998, Johnson Investment Counsel, Inc., an Ohio
corporation, the Johnson Investment Counsel, Inc. Profit Sharing
Plan, discretionary accounts of Johnson Investment Counsel,
Inc., and other accounts which its officers and/or employees may
control, may be deemed to control the Growth Fund, the
Opportunity Fund, the Fixed Income Fund and the Municipal Income
Fund as a result of their beneficial ownership of those Funds.
A new entity, Johnson Financial Services, Inc., is a wholly
owned subsidiary of Johnson Investment Counsel, Inc., and
therefore may be deemed to be under common control with the
Registrant.
<PAGE> 38
Item 26. Number of Holders of Securities (as of March 31, 1998)
- -------- ------------------------------------------------------
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
-------------- ------------------------
<S> <C>
Johnson Growth Fund 779
Johnson Opportunity Fund 408
Johnson Fixed Income Fund 329
Johnson Municipal Income Fund 25
</TABLE>
Item 27. Indemnification
- -------- ---------------
(a) Article VI of the Registrant's Declaration of Trust
provides for indemnification of Officers and Trustees as
follows:
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS,
ETC. Subject to an except as otherwise provided in the
Securities Act of 1933, as amended, and the 1940 Act,
the Trust shall indemnify each of its Trustees and
Officers (including persons who serve at the Trust's
request as directors, officers or trustees of another
organization in which the Trust has any interest as a
shareholder, creditor or otherwise (hereinafter referred
to as a "Covered Person") against all liabilities,
including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by any Covered
Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or
legislative body, in which such Covered Person may be or
may have been involved as a party or otherwise or with
which such person may be or may have been threatened,
while in office or thereafter, by reason of being or
having been such a Trustee or Officer, director or
trustee, and except that no Covered Person shall be
indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would
otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's
office.
SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall
advance attorneys' fees or other expenses incurred by a
Covered Person in defending a proceeding to the full
extent permitted by the Securities Act of 1933, as
amended, the 1940 Act, and Ohio Revised Code Chapter
1707, as amended. In the event any of these laws
conflict with Ohio Revised Code Section 1701.13(E), as
amended, these laws, and not Ohio Revised Code Section
1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC.
The right of indemnification provided by this Article VI
shall not be exclusive of or affect any other rights to
which any such Covered Person may be entitled. As used
in this Article VI, "Covered Person" shall include such
person's heirs, executors and administrators. Nothing
contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other
than Trustees and Officers, and other persons may be
entitled by contract or otherwise under law, nor the
power of the Trust to purchase and maintain liability
insurance on behalf of any such person.
The registrant may not pay for insurance which protects
the Trustees and Officers against liabilities rising
from action involving willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties
involved in the conduct of their offices.
(b) The Registrant maintains a standard mutual fund
investment advisory professional and directors and
officers liability policy. The policy provides coverage
to the Registrant, its Trustees and Officers, and its
Adviser, among others. Coverage
<PAGE> 39
under the policy includes losses by reason of any act,
error, omission, misstatement, misleading statement,
neglect or breach of duty.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to Trustees,
Officers and controlling persons of the Registrant
pursuant to the provisions of Ohio law and the Agreement
and Declaration of the Registrant or the By-Laws of the
Registrant, 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 Trustee, Officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against
public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
- -------- ----------------------------------------------------
(A) Johnson Investment Counsel, Inc. (the "Adviser") is a
registered investment adviser. It has engaged in no
other business during the past two fiscal years.
(B) The following list sets forth the business and other
connections of the Directors and Officers of Johnson
Investment Counsel, Inc. during the past two years.
(1) Timothy E. Johnson
(a) President and a Director of Johnson
Investment Counsel, Inc., 3777 West Fork
Road, Cincinnati, Ohio 45247.
(b) President and a Trustee of Johnson Mutual
Funds Trust, 3777 West Fork Road,
Cincinnati, Ohio 45247.
(c) President of Johnson Financial Services,
Inc., 3777 West Fork Road, Cincinnati, Ohio
45247.
(2) Janet L. Johnson -
(a) Vice President, Secretary and Director of
Johnson Investment Counsel, Inc., 3777 West Fork
Road, Cincinnati, Ohio 45247.
(b) Vice President, Secretary and Director of
Johnson Financial Services, Inc., 3777 West
Fork Road, Cincinnati, Ohio 45247.
(3) Dianna J. Rosenberger - Chief Operating Officer of
Johnson Financial Services, Inc. 3777 West Fork
Road, Cincinnati, Ohio 45247
Item 29. Principal Underwriters
- -------- ----------------------
None.
Item 30. Location of Accounts and Records
- -------- --------------------------------
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder will be maintained by the
Registrant and Transfer Agent at 3777 West Fork Road,
Cincinnati, Ohio 45247, or by The Provident Bank, the
Registrant's custodian at One East Fourth Street, Cincinnati,
<PAGE> 40
Ohio 45202.
Item 31. Management Services Not Discussed in Parts A or B - None.
- -------- -------------------------------------------------
Item 32. Undertakings
- -------- ------------
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant hereby undertakes to furnish each person
to whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders, upon
request and without charge.
<PAGE> 41
POST EFFECTIVE AMENDMENT CERTIFICATION OF EFFECTIVENESS
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Cincinnati, State of
Ohio, on the 20 day of April, 1998.
JOHNSON MUTUAL FUNDS TRUST
By: /s/ Timothy E. Johnson
-----------------------------------
TIMOTHY E. JOHNSON
President
By: /s/ Dianna J. Rosenberger
-----------------------------------
DIANNA J. ROSENBERGER
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
RONALD H. McSWAIN TRUSTEE )
) By: /s/ Timothy E. Johnson
) ---------------------------
) TIMOTHY E. JOHNSON
) Attorney-In-Fact
KENNETH S. SHULL TRUSTEE )
) April 20, 1998
)
)
)
JOHN W. CRAIG TRUSTEE )
/s/ Timothy E. Johnson
- ---------------------------
TIMOTHY E JOHNSON
Trustee and President
/s/ Dianna J. Rosenberger
- ---------------------------
DIANNA J. ROSENBERGER
Treasurer and Chief Financial Officer
<PAGE> 42
POST EFFECTIVE AMENDMENT NUMBER 9
EXHIBIT INDEX
-------------
<TABLE>
<S> <C>
1 Registrant's Declaration of Trust.....................................................Ex-99.B1.1
2 Amendment No. 1 to Registrant's Declaration of Trust..................................Ex-99.B1.2
3 Registrant's By-Laws..................................................................Ex-99.B2
4 Management Agreement for the Johnson Growth Fund and Johnson
Fixed Income Fund.....................................................................Ex-99.B5.1
5 Management Agreement for the Johnson Opportunity Fund and Johnson
Municipal Income Fund.................................................................Ex-99.B5.2
6 Custody Agreement.....................................................................Ex-99.B8
7 Consent of McCurdy & Associates, CPA's Inc............................................Ex-99.B11
8 Initial Stockholder letter for the Growth Fund and Fixed Income Fund..................Ex-99.B13.1
9 Initial Stockholder letter for the Opportunity Fund and Municipal
Income Fund...........................................................................Ex-99.B13.2
10 Schedule for Computation of Performance...............................................Ex-99.B16
</TABLE>
<PAGE> 1
Exhibit 99.B1.1
JOHNSON INVESTMENT MUTUAL FUNDS TRUST
AGREEMENT AND DECLARATION OF TRUST
SEPTEMBER 30, 1992
<PAGE> 2
JOHNSON INVESTMENT MUTUAL FUNDS TRUST
AGREEMENT AND DECLARATION OF TRUST
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I - NAME AND DEFINITIONS........................................................................................ 1
Section 1.1 Name..................................................................................... 1
Section 1.2 Definitions.............................................................................. 1
(a) The "Trust".................................................................................. 1
(b) "Trustees"................................................................................... 1
(c) "Shares"..................................................................................... 1
(d) "Series"..................................................................................... 1
(e) "Shareholder"................................................................................ 1
(f) "1940 Act"................................................................................... 1
(g) "Commission"................................................................................. 1
(h) "Declaration of Trust"....................................................................... 2
(i) "By-Laws".................................................................................... 2
(j) "By-Laws".................................................................................... 2
ARTICLE II - PURPOSE OF TRUST........................................................................................... 2
ARTICLE III - THE TRUSTEES.............................................................................................. 2
Section 3.1 Number, Designation, Election, Term, etc................................................. 2
(a) Initial Trustees............................................................................. 2
(b) Number....................................................................................... 2
(c) Term......................................................................................... 2
(d) Resignation and Retirement................................................................... 2
(e) Removal...................................................................................... 3
(f) Vacancies.................................................................................... 3
(g) Effect of Death, Resignation, etc............................................................ 3
(h) No Accounting................................................................................ 3
Section 3.2 Powers of Trustees....................................................................... 3
(a) Investments.................................................................................. 4
(b) Disposition of Assets........................................................................ 4
(c) Ownership Powers............................................................................. 4
(d) Subscription................................................................................. 4
(e) Form of Holding.............................................................................. 4
(f) Reorganization, etc.......................................................................... 4
(g) Voting Trusts, etc........................................................................... 5
(h) Compromise................................................................................... 5
(i) Partnerships, etc............................................................................ 5
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
(j) Borrowing and Security....................................................................... 5
(k) Guarantees, etc.............................................................................. 5
(l) Insurance.................................................................................... 5
(m) Pensions, etc................................................................................ 5
Section 3.3 Certain Contracts........................................................................ 6
(a) Advisory..................................................................................... 6
(b) Administration............................................................................... 6
(c) Distribution................................................................................. 6
(d) Custodian and Depository..................................................................... 6
(e) Transfer and Dividend Disbursing Agency...................................................... 6
(f) Shareholder Servicing........................................................................ 7
(g) Accounting................................................................................... 7
Section 3.4 Payment of Trust Expenses and Compensation of Trustees................................... 8
Section 3.5 Ownership of Assets of the Trust......................................................... 8
ARTICLE IV - SHARES..................................................................................................... 8
Section 4.1 Description of Shares.................................................................... 8
Section 4.2 Establishment and Designation of Series................................................... 9
(a) Assets Belonging to Series................................................................... 10
(b) Liabilities Belonging to Series.............................................................. 10
(c) Dividends.................................................................................... 10
(d) Liquidation.................................................................................. 11
(e) Voting....................................................................................... 11
(f) Redemption by Shareholder.................................................................... 12
(g) Redemption by Trust.......................................................................... 12
(h) Net Asset Value.............................................................................. 12
(i) Transfer..................................................................................... 13
(j) Equality..................................................................................... 13
(k) Fractions.................................................................................... 13
(l) Conversion Rights............................................................................ 13
Section 4.3 Ownership of Shares...................................................................... 13
Section 4.4 Investments in the Trust................................................................. 14
Section 4.5 No Preemptive Rights..................................................................... 14
Section 4.6 Status of Shares and Limitation of Personal Liability.................................... 14
ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS.................................................................... 14
Section 5.1 Voting Powers............................................................................ 14
Section 5.2 Meetings................................................................................. 15
Section 5.3 Record Dates............................................................................. 15
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 5.4 Quorum and Required Vote................................................................. 15
Section 5.5 Action by Written Consent................................................................ 15
Section 5.6 Inspection of Records.................................................................... 16
Section 5.7 Additional Provisions.................................................................... 16
ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION................................................................... 16
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice............................... 16
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or Surety............................ 16
Section 6.3 Indemnification of Shareholders.......................................................... 17
Section 6.4 Indemnification of Trustees, Officers, etc............................................... 17
Section 6.5 Advances of Expenses..................................................................... 17
Section 6.6 Indemnification Not Exclusive, etc....................................................... 17
Section 6.7 Liability of Third Persons Dealing with Trustees......................................... 18
ARTICLE VII - MISCELLANEOUS............................................................................................. 18
Section 7.1 Duration and Termination of Trust........................................................ 18
Section 7.2 Reorganization........................................................................... 18
Section 7.3 Amendments............................................................................... 18
Section 7.4 Filing of Copies; References; Headings................................................... 19
Section 7.5 Applicable Law........................................................................... 19
</TABLE>
iii
<PAGE> 5
JOHNSON INVESTMENT MUTUAL FUNDS TRUST
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made at Cincinnati, Ohio, this 30th
day of September, 1992, by the Trustees hereunder, and by the holders of Shares
of beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH:
WHEREAS, this Trust is being formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of an Ohio business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.1 NAME. This Trust shall be known as "JOHNSON INVESTMENT
MUTUAL FUNDS TRUST" and the Trustees shall conduct the business of the Trust
under that name or any other name as they may from time to time determine.
SECTION 1.2 DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Ohio business trust established by this
Agreement and Declaration of Trust, as amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest into which
the beneficial interest in the Trust or any series of the Trust (as the context
may require) shall be divided from time to time;
(d) "Series" refers to Series of Shares established and designated
under or in accordance with the provisions of Article IV;
(e) "Shareholder" means a record owner of Shares;
(f) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and
iv
<PAGE> 6
Regulations thereunder, all as amended from time to time;
(g) "Commission" shall have the meaning given it in the 1940 Act;
(h) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as amended or restated from time to time; and
(i) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company, to
offer Shareholders one or more investment programs primarily in securities and
debt instruments and to engage in any and all lawful acts or activities for
which business trusts may be formed under Chapter 1746 of the Ohio Revised Code.
ARTICLE III
THE TRUSTEES
Section 3.1 Number, Designation, Election, Term, Etc.
----------- -----------------------------------------
(a) INITIAL TRUSTEES. Upon his execution of this Declaration of
Trust or a counterpart hereof or some other writing in which
he accepts such Trusteeship and agrees to the provisions
hereof, Timothy E. Johnson shall become a Trustee hereof.
(b) NUMBER. The Trustees serving as such, whether named above or
hereafter becoming a Trustee, may increase or decrease the
number of Trustees to a number other than the number
theretofore determined. No decrease in the number of Trustees
shall have the effect of removing any Trustee from office
prior to the expiration of his term, but the number of
Trustees may be decreased in conjunction with the removal of a
Trustee pursuant to subsection (e) of this Section 3.1.
(c) TERM. Each Trustee shall serve as a Trustee during the
lifetime of the Trust and until its termination as hereinafter
provided or until such Trustee sooner dies, resigns, retires
or is removed. The Trustees may elect their own successors and
may, pursuant to Section 3.1(f) hereof, appoint Trustees to
fill vacancies; provided that, immediately after filling a
vacancy, at least two-thirds of the Trustees then holding
office shall have been elected to such office by the
Shareholders at an annual or special meeting. If at any time
less than a majority of the Trustees then holding office were
so elected, the Trustees shall forthwith cause to be held as
promptly as possible, and in any event within 60 days, a
meeting of Shareholders for the purpose of electing Trustees
to fill any existing vacancies.
(d) RESIGNATION AND RETIREMENT. Any Trustee may resign his trust
or retire as a Trustee, by written instrument signed by him
and delivered to the other Trustees or to any officer of the
Trust, and such resignation or retirement shall take effect
upon such delivery or upon such later date as is specified in
such instrument.
2
<PAGE> 7
(e) REMOVAL. Any Trustee may be removed with or without cause at
any time: (i) by written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal,
specifying the date upon which such removal shall become
effective, (ii) by vote of the Shareholders holding not less
than two-thirds of the Shares then outstanding, cast in person
or by proxy at any meeting called for the purpose, or (iii) by
a declaration in writing signed by Shareholders holding not
less than two-thirds of the Shares then outstanding and filed
with the Trust's Custodian.
(f) VACANCIES. Any vacancy or anticipated vacancy resulting from
any reason, including without limitation the death,
resignation, retirement, removal or incapacity of any of the
Trustees, or resulting from an increase in the number of
Trustees by the Trustees may (but so long as there are at
least three remaining Trustees, need not unless required by
the 1940 Act) be filled either by a majority of the remaining
Trustees through the appointment in writing of such other
person as such remaining Trustees in their discretion shall
determine (unless a shareholder election is required by the
1940 Act) or by the election by the Shareholders, at a meeting
called for the purpose, of a person to fill such vacancy, and
such appointment or election shall be effective upon the
written acceptance of the person named therein to serve as a
Trustee and agreement by such person to be bound by the
provisions of this Declaration of Trust, except that any such
appointment or election in anticipation of a vacancy to occur
by reason of retirement, resignation, or increase in number of
Trustees to be effective at a later date shall become
effective only at or after the effective date of said
retirement, resignation, or increase in number of Trustees. As
soon as any Trustee so appointed or elected shall have
accepted such appointment or election and shall have agreed in
writing to be bound by this Declaration of Trust and the
appointment or election is effective, the Trust estate shall
vest in the new Trustee, together with the continuing
Trustees, without any further act or conveyance.
(g) EFFECT OF DEATH, RESIGNATION, ETC. The death, resignation,
retirement, removal, or incapacity of the Trustees, or any one
of them, shall not operate to annul or terminate the Trust or
to revoke or terminate any existing agency or contract created
or entered into pursuant to the terms of this Declaration of
Trust.
(h) NO ACCOUNTING. Except to the extent required by the 1940 Act
or under circumstances which would justify his removal for
cause, no person ceasing to be a Trustee as a result of his
death, resignation, retirement, removal or incapacity (nor the
estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon such
cessation.
SECTION 3.2 POWERS OF TRUSTEES. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders; they may as they consider appropriate elect and
remove officers and appoint and terminate agents and consultants and hire and
terminate employees, any one or more of the
3
<PAGE> 8
foregoing of whom may be a Trustee, and may provide for the compensation of all
of the foregoing; they may appoint from their own number, and terminate, any one
or more committees consisting of two or more Trustees, including without implied
limitation an executive committee, which may, when the Trustees are not in
session and subject to the 1940 Act, exercise some or all of the power and
authority of the Trustees as the Trustees may determine; in accordance with
Section 3.3 they may employ one or more Advisers, Administrators, Depositories
and Custodians and may authorize any Depository or Custodian to employ
subcustodians or agents and to deposit all or any part of such assets in a
system or systems for the central handling of securities and debt instruments,
retain transfer, dividend, accounting or Shareholder servicing agents or any of
the foregoing, provide for the distribution of Shares by the Trust through one
or more distributors, principal underwriters or otherwise, set record dates or
times for the determination of Shareholders or number of them with respect to
various matters; they may compensate or provide for the compensation of the
Trustees, officers, advisers, administrators, custodians, other agents,
consultants and employees of the Trust or the Trustees on such terms as they
deem appropriate; and in general they may delegate to any officer of the Trust,
to any committee of the Trustees and to any employee, adviser, administrator,
distributor, principal underwriter, depository, custodian, transfer and dividend
disbursing agent, or any other agent or consultant of the Trust such authority,
powers, functions and duties as they consider desirable or appropriate for the
conduct of the business and affairs of the Trust, including without implied
limitation the power and authority to act in the name of the Trust and of the
Trustees, to sign documents and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with
the 1940 Act or other applicable law, the Trustees shall have power and
authority:
(a) INVESTMENTS. To invest and reinvest cash and other property,
and to hold cash or other property uninvested without in any
event being bound or limited by any present or future law or
custom in regard to investments by trustees;
(b) DISPOSITION OF ASSETS. To sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or all
of the assets of the Trust;
(c) OWNERSHIP POWERS. To vote or give assent, or exercise any
rights of ownership, with respect to stock or other
securities, debt instruments or property; and to execute and
deliver proxies or powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities, debt instruments or property as the Trustees shall
deem proper;
(d) SUBSCRIPTION. To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities or debt instruments;
(e) FORM OF HOLDING. To hold any security, debt instrument or
property in a form not indicating any trust, whether in
bearer, unregistered or other negotiable form, or in the name
of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depository or a nominee or nominees or
otherwise;
(f) REORGANIZATION, ETC. To consent to or participate in any plan
for the reorganization, consolidation or merger of any
corporation or issuer, any security or debt instrument of
4
<PAGE> 9
which is or was held in the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with
respect to any security or debt instrument held in the Trust;
(g) VOTING TRUSTS, ETC. To join with other holders of any
securities or debt instruments in acting through a committee,
depository, voting trustee or otherwise, and in that
connection to deposit any security or debt instrument with, or
transfer any security or debt instrument to, any such
committee, depository or trustee, and to delegate to them such
power and authority with relation to any security or debt
instrument (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such
committee, depository or trustee as the Trustees shall deem
proper;
(h) COMPROMISE. To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including but not limited to claims for taxes;
(i) PARTNERSHIPS, ETC. To enter into joint ventures, general or
limited partnerships and any other combinations or
associations;
(j) BORROWING AND SECURITY. To borrow funds and to mortgage and
pledge the assets of the Trust or any part thereof to secure
obligations arising in connection with such borrowing;
(k) GUARANTEES, ETC. To endorse or guarantee the payment of any
notes or other obligations of any person; to make contracts of
guaranty or suretyship, or otherwise assume liability for
payment thereof; and to mortgage and pledge the Trust property
or any part thereof to secure any of or all such obligations;
(l) INSURANCE. To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or
appropriate for the conduct of the business, including,
without limitation, insurance policies insuring the assets of
the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents,
consultants, investment advisers, managers, administrators,
distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected
therewith), of the Trust individually against all claims and
liabilities of every nature arising by reason of holding,
being or having held any such office or position, or by reason
of any action alleged to have been taken or omitted by any
such person in any such capacity, including any action taken
or omitted that may be determined to constitute negligence;
provided, however, that insurance which protects the Trustees
and officers against liabilities rising from action involving
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their
offices may not be purchased; and
(m) PENSIONS, ETC. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry
out pension, profit-sharing, share bonus, share purchase,
savings, thrift and other retirement, incentive and benefit
plans, trusts and provisions, including the purchasing of life
insurance and annuity contracts as a means of providing
5
<PAGE> 10
such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust.
Except as otherwise provided by the 1940 Act or other applicable law,
this Declaration of Trust or the By-Laws, any action to be taken by the Trustees
may be taken by a majority of the Trustees present at a meeting of Trustees (a
quorum, consisting of at least a majority of the Trustees then in office, being
present), within or without Ohio, including any meeting held by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office (or such larger
or different number as may be required by the 1940 Act or other applicable law).
SECTION 3.3 CERTAIN CONTRACTS. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time and without limiting the
generality of their powers and authority otherwise set forth herein, enter into
one or more contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, other type of organizations, or individuals
("Contracting Party") to provide for the performance and assumption of some or
all of the following services, duties and responsibilities to, for or of the
Trust and/or the Trustees, and to provide for the performance and assumption of
such other services, duties and responsibilities in addition to those set forth
below as the Trustees may determine appropriate:
(a) ADVISORY. Subject to the general supervision of the Trustees
and in conformity with the stated policy of the Trustees with
respect to the investments of the Trust or of the assets
belonging to any Series of Shares of the Trust (as that phrase
is defined in subsection (a) of Section 4.2), to manage such
investments and assets, make investment decisions with respect
thereto, and to place purchase and sale orders for portfolio
transactions relating to such investments and assets;
(b) ADMINISTRATION. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees
with respect to the operations of the Trust, to supervise all
or any part of the operations of the Trust, and to provide all
or any part of the administrative and clerical personnel,
office space and office equipment and services appropriate for
the efficient administration and operations of the Trust;
(c) DISTRIBUTION. To distribute the Shares of the Trust, to be
principal underwriter of such Shares, and/or to act as agent
of the Trust in the sale of Shares and the acceptance or
rejection of orders for the purchase of Shares;
(d) CUSTODIAN AND DEPOSITORY. To act as depository for and to
maintain custody of the property of the Trust and accounting
records in connection therewith;
(e) TRANSFER AND DIVIDEND DISBURSING AGENCY. To maintain records
of the ownership of outstanding Shares, the issuance and
redemption and the transfer thereof, and to disburse any
dividends declared by the Trustees and in accordance with the
policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;
6
<PAGE> 11
(f) SHAREHOLDER SERVICING. To provide service with respect to the
relationship of the Trust and its Shareholders, records with
respect to Shareholders and their Shares, and similar matters;
and
(g) ACCOUNTING. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's
properties, Shareholders or otherwise.
The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into subcontractual arrangements relative to any of the matters referred to in
Sections 3.3(a) through (g) hereof.
Subject to the provisions of the 1940 Act, the fact that:
(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter or distributor or agent of or
for any Contracting Party, or of or for any parent or affiliate of any
Contracting Party or that the Contracting Party or any parent or
affiliate thereof is a Shareholder or has an interest in the Trust, or
that
(ii) any Contracting Party may have a contract providing for
the rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited partnerships
or other organizations, or has other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust and/or the
Trustees or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders, provided that in the case of any relationship or
interest referred to in the preceding clause (i) on the part of any Trustee or
officer of the Trust either (l) the material facts as to such relationship or
interest have been disclosed to or are known by the Trustees not having any such
relationship or interest and the contract involved is approved in good faith
reasonably justified by such facts by a majority of such Trustees not having any
such relationship or interest (even though such unrelated or disinterested
Trustees are less than a quorum of all of the Trustees), (2) the material facts
as to such relationship or interest and as to the contract have been disclosed
to or are known by the Shareholders not having such relationship or interest and
who are entitled to vote thereon and the contract involved is specifically
approved in good faith by majority vote of such Shareholders, or (3) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by the Shareholders.
SECTION 3.4 PAYMENT OF TRUST EXPENSES AND COMPENSATION OF TRUSTEES. The
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust, or partly out of principal and partly out of income, and to
charge or allocate the same to, between or among such one or more of the Series
and Sub-Series that may be established and designated pursuant to Article IV, as
the Trustees deem
7
<PAGE> 12
fair, all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust, or in connection with the management thereof,
including, but not limited to, the Trustees' compensation and such expenses and
charges for the services of the Trust's officers, employees, investment adviser,
administrator, distributor, principal underwriter, auditor, counsel, depository,
custodian, transfer agent, dividend disbursing agent, accounting agent,
Shareholder servicing agent, and such other agents, consultants, and independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur. Without limiting the generality of any other
provision hereof, the Trustees shall be entitled to reasonable compensation from
the Trust for their services as Trustees and may fix the amount of such
compensation.
SECTION 3.5 OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the
assets of the Trust shall at all times be considered as vested in the Trustees.
ARTICLE IV
SHARES
SECTION 4.1 DESCRIPTION OF SHARES. The beneficial interest in the Trust
shall be divided into Shares, all without par value. The Trustees shall have the
authority from time to time to issue or reissue Shares in one or more Series of
Shares (including without limitation the Series specifically established and
designated in Section 4.2), as they deem necessary or desirable, to establish
and designate such Series, and to fix and determine the relative rights and
preferences as between the different Series of Shares as to right of redemption
and the price, terms and manner of redemption, special and relative rights as to
dividends and other distributions and on liquidation, sinking or purchase fund
provisions, conversion rights, and conditions under which the several Series
shall have separate voting rights or no voting rights. Except as aforesaid all
Shares of the different Series shall be identical.
The Shares of each Series may be issued or reissued from time to time
in one or more sub-series ("Sub-Series"), as determined by the Board of Trustees
pursuant to resolution. Each Sub-Series shall be appropriately designated, prior
to the issuance of any shares thereof, by some distinguishing letter, number or
title. All Shares within a Sub-Series shall be alike in every particular. All
Shares of each Series shall be of equal rank and have the same powers,
preferences and rights, and shall be subject to the same qualifications,
limitations and restrictions without distinction between the shares of different
Sub-Serieses thereof, except with respect to such differences among such
Sub-Serieses, as the Board of Trustees shall from time to time determine to be
necessary or desirable, including differences in the rate or rates of dividends
or distributions. The Board of Trustees may from time to time increase the
number of Shares allocated to any Sub-Series already created by providing that
any unissued Shares of the applicable Series shall constitute part of such
Sub-Series, or may decrease the number of Shares allocated to any Sub-Series
already created by providing that any unissued Shares previously assigned to
such Sub-Series shall no longer constitute part thereof. The Board of Trustees
is hereby empowered to classify or reclassify from time to time any unissued
Shares of each Series by fixing or altering the terms thereof and by assigning
such unissued shares to an existing or newly created Sub-Series. Notwithstanding
anything to the contrary in this paragraph the Board of Trustees is hereby
empowered (i) to redesignate any issued Shares of any Series by assigning a
distinguishing letter, number or title to such shares and (ii) to reclassify all
or any part of the issued Shares of any Series to make them part of an existing
or newly created Sub-Series.
The number of authorized Shares and the number of Shares of each Series
that may be issued is
8
<PAGE> 13
unlimited, and the Trustees may issue Shares of any Series or Sub-Series for
such consideration and on such terms as they may determine (or for no
consideration if pursuant to a Share dividend or split-up), all without action
or approval of the Shareholders. All Shares when so issued on the terms
determined by the Trustees shall be fully paid and non-assessable (but may be
subject to mandatory contribution back to the Trust as provided in subsection
(h) of Section 4.2). The Trustees may classify or reclassify any unissued Shares
or any Shares previously issued and reacquired of any Series into one or more
Series that may be established and designated from time to time. The Trustees
may hold as treasury Shares (of the same or some other Series), reissue for such
consideration and on such terms as they may determine, or cancel, at their
discretion from time to time, any Shares of any Series reacquired by the Trust.
The Trustees may from time to time close the transfer books or
establish record dates and times for the purposes of determining the holders of
Shares entitled to be treated as such, to the extent provided or referred to in
Section 5.3.
The establishment and designation of any Series of Shares in addition
to those established and designated in Section 4.2, or of any Sub-Series of
Shares, shall be effective upon the execution by a majority of the then Trustees
of an instrument setting forth such establishment and designation and the
relative rights and preferences of such Series or Sub-Series, or as otherwise
provided in such instrument. At any time that there are no Shares outstanding of
any particular Series or Sub-Series previously established and designated the
Trustees may by an instrument executed by a majority of their number abolish
that Series or Sub-Series and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any organization
in which any such person is interested may acquire, own, hold and dispose of
Shares to the same extent as if such person were not a Trustee, officer or other
agent of the Trust; and the Trust may issue and sell or cause to be issued and
sold and may purchase Shares from any such person or any such organization
subject only to the general limitations, restrictions or other provisions
applicable to the sale or purchase of Shares generally.
SECTION 4.2 ESTABLISHMENT AND DESIGNATION OF SERIES. Without limiting
the authority of the Trustees set forth in Section 4.1 to establish and
designate any further Series, the Trustees hereby establish and designate two
Series of Shares: the "Johnson Investment Growth Fund" and the "Johnson
Investment Fixed Income Fund". The Shares of these Series and any Shares of any
further Series that may from time to time be established and designated by the
Trustees shall (unless the Trustees otherwise determine with respect to some
further Series or Sub-Series at the time of establishing and designating the
same) have the following relative rights and preferences:
(a) ASSETS BELONGING TO SERIES. All consideration received by the
Trust for the issuance or sale of Shares of a particular
Series together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to
that Series for all purposes, subject only to the rights of
creditors, and shall be so recorded upon the books of account
of the Trust. Such consideration, assets, income, earnings,
profits and proceeds thereof, including any
9
<PAGE> 14
proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may
be, together with any General Items allocated to that Series
as provided in the following sentence, are herein referred to
as "assets belonging to" that Series. In the event that there
are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable
as belonging to any particular Series (collectively "General
Items"), the Trustees shall allocate such General Items to and
among any one or more of the Series established and designated
from time to time in such manner and on such basis as they, in
their sole discretion, deem fair and equitable; and any
General Items so allocated to a particular Series shall belong
to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for
all purposes.
The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall
be treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding
upon the Shareholders.
(b) LIABILITIES BELONGING TO SERIES. The assets belonging to each
particular Series and Sub-Series thereof shall be charged with
the liabilities of the Trust in respect of that Series or
Sub-Series and all expenses, costs, charges and reserves
attributable to that Series or Sub-Series, and any general
liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as belonging to any
particular Series shall be allocated and charged by the
Trustees to and among any one or more of the Series and
Sub-Serieses established and designated from time to time in
such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. The liabilities, expenses,
costs, charges and reserves allocated and so charged to a
Series or Sub-Series are herein referred to as "liabilities
belonging to" that Series or Sub-Series. Each allocation of
liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the Shareholders
of all Series for all purposes.
(c) DIVIDENDS. Dividends and distributions on Shares of a
particular Series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise
pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustees may determine, to
the holders of Shares of that Series, from such of the
estimated income and capital gains, accrued or realized, from
the assets belonging to that Series, as the Trustees may
determine, after providing for actual and accrued liabilities
belonging to that Series. All dividends and distributions on
Shares of a particular Series shall be distributed pro rata to
the holders of that Series in proportion to the number of
Shares of that Series held by such holders at the date and
time of record established for the payment of such dividends
or distributions, except that in connection with any dividend
or distribution program or procedure the Trustees may
determine that no dividend or distribution shall be payable on
Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times
established by the Trustees under such program or procedure,
and except that if Sub-Serieses have been established for any
Series, the rate of dividends or distributions may vary among
such Sub-Series pursuant to resolution, which may be a
standing resolution, of the Board of Trustees. Such dividends
and distributions may be made in cash or Shares or a
combination thereof as determined by the Trustees or
10
<PAGE> 15
pursuant to any program that the Trustees may have in effect
at the time for the election by each Shareholder of the mode
of the making of such dividend or distribution to that
Shareholder. Any such dividend or distribution paid in Shares
will be paid at the net asset value thereof as determined in
accordance with subsection (h) of Section 4.2.
The Trust intends to qualify each Series as a "regulated
investment company" under the Internal Revenue Code of 1954,
as amended, or any successor or comparable statute thereto,
and regulations promulgated thereunder. Inasmuch as the
computation of net income and gains for federal income tax
purposes may vary from the computation thereof on the books of
the Trust, the Board of Trustees shall have the power, in its
sole discretion, to distribute in any fiscal year as
dividends, including dividends designated in whole or in part
as capital gains distributions, amounts sufficient, in the
opinion of the Board of Trustees, to enable each Series to
qualify as a regulated investment company and to avoid
liability of the Series for federal income tax in respect of
that year. However, nothing in the foregoing shall limit the
authority of the Board of Trustees to make distributions
greater than or less than the amount necessary to qualify as a
regulated investment company and to avoid liability of each
Series for such tax.
(d) LIQUIDATION. In event of the liquidation or dissolution of the
Trust, the Shareholders of each Series or Sub-Series that has
been established and designated shall be entitled to receive,
as a Series or Sub-Series, when and as declared by the
Trustees, the excess of the assets belonging to that Series or
Sub-Series over the liabilities belonging to that Series or
Sub-Series. The assets so distributable to the Shareholders of
any particular Series or Sub-Series shall be distributed among
such Shareholders in proportion to the number of Shares of
that Series or Sub-Series held by them and recorded on the
books of the Trust. The liquidation of any particular Series
or Sub-Series may be authorized by vote of a majority of the
Trustees then in office subject to the approval of a majority
of the outstanding voting Shares of that Series or Sub-Series,
as defined in the 1940 Act.
(e) VOTING. All Shares shall have "equal voting rights" as such
term is defined in the Investment Company Act of 1940 and
except as otherwise provided by that Act or rules, regulations
or orders promulgated thereunder. On each matter submitted to
a vote of the Shareholders, each Series shall vote as a
separate series except as to any matter with respect to which
a vote of all Series voting as a separate series is required
by the 1940 Act or rules and regulations promulgated
thereunder, or would be required under the Ohio General
Corporation Law if the Trust were an Ohio corporation. As to
any matter which does not affect the interest of a particular
Series or Sub-Series, only the holders of Shares of the one or
more affected Series or Sub-Serieses shall be entitled to
vote.
(f) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a
particular Series shall have the right at such times as may be
permitted by the Trust, but no less frequently than once each
week, to require the Trust to redeem all or any part of his
Shares of that Series at a redemption price equal to the net
asset value per Share of that Series next determined in
accordance with subsection (h) of this Section 4.2 after the
Shares are properly tendered for redemption. Payment of the
redemption price shall be in cash; provided, however, that if
the Trustees determine, which determination shall be
conclusive, that conditions exist
11
<PAGE> 16
which make payment wholly in cash unwise or undesirable, the
Trust may make payment wholly or partly in securities or other
assets belonging to the Series of which the Shares being
redeemed are part at the value of such securities or assets
used in such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment
of the redemption price and may suspend the right of the
holders of Shares of any Series to require the Trust to redeem
Shares of that Series during any period or at any time when
and to the extent permissible under the 1940 Act, and such
redemption is conditioned upon the Trust having funds or
property legally available therefor.
(g) REDEMPTION BY TRUST. Each Share of each Series that has been
established and designated is subject to redemption by the
Trust at the redemption price which would be applicable if
such Share was then being redeemed by the Shareholder pursuant
to subsection (f) of this Section 4.2:(a) at any time, if the
Trustees determine in their sole discretion that failure to so
redeem may have materially adverse consequences to all or any
of the holders of the Shares, or any Series thereof, of the
Trust, or (b) upon such other conditions as may from time to
time be determined by the Trustees and set forth in the then
current Prospectus of the Trust with respect to maintenance of
Shareholder accounts of a minimum amount. Upon such redemption
the holders of the Shares so redeemed shall have no further
right with respect thereto other than to receive payment of
such redemption price.
(h) NET ASSET VALUE. The net asset value per Share of any Series
or Sub-Series shall be the quotient obtained by dividing the
value of the net assets of that Series or Sub-Series (being
the value of the assets belonging to that Series or Sub-Series
less the liabilities belonging to that Series or Sub-Series)
by the total number of Shares of that Series or Sub-Series
outstanding, all determined in accordance with the methods and
procedures, including without limitation those with respect to
rounding, established by the Trustees from time to time.
The Trustees may determine to maintain the net asset value per
Share of any Series at a designated constant dollar amount and
in connection therewith may adopt procedures not inconsistent
with the 1940 Act for the continuing declarations of income
attributable to that Series as dividends payable in additional
Shares of that Series at the designated constant dollar amount
and for the handling of any losses attributable to that
Series. Such procedures may provide that in the event of any
loss each Shareholder shall be deemed to have contributed to
the capital of the Trust attributable to that Series or
Sub-Series his pro rata portion of the total number of Shares
required to be canceled in order to permit the net asset value
per Share of that Series to be maintained, after reflecting
such loss, at the designated constant dollar amount. Each
Shareholder of the Trust shall be deemed to have agreed, by
his investment in any Series with respect to which the
Trustees shall have adopted any such procedure, to make the
contribution referred to in the preceding sentence in the
event of any such loss.
(i) TRANSFER. All Shares of each particular Series shall be
transferable, but transfers of Shares of a particular Series
will be recorded on the Share transfer records of the Trust
applicable
12
<PAGE> 17
to that Series only at such times as Shareholders shall have
the right to require the Trust to redeem Shares of that Series
and at such other times as may be permitted by the Trustees.
(j) EQUALITY. All Shares of each particular Series shall represent
an equal proportionate interest in the assets belonging to
that Series (subject to the liabilities belonging to that
Series), and each Share of any particular Series shall be
equal to each other Share of that Series; but the provisions
of this sentence shall not restrict any distinctions
permissible under this Section 4.2 that may exist with respect
to a Sub-Series of the same Series. The Trustees may from time
to time divide or combine the Shares of any particular Series
into a greater or lesser number of Shares of that Series
without thereby changing the proportionate beneficial interest
in the assets belonging to that Series or in any way affecting
the rights of Shares of any other Series.
(k) FRACTIONS. Any fractional Share of any Series or Sub-Series,
if any such fractional Share is outstanding, shall carry
proportionately all the rights and obligations of a whole
Share of that Series or Sub-Series, including with respect to
voting, receipt of dividends and distributions, redemption of
Shares, and liquidation of the Trust.
(l) CONVERSION RIGHTS. Subject to compliance with the requirements
of the 1940 Act, the Trustees shall have the authority to
provide that holders of Shares of any Series or Sub-Series
shall have the right to convert said Shares into Shares of one
or more other Series of Shares in accordance with such
requirements and procedures as may be established by the
Trustees.
SECTION 4.3 OWNERSHIP OF SHARES. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each Series
that has been established and designated. No certificates certifying the
ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders and as to the number of
Shares of each Series and Sub-Series held from time to time by each such
Shareholder.
SECTION 4.4 INVESTMENTS IN THE TRUST. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as they
from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or other person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares whether or not conforming to such
authorized terms.
SECTION 4.5 NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive
or other right to subscribe to any additional Shares or other securities issued
by the Trust.
SECTION 4.6 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have
13
<PAGE> 18
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the Trust nor entitle the representative of
any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle the Shareholder
to any title in or to the whole or any part of the Trust property or right to
call for a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders partners. Neither the Trust nor
the Trustees, nor any officer, employee or agent of the Trust shall have any
power to bind personally any Shareholder, nor except as specifically provided
herein to call upon any Shareholder for the payment of any sum of money or
assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 5.1 VOTING POWERS. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Section 3.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii)
with respect to any termination or reorganization of the Trust or any Series to
the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Section
7.3, (v) to the same extent as the stockholders of an Ohio business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by the 1940 Act, this Declaration of Trust, the
By-Laws or any registration of the Trust with the Commission (or any successor
agency) or any state, or as the Trustees may consider necessary or desirable.
There shall be no cumulative voting in the election of any Trustee or Trustees.
Shares may be voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law, this
Declaration of Trust or the By-Laws to be taken by Shareholders.
SECTION 5.2 MEETINGS. Meetings (including meetings involving only the
holders of Shares of one or more but less than all Series or Sub-Serieses) of
Shareholders may be called by the Trustees from time to time for the purpose of
taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter deemed by the Trustees
to be necessary or desirable. Written notice of any meeting of Shareholders
shall be given or caused to be given by the Trustees by mailing such notice at
least seven days before such meeting, postage prepaid, stating the time, place
and purpose of the meeting, to each Shareholder at the Shareholder's address as
it appears on the records of the Trust. If the Trustees shall fail to call or
give notice of any meeting of Shareholders (including a meeting involving only
the holders of Shares of one or more but less than all Series or Sub-Serieses)
for a period of 30 days after written application by Shareholders holding at
least 25% of the Shares then outstanding requesting a meeting be called for any
other purpose requiring action by the Shareholders as provided herein or in the
By-Laws, then Shareholders holding at least 25% of the Shares then outstanding
may call and give notice of such meeting, and thereupon the meeting shall be
held in the manner provided for herein in case of call thereof by the Trustees.
14
<PAGE> 19
SECTION 5.3 RECORD DATES. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or (subject to any provisions permissible
under subsection (c) of Section 4.2 with respect to dividends or distributions
on Shares that have not been ordered and/or paid for by the time or times
established by the Trustees under the applicable dividend or distribution
program or procedure then in effect) to be treated as a Shareholder of record
for purposes of such other action, even though he has since that date and time
disposed of his Shares, and no Shareholder becoming such after that date and
time shall be so entitled to vote at such meeting or any adjournment thereof or
to be treated as a Shareholder of record for purposes of such other action.
SECTION 5.4 QUORUM AND REQUIRED VOTE. A majority of the Shares of each
Series, or of all Series if voting as a single series is required, which are
entitled to vote shall be a quorum for the transaction of business at a
Shareholders' meeting, but any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a reasonable
time after the date set for the original meeting without the necessity of
further notice. A majority of the Shares voted, at a meeting of which a quorum
is present, shall decide any questions and a plurality shall elect a Trustee,
except when a different vote is required or permitted by any provision of the
1940 Act or other applicable law or by this Declaration of Trust or the By-Laws.
SECTION 5.5 ACTION BY WRITTEN CONSENT. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such other proportion thereof as shall be required by the 1940 Act or by any
express provision of this Declaration of Trust or the By-Laws) consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
SECTION 5.6 INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
stockholders of an Ohio corporation under the Ohio General Corporation Law.
SECTION 5.7 ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE.
All persons extending credit to, contracting with or having any claim against
the Trust shall look only to the assets of that Series
15
<PAGE> 20
for payment under such credit, contract or claim; and neither the Shareholders
nor the Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor. Every note, bond,
contract, instrument, certificate or undertaking and every other act or thing
whatsoever executed or done by or on behalf of the Trust or the Trustees or any
of them in connection with the Trust shall be conclusively deemed to have been
executed or done only by or for the Trust or the Trustees and not personally.
Nothing in this Declaration of Trust shall protect any Trustee or officer
against any liability to the Trust or the Shareholders to which such Trustee or
officer would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee or of such officer.
Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of the State of Ohio and
shall recite to the effect that the same was executed or made by or on behalf of
the Trust or by them as Trustees or Trustee or as officers or officer and not
individually and that the obligations of such instrument are not binding upon
any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
SECTION 6.2 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall be liable for his own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, (a) the Trustees shall not be responsible or liable in
any event for any neglect or wrongdoing of any officer, agent, employee,
consultant, adviser, administrator, distributor or principal underwriter,
custodian or transfer, dividend disbursing, Shareholder servicing or accounting
agent of the Trust, nor shall any Trustee be responsible for the act or omission
of any other Trustee; (b) the Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
and their duties as Trustees, and shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice;
and (c) in discharging their duties, the Trustees, when acting in good faith,
shall be entitled to rely upon the books of account of the Trust and upon
written reports made to the Trustees by any officer appointed by them, any
independent public accountant, and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of a Contracting
Party appointed by the Trustees pursuant to Section 3.3. The Trustees as such
shall not be required to give any bond or surety or any other security for the
performance of their duties. Nothing stated herein is intended to detract from
the protection accorded to Trustees by Ohio Revised Code Sections 1746.08 and
1701.59, as amended from time to time.
SECTION 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be charged or held to be personally liable for any
obligation or liability of the Trust solely by reason of being or having been a
Shareholder and not because of such Shareholder's acts or omissions or for some
other reason, the Trust (upon proper and timely request by the Shareholder)
shall assume the defense against such charge and satisfy any judgment thereon,
and the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the Trust estate to be held harmless from and indemnified against
all loss and expense arising from such liability;
16
<PAGE> 21
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall advance attorneys'
fees or other expenses incurred by a Covered Person in defending a proceeding to
the full extent permitted by the Securities Act of 1933, as amended, the 1940
Act, and Ohio Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws,
and not Ohio Revised Code Section 1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
SECTION 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 DURATION AND TERMINATION OF TRUST. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by a majority of the Trustees then in office
subject to a favorable vote of a majority of the outstanding voting Shares, as
defined in the 1940 Act, of each Series voting separately by Series.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
17
<PAGE> 22
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
SECTION 7.2 REORGANIZATION. The Trustees may sell, convey and transfer
the assets of the Trust, or the assets belonging to any one or more Series, to
another trust, partnership, association or corporation organized under the laws
of any state of the United States, or to the Trust to be held as assets
belonging to another Series of the Trust, in exchange for cash, shares or other
securities (including, in the case of a transfer to another Series of the Trust,
Shares of such other Series) with such transfer being made subject to, or with
the assumption by the transferee of, the liabilities belonging to each Series
the assets of which are so transferred; provided, however, that if shareholder
approval is required by the 1940 Act, no assets belonging to any particular
Series shall be so transferred unless the terms of such transfer shall have
first been approved at a meeting called for the purpose by the affirmative vote
of the holders of a majority of the outstanding voting Shares, as defined in the
1940 Act, of that Series. Following such transfer, the Trustees shall distribute
such cash, shares or other securities (giving due effect to the assets and
liabilities belonging to and any other differences among the various Series the
assets belonging to which have so been transferred) among the Shareholders of
the Series the assets belonging to which have been so transferred; and if all of
the assets of the Trust have been so transferred, the Trust shall be terminated.
SECTION 7.3 AMENDMENTS. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time by an instrument in
writing signed by a majority of the then Trustees (or by an officer of the Trust
pursuant to the vote of a majority of such Trustees), when authorized so to do
by the vote in accordance with subsection (e) of Section 4.2 of Shareholders
holding a majority of the Shares entitled to vote, except that amendments either
(a) establishing and designating any new Series of Shares not established and
designated in Section 4.2, or any Sub-Series or (b) having the purpose of
changing the name of the Trust or the name of any Shares theretofore established
and designated or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any provision hereof which is internally
inconsistent with any other provision hereof or which is defective or
inconsistent with the 1940 Act or with the requirements of the Internal Revenue
Code and applicable regulations for the Trust's obtaining the most favorable
treatment thereunder available to regulated investment companies, shall not
require authorization by Shareholder vote. Subject to the foregoing, any such
amendment shall be effective as provided in the instrument containing the terms
of such amendment or, if there is no provision therein with respect to
effectiveness, upon the execution of such instrument and of a certificate (which
may be a part of such instrument) executed by a Trustee or officer of the Trust
to the effect that such amendment has been duly adopted.
SECTION 7.4 FILING OF COPIES; REFERENCES; HEADINGS. The original or a
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of the State of Ohio, as well as any other governmental office where
such filing may from time to time be required, but the failure to make any such
filing shall not impair the effectiveness of this instrument or any such
amendment. Anyone dealing with the Trust may rely on a certificate by an officer
of the Trust as to whether or not any such amendments have been made, as to the
identities of the Trustees and officers,
18
<PAGE> 23
and as to any matters in connection with the Trust hereunder; and, with the same
effect as if it were the original, may rely on a copy certified by an officer of
the Trust to be a copy of this instrument or of any such amendments. In this
instrument and in any such amendment, references to this instrument, and all
expressions like "herein", "hereof" and "hereunder" shall be deemed to refer to
this instrument as a whole as the same may be amended or affected by any such
amendments. The masculine gender shall include the feminine and neuter genders.
Headings are placed herein for convenience of reference only and shall not be
taken as a part hereof or control or affect the meaning, construction or effect
of this instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
SECTION 7.5 APPLICABLE LAW. This Declaration of Trust is made in the
State of Ohio, and it is created under and is to be governed by and construed
and administered according to the laws of said State, including the Ohio General
Corporation Law as the same may be amended from time to time, but the reference
to said Corporation Law is not intended to give the Trust, the Trustees, the
Shareholders or any other person any right, power, authority or responsibility
available only to or in connection with an entity organized in corporate form.
The Trust shall be of the type referred to in Section 1746.01 of the Ohio
Revised Code, and without limiting the provisions hereof, the Trust may exercise
all powers which are ordinarily exercised by such a trust.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand in
Cincinnati, Ohio for himself and his assigns, as of the day and year first above
written.
/s/
------------------------
TIMOTHY E. JOHNSON
STATE OF OHIO )
) ss:
COUNTY OF HAMILTON )
Before me, a Notary Public in and for said county and state, personally
appeared the above named TIMOTHY E. JOHNSON, who acknowledged that he did sign
the foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal on this 30th day of September, 1992.
/s/
--------------------------
David C. Tedford
Notary Public
My Commission Expires: June 3, 1997
--------------
<PAGE> 1
Exhibit 99.B1.2
JOHNSON INVESTMENT MUTUAL FUNDS TRUST
AMENDMENT NO. 1 TO AGREEMENT AND DECLARATION OF TRUST
Pursuant to Section 7.3 of the Agreement and Declaration of Trust of
Johnson Investment Mutual Funds Trust (the "Trust") and effective upon the
execution of this document, the undersigned, being a majority of the Trustees of
the Trust, hereby change the name of the Trust to "Johnson Mutual Funds Trust",
change the name of the Johnson Investment Growth Fund series to "Johnson Growth
Fund", and change the name of the Johnson Investment Fixed Income Fund series to
"Johnson Fixed Income Fund."
Pursuant to Section 4.1 of the Agreement and Declaration of Trust of
the Trust and effective upon the execution of this document, the undersigned,
being a majority of the Trustees of the Trust, hereby establish two new series
of shares of the Trust and designate such series the "Johnson Opportunity Fund"
and the "Johnson Municipal Income Fund." The relative rights and preferences of
these new series of shares shall be those rights and preferences set forth in
Section 4.2 of the Agreement and Declaration of Trust of the Trust.
/s/
---
Timothy E. Johnson, Trustee
/s/
---
John W. Craig, Trustee
/s/
---
Ronald H. McSwain, Trustee
/s/
---
Kenneth S. Shull, Trustee
Dated: February 15, 1994
<PAGE> 1
Exhibit 99.B2
BY-LAWS
OF
JOHNSON INVESTMENT MUTUAL FUNDS TRUST
ARTICLE 1
Agreement and Declaration of Trust and Offices
----------------------------------------------
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of Johnson Investment Mutual Funds Trust, the Ohio
business trust established by the Declaration of Trust (the "Trust").
1.2 OFFICES. The Trust may maintain one or more other offices,
including its principal office, in or outside of Ohio, in such cities as the
Trustees may determine from time to time. Unless the Trustees otherwise
determine, the principal office of the Trust shall be located in Hamilton
County, Ohio.
ARTICLE 2
Meetings of Trustees
--------------------
2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice immediately after and
at the same place as any meeting of the shareholders.
2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the President or the Treasurer or by two or more Trustees, sufficient notice
thereof being given to each Trustee by the Secretary or an Assistant Secretary
or by the officer or the Trustees calling the meeting.
2.3 NOTICE. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
<PAGE> 2
2.4 QUORUM. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5 PARTICIPATION BY TELEPHONE. One or more of the Trustees or of any
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting except as
otherwise provided by the Investment Company Act of 1940.
2.6 ACTION BY CONSENT. Any action required or permitted to be taken at
any meeting of the Trustees or any committee thereof may be taken without a
meeting, if a written consent of such action is signed by a majority of the
Trustees then in office or a majority of the members of such committee, as the
case may be, and such written consent is filed with the minutes of the
proceedings of the Trustees or such committee.
ARTICLE 3
Officers
--------
3.1 ENUMERATION AND QUALIFICATION. The officers of the Trust shall be a
President, a Treasurer, a Secretary and such other officers, including Vice
Presidents, if any, as the Trustees from time to time may in their discretion
elect. The Trust may also have such agents as the Trustees from time to time may
in their discretion appoint. Any officer may be but none need be a Trustee or
shareholder. Any two or more offices may be held by the same person.
3.2 ELECTION. The President, the Treasurer and the Secretary shall be
elected annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time. Vacancies in any office may be filled at
any time.
3.3 TENURE. The President, the Treasurer and the Secretary shall hold
office for one year and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent shall
retain authority at the pleasure of the Trustees.
3.4 POWERS. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as an Ohio
business corporation and such other duties and powers as the Trustees may from
time to time designate.
3.5 PRESIDENT. Unless the Trustees otherwise provide, the President, or
in the absence of the President, any Trustee chosen by the Trustees, shall
preside at all meetings of the shareholders and of the Trustees. The President
shall be the chief executive officer.
<PAGE> 3
3.6 TREASURER. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
3.7 SECRETARY. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an assistant
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.8 RESIGNATIONS AND REMOVALS. Any Trustee or officer may resign at any
time by written instrument signed by him or her and delivered to the President
or the Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time. The
Trustees may remove any officer elected by them with or without cause. Except to
the extent expressly provided in a written agreement with the Trust, no Trustee
or officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
ARTICLE 4
Committees
----------
4.1 GENERAL. The Trustees, by vote of a majority of the Trustees then
in office, may elect from their number an Executive Committee or other
committees and may delegate thereto some or all of their powers except those
which by law, by the Declaration of Trust, or by these By-Laws may not be
delegated. Except as the Trustees may otherwise determine, any such committee
may make rules for the conduct of its business, but unless otherwise provided by
the Trustees or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-Laws for the Trustees
themselves. All members of such committees shall hold such offices at the
pleasure of the Trustees. The Trustees may abolish any such committee at any
time. Any committee to which the Trustees delegate any of their powers or duties
shall keep records of its meetings and shall report its action to the Trustees.
The Trustees shall have power to rescind any action of any committee, but no
such rescission shall have retroactive effect.
ARTICLE 5
Reports
-------
5.1 GENERAL. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
<PAGE> 4
ARTICLE 6
Fiscal Year
-----------
6.1 GENERAL. The fiscal year of the Trust shall be fixed by, and shall
be subject to change by, the Trustees.
ARTICLE 7
Seal
----
7.1 GENERAL. If required by applicable law, the seal of the Trust shall
consist of a flat-faced die with the word "Ohio", together with the name of the
Trust and the year of its organization cut or engraved thereon, but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
ARTICLE 8
Execution Of Papers
-------------------
8.1 GENERAL. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust, but shall state the substance of or make reference to the
provisions of Section 6 of the Declaration of Trust.
ARTICLE 9
Issuance of Share Certificates
------------------------------
9.1 SHARE CERTIFICATES. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a certificate
stating the number of shares owned by him, in such form as shall be prescribed
from time to time by the Trustees. Such certificate shall be signed by the
President or a Vice-President and by the Treasurer or Assistant Treasurer. Such
signatures may be facsimiles if the certificate is signed by a transfer agent,
or by a registrar, other than a Trustee, officer or employee of the Trust. In
case any officer who has signed or whose facsimile signature has been placed on
such certificate shall cease to be such officer before such certificate is
issued, it may be issued by the Trust with the same effect as if he were such
officer at the time of its issue.
9.2 LOSS OF CERTIFICATES. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the
<PAGE> 5
Trustees shall prescribe.
9.3 ISSUANCE OF NEW CERTIFICATE TO PLEDGEE. In the event certificates
have been issued, a pledgee of shares transferred as collateral security shall
be entitled to a new certificate if the instrument of transfer substantially
describes the debt or duty that is intended to be secured thereby. Such new
certificate shall express on its face that it is held as collateral security,
and the name of the pledgor shall be stated thereon, who alone shall be liable
as a shareholder, and entitled to vote thereon.
9.4 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of share certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.
ARTICLE 10
Custodian
---------
10.1 GENERAL. The Trust shall at all times employ a bank or trust
company having a capital, surplus and undivided profits of at least Five Hundred
Thousand ($500,000) Dollars as Custodian of the capital assets of the Trust. The
Custodian shall be compensated for its services by the Trust and upon such basis
as shall be agreed upon from time to time between the Trust and the Custodian.
ARTICLE 11
Dealings With Trustees and Officers
-----------------------------------
11.1 GENERAL. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of shares of the Trust to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may accept subscriptions to
shares or repurchase shares from any firm or company in which he is interested.
ARTICLE 12
Shareholders
------------
12.1 MEETINGS. A meeting of the shareholders of the Trust shall be held
whenever called by the Trustees, whenever election of a Trustee or Trustees by
shareholders is required by the provisions of Section 16(a) of the Investment
Company Act of 1940 for that purpose or whenever otherwise required pursuant to
the Declaration of Trust. Any meeting shall be held on such day and at such time
as the President or the Trustees may fix in the notice of the meeting.
12.2 RECORD DATES. For the purpose of determining the shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a time, which shall be not more than 60
days before the date of any meeting of shareholders or the date for the payment
of any dividend or of any other distribution, as the record date for determining
the shareholders having the right to notice of and to vote at such meeting and
any adjournment
<PAGE> 6
thereof or the right to receive such dividend or distribution, and in such case
only shareholders of record on such record date shall have such right,
notwithstanding any transfer of shares on the books of the Trust after the
record date; or without fixing such record date the Trustees may for any such
purposes close the register or transfer books for all or any part of such
period.
ARTICLE 13
Amendments to the By-Laws
-------------------------
13.1 GENERAL. These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
<PAGE> 1
Exhibit 99.B5.1
MANAGEMENT AGREEMENT
TO: JOHNSON INVESTMENT COUNSEL, INC.
5556 Cheviot Road
Cincinnati, Ohio 45247
Dear Sirs:
Johnson Investment Mutual Funds Trust (hereinafter referred to as the
"Trust") herewith confirms our agreement with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers two series of shares to investors: the
Johnson Investment Growth Fund and the Johnson Investment Fixed Income Fund. The
Trust's Board of Trustees (the "Board") is authorized from time to time, as it
deems necessary or desirable, to establish and designate additional series of
shares.
You have been selected to act as the sole investment adviser of the
Trust and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows upon the date of execution of this Agreement.
1. ADVISORY SERVICES
-----------------
You will regularly provide the Trust with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for each of the Trust's series consistent with the respective
series' investment objectives and policies. You will determine the securities to
be purchased for each series of the Trust, the portfolio securities to be held
or sold by each series of the Trust and the portion of each series' assets to be
held uninvested, subject always to to the series' investment objectives,
policies and restrictions, as each of the same shall be from time to time in
effect, and subject further to such policies and instructions as the Board may
from time to time establish. You will advise and assist the officers of the
Trust in taking such steps as are necessary or appropriate to carry out the
decisions of the Board and the appropriate committees of the Board regarding the
conduct of the business of the Trust.
2. ALLOCATION OF CHARGES AND EXPENSES
----------------------------------
You will pay all operating expenses of the Trust, including
the compensation and expenses of any trustees, officers and employees of the
Trust and of any other persons rendering any services to the Trust; clerical and
shareholder service staff salaries; office space and other
<PAGE> 2
office expenses; fees and expenses incurred by the Trust in connection with
membership in investment company organizations; legal, auditing and accounting
expenses; non-organizational expenses of registering shares under federal and
state securities laws; insurance expenses; fees and expenses of the custodian,
transfer agent, dividend disbursing agent, shareholder service agent, plan
agent, administrator, accounting and pricing services agent and underwriter of
the Trust; expenses, including clerical expenses, of issue, sale, redemption or
repurchase of shares of the Trust; the cost of preparing and distributing
reports and notices to shareholders, the cost of printing or preparing
prospectuses and statements of additional information for delivery to the
Trust's current and prospective shareholders; the cost of printing or preparing
stock certificates or any other documents, statements or reports to
shareholders; expenses of shareholders' meetings and proxy solicitations;
pursuant to the Trust's Distribution and Service Plan, advertising, promotion
and other expenses incurred directly or indirectly in connection with the sale
or distribution of the Trust's shares; and all other operating expenses not
specifically assumed by the Trust.
The Trust will pay all brokerage fees and commissions, taxes,
interest, expenses incurred by the Trust in connection with the organization and
initial registration of shares of any series of the Trust, and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Trust may be a party and indemnification of the Trust's trustees and
officers with respect thereto. You may obtain reimbursement from the Trust, at
such time or times as you may determine in your sole discretion, for any of the
expenses advanced by you, which the Trust is obligated to pay, and such
reimbursement shall not be considered to be part of your compensation pursuant
to this Agreement.
3. COMPENSATION OF THE ADVISER
---------------------------
For all of the services to be rendered and payments to be made
as provided in this Agreement, each series of the Trust will pay you, as of the
last day of each month, a fee at the annual rate of 1.30% of the average value
of the daily net assets of the Johnson Investment Growth Fund series and 1.15%
of the average value of the daily net assets of the Johnson Investment Fixed
Income Fund series.
Your compensation with respect to each additional series of
the Trust established after the date of this Agreement shall be the fee
described above unless the Board of Trustees, including a majority of the
Trustees who are not interested persons as defined in the Investment Company Act
of 1940 of you or the Trust, determines otherwise. If the Board of Trustees
adopts a different fee arrangement for an additional series, the fee arrangement
shall be approved pursuant to the provisions of Section 15 of the Investment
Company Act of 1940.
The average value of the daily net assets of a series shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of a series is suspended for
any particular business day, then for the purposes of this paragraph, the value
of
2
<PAGE> 3
the net assets of the series as last determined shall be deemed to be the
value of the net assets as of the close of the business day, or as of such other
time as the value of the series' net assets may lawfully be determined, on that
day. If the determination of the net asset value of a series has been suspended
for a period including such month, your compensation payable at the end of such
month shall be computed on the basis of the value of the net assets of the
series as last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
-------------------------------------
In connection with purchases or sales of portfolio securities
for the account of each series of the Trust, it is understood that you will
arrange for the placing of all orders for the purchase and sale of portfolio
securities for the account with brokers or dealers selected by you, subject to
review of this selection by the Board from time to time. You will be responsible
for the negotiation and the allocation of principal business and portfolio
brokerage. In the selection of such brokers or dealers and the placing of such
orders, you are directed at all times to seek for the series the best
qualitative execution, taking into account such factors as price (including the
applicable brokerage commission or dealer spread), the execution capability,
financial responsibility and responsiveness of the broker or dealer and the
brokerage and research services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities and Exchange Act of 1934) to the Trust and/or the other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a Trust portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if you determine in good faith that the amount of the
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker or dealer. The determination may be
viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Trust and to accounts over which you
exercise investment discretion. The Trust and you understand and acknowledge
that, although the information may be useful to the Trust and you, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Trust to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Trust.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Trust as a factor in the selection of brokers and dealers to execute Trust
portfolio transactions.
Subject to the provisions of the Investment Company Act of
1940, as amended,
3
<PAGE> 4
and other applicable law, you or any of your affiliates may retain compensation
in connection with effecting the Trust's portfolio transactions, including
transactions effected through others. If any occasion should arise in which you
give any advice to clients of yours concerning the shares of the Trust, you will
act solely as investment counsel for such client and not in any way on behalf of
the Trust. Your services to the Trust pursuant to this Agreement are not to be
deemed to be exclusive and it is understood that you may render investment
advice, management and other services to others, including other registered
investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
----------------------------------
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the Investment
Company Act of 1940 or the rules thereunder, neither you nor your shareholders,
officers, directors, employees, agents, control persons or affiliates of any
thereof shall be subject to any liability for, or any damages, expenses or
losses incurred by the Trust in connection with, any error of judgment, mistake
of law, any act or omission connected with or arising out of any services
rendered under or payments made pursuant to this Agreement or any other matter
to which this Agreement relates, except by reason of willful misfeasance, bad
faith or gross negligence on the part of any such persons in the performance of
your duties under this Agreement or by reason of reckless disregard by any of
such persons of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee,
shareholder or agent of you, or one under your control or direction, even though
paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
------------------------------------------
This Agreement shall take effect on the date of its execution
and shall remain in force for a period of two (2) years from the date of its
execution with respect to each of the Trust's series established on the date of
such execution and, with respect to any additional series registered after the
date of execution, until the next anniversary date of the Agreement following
the date on which such series becomes effectively registered for sale in a
public offering, and from year to year thereafter as to each series of the
Trust's shares, subject to annual approval by (i) The Board or (ii) a vote of a
majority (as defined in the Investment Company Act of 1940) of the outstanding
voting securities of such series, provided that in either event continuance is
also approved by a majority of the trustees who are not "interested persons" as
defined in the Investment Company Act of 1940 of you or the Trust, by a vote
cast in person at a meeting called for the purpose of voting such approval.
If the shareholders of any series of the Trust's shares fail
to approve the
4
<PAGE> 5
Agreement in the manner set forth above, upon request of the Board, you will
continue to serve or act in such capacity for the series for the period of time
pending required approval of the Agreement, of a new agreement with you or a
different adviser or other definitive action; provided that the compensation to
be paid by the Trust to you for your services to and payments on behalf of the
series will be equal to the lesser of your actual costs incurred in furnishing
such services and payments or the amount you would have received under this
Agreement for furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to a series at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of the series or by you. This Agreement shall automatically terminate
in the event of its assignment.
7. USE OF NAME
-----------
The Trust and you acknowledge that all rights to the name
"Johnson Investment" belong to you and that the Trust is being granted a limited
license to use such words in its Trust name or in any series name. In the event
you cease to be the adviser to the Trust, the Trust's right to the use of the
name "Johnson Investment" shall automatically cease on the thirtieth day
following the termination of this Agreement. The right to the name may also be
withdrawn by you during the term of this Agreement upon thirty (30) days'
written notice by you to the Trust. Nothing contained herein shall impair or
diminish in any respect, your right to use the name "Johnson Investment" in the
name of or in connection with any other business enterprises with which you are
or may become associated. There is no charge to the Trust for the right to use
this name.
8. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the outstanding
voting securities of the series to which the amendment relates and by the Board,
including a majority of the trustees who are not interested persons of you or of
the Trust, case in person at a meeting called for the purpose of voting on such
approval.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
-----------------------------------------
The term "Johnson Investment Mutual Funds Trust" means and
refers to the Trustees from time to time serving under the Trust's Declaration
of Trust as the same may subsequently thereto have been, or subsequently hereto
be, amended. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Trust, as provided in the Declaration of Trust of the Trust. The
execution and delivery of
5
<PAGE> 6
this Agreement have been authorized by the trustees and shareholders of the
Trust and signed by officers of the Trust, acting as such, and neither such
authorization by such trustees and shareholders nor such execution and delivery
by such officers shall be deemed to have been made by any of them individually
or to impose any liability on any of them personally, but shall bind only the
trust property of the Trust as provided in its Declaration of Trust. A copy of
the Agreement and Declaration of Trust of the Trust is on file with the
Secretary of State of Ohio.
10. SEVERABILITY
------------
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
---------------------------
(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act of 1940, as amended (the "Act") shall be
resolved by reference to such term or provision of the Act and to interpretation
thereof, if any, by the United States courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
Securities and Exchange Commission issued pursuant to said Act. In addition,
where the effect of a requirement of the Act, reflected in any provision of this
Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
12. NOTICES
-------
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
and your address for this purpose shall be 5556 Cheviot Road, Cincinnati, Ohio
45247.
13. COUNTERPARTS
------------
This Agreement may be in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14. BINDING EFFECT
--------------
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his
6
<PAGE> 7
signature will operate to bind the party indicated to the foregoing terms.
15. MISCELLANEOUS
-------------
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST: JOHNSON INVESTMENT MUTUAL FUNDS TRUST
/s/ By: /s/
- ----------------------------- ---------------------------------
David C. Tedford, Secretary TIMOTHY E. JOHNSON, President
Dated: December 18, 1992
ACCEPTANCE
----------
The foregoing Agreement is hereby accepted.
ATTEST: JOHNSON INVESTMENT MUTUAL FUNDS TRUST
/s/ By:/s/
- ----------------------------- ---------------------------------
Timothy E. Johnson, President Janet L. Johnson, Secretary
Dated: December 18, 1992
7
<PAGE> 1
Exhibit 99.B5.2
MANAGEMENT AGREEMENT
TO: JOHNSON INVESTMENT COUNSEL, INC.
5556 Cheviot Road
Cincinnati, Ohio 45247
Dear Sirs:
Johnson Mutual Funds Trust, formerly Johnson Investment Mutual Funds
Trust (hereinafter referred to as the "Trust") herewith confirms our agreement
with you.
The Trust has been organized to engage in the business of an investment
company. The Trust currently offers two series of shares to investors: the
Johnson Growth Fund and the Johnson Fixed Income Fund.
The Trust has previously entered into a management agreement (the
"Original Agreement") dated December 18, 1992, with you on behalf of the Johnson
Growth Fund and the Johnson Fixed Income Fund. The Trust is organizing two new
series, the Johnson Opportunity Fund and the Johnson Municipal Income Fund (the
"Funds").
You have been selected to act as the sole investment adviser to the
Funds and to provide certain other services to the Funds, as more fully set
forth below, and you are willing to act as such investment adviser and to
perform such services under the terms and conditions hereinafter set forth. The
Original Agreement provides that your compensation with respect to series
established after December 18, 1992, may be determined pursuant to a different
fee than in the Original Agreement. The Board has determined, in the exercise of
its fiduciary duty, that it is in the best interests of the shareholders of the
Trust to enter into a separate management agreement, including a different fee
arrangement, with you on behalf of the Funds. Accordingly, the Trust agrees with
you as follows upon the date of execution of this Agreement.
1. ADVISORY SERVICES
-----------------
You will regularly provide the Funds with such investment
advice as you in your discretion deem advisable and will furnish a continuous
investment program for each of the Funds consistent with the respective series'
investment objectives and policies. You will determine the securities to be
purchased for the Funds, the portfolio securities to be held or sold by each
Fund and the portion of each Funds' assets to be held uninvested, subject always
to the series' investment objectives, policies and restrictions, as each of the
same shall be from time to time in effect, and subject further to such policies
and instructions as the Board may from time to time establish. You will advise
and assist the officers of the Trust in taking such steps as are necessary or
appropriate to carry out the decisions of the Board and the appropriate
committees of the Board regarding the conduct of the business of the Funds.
<PAGE> 2
2. ALLOCATION OF CHARGES AND EXPENSES
----------------------------------
You will pay all operating expenses of the Funds, including
the compensation and expenses of any trustees, officers and employees of the
Trust and of any other persons rendering any services to the Funds; clerical and
shareholder service staff salaries; office space and other office expenses; fees
and expenses incurred by the Funds in connection with membership in investment
company organizations; legal, auditing and accounting expenses;
non-organizational expenses of registering shares under federal and state
securities laws; insurance expenses; fees and expenses of the custodian,
transfer agent, dividend disbursing agent, shareholder service agent, plan
agent, administrator, accounting and pricing services agent and underwriter of
the Funds; expenses, including clerical expenses, of issue, sale, redemption or
repurchase of shares of the Funds; the cost of preparing and distributing
reports and notices to shareholders, the cost of printing or preparing
prospectuses and statements of additional information for delivery to the Funds'
current and prospective shareholders; the cost of printing or preparing stock
certificates or any other documents, statements or reports to shareholders;
expenses of shareholders' meetings and proxy solicitations; advertising,
promotion and other expenses incurred directly or indirectly in connection with
the sale or distribution of the Funds' shares; and all other operating expenses
not specifically assumed by the Funds.
The Funds will pay all brokerage fees and commissions, taxes,
interest, and their share of such extraordinary or non-recurring expenses as may
arise, including litigation to which the Trust may be a party and
indemnification of the Trust's trustees and officers with respect thereto. You
may obtain reimbursement from the Funds, at such time or times as you may
determine in your sole discretion, for any of the expenses advanced by you,
which the Funds are obligated to pay, and such reimbursement shall not be
considered to be part of your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
---------------------------
For all of the services to be rendered and payments to be made
as provided in this Agreement, as of the last day of each month, the Johnson
Opportunity Fund will pay you a fee at the annual rate of 1.30% of the average
value of its daily net assets and the Johnson Municipal Income Fund will pay you
a fee of 1.15% of the average value of its daily net assets.
The average value of the daily net assets of the Funds shall
be determined pursuant to the applicable provisions of the Declaration of Trust
of the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of a Fund is suspended for any
particular business day, then for the purposes of this paragraph, the value of
the net assets of the Fund as last determined shall be deemed to be the value of
the net assets as of the close of the business day, or as of such other time as
the value of the Fund's net assets may lawfully be determined, on that day. If
the determination of the net asset value of a Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the series as
last determined (whether during or prior to such month).
<PAGE> 3
4. EXECUTION OF PURCHASE AND SALE ORDERS
-------------------------------------
In connection with purchases or sales of portfolio securities
for the account of the Funds, it is understood that you will arrange for the
placing of all orders for the purchase and sale of portfolio securities for the
account with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the series the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
You should generally seek favorable prices and commission
rates that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Trust and/or the other
accounts over which you exercise investment discretion. You are authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Funds which is in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction if you determine in good faith that the amount of
the commission is reasonable in relation to the value of the brokerage and
research services provided by the executing broker or dealer. The determination
may be viewed in terms of either a particular transaction or your overall
responsibilities with respect to the Trust and to accounts over which you
exercise investment discretion. The Trust and you understand and acknowledge
that, although the information may be useful to the Funds and you, it is not
possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Funds to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Funds.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Trust as a factor in the selection of brokers and dealers to execute Trust
portfolio transactions.
Subject to the provisions of the Investment Company Act of
1940, as amended, and other applicable law, you or any of your affiliates may
retain compensation in connection with effecting the Funds' portfolio
transactions, including transactions effected through others. If any occasion
should arise in which you give any advice to clients of yours concerning the
shares of the Funds, you will act solely as investment counsel for such client
and not in any way on behalf of the Funds. Your services to the Funds pursuant
to this Agreement are not to be deemed to be exclusive and it is understood that
you may render investment advice, management and other services to others,
including other registered investment companies.
<PAGE> 4
5. LIMITATION OF LIABILITY OF ADVISER
----------------------------------
You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the Investment
Company Act of 1940 or the rules thereunder, neither you nor your shareholders,
officers, directors, employees, agents, control persons or affiliates of any
thereof shall be subject to any liability for, or any damages, expenses or
losses incurred by the Trust in connection with, any error of judgment, mistake
of law, any act or omission connected with or arising out of any services
rendered under or payments made pursuant to this Agreement or any other matter
to which this Agreement relates, except by reason of willful misfeasance, bad
faith or gross negligence on the part of any such persons in the performance of
your duties under this Agreement or by reason of reckless disregard by any of
such persons of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
shareholder or agent of you, who may be or become an officer, director, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than services or business in
connection with your duties hereunder), to be rendering such services to or
acting solely for the Trust and not as a director, officer, employee,
shareholder or agent of you, or one under your control or direction, even though
paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
------------------------------------------
This Agreement shall take effect on the date of its execution
and shall remain in force for a period of two (2) years from the date of its
execution and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority (as defined in the Investment Company Act
of 1940) of the outstanding voting securities of a Fund, provided that in either
event continuance is also approved by a majority of the trustees who are not
"interested persons" as defined in the Investment Company Act of 1940 of you or
the Trust, by a vote cast in person at a meeting called for the purpose of
voting such approval.
If the shareholders of a Fund fail to approve the Agreement in
the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the series will
be equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be
terminated with respect to either Fund at any time without the payment of any
penalty, by the Board, by a vote of a majority of the outstanding voting
securities of a Fund or by you. This Agreement shall automatically terminate in
the event of its assignment.
<PAGE> 5
7. USE OF NAME
-----------
The Trust and you acknowledge that all rights to the name
"Johnson" belong to you and that the Funds are being granted a limited license
to use such words in the name of the Funds. In the event you cease to be the
adviser to the Funds, the Funds' right to the use of the name "Johnson" shall
automatically cease on the thirtieth day following the termination of this
Agreement. The right to the name may also be withdrawn by you during the term of
this Agreement upon thirty (30) days' written notice by you to the Funds.
Nothing contained herein shall impair or diminish in any respect, your right to
use the name "Johnson" in the name of or in connection with any other business
enterprises with which you are or may become associated. There is no charge to
the Funds for the right to use this name.
8. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived,
discharged or terminated orally, and no amendment of this Agreement shall be
effective until approved (a) by the Board, including a majority of the Trustees
who are not interested persons of you or of the Trust, cast in person at a
meeting called for the purpose of voting on such approval, and (b) if and only
if required by the Investment Company Act of 1940, by vote of the holders of a
majority of the outstanding voting securities of the Fund to which the amendment
relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
-----------------------------------------
The term "Johnson Mutual Funds Trust" means and refers to the
Trustees from time to time serving under the Trust's Declaration of Trust as the
same may subsequently thereto have been, or subsequently hereto be, amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Funds and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of Ohio.
10. SEVERABILITY
------------
In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect the remainder of
this Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
---------------------------
(a) This Agreement shall be governed by the laws of the State
of Ohio.
<PAGE> 6
(b) Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Investment Company Act of 1940, as amended (the "Act") shall be
resolved by reference to such term or provision of the Act and to interpretation
thereof, if any, by the United States courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
Securities and Exchange Commission issued pursuant to said Act. In addition,
where the effect of a requirement of the Act, reflected in any provision of this
Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
12. NOTICES
-------
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
and your address for this purpose shall be 5556 Cheviot Road, Cincinnati, Ohio
45247.
13. COUNTERPARTS
------------
This Agreement may be in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14. BINDING EFFECT
--------------
Each of the undersigned expressly warrants and represents that
he has the full power and authority to sign this Agreement on behalf of the
party indicated, and that his signature will operate to bind the party indicated
to the foregoing terms.
15. CAPTIONS
--------
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
<PAGE> 7
If you are in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterpart of this letter and return
such counterpart to the Trust, whereupon this letter shall become a binding
contract upon the date thereof.
Yours very truly,
ATTEST: JOHNSON MUTUAL FUNDS TRUST
/s/ By:/s/
- ------------------------- ---
David C. Tedford, Secretary TIMOTHY E. JOHNSON, President
Dated: February 15, 1994
ACCEPTANCE
----------
The foregoing Agreement is hereby accepted.
ATTEST: JOHNSON INVESTMENT COUNSEL, INC.
/s/ By: /s/
- ------------------------- ---
David C. Tedford Timothy E. Johnson
Dated: February 15, 1994
<PAGE> 1
Exhibit 99.B8
CUSTODIAN AGREEMENT
AGREEMENT made as of December 18, 1992, between JOHNSON INVESTMENT
MUTUAL FUNDS TRUST, an Ohio business trust (the "Trust"), and THE PROVIDENT
BANK, an Ohio banking corporation ("Provident");
WHEREAS, the Trust is engaged in the business of investment in certain
types of securities, as more fully described in its Registration Statement on
Form N-1A under the Securities Act of 1933, as amended, including its then
current prospectus and statement of additional information (the "Registration
Statement");
WHEREAS, the Trustees of the Trust have selected Provident to act as
the custodian of the Securities (as subsequently defined) and funds of the Trust
and to perform certain ministerial duties as agent, as more fully set forth
herein;
WHEREAS, Provident is ready and willing to act as custodian and agent
in accordance with the provisions hereof;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
Article 1. Definitions.
1.1 "Book-Entry" or "Book Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and federal agency
securities as provided in Subpart O of Treasury Circular No. 300, 31 CFR 306,
Subpart B of 31 CFR Part 350, and the book-entry regulations of federal agencies
substantially in the form of Subpart O, and its successor or successors.
1.2 "Broker Account" shall mean a segregated account, in the name of a
broker, dealer or futures commission merchant or in the name of the Trust for
the benefit of a broker, dealer or futures commission merchant, as the case may
be, separate and distinct from the Trust's custody account, in which certain
securities and/or cash of the Trust shall be deposited and held by Provident for
the benefit of a broker, dealer or futures commission merchant in connection
with the purchase or sale of Financial Futures Contract.
1.3 "Financial Futures Contract" shall mean a contractual commitment to
buy or sell Securities during a specified month at an agreed-upon price, issued
by or pursuant to the regulations of a commodities exchange regulated under the
Commodities Futures Trading Act.
1.4 "Option" shall mean any exchange traded put or call option on
Securities (as defined below).
1.5 (a) "Proper Instruction" shall mean a writing signed or initialled
by one or more persons as the Trustees shall have from time to time authorized,
and, to the extent and for the purposes authorized by the Trustees of the Trust.
Each such writing shall set forth the specific transaction or type of
transaction involved in a manner customarily used in the industry. Oral
instructions confirmed in writing within twenty-four (24) hours by persons
authorized to do so will be considered Proper Instructions if Provident
reasonably believes them to have been given by persons authorized to give such
instructions with respect to the transaction involved.
<PAGE> 2
Upon receipt of a certificate of the Secretary of the Trust as to the
authorization by the Trustees of the Trust accompanied by a detailed description
of procedures approved by the Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that such procedures afford adequate safeguards for the Trust's
assets. In performing its duties generally, and more particularly in connection
with the purchase, sale and exchange of securities made by or for the Trust,
Provident may take cognizance of the provisions of the Trust's Declaration of
Trust, By-Laws and Registration Statement; however, except as otherwise
expressly provided herein, it may assume unless and until notified in writing to
the contrary that instructions purporting to be proper instructions received by
it are not in conflict with or in any way contrary to any provisions of the
Trust's Declaration of Trust, ByLaws, or Registration Statements.
1.6 "Securities" shall mean stocks, bonds, debentures, notes, evidence
of indebtedness, evidences of interest; warrants, Options and Financial Futures
Contracts and other securities, irrespective of their form, the name by which
they may be described, or the character or form of the entities by which they
are issued or created.
1.7 "Securities Depository" shall mean a clearing agency that is
registered under Section 17A of the Securities Exchange Act of 1934 and that
acts as a securities depository as that term is defined by Rule 17f-4 (a) under
the Investment Company act of 1940.
1.8 "Shares" shall mean the shares of beneficial interests of the Trust
issued by the Trust.
Article 2. Appointment and Property to be Held in Custody
2.1 The Trust hereby appoints Provident as its custodian and agent
subject to the provisions of this Agreement. The Trust agrees to deliver to
Provident all Securities and cash owned by it, and all payments of income,
payments of principal and capital distributions received by it with respect to
all Securities owned by the Trust from time to time, and the cash consideration
received by it for such Shares of the Trust as may be issued or sold from time
to time.
2.2 The Trust will deposit with Provident properly certified or
authenticated copies of its Declaration of Trust and By-Laws, and all amendments
thereto, its current prospectus and statement of additional information, as from
time to time amended, and such resolutions, votes, or other proceedings of the
Trust as may be necessary for or convenient to Provident in the performance of
its duties.
Article 3. Duties of Provident with Respect to Property of the Trust Held in
Custody.
3.1 Safekeepinq. Provident shall hold and physically segregate for the
account of the Trust all non-cash property and Securities other than Securities
that are maintained pursuant to Section 3.13, and shall maintain records of all
receipts, deliveries and locations of such Securities, together with a current
inventory thereof, and shall conduct periodic physical inspections (including
sampling counts and four quarterly complete physical accounts per year to be
conducted and certified to the Trust by a Bank officer of Provident) of
certificates representing bonds and other Securities held by it under this
Agreement in such manner as Provident shall determine from time to time to be
advisable in order to verify the accuracy of such inventory. With respect to
<PAGE> 3
Securities held by any agent appointed pursuant to Section 3.11, and with
respect to Securities or cash held by any Sub-Custodian employed pursuant to
Section 3.12, Provident may rely upon certificates from such agent as to the
holdings of such Sub-Custodian, it being understood that Provident must perform
account reconciliations with such agents and Sub-Custodians no less frequently
than quarterly, and that reliance upon such certificates in no way relieves
Provident of its responsibilities under this Agreement.
Provident will promptly report to the Trust the results of such
inspections and certifications, indicating any shortages or discrepancies
uncovered thereby, and take appropriate action to remedy such shortages or
discrepancies.
3.2 Delivery of Securities. Provident shall release and deliver
Securities owned by the Trust that are either held by Provident or are in a
Securities System account (as defined in Section 3.13) of Provident, and only
upon receipt of Proper Instructions (which may be continuing instruction when
deemed appropriate by the parties) and only in the following cases:
(a) upon sale of such Securities for the account of the Trust and receipt of
payment thereof;
(b) upon the receipt of payment in connection with any repurchase agreement
related to such Securities entered into by the Trust, and prior to any receipt
of confirmation of the repurchase agreement if Provident in its sole discretion
deems it appropriate;
(c) in the case of a sale effected through a Securities System, in accordance
with the provisions of Section 3.13 hereof;
(d) to the depository agent in connection with tender or other similar offers
for portfolio Securities of the Trust;
(e) to the issuer thereof or its agent when such Securities are called,
redeemed, retired or otherwise become payable; provided that, in any such case,
the cash or other consideration is to be delivered to Provident;
(f) to the issuer thereof, or its agent, for transfer into the name of the Trust
or into the name of any nominee or nominees of Provident or into the name or
nominee name of any agent appointed pursuant to Section 3.11 or into the name or
nominee name of any sub-custodian appointed pursuant to Section 3.12; or for
exchange for a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units; provided that,
in any such case, the new Securities are to be delivered to Provident;
(g) for exchange or conversion pursuant to any plan of merger, consolidation,
recapitalization, reorganization or readjustment of the Securities, or pursuant
to provisions for conversion contained in such Securities, or pursuant to any
deposit agreement, provided that, in any such case, the new Securities and cash,
if any, are to be delivered to Provident;
(h) in the case of warrants, rights or similar Securities, the surrender thereof
in the exercise of such warrants, rights, or similar Securities or the surrender
of interim receipts or temporary Securities for definitive Securities; provided
that, in any such case, the new Securities and cash, if any, are to be delivered
to Provident;
<PAGE> 4
for delivery in connection with any loans of Securities made by the Trust, but
only against receipt of adequate collateral as determined by the Trust, which
may be in the form of cash or obligations issued by the United States
government, its agencies or instrumentalities;
(j) for delivery as security in connection with any borrowings by the Trust
requiring a pledge of assets by the Trust, but only against receipt of amounts
borrowed;
(k) upon receipt of instructions from the Transfer Agent, for delivery to such
Transfer Agent or to the holders of Shares in connection with distributions in
kind, as may be described from time to time in the Trust's currently effective
prospectus, in satisfaction of requests by holders of Shares for repurchase or
redemption;
(l) in the case of Options for the purchase or sale of Securities, upon the
exercise of any put Option by the Trust or sale of an Option by the Trust and
receipt of payment thereof;
(m) for any other proper purpose, upon receipt of Proper Instructions specifying
the Securities to be delivered and naming the person or persons to whom delivery
of such Securities shall be made. Provident shall have no responsibility to
determine whether said activities are a proper purpose of the Trust.
3.3 Liability for Delivery of Securities in Violation of Section 3.2.
Notwithstanding anything to the contrary in this Agreement, in any and every
case where Securities owned by the Trust are released and delivered by Provident
in violation of Section 3.2, Provident shall be liable to the Trust in the event
any loss results to the Trust from the failure of Provident to comply with the
provisions of Section 3.2.
3.4 Registration of Securities. Securities held by Provident pursuant
to this Agreement (other than bearer Securities) shall be registered (a) in the
name of the Trust, (b) in the name of any nominee of the Trust or of any nominee
of Provident (which nominee shall be assigned exclusively to the Trust), (c) in
the name or nominee name of any agent appointed pursuant to Section 3.11, or (d)
in the name or nominee name of any sub-custodian appointed pursuant to Section
3.12. All Securities accepted by Provident on behalf of the Trust under the
terms of this Agreement shall be in "street name" or other good delivery form.
3.5 Bank Accounts. Provident shall retain all cash of the Trust, other
than cash maintained by the Trust in a checking account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940, in the
banking department of Provident in a separate account or accounts in the name of
the Trust, subject only to draft or order by Provident acting pursuant to the
terms of this Agreement. If and when authorized by Proper Instructions in
accordance with a vote of the majority of the Board of Trustees of the Trust,
Provident may open and maintain an additional account or accounts in such other
bank or trust companies (which are qualified to act as a custodian under the
Investment Company Act of 1940) as may be designated by such instructions, such
account or accounts, however, to be in the name of Provident in its capacity as
Custodian and subject only to its draft or order in accordance with the terms
of
<PAGE> 5
this Agreement. If requested by the Trust, Provident shall furnish the Trust
with monthly statements of the Trust's accounts.
3.6 Payments for Shares. Provident shall receive as transfer agent for
the Trust, and it shall receive from the distributor for the Trust shares, or
from the Trust, and deposit into the Trust's accounts such payments as are
received for shares of the Trust issued or sold from time to time by the Trust.
3.7 Collections. Unless otherwise instructed by receipt of Proper
Instructions, and to the extent that Provident should reasonably be cognizant of
same in the exercise of due care, Provident shall collect, receive and deposit
in a bank account or accounts maintained pursuant to Section 3.5 all income and
other payments with respect to the Securities held hereunder, and to execute
ownership and other certificates and affidavits for all Federal and State tax
purposes in connection with the collection of bond and note coupons, and to do
all other things necessary or proper in connection with the collection of such
income, and without waiving the generality of the foregoing, to:
(1) present for payment on the date of payment all coupons and other income
items requiring presentation;
(2) present for payment all Securities which may mature or be called, redeemed,
retired or otherwise become payable on the date such Securities become payable;
(3) endorse and deposit for collection, in the name of the Trust, checks, drafts
or other negotiable instruments on the same day as received.
In any case in which Provident does not receive any such due and unpaid income
within a reasonable time after it has made demands for the same as is customary
in the industry (which demands shall commence within a reasonable period of
time), it shall notify the Trust in writing, including copies of all demand
letters, if any, any written responses thereto and memoranda of all oral
responses thereto and to telephonic demands, and await Proper Instructions.
Provident shall not be obliged to take legal action for collection unless and
until reasonably indemnified to its satisfaction. All income and other payments
with respect to the Securities held hereunder shall be credited to the Trust's
appropriate investment account no later than one day after such income or other
payment is due from the obligor of such Security, whether or not such payments
have been collected by Provident, except where Provident promptly notifies the
Trust at the time when Provident obtains knowledge or reasonably should have
known prior to such time of the occurrence, of a failure or default on the
payment of the obligor. Provident shall notify the Trust as soon as reasonably
practicable whenever income due on Securities is not received by Provident in
due course.
3.8 Payment of Trust Moneys. Upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the parties, Provident
shall pay out moneys of the Trust in the following cases only:
(a) upon the purchase of Securities for the account of the Trust but only: (i)
against the delivery of such Securities to Provident (or any bank, banking firm
or trust company doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by Provident as its agent for this purpose)
registered in the name of the Trust or in the name of a nominee of Provident
<PAGE> 6
referred to in Section 3.4 hereof or in proper form for transfer; (ii) in the
case of a purchase effected through a Securities System, in accordance with the
conditions set forth in Section 3.13 hereof; or (iii) in the case of repurchase
agreements entered into between the Trust and either Provident or another party,
(1) against delivery of the Securities either in certificate form or through an
entry crediting Provident's custodial account at the Federal Reserve Bank with
such Securities; (2) against delivery of a safekeeping receipt from a Securities
depository evidencing purchase by the Trust of securities owned by Provident or
another party, and prior to any receipt of confirmation of the repurchase
agreement if Provident in its sole discretion deems it appropriate or (3)
pursuant to such other procedures enumerated in written repurchase agreements
entered into by the Trust.
(b) in connection with conversion, exchange or surrender of Securities owned by
the fund as set forth in Section 3.2 hereof;
(c) for the payment of any expense or liability incurred by the Trust, including
but not limited to the following payments for the account of the Trust:
interest, taxes, management, accounting, transfer agent and legal fees, and
operating expenses of the Trust whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
(d) for the payment of any dividends declared pursuant to the Trust's
Declaration of Trust, By-Laws and Registration Statement.
(e) in the case of Options, (1) the premium for the purchase of an Option shall
be payable upon receipt of Proper Instructions and the oral affirmation of the
purchase of such Options, given by the clearing member (in the case of Options
Clearing Corporation traded options) or by the broker and may be made in advance
of receipt of a clearing member's confirmation or broker's confirmation
confirming purchase of an Option by the Trust, and (2) the payment to a clearing
member or broker upon the exercise of a call Option by the Trust shall be made
upon receipt of the Securities underlying the call Option exercised by the
Trust;
(f) in the case of Financial Futures Contracts, (1) payments for Financial
Futures Contracts, including payments of initial margin, shall be payable into a
Broker Account upon receipt of Proper Instructions and the oral affirmation of
the purchase or sale of the Financial Futures Contract given by the broker and
may be made in advance of any receipt of a broker's confirmation confirming the
purchase or sale of the Financial Futures contract, (2) payment of variation
margin shall be payable upon receipt of proper instructions, and (3) payments in
settlement of Financial Futures Contracts shall be payable into a Broker Account
upon receipt of Proper Instructions and the oral affirmation of the settlement
of the Financial Futures Contract and may be made in advance of receipt of a
broker's confirmation confirming settlement of the Financial Futures Contract.
(g) upon receipt of Proper Instructions, for any other purpose which the Trust
declares is a proper Trust purpose. Provident shall have no responsibility to
determine whether said activities are a proper purpose of the Trust.
3.9 Liability for Payment in Advance of Receipt of Securities
Purchased. Notwithstanding anything to the contrary in this agreement, in any
and every case where payment for purchase of Securities for the account of the
Trust is made by Provident in violation of Section 3.8 and in the absence of
specific written instructions from the Trust, Provident shall be liable to the
Trust in
<PAGE> 7
the event any loss results to the Trust from the failure of Provident to comply
with the provisions of Section 3.7. In every and any case of a purchase of
Securities for the account of the Trust where payment is made by Provident in
advance of receipt of the Securities purchased, Provident shall be absolutely
liable to the Trust for such Securities to the same extent as if the Securities
had been received by Provident.
3.10 Failed Transactions. If, on the day a purchase transaction is to
be effected, Provident is unable to obtain custody and control of any security
intended to be purchased by the Trust, Provident shall advise the Trust of such
failure and shall assist the Trust in obtaining credits in favor of the Trust
based upon any Trust credit balances resulting from such incompleted
transactions. Provident shall also assist the Trust in collecting any payments
of interest, dividends or penalties arising from the failed transaction.
3.11 Appointment of Agents. Provident, may at any time or times appoint
(and may at any time remove) any other bank, trust company or reasonable
commercial agent, qualified to act as Custodian under the Investment Company Act
of 1940, as its agent to carry out such of the provisions of this Agreement as
Provident may from time to time direct, provided, however, that the appointment
of such Agent shall have been approved by the Trustees of the Trust, and that
such appointment shall not relieve Provident of any of its responsibilities
under this Agreement. Each agency relationship shall be established by a written
instrument, copies of which are to be provided promptly to the Trust, which
shall contain, inter alia, the obligation of the agent to segregate and hold
assets of the Trust only in the name of and for the benefit of the Trust.
3.12 Appointment of Sub-Custodians. Provident may from time to time
employ one or more banks and/or trust companies qualified under the Investment
Company Act of 1940 to act as custodian, as Sub-Custodians, provided, however,
that the appointment of such Agent shall have been approved by the Trustees of
the Trust, and that such appointment shall not relieve Provident of any of its
responsibilities under this Agreement. Each Sub-Custodian relationship shall be
established by written instrument, copies of which are to be provided promptly
to the Trust, which shall contain, inter alia, the obligation of the
SubCustodian to segregate and hold assets of the Trust only in the name of and
for the benefit of the Trust.
3.13 Deposit of Trust Assets in Securities System. Provident may
deposit and/or maintain Securities owned by the Trust in (a) a Securities
Depository, and (b) the Book-Entry System authorized by the U.S. Department of
Treasury and certain federal agencies (collectively referred to in this
Agreement as "Securities System"), all in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules and regulations, if
any, and subject to the following provisions:
(a) Provident may keep Securities of the Trust in a Securities System provided
that such Securities are represented in an account (for purposes of this
paragraph "Account") of Provident in the Securities System that shall not
include any assets of Provident other than assets held as a fiduciary or
custodian.
<PAGE> 8
(b) The records of Provident with respect to Securities of the Trust that are
maintained in a Securities System shall identify those Securities belonging to
the Trust.
(c) Provident shall pay for Securities purchased for the account of the Trust
upon (i) receipt of advice from the Securities System that such Securities have
been transferred to the Account, and (ii) the making of an entry on the records
of Provident to reflect such payment and transfer for the account of the Trust.
Provident shall transfer Securities sold for the account of the Trust upon (1)
receipt of advice from the Securities System that payment for such Securities
has been transferred to the Account, and (2) the making of an entry on the
records of Provident to reflect such transfer and payment for the account of the
Trust. Copies of all advices from the Securities System of transfers of
Securities for the account of the Trust shall identify the Trust, be maintained
for the Trust by Provident, and be provided to the Trust at its request.
Provident shall furnish to the Trust copies of daily transaction sheets
reflecting each day's transactions in the Securities System for the account of
the Trust on the next business day.
(d) Provident shall provide the Trust with any report obtained by Provident on
the Securities System's accounting system, internal accounting control and
procedures for safeguarding Securities deposited in the Securities System.
(e) Provident shall not act under this paragraph 3.13 in the absence of receipt
of an initial certificate of the Secretary that the Trustees of the Trust have
approved the initial use of a particular Securities System and the receipt of an
annual certificate of the Secretary that the Trustees of the Trust have reviewed
the use by the Trust of such Securities System, as required in each case by Rule
17f-4 under the Investment Company Act of 1940, as amended.
(f) Anything to the contrary in this Agreement notwithstanding, Provident shall
be liable to the Trust for any loss or damage to the Trust resulting from (i)
any negligence, misfeasance or misconduct of Provident or any of its agents or
of any of its employees in using the Securities System or from (ii) failure of
Provident or any of its agents or employees to enforce effectively such rights
as it may have against the Securities System. At the election of the Trust, it
shall be entitled to be subrogated to the rights of Provident with respect to
any claim against the Securities System or any other person that Provident may
have a claim against as a consequence of any such loss or damage if and to the
extent that the Trust has not been made whole for any such loss or damage.
3.14 Ownership Certificates for Tax Purposes. Provident shall execute
ownership and other certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other payments with respect to
Securities of the Trust held by it and in connection with transfers of
Securities.
3.15 Proxies. Provident shall, with respect to the Securities held
hereunder, cause to be promptly executed by the registered holder of such
Securities, if the Securities are registered otherwise than in the name of the
Trust or a nominee of the fund, all proxies, without indication of the manner in
which such proxies are to be voted, and shall promptly deliver to the Trust such
proxies, all proxy soliciting materials and all notices relating to such
Securities.
<PAGE> 9
3.16 Communication Relating to Trust Portfolio Securities. Provident
shall transmit promptly to the Trust all written information (including, without
limitation, pendency of calls and maturities of Securities and expirations of
rights in connection therewith) received by Provident from issuers of the
Securities being held for the Trust. With respect to tender or exchange offers,
Provident shall transmit promptly to the Trust all written information received
by Provident from issuers of the Securities whose tender or exchange is sought
and from the party (or his agents) making the tender or exchange offer. If the
Trust desires to take action with respect to any tender offer, exchange offer or
any other similar transaction, the Trust shall provide Provident with Proper
Instructions on the action the Trust desires Provident to take provided,
however, Provident shall not be liable to the Trust for the failure to take any
such action unless such Proper Instructions are received by Provident at least
one (1) business day prior to the date on which Provident is to take such
action.
3.17 Actions Permitted Without Express Authority. Provident may in its
reasonable discretion, without express authority from the Trust:
(a) surrender Securities in temporary form for Securities in definitive form;
(b) endorse for collection, in the name of the Trust, checks, drafts and other
negotiable instruments; and
in general, attend to all non-discretionary details in connection with the sale,
exchange, substitution, purchase, transfer and other dealings with the
Securities and property of the Trust except as otherwise directed by the
officers of the Trust.
3.18 Evidence of Authority. Provident shall be protected in acting upon
any instructions, notice, request, consent, certificate or other instrument or
paper reasonably believed by it to be genuine and to have been properly executed
by or on behalf of the Trust. Provident may receive and accept a certified copy
of a vote of the Trustees of the Trust as conclusive evidence of (a) the
authority of any person to act in accordance with such vote, or (b) any
determination or action by the Trustees pursuant to the Declaration of Trust and
By-Laws as the case may be, as described in such vote, and such vote may be
considered as in full force and effect until receipt by Provident of notice to
the contrary.
Article 4. Duties of Provident with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.
4.1 Provident shall cooperate with and supply necessary information to
the entity or entities appointed by the Trustees of the Trust to keep the books
of account of the Trust and/or compute the net asset value per share of the
outstanding shares of each series of the Trust. If directed in writing to do so
by the Trust, Provident shall itself keep such books of account and/or compute
such net asset value per share. If so directed, Provident shall also compute
such net asset value per share. If so directed, Provident shall also calculate
daily the net income of each series of the Trust as described in the currently
effective prospectus of such series and shall advise the Trust and the Transfer
Agent daily of the total amounts of such net income and, if instructed in
<PAGE> 10
writing by an officer of the Trust to do so, shall advise the Transfer Agent
periodically of the division of such net income among its various components.
The calculations of the net asset value per share and the daily income of each
series of the Trust shall be made at the time or times described from time to
time in the currently effective prospectus of such series.
Article 5. Custodian Records.
5.1 Provident shall create, maintain and retain all records relating to
its activities and obligations under this Agreement in such manner as will meet
with obligations of the Trust under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Trust. All records maintained by
Provident in connection with the performance of its duties under this Agreement
shall be the property of the Trust, shall at all times during the regular
business hours of Provident be open for inspection by duly authorized officers,
employees, attorneys for, auditors employed by, and other agents of the Trust
and, in the event of termination of this Agreement, will be delivered by
Provident to the Trust or to the successor Custodian designated by the Trust.
Provident shall, on a monthly basis, and otherwise when requested by the Trust,
at Provident's cost, supply the Trust with a tabulation of Securities owned by
the Trust and held by Provident.
Article 6. Opinion of Trust's Independent Accountant.
6.1 Provident shall take all reasonable action, as the Trust may from
time to time request, so that the Trust may obtain from year to year favorable
opinions from the Trust's independent accountants with respect to its activities
hereunder in connection with the preparation of reports to the Securities and
Exchange Commission and with respect to any other requirements of such
Commission.
Article 7. Reports to Trust by Independent Public Accountants.
7.1 Provident shall provide the Trust, at such times as the Trust may
reasonably require, with reports of independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
Securities, including Securities deposited and/or maintained in a Securities
System, relating to the services provided by Provident under this Agreement;
such reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Trust, to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, shall so state.
Article 8. Compensation of Provident.
8.1 Provident shall be entitled to such reasonable compensation for its
services and expenses as custodian, as agreed upon in writing from time to time
between the Trust and Provident and set forth in Schedule A Addendum attached to
this Agreement. In the event Provident shall be instructed to keep the books of
account of the Trust and/or compute the net asset value per share of the
outstanding shares of the Trust pursuant to Article 4 herein, at the time of
such instruction Provident and the Trust shall agree in writing upon reasonable
compensation for those additional services.
<PAGE> 11
Article 9. Liability and Indemnification of Provident.
9.1 Provident shall be entitled to receive and act upon advice of
counsel (who may be counsel for the Trust) and shall be without liability for
any action reasonably taken pursuant to such advice, provided that such action
is not in violation of applicable Federal or state laws or regulations.
Provident shall be kept indemnified by the Trust and be without liability for
any action taken or thing done by it or its employees, Sub-Custodians and
agents, in carrying out the terms and provisions of this Agreement in good faith
and without negligence, provided that it shall be liable to the Trust for any
error, omission or other act by it or any of its employees, Sub-Custodian and
agents, including acts of negligence, clerical errors and mechanical failures.
In order that the indemnification provision contained in this Section 9.1 shall
apply, however, it is understood that if in any case the Trust may be asked to
indemnify or save Provident harmless, the Trust shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that Provident will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust. The Trust shall have the option to defend Provident against any claim
which may be the subject of this indemnification, and in the event that the
Trust so elects it will so notify Provident, and thereupon the Trust shall take
over complete defense of the claim, and Provident shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this Section 9.1 Provident shall in no case confess any
claim or make any compromise in any case in which the Trust will be asked to
indemnify Provident except with the Trust's written consent.
Article 10. Effective Period: Termination.
10.1 This Agreement shall become effective as of its execution, shall
continue in full force and effect until termination by either party by an
instrument in writing delivered or mailed, postage prepaid to the other party,
such termination to take effect hot sooner than sixty (60) days after the date
of such delivery or mailing; provided, that the Trustees may immediately
terminate this Agreement in the event of the appointment of a conservator or
receiver for Provident by the Ohio Superintendent of Banks or upon the happening
of a like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction.
10.2 Upon termination of this Agreement, the Trust shall pay to
Provident such compensation as may be due as of the date of such termination and
shall likewise reimburse Provident for its reasonable costs, expenses and
disbursements in connection with the termination of this Agreement.
Article 11. Successor Custodian.
11.1 If a successor custodian shall be appointed by the Trustees of the
Trust, Provident shall, upon termination of this Agreement, deliver to such
successor custodian at the office of Provident, duly endorsed and in the form
for transfer, all Securities then held by it hereunder, shall transfer to an
account of the successor custodian all the Trust's Securities held in a
Securities System and shall deliver to such successor custodian all funds and
other property held by it, including all books, records, entries, accounts and
statements held by Provident or its agents, and generally shall fully cooperate
with the successor custodian in the transition.
<PAGE> 12
11.2 In the event that no written order designating a successor
custodian shall have been delivered to Provident on or before the date when such
termination shall become effective, then Provident shall have the right to
deliver to a bank or trust company, which is a "bank" as defined in the
Investment Company Act of 1940, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $5,000,000, all Securities, funds and other properties held by
Provident and all instruments held by Provident relative thereto and all other
property held by it under this Agreement and to transfer to an account of such
successor custodian all of the Trust's Securities held in any Securities System.
Thereafter, such bank or trust company shall be the successor of Provident under
this Agreement.
11.3 In the event that Securities, funds and other properties remain in
the possession of Provident after the date of termination hereof due to the
failure of the Trust to appoint a successor custodian, and Provident retains
possession of such Securities, funds and other properties of the Trust, the
provisions of this Agreement shall remain in full force and effect.
Article 12. Interpretive and Additional Provisions.
12.1 In connection with the operation of this Agreement, Provident and
the Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provision shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust and By-Laws of the Trust. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.
Article 13. Ohio Law to Apply.
13.1 This Agreement shall be construed in accordance with the laws of
Ohio.
Article 14. Limitation of Liability of the Trustees and Shareholders.
14.1 It is expressly agreed to that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust, personally, but bind only the trust
property of the Trust, as provided in the Declaration of Trust of the Trust. The
execution and delivery of this Agreement have been authorized by the Trustees of
the Trust and signed by an authorized officer of the Trust, acting as such, and
neither such authorization by such Trustees nor such execution and delivery by
such officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in its Declaration of Trust.
Article 15. Entire Agreement and Amendments.
15.1 This Agreement supersedes and terminates, as of the date hereof,
all prior contracts between the Trust and Provident relating to the custody of
the
<PAGE> 13
Trust's assets. Provident and the Trust acknowledge that this Agreement and the
Compensation Addendum attached constitute the entire agreement between them with
respect to the subject matter hereof, and that any and all prior discussions,
negotiations, commitments, or understanding relating to the subject matter of
this Agreement or the Compensation Addendum are hereby superseded and merged
herein. The terms and provisions of this Agreement shall not be changed,
modified, amended, waived, or terminated in any respect whatsoever except by a
written instrument executed by Provident and the Trusts.
Article 16. Severability.
16.1 If any of the provisions of this Agreement is held to be illegal,
invalid or unenforceable in any respect, Provident and the Trust agree that such
term or provision shall be deemed to be modified to the extent necessary to
permit its enforcement to the maximum extent permitted by applicable law. If any
of the provisions of this Agreement is held to be illegal, invalid or
unenforceable in any respect, the remainder of this Agreement and all other
provisions hereof shall not be affected thereby,
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized
representative as of the 18th day of December, 1992.
1992.
WITNESSETH:
JOHNSON INVESTMENT MUTUAL FUNDS TRUST
600-D6005/D12
<PAGE> 1
Exhibit 99.B11
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, Ohio 44145
Phone: (216) 835-8500
Fax: (216) 835-1093
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use in this
Post-Effective Amendment Number 9 of our report dated January 14, 1998 and to
all references to our firm included in or made a part of this Post-Effective
Amendment.
/s/ McCurdy & Associates, CPAs, Inc.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
April 22, 1998
<PAGE> 1
Exhibit 99.B13.1
December 16, 1992
Johnson Investment Mutual Funds Trust
5556 Cheviot Road
Cincinnati, OH 45247
Gentlemen:
Johnson Investment Counsel, Inc. hereby agrees to purchase 3,333.3333 shares of
the Johnson Investment Growth Fund at $15.00 per share and 3,333.3333 shares of
the Johnson Investment Fixed Income Fund at $15.00 per share, representing a
total investment of $100,000 in the shares of the series of the Johnson
Investment Mutual Funds Trust. Johnson Investment Counsel, Inc. hereby
represents that (1) such purchase is for investment purposes, and (2) the
undersigned has no present intention of redeeming or selling said shares.
JOHNSON INVESTMENT COUNSEL, INC.
By:/s/
----------------
TIMOTHY E. JOHNSON, President
<PAGE> 1
Exhibit 99.B13.2
TIMOTHY E. JOHNSON
5807 McCray Court
Cincinnati, Ohio 45224
May 16, 1994
Johnson Mutual Funds Trust
5556 Cheviot Road
Cincinnati, Ohio 45247
Dear Johnson Mutual Funds Trust:
The undersigned agrees to purchase 3,333.333 shares of the Johnson Municipal
Income Fund at $15.00 per share. The undersigned represents that: 1) such
purchase is for investment purposes; and 2) the undersigned has no present
intention of redeeming or selling said shares.
Sincerely,
/s/
Timothy E. Johnson
/s/
Janet L. Johnson
<PAGE> 2
TIMOTHY E. JOHNSON
5807 McCray Court
Cincinnati, Ohio 45224
May 16, 1994
Johnson Mutual Funds Trust
5556 Cheviot Road
Cincinnati, Ohio 45247
Dear Johnson Mutual Funds Trust:
The undersigned agrees to purchase 3,333.3333 shares of the Johnson Opportunity
Fund at $15.00 per share. The undersigned represents that: 1) the undersigned
has no present intention of redeeming or selling said shares; and 2) such
purchase is for investment purposes.
Sincerely,
/s/
Timothy E. Johnson
/s/
Janet L. Johnson
