File No. 2-15530
File No. 811-901
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. 77 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 78
(Check appropriate box or boxes.)
DAVID L. BABSON GROWTH FUND, INC.
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Larry D. Armel, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 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.
<PAGE>
File No. 33-17762
File No. 811-5386
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. 16 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 17
(Check appropriate box or boxes.)
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Larry D. Armel, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 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.
<PAGE>
File No. 33-15074
File No. 811-5218
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. 16 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 18
(Check appropriate box or boxes.)
SHADOW STOCK FUND, INC.
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Larry D. Armel, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 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.
<PAGE>
File No. 2-85791
File No. 811-3823
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. 20 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 21
(Check appropriate box or boxes.)
BABSON ENTERPRISE FUND, INC.
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Larry D. Armel, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 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.
<PAGE>
File No. 33-39321
File No. 811-6252
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. 11 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 12
(Check appropriate box or boxes.)
BABSON ENTERPRISE FUND II, INC.
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Larry D. Armel, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 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.
<PAGE>
File No. 2-93363
File No. 811-4114
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. 18 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 20
(Check appropriate box or boxes.)
BABSON VALUE FUND, INC.
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Larry D. Armel, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 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.
<PAGE>
File No. 2-65761
File No. 811-2963
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. 26 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 28
(Check appropriate box or boxes.)
D. L. BABSON MONEY MARKET FUND, INC.
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Larry D. Armel, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 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.
<PAGE>
File No. 2-65489
File No. 811-2948
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. 26 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 27
(Check appropriate box or boxes.)
D. L. BABSON TAX-FREE INCOME FUND, INC.
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Larry D. Armel, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 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.
<PAGE>
File No. 2-10002
File No. 811-495
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ /_/
Post Effective Amendment No. 100 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. 100
(Check appropriate box or boxes.)
D.L. BABSON BOND TRUST
(Exact name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Blvd., Kansas City, MO 64108-3306
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 751-5900
Larry D. Armel, BMA Tower, 700 Karnes Blvd., Kansas City, MO
64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing become effective (check
appropriate box)
/_/ immediately upon filing pursuant to paragraph (b)
/_/ on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on March 31, 1999 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.
<PAGE>
PART A
BABSON FUNDS
PROSPECTUS
October 31, 1999
EQUITIES
Enterprise Fund
Enterprise Fund II
Growth Fund
Shadow Stock Fund
Value Fund
International Fund
FIXED INCOME
Bond Trust
Money Market Fund
Tax-Free Income Fund
BABSON FUNDS
Jones & Babson Distributors
A Member of the Generali Group
Shares of the Funds have not been approved or disapproved by the
Securities and Exchange Commission nor has
the Commission passed on the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
EQUITY FUNDS
Babson Enterprise Fund, Inc.
Babson Enterprise Fund II, Inc.
Babson Growth Fund, Inc.
Shadow Stock Fund, Inc.
Babson Value Fund, Inc.
Babson-Stewart Ivory
International Fund, Inc.
FIXED
INCOME FUNDS
D.L. Babson Bond Trust
D.L. Babson Money Market Fund, Inc.
D.L. Babson Tax-Free Income Fund, Inc.
PROSPECTUS
October 31, 1999
BABSON FUNDS
INVESTMENT ADVISER:
David L. Babson & Co., Inc.
Cambridge, Massachusetts
managed and distributed by:
Jones & Babson, Inc.
Kansas City, Missouri
TABLE OF CONTENTS
Information About the Funds
Investment Objective and
Principal Investment Strategies 2
Principal Risk Factors 5
Past Performance 7
Fees and Expenses 11
Management and Investment Advisor 12
Financial Highlights 13
Information about Investing
How to Purchase Shares 20
How to Redeem Shares 20
Shareholder Services 21
How Share Price is Determined 21
Dividends, Distributions and their Taxation 21
Additional Policies about Transactions 23
Conducting Business with the Babson Funds 24
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
BABSON FUND OBJECTIVE
Babson Enterprise Fund Long term growth of capital.
Babson Enterprise Fund II
Shadow Stock Fund
Babson Growth Fund Above average total return over longer
periods of time through the growth
of both capital and dividend income.
Babson Value Fund Long term growth of capital and income.
Babson-Stewart Ivory Favorable total return
International Fund (market appreciation and income).
Babson Bond Trust Maximum current income and reasonable
Portfolio S - Shorter Term stability of principal, consistent with
Babson Bond Trust its quality and maturity standards.
Portfolio L - Longer Term
Babson Money Market Fund Maximizing income consistent with safety
Federal Portfolio of principal and liquidity. Seeks to
Babson Money Market Fund maintain liquidity and a one dollar net
Prime Portfolio asset value.
Babson Tax-Free Income Fund Providing the highest level of regular
Portfolio MM - Money Market income exempt from federal income tax
Babson Tax-Free Income Fund consistent with their quality and maturity
Portfolio S - Shorter Term standards. The Money Market Portfolio
Babson Tax-Free Income Fund seeks to maintain a one dollar net asset
Portfolio L - Longer Term value.
PRINCIPAL INVESTMENT STRATEGIES:
Each Fund and Portfolio intends to pursue their objectives by
principally investing as described below:
Babson Enterprise Fund - This Fund will invest at least 80% in common
stocks of small, faster-growing companies (referred to as micro-cap)
worth between $15 million and $300 million in stock market
capitalization at the time of purchase. The Fund will select companies
whose stocks are selling at prices it believes are reasonable in
relation to the company's fundamental financial characteristics and
business prospects. The primary valuation ratios used are:
price relative to earnings
price relative to sales
price relative to assets as measured by book value
price relative to cash flow
Babson Enterprise Fund II - This Fund will invest substantially the same
way as Babson Enterprise Fund with the exception that it will target
companies larger relative to net worth of between $250 million and $1
billion in stock market capitalization at the time of purchase. The Fund
generally invests in stocks listed on national or regional exchanges or
listed over-the-counter (e.g., NASDAQ) with prices quoted daily in the
financial press.
Babson Growth Fund - This Fund will remain 80% invested in a diversified
list of common stocks
representing companies selected for their long-term possibilities of
both capital and income growth.
The Investment Adviser defines "above-average total return" as total
return that is higher than return generated by traditional investment
vehicles other than equity products.
Babson Growth Fund will invest at time of initial purchase in stocks of
well-managed companies in growing industries which have demonstrated
both a consistent and an above-average ability to increase their
earnings and dividends and which have favorable prospects of sustaining
such growth. Measurements used for selection screening include:
earning power
dividend paying ability
assets of the company
Shadow Stock Fund - This Fund will invest in small company stocks called
"Shadow Stocks". These are stocks that combine the characteristics of
"small stocks" and "neglected stocks". Small stocks are those stocks
that have market capitalization of between $20 million and $213 million
and have annual net
profits of at least $1 million for the three most recent fiscal years.
"Neglected Stocks" are those that have below average institutional
holdings and below average coverage by analysts and newsletters. It is
estimated that the Shadow Stock Fund will contain about 250 stocks at
any one time.
The Fund will screen "small and neglected stocks" and will not buy a
stock or will sell part or all of a stock it owns if the Investment
Adviser believes:
the financial condition of the company is in jeopardy
that liquidity is insufficient
that total acquisition costs are unreasonably high
the stock is selling for less than $5 per share (stock will
not be sold for this reason alone but
additional stock will not be bought below $4 per share)
The Fund will also sell stock based on:
potential negative earnings
tenders or potential mergers
not meeting criteria for "neglected stocks" for three semi-
annual evaluations
not meeting criteria for "small stocks" by having market
capitalization below $10 million or above $426 million
Babson Value Fund - This Fund will invest at least 90% in common stocks
that are considered to be undervalued in relation to earnings, dividends
and/or assets.
Babson Value Fund will invest at time of initial purchase in stocks that
meet each of the following
criteria:
stocks that the Fund considers to be undervalued based on their
earnings, dividends and/or assets, or other widely recognized stock
valuation measurements
stocks of companies the Fund believes are sound businesses with
good future potential
stocks of companies with an investment quality rating of "B-" or
better by Standard & Poor's, or a financial strength rating of "B" or
better by Value Line.
stocks of any price range that may or may not be paying current
dividends
Babson-Stewart Ivory International Fund - This Fund will invest at least
80% in equity securities (common stocks and securities convertible into
common stocks) of established companies whose primary business is
carried on outside the United States. These securities will primarily be
listed on foreign stock exchanges and will have attractive
characteristics in terms of:
growth
financial resources
quality
acceptance of products or services
ability to generate profits and in many cases - dividends
Babson-Steward Ivory International Fund from time to time will also
purchase:
investment grade fixed income securities of foreign
governments or corporations
American Depository Receipts
European Depository Receipts
International Depository Receipts
Foreign currency or foreign currency forwards (the latter
only for hedging)
Fixed income securities of foreign governments or countries
which are considered investment grade
Securities not listed on an exchange (which may be more
difficult to sell)
D.L. Babson Bond Trust - D.L. Babson Bond Trust offers shares of two
separate fixed income portfolios. Portfolio L (Longer Term) will have a
dollar weighted average maturity of more than five years. Portfolio S
(Shorter Term) will have a dollar weighted average maturity of five years
or less. Each Portfolio may invest at time of purchase:
At least 80% of its assets in debt securities to include:
(1) direct or guaranteed obligations of the U.S. government and its
agencies, and (2) investment grade debt securities issued by
corporations or other business organizations, including notes and
bonds. The Portfolios will limit its investment in securities rated
BBB or Baa to no more than 25% of their assets.
In debt securities secured by specific assets of the issuing
corporation (such as mortgage bonds and equipment trusts) as well as
unsecured debt securities that represent claims on the general
credit of the issuer.
Up to 25% of their assets in Yankee Bonds. Yankee Bonds are
issued by foreign-domiciled entities and underwritten by a U.S.
syndicate for delivery in the U.S.
In cash or short term debt obligations.
In variable rate master demand notes, which represent a
borrowing agreement between an institutional lender and borrower.
Currently, the average weighted maturity range of Portfolio L is 7 to 15
years and Portfolio S is 2 to 5 years, but maturities may be shortened
or lengthened to respond to interest rate changes.
D.L. Babson Money Market Fund - D.L. Babson Money Market Fund offers
shares of two separate fixed income portfolios, each of which invests in
high quality short-term debt instruments for the purpose of maximizing
income consistent with safety of principal and liquidity. Each Portfolio
will have an expected weighted average maturity 90 days or less. Net
asset value is expected to remain constant at $1.00 per share. Each
Portfolio may invest at time of purchase:
In direct obligations of the U.S. Government
In obligations of U.S. government agencies and
instrumentalities which are secured by the
full faith and credit of the U.S. Treasury such as Government National
Mortgage Association, Export-Import Bank, or the Student Loan Marketing
Association; or which are secured by the right of the issuer to borrow
from the Treasury, such as securities issued by the Federal Financing
Bank or the U.S. Postal Service; or are supported by the credit of the
government agency or instrumentality itself, such as securities of the
Federal Home Loan Banks, or the Federal National Mortgage Association.
In repurchase agreements collateralized by issues of the
United States Treasury or United States government agencies
In addition, Prime Portfolio may invest at time of purchase:
In short term obligations issued domestically by U.S.
commercial banks or savings and loan associations having assets of
at least $1 billion and are members of FDIC or Federal Home Loan
Banks Association
In high quality commercial paper or variable rate master
demand notes of corporations
In high quality non-convertible short-term debt obligations
D.L. Babson Tax-Free Income Fund - D.L. Babson Tax-Free Income Fund
offers shares of three
separate fixed income portfolios exempt from federal income tax
consistent with the quality and maturity standards prescribed for each
Portfolio. Portfolio L (Longer Term) will have an expected weighted
average maturity between ten and twenty five years with maturities being
longer than five years at time of purchase. Portfolio S (Shorter Term)
will have an expected weighted average maturity between two and five
years with no maturities more than ten years at time of purchase.
Portfolio MM (Money Market) will have an expected weighted average
maturity 90 days or less. Net asset value is expected to remain
constant at $1.00 per share. Each Portfolio may invest at time of
purchase:
At least 80% of its assets (exclusive of cash) in municipal
securities, such as bonds and other debt instruments issued by or on
behalf of states, territories and possessions of the United States,
including their subdivisions, authorities, agencies and
instrumentalities. The interest they pay is expected to be exempt from
federal income tax including the alternative minimum tax.
At least 90% of the municipal bonds bought by Portfolio L
and Portfolio S will be rated within the three top rating categories of
Moody's (Aaa, Aa or A) or Standard & Poor's (AAA, AA or A).
Investments by Portfolio L and Portfolio S in short term
municipal obligations and notes will be
(1) backed by the full faith and credit of the United States; or (2)
rated MIG-1, MIG-2 or MIG-3 by Moody's; or (3) A-1 or A-2 by Standard
& Poor's; or (4) if unrated short-term then the issuer's long-term
bond rating must be at least A as determined by Moody's or Standard
& Poor's.
One hundred percent of the securities purchased by Portfolio
MM must satisfy the federal regulations that govern money market funds.
In cash or short term money market obligations (including
taxable money market obligations on a temporary basis) that are rated
in the top two categories (A-1/Prime-1 or A-2/Prime-2).
PRINCIPAL RISK FACTORS
Market Risks
Common stocks fluctuate in price. Since Growth, Enterprise, Enterprise
II, Value, Shadow and International Funds invest primarily in common
stocks, the value of the Funds will go up and down. As with any mutual
fund, there is a risk that you could lose money by investing in any of
the Funds.
Small Company Risks
Generally, smaller and less seasoned companies have more potential for
rapid growth. However,
they often involve greater risk than larger companies. They may not have
the management experience, financial resources, product diversification
and competitive strengths of larger companies. While the Enterprise,
Enterprise II and Shadow Stock Funds cannot eliminate these risks, the
Funds' Adviser will try to minimize risk by diversifying - spreading the
risk by putting the Funds' investments into a broad range of small
company stocks.
Smaller company stocks tend to be bought and sold less often and in
smaller amounts than larger company stocks. Because of this, if a Fund
wants to sell a large quantity of a small company stock it may have to
sell at a lower price than its Adviser might prefer, or it may have to
sell in small quantities over a period of time. Enterprise and
Enterprise II Funds try to minimize this risk by investing in stocks
that are readily bought and sold. However, the lower liquidity of the
neglected stocks in which Shadow Stock Fund invests carry greater risk
in the event of a weak stock market and substantial liquidations by the
Fund.
Fixed Income Risks
An investment in the Portfolios of the Money Market Fund and Portfolio
MM of the Tax-Free Income Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the Adviser seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in them.
The yields and principal values of debt securities fluctuate. Generally,
values of debt securities change inversely with changes in interest
rates. That is, as interest rates go up, the values of debt securities
tend to go down and vice versa. As a result, the values of the
Portfolios of Bond Trust and Tax-Free Income Fund will go up or down.
The fluctuations that are experienced by Portfolios L will likely be
greater
than those of Portfolios S, since longer-term bond prices tend to
fluctuate more in response to interest
rate changes. Future interest rates cannot be accurately and
consistently forecast. As with all mutual funds, there is a risk that
you could lose money by investing in the Portfolios of Bond Trust and
Tax-Free Income Fund.
The amount of the dividends paid by a Portfolio of Bond Trust and Tax-
Free Income Fund will change based on the amount of income it earns on
its investments. Also, it is possible that the issuer of a debt security
may default on the interest and principal payments due to a Portfolio.
Fixed income securities rated in the fourth classification by Moody's
(Baa) and S&P (BBB) may have
speculative characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of those
issuers to make principal or interest payments, as compared to issuers
of more highly rated securities. While we cannot eliminate these risks,
the Adviser will try to
minimize risk by selecting securities considered to be high quality and
by diversifying - spreading the risk by putting each Portfolio's
investment into a broad range of debt securities.
With regard to the Portfolios of Bond Trust, variable rate master demand
notes are not generally traded, and there is no secondary market. The
securities are immediately repayable by the borrower at face value, plus
accrued interest, at any time. The Portfolios of the Bond Trust
monitors, on an ongoing basis, the issuer's earning power, cash flow and
other liquidity ratios, and the borrower's ability to pay principal and
interest on demand.
International Risks
International investing poses additional risks such as currency
fluctuation and political instability. These risks are inherently passed
on to the company's shareholders and in turn, to the Fund's
shareholders. The International Fund will seek to limit these risks by
investing in at least three foreign countries and no more than 35% of
its assets in any one country.
Investing in developing countries may pose additional risks. Securities
issued by companies in developing countries may not be as liquid as
those in more developed countries. In addition, regulations in
developing countries may not be as strong nor information as readily
available. Babson-Stewart Ivory International Fund intends to limit
purchases of securities issued by developing countries to no more than
20% of the Fund.
Year 2000 Risks
Computer systems that cannot process and calculate date-related
information as of and after January 1, 2000 are a concern for financial
and business organizations around the world. We are taking steps to
address the Year 2000 issue with respect to the computers we use, and
have asked that our major service providers take comparable steps. Also,
the Funds' Adviser is using its best efforts to evaluate any
potential adverse effects from the Year 2000 issue that may affect
companies whose stock may be
purchased by the Funds. However, there is no way to be sure that these
steps will completely protect the Funds from being affected.
Temporary Defensive Strategy
Each Fund may respond to adverse market, economic, political or other
conditions by investing up to 100% of its assets in temporary defensive
investments. During such periods, the Funds may not achieve their
investment objectives.
PAST PERFORMANCE
The tables on the following page provide an indication of the risks of
investing in the Funds. The
tables below show how the total returns generated by the respective
Funds have changed for each
calendar year and how the Funds' average annual returns for certain
periods compare with those of an appropriate benchmark. Each table
reflects all expenses of each Fund and assumes that all dividends and
capital gains distributions have been reinvested in new shares of the
same Fund. Past performance is not necessarily an indication of how a
Fund will perform in the future.
CHART - BABSON ENTERPRISE FUND
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q1 '91 = 24.55%
Worst Quarter: Q3 '90 = -21.74%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Enterprise
Fund -11.36% 11.17% 13.74%
Russell 2000 Index -2.55% 11.87% 12.92%
CHART - BABSON ENTERPRISE FUND II
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q2 '99 = 17.47%
Worst Quarter: Q3 '98 = -18.71%
Average Annual Total Return as of December 31, 1998
Inception
1 Year 5 Years 8/5/91
Babson Enterprise
Fund II -4.33% 12.55% 14.18%
Russell 2000 Index -2.55% 11.87% 14.48%
CHART - BABSON GROWTH FUND
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q4 '98 = 26.23%
Worst Quarter: Q3 '90 = -17.26%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Growth Fund 32.24% 21.92% 16.28%
S&P 500 Stock 28.58% 24.05% 19.20%
Russell 1000 Growth
Index % % %
CHART - BABSON VALUE FUND
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q1 '91 = 17.10%
Worst Quarter: Q3 '98 = -17.78%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Value Fund 6.07% 17.33% 15.59%
S&P 500 Index 28.58% 24.05% 19.20%
S&P Barra Value Index % % %
CHART - SHADOW STOCK FUND
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q1 '91 = 21.95%
Worst Quarter: Q3 '90 = -21.42%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Shadow Stock
Fund -1.49% 12.54% 11.87%
Russell 2000 Index -2.55% 11.87% 12.92%
CHART - BABSON-STEWART IVORY INTERNATIONAL FUND
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q4 '98 = 16.69%
Worst Quarter: Q3 '90 = -18.66%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Stewart Ivory
International Fund 13.30% 8.34% 9.99%
MSCI EAFE Index 10.63% NA NA
CHART - BABSON BOND TRUST - PORTFOLIO L
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q2 '89 = 7.82%
Worst Quarter: Q1 '94 = -2.67%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Bond Trust -
Portfolio L 7.55% 6.31% 8.62%
Lehman Bros. Aggregate
Bond Index 8.67% 7.27% 9.26%
CHART - BABSON MONEY MARKET FUND - PRIME PORTFOLIO
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q2 '89 = 2.25%
Worst Quarter: Q2 '93 = 0.57%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Money Market
Fund - Prime Portfolio4.72% 4.52% 4.96%
Merrill Lynch 91-Day
Treasury Bill Index 5.23% 5.21% 5.68%
CHART - BABSON BOND TRUST - PORTFOLIO S
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q2 '89 = 5.98%
Worst Quarter: Q1 '94 = -2.04%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Bond Trust -
Portfolio S 6.88% 6.08% 7.89%
Lehman Bros. Intermediate
Govt./Corporate Index 8.42% 6.59% 8.51%
CHART - BABSON MONEY MARKET FUND - FEDERAL PORTFOLIO
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q2 '89 = 2.18%
Worst Quarter: Q2 '93 = 0.57%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Money Market
Fund - Federal
Portfolio 4.66% 4.45% 4.88%
Merrill Lynch 91-Day
Treasury Bill Index 5.23% 5.21% 5.68%
CHART - BABSON TAX-FREE INCOME FUND - PORTFOLIO L
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q2 '89 = 6.40%
Worst Quarter: Q2 '99 = -2.09%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Tax-Free Income
Fund - Portfolio L 5.41% 5.00% 7.26%
Lipper General Muncipal
Bond Index 5.32% 5.43% 7.68%
CHART - BABSON TAX-FREE INCOME FUND - PORTFOLIO S
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q2 '89 = 3.30%
Worst Quarter: Q1 '94 = -2.71%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Tax-Free Income
Fund - Portfolio S 4.12% 3.99% 5.59%
Lipper Short-Intermediate
Muncipal Bond Index 4.58% 4.19% 5.80%
CHART - BABSON TAX-FREE INCOME FUND - PORTFOLIO MM
Year-to-Date Return (through September 30, 1999) ______%
Best Quarter: Q2 '89 = 1.59%
Worst Quarter: Q1 '94 = 0.46%
Average Annual Total Return as of December 31, 1998
1 Year 5 Years 10 Years
Babson Tax-Free Income
Fund - Portfolio MM 2.90% 2.94% 3.50%
Merrill Lynch 91-Day
Treasury Bill Index 5.23% 5.21% 5.68%
Lipper Tax-Free Money
Market Fund Index % % %
Fees & Expenses
The following tables describe the fees and expenses that you may pay if
you buy and hold shares of the Funds.
BABSON BABSON BABSON SHADOW BABSON STEWART IVORY
ENTERPRISE ENTERPRISE GROWTH STOCK VALUE INTERNATIONAL
FUND FUND II FUND FUND FUND FUND
Shareholder Fees
(fees paid directly
from your investment)
Maximum Sales
Charge (Load)
Imposed on
Purchases None None None None None None
Maximum Deferred
Sales Charge
(Load) None None None None None None
Maximum Sales
Charge (Load)
Imposed
on Reinvested
Dividends None None None None None None
Redemption Fee None* None* None* None* None* None*
Exchange Fee None None None None None None
*A $10 fee is imposed for redemptions by wire.
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management
Fees 1.10%** 1.20%** .78% 1.00% .95%** .95%
Distribution
(12b-1) Fees None None None None None None
Other Expenses .01%** .03%** .01% .10% .01%** .28%
Total Annual F
und Operating
Expenses 1.11%** 1.23%** .79% 1.10% .96%** 1.23%
**Annualized Expense Ratio for seven months ended June 30, 1999.
BABSON BABSON BABSON BABSON BABSON BABSON BABSON
BOND BOND MM MM TF TF TF
TRUST TRUST PRIME FEDERAL INCOME INCOME INCOME
PORT L PORT S PORT PORT PORT L PORT S PORT MM
Shareholder Fees
(fees paid directly
from your investment)
Maximum Sales
Charge (Load)
Imposed on
Purchases None None None None None None None
Maximum Deferred
Sales Charge
(Load) None None None None None None None
Maximum Sales
Charge (Load)
Imposed
on Reinvested
Dividends None None None None None None None
Redemption Fee None* None* None* None* None* None* None*
Exchange Fee None None None None None None None
*A $10 fee is imposed for redemptions by wire.
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management
Fees .95%** .95%*** .85% .85% .95% .95% .50%
Distribution
(12b-1) Fees None None None None None None None
Other Expenses .02%** .02%** .03% .03% .08% .06% .05%
Total Annual
Fund Operating
Expenses .97%** .97%** .88% .88% 1.03% 1.01% .55%
**Annualized Expense Ratio for seven months ended June 30, 1999.
***The Manager has voluntarily agreed to a reduction in the management
fee paid by the portfolio to .65% through March 31, 2000.
Fee Examples
The following examples are intended to help you compare the cost of
investing in each Fund with the cost of investing in other mutual funds.
Although your actual costs may be higher or lower, based on the
assumptions below your costs would be:
1 Year 3 Years 5 Years 10 Years
Babson Enterprise Fund 113 353 612 1,352
Babson Enterprise Fund II 125 390 676 1,489
Babson Growth Fund 81 252 439 978
Shadow Stock Fund 112 350 606 1,340
Babson Value Fund 98 306 531 1,178
Babson-Stewart Ivory
International Fund 125 390 676 1,489
Babson Bond Trust -
Portfolio L 99 309 536 1,190
Babson Bond Trust -
Portfolio S 99 309 536 1,190
Babson Money Market -
Federal Portfolio 90 281 488 1,084
Babson Money Market -
Prime Portfolio 90 281 488 1,084
Babson Tax-Free Income -
Portfolio L 105 328 569 1,259
Babson Tax-Free Income -
Portfolio S 103 322 558 1,236
Babson Tax-Free Income -
Portfolio MM 56 176 307 689
*Assumes $10,000 investment for time period indicated with a 5% annual
return.
MANAGEMENT AND INVESTMENT ADVISER
Jones & Babson, Inc. was founded in 1959. Jones & Babson, Inc. acts as
the Manager and principal
underwriter of the Babson Fund family. Pursuant to the current
Management Agreement, Jones & Babson, Inc. provides or pays the cost of
all management, supervisory and administrative services required in the
normal operation of the Funds. This includes investment management and
supervision; fees of the custodian, independent auditors and legal
counsel; officers, directors and other personnel; rent; shareholder
services; and other items incidental to corporate administration.
Operating expenses not required in the normal operation of the Funds are
payable by the Funds. These expenses include taxes, interest,
governmental charges and fees, including registration of the Fund with
the Securities and Exchange Commission and the fees payable to various
States, brokerage costs,
dues, and all extraordinary costs including expenses arising out of
anticipated or actual litigation or administrative proceedings.
As a part of the Management Agreement, Jones & Babson, Inc. employs at
its own expense David L. Babson & Co., Inc., an investment advisory firm
founded in 1940, as its Investment Adviser to assist in the investment
advisory function. To assist in the investment advisory function related
to Babson-Stewart Ivory International Fund, Jones & Babson, Inc. employs
at its own expense Babson-Stewart Ivory International, a partnership
formed in 1987, by David L. Babson & Co. of Cambridge, Massachusetts and
Stewart Ivory & Company (International) Ltd, a wholly owned subsidiary
of Stewart Ivory (Holdings), Ltd., of Edinburgh, Scotland.
James B. Gribbell has been the manager of Babson Growth Fund since 1996.
He is a Chartered Financial Analyst ("CFA"). He joined David L. Babson &
Co. in 1991. Lance F. James has been the manager of Babson Enterprise II
since its inception in 1991 and manager of Enterprise since 1999. He
joined David L. Babson & Co. in 1986. Anthony M. Maramarco, CFA, has
been the manager of Babson Value Fund and the Shadow Stock Fund since
1999. He joined David L. Babson & Co. in 1996 and has over 18 years
investment management experience. John G.L. Wright has been the manager
of Babson-Stewart Ivory International Fund since its inception in 1988.
He joined Stewart Fund Managers (which became Stewart-Ivory) in 1971,
and has over 30 years of investment management experience. Edward L.
Martin, CFA, has been the manager of Babson Bond Trust since 1984, with
over 27 years of investment management
experience. He joined David L. Babson & Co. in 1984. Joanne E. Keers,
CFA, has been the manager of Babson Tax-Free Income Fund since 1999. She
joined David L. Babson & Co. in 1987.
For its services, Babson Growth Fund pays Jones & Babson, Inc. a fee at
the annual rate of .85% of the first $250 million and .70% of amounts in
excess of $250 million of average daily net assets. Babson Enterprise
Fund and Enterprise Fund II pay Jones & Babson, Inc. a fee at the annual
rate of 1.50% of the first $30 million and 1% of amounts in excess of
$30 million of its average daily net assets. Babson Value Fund, Babson-
Stewart Ivory International Fund and Babson Bond Trust pay Jones &
Babson, Inc. a fee at the annual rate of .95% of average daily net
assets. However, during the period from May 1, 1988 through March 31,
2000, Jones & Babson has agreed to voluntarily waive .30% of the fee for
Portfolio S bringing its total to .65%. Babson Tax-Free Income Fund
Portfolio L and Portfolio S pay Jones & Babson, Inc. a fee at the annual
rate of .95% of average daily net assets. Shadow Stock Fund pays Jones &
Babson, Inc. a fee of 1.00% of average daily assets. Babson Tax-Free
Income Fund Portfolio MM pays Jones & Babson, Inc. a fee at the annual
rate of .50% of average daily net assets. Babson Money Market Fund
Portfolio Prime and Portfolio Federal pay Jones & Babson, Inc. a fee at
the annual rate of 0.85% of average daily assets. The Management
Agreement limits the liability of the Manager or its Investment Adviser,
as well as their officers, directors and personnel, to acts or omissions
involving willful malfeasance, bad faith, gross negligence or reckless
disregard of their duties.
Jones & Babson, Inc. is located at 700 Karnes Blvd., Kansas City, MO
64108-3306 and David L. Babson
& Co., Inc. is located at One Memorial Drive, Cambridge, MA 02142.
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand each
Fund's financial performance
for the five years ended June 30, 1999 except for Babson Enterprise
Fund, Babson Enterprise Fund II, Babson Value Fund and Babson Bond Trust
(Portfolio L and Portfolio S)
which is for the seven months ended June 30, 1999 and the five years
ended November 30, 1998. Certain information reflects financial results
for a single share
of a Fund. The total returns in the tables represent the rate that an
investor would have earned on an investment in a Fund (assuming
reinvestment of all dividends and distributions). The financial
highlights for Babson Growth Fund, Shadow Stock Fund,
Babson-Stewart Ivory International Fund, Babson Money
Market Fund (Portfolio Prime and Portfolio Federal) and
Babson Tax-Free Income Fund (Portfolio L, Portfolio S and
Portfolio MM) have been audited by Ernst & Young LLP for the year ended
June 30, 1999. Additionally, the financial highlights for Babson
Enterprise Fund, Babson Enterprise Fund II, Babson Value
Fund and Babson Bond Trust (Portfolio L and Portfolio S) were
audited by Ernst & Young LLP for the periods indicated above. The
financial highlights for Babson Growth Fund, Shadow Stock
Fund, Babson-Stewart Ivory International Fund, Babson
Money Market Fund (Portfolio Prime and Portfolio Federal) and
Babson Tax-Free Income Fund (Portfolio L, Portfolio S and
Portfolio MM) for the years ended on or before June 30, 1998 have been
audited by other auditors. This information, along with the Funds'
financial statements, are included in the annual report, which is
available upon request.
BABSON ENTERPRISE FUND
Condensed data for a share of capital stock
outstanding throughout each period.
SEVEN
MONTHS
ENDED YEARS ENDED NOVEMBER 30,
JUNE 30,
1999 1998 1997 1996 1995 1994
Net asset value,
beginning of
period $16.63 $21.22 $18.51 $17.35 $16.64 $17.20
Income from
investment operations:
Net investment
income .03 .04 .06 .06 .10 .03
Net gains (losses)
on securities
(both realized
and unrealized) .58 (2.15) 5.31 3.06 2.34 .57
Total from
investment operations .61 (2.11) 5.37 3.12 2.44 .60
Less distributions:
Dividends from net
investment income (.05) (.06) - (.12) (.04) (.05)
Distributions from
capital gains (2.47) (2.42) (2.66) (1.84) (1.69) (1.11)
Total distributions (2.52) (2.48) (2.66) (1.96) (1.73) (1.16)
Net asset value,
end of period $14.72 $16.63 $21.22 $18.51 $17.35 $16.64
Total return* 4.70% (11.05%) 33.49% 20.17% 16.42% 3.70%
Ratios/Supplemental Data
Net assets, end of
period (in millions) $ 155 $ 179 $ 216 $ 202 $ 202 $ 188
Ratio of expenses to
average net assets** 1.11% 1.09% 1.08% 1.08% 1.09% 1.08%
Ratio of net investment
income to average
net assets** .32% .29% .30% .35% .67% .22%
Portfolio turnover rate 12% 22% 22% 24% 13% 15%
BABSON ENTERPRISE FUND II
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each period.
<CAPTION>
SEVEN MONTHS ENDED YEARS ENDED NOVEMBER 30,
JUNE 30, 1999 1998 1997 1996 1995 1994
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 23.20 $26.70 $22.75 $19.19 $16.22 $16.92
Income from investment operations:
Net investment income .03 .10 .08 .11 .05 .02
Net gains (losses) on securities
(both realized and unrealized) 2.37 (1.50) 6.97 4.45 3.03 (.39)
Total from investment operations 2.40 (1.40) 7.05 4.56 3.08 (.37)
Less distributions:
Dividends from net investment income (.05) (.05) (.11) (.05) (.02) -
Distributions from capital gains (1.07) (2.05) (2.99) (.95) (.09) (.33)
Total distributions (1.12) (2.10) (3.10) (1.00) (.11) (.33)
Net asset value, end of period $ 24.48 $ 23.20 $26.70 $22.75 $19.19 $16.22
Total return* 11.03% (5.61%) 35.29% 25.04% 19.11% (2.32%)
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 77 $ 83 $ 82 $ 46 $ 40 $ 36
Ratio of expenses to average net assets** 1.23% 1.22% 1.28% 1.38% 1.45% 1.50%
Ratio of net investment income to average
net assets** .11% .40% .27% .55% .30% .14%
Portfolio turnover rate 14% 25% 25% 30% 15% 9%
</TABLE>
*Total return not annualized for periods less than one full year
**Annualized for periods less than one full year
BABSON GROWTH FUND
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
YEARS ENDED JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $20.77 $17.80 $14.42 $13.43 $11.78
Income from investment operations:
Net investment income .02 .06 .09 .12 .18
Net gains (losses) on securities
(both realized and unrealized) 3.25 4.41 4.16 2.91 2.18
Total from investment operations 3.27 4.47 4.25 3.03 2.36
Less distributions:
Dividends from net investment income (.02) (.06) (.09) (.13) (.18)
Distributions from capital gains (4.01) (1.44) (.78) (1.91) (.53)
Total distributions (4.03) (1.50) (.87) (2.04) (.71)
Net asset value, end of year $20.01 $20.77 $17.80 $14.42 $13.43
Total return 17.04% 26.73% 30.10% 22.99% 20.23%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 490 $ 451 $ 365 $ 280 $ 247
Ratio of expenses to average net assets .79% .80% .83% .85% .85%
Ratio of net investment income to average net assets .09% .30% .61% .82% 1.42%
Portfolio turnover rate 39% 35% 20% 33% 17%
</TABLE>
SHADOW STOCK FUND
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
YEARS ENDED JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $13.24 $12.57 $11.31 $10.55 $9.67
Income from investment operations:
Net investment income .11 .08 .12 .09 .10
Net gains (losses) on securities
(both realized and unrealized) (.24) 2.54 2.44 1.67 1.42
Total from investment operations (.13) 2.62 2.56 1.76 1.52
Less distributions:
Dividends from net investment income (.07) (.10) (.09) (.10) (.10)
Distributions from capital gains (.98) (1.85) (1.21) (.90) (.54)
Total distributions (1.05) (1.95) (1.30) (1.00) (.64)
Net asset value, end of year $12.06 $13.24 $12.57 $11.31 $10.55
Total return (.25%) 21.98% 23.63% 17.13% 16.16%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 50 $ 52 $ 41 $ 39 $ 39
Ratio of expenses to average net assets 1.10% 1.16% 1.13% 1.14% 1.13%
Ratio of net investment income to average net assets .97% .56% 1.00% .79% 1.01%
Portfolio turnover rate 21% 43% 0% 25% 19%
</TABLE>
BABSON VALUE FUND
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
SEVEN MONTHS ENDED YEARS ENDED NOVEMBER 30,
JUNE
30,
1999 1998 1997 1996 1995 1994
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $47.42 $47.73 $38.65 $31.78 $25.19 $25.36
Income from investment operations:
Net investment income .45 .62 .51 .55 .59 .56
Net gains (losses) on securities
(both realized and unrealized) 5.90 1.09 9.65 7.20 7.20 .58
Total from investment operations 6.35 1.71 10.16 7.75 7.79 1.14
Less distributions:
Dividends from net investment income (.44) (.56) (.47) (.53) (.60) (.40)
Distributions from capital gains (1.97) (1.46) (.61) (.35) (.60) (.91)
Total distributions (2.41) (2.02) (1.08) (.88) (1.20) (1.31)
Net asset value, end of period $51.36 $47.42 $47.73 $38.65 $31.78 $25.19
Total return* 14.14% 3.85% 26.89% 24.91% 32.07% 4.51%
Ratios/Supplemental Data
Net assets, end of period (in millions) $1,244 $1,494 $1,419 $ 764 $ 293 $ 120
Ratio of expenses to average net assets** .96% .98% .97% .96% .98% .99%
Ratio of net investment income to average net assets** 1.05% 1.28% 1.22% 1.63% 2.12% 2.32%
Portfolio turnover rate 13% 42% 17% 11% 6% 14%
*Total return not annualized for periods less than one full year
**Annualized for periods less than one full year
BABSON-STEWART IVORY INTERNATIONAL FUND
</TABLE>
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
YearS Ended JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $19.65 $19.53 $18.04 $15.96 $16.41
Income from investment operations:
Net investment income .03 .08 .07 .07 .16
Net gains (losses) on securities
(both realized and unrealized) .66 1.07 1.70 2.85 .23
Total from investment operations .69 1.15 1.77 2.92 .39
Less distributions:
Dividends from net investment income (.04) (.07) (.05) (.08) (.17)
Distributions from capital gains (.82) (.96) (.23) (.65) (.67)
Distributions in excess of realized capital gains - - - (.11) -
Total distributions (.86) (1.03) (.28) (.84) (.84)
Net asset value, end of year $19.48 $19.65 $19.53 $18.04 $15.96
Total return 3.76% 6.48% 9.91% 18.66% 2.54%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 89 $ 104 $ 111 $ 80 $ 65
Ratio of expenses to average net assets 1.23% 1.16% 1.19% 1.26% 1.30%
Ratio of net investment income to average net assets .24% .37% .47% .44% 1.13%
Portfolio turnover rate 51% 48% 40% 33% 37%
</TABLE>
BABSON BOND TRUST - PORTFOLIO L
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
SEVEN MONTHS ENDED YearS Ended November 30,
JUNE
30,
1999 1998 1997 1996 1995 1994
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.59 $1.56 $1.55 $1.58 $1.47 $1.67
Income from investment operations:
Net investment income .05 .09 .10 .11 .11 .11
Net gains (losses) on securities
(both realized and unrealized) (.07) .03 .01 (.03) .11 (.15)
Total from investment operations (.02) .12 .11 .08 .22 (.04)
Less distributions:
Dividends from net investment income (.05) (.09) (.10) (.11) (.11) (.11)
Distributions from capital gains - - - - - (.05)
Total distributions (.05) (.09) (.10) (.11) (.11) (.16)
Net asset value, end of period $1.52 $1.59 $1.56 $1.55 $1.58 $1.47
Total return* (1.16%) 8.13% 7.26% 5.17% 15.28% (2.71%)
Ratios/Supplemental Data
Net assets, end of period (in millions) $121 $128 $132 $142 $161 $140
Ratio of expenses to average net assets** .97% .97% .97% .97% .97% .97%
Ratio of net investment income to average net assets** 5.73% 5.93% 6.38% 6.96% 7.06% 6.95%
Portfolio turnover rate 38% 43% 59% 61% 50% 40%
</TABLE>
BABSON BOND TRUST - PORTFOLIO S
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
SEVEN MONTHS ENDED YearS Ended November 30,
JUNE
30,
1999 1998 1997 1996 1995 1994
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.91 $9.78 $9.77 $9.90 $9.43 $10.48
Income from investment operations:
Net investment income .33 .58 .62 .69 .73 .69
Net gains (losses) on securities
(both realized and unrealized) (.31) .13 .01 (.13) .47 (.90)
Total from investment operations .02 .71 .63 .56 1.20 (.21)
Less distributions:
Dividends from net investment income (.33) (.58) (.62) (.69) (.73) (.69)
Distributions from capital gains - - - - - (.15)
Total distributions (.33) (.58) (.62) (.69) (.73) (.84)
Net asset value, end of period $9.60 $9.91 $9.78 $9.77 $9.90 $9.43
Total return* .15% 7.47% 6.70% 5.96% 13.10% (2.06%)
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 37 $ 38 $ 41 $ 34 $ 33 $ 30
Ratio of expenses to average net assets** .67% .67% .66% .66% .67% .67%
Ratio of net investment income to average net assets** 5.75% 5.90% 6.42% 7.10% 7.47% 7.02%
Ratio of expenses to average net assets before
voluntary reduction of management fee ** .97% .97% .97% .96% .97% .97%
Portfolio turnover rate 54% 60% 65% 48% 57% 42%
</TABLE>
*Total return not annualized for periods less than one full year
**Annualized for periods less than one full year
BABSON MONEY MARKET FUND - PRIME PORTFOLIO
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
YearS Ended JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income .04 .05 .05 .05 .05
Less distributions:
Dividends from net investment income (.04) (.05) (.05) (.05) (.05)
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
Total return 4.38% 4.82% 4.61% 4.83% 4.66%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 39 $ 37 $ 38 $ 36 $ 40
Ratio of expenses to average net assets .88% .91% .92% .92% .92%
Ratio of net investment income to average net assets 4.30% 4.73% 4.58% 4.75% 4.58%
</TABLE>
BABSON MONEY MARKET FUND - FEDERAL PORTFOLIO
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
YearS Ended JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income .04 .05 .04 .05 .04
Less distributions:
Dividends from net investment income (.04) (.05) (.04) (.05) (.04)
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
Total return 4.31% 4.75% 4.58% 4.77% 4.56%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 13 $ 12 $ 13 $ 10 $ 10
Ratio of expenses to average net assets .88% .91% .91% .91% .92%
Ratio of net investment income to average net assets 4.23% 4.65% 4.51% 4.67% 4.48%
</TABLE>
BABSON TAX-FREE INCOME FUND - PORTFOLIO L
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
YearS Ended JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $9.22 $8.96 $8.74 $8.67 $8.52
Income from investment operations:
Net investment income .40 .40 .42 .41 .42
Net gains (losses) on securities
(both realized and unrealized) (.24) .28 .24 .07 .17
Total from investment operations .16 .68 .66 .48 .59
Less distributions:
Dividends from net investment income (.40) (.40) (.42) (.41) (.42)
Distributions from capital gains (.07) (.02) (.02) - (.02)
Total distributions (.47) (.42) (.44) (.41) (.44)
Net asset value, end of year $8.91 $9.22 $8.96 $8.74 $8.67
Total return 1.70% 7.82% 7.67% 5.60% 7.21%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 26 $ 27 $ 27 $ 27 $ 28
Ratio of expenses to average net assets 1.03% 1.06% 1.01% 1.01% 1.02%
Ratio of net investment income to average net assets 4.36% 4.46% 4.71% 4.67% 4.98%
Portfolio turnover rate 9% 18% 21% 39% 34%
</TABLE>
BABSON TAX-FREE INCOME FUND - PORTFOLIO S
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
YearS Ended JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.79 $10.74 $10.69 $10.71 $10.62
Income from investment operations:
Net investment income .42 .44 .44 .44 .45
Net gains (losses) on securities
(both realized and unrealized) (.21) .08 .10 .01 .10
Total from investment operations .21 .52 .54 .45 .55
Less distributions:
Dividends from net investment income (.42) (.44) (.44) (.44) (.45)
Distributions from capital gains (.03) (.03) (.05) (.03) (.01)
Total distributions (.44) (.47) (.49) (.47) (.46)
Net asset value, end of year $10.56 $10.79 $10.74 $10.69 $10.71
Total return 1.96% 4.84% 5.18% 4.25% 5.32%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 19 $ 21 $ 23 $ 25 $ 28
Ratio of expenses to average net assets 1.01% 1.06% 1.01% 1.01% 1.01%
Ratio of net investment income to average net assets 3.82% 4.00% 4.12% 4.13% 4.28%
Portfolio turnover rate 22% 21% 23% 41% 34%
</TABLE>
BABSON TAX-FREE INCOME FUND - PORTFOLIO MM
<TABLE>
Condensed data for a share of capital stock
outstanding throughout each year.
<CAPTION>
YearS Ended JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income .03 .03 .03 .03 .03
Less distributions:
Dividends from net investment income (.03) (.03) (.03) (.03) (.03)
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
Total return 2.70% 3.06% 3.03% 3.15% 3.05%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 10 $ 10 $ 9 $ 8 $ 16
Ratio of expenses to average net assets .55% .61% .58% .58% .59%
Ratio of net investment income to average net assets 2.65% 3.06% 3.10% 3.15% 3.07%
</TABLE>
HOW TO PURCHASE SHARES
No Load Funds
There are no sales commissions or Rule 12b-1 fees
How to Buy Shares (see accompanying chart on page 24 for details)
By phone, mail or wire
Through Automatic Monthly Investments
Through exchanges from a Babson or Buffalo Fund (non
fiduciary accounts only)
Minimum Initial Investment
$1,000 for most accounts
$250 for IRA and Uniform Transfer (Gift) to Minors accounts
$100 with an Automatic Monthly Investment
$1,000 for exchanges from another fund ($100 for IRAs and
Uniform Gifts to Minors accounts)
Minimum Additional Investment
$100 by phone, mail or ACH
$1,000 By Wire
$50 for Automatic Monthly Investments
$1,000 for exchanges from another fund ($100 for IRAs and
Uniform Gifts to Minors accounts)
Minimum Account Size
You must maintain a minimum account value equal to the current minimum
initial investment ($1,000). If your account falls below this amount due
to redemptions (not market action) we may notify you and ask you to
increase the account to the minimum. We will close the account and send
your money if you do not bring the account up to the minimum within 60
days after we mail you the notice.
HOW TO REDEEM SHARES
You may withdraw from your Fund's account at any time in the following
amounts:
any amount for redemptions requested by mail or phone to
address of record
$50,000 for fund web site redemptions
$1,000 or more for redemptions wired to your account ($10
fee)($100 minimum for ACH to bank account)
$50 or more for redemptions by a systematic redemption plan
(there may be a fee)
$1,000 or more for exchanges to another fund ($100 for IRAs
and Uniform Gifts to Minors accounts)
$100 or more for redemptions by automatic monthly exchange
to another fund
SHAREHOLDER SERVICES
The following services are also available to shareholders. Please call
1-800-4-BABSON (1-800-422-2766) for more information:
Uniform Transfers (Gifts) to Minors accounts
Accounts for corporations or partnerships
Sub-Accounting Services for tax qualified retirement plans
and others
Prototype Retirement Plans for the self-employed,
partnerships and corporations.
Traditional IRA accounts
Roth IRA accounts
Simplified Employee Pensions (SEPs)
HOW SHARE PRICE IS DETERMINED
Shares of the Funds are purchased or redeemed at the net asset value per
share next calculated after
your purchase order and payment or redemption order is received in good
order. In the case of certain institutions which have made satisfactory
payment or redemption arrangements with the Funds, orders may be
processed at the net asset value per share next effective after receipt
by that institution.
The per share calculation is made by subtracting from the Fund's total
assets any liabilities and then dividing into this amount the total
outstanding shares as of the date of the calculation. The net asset
value per share (except for portfolio MM) is computed once daily, Monday
through Friday, at 4:00 p.m. (Eastern Time) on days when the Funds are
open for business (generally the same days that the New York Stock
Exchange is open for trading). The net asset value per share for
Portfolio MM is computed at 1:00 p.m. (Eastern Standard Time).
Each security owned by the Funds that is listed on an Exchange is valued
at its last sale price on that Exchange on the date as of which assets
are valued. Where the security is listed on more than one Exchange, the
Funds will use the price of that Exchange which they generally consider
to be the
principal Exchange on which the stock is traded. Lacking sales, the
security is valued at the mean between the last current closing bid and
asked prices. An unlisted security for which over-the-counter market
quotations are readily available is valued at the mean between the last
current bid and asked prices. When market quotations are not readily
available, any security or other asset is valued at its fair value as
determined in good faith by the Board of Directors.
Short-term instruments maturing within 60 days may be valued at
amortized cost. The Portfolios of
the Money Market Fund and Portfolio MM of the Tax-Free Income Fund value
assets on the basis of amortized cost.
DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION
Your distributions will be reinvested automatically in additional shares
of the same Fund unless you have elected on your original application,
or by written instructions filed with the Funds, to have them paid in
cash ($10 minimum check amount). There are no fees or sales charges on
reinvestments.
If you buy shares of any fund shortly before the record date, please
keep in mind that any distribution will lower the value of the fund's
shares by the amount of the distribution and you will then receive a
portion of the price back in the form of a taxable distribution.
DISTRIBUTIONS - Bond Trust, Tax Free Income Fund and Money Market Fund -
At the end of each day, the Portfolios declare dividends from their net
investment income. These dividends are payable to those who were
shareholders of record at the end of the previous business day. On the
last day of the month, all
dividends declared during that month are credited to the accounts of
those shareholders. Distributions from capital gains, if any, will be
declared annually by December 31.
Shares begin earning income on the day following the effective date of
purchase. Income earned by a Portfolio on weekends, holidays and other
days on which the Funds is closed for business is declared as
a dividend on the next day on which the Fund is open for business.
However, on month-ends such
dividend is declared as of the last day of the month.
Value Fund - The Value Fund pays shareholders distributions from its net
investment income quarterly, usually in March, June, September and
December. Distributions from any net capital gains that it has
realized on the sale of securities will be declared annually on or
before December 31.
Stewart Ivory International Fund, Growth Fund and Shadow Stock Fund -
The Funds pay dividends from net investment income and capital gains, if
any, semiannually, usually in June and December.
Enterprise Fund and Enterprise Fund II - The Funds pay shareholders
distributions from its net investment income and from any net capital
gains that it has realized on the sale of the securities. Each of these
distributions will be declared annually on or before December 31.
TAX CONSIDERATIONS - In general, fund distributions are taxable to you
as either ordinary income or capital gains. This is true whether you
reinvest your distributions in additional fund shares or receive them in
cash. Any capital gains a fund distributes are taxable to you as long-
term capital gains no matter how long you have owned your shares.
Distributions from Portfolios S and L of the Tax-Free Income Fund will
consist primarily of exempt-
interest dividends from interest earned on municipal securities. In
general, exempt-interest dividends
are exempt from federal income tax. These portfolios, however, may
invest a portion of their assets in securities that pay income that is
not tax-exempt.
By law, a fund must withhold 31% of your taxable distributions and
proceeds if you do not provide your correct social security or taxpayer
identification number, or if the IRS instructs the fund to do so.
Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared
in December but paid in January are taxable as if they were paid in
December.
In general, when you sell your shares of a fund, you may have a capital
gain or loss. For tax purposes, an exchange of your fund shares for
shares of a different Babson Fund is the same as a sale. The individual
tax rate on any gain from the sale or exchange of your fund shares
depends on your marginal tax bracket and on how long the shares have
been held. However, because the Federal and Prime Portfolios of the
Money Market Fund and Portfolio MM of the Tax-Free Income Fund expect to
maintain a $1.00 net asset value per share, investors in these
Portfolios should not have any gain or loss on the sale of such shares.
Exempt-interest dividends paid by Portfolios S and L of the Tax-Free
Income Fund are taken into account when determining the taxable portion
of an investor's social security or railroad retirement benefits. These
Portfolios may invest a portion of their assets in private activity
bonds. The income from these bonds will be a preference item when
determining an investor's alternative minimum tax.
Many states grant tax-free status to dividends paid from interest earned
on direct obligations of the U.S. government, subject to certain
restrictions.
Exempt-interest dividends from interest earned on municipal securities
of a state, or of its political subdivisions, generally will be exempt
from that state's personal income taxes. Most states, however, do not
grant tax-free treatment to interest on investments in municipal
securities of other states.
Fund distributions and gains from the sale or exchange of your fund
shares generally will be subject to state and local income tax. Any
foreign taxes paid by the Stewart-Ivory International Fund on its
investments may be passed through to you as a foreign tax credit. Non-
U.S. investors may be subject to U.S. withholding and estate tax. You
should consult your tax advisor about the federal, state, local or
foreign tax consequences of your investment in a fund.
ADDITIONAL POLICIES ABOUT TRANSACTIONS
We cannot process transaction requests that are not complete and in good
order as described in this
section. We may cancel or change our transaction policies without
notice. To avoid delays, please call us if you have any questions about
these policies.
Purchases - We may reject orders when not accompanied by payment or when
in the best interest of the Funds and their shareholders.
Redemptions - The Funds will endeavor to transmit redemption proceeds to
the proper party, as instructed, as soon as practicable after a
redemption request has been received in "good order" and accepted, but
reserves the right under certain circumstances to delay redemption
transactions up to seven days, or as required by applicable law. The
Fund Manager believes that certain investors who try to "time the
market" by purchasing and redeeming shares from the Funds on a regular
basis, may disrupt the investment process and pose additional
transactions costs to the Funds. Therefore in those cases the Fund
Managers may delay redemption proceeds as described above or take other
actions it deems necessary to discourage such activity.
If you request a redemption within 15 days of purchase, we will delay
sending your proceeds until we are certain that we have collected
unconditional payment, which may take up to 15 days from the date of
purchase. For your protection, if your account address has been changed
within the last 30 days, your redemption request must be in writing and
signed by each account owner, with signature guarantees. The right to
redeem shares may be temporarily suspended in emergency situations only
as permitted under Federal law.
Withdrawal by Draft ("check") is limited to open account shares of
Babson Money Market Fund or Babson Tax-Free Income Fund Portfolio MM.
Draft amounts may range from $500 to $100,000.
We cannot accept requests that contain special conditions or effective
dates. We may request additional documentation to insure that a request
is genuine. Under certain circumstances, we may pay you
proceeds in the form of portfolio securities owned by the Fund being
redeemed. If you receive securities instead of cash, you may incur
brokerage costs when converting into cash.
Signature Guarantees - You can get a signature guarantee from most banks
or securities dealers, but not a notary public. For your protection, we
require a guaranteed signature if you request:
A redemption check sent to a different payee, bank or
address than we have on file.
A redemption check mailed to an address that has been
changed within the last 30 days.
A redemption for $50,000 or more in writing.
A change in account registration or redemption instructions
(including withdrawal by draft election).
Corporations, Trusts and Other Entities - Additional documentation is
normally required for corporations, fiduciaries and others who hold
shares in a representative or nominee capacity. We cannot process your
request until we have all documents in the form required. Please call us
first to avoid delays.
Exchanges to Another Fund - You must meet the minimum investment
requirement of the fund
you are exchanging into. The names and registrations on the two accounts
must be identical. Your shares must have been held in an open account
for 15 days or more and we must have received good payment before we
will exchange shares.
Telephone and fund web site Services - During periods of increased
market activity, you may have difficulty reaching us by telephone. If
this happens, contact us by mail or web site. We may refuse
a telephone request, including a telephone redemption request. We will
use reasonable procedures to
confirm that telephone or Fund web site instructions are genuine. If
such procedures are not followed, the Funds may be liable for losses due
to unauthorized or fraudulent instructions. At our option, we may limit
the frequency or the amount of telephone redemption requests. Neither
the Funds nor Jones & Babson, Inc. assumes responsibility for the
authenticity of telephone and Fund web site redemption requests.
CONDUCTING BUSINESS WITH THE BABSON FUNDS
By Phone
1-800-4-BABSON
(1-800-422-2766)
in the Kansas City area 751-5900
You must authorize each type of telephone transaction
on your account application or the appropriate form,
available from us. All account owners must sign. When you call, we may
request personal identification and tape record the call.
If you already have an account with us and you have authorized telephone
exchanges, you may call to open an account in another Babson or Buffalo
Fund by exchange ($1,000 minimum). The names and registrations on the
accounts must be identical.
You may make investments ($100
minimum) by telephone. After we have received your telephone call, we
will deduct from your checking account the cost of the shares.
Availability of this service is subject to approval by the Funds and
participating banks.
You may withdraw any amount ($1,000 minimum if wired) by telephone or
telegram. We will send funds only to the address or bank account on
file with us. Provide the Fund's name, your account number, the names of
each account owner (exactly as registered), and the number
of shares or dollar amount to be redeemed.
For wires, also provide the bank name and
bank account number.
You may exchange shares ($1,000
minimum or the initial minimum fund requirement) for shares in another
Babson Fund which have been held
in open account for 15 days or more.
All account owners are automatically granted telephone and Fund web site
exchange privileges unless they decline them explicitly in writing,
either on the account application or by writing to the Babson Funds.
By Mail
Initial Purchases, Redemptions and all Correspondence:
The Babson Fund Group
P.O. Box 219757
Kansas City, MO 64121-9779
Subsequent Purchases:
The Babson Fund Group
P.O. Box 219779
Kansas City, MO 64121-9779
Complete and sign the application which accompanies this Prospectus.
Your initial investment must meet the minimum amount. Make your check
payable to UMB Bank, n.a.
Make your check ($50 minimum) payable to UMB Bank, n.a. and mail
it to us. Always identify your account number or include the detachable
reminder stub (from your confirmation statement).
In a letter, include the genuine signature
of each registered owner (exactly as registered), the name of each
account owner, the account number and the number of shares or the dollar
amount to be redeemed. We will send funds
only to the address of record.
In a letter, include the genuine
signature of each registered owner,
the account number, the number
of shares or dollar amount to
be exchanged ($1,000 minimum)
and the Babson Fund into which
the amount is being transferred.
By Wire
UMB Bank, n.a.,
Kansas City, Missouri, ABA #101000695
For Account Number 9870326213
Please provide:
(Fund Number)/(Babson Account Number)/(Name on Account)
Call us first to get an account number. We
will require information such as your Social Security or Taxpayer
Identification Number, the amount being wired ($1,000 minimum), and the
name and telephone number of the wiring bank. Then tell your bank to
wire the amount. You must send us a completed application
as soon as possible or payment of your redemption proceeds will be
delayed.
Wire share purchases ($1,000
minimum) should include the names of each account owner, your account
number and the Babson Fund in which you are purchasing shares. You
should notify us by telephone that you have sent a wire purchase order
to UMB Bank, n.a.
Redemption proceeds ($1,000 minimum) may be wired to your pre-identified
bank account. A $10 fee is deducted. If we receive your request before
4:00 P.M. (Eastern Time) we will normally wire funds the following
business day. If we receive your request later in the day, we will
normally wire funds on the second business day. Contact your bank about
the time of receipt and availability.
Not applicable.
Through Automatic Transaction Plans
You must authorize each type of automatic transaction
on your account application or complete an authorization form, available
from us upon request. All registered
owners must sign.
Not applicable.
Automatic Monthly Investment:
You may authorize automatic monthly investments in a constant dollar
amount ($50 minimum) from your checking account. We will draft your
checking account on the same day each month in the amount you
authorize.
Systematic Redemption Plan:
You may specify a dollar amount ($50 minimum) to be withdrawn monthly or
quarterly or have your shares redeemed at a rate calculated to exhaust
the account at the end of a specified period. A fee of $1.50 or less may
be charged for each withdrawal. You must own shares in an open account
valued at $10,000 when you first
authorize the systematic redemption plan.
You may cancel or change your plan or redeem
all your shares at any time. We will continue
withdrawals until your shares are gone or until
the Fund or you cancel the plan.
Monthly Exchanges:
You may authorize monthly exchanges from your account ($100 minimum) to
another Babson Fund. Exchanges will be continued until all shares have
been exchanged or until you terminate the
service.
additional information
The Statement of Additional Information (SAI) contains additional
information about the Funds and is incorporated by reference into this
Prospectus. The Funds' annual and semi-annual reports to shareholders
contain additional information about each Funds' investments. In the
Funds' annual report, you will find a discussion of the market
conditions and investment strategies that significantly affected each
Fund's performance during the last fiscal year.
You may obtain a free copy of these documents by calling, writing or e-
mailing the Funds as shown below. You also may call the toll free number
given below to request other information about the Funds and to make
shareholder inquiries.
You may review and copy the SAI and other information about the Funds by
visiting the Securities and Exchange Commission's Public Reference Room
in Washington, DC (1-800-SEC-0330) or by visiting the Commission's
Internet site at http://www.sec.gov. Copies of this information also may
be obtained, upon payment of a duplicating fee, by writing to the Public
Reference Section of the Commission, Washington, DC 20549-6009.
811-3823 Enterprise Fund
811-6258 Enterprise Fund II
811-901 Growth Fund
811-5218 Shadow Stock Fund
811-4114 Value Fund
811-5386 International Fund
811-495 Bond Trust
811-2963 Money Market Fund
811-2948 Tax-Free Income Fund
BABSON FUNDS
Jones & Babson Distributors
A Member of the Generali Group
<PAGE>
PART B
BABSON GROWTH FUND, INC. BABSON BOND TRUST
BABSON ENTERPRISE FUND, INC. BABSON MONEY MARKET FUND, INC.
BABSON ENTERPRISE FUND II, INC. BABSON TAX-FREE INCOME FUND, INC.
BABSON VALUE FUND, INC.
SHADOW STOCK FUND, INC.
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
October 31, 1999
This Statement is not a Prospectus but should be
read in conjunction with the Funds' current combined
Prospectus dated October 31, 1999. To obtain the
Prospectus or Annual Report to Shareholders, please
call the Funds toll-free at 1-800-4-BABSON (1-800-422-
2766), or in the Kansas City area 751-5900. Certain
information from the Annual Report to Shareholders is
incorporated by reference into this Statement.
TABLE OF CONTENTS
Page
Investment Objective, Strategies and Risks 2
Repurchase Agreements 6
Repurchase Agreement Risk Factors 7
Foreign Investments, Foreign Currency Transactions 7
Cash Management 8
Investment Restrictions 9
Portfolio Transactions 13
Performance Measures 15
Total Return 16
How the Fund's Shares are Distributed 16
Purchase and Redemption Services 17
How Share Purchases are Handled 17
Redemption of Shares 18
Management and Investment Counsel 18
Officers and Directors 20
Compensation Table 21
Holidays 22
Dividends, Distributions and their Taxation 22
General Information and History 24
Custodian 26
Transfer Agent 27
Independent Auditors 27
Other Jones & Babson Funds 27
Description of Stock Ratings 28
Ratings of Municipal and Taxable Securities 28
Description of Commercial Paper Ratings 31
Financial Statements 32
INVESTMENT OBJECTIVES, STRATEGIES
AND RISKS
The Funds are open-ended,
diversified management investment
companies commonly known as mutual
funds. The following information
supplements each Fund's investment
objective, strategies and risks set
forth in the Prospectus.
Babson Growth Fund. Current
yield is secondary objective. The
Fund generally defines "above
average total return" as total
return that is higher than return
generated by traditional investment
vehicles other than equity
products, including but not limited
to, passbook savings accounts,
certificates of deposit, bonds,
U.S. government securities and
traditional insurance products,
such as whole life policies and
annuities. All assets of the Fund
will be invested in marketable
securities composed principally of
common stocks and securities
convertible into common stock.
Necessary reserves will be held in
cash or high-quality short-term
debt obligations readily changeable
to cash, such as treasury bills,
commercial paper or repurchase
agreements. The Fund reserves the
freedom to invest in preferred
stocks, high grade bonds or other
defensive issues when, in
management's judgment, economic and
market conditions make such a
course desirable. Normally,
however, the Fund will maintain at
least 80% of the portfolio in
common stocks.
D.L. Babson Bond Trust.
Babson Bond Trust will limit its
investments in securities rated in
the fourth classification (Baa and
BBB) to a maximum of 25% of its
assets since these securities may
have speculative characteristics
and changes in economic conditions
or other circumstances are more
likely to lead to a weakened
capacity of those issuers to make
principal or interest payments.
The Portfolios may shorten or
lengthen portfolio maturities as
interest rates change. If the bond
rating of a security purchased by a
Portfolio is subsequently
downgraded, the Portfolio will take
any necessary steps designed to
bring the Portfolio into compliance
with its investment policies as
soon as reasonably practicable.
The Portfolios may also respond to
adverse market, economic, political
or other considerations by
investing up to 100% of its assets
in cash or short-term debt
obligations for temporary defensive
purposes.
Portfolio L will generally
have a duration of between 3.5 and
7 years (excluding short-term
investments). Portfolio S will
generally have a duration of
between 2 and 4 years (excluding
short-term investments). Duration
is a portfolio management tool used
to determine the price sensitivity
of an individual bond or portfolio
of fixed income securities to a
change in interest rates. Unlike
maturity, which only states when
the final payment is received, the
duration of a fixed income security
is the weighted average maturity,
expressed in years, of the present
value of all future cash flows,
including coupon payments and
principal repayments. The
Portfolios may include securities
with maturities and durations
outside these ranges.
Babson Enterprise Fund and
Babson Enterprise Fund II. Since
Babson Enterprise Fund's and Babson
Enterprise Fund II's focus on
smaller companies, the overall
income return on these Funds may be
low. Smaller companies frequently
need to retain all or most of their
profits to finance their growth and
will pay small dividend yields, or
none. If the companies are
successful, this plow-back of
earnings and internal financing of
growth without the need to issue
additional shares ultimately should
enhance the companies' per share
earnings and dividend capability
and make their shares more
attractive in the marketplace.
Effective July 1, 1999, the
Babson Enterprise Fund was opened
to new investors. This means that
investors may open new accounts
with the Fund through direct
purchases, or through exchanges
from any other fund in the Babson
Funds family or the Buffalo Funds
family. Investors whose accounts
were open in 1992 when the Fund was
closed to new investors have been
permitted to add to their accounts
since that time. It is anticipated
that the Fund will again close to
new investors when it reaches $280
million in assets.
Babson Value Fund. Under
normal conditions, the Fund will
invest at least 90% of its assets
in common stocks. In addition, the
Fund intends to hold a small
percentage of cash or high quality,
short term debt obligations for
reserves to cover redemptions and
unanticipated expenses.
Babson Shadow Stock Fund,
Inc. "Small stocks" were originally
defined as those in the bottom
quintile of stocks listed on the
New York Stock Exchange ("NYSE")
when ranked by market
capitalization (number of shares
outstanding times price per share).
At present this would be a market
capitalization of below $213
million, but this level changes as
market prices rise and fall.
Currently, this concept is also
applied to stocks listed on the
American Stock Exchange ("AMEX")
and over-the-counter ("OTC")
stocks. The Fund defines "small
stocks" to include stocks listed on
the NYSE, AMEX and OTC stocks that
have market capitalization of
between $20 million and $213
million and have annual net profits
of at least $1 million for the
three most recent fiscal years.
"Neglected stocks" are those that
have below average institutional
holdings and below average coverage
by analysts and newsletters. The
term "neglected" has not had a
consistent definition, but the
Fund's Manager and Investment
Adviser define it as meaning the
fifty percent of "small stocks"
which have the least coverage by
institutions and analysts. The
Fund's Manager and Investment
Adviser will use their judgment in
determining the methods of
measuring analyst and institutional
interest. It is estimated that
Shadow Stock Fund's portfolio will
contain about 250 stocks and thus
be very diversified.
It is the intention of the
Fund to maintain ownership of the
Shadow Stocks approximately in
proportion to their respective
market capitalizations, but this
approach may be departed from for
the following reasons. First,
acquisition of the shares of
smaller companies is sometimes
difficult without disrupting the
supply/demand relationship and
thereby increasing transaction
costs. For this reason, shares of
companies on the buy list may be
purchased when opportunities for
block trades present themselves
even if purchases of such a
company's stock would not otherwise
be the highest priority on a market
capitalization basis. Conversely,
high priority shares might be
avoided if they cannot be acquired
at the time without disrupting the
market. Second, the Fund will
attempt to purchase shares in
optimal lot sizes which precludes
fine tuning of the weighting.
Third, the Fund's Manager and
Investment Adviser will take a
long-term view and do not feel it
prudent to constantly purchase and
sell stocks for short-term
balancing. Guideline relative
weights will be reviewed in detail
twice a year.
Shares of stock will be
considered for elimination from the
portfolio in the following bases:
(1) on the basis of the $5 minimum
price criterion (a stock will not
be sold for this reason alone, but
additional shares will not be
purchased below $4 per share which
may result in a disproportionate
representation in terms of ideal
weighting); (2) on the basis or
profitability (a company's stock
will be sold as soon as the Fund's
Manager and Investment Adviser feel
it is highly unlikely that there
will be negative earnings in the
current fiscal year); (3) on the
basis of tenders or potential
mergers (the Fund's Manager and
Investment Adviser will use their
judgment as to the best time to
sell or tender); (4) on the basis
on neglect (shares will be sold
when the company has been beyond
the Manager's and Investment
Adviser's criteria for a neglected
stock for three successive
semiannual evaluation periods); or
(5) on the basis of capitalization
a stock will be sold if, at a
semiannual evaluation, either the
market capitalization is twice the
current acceptable maximum or one-
half the current minimum. In the
case of portfolio companies whose
capitalization has gone beyond the
current maximum or minimum, the
Fund's Investment Adviser may keep
the portfolio weighting at the
level appropriate for the current
maximum or minimum. If funds
beyond current liquid assets are
necessary to meet redemptions,
stocks not meeting current initial
criteria will be liquidated first.
While the objectives of the
Fund would favor a fully invested
position in Shadow Stocks, the
practicality of Fund management
requires liquidity. An average of
about 5% of the Fund's assets may
be invested in cash or cash
equivalents including: securities
that are issued or guaranteed as to
principal and interest by the U.S.
government, its agencies,
authorities or instrumentalities
(such as U.S. Treasury obligations,
which differ only in their interest
rates, maturities and times of
issuance, and obligations issued or
guaranteed by U.S. government
agencies or instrumentalities which
are backed by the full faith and
credit of the U.S. Treasury or
which are supported by the right of
the issuer to borrow from the U.S.
government), repurchase agreements,
certificates of deposit, time
deposits, commercial paper and
other high quality short-term debt
securities. The Fund may adopt a
temporary defensive position by
investing it assets in debt
securities, such as money market
obligations, including securities
of the U.S. government and its
agencies, high quality commercial
paper, bankers' acceptances and
repurchase agreements with banks
and brokers for U.S. government
securities.
Babson-Stewart Ivory
International Fund, Inc. The Fund
will look at such factors as the
location of the company's assets,
personnel, sales and earnings, to
determine whether a company's
primary business is carried on
outside the United States. The
Fund diversifies its investments
among various countries and a
number of different industries.
The Fund is designed to provide
investors with a diversified
participation in international
businesses. Over the years, some
foreign businesses have been
especially successful in their
particular industries and some
foreign stock markets have
outperformed the American markets.
Foreign securities markets do not
always move in parallel with the
U.S. securities markets, so
investing in international
securities can provide
diversification advantages.
The Fund primarily invests in
equity securities of seasoned
companies which are listed on
foreign stock exchanges and which
the investment counsel considers to
have attractive characteristics in
terms of profitability, growth and
financial resources. "Seasoned"
and "established" companies are
those companies which, in the
opinion of the investment counsel,
are known for the quality and
acceptance of their products or
services and for their ability to
generate profits and in many cases
pay dividends. The Fund may invest
in fixed-income securities of
foreign governments or companies
when the investment counsel
believes that prevailing market,
economic, political or currency
conditions warrant such
investments. While most foreign
securities are not subject to
standard credit ratings, the
investment counsel intends to
select "investment grade" issued of
foreign debt securities which are
comparable to a Baa or higher
rating by Moody's Investors
Service, Inc. or a BBB or higher
rating by Standard and Poor's
Corporation based on available
information, and taking into
account liquidity and quality
issues. Securities rated BBB or
Baa are considered to be medium
grade and may have speculative
characteristics.
The Fund may also purchase
American Depository Receipts
("ADRs") which represent foreign
securities traded on U.S. exchanges
or in the over-the-counter market,
European Depository Receipts
("EDRs"), and International
Depository Receipts ("IDRs"), in
bearer form, which are designed for
use in European and other
securities markets. The fund may
also invest in securities that are
not listed on an exchange.
Generally, the volume of trading in
an unlisted common stock is less
than the volume of trading in a
listed stock. This means that the
degree of market liquidity of some
stocks in which the Fund invests
may be relatively limited. When
the Fund disposes of such a stock
it may have to offer the shares at
a discount from recent prices or
sell the shares in small lots over
an extended period of time.
In order to expedite
settlement of portfolio
transactions and to minimize
currency value fluctuations, the
Fund may purchase foreign
currencies and/or engage in forward
foreign currency transactions. The
Fund will not engage in forward
foreign currency exchange contracts
for speculative purposes. A
forward foreign currency exchange
contract involves an obligation to
purchase or sell a specific
currency at a future date, which
may be any fixed number of days
from the date of the contract
agreed upon by the parties, at a
price set at the time of the
contract. These contracts may be
bought or sold to protect the Fund,
to some degree, against a possible
loss resulting from an adverse
change in the relationship between
foreign currencies and the U.S.
dollar. This method of protecting
the value of the Fund's investment
securities against a decline in the
value of a currency does not
eliminate fluctuations in the
underlying prices of the
securities. It establishes a rate
of exchange that one can achieve at
some future point in time.
Although such contracts tend to
minimize the risk of loss due to a
decline in the value of the hedged
currency, at the same time, they
tend to limit any potential gain
which might result should the value
of such currency increase.
Generally, the Fund does not
intend to invest more than 35% of
its total assets in any one
particular country. However, the
Fund may, at times, temporarily
invest a substantial portion of its
assets in one or more of such
countries if economic and business
conditions warrant such
investments, although it currently
does not intend to do so to any
principal extent. The Fund may
also invest up to 20% of its assets
in companies located in developing
countries. A developing country is
generally considered to be a
country which is in the initial
stages of its industrialization
cycle with a low per capita gross
national product. Compared to
investment in the United States and
other developed countries,
investing in the equity and fixed
income markets of developing
countries involves exposure to
relatively unstable governments,
economic structures that are
generally less mature and based on
only a few industries, and
securities markets which trade a
small number of securities. Prices
on securities exchanges in
developing countries tend to be
more volatile than those in
developed countries. The Fund will
not invest more than 20% of its
total assets in companies located
in developing countries.
Under normal conditions, the
Fund will invest at least 65% of
its assets in equity securities of
foreign issuers. However, to meet
the liquidity needs of the Fund or
when the Fund believes that
investments should be deployed in a
temporary defensive position
because of economic or market
conditions, the Fund may invest all
or a major portion of its assets in
short-term debt securities
denominated in U.S. dollars,
including U.S. Treasury bills and
other securities of the U.S.
government and its agencies,
bankers' acceptances, certificates
of deposit, and repurchase
agreements maturing in seven days
or less with U.S. banks and broker-
dealers. The Fund may also hold
cash and time deposits in foreign
banks, denominated in any major
foreign currency.
Babson Money Market Fund. To
achieve its objectives the Fund may
engage in trading activity in order
to take advantage of opportunities
to enhance yield, protect principal
or improve liquidity. This trading
activity should not increase the
Fund's expenses since there are
normally no broker's commissions
paid by the Fund for the purchase
or sale of money market
instruments. However, a markup or
spread may be paid to a dealer from
which the Fund purchases a
security.
To assure compliance with the
adopted procedures pursuant to Rule
2a-7 under the Investment Company
Act of 1940, the Fund will only
invest in U.S. dollar denominated
securities with remaining
maturities of 397 days or less,
maintain the dollar weighted
average maturity of the securities
in the Fund's portfolio at 90 days
or less and limit its investments
to those instruments which the
Directors of the Fund determine to
present minimal credit risks and
which are eligible investments
under the rule.
Babson Tax-Free Income Fund.
Each Portfolio will have
substantially all of its assets
invested in investment-grade
municipal securities, the interest
on which is deemed exempt from
federal income tax (including the
alternative minimum tax). The
essential difference in the
Portfolios will be the time to
maturity of their holdings. The
Portfolios are:
Portfolio L - Longer
term: There is no
maximum maturity.
Longer maturities
produce higher income
but carry greater
possibility of price
fluctuation compared to
obligations with
shorter terms.
Portfolio S - Shorter
Term: Shorter
maturities usually
result in lower income
but provide more
stability in price when
compared to obligations
with longer maturities.
Portfolio MM - Money
Market: Maturities will
conform to Rule 2a-7 at
the time of purchase.
During periods of normal
market conditions, the Fund will
invest at least 80% of the total
assets of each Portfolio (exclusive
of cash) in municipal securities.
The Fund may invest any remaining
balance in taxable money market
instruments on a temporary basis,
if management believes this actions
would be in the best interest of
shareholders. Included in this
category are: obligations of the
U.S., its agencies or
instrumentalities; certificates of
deposit; bankers' acceptances and
other short-term debt obligations
of U.S. banks with total assets of
$1 billion or more; and commercial
paper rated A-2 or better by
Standard & Poor's Corp. ("S&P") or
Prime-2 or better by Moody's
Investors Services, Inc.
("Moody's"), or certain rights to
acquire these securities.
The Fund reserves the right
to deviate temporarily from this
policy during extraordinary
circumstances when, in the opinion
of management, it is advisable to
do so in the best interests of
shareholders.
At least 90% of the municipal
bonds in Portfolio L and Portfolio
S will be rated at the time of
purchase within the top three
classifications of Moody's (Aaa, Aa
and A), or by S&P (AAA, AA, and A).
Any municipal bond backed by the
full faith and credit of the
federal government shall be
considered to have a rating of AAA.
Investments in short-term municipal
obligations and notes are limited
to those obligations which at the
time of purchase: (1) are backed by
the full faith and credit of the
U.S.; or (2) are rated MIG-1, MIG-2
or MIG-3 by Moody's; or (3) if the
notes are not rated, then the
issuer's long-term bond rating must
be at least A as determined by
Moody's or by S&P. Short-term
discount notes are limited to those
obligations rated A-1 or A-2 by
S&P, or Prime-1 or Prime-2 by
Moody's or their equivalents as
determined by the Board of
Directors. With respect to short-
term discount notes which are not
rated, the issuer's long-term bond
rating must be at least A by S&P or
Moody's.
One hundred percent of the bonds in
Portfolio MM must be rated at the
time of purchase within the two
highest grades assigned by Moody's
(Aaa and Aa) or by S&P (AAA and AA)
or of comparable quality as
determined by the Board of
Directors. Any municipal bond held
in Portfolio MM that is backed by
the full faith and credit of the
federal government shall be
considered to have a rating of AAA.
Investments in short-term municipal
obligations and notes will be
limited to those obligations which
at the time of purchase: (1) are
backed by the full faith and credit
of the U.S.; (2) are rated MIG-1 or
MIG-2 by Moody's; or (3) if the
obligations or notes are not rated,
then of comparable quality as
determined by the Board of
Directors. Short-term discount
notes will be limited to those
obligations rated A-1 by S&P or
Prime-1 by Moody's or their
equivalents as determined by the
Board of Directors. If short-term
discount notes are not rated, then
they must be of comparable quality
as determined by the Board of
Directors.
It is the policy of the Fund
not to invest more than 25% of its
assets in any one classification of
municipal securities, except tax-
exempt obligations which are backed
by the U.S. governments. Should
the rating organizations used by
the Fund cease to exist or change
their systems, the Fund will
attempt to use other comparable
ratings as standards for its
investments in municipal securities
in accordance with its investment
policies.
Repurchase Agreements. The Funds
may invest in issues of the United
States Treasury or a United States
government agency subject to
repurchase agreements. A
repurchase agreement involves the
sale of securities to the Funds
with the concurrent agreement by
the seller to repurchase the
securities at the Fund's cost plus
interest at an agreed rate upon
demand or within a specified time,
thereby determining the yield
during the purchaser's period of
ownership. The result is a fixed
rate of return insulated from
market fluctuations during such
period. Under the Investment
Company Act of 1940, repurchase
agreements are considered loans by
the Funds.
The Funds will enter into such
repurchase agreements only with
United States banks having assets
in excess of $1 billion which are
members of the Federal Deposit
Insurance Corporation, and with
certain securities dealers who meet
the qualifications set from time to
time by the Board of Directors of
the Funds. The term to maturity of
a repurchase agreement normally
will be no longer than a few days.
Repurchase agreements maturing in
more than seven days and other
illiquid securities will not exceed
10% of the net assets of the Funds.
Repurchase Agreement Risk Factors.
The use of repurchase agreements
involves certain risks. For
example, if the seller of the
agreement defaults on its
obligation to repurchase the
underlying securities at a time
when the value of these securities
has declined, the Funds may incur a
loss upon disposition of them. If
the seller of the agreement becomes
insolvent and subject to
liquidation or reorganization under
the Bankruptcy Code or other laws,
disposition of the underlying
securities may be delayed pending
court proceedings. Finally, it is
possible that the Funds may not be
able to perfect its interest in the
underlying securities. While the
Funds' management acknowledges
these risks, it is expected that
they can be controlled through
stringent security selection
criteria and careful monitoring
procedures.
Foreign Investments. Investors
should recognize that investing in
foreign companies involves certain
special considerations which are
not typically associated with
investing in U.S. companies. Since
the stocks of foreign companies are
frequently denominated in foreign
currencies, and since the Babson-
Stewart Ivory International Fund
may temporarily hold uninvested
reserves in bank deposits in
foreign currencies, the Fund will
be affected favorably or
unfavorably by changes in currency
rates and in exchange control
regulations, and may incur costs in
connection with conversions between
various currencies. The investment
policies of the Fund permit it to
enter into forward foreign currency
exchange contracts in order to
hedge the Fund's holdings and
commitments against changes in the
level of future currency rates.
Such contracts involve an
obligation to purchase or sell a
specific currency at a future date
at a price set at the time of the
contract.
As foreign companies are not
generally subject to uniform
accounting, auditing and financial
reporting standards and practices
comparable to those applicable to
domestic companies, there may be
less publicly available information
about certain foreign companies
than about domestic companies.
Securities of some foreign
companies are generally less liquid
and more volatile than securities
of comparable domestic companies.
There is generally less government
supervision and regulation of stock
exchanges, brokers and listed
companies than in the U.S. In
addition, with respect to certain
foreign countries, there is the
possibility of expropriation or
confiscatory taxation, political or
social instability, or diplomatic
developments which could affect
U.S. investments in those
countries.
Although the Fund will endeavor to
achieve most favorable execution
costs in its portfolio
transactions, fixed commissions on
many foreign stock exchanges are
generally higher than negotiated
commissions on U.S. Exchanges. In
addition, it is expected that the
expenses of custodian arrangements
of the Fund's foreign securities
will be somewhat greater than the
expenses for the custodian
arrangements for handling the
Fund's securities of equal value.
Certain foreign governments levy
withholding taxes against dividend
and interest income. Although in
some countries a portion of these
taxes are recoverable, the
nonrecovered portion of foreign
withholding taxes will reduce the
income received from the companies
comprising the Fund's portfolio.
Foreign Currency Transactions. The
value of the assets of the Babson-
Stewart Ivory International Fund as
measured in U. S. dollars may be
affected favorably or unfavorably
by changes in foreign currency
exchange rates and exchange control
regulations, and the Fund may incur
costs in connection with
conversions between various
currencies.
The Fund will conduct its foreign
currency exchange transactions
either on a spot (i.e., cash) basis
at the spot rate prevailing in the
foreign currency exchange market,
or through the use of forward
contracts to purchase or sell
foreign currencies. A forward
foreign currency exchange contract
will involve an obligation by the
Fund to purchase or sell a specific
amount of currency at a future
date, which may be any fixed number
of days, from the date of the
contract agreed upon by the
parties, at a price set at the time
of the contract. These contracts
are transferable in the interbank
market conducted directly between
currency traders (usually large
commercial banks) and their
customers. A forward contract
generally has no deposit
requirements, and no commissions
are charged at any stage for
trades. Neither type of foreign
currency transaction will eliminate
fluctuations in the prices of the
Fund's portfolio securities or
prevent loss if the prices of such
securities should decline.
The Fund may enter into forward
foreign currency exchange contracts
only under two circumstances.
First, when the Fund enters into a
contract for the purchase or sale
of a security denominated in a
foreign currency, it may desire to
"lock in" the U.S. dollar price of
the security. The Fund will then
enter into a forward contract for
the purchase or sale, for a fixed
amount of dollars, of the amount of
foreign currency involved in the
underlying securities transaction;
in this manner the Fund will be
better able to protect itself
against a possible loss resulting
from an adverse change in the
relationship between the U.S.
dollar and the subject foreign
currency during the period between
the date the securities are
purchased or sold and the date on
which payment is made or received.
Second, when the Investment Adviser
believes that the currency of a
particular foreign country may
suffer a substantial decline
against the U.S. dollar, it may
enter into a forward contract to
sell, for a fixed amount of
dollars, the amount of foreign
currency approximating the value of
some or all of the Fund's
securities denominated in such
foreign currency. The precise
matching of the forward contract
amounts and the value of the
securities involved will not
generally be possible since the
future value of such securities in
foreign currencies will change as a
consequence of market movements in
the value of those securities
between the date the forward
contract is entered into and the
date it matures. The projection of
short-term currency market movement
is extremely difficult, and the
successful execution of a short-
term hedging strategy is highly
uncertain. The Investment Adviser
does not intend to enter into such
forward contracts under this second
circumstance on a regular or
continuous basis. The Fund will
also not enter into such forward
contracts or maintain a net
exposure to such contracts when the
consummation of the contracts would
obligate the Fund to deliver an
amount of foreign currency in
excess of the value of the Fund's
securities or other assets
denominated in that currency. The
Investment Adviser believes that it
is important to have flexibility to
enter into such forward contracts
when it determines that to do so is
in the best interests of the Fund.
The Fund's custodian bank
segregates cash or equity or debt
securities in an amount not less
than the value of the Fund's total
assets committed to forward foreign
currency exchange contracts entered
into under this second type of
transaction. If the value of the
securities segregated declines,
additional cash or securities is
added so that the segregated amount
is not less than the amount of the
Funds' commitments with respect to
such contracts. Under normal
circumstances, the Fund expects
that any appreciation or
depreciation on such forward
exchange contracts will be
approximately offset by the
depreciation or appreciation in
translation of the underlying
foreign investment arising from
fluctuations in foreign currency
exchange rates.
The Fund will recognize the
unrealized appreciation or
depreciation from the fluctuation
in a foreign currency forward
contract as an increase or decrease
in the Fund's net assets on a daily
basis, thereby providing an
appropriate measure of the Fund's
financial position and changes in
financial position.
Cash Management. For purposes
including but not limited to
meeting redemptions and
unanticipated expenses, the Funds
may invest a portion of their
assets in cash or high-quality,
short-term debt obligations readily
changeable into cash such as:
(1) certificates of deposit,
bankers' acceptances and other
short-term obligations issued
domestically by United States
commercial banks having assets
of at least $1 billion and which
are members of the Federal
Deposit Insurance Corporation or
holding companies of such banks;
(2) commercial paper of
companies rated P-2/MIG-2 or
higher by Moody's Investors
Service, Inc. (Moody's) or A-2
or higher by Standard and Poor's
Corporation (S&P), or if not
rated by either Moody's or S&P,
a company's commercial paper may
be purchased by the Fund if the
company has an outstanding bond
issue rated A or higher by
Moody's or A or higher by S&P;
(3) short-term debt securities
which are non-convertible and
which have one year or less
remaining to maturity at the
date of purchase and which are
rated A or higher by Moody's or
A or higher by S&P; (4)
negotiable certificates of
deposit and other short-term
debt obligations of savings and
loan associations having assets
of at least $1 billion and which
are members of the Federal Home
Loan Banks Association and
insured by the Federal Deposit
Insurance Corporation.
Investment Restrictions. In
addition to the investment
objective and portfolio management
policies set forth in the
Prospectus under the caption
"Investment Objective and Principal
Investment Strategies," the Funds
are subject to certain other
restrictions which may not be
changed without approval of the
lesser of: (1) at least 67% of the
voting securities present at a
meeting if the holders of more than
50% of the outstanding securities
of the Fund are present or
represented by proxy, or (2) more
than 50% of the outstanding voting
securities of the Fund.
Babson Growth Fund and Babson Value
Fund will not: (1) purchase the
securities of any one issuer,
except the United States
government, if immediately after
and as a result of such purchase
(a) the value of the holdings of
the Fund in the securities of such
issuer exceeds 5% of the value of
the Fund's total assets, or (b) the
Fund owns more than 10% of the
outstanding voting securities, or
any other class of securities, of
such issuer; (2) engage in the
purchase or sale of real estate or
commodities; (3) underwrite the
securities of other issuers; (4)
make loans to any of its officers,
directors, or employees, or to its
manager, or general distributor, or
officers or directors thereof; (5)
make any loan (the purchase of a
security subject to a repurchase
agreement or the purchase of a
portion of an issue of publicly
distributed debt securities is not
considered the making of a loan);
(6)invest in companies for the
purpose of exercising control of
management; (7) purchase securities
on margin or sell securities short;
(8) purchase shares of other
investment companies except in the
open market at ordinary broker's
commission, but, with respect to
the Growth Fund, not in excess of
5% of the Growth Fund's assets, or,
for either Fund, pursuant to a plan
of merger or consolidation; (9)
invest in the aggregate more than
5% of the value of its gross assets
in the securities of issuers (other
than federal, state, territorial,
or local governments, or
corporations, or authorities
established thereby), which
including predecessors, have not
had at least three years'
continuous operations nor, with
respect to the Growth Fund, invest
more than 25% of the Growth Fund's
assets in any one industry; (10)
enter into dealings with its
officers or directors, its manager
or underwriter, or their officers
or directors or any organization in
which such persons have a financial
interest except for transactions in
the Fund's own shares or other
securities through brokerage
practices which are considered
normal and generally accepted under
circumstances existing at the time;
(11) purchase or retain securities
of any company in which any Fund
officers or directors, or Fund
manager, its partner, officer, or
director beneficially owns more
than 1/2 of 1% of said company's
securities, if all such persons
owning more than 1/2 of 1% of such
company's securities, own in the
aggregate more than 5% of the
outstanding securities of such
company; (12) borrow or pledge its
credit under normal circumstances
except up to 10% of its gross
assets (computed at the lower of
fair market value or cost) for
temporary or emergency purposes,
and not for the purpose of
leveraging its investments, and
provided further that any borrowing
in excess of 5% of the total assets
of the Fund shall have asset
coverage of at least 3 to1; (13)
make itself or its assets liable
for the indebtedness of others;
(14) invest in securities which are
assessable or involve unlimited
liability;
Babson Enterprise Fund, Babson
Enterprise Fund II and Shadow Stock
Fund will not: (1) purchase the
securities of any one issuer,
except the United States
government, if immediately after
and as a result of such purchase
(a) the value of the holdings of
the Fund in the securities of such
issuer exceeds 5% of the value of
the Fund's total assets, or (b) the
Fund owns more than 10% of the
outstanding voting securities, or
any other class of securities, of
such issuer; (2) engage in the
purchase or sale of real estate or
commodities or, with respect to
Enterprise Fund II, futures
contracts; (3) underwrite the
securities of other issuers; (4)
make loans to any of its officers,
directors, or employees, or to its
manager, or general distributor, or
officers or directors thereof; (5)
make loans to other persons, except
by the purchase of debt obligations
which are permitted under its
investment policy; (6)invest in
companies for the purpose of
exercising control of management;
(7) purchase securities on margin
or sell securities short; (8)
purchase shares of other investment
companies except in the open market
at ordinary broker's commission,
but not in excess of 5% of the
Fund's assets, or pursuant to a
plan of merger or consolidation;
(9) invest in the aggregate more
than 5% of the value of its gross
assets in the securities of issuers
(other than federal, state,
territorial, or local governments,
or corporations, or authorities
established thereby), which
including predecessors, have not
had at least three years'
continuous operations nor invest
more than 25% of the Fund's assets
in any one industry; (10) enter
into dealings with its officers or
directors, its manager or
underwriter, or their officers or
directors or any organization in
which such persons have a financial
interest except for transactions in
the Fund's own shares or other
securities through brokerage
practices which are considered
normal and generally accepted under
circumstances existing at the time;
(11) purchase or retain securities
of any company in which any Fund
officers or directors, or Fund
manager, its partner, officer, or
director beneficially owns more
than 1/2 of 1% of said company's
securities, if all such persons
owning more than 1/2 of 1% of such
company's securities, own in the
aggregate more than 5% of the
outstanding securities of such
company; (12) borrow or pledge its
credit under normal circumstances,
except up to 10% of its gross
assets (computed at the lower of
fair market value or cost) for
temporary or emergency purposes,
and not for the purpose of
leveraging its investments, and
provided further that any borrowing
in excess of 5% of the total assets
of the Fund shall have asset
coverage of at least 3 to1; (13)
make itself or its assets liable
for the indebtedness of others;
(14) invest in securities which are
assessable or involve unlimited
liability; or (15) issue senior
securities except for those
investment procedures permissible
under the Fund's other
restrictions.
Babson-Stewart Ivory International
Fund will not: (1) purchase the
securities of any one issuer,
except the United States
government, if immediately after
and as a result of such purchase
(a) the value of the holdings of
the Fund in the securities of such
issuer exceeds 5% of the value of
the Fund's total assets, or (b) the
Fund owns more than 10% of the
outstanding voting securities, or
any other class of securities, of
such issuer; (2) engage in the
purchase or sale of real estate or
commodities; (3) underwrite the
securities of other issuers; (4)
make loans to any of its officers,
directors, or employees, or to its
manager, or general distributor, or
officers or directors thereof; (5)
make loans to other persons, except
by the purchase of debt obligations
which are permitted under its
investment policy; (6) invest in
companies for the purpose of
exercising control of management;
(7) purchase securities on margin
or sell securities short; (8)
purchase shares of other investment
companies except shares of closed-
end investment companies, purchased
in the open market at ordinary
broker's commission, but not in
excess of 5% of the Fund's assets,
or pursuant to a plan of merger or
consolidation; (9) invest in the
aggregate more than 5% of the value
of its gross assets in the
securities of issuers (other than
federal, state, territorial, or
local governments, or corporations,
or authorities established
thereby), which including
predecessors, have not had at least
three years' continuous operations
nor invest more than 25% of the
Fund's assets in any one industry;
(10) enter into dealings with its
officers or directors, its manager
or underwriter, or their officers
or directors or any organization in
which such persons have a financial
interest except for transactions in
the Fund's own shares or other
securities through brokerage
practices which are considered
normal and generally accepted under
circumstances existing at the time;
(11) purchase or retain securities
of any company in which any Fund
officers or directors, or Fund
manager, its partner, officer, or
director beneficially owns more
than 1/2 of 1% of said company's
securities, if all such persons
owning more than 1/2 of 1% of such
company's securities, own in the
aggregate more than 5% of the
outstanding securities of such
company; (12) borrow or pledge its
credit under normal circumstances,
except up to 10% of its gross
assets (computed at the lower of
fair market value or cost) for
temporary or emergency purposes,
and not for the purpose of
leveraging its investments, and
provided further that any borrowing
in excess of 5% of the total assets
of the Fund shall have asset
coverage of at least 3 to1; (13)
make itself or its assets liable
for the indebtedness of others;
(14) invest in securities which are
assessable or involve unlimited
liability; or (15) issue senior
securities except for those
investment procedures permissible
under the Fund's other
restrictions.
Although not fundamental policies
subject to shareholder vote,
Babson-Stewart Ivory International
Fund may not engage in any of the
following activities: (1) invest
directly in oil, gas, or other
mineral exploration or development
programs: (2) invest more than 5%
of its total assets in securities
which are restricted as to future
sale; (3) invest more than 5% of
its total assets in puts, calls,
straddles, spreads, and any
combination thereof (the Fund will
engage in options transactions for
hedging purposes only); and (4)
purchase warrants, valued at the
lower of cost or market, in excess
of 5% of the value of the Fund's
net assets. Included within that
amount, but not to exceed 2% of the
value of the Fund's net assets, may
be warrants which are not listed on
the New York or American Stock
Exchange. Warrants acquired by the
Fund at any time in units or
attached to securities are not
subject to this restriction.
Babson Bond Trust will not: (1)
purchase any investment security
for credit or on margin, except
such short-term credits as are
necessary for the clearance of
transactions; (2) participate on a
joint or a joint-and-several basis
in any trading account in
securities; (3) sell any securities
short; (4) borrow money, securities
or other property in any event or
for any purpose whatsoever, or
issue any security senior to the
shares authorized by the Trust
Indenture; (5) lend money,
securities or other assets of the
Trust for any purpose whatsoever,
provided, however, that the
acquisition of any publicly
distributed securities shall not be
held or construed to be the making
of a loan; (6) mortgage, pledge,
hypothecate or encumber in any
manner whatsoever any investment
securities at any time owned or
held by the Trust; (7) underwrite
or participate in the underwriting
of any securities; (8) purchase
shares of other investment
companies except in the open market
at ordinary broker's commission or
pursuant to a plan of merger or
consolidation; (9) acquire any
security issued by any issuer in
which an officer, director or
stockholder of such issuer is a
Trustee of the Trust or an officer
or director of a principal
underwriter (as defined in the
Investment Company Act of 1940) if
after the purchase of such security
one or more of the Trustees owns
beneficially more than 1/2 of 1% of
the capital stock of such issuer
and such Trustees together own
beneficially more than 5% of the
capital stock of such issuer; (10)
acquire any security of another
issuer if immediately after and as
a result of such acquisition the
market value of such securities of
such other issuer shall exceed 5%
of the market value of the total
assets of the Trust or the Trust
shall own more than 10% of the
outstanding voting securities of
such issuer (this restriction does
not apply to securities issued by
the United States or any state,
county or municipality thereof;
(11) invest more than 25% of the
value of its assets in any one
industry; (12) engage in the
purchase or sale of real estate or
commodities; (13) invest in
companies for the purpose of
exercising control of management;
or (14) purchase any securities
which are subject to legal or
contractual restrictions, i.e.,
restricted securities which may not
be distributed publicly without
registration under the Securities
Act of 1933.
Babson Money Market Fund will not:
(1) invest in equity securities or
securities convertible into
equities; (2) purchase the
securities of any issuer (other
than obligations issued or
guaranteed as to principal and
interest by the government of the
United States, its agencies or
instrumentalities), if as a result,
(a) more than 5% of the Fund's
total assets (taken at current
value) would be invested in the
securities of such issuer, or (b)
the Fund would hold more than 10%
of any class of securities of such
issuer (for this purpose, all debts
and obligations of an issuer
maturing in less than one year are
treated as a single class of
securities); (3) borrow money in
excess of 15% of its total assets
taken at market value, and then
only from banks as a temporary
measure for extraordinary or
emergency purposes; the Fund will
not borrow to increase income
(leveraging) but only to facilitate
redemption requests which might
otherwise require untimely
dispositions of Portfolio
securities; the Fund will repay all
borrowings before making additional
investments, and interest paid on
such borrowings will reduce net
income; (4) mortgage, pledge or
hypothecate its assets except in an
amount up to 15% (10% as long as
the Fund's shares are registered
for sale in certain states) of the
value of its total assets but only
to secure borrowings for temporary
or emergency purposes; (5) issue
senior securities, as defined in
the Investment Company Act of 1940,
as amended; (6) underwrite
securities issued by other persons;
(7) purchase or sell real estate,
but this shall not prevent
investment in obligations secured
by real estate; (8) make loans to
other persons, except by the
purchase of debt obligations which
are permitted under its investment
policy; (9) purchase securities on
margin or sell short; (10)
purchase or retain securities of an
issuer if to the knowledge of the
Fund's management those directors
of the Fund, each of whom owns more
than 1/2 of 1% of such securities,
together own more than 5% of the
securities of such issuer; (11)
purchase or sell commodities or
commodity contracts; (12) write or
invest in put, call, straddle or
spread options or invest in
interests in oil, gas or other
mineral exploration or development
programs; (13) invest in companies
for the purpose of exercising
control; (14) invest in securities
of other investment companies,
except as they may be acquired as
part of a merger, consolidation or
acquisition of assets; (15) invest
more than 5% of the value of its
total assets at the time of
investment in the securities of any
issuer or issuers which have
records of less than three years
continuous operation, including the
operation of any predecessor, but
this limitation does not apply to
securities issued or guaranteed as
to interest and principal by the
U.S. government or its agencies or
instrumentalities; or (16) purchase
any securities which would cause
more than 25% of the value of a
Portfolio's total net assets at the
time of such purchase to be
invested in any one industry;
provided, however, the Prime
Portfolio reserves freedom of
action to invest up to 100% of its
assets in certificates of deposit
or bankers' acceptances of domestic
branches of U.S. banks.
There is no limitation with respect
to investments in U.S. Treasury
Bills, or other obligations issued
or guaranteed by the federal
government, its agencies and
instrumentalities.
Babson Tax-Free Income Fund will
not: (1) invest in equity
securities or securities
convertible into equities; (2)
purchase more than 10% of the
outstanding publicly issued debt
obligations of any issuer; (3)
borrow money in any Portfolio
except for temporary emergency
purposes, and then only in an
amount not exceeding 10% of the
value of the total assets of that
Portfolio; (4) mortgage, pledge or
hypothecate the assets of any
Portfolio to an extent greater than
10% of the value of the net assets
of that Portfolio; (5) issue senior
securities, as defined in the
Investment Company Act of 1940, as
amended; (6) underwrite any issue
of securities; (7) purchase or sell
real estate, but this shall not
prevent investment in municipal
bonds secured by real estate; (8)
make loans to other persons, except
by the purchase of bonds,
debentures or similar obligations
which are publicly distributed; (9)
purchase securities on margin or
sell short; (10) purchase or
retain securities of an issuer if
to the knowledge of the Fund's
management those directors of the
Fund, each of whom owns more than 1/2
of 1% of such securities, together
own more than 5% of the securities
of such issuer; (11) purchase or
sell commodities or commodity
contracts; (12) invest in put,
call, straddle or special options;
(13) purchase securities of any
issuer (except the U.S. government,
its agencies and instrumentalities,
and any municipal bond guaranteed
by the U.S. government) in any
Portfolio if, as a result, more
than 5% of the total assets of that
Portfolio would be invested in the
securities of such issuer; for
purposes of this limitation,
"issuer" will be based on a
determination of the source of
assets and revenues committed to
meeting interest and principal
payments of each security, and a
government entity which guarantees
the securities issued by another
entity is also considered an issuer
of that security; (14) invest in
companies for the purpose of
exercising control; (15) invest in
securities of other investment
companies, except as they may be
acquired as part of a merger,
consolidation or acquisition of
assets; (16) invest more than 5% of
the value of its total assets at
the time of investment in the
securities of any issuer or issuers
which have records of less than
three years continuous operation,
including the operation of any
predecessor, but this limitation
does not apply to securities issued
or guaranteed as to interest and
principal by the U.S. government or
its agencies or instrumentalities.
Portfolio Transactions. Decisions
to buy and sell securities for the
Funds are made by Jones & Babson,
Inc. pursuant to recommendations by
David L. Babson & Co. Inc. and
Babson-Stewart Ivory International.
Officers of the Funds and Jones &
Babson, Inc. are generally
responsible for implementing or
supervising these decisions,
including allocation of portfolio
brokerage and principal business
and the negotiation of commissions
and/or the price of the securities.
Portfolio turnover will be no more
than is necessary to meet the
Funds' investment objectives.
Under normal circumstances, it is
anticipated that the Funds'
portfolio turnover will not exceed
100%.
In instances where securities are
purchased on a commission basis,
the Funds will seek competitive and
reasonable commission rates based
on circumstances of the trade
involved and to the extent that
they do not detract from the
quality of the execution. The
Funds, in purchasing and selling
portfolio securities, will seek the
best available combination of
execution and overall price (which
shall include the cost of the
transaction) consistent with the
circumstances which exist at the
time. The Funds do not intend to
solicit competitive bids on each
transaction.
The Funds believe it is in its
best interest and that of their
shareholders to have a stable and
continuous relationship with a
diverse group of financially strong
and technically qualified broker-
dealers who will provide quality
executions at competitive rates.
Broker-dealers meeting these
qualifications also will be
selected for their demonstrated
loyalty to the Funds, when acting
on their behalf, as well as for any
research or other services provided
to the Funds. Substantially all of
the equity portfolio transactions
(except for the Babson-Stewart
Ivory International Fund) are
through brokerage firms which are
members of the New York Stock
Exchange which is typically the
most active market in the size of
the Fund's transactions and for the
types of securities predominant in
the Fund's portfolio. Commissions
of transactions executed on foreign
exchanges are generally on a fixed
basis. The Babson-Stewart Ivory
International Fund endeavors to
obtain the rate of such commission
in good faith so as to achieve the
most favorable results under the
circumstances of each transaction.
When buying securities in the over-
the-counter market, the Funds will
select a broker who maintains a
primary market for the security
unless it appears that a better
combination of price and execution
may be obtained elsewhere. The
Funds normally will not pay a
higher commission rate to broker-
dealers providing benefits or
services to it than it would pay to
broker-dealers who do not provide
it such benefits or services.
However, the Funds reserve the
right to do so within the
principles set out in Section 28(e)
of the Securities Exchange Act of
1934 when it appears that this
would be in the best interests of
the shareholders.
No commitment is made to any
broker or dealer with regard to
placing of orders for the purchase
or sale of Fund portfolio
securities, and no specific formula
is used in placing such business.
Allocation is reviewed regularly by
both the Board of Directors of the
Funds and Jones & Babson, Inc.
Since the Funds do not currently
market shares through intermediary
brokers or dealers, it is not the
Funds' practice to allocate
brokerage or principal business on
the basis of sales of its shares
which may be made through such
firms. However, it may place
portfolio orders with qualified
broker-dealers who recommend the
Funds to other clients, or who act
as agents in the purchase of the
Funds' shares for their clients.
Research services furnished by
broker-dealers may be useful to the
Fund managers in serving other
clients, as well as the Funds.
Conversely, the Funds may benefit
from research services obtained by
the managers from the placement of
portfolio brokerage of other
clients.
When it appears to be in the best
interests of its shareholders, the
Funds may join with other clients
of the managers in acquiring or
disposing of a portfolio holding.
Securities acquired or proceeds
obtained will be equitably
distributed between the Funds and
other clients participating in the
transaction. In some instances,
this investment procedure may
affect the price paid or received
by the Funds or the size of the
position obtained by the Funds.
For the past three fiscal years
each year, the total dollar amount
of brokerage commissions paid by
the Funds were as follows:
Growth - $488,655, $208,141 and
$129,998 for 1999, 1998 and 1997
respectively; Enterprise -
$ 92,129*, $264,561 and $306,945;
Enterprise II - $64,350*, $95,748
and $52,014; Value - $866,352*,
$1,103,306 and $669,271; Shadow
$ 38,503, $81,743 and $8,350;
International - $260,815, $268,815
and $229,337.
*Denotes seven month figures.
PERFORMANCE MEASURES
The Funds may advertise "average
annual total return" over various
periods of time. Such total return
figures show the average percentage
change in value of an investment in
the Funds from the beginning date
of the measuring period to the end
of the measuring period. These
figures reflect changes in the
price of the Funds' shares and
assume that any income dividends
and/or capital gains distributions
made by the Funds during the period
were reinvested in shares of the
Funds. Figures will be given for
recent one-, five- and ten-year
periods (if applicable), and may be
given for other periods as well
(such as from commencement of the
Funds' operations, or on a year-by-
year basis). When considering
"average" total return figures for
periods longer than one year, it is
important to note that a Fund's
annual total return for any one
year in the period might have been
greater or less than the average
for the entire period.
From time to time, the Babson Money
Market Fund and the Babson Tax-Free
Income Fund Portfolio MM may quote
their yields in advertisements,
shareholder reports or other
communications to shareholders.
Yield information is generally
available by calling the Funds toll
free 1-800-4-BABSON (1-800-422-
2766), or in the Kansas City area
751-5900. The current annualized
yield for the Money Market Fund and
Portfolio MM is computed by: (a)
determining the net change in the
value of a hypothetical pre-
existing account in each Fund or
Portfolio having a balance of one
share at the beginning of a seven
calendar day period for which yield
is to be quoted, (b) dividing the
net change by the value of the
account at the beginning of the
period to obtain the base period
return, and (c) annualizing the
results (i.e., multiplying the base
period return by 365/7). The net
change in value of the account
reflects the value of additional
shares purchased with dividends
declared on the original share and
any such additional shares, but
does not include realized gains and
losses or unrealized appreciation
and depreciation. In addition,
each Fund may calculate a compound
effective yield by adding 1 to the
base period return (calculated as
described above, raising the sum to
a power equal to 465/7 and
subtracting 1). For the seven-day
period ended June 30, 1999, the
current annualized yield and
compound effective yield of Money
Market Portfolio Prime was 4.09%
and 4.10%, of Money Market
Portfolio Federal was 3.96% and
4.00% and of Tax-Free Income
Portfolio MM was 2.91% and 3.03%.
At June 30, 1999, the average
maturity of Federal was 35 days, of
Prime was 38 days and of Portfolio
MM was 42 days.
Performance Comparisons. In
advertisements or in reports to
shareholders, the Funds may compare
their performance to that of other
mutual funds with similar
investment objectives and to stock
or other relevant indices. For
example, they may compare their
performance to rankings prepared by
Lipper Analytical Services, Inc.
(Lipper) or Morningstar, Inc., two
widely recognized independent
services which monitor the
performance of mutual funds. The
Funds may compare their performance
to the Standard & Poor's 500 Stock
Index (S&P 500), an index of
unmanaged groups of common stocks,
the Dow Jones Industrial Average, a
recognized unmanaged index of
common stocks of 30 industrial
companies listed on the NYSE, the
MSCI/EAFE, an index of unmanaged
stocks from 20 international
markets, the S&P Barra Value, a
capitalization weighted index
associated with "value" stocks, the
S&P Barra Growth, a capitalization
weighted index associated with
"growth" stocks, the Russell 2000
Index, an index that measures the
performance of the smallest 2000
publicly traded companies, the
Lehman Brothers Aggregate Bond
Index, an index of government,
corporate and agency bonds, the
Lehman Brothers Intermediate
Government Corporate Index, an
index of government, agency and
corporate notes between 1 and 10
years maturities, or the Consumer
Price Index. Performance
information, rankings, ratings,
published editorial comments and
listings as reported in national
financial publications such as
Kiplinger's Personal Finance
Magazine, Business Week,
Morningstar Mutual Funds,
Investor's Business Daily,
Institutional Investor, The Wall
Street Journal, Mutual Fund
Forecaster, No-Load Investor,
Money, Forbes, Fortune and Barron's
may also be used in comparing
performance of the Fund.
Performance comparisons should not
be considered as representative of
the future performance of any Fund.
Performance rankings,
recommendations, published
editorial comments and listings
reported in Money, Barron's,
Kiplinger's Personal Finance
Magazine, Financial World, Forbes,
U.S. News & World Report, Business
Week, The Wall Street Journal,
Investors Business Daily, USA
Today, Fortune and Stanger's may
also be cited (if the Funds are
listed in any such publication) or
used for comparison, as well as
performance listings and rankings
from Morningstar Mutual Funds,
Personal Finance, Income and
Safety, The Mutual Fund Letter, No-
Load Fund Investor, United Mutual
Fund Selector, No-Load Fund
Analyst, No-Load Fund X, Louis
Rukeyser's Wall Street newsletter,
Donoghue's Money Letter, CDA
Investment Technologies, Inc.,
Wiesenberger Investment Companies
Service and Donoghue's Mutual Fund
Almanac.
TOTAL RETURN
The Funds' "average annual total
return" figures described and shown
below are computed according to a
formula prescribed by the
Securities and Exchange Commission.
The formula can be expressed as
follows:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total
return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the 1, 5 or 10
year (or other) periods at the end of the 1, 5
or 10 year (or other) periods (or fractional
portions thereof).
The table below shows the average
total return for each Fund for the
specified periods.
For the one year 7/1/98-6/30/99
Growth 17.04%
Enterprise -11.30%
Enterprise II 0.00%
Value 5.63%
Shadow Stock -0.25%
Stewart Ivory International 3.76%
Bond Trust - L 1.88%
Bond Trust - S 3.22%
Tax-Free Income - L 1.70%
Tax-Free Income - S 1.96%
Tax-Free Income - MM 2.70%
Money Market - Federal 4.31%
Money Market - Prime 4.38%
For the five years 7/1/94 -
6/30/99
Growth 23.33%
Enterprise 12.54%
Enterprise II 15.65%
Value 19.95%
Shadow Stock 15.40%
Stewart Ivory International 8.12%
Bond Trust - L 6.86%
Bond Trust - S 6.61%
Tax-Free Income - L 5.98%
Tax-Free Income - S 4.30%
Tax-Free Income - MM 3.00%
Money Market - Federal 4.60%
Money Market - Prime 4.66%
For the ten years 7/1/89 - 6/30/99
Growth 14.89%
Enterprise 12.44%
Enterprise II 14.30%*
Value 15.51%
Shadow Stock 11.35%
Stewart Ivory International 9.41%
Bond Trust - L 7.51%
Bond Trust - S 7.16%
Tax-Free Income - L 6.46%
Tax-Free Income - S 5.20%
Tax-Free Income - MM 3.31%
Money Market - Federal 4.65%
Money Market - Prime 4.72%
*Inception date 8/5/91.
___________________________________
_______
HOW THE FUND'S SHARES ARE
DISTRIBUTED
Jones & Babson, Inc., as agent of
the Funds agrees to supply its best
efforts as sole distributor of the
Funds' shares and, at its own
expense, pay all sales and
distribution expenses in connection
with their offering other than
registration fees and other
government charges. Jones &
Babson, Inc. is located at BMA
Tower, 700 Karnes Blvd., Kansas
City, MO 64108-3306.
Jones & Babson, Inc. does not
receive any fee or other
compensation under the distribution
agreement which continues in effect
until October 31, 1999, and which
will continue automatically for
successive annual periods ending
each October 31, if continued at
least annually by the Funds' Board
of Directors, including a majority
of those Directors who are not
parties to such Agreements or
interested persons of any such
party. It terminates automatically
if assigned by either party or upon
60 days written notice by either
party to the other.
Jones & Babson, Inc. also acts as
sole distributor of the shares for
UMB Scout Stock Fund, Inc., UMB
Scout Bond Fund, Inc., UMB Scout
Money Market Fund, Inc., UMB Scout
Tax-Free Money Market Fund, Inc.,
UMB Scout Regional Fund, Inc., UMB
Scout WorldWide Fund, Inc., UMB
Scout Balanced Fund, Inc., UMB
Scout Capital Preservation Fund,
Inc., UMB Scout Kansas Tax-Exempt
Bond Fund, Inc., Buffalo Balanced
Fund, Inc., Buffalo Equity Fund,
Inc., Buffalo High Yield Fund,
Inc., Buffalo USA Global Fund,
Inc., Buffalo Small Cap Fund, Inc.
and AFBA Five Star Fund, Inc.
PURCHASE AND REDEMPTION SERVICES
We reserve the right to:
Waive or increase the minimum
investment requirements with
respect to any person or class of
persons, which include shareholders
of the Funds' special investment
programs.
Cancel or change the
telephone/Fund web site investment
service, the telephone/internet
exchange service and the automatic
monthly investment plan without
prior notice to you where in the
best interest of the Funds and
theirs investors.
Cancel or change the
telephone/Fund web site redemption
service at any time without notice.
Begin charging a fee for the
telephone investment service or the
automatic monthly investment plan
and to cancel or change these
services upon 15 days written
notice to you.
Begin charging a fee for the
telephone/Fund web site service and
to cancel or change the service
upon 60 days written notice to you.
Begin charging a fee for the
systematic redemption plan upon 30
days written notice to you.
Waive signature guarantee
requirements in certain instances
where it appears reasonable to do
so and will not unduly affect the
interests of other shareholders.
We may waive the signature
guarantee requirement if you
authorize the telephone/Fund web
site redemption method at the same
time you submit the initial
application to purchase shares.
Require signature guarantee if
there appears to be a pattern of
redemptions designed to avoid the
signature guarantee requirement, or
if we have other reason to believe
that this requirement would be in
the best interests of the Funds and
their shareholders.
HOW SHARE PURCHASES ARE HANDLED
We will not be responsible for the
consequences of delays, including
delays in the banking or Federal
Reserve wire systems. We cannot
process transaction requests that
are not complete and in good order
as described in the prospectus. If
you use the services of any other
broker to purchase or redeem shares
of the Funds, that broker may
charge you a fee. Each order
accepted will be fully invested in
whole and fractional shares, unless
the purchase of a certain number of
whole shares is specified, at the
net asset value per share next
effective after the order is
accepted by the Funds.
Each investment is confirmed by a
year-to-date statement which
provides the details of the
immediate transaction, plus all
prior transactions in your account
during the current year. This
includes the dollar amount
invested, the number of shares
purchased or redeemed, the price
per share, and the aggregate shares
owned. A transcript of all
activity in your account during the
previous year will be furnished
each January. By retaining each
annual summary and the last year-
to-date statement, you have a
complete detailed history of your
account which provides necessary
tax information. A duplicate copy
of a past annual statement is
available from Jones & Babson, Inc.
at its cost, subject to a minimum
charge of $5 per account, per year
requested.
The shares which you purchase are
held by the Funds in open account,
thereby relieving you of the
responsibility of providing for the
safekeeping of a negotiable share
certificate. Jones & Babson does
not intend to issue new
certificated shares for any
accounts.
If an order to purchase shares
must be canceled due to non-
payment, the purchaser will be
responsible for any loss incurred
by the Funds arising out of such
cancellation. To recover any such
loss, the Funds reserve the right
to redeem shares owned by any
purchaser whose order is canceled,
and such purchaser may be
prohibited or restricted in the
manner of placing further orders.
The Funds reserve the right in its
sole discretion to withdraw all or
any part of the offering made by
the prospectus or to reject
purchase orders when, in the
judgment of management, such
withdrawal or rejection is in the
best interest of the Funds and
their shareholders.
The Funds may accept investments
in kind of stocks based on
judgments as to whether, in each
case, acceptance of stock will
allow the Fund to acquire the stock
at no more than net cost of
acquiring it through normal
channels, and whether the stock has
restrictions on its sale by the
Fund under the Securities Act of
1933. Fund shares purchased in
exchange for stock are issued at
net asset value.
The Funds reserve the right to
refuse to accept orders for Fund
shares unless accompanied by
payment, except when a responsible
person has indemnified the Fund
against losses resulting from the
failure of investors to make
payment. In the event that the
Funds sustain a loss as the result
of failure by a purchaser to make
payment, the Funds' underwriter,
Jones & Babson, Inc., will cover
the loss.
REDEMPTION OF SHARES
We will not be responsible for the
consequences of delays, including
delays in the banking or Federal
Reserve wire systems. We cannot
process transaction requests that
are not complete and in good order.
We must receive an endorsed share
certificate with a signature
guarantee, where a certificate has
been issued.
The Telephone/Fund Web Site
Redemption Service may only be used
for non certificated shares held in
an open account. We reserve the
right to refuse a telephone or Fund
web site redemption request. At
our option, we may pay such
redemption by wire or check. We
may reduce or waive the $10 charge
for wiring redemption proceeds in
connection with certain accounts.
To participate in the Systematic
Redemption Plan your dividends and
capital gains distributions must be
reinvested in additional shares of
the Funds.
The right of redemption may be
suspended, or the date of payment
postponed beyond the normal three-
day period under the following
conditions authorized by the
Investment Company Act of 1940:
(1) for any period (a) during which
the New York Stock Exchange is
closed, other than customary
weekend and holiday closing, or (b)
during which trading on the New
York Stock Exchange is restricted;
(2) for any period during which an
emergency exists as a result of
which (a) disposal by the Funds of
securities owned by it is not
reasonably practicable, or (b) it
is not reasonably practicable for
the Funds to determine the fair
value of its net assets; or (3)
under certain circumstances where
certain shareholders are attempting
to "time the market" by purchasing
and redeeming shares from the Funds
on a regular basis; or (4) for such
other periods as the Securities and
Exchange Commission may by order
permit for the protection of the
Fund's shareholders.
Babson Money Market Fund and
Portfolio MM of Babson Tax-Free
Income Fund may accept drafts
(checks) on the form provided by
the Fund without the necessity of
an accompanying guarantee of
signature, and drawn on the
registered shareholder account, to
redeem sufficient shares in the
registered shareholder account and
to deposit the proceeds in a
special account at UMB Bank, n.a.
for transmission through the
commercial banking system to the
credit of the draft payee. The
drafts must be in at least the
amount of $500, and may be drawn
only against shares held in open
account (no certificate
outstanding). The Funds and their
Manager may refuse to honor drafts
where there are insufficient open
account shares in the registered
account, or where shares to be
redeemed which were purchased by
check have been held for less than
15 days, and to the specific
conditions relating to this
privilege as well as the general
conditions set out above.
The Funds have elected to be
governed by Rule 18f-1 under the
Investment Company Act of 1940
pursuant to which the Funds are
obligated to redeem shares solely
in cash up to the lesser of
$250,000 or 1% of the Funds' net
asset value during any 90-day
period for any one shareholder.
Should redemptions by any
shareholder exceed such limitation,
the Funds may redeem the excess in
kind. If shares are redeemed in
kind, the redeeming shareholder may
incur brokerage costs in converting
the assets to cash. The method of
valuing securities used to make
redemptions in kind will be the
same as the method of valuing
portfolio securities described
under "How Share Price is
Determined" in the Prospectus, and
such valuation will be made as of
the same time the redemption price
is determined.
MANAGEMENT AND
INVESTMENT ADVISER
As a part of the Management
Agreement, Jones & Babson, Inc.
employs at its own expense David L.
Babson & Co. Inc. and for the
Babson-Stewart Ivory International
Fund, Babson-Stewart Ivory
International, as its investment
advisers. David L. Babson & Co.
Inc. was founded in 1940 as a
private investment research and
counseling organization. David L.
Babson & Co. Inc. serves
individual, corporate and other
institutional clients. It
participates with Jones & Babson in
the management of nine Babson no-
load mutual funds. Babson-Stewart
Ivory International is a
partnership formed in 1987, by
David L. Babson & Co. of Cambridge,
Massachusetts and Stewart Ivory &
Company (International) Ltd, a
wholly owned subsidiary of Stewart
Ivory (Holdings), Ltd., of
Edinburgh, Scotland.
The aggregate management fees paid
to Jones & Babson, Inc. by the
Funds during the three most recent
fiscal years ended June 30, 1999,
1998, and 1997 (from which Jones &
Babson, Inc. paid all the Funds'
expenses except those payable
directly by the Funds) were
$3,699,538, $3,251,137, and
$2,566,555, respectively for the
Growth Fund; $990,364*, $2,199,612
and $2,176,042 for the Enterprise
Fund; $513,015*, $998,783 and
$760,997 for the Enterprise Fund
II; $7,202,092*, $5,468,960 and
$3,911,594 for the Value Fund;
$374,771, $527,001 and $379,685 for
the Shadow Stock Fund; $884,366,
$995,338 and $857,963 for the
Stewart Ivory International Fund;
$691,818*, $1,226,260 and
$1,275,822 for the Bond Trust
Portfolio L; $215,212*, $370,143
and $254,164 for the Bond Trust
Portfolio S (does not include the effect of
fee waiver); $448,280, $426,396 and
$436,044 for the Money Market Fund;
$513,722, $530,401 and $535,180 for
the Tax-Free Income Fund. Figures
followed by an asterisk (*) denote
7 month figures due to a change in
fiscal year end from November 30 to
June 30. The annual fee charged by
Jones & Babson, Inc. covers all
normal operating costs of the
Funds. The annual fee charged by
Jones & Babson, Inc. is higher than
the fees of most other investment
advisers whose charges cover only
investment advisory services with
all remaining operational expenses
absorbed directly by the Funds.
Yet, it compares favorably with
these other advisers when all
expenses to Funds shareholders are
taken into account.
David L. Babson & Co. Inc. has an
experienced investment analysis and
research staff which eliminates the
need for Jones & Babson, Inc. and
the Funds to maintain an extensive
duplicate staff, with the
consequent increase in the cost of
investment advisory service. Jones
& Babson, Inc. pays David L. Babson
& Co. Inc. a fee of 30/100 of one
percent (0.30%) for the first $100
million, 25/100 of one percent
(0.25%) on the next $150 million
and 20/100 of one percent (0.20%)
for amounts in excess of $250
million of Growth Fund's average
daily total net assets; 70/100 of
one percent (0.70%) of the first
$30 million and 50/100 of one
percent (0.50%) of amounts in
excess of $30 million of Enterprise
Fund's; 70/100 of one percent
(0.70%) of the first $30 million
and 50/100 of one percent (0.50%)
of amounts in excess of $30 million
of Enterprise Fund II's; 35/100 of
one percent (0.35%) of Value
Fund's; 25/100 of one percent
(0.25%) of Shadow Stock Fund's;
475/1000 of one percent (0.475%) of
Stewart Ivory International Fund's;
25/100 of one percent (0.25%) of
Bond Trust Portfolio L's; 15/100 of
one percent (0.15%) of Bond Trust
Portfolio S's (through March 1,
2000); 20/100 of one percent
(0.20%) of Money Market Fund
Portfolio Federal and Prime's;
25/100 of one percent (0.25%) of
Tax-Free Income Fund Portfolio L's,
25/100 of one percent (0.25%) of
Tax-Free Income Fund Portfolio S's,
10/100 of one percent (0.10%) of
Tax-Free Income Fund Portfolio
MM's, which is computed daily and
paid semimonthly. The cost of the
services of David L. Babson & Co.
Inc. is included in the services of
Jones & Babson, Inc. During the
three most recent fiscal years
ended June 30, 1999, 1998 and 1997,
Jones & Babson, Inc. paid David L.
Babson & Co. Inc. fees amounting to
$1,128,746, $1,003,328, and
$800,947, respectively for the
Growth Fund, $486,539*, $1,088,793
and $1,088,713 for the Enterprise
Fund; $249,077*, $486,060 and
$365,461 for the Enterprise Fund
II; $2,652,720*, $5,468,960 and
$3,911,594 for the Value Fund;
$117,145, $131,750 and $94,921 for
the Shadow Stock Fund; $93,716,
$497,669 and $428,982 for the
Stewart Ivory International Fund;
$182,021*, $323,879 and $335,133
for the Bond Trust Portfolio L;
$33,198*, $58,443 and $58,337 for
the Bond Trust Portfolio S;
$105,477, $100,325 and $102,869 for
the Money Market Fund; $131,478,
$136,416 and $137,997 for the Tax-
Free Income Fund, related to
services provided to the Funds.
Figures followed by an asterisk (*)
denote seven month figures due to a
change in fiscal year end from
November 30 to June 30.
Controlling Persons. Certain
officers and directors of the Funds
are also officers or directors or
both of Jones & Babson, Inc.,
Babson-Stewart Ivory International
or David L. Babson & Co. Inc.
Jones & Babson, Inc. is a wholly-
owned subsidiary of Business Men's
Assurance Company of America which
is considered to be a controlling
person under the Investment Company
Act of 1940. Assicurazioni Generali
S.p.A., an insurance organization
founded in 1831 based in Trieste,
Italy, is considered to be a
controlling person and is the
ultimate parent of Business Men's
Assurance Company of America.
Mediobanca is a 5% owner of
Generali.
David L. Babson & Co. Inc. is a
wholly-owned subsidiary of DLB
Acquisition Corporation, an
indirect, majority owned subsidiary
of Massachusetts Mutual Life
Insurance Company headquartered in
Springfield, Massachusetts.
Massachusetts Mutual Life Insurance
Company is an insurance
organization founded in 1851 and is
considered to be a controlling
person of David L. Babson & Co.
Inc., under the Investment Company
Act of 1940. Babson-Stewart Ivory
International is a partnership
formed in 1987 by David L. Babson &
Co. Inc. and Stewart Ivory &
Company Ltd.
OFFICERS AND DIRECTORS
The officers of the Funds manage
their day-to-day operations. The
Funds' manager and their officers
are subject to the supervision and
control of the Board of Directors.
The following table lists the
officers and directors of the Funds
and their ages. Unless noted
otherwise, the address of each
officer and director is BMA Tower,
700 Karnes Blvd., Kansas City,
Missouri 64108-3306. Except as
indicated, each has been an
employee of Jones & Babson, Inc.
for more than five years.
* Larry D. Armel (58), President and
Director. President and Director,
Jones & Babson, Inc., and of each
of the Babson Funds, UMB Scout
Funds, Buffalo Funds and the
Investors Mark Series Fund, Inc.;
President and Trustee, D.L. Babson
Bond Trust; Director, AFBA Five
Star Fund, Inc.
Francis C. Rood (65), Director.
Retired, 73-395 Agave Lane,
Palm Desert, California 92260-6653.
Formerly Vice President of Finance,
Hallmark Cards, Inc.; Director, of
each of the Babson Funds, Buffalo
Funds and the Investors Mark Series
Fund, Inc.; Trustee, D.L. Babson
Bond Trust.
William H. Russell (75), Director.
Financial Consultant, 645 West 67th
Street, Kansas City, Missouri
64113; previously Vice President,
Sprint; Director, of each of the
Babson Funds, Buffalo Funds and the
Investors Mark Series Fund, Inc.;
Trustee, D.L. Babson Bond Trust.
H. David Rybolt (57), Director.
Consultant, HDR Associates, P.O.
Box 2468, Shawnee Mission, Kansas
66201; Director, of each of the
Babson Funds, (except the Babson-
Stewart Ivory International Fund,
Inc.) Buffalo Funds and the
Investors Mark Series Fund, Inc.;
Trustee, D.L. Babson Bond Trust.
James T. Jensen (70), Director.
Chief Executive Officer, Jensen
Associates, Inc., 892 Worcester
Street, Suite 210, Wellesley,
Massachusetts 02482; Director, of
Babson-Stewart Ivory International
Fund, Inc.
Richard J. Phelps (71), Director.
Chairman, Phelps Industries, Inc.,
122 Quincy Shore Drive, Quincy,
Massachusetts 02171. Trustee, The
DLB Fund Group; Director, Superior
Pet Products (Aust.) Pty. Ltd. And
Superior Pet Products, Ltd.
(England); Member, Board of
Overseers, Tufts University School
of Veterinary Medicine and Dean's
Council, Harvard Graduate School of
Education; Director, of Babson-
Stewart Ivory International Fund,
Inc.
P. Bradley Adams (39), Vice
President and Treasurer. Vice
President and Treasurer, Jones &
Babson, Inc., and each of the
Babson Funds, UMB Scout Funds and
Buffalo Funds; Vice President and
Chief Financial Officer, AFBA Five
Star Fund, Inc.; Principal
Financial Officer, Investors Mark
Series Fund, Inc.
Martin A. Cramer (49), Vice
President and Secretary. Vice
President and Secretary, Jones &
Babson, Inc., and of each of the
Babson Funds, UMB Scout Funds and
Buffalo Funds; Secretary and
Assistant Vice President, AFBA Five
Star Fund, Inc.; Secretary,
Investors Mark Series Fund, Inc.;
Constance E. Martin (38), Vice
President. Shareholder Operations
Vice President and Director, Jones
& Babson, Inc.; Vice President, of
each of the Babson Funds, UMB Scout
Funds, Buffalo Funds and AFBA Five
Star Fund, Inc.
Rhonda L. Grimes (39), Vice
President. Vice President and
Director Control and Technology
Integration, Jones & Babson, Inc.;
Vice President, of each of the
Babson Funds, AFBA Five Star Fund
and Buffalo Funds. She joined
Jones & Babson in 1998.
W. Guy Cooke (38), Vice President.
Chief Compliance Officer, Jones &
Babson, Inc.; Vice President, of
each of the Babson Funds, AFBA Five
Star Fund and Buffalo Funds. He
joined Jones & Babson in 1998.
Anthony M. Maramarco (50), Vice
President-Portfolio. Senior Vice
President and Director, David L.
Babson & Co. Inc., One Memorial
Drive, Cambridge, Massachusetts
02142; Vice President-Babson Value
Fund, Inc. and Shadow Stock Fund,
Inc.
Edward L. Martin (50), Vice
President-Portfolio. Executive
Vice President and Director, David
L. Babson & Co. Inc., One Memorial
Drive, Cambridge, Massachusetts
02142; Vice President-Babson Bond
Trust, Money Market Fund, Inc.,
D.L. Babson Tax-Free Income Fund,
Inc.
James B. Gribbell (32), Vice
President-Portfolio. Vice
President, David L. Babson & Co.
Inc., One Memorial Drive,
Cambridge, Massachusetts 02142;
Vice President-Babson Growth Fund,
Inc.
Lance F. James (45), Vice
President-Portfolio. Executive
Vice President and Director, David
L. Babson & Co. Inc., One Memorial
Drive, Cambridge, Massachusetts
02142; Vice President-Babson
Enterprise Fund, Inc. and Babson
Enterprise Fund II, Inc.
Remuneration of Officers, Directors
and Trustees. None of the officers,
directors or Trustees will be
remunerated by the Funds for their
normal duties and services. Their
compensation and expenses arising
out of normal operations will be
paid by Jones & Babson, Inc. under
the provisions of the Management
Agreement.
Messrs. Rood, Russell, Rybolt,
Jensen and Phelps have no financial
interest in, nor are they
affiliated with either Jones &
Babson, Inc. or David L. Babson &
Co. Inc. The Audit Committee of
the Board of Directors for Babson-
Stewart Ivory International Fund,
Inc. is composed of Messrs. Jensen,
Phelps, Rood and Russell. The
Audit Committee of the Board of
Directors for the other Babson
Funds is composed of Messrs. Rood,
Russell and Rybolt.
The officers, directors and
trustees of the Funds as a group
own less than 1% of the Fund. To
the best information available to
the Manager, there are no
"Controlling Persons", shareholders
that constitute 5% or 25% of the
Funds.
COMPENSATION TABLE
Aggregate Pension or Retirement
Compensation Benefits Accrued As
Name of Director From the Fund Part of Fund Expenses
______________ _____________ __________________
Larry D. Armel* -- -- -- --
Francis C. Rood $500 -- -- $7,250
William H. Russell $500 -- -- $7,250
H. David Rybolt $500 -- -- $7,000
James T. Jensen $3,375 -- -- $3,375
Richard J. Phelps $3,250 -- -- $3,250
Estimated Total Compensation
Annual Benefits From All Babson Funds
Upon Retirement Paid to Directors**
--------------- -------------------
Larry D. Armel* -- --
Francis C. Rood -- $7,250
William H. Russell -- $7,250
H. David Rybolt -- $7,000
James T. Jensen -- $3,375
Richard J. Phelps -- $3,250
* As an "interested director," Mr. Armel received no compensation
for his services as a director.
** The amounts reported in this column reflect the total compensation
paid to Messrs. Jensen and Phelps for services as directors of Babson-Stewart
Ivory International Fund, Inc. Mr. Rybolt for services as director or
trustee of eight Babson Funds and to Messrs. Rood and Russell for services
as a directors or trustees of nine Babson Funds during the fiscal year
ended June 30, 1999. Directors' fees are paid by the Funds' manager and
not by the Funds themselves.
HOLIDAYS
The net asset value per share is
computed once daily, Monday
through Friday, at 4:00 p.m.
(Eastern Time) except: days when
the Funds are not open for
business; days on which changes in
the value of portfolio securities
will not materially affect the net
asset value; days during which no
purchase or redemption order is
received by the Funds; and
customary holidays.
The Funds do not compute their
net asset value on the following
customary holidays:
New Year's Day January 1
Martin Luther Third Monday
King, Jr. Day in January
Presidents' Holiday Third Monday
in February
Good Friday Friday before
Easter
Memorial Day Last Monday
in May
Independence Day July 4
Labor Day First Monday
in September
Thanksgiving Day Fourth Thursday
in November
Christmas Day December 25
DIVIDENDS, DISTRIBUTIONS AND
THEIR TAXATION
Distributions and Taxes
Distributions of net investment
income In general, the Funds
receive income in the form of
dividends or interest on their
investments. This income, less
expenses incurred in the operation
of a fund, constitutes a fund's
net investment income from which
dividends may be paid to
investors. Any distributions by a
fund from such income will be
taxable to investors as ordinary
income, whether the investors take
them in cash or in additional
shares.
By meeting certain requirements of
the Internal Revenue Code,
Portfolios S and L of the Tax-Free
Income Fund have qualified and
continue to qualify to pay exempt-
interest dividends. These
dividends are derived from
interest income exempt from
regular federal income tax, and
are not subject to regular federal
income tax when they are
distributed. In addition, to the
extent that exempt-interest
dividends are derived from
interest on obligations of a state
or its political subdivisions, or
from interest on qualifying U.S.
territorial obligations (including
qualifying obligations of Puerto
Rico, the U.S. Virgin Islands or
Guam), they also will be exempt
from such state's personal income
taxes. A state generally does not
grant tax-free treatment to
interest on state and municipal
securities of other states.
Portfolios S and L of the Tax-Free
Income Fund may earn taxable
income on any temporary
investments, on the discount from
stripped obligations or their
coupons, on income from securities
loans or other taxable
transactions, or on ordinary
income derived from the sale of
market discount bonds. Any fund
distributions from such income
will be taxable as ordinary
income, whether received by
investors in cash or in additional
shares.
The Federal and Prime Portfolios
of the Money Market Fund,
Portfolio MM of the Tax-Free
Income Fund and Portfolios S and L
of the Bond Trust declare
dividends for each day that their
net asset value is calculated.
These dividends will equal all of
the daily net income payable to
shareholders of record as of the
close of business the preceding
day. The daily net income
includes accrued interest and any
original issue or acquisition
discount, plus or minus any gain
or loss on the sale of portfolio
securities and changes in
unrealized appreciation or
depreciation in portfolio
securities (to the extent required
to maintain a constant net asset
value per share), less the
estimated expenses of the funds.
Distributions of capital gains In
general, the funds may derive
capital gains and losses in
connection with sales or other
dispositions of their portfolio
securities. Distributions from net
short-term capital gains will be
taxable as ordinary income.
Distributions from net long-term
capital gains will be taxable as
long-term capital gain, regardless
of how long the fund shares have
been held. Any net capital gains
realized by a fund generally will
be distributed once each year, and
may be distributed more
frequently, if necessary, in order
to reduce or eliminate excise or
income taxes on the fund. Because
the Federal and Prime Portfolios
of the Money Market Fund and
Portfolio MM of the Tax-Free
Income Fund are money market
funds, they do not anticipate
realizing any long-term capital
gains.
Effect of foreign investments on
distributions Most foreign
exchange gains realized on the
sale of debt securities are
treated as ordinary income by a
fund for tax purposes. Similarly,
foreign exchange losses realized
by a fund on the sale of debt
securities are generally treated
as ordinary losses by the fund for
tax purposes. These gains when
distributed will be taxable as
ordinary dividends, and any losses
will reduce a fund's ordinary
income otherwise available for
distribution. This treatment
could increase or reduce a fund's
ordinary income distributions, and
may cause some or all of a fund's
previously distributed income to
be classified as a return of
capital.
The funds may be subject to
foreign withholding taxes on
income from certain of their
foreign securities. If more than
50% of a fund's total assets at
the end of the fiscal year are
invested in securities of foreign
corporations, the fund may elect
to pass-through each investor's
pro rata share of foreign taxes
paid by the fund. If this
election is made, the year-end
statement investors receive from
the fund will show more taxable
income than was actually
distributed. However, investors
will be entitled to either deduct
their share of such taxes in
computing their taxable income or
(subject to limitations) claim a
foreign tax credit for such taxes
against their U.S. federal income
tax. The fund will provide
investors with the information
necessary to complete their
individual income tax returns if
it makes this election.
Information on the tax character
of distributions The funds will
inform you of the amount of your
ordinary income dividends and
capital gains distributions at the
time they are paid, and will
advise you of their tax status for
federal income tax purposes
shortly after the close of each
calendar year. If you have not
held fund shares for a full year,
a fund may designate and
distribute to you, as ordinary
income or capital gain, a
percentage of income that is not
equal to the actual amount of such
income earned during the period of
your investment in the fund.
Election to be taxed as a
regulated investment company Each
fund has elected to be treated as
a regulated investment company
under Subchapter M of the Internal
Revenue Code, has qualified as
such for its most recent fiscal
year, and intends to so qualify
during the current fiscal year.
As regulated investment companies,
the funds generally pay no federal
income tax on the income and gains
they distribute to you. The board
reserves the right not to maintain
the qualification of a fund as a
regulated investment company if it
determines such course of action
to be beneficial to shareholders.
In such case, a fund will be
subject to federal, and possibly
state, corporate taxes on its
taxable income and gains, and
distributions to you will be taxed
as ordinary dividend income to the
extent of such fund's earnings and
profits.
Excise tax distribution
requirements To avoid federal
excise taxes, the Internal Revenue
Code requires a fund to distribute
to you by December 31 of each
year, at a minimum, the following
amounts: 98% of its taxable
ordinary income earned during the
calendar year; 98% of its capital
gain net income earned during the
twelve month period ending October
31; and 100% of any undistributed
amounts from the prior year. Each
fund intends to declare and pay
these amounts in December (or in
January that are treated by you as
received in December) to avoid
these excise taxes, but can give
no assurances that its
distributions will be sufficient
to eliminate all taxes.
Redemption of fund shares
Redemptions and exchanges of fund
shares are taxable transactions
for federal and state income tax
purposes. If you redeem your fund
shares, or exchange your fund
shares for shares of a different
Babson Fund, the IRS will require
that you report a gain or loss on
your redemption or exchange. If
you hold your shares as a capital
asset, the gain or loss that you
realize will be capital gain or
loss and will be long-term or
short-term, generally depending on
how long you hold your shares.
Any loss incurred on the
redemption or exchange of shares
held for six months or less will
be treated as a long-term capital
loss to the extent of any long-
term capital gains distributed to
you by the fund on those shares.
All or a portion of any loss that
you realize upon the redemption of
your fund shares will be
disallowed to the extent that you
buy other shares in such fund
(through reinvestment of dividends
or otherwise) within 30 days
before or after your share
redemption. Any loss disallowed
under these rules will be added to
your tax basis in the new shares
you buy.
As to Portfolios S and L of the
Tax-Free Income Fund, any loss
incurred on the redemption or
exchange of shares held for six
months or less will be disallowed
to the extent of any exempt-
interest dividends distributed to
investors with respect to his or
her fund shares and any remaining
loss will be treated as a long-
term capital loss to the extent of
any long-term capital gains
distributed to the investor by the
fund on those shares.
As to the Federal and Prime
Portfolios of the Money Market
Fund and Portfolio MM of the Tax-
Free Income Fund, because the
funds seek to maintain a constant
$1.00 per share net asset value,
investors should not expect to
realize a capital gain or loss
upon redemption or exchange of
fund shares.
U.S. government obligations Many
states grant tax-free status to
dividends paid to you from
interest earned on direct
obligations of the U.S.
government, subject in some states
to minimum investment requirements
that must be met by a fund.
Investments in Government National
Mortgage Association or Federal
National Mortgage Association
securities, bankers' acceptances,
commercial paper and repurchase
agreements collateralized by U.S.
government securities do not
generally qualify for tax-free
treatment. The rules on exclusion
of this income are different for
corporations.
Dividends-received deduction for
corporations If you are a
corporate shareholder, you should
note that dividends paid by the
following funds for the most
recent fiscal year qualified for
the dividends-received deduction
as set forth below:
Value Fund 33%
Growth Fund 19%
Shadow Stock Fund 100%
Enterprise Fund 100%
Enterprise Fund II 70%
In some circumstances, you will be
allowed to deduct these qualified
dividends, thereby reducing the
tax that you would otherwise be
required to pay on these
dividends. The dividends-received
deduction will be available only
with respect to dividends
designated by such fund as
eligible for such treatment. All
dividends (including the deducted
portion) must be included in your
alternative minimum taxable income
calculation.
Because the Stewart-Ivory
International Fund's income is
derived primarily from investments
in foreign rather than domestic
U.S securities, no portion of its
distributions will generally be
eligible for the dividends-
received deduction. None of the
dividends paid by the fund for the
most recent calendar year
qualified for such deduction, and
it is anticipated that none of the
current year's dividends will so
qualify.
Because the Money Market Fund's
(Federal and Prime Portfolios),
the Tax-Free Income Fund's
(Portfolios S, L and MM) and the
Bond Trust's (Portfolios S and L)
income consists of interest rather
than dividends, no portion of
their distributions will generally
be eligible for the dividends-
received deduction. None of the
dividends paid by the funds for
the most recent calendar year
qualified for such deduction, and
it is anticipated that none of the
current year's dividends will so
qualify.
Investment in complex securities
The funds may invest in complex
securities. These investments may
be subject to numerous special and
complex tax rules. These rules
could affect whether gains and
losses recognized by a fund are
treated as ordinary income or
capital gain, accelerate the
recognition of income to a fund
and/or defer a fund's ability to
recognize losses, and, in limited
cases, subject a fund to U.S.
federal income tax on income from
certain of its foreign securities.
In turn, these rules may affect
the amount, timing or character of
the income distributed to you by a
fund.
GENERAL INFORMATION AND HISTORY
The Babson Bond Trust was
organized in Kansas City,
Missouri, as a common law trust
under an Agreement and Declaration
of Trust dated November 2, 1944,
which was amended and restated on
February 24, 1989. It originally
was known as Mutual Trust. When it
came under the management of Jones
& Babson, Inc., its name was
changed to Babson (D.L.) Income
Trust. On February 14, 1984,
shareholders changed its name to
D.L. Babson Bond Trust. On March
31, 1988, the issued and
outstanding shares of beneficial
interest of the Trust were
redesignated as "Portfolio L"
(longer term) and a second class
or series of shares known as
"Portfolio S" (shorter term) was
created. Each full and fractional
share, when issued and
outstanding, has: (1) equal voting
rights with respect to matters
which affect the Trust in general
and with respect to matters
relating solely to the interests
of the Portfolio for which issued,
and (2) equal dividend,
distribution and redemption rights
to the assets of the Portfolio for
which issued and to general
assets, if any, of the Trust which
are not specifically allocated to
either Portfolio. Shares when
issued are fully paid and non-
assessable. Except for the
priority of each share in the
assets of its Portfolio, the Trust
will not issue any class of
securities senior to any other
class. The initial par value of
the shares was $1.00 each. On
September 30, 1955, this was
changed to $0.25 each, and three
additional shares at that time
were issued for each share then
outstanding. Shareholders do not
have pre-emptive or conversion
rights.
The other Babson Funds were
incorporated in Maryland as
follows: The Growth Fund,
originally incorporated in
Delaware in 1959 and was merged
into a Maryland corporation in
1978, has a present authorized
capitalization of 100,000,000
shares of $1 par value common
stock; the Enterprise Fund on July
5, 1983, has a present authorized
capitalization of 20,000,000
shares of $1 par value common
stock; the Enterprise Fund II on
February 5, 1991, has a present
authorized capitalization of
10,000,000 shares of $1 par value
common stock; the Value Fund on
July 24, 1984, has a present
authorized capitalization of
50,000,000 shares of $1 par value
common stock; the Shadow Stock
Fund on June 3, 1987, has a
present authorized capitalization
of 10,000,000 shares of $1 par
value common stock; the Stewart
Ivory International Fund on
October 2, 1987, has a present
authorized capitalization of
10,000,000 shares of $1 par value
common stock; the Money Market
Fund on October 19, 1979, has a
present authorized capitalization
of 2,000,000,000 shares of $.01
par value common stock to be
issued in two separate classes;
the Tax-Free Income Fund on August
22, 1979, has a present authorized
capitalization of 200,000,000
shares of $.10 par value common
stock to be issued in three
separate classes;. All shares are
of the same class unless otherwise
stated and with like rights and
privileges. Each full and
fractional share, when issued and
outstanding, has: (1) equal voting
rights with respect to matters
which affect the Fund, and (2)
equal dividend, distribution and
redemption rights to the assets of
the Fund. Shares when issued are
fully paid and non-assessable. The
Funds may create other series of
stock but will not issue any
senior securities. Shareholders do
not have pre-emptive or conversion
rights.
Non-cumulative voting - The Funds'
shares have non-cumulative voting
rights, which means that the
holders of more than 50% of the
shares voting for the election of
directors can elect 100% of the
directors, if they choose to do
so, and in such event, the holders
of the remaining less than 50% of
the shares voting will not be able
to elect any directors.
The Funds may not, at their
discretion, hold annual meetings
of shareholders for the following
purposes unless required to do so:
(1) election of directors; (2)
approval of continuance of any
investment advisory agreement; (3)
ratification of the selection of
independent auditors; and (4)
approval of a distribution plan.
As a result, the Funds do not
intend to hold annual meetings.
The Funds will not hold annual
meetings except as required by the
Investment Company Act of 1940 and
other applicable laws. A special
meeting of stockholders of the
Funds must be held if the Fund
receives the written request for a
meeting from the stockholders
entitled to cast at least 25% of
all the votes entitled to be cast
at the meeting. The Funds have
undertaken that their Directors
will call a meeting of
stockholders if such a meeting is
requested in writing by the
holders of not less than 10% of
the outstanding shares of each
Fund. To the extent required by
the undertaking, the Funds will
assist shareholder communications
in such matters.
The Funds may use the name
"Babson" in their names so long as
Jones & Babson, Inc. continues as
manager and David L. Babson & Co.
Inc. as its investment adviser.
Complete details with respect to
the use of the name are set out in
the Management Agreement between
the Funds and Jones & Babson, Inc.
Shadow Stock Fund has an
exclusive and perpetual license to
use the name "Shadow Stock" in its
name so long as Analytic Systems,
Inc. or an affiliate thereof or of
James B. Cloonan, acts as its
Investment Adviser. Complete
details with respect to the use of
the name are set out in the
Management Agreement between the
Fund and Jones & Babson, Inc.
CUSTODIAN
Except for the Babson-Stewart
Ivory International Fund, Inc.,
the Funds' assets are held for
safekeeping by an independent
custodian, UMB Bank, n.a. This
means the bank, rather than the
Funds, has possession of the
Funds' cash and securities. The
custodian bank is not responsible
for the Funds' investment
management or administration.
But, as directed by the Funds'
officers, it delivers cash to
those who have sold securities to
the Funds in return for such
securities, and to those who have
purchased portfolio securities
from the Funds, it delivers such
securities in return for their
cash purchase price. It also
collects income directly from
issuers of securities owned by the
Funds and holds this for payment
to shareholders after deduction of
the Funds' expenses. The
custodian is compensated for its
services by the manager. There is
no separate charge to the Funds.
The Babson-Stewart Ivory
International Fund's assets are
held for safekeeping by an
independent custodian, State
Street Bank and Trust Company of
Boston, Massachusetts and foreign
subcustodians as discussed below.
This means State Street Bank and
Trust Company, rather than the
Fund, has possession of the Fund's
cash and securities. State Street
Bank and Trust Company is not
responsible for the Fund's
investment management or
administration. But, as directed
by the Fund's officers, it
delivers cash to those who have
sold securities to the Fund in
return for such securities, and to
those who have purchased portfolio
securities from the Fund, it
delivers such securities in return
for their cash purchase price. It
also collects income directly from
issuers of securities owned by the
Fund and holds this for payment to
shareholders after deduction of
the Fund's expenses. The
custodian is compensated for its
services by the Fund.
Pursuant to rules adopted under
the 1940 Act, the Fund may
maintain its foreign securities
and cash in the custody of certain
eligible foreign banks and
securities depositories.
Selection of these foreign
custodial institutions is made by
the Board of Directors following a
consideration of a number of
factors, including (but not
limited to) the eligibility and
financial stability of the
institution; the ability of the
institution to perform capably
custodial services for the fund;
the reputation of the institution
in its national market; the
political and economic stability
of the country in which the
institution is located; and
further risks of potential
nationalization or expropriation
of Fund assets.
TRANSFER AGENT
Jones & Babson, Inc. also serves
as transfer agent to the Funds.
INDEPENDENT AUDITORS
The Funds' financial statements
are audited annually by
independent auditors approved by
the directors each year, and in
years in which an annual meeting
is held the directors may submit
their selection of independent
auditors to the shareholders for
ratification. Ernst & Young LLP,
One Kansas City Place, 1200 Main
Street, Suite 2000, Kansas City,
Missouri 64105, serves as the
Funds' present independent
auditor.
OTHER JONES & BABSON FUNDS
Jones & Babson also sponsors and
manages the Buffalo Group of
Mutual Funds. They are:
BUFFALO BALANCED FUND, INC. was
organized in 1994, with the
objective of long-term capital
growth and high current income
through investing in common
stocks and secondarily by
investing in convertible bonds,
preferred stocks and convertible
preferred stocks.
BUFFALO EQUITY FUND, INC. was
organized in 1994, with the
objective of long-term capital
appreciation to be achieved
primarily by investment in
common stocks. Realization of
dividend income is a secondary
consideration.
BUFFALO HIGH YIELD FUND, INC.
was organized in 1994, with the
objective of a high level of
current income and secondarily,
capital growth by investing
primarily in high-yielding fixed
income securities.
BUFFALO USA GLOBAL FUND, INC.
was organized in 1994, with the
objective of capital growth by
investing in common stocks of
companies based in the United
States that receive greater than
40% of their revenues or pre-tax
income from international
operations.
BUFFALO SMALL CAP FUND, INC. was
organized in 1998, with the
objective of long-term capital
growth by investment in equity
securities of small companies.
A prospectus for any of the
Funds may be obtained from Jones &
Babson, Inc., BMA Tower, 700
Karnes Blvd., Kansas City, MO
64108-3306.
Jones & Babson, Inc. also
sponsors nine mutual funds which
especially seek to provide
services to customers of affiliate
banks of UMB Financial
Corporation. They are: UMB Scout
Stock Fund, Inc., UMB Scout Bond
Fund, Inc., UMB Scout Money Market
Fund, Inc., UMB Scout Tax-Free
Money Market Fund, Inc., UMB Scout
Regional Fund, Inc., UMB Scout
WorldWide Fund, Inc., UMB Scout
Balanced Fund, Inc., UMB Scout
Capital Preservation Fund, Inc.
and UMB Scout Kansas Tax-Exempt
Bond Fund, Inc.
Jones & Babson, Inc., also
sponsors the AFBA Five Star Fund,
Inc.
DESCRIPTION OF STOCK RATINGS
Standard & Poor's Earnings and
Dividend Rankings for Common
Stocks (S&P) - Growth and
stability of earnings and
dividends are deemed key elements
in establishing Standard & Poor's
earnings and dividend rankings for
common stocks. Basic scores are
computed for earnings and
dividends, then adjusted by a set
of predetermined modifiers for
growth, stability within long-term
trend, and cyclically. Adjusted
scores for earnings and dividends
are then combined to yield a final
score. The final score is
measured against a scoring matrix
determined by an analysis of the
scores of a large and
representative sample of stocks.
The rankings are:
A+ Highest
A High
A- Above Average
B+ Average
B Below Average
B- Lower
C Lowest
D In Reorganization
Value Line Ratings of Financial
Strength - The financial strength
of each of the companies reviewed
by Value Line is rated relative to
all the others. The ratings are:
A++ The very highest relative
financial strength.
A+ Excellent financial position
relative to other companies.
A High grade relative finan-
cial strength.
B++ Superior financial health on
a relative basis.
B+ Very good relative financial
structure.
B Good overall relative
financial structure.
C++ Satisfactory finances
relative to other companies.
C+ Below-average relative
financial position.
C Poorest financial strength
relative to other major
companies.
The ratings are based upon
computer analysis of a number of
key variables that determine: (a)
financial leverage, (b) business
risk and (c) company size plus the
judgment of their analysts and
senior editors regarding factors
that cannot be quantified across-
the-board for all stocks. The
primary variables that are indexed
and studied include equity
coverage of debt, equity coverage
of intangibles, "quick ratio"
accounting methods, variability of
return, quality of fixed charge
coverage, stock price stability
and company size.
MUNICIPAL SECURITIES DESCRIBED
AND RATINGS
In evaluating investment
suitability, each investor must
relate the characteristics of a
particular investment under
consideration to personal
financial circumstances and goals.
Municipal securities include bonds
and other debt obligations issued
by or on behalf of states,
territories and possessions of the
United States of America and the
District of Columbia including
their political subdivisions or
their duly constituted
authorities, agencies and
instrumentalities, the interest on
which is exempt from federal
income tax.
Municipal securities are issued to
obtain funds for various public
purposes, including the
construction of a wide range of
public facilities, such as
airports, bridges, highways,
housing, hospitals, mass
transportation, schools, streets,
waterworks and sewer systems.
Municipal securities also may be
issued in connection with the
refunding of outstanding
obligations and obtaining funds to
lend to other public institutions
and facilities or for general
operating expenses.
The two principal classifications
of municipal bonds are "general
obligation" and "revenue".
General obligation bonds are
secured by the issuer's pledge of
its full faith, credit and taxing
power for the payment of principal
and interest. Revenue bonds are
payable only from the revenues
derived from a particular facility
or class of facilities, or in some
cases, from the proceeds of a
special excise tax or other
specific revenue source.
The Fund may invest in industrial
development bonds, the interest
from which is exempt from federal
income tax. Under certain
circumstances, "substantial users"
of the facilities financed with
such obligations, or persons
related to "substantial users" of
the facilities financed with such
obligations, or persons related to
"substantial users," may be
required to pay federal income tax
on this otherwise exempted
interest. Such persons should
consult the Internal Revenue Code
and their financial adviser to
determine whether or not the Fund
is an appropriate investment for
them.
There are a variety of hybrid and
special types of municipal
obligations, as well as numerous
differences in the security of
municipal bonds, both within and
between the two principal
classifications of general
obligation and revenue.
Municipal notes include tax,
revenue and bond anticipation
notes of short maturity, generally
less than three years, which are
issued to obtain temporary funds
for various public purposes. Also
included in this category are
Construction Loan Notes, Short-
Term Discount Notes and Project
Notes issued by a state or local
housing agency but secured by the
full faith and credit of the
United States.
Yields on municipal securities
depend on a variety of factors,
such as the size of a particular
offering, the maturity and the
rating of the obligation, economic
and monetary conditions, and
conditions of the municipal
securities market, including the
volume of municipal securities
available. Market values of
municipal securities will vary
according to the relation of their
yields available. Consequently,
the net asset value of the Fund
and its shares can be expected to
change as the level of interest
rates fluctuates.
Municipal obligations, like all
other debt obligations, carry a
risk of default. Through careful
selection and supervision, and
concentration in the higher-
quality investment grade issues,
management intends to reduce this
risk.
Prices of outstanding municipal
securities will fluctuate with
changes in the interest rates on
new issues. Thus, the price of
the Fund's shares will tend to
increase as the rates on new
issues decline, and decrease
whenever the current rate is
rising. Management will seek to
minimize such share price
fluctuation to the extent this can
be achieved without detracting
from the Fund's primary objective
of the highest quality and
maturity characteristics of the
Portfolio.
Municipal securities are not
traded as actively as other
securities. Even though municipal
securities will be redeemed at
face value upon maturity, from
time to time, when there has been
no active trading in a particular
Portfolio holding, its interim
pricing for the purpose of the
daily valuation of the Fund shares
may have to be based on other
sources of information and methods
deemed fair and reasonable by the
Board of Directors. One principal
method which is commonly used by
Funds and other investors who own
municipal securities is called
matrix pricing.
From time to time, proposals have
been introduced in Congress to
restrict or eliminate the federal
income tax exemption for interest
on municipal securities. Similar
proposals may be introduced in the
future. If such a proposal was
enacted, the availability of
municipal securities for
investment by the Fund would be
adversely affected. In such
event, the Fund would reevaluate
its investment objective and
policies and submit possible
changes in the structure of the
Fund for the consideration of the
shareholders.
RATINGS OF MUNICIPAL AND TAXABLE
SECURITIES
The ratings of bonds by Moody's
and Standard and Poor's
Corporation represent their
opinions of quality of the
municipal bonds they undertake to
rate. These ratings are general
and are not absolute standards.
Consequently, municipal bonds with
the same maturity, coupon and
rating may have different yields,
while municipal bonds of the same
maturity and coupon with different
ratings may have the same yield.
Both Moody's and S&P's Municipal
Bond Ratings cover obligations of
states and political subdivisions.
Ratings are assigned to general
obligation and revenue bonds.
General obligation bonds are
usually secured by all resources
available to the municipality and
the factors outlined in the rating
definitions below are weighted in
determining the rating. Because
revenue bonds in general are
payable form specifically pledged
revenues, the essential element in
the security for a revenue bond is
the quantity and quality of the
pledged revenues available to pay
debt service.
S&P'S BOND RATINGS
AAA Prime - These are obligations
of the highest quality. They have
the strongest capacity for timely
payment of debt service.
General Obligation Bonds - In a
period of economic stress, the
issuers will suffer the smallest
declines in income and will be
susceptible to autonomous
decline. Debt burden is
moderate. A strong revenue
structure appears more than
adequate to meet future
expenditure requirements.
Quality of management appears
superior.
Revenue Bonds - Debt service
coverage has been, and is
expected to remain, substantial.
Stability of the pledged
revenues is also exceptionally
strong, due to the competitive
position of the municipal
enterprise or to the nature of
the revenues. Basic security
provisions (including rate
covenant, earnings test for
issuance of additional bonds,
debt service, reserve
requirements) are rigorous.
There is evidence of superior
management.
AA - High Grade - The investment
characteristics of general
obligation and revenue bonds in
this group are only slightly less
marked than those of the prime
quality issues. Bonds rated "AA"
have the second strongest capacity
for payment of debt service.
A - Good Grade - Principal and
interest payments on bonds in this
category are regarded as safe.
This rating describes the third
strongest capacity for payment of
debt service. It differs from the
two higher ratings because:
General Obligation Bonds -
There is some weakness, either
in the local economic base, in
debt burden, in the balance
between revenues and
expenditures, or in quality of
management. Under certain
adverse circumstances, any one
such weakness might impair the
ability of the issuer to meet
debt obligations at some future
date.
Revenue Bonds - Debt service
coverage is good, but not
exceptional. Stability of the
pledged revenues could show some
variations because of increased
competition or economic
influences on revenues. Basic
security provisions, while
satisfactory, are less
stringent. Management
performance appears adequate.
BBB Adequate Grade - These are
obligations regarded as having
adequate capacity to pay
interest and repay principal.
Whereas it normally exhibits
adequate protection parameters,
adverse economic conditions or
changing circumstances are more
likely to lead to a weakened
capacity to pay interest and
repay principal for debt in this
category than in higher rated
categories.
MOODY'S RATINGS OF
BONDS
Aaa - Bonds which are rated Aaa
are judged to be the best quality.
These securities carry the
smallest degree of investment risk
and are generally referred to as
"gilt-edge." Interest payments
are protected by a large, or by an
exceptionally stable margin, and
principal is secure. While the
various protective elements are
likely to change, such changes as
can be visualized are most
unlikely to impair the
fundamentally strong position of
such issues.
Aa - Bonds which are rated Aa are
judged to be of high quality by
all standards. They are rated
lower than the best bonds because
margins of protection may not be
as large as in Aaa securities,
fluctuation of protective elements
may be of greater amplitude, or
there may be other elements
present which make the long-term
risks appear somewhat greater.
A - Bonds which are rated A
possess many favorable investment
attributes and are to be
considered as upper medium grade
obligations. Factors giving
security to principal and interest
are considered adequate, but
elements may be present which
suggest a susceptibility to
impairment sometime in the future.
Baa Adequate Grade - These are
obligations regarded as having
adequate capacity to pay interest
and repay principal. Whereas it
normally exhibits adequate
protection parameters, adverse
economic conditions or changing
circumstances are more likely to
lead to a weakened capacity to pay
interest and repay principal for
debt in this category than in
higher rated categories.
MOODY'S RATINGS
OF MUNICIPAL NOTES
MIG 1: The best quality, enjoying
strong protection from established
cash flow of funds for their
servicing or from established and
broad based access to the market
for refinancing, or both.
MIG 2: High quality with margins
of protection ample, although not
so large as in the preceding
group,
MIG 3: Favorable quality, with
all security elements accounted
for, but lacking the undeniable
strength of the preceding grades.
Market access for refinancing, in
particular, is likely to be less
well established.
DESCRIPTION OF COMMERCIAL
PAPER RATINGS
Moody's . . . Moody's commercial
paper rating is an opinion of the
ability of an issuer to repay
punctually promissory obligations
not having an original maturity in
excess of nine months. Moody's
has one rating - prime. Every
such prime rating means Moody's
believes that the commercial paper
note will be redeemed as agreed.
Within this single rating category
are the following classifications:
Prime - 1 Highest
Quality
Prime - 2 Higher
Quality
Prime - 3 High
Quality
The criteria used by Moody's for
rating a commercial paper issuer
under this graded system include,
but are not limited to the
following factors:
(1) evaluation of the management
of the issuer;
(2) economic evaluation of the
issuer's industry or
industries and an appraisal
of speculative type risks
which may be inherent in
certain areas;
(3) evaluation of the issuer's
products in relation to
competition and customer
acceptance;
(4) liquidity;
(5) amount and quality of long-
term debt;
(6) trend of earnings over a
period of ten years;
(7) financial strength of a
parent company and relation-
ships which exist with the
issuer; and
(8) recognition by the
management of obligations
which may be present or may
arise as a result of public
interest questions and
preparations to meet such
obligations.
S&P . . . Standard & Poor's
commercial paper rating is a
current assessment of the
likelihood of timely repayment of
debt having an original maturity
of no more than 270 days. Ratings
are graded into four categories,
ranging from "A" for the highest
quality obligations to "D" for the
lowest. The four categories are
as follows:
"A" Issues assigned this
highest rating are regarded
as having the greatest
capacity for timely payment.
Issues in this category are
further refined with the
designations 1, 2, and 3 to
indicate the relative degree
of safety.
"A-1" This designation
indicates that the degree of
safety regarding timely
payment is very strong.
"A-2" Capacity for timely
payment on issues with this
designation is strong.
However, the relative degree
of safety is not as
overwhelming.
"A-3" Issues carrying this
designation have a
satisfactory capacity for
timely payment. They are,
however, somewhat more
vulnerable to the adverse
effects of changes in
circumstances than
obligations carrying the
higher designations.
"B" Issues rated "B" are
regarded as having only an
adequate capacity for timely
payment. Furthermore, such
capacity may be damaged by
changing conditions or
short-term adversities.
"C" This rating is
assigned to short-term debt
obligations with a doubtful
capacity for payment.
"D" This rating indicates that
the issuer is either in
default or is expected to be
in default upon maturity.
FINANCIAL STATEMENTS
The audited financial statements
of the Funds which are contained
in the June 30, 1999, Annual
Report to Shareholders are
incorporated herein by reference.
28
<PAGE>
BABSON FUND GROUP
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS:
(a) Articles of Incorporation
(1) David L. Babson Growth Fund, Inc.
(A) Articles of Incorporation of the
Registrant as filed in Maryland on
August 17, 1978
and filed herewith as
Exhibit EX99.23(a)(1)(A).
(B) Articles of Amendment and
Restatement of the Registrant
as filed in Maryland on
October 3, 1978
and filed herewith as
Exhibit EX99.23(a)(1)(B).
(C) Articles of Merger of the Registrant
as filed in Maryland on
October 31, 1978
and filed herewith as
Exhibit EX99.23(a)(1)(C).
(D) Articles of Amendment of the Registrant
as filed in Maryland on
October 3, 1983
and filed herewith as
Exhibit EX99.23(a)(1)(D).
(2) D. L. Babson Money Market Fund, Inc.
(A) Articles of Incorporation of the
Registrant as filed in Maryland on
October 19, 1979
and filed herewith as
Exhibit EX99.23(a)(2)(A).
(B) Articles of Amendment of the
Registrant as filed in Maryland on
April 15, 1982
and filed herewith as
Exhibit EX99.23(a)(2)(B).
(C) Articles Supplementary of the
Registrant as filed in Maryland on
April 22, 1982
and filed herewith as
Exhibit EX99.23(a)(2)(C).
(3) D. L. Babson Tax-Free Income Fund, Inc.
(A) Articles of Incorporation of the
Registrant as filed in Maryland on
August 22, 1979
and filed herewith as
Exhibit EX99.23(a)(3)(A).
(B) Articles of Amendment of the
Registrant as filed in Maryland on
November 30, 1979
and filed herewith as
Exhibit EX99.23(a)(3)(B).
(C) Articles of Amendment of the
Registrant as filed in Maryland on
January 2, 1981
and filed herewith as
Exhibit EX99.23(a)(3)(C).
(4) Babson-Stewart Ivory International Fund, Inc.
(A) Articles of Incorporation of the
Registrant as filed in Maryland on
October 2, 1987
and filed herewith as
Exhibit EX99.23(a)(4)(A).
(B) Articles of Amendment of the
Registrant as filed in Maryland on
December 10, 1987
and filed herewith as
Exhibit EX99.23(a)(4)(B).
(5) Shadow Stock Fund, Inc.
(A) Articles of Incorporation of the
Registrant as filed in Maryland on
June 3, 1987
and filed herewith as
Exhibit EX99.23(a)(5)(A).
(6) Babson Enterprise Fund, Inc.
(A) Articles of Incorporation of the
Registrant as filed in Maryland on
July 5, 1983. Previously filed with
Post-Effective Amendment No. 19 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(B) Articles Supplementary of the
Registrant as filed in Maryland on
October 14, 1983. Previously filed with
Post-Effective Amendment No. 19 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(C) Articles Supplementary of the
Registrant as filed in Maryland on
April 24, 1991. Previosly filed with
Post-Effective Amendment No. 19 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(7) Babson Enterprise II Fund, Inc.
(1) Articles of Incorporation of the
Registrant as filed in Maryland on
January 30, 1991. Previously filed with
Post-Effective Amendment No. 10 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(2) Articles Supplementary of the
Registrant as filed in Maryland on
April 18, 1991. Previously filed with
Post-Effective Amendment No. 10 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(8) Babson Value Fund, Inc.
(A) Articles of Incorporation of the
Registrant as filed in Maryland on
July 24, 1984. Previously filed with
Post-Effective Amendment No. 17 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(B) Articles Supplementary of the
Registrant as filed in Maryland on
September 25, 1984. Previously filed with
Post-Effective Amendment No. 17 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(C) Articles Supplementary of the
Registrant as filed in Maryland on
February 9, 1996. Previously filed with
Post-Effective Amendment No. 17 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(D) Articles Supplementary of the
Registrant as filed in Maryland on
October 30, 1996. Previously filed with
Post-Effective Amendment No. 17 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(9) D. L. Babson Bond Trust
(A) Amended and Restated Agreement
and Declaration of Trust of the
Registrant dated March 31, 1988.
Previously filed with
Post-Effective Amendment No. 99 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(B) Provisions of Supplementary Agreement
and Declaration of Trust of the
Registrant dated March 31, 1988.
Previously filed with
Post-Effective Amendment No. 99 to
the Registration Statement on
Form N-1A on Janaury 22, 1999.
(b) By-laws
(1) David L. Babson Growth Fund, Inc.
By-laws for the Registrant
filed herewith as
Exhibit EX99.23(b)(1).
(2) D. L. Babson Money Market Fund, Inc.
By-laws for the Registrant
filed herewith as
Exhibit EX99.23(b)(2).
(3) D. L. Babson Tax-Free Income Fund, Inc.
By-laws for the Registrant
filed herewith as
Exhibit EX99.23(b)(3).
(4) Babson-Stewart Ivory International Fund, Inc.
By-laws for the Registrant
filed herewith as
Exhibit EX99.23(b)(4).
(5) Shadow Stock Fund, Inc.
By-laws for the Registrant
filed herewith as
Exhibit EX99.23(b)(5).
(6) Babson Enterprise Fund, Inc.
By-laws for the Registrant
Previously filed with Post-Effective
Amendment No. 19 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(7) Babson Enterprise II Fund, Inc.
By-laws for the Registrant
Previously filed with Post-Effective
Amendment No. 10 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(8) Babson Value Fund, Inc.
By-laws for the Registrant
Previously filed with Post-Effective
Amendment No. 17 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(9) D. L. Babson Bond Trust
By-laws for the Registrant
Previously filed with Post-Effective
Amendment No. 99 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(c) Instrument Defining Rights of Security Holders
Not Applicable
(d) Investment Advisory Contracts
(1) David L. Babson Growth Fund, Inc.
(A) Investment Management Agreement between
Registrant and Jones & Babson, Inc.
dated June 30, 1995
is filed herewith as
Exhibit No. EX99.23(d)(1)(A).
(B) Investment Counsel Agreement between
Jones & Babson, Inc. and
David L. Babson & Co., Inc.
dated June 30, 1995,
is filed herewith as
Exhibit No. EX99.23(d)(1)(B).
(2) D. L. Babson Money Market Fund, Inc.
(A) Investment Management Agreement between
Registrant and Jones & Babson, Inc.
dated June 30, 1995
is filed herewith as
Exhibit No. EX99.23(d)(2)(A).
(B) Investment Counsel Agreement between
Jones & Babson, Inc. and
David L. Babson & Co., Inc.
dated June 30, 1995,
is filed herewith as
Exhibit No. EX99.23(d)(2)(B).
(3) D. L. Babson Tax-Free Income Fund, Inc.
(A) Investment Management Agreement between
Registrant and Jones & Babson, Inc.
dated June 30, 1995
is filed herewith as
Exhibit No. EX99.23(d)(3)(A).
(B) Investment Counsel Agreement between
Jones & Babson, Inc. and
David L. Babson & Co., Inc.
dated June 30, 1995,
is filed herewith as
Exhibit No. EX99.23(d)(3)(B).
(4) Babson-Stewart Ivory International Fund, Inc.
(A) Investment Management Agreement between
Registrant and Jones & Babson, Inc.
dated June 30, 1995
is filed herewith as
Exhibit No. EX99.23(d)(4)(A).
(B) Investment Counsel Agreement between
Jones & Babson, Inc. and
Babson-Stewart Ivory International
dated June 30, 1995,
is filed herewith as
Exhibit No. EX99.23(d)(4)(B).
(5) Shadow Stock Fund, Inc.
(A) Investment Management Agreement between
Registrant and Jones & Babson, Inc.
dated June 30, 1995
is filed herewith as
Exhibit No. EX99.23(d)(5)(A).
(B) Investment Counsel Agreement between
Jones & Babson, Inc. and
David L. Babson & Co., Inc.
dated June 30, 1995,
is filed herewith as
Exhibit No. EX99.23(d)(5)(B).
(C) Investment Counsel Agreement between
Jones & Babson, Inc. and
Anaylitc Systems, Inc.
dated June 30, 1995,
is filed herewith as
Exhibit No. EX99.23(d)(5)(C).
(6) Babson Enterprise Fund, Inc.
(A) Investment Management Agreement between
Registrant and Jones & Babson, Inc.
dated June 30, 1995
previously filed with Post-Effective
Amendment No. 19 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(B) Investment Counsel Agreement between
Jones & Babson, Inc. and
David L. Babson & Co., Inc.
dated June 30, 1995,
previously filed with Post-Effective
Amendment No. 19 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(7) Babson Enterprise II Fund, Inc.
(A) Investment Management Agreement between
Registrant and Jones & Babson, Inc.
dated June 30, 1995
previously filed with Post-Effective
Amendment No. 10 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(B) Investment Counsel Agreement between
Jones & Babson, Inc. and
David L. Babson & Co., Inc.
dated June 30, 1995,
previously filed with Post-Effective
Amendment No. 10 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(8) Babson Value Fund, Inc.
(A) Investment Management Agreement between
Registrant and Jones & Babson, Inc.
dated June 30, 1995
previously filed with Post-Effective
Amendment No. 17 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(B) Investment Counsel Agreement between
Jones & Babson, Inc. and
David L. Babson & Co., Inc.
dated June 30, 1995,
previously filed with Post-Effective
Amendment No. 17 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(9) D. L. Babson Bond Trust
(A) Investment Management Agreement between
Registrant and Jones & Babson, Inc.
dated June 30, 1995
previously filed with Post-Effective
Amendment No. 99 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(B) Investment Counsel Agreement between
Jones & Babson, Inc. and
David L. Babson & Co., Inc.
dated June 30, 1995,
previously filed with Post-Effective
Amendment No. 99 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(e) Underwriting Contracts between:
(1) David L. Babson Growth Fund, Inc.
and Jones & Babson, Inc. dated
September 30, 1995
is filed herewith as
Exhibit No. EX99.23(e)(1).
(2) D. L. Babson Money Market Fund, Inc.
and Jones & Babson, Inc. dated
September 30, 1995
is filed herewith as
Exhibit No. EX99.23(e)(2).
(3) D. L. Babson Tax-Free Income Fund, Inc.
and Jones & Babson, Inc. dated
September 30, 1995
is filed herewith as
Exhibit No. EX99.23(e)(3).
(4) Babson-Stewart Ivory International Fund, Inc.
and Jones & Babson, Inc. dated
September 30, 1995
is filed herewith as
Exhibit No. EX99.23(e)(4).
(5) Shadow Stock Fund, Inc.
and Jones & Babson, Inc. dated
September 30, 1995
is filed herewith as
Exhibit No. EX99.23(e)(5).
(6) Babson Enterprise Fund, Inc.
and Jones & Babson, Inc. dated
September 30, 1995
previously filed with Post-Effective
Amendment No. 19 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(7) Babson Enterprise II Fund, Inc.
and Jones & Babson, Inc. dated
September 30, 1995
previously filed with Post-Effective
Amendment No. 10 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(8) Babson Value Fund, Inc.
and Jones & Babson, Inc. dated
September 30, 1995
previously filed with Post-Effective
Amendment No. 17 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(9) D. L. Babson Bond Trust
and Jones & Babson, Inc. dated
September 30, 1995
previously filed with Post-Effective
Amendment No. 99 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(f) Bonus or Profit Sharing Contracts
Not Applicable.
(g) Custodian Agreement between:
Registrants and
UMB Bank, N.A. dated
May 5, 1997
is filed herewith as
Exhibit No. EX99.23(g).
(h) Other Material Contracts:
(1) Transfer Agency Agreement between
David L. Babson Growth Fund, Inc.
and Jones & Babson, Inc. dated
October 31, 1994
is filed herewith as
Exhibit No. EX99.23(h)(1).
(2) Transfer Agency Agreement between
D. L. Babson Money Market Fund, Inc.
and Jones & Babson, Inc. dated
October 31, 1994
is filed herewith as
Exhibit No. EX99.23(h)(2).
(3) Transfer Agency Agreement between
D. L. Babson Tax-Free Income Fund, Inc.
and Jones & Babson, Inc. dated
October 31, 1994
is filed herewith as
Exhibit No. EX99.23(h)(3).
(4) Transfer Agency Agreement between
Babson-Stewart Ivory International Fund, Inc.
and Jones & Babson, Inc. dated
October 31, 1994
is filed herewith as
Exhibit No. EX99.23(h)(4).
(5) Transfer Agency Agreement between
Shadow Stock Fund, Inc.
and Jones & Babson, Inc. dated
October 31, 1994
is filed herewith as
Exhibit No. EX99.23(h)(5).
(6) Transfer Agency Agreement between
Babson Enterprise Fund, Inc.
and Jones & Babson, Inc. dated
October 31, 1994
previously filed with Post-Effective
Amendment No. 19 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(7) Transfer Agency Agreement between
Babson Enterprise II Fund, Inc.
and Jones & Babson, Inc. dated
October 31, 1994
previously filed with Post-Effective
Amendment No. 10 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(8) Transfer Agency Agreement between
Babson Value Fund, Inc.
and Jones & Babson, Inc. dated
October 31, 1994
previously filed with Post-Effective
Amendment No. 17 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(9) Transfer Agency Agreement between
D. L. Babson Bond Trust
and Jones & Babson, Inc. dated
October 31, 1994
previously filed with Post-Effective
Amendment No. 99 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(i) Opinion and Consent of Counsel as to the
Legality of the Securities Issued for:
(1) David L. Babson Growth Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(i)(1).
(2) D. L. Babson Money Market Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(i)(2).
(3) D. L. Babson Tax-Free Income Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(i)(3).
(4) Babson-Stewart Ivory International Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(i)(4).
(5) Shadow Stock Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(i)(5).
(6) Babson Enterprise Fund, Inc.
previously filed with Post-Effective
Amendment No. 19 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(7) Babson Enterprise II Fund, Inc.
previously filed with Post-Effective
Amendment No. 10 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(8) Babson Value Fund, Inc.
previously filed with Post-Effective
Amendment No. 19 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(9) D. L. Babson Bond Trust
previously filed with Post-Effective
Amendment No. 99 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(j) Other Opinions
(1) Consent of Independent Auditors for:
(A) David L. Babson Growth Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(1)(A).
(B) D. L. Babson Money Market Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(1)(B).
(C) D. L. Babson Tax-Free Income Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(1)(C).
(D) Babson-Stewart Ivory International
Fund, Inc. is filed herewith as
Exhibit No. EX99.23(j)(1)(D).
(E) Shadow Stock Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(1)(E).
(F) Babson Enterprise Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(1)(F).
(G) Babson Enterprise II Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(1)(G).
(H) Babson Value Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(1)(H).
(I) D. L. Babson Bond Trust
is filed herewith as
Exhibit No. EX99.23(j)(1)(I).
(2) Power of Attorney for:
(A) David L. Babson Growth Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(2)(A).
(B) D. L. Babson Money Market Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(2)(B).
(C) D. L. Babson Tax-Free Income Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(2)(C).
(D) Babson-Stewart Ivory International
Fund, Inc. is filed herewith as
Exhibit No. EX99.23(j)(2)(D).
(E) Shadow Stock Fund, Inc.
is filed herewith as
Exhibit No. EX99.23(j)(2)(E).
(F) Babson Enterprise Fund, Inc.
previously filed with Post-Effective
Amendment No. 19 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(G) Babson Enterprise II Fund, Inc.
previously filed with Post-Effective
Amendment No. 10 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(H) Babson Value Fund, Inc.
previously filed with Post-Effective
Amendment No. 19 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(I) D. L. Babson Bond Trust
previously filed with Post-Effective
Amendment No. 99 to Registration
Statement filed on Form N-1A on
Janaury 22, 1999.
(k) Omitted Financial Statments
Not Applicable.
(l) Initial Capital Agreements
Not Applicable.
(m) Rule 12b-1 Plan
Not Applicable.
(n) Rule 18f-3 Plan
Not Applicable.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT:
None.
ITEM 25. INDEMNIFICATION:
Under the terms of the Maryland General Corporation Law and
the Registrant's By-Laws, the Registrant shall indemnify any person who
was or is a director, officer, or employee of the Registrant to the
maximum extent permitted by the Maryland General Corporation Law;
provided however, that any such indemnification (unless ordered by a
court) shall be made by the Registrant only as authorized in the
specific case upon a determination that indemnification of such person
is proper in the circumstances. Such determination shall be made:
(i) by the Board of Directors by a majority vote of a
quorum which consists of the directors who are neither "interested
persons" of the Registrant as defined in Section 2(a)(19) of the 1940
Act, nor parties to the proceedings, or
(ii) if the required quorum is not obtainable or if a
quorum of such directors so directs, by independent legal counsel in a
written opinion.
No indemnification will be provided by the Registrant to any
director or officer of the Registrant for any liability to the
Registrant or shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.
The principal business of Jones & Babson, Inc. is the management of the
Babson and Buffalo families of mutual funds. It also has expertise in
the tax and pension plan field. It supervises a number of prototype and
profit-sharing plan programs sponsored by various organizations eligible
to be prototype plan sponsors. The principal business of David L.
Babson & Co., Inc. is to provide investment counsel and advice to a wide
variety of clients.
ITEM 27. PRINCIPAL UNDERWRITER:
(a) Jones & Babson, Inc., the only principal underwriter of the
Registrant, also acts as principal underwriter for:
David L. Babson Growth Fund, Inc.
D.L. Babson Money Market Fund, Inc.
D.L. Babson Tax-Free Income Fund, Inc.
Shadow Stock Fund, Inc.
Babson-Stewart Ivory International Fund, Inc.
Babson Enterprise Fund, Inc.
Babson Enterprise Fund II, Inc.
Babson Value Fund, Inc.
D.L. Babson Bond Trust
UMB Scout Stock Fund, Inc.
UMB Scout Bond Fund, Inc.
UMB Scout Money Market Fund, Inc.
UMB Scout Tax-Free Money Market Fund, Inc.
UMB Scout Balanced Fund, Inc.
UMB Scout Regional Fund, Inc.
UMB Scout WorldWide Fund, Inc.
UMB Scout Capital Preservation Fund, Inc.
UMB Scout Kansas Tax-Exempt Bond Fund, Inc.
Buffalo Balanced Fund, Inc.
Buffalo Equity Fund, Inc.
Buffalo High Yield Fund, Inc.
Buffalo Small Cap Fund, Inc.
Buffalo USA Global Fund, Inc.
and AFBA Five Star Fund, Inc.
(b) The tables below set forth certain information as to
the Underwriter's Directors, Officers, Partners and
Control Persons:
Name and Business Positions and Offices Positions and Offices
Address with Underwriter with the Registrant
Stephen S. Soden Chairman and Director None
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Larry D. Armel President and Director President and Director
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Giorgio Balzer Director None
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Robert T. Rakich Director None
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Edward S. Ritter Director None
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Robert N. Sawyer Director None
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
Vernon W. Voorhees Director None
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
P. Bradley Adams Vice President and Vice Presdient and
BMA Tower Treasurer Treasurer
700 Karnes Blvd.
Kansas City, MO 64108-3306
Martin A. Cramer Vice Presdient and Vice President and
BMA Tower Secretary Secretary
700 Karnes Blvd.
Kansas City, MO 64108-3306
Constance E. Martin Asst. Vice President Asst. Vice President
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS:
Each account, book or other document required to be
maintained by Section 31(a) of the Investment Company Act of 1940, as
amended and Rules (17 CFR 270-31a-1 to 31a-3) promulgated thereunder, is
in the physical possession of Jones and Babson, Inc., at BMA Tower, 700
Karnes Blvd., Kansas City, Missouri 64108-3306.
ITEM 29. MANAGEMENT SERVICES:
There are no management related service contracts not discussed in
Part A or Part B.
ITEM 30. UNDERTAKINGS
Registrant undertakes that, if requested to do so by the
holders of at least 10% of the registrant's outstanding shares, to call
a meeting of shareholders for the purpose of voting upon the question of
removal of a director or directors and to assist in communications with
other shareholders as required by Section 16(c) of the Investment
Company Act of 1940, as amended.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 26th day of August, 1999.
DAVID L. BABSON GROWTH FUND, INC.
By: /s/ Larry D. Armel
Larry D. Armel
President, Principal Executive Officer
and Director
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below on by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Larry D. Armel President, Principal Executive August 26, 1999
Larry D. Armel Officer and Director
/s/ F. C. Rood Director August 26, 1999
F. C. Rood*
/s/ William H. Russell Director August 26, 1999
William H. Russell*
/s/ H. David Rybolt Director August 26, 1999
H. David Rybolt*
/s/ P. Bradley Adams Treasurer and Principal August 26, 1999
P Bradley Adams Financial and Accounting
Officer
* By: /s/ Larry D. Armel
Larry D. Armel, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 26th day of August, 1999.
BABSON ENTERPRISE FUND, INC.
By: /s/ Larry D. Armel
Larry D. Armel
President, Principal Executive Officer
and Director
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below on by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Larry D. Armel President, Principal Executive August 26, 1999
Larry D. Armel Officer and Director
/s/ F. C. Rood Director August 26, 1999
F. C. Rood*
/s/ William H. Russell Director August 26, 1999
William H. Russell*
/s/ H. David Rybolt Director August 26, 1999
H. David Rybolt*
/s/ P. Bradley Adams Treasurer and Principal August 26, 1999
P Bradley Adams Financial and Accounting
Officer
* By: /s/ Larry D. Armel
Larry D. Armel, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 26th day of August, 1999.
BABSON ENTERPRISE FUND II, INC.
By: /s/ Larry D. Armel
Larry D. Armel
President, Principal Executive Officer
and Director
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below on by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Larry D. Armel President, Principal Executive August 26, 1999
Larry D. Armel Officer and Director
/s/ F. C. Rood Director August 26, 1999
F. C. Rood*
/s/ William H. Russell Director August 26, 1999
William H. Russell*
/s/ H. David Rybolt Director August 26, 1999
H. David Rybolt*
/s/ P. Bradley Adams Treasurer and Principal August 26, 1999
P Bradley Adams Financial and Accounting
Officer
* By: /s/ Larry D. Armel
Larry D. Armel, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 26th day of August, 1999.
BABSON VALUE FUND, INC.
By: /s/ Larry D. Armel
Larry D. Armel
President, Principal Executive Officer
and Director
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below on by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Larry D. Armel President, Principal Executive August 26, 1999
Larry D. Armel Officer and Director
/s/ F. C. Rood Director August 26, 1999
F. C. Rood*
/s/ William H. Russell Director August 26, 1999
William H. Russell*
/s/ H. David Rybolt Director August 26, 1999
H. David Rybolt*
/s/ P. Bradley Adams Treasurer and Principal August 26, 1999
P Bradley Adams Financial and Accounting
Officer
* By: /s/ Larry D. Armel
Larry D. Armel, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 26th day of August, 1999.
SHADOW STOCK FUND, INC.
By: /s/ Larry D. Armel
Larry D. Armel
President, Principal Executive Officer
and Director
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below on by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Larry D. Armel President, Principal Executive August 26, 1999
Larry D. Armel Officer and Director
/s/ F. C. Rood Director August 26, 1999
F. C. Rood*
/s/ William H. Russell Director August 26, 1999
William H. Russell*
/s/ H. David Rybolt Director August 26, 1999
H. David Rybolt*
/s/ P. Bradley Adams Treasurer and Principal August 26, 1999
P Bradley Adams Financial and Accounting
Officer
* By: /s/ Larry D. Armel
Larry D. Armel, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 26th day of August, 1999.
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
By: /s/ Larry D. Armel
Larry D. Armel
President, Principal Executive Officer
and Director
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below on by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Larry D. Armel President, Principal Executive August 26, 1999
Larry D. Armel Officer and Director
/s/ James T. Jensen Director August 26, 1999
James T. Jenses
/s/ Richard J. Phelps Director August 26, 1999
Richard J. Phelps
/s/ F. C. Rood Director August 26, 1999
F. C. Rood*
/s/ William H. Russell Director August 26, 1999
William H. Russell*
/s/ P. Bradley Adams Treasurer and Principal August 26, 1999
P Bradley Adams Financial and Accounting
Officer
* By: /s/ Larry D. Armel
Larry D. Armel, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 26th day of August, 1999.
D. L. BABSON MONEY MARKET FUND, INC.
By: /s/ Larry D. Armel
Larry D. Armel
President, Principal Executive Officer
and Director
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below on by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Larry D. Armel President, Principal Executive August 26, 1999
Larry D. Armel Officer and Director
/s/ F. C. Rood Director August 26, 1999
F. C. Rood*
/s/ William H. Russell Director August 26, 1999
William H. Russell*
/s/ H. David Rybolt Director August 26, 1999
H. David Rybolt*
/s/ P. Bradley Adams Treasurer and Principal August 26, 1999
P Bradley Adams Financial and Accounting
Officer
* By: /s/ Larry D. Armel
Larry D. Armel, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 26th day of August, 1999.
D. L. BABSON TAX-FREE INCOME FUND, INC.
By: /s/ Larry D. Armel
Larry D. Armel
President, Principal Executive Officer
and Director
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below on by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Larry D. Armel President, Principal Executive August 26, 1999
Larry D. Armel Officer and Director
/s/ F. C. Rood Director August 26, 1999
F. C. Rood*
/s/ William H. Russell Director August 26, 1999
William H. Russell*
/s/ H. David Rybolt Director August 26, 1999
H. David Rybolt*
/s/ P. Bradley Adams Treasurer and Principal August 26, 1999
P Bradley Adams Financial and Accounting
Officer
* By: /s/ Larry D. Armel
Larry D. Armel, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, each as amended, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Kansas City, and State of
Missouri, on the 26th day of August, 1999.
D. L. BABSON BOND TRUST
By: /s/ Larry D. Armel
Larry D. Armel
President, Principal Executive Officer
and Trustee
Pursuant to the requirement of the Securities Act of 1933, this
Registration Statement has been signed below on by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ Larry D. Armel President, Principal Executive August 26, 1999
Larry D. Armel Officer and Trustee
/s/ F. C. Rood Trustee August 26, 1999
F. C. Rood*
/s/ William H. Russell Trustee August 26, 1999
William H. Russell*
/s/ H. David Rybolt Trustee August 26, 1999
H. David Rybolt*
/s/ P. Bradley Adams Treasurer and Principal August 26, 1999
P Bradley Adams Financial and Accounting
Officer
* By: /s/ Larry D. Armel
Larry D. Armel, Attorney-in-Fact
(Pursuant to Power of Attorney filed herewith)
<PAGE>
EX99.23(a)(1)(A)
ARTICLES OF INCORPORATION
OF
DAVID L. BABSON INVESTMENT FUND, INC.
FIRST: I, the undersigned, ALFRED J. HOFFMAN, whose post
office address is 6701 High Drive, Shawnee Mission, Kansas 66208,
being at least twenty-one years of age, do, under and by virtue of the
General Laws of the State of Maryland authorizing the formation of
corporations, associate myself as incorporator with the intention of
forming a corporation (hereinafter called the "Corporation").
SECOND: The name of the Corporation is DAVID L. BABSON
INVESTMENT FUND, INC.
THIRD: The purposes for which the Corporation is formed
To engage generally in the business of an incorporated 66208
investment company of the management type, investing and reinvesting
as more specifically set forth herein, subject to limitations as set
forth elsewhere in these Articles of Incorporation and in the By-laws
of the Corporation, its assets in all forms of securities and other
personal property, of every kind and description; to consolidate or
merge with, to acquire and take over the assets of, and to assume the
liabilities of, any other corporation or trust with similar powers; to
make contracts; and, generally to do any or all acts and things
necessary or desirable in furtherance of any of the corporate purposes
or designed to protect, preserve, or enhance the value of the
corporate assets, or to the extent permitted to business corporations
authorized under the State of Maryland as now or may in the future be
enforced, and to do any or all of the things in furtherance of the
above purposes as natural persons might do;
To invest and reinvest its capital and/or surplus and/or
reserves, and to acquire by purchase, subscription, contract or other
and 'to receive, own, hold, guarantee, sell, assign, exchange,
transfer, mortgage, pledge, hypothecate, or otherwise dispose of and
generally deal in and with all forms of securities and investments of
every kind and description, including, but not by way of limitation,
shares of stock (preferred, common and debenture), notes, bonds,
debentures, script, warrants, participation certificates, mortgages,
commercial Papers, choses in action, evidence of indebtedness and
other obligations of every kind and disposition; (a) of any private,
public, quasi-public, municipal, corporation, syndicate, association,
common law trust, firm or individual existing or carrying on business
in the United states or elsewhere throughout the world; (b) of any
government, United States or foreign or subdivision thereof, whether
state, county municipality 6r,'o'ther political or government division
or subdivision.
And also, all trust, partnership or other certificates of
rights, evidencing interest in any such securities or instruments,
both within and without the State of Maryland; and while the owners of
any such securities or investments to exercise all the rights, powers,
privileges of ownership or interest in respect to the same, including
the right to vote, to subscribe for additional stock, and to purchase
or exercise "rights" in connection therewith; to do any or all acts
and things for the preservation, protection, improvement, management,
and enhancement in value thereof, or designated to accomplish any such
purpose, all to such extent as permitted under the laws of the State
of Maryland and not otherwise.
To conduct researches, investigations, and analyses of
enterprises of every kind and description in the United States and
elsewhere throughout the world;
To acquire or become interested in any such securities or
evidences of interest therein as aforesaid by original subscription,
or otherwise, and to make payment thereon as called for, and to
subscribe for the same conditionally or otherwise.
Subject to limitations as set forth elsewhere in these
Articles of Incorporation and in the By-laws of the Corporation and
other governing laws and regulations, to acquire, and pay for in cash,
stock or evidences of indebtedness of this Corporation or otherwise,
the assets and property, and to undertake or assume the whole or any
part of the obligations or liabilities of any person, firm,
association or corporation;
To acquire, hold, use, sell, assign, lease, grant licenses
in respect of, mortgage or otherwise dispose of letters patent of the
United States or any foreign country, patent rights, licenses and
privileges, inventions, improvements and processes, copyrights,
trademarks and trade names relating to or useful in connection with
any business of this Corporation;
To enter into, make and perform contracts of every kind and
description with any person, firm, association, corporation,
municipality, county, state, body politic or government or colony or
dependency thereof;
Subject to limitations as set forth elsewhere in these
Articles of Incorporation and in the By-laws of the Corporation and
other governing laws and regulations, to borrow or raise moneys for
any of the purposes of the Corporation and, from time to time without
limit as to amount; to draw, make, accept, endorse, execute and issue
promissory notes, drafts, bills of exchange, warrants, bonds,
debentures and other negotiable or non-negotiable instruments and
evidences of indebtedness, and to secure the payment of any thereof
and of the interest thereon by pledge, conveyance or assignment in
trust of the whole or any part of the property of the corporation
whether at the time owned or thereafter acquired, to sell, pledge, or
otherwise dispose of such bonds or other obligations of the
Corporation for its corporate purposes; and to any firm, person or
corporation any of its surplus funds, either with or without security;
To purchase, hold, sell, and transfer the shares of its own
capital stock, provided it shall not use its funds or property for the
purchase of its own shares of capital stock when such use would cause
any impairment of its capital except as otherwise permitted by law,
and provided further that shares of its own capital stock belonging to
it shall not be voted upon directly or indirectly.
To have one or more offices in any or all states,
territories, and districts of the United States and any foreign
countries; to carry on all or any of its operations and business and
without restriction or limit as to amount but subject to the
restrictions as set forth elsewhere in these Articles of Incorporation
and in the By-laws of the Corporation; to purchase or otherwise
acquire, hold, own, mortgage, sell, convey or otherwise dispose of
personal property of every class and description, subject to the
limitations as set forth elsewhere in these Articles of Incorporation
and in the By-laws of the Corporation, in any of the states,
districts, territories or colonies of the United States, and in any
and all foreign countries, subject to the laws of such state,
district, territory, colony or country.
The Corporation shall be authorized to exercise and enjoy
all of the powers, rights and privileges granted to, or conferred
upon, corporations of a similar character by the General Laws of the
State of Maryland now or hereafter in force, and the enumeration of
the foregoing powers shall not be deemed to exclude any powers,
rights, or privileges so granted or conferred.
Subject to the restrictions contained elsewhere in these
Articles of Incorporation and in the By-laws of the Corporation, the
objects and purposes specified in the foregoing clauses shall, except
where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clauses in
these Articles of Incorporation, but the objects and purposes
specified in each of the foregoing clauses of this Article shall be
regarded as independent objects and purposes.
FOURTH: The post-office address of the principal office of
the Corporation in this state is c/o The Corporation Trust Incorpor-
ated, First Maryland Building, 25 South Charles Street, Baltimore,
Maryland 21201. The name of the resident agent of the Corporation in
this state is The Corporation Trust Incorporated, a corporation of
this state, and the post-office address of the resident agent is First
Maryland Building, 25 South Charles Street, Baltimore, Maryland 21201.
FIFTH: The total number of shares of stock which the
Corporation shall have the authority to issue is one hundred million
(100,000,000) shares, all of one class called Common Stock, of the par
value of one ($1.00) dollar per share each and of the aggregate par
value of One Hundred Million ($100,000,000) Dollars each of which
shall be entitled to full and equal voting rights.
SIXTH: The shares of the Common Stock of the Corporation may
be issued to such persons and at such prices no less than the par
value thereof as from time to time the Board of Directors may
determine. Such issuance shall be-on a non-assessable basis. No holder
of shares of Common Stock or of any other securities issued by the
Corporation shall have preemptive rights, and the Corporation shall
have the right to issue and sell to any person or persons any shares
of its Common Stock or any securities convertible into shares of its
Common Stock or any option rights exercisable for shares of its Common
Stock or any other securities it is authorized to issue without first
offering such shares, rights or securities to the holders of any
shares of its Common Stock or of any other securities of which it may
be the issuer.
SEVENTH: The number of directors of the Corporation shall be
determined from time to time by the directors pursuant to the By-laws
of the Corporation. Such number initially shall be seven (7) but shall
never be less than three (3). The names of the initial directors are:
David L. Babson and James W. Holman who shall serve until the 1979
annual meeting of stockholders; Robert H. Lange, Francis C. Rood and
William J. Smith who shall serve until the 1980 annual meeting of
stockholders; and Stephen W. Harris and Alfred J. Hoffman who shall
serve until the 1981 annual meeting of stockholders, and in each
instance shall serve until their respective successors shall have been
duly elected and shall have qualified.
If there be a vacancy, on the Board by reason of death,
resignation or otherwise, to fill such vacancy for the unexpired term
by majority vote of the remaining directors; provided that after
filling any such vacancy, at least two-thirds of the directors shall
have been elected by the stockholders, and provided further that if at
any time less than a majority of the directors then holding office
were elected by the stockholders, a stockholders' meeting shall be
called for the purpose of electing directors to fill existing
vacancies.
EIGHTH: Notwithstanding any provision of law requiring a
greater proportion than a majority of the votes of all classes or of
any class of stock entitled, to be cast, to take or authorize any
action, the Corporation may take or authorize such action upon the
concurrence, of a majority of the aggregate number of the votes
entitled to be cast thereon.
NINTH: The Corporation shall redeem or purchase from its
stockholders shares of its own stock as provided elsewhere in these
Articles of Incorporation and in the By-laws of the Corporation;
provided that the Corporation shall not pay for such shares of stock
an amount greater than the proportionate interest in the Corporation
represented by such shares of stock.
TENTH: The Corporation, pursuant to a resolution of the
Board of Directors and without the vote or consent of stockholders of
the Corporation, shall have the right to redeem at net asset value all
shares of capital stock in any stockholder account in which there are
fewer than 20 shares or such fewer shares as shall be specified in
such resolution. Such resolution shall set forth that redemption of
shares in such accounts has been determined to be in the economic best
interest of the Corporation or necessary to reduce disproportionately
burdensome expenses in servicing stockholder accounts. Such resolution
shall provide that prior notice of at least six months shall be given
to a stockholder before such redemption of shares, and that the stock-
holder will have six months (or such longer period as is specified in
the resolution) from the date of the notice to avoid such redemption
by increasing his account to at least 20 shares, or such fewer shares
as is specified in the resolution.
ELEVENTH: In furtherance and not in limitation of the powers
conferred by the laws of the State of Maryland, the Board of Directors
is expressly authorized:
To make, alter or repeal the By-laws of the Corporation
except where such power is reserved by the By-laws to the stockholders
and subject to the power of the stockholders to adopt, alter, or
repeal any of the By-laws of the Corporation.
From time to time to determine whether and to what extent
and at what times and places and under what conditions. and
regulations the books and accounts of this Corporation, or any of them
other than the stock ledger, shall be open to the inspection of the
stockholders, and no stockholder shall have any right to inspect any
account or book or document of the Corporation, except as conferred by
law or authorized by resolution of the directors or of the
stockholders.
This Corporation may in its By-laws confer powers additional
to the foregoing upon the directors, in addition to the powers and
authorities expressly conferred upon them by law.
TWELFTH: Meetings of stockholders may be held outside the
State of Maryland, if the By-laws so provide. The books of the
Corporation may be kept (subject to any provision contained in the
statutes) outside the State of Maryland at such place or places as may
be designated from time to time by the Board of Directors or in the
By-laws of the Corporation. Elections of directors need not be by
ballot unless the By-laws of the Corporation shall so provide,
THIRTEENTH: The shares of the capital stock of the Corporation
may be issued to such persons and at such prices from time to time as
the Board of Directors may determine. Such issuance shall be on a
non-assessable basis and, unless it be pro rata to the existing
stockholders as a stock or optional dividend, stock split, or stock
combination, shall be only in exchange for cash or for such other
securities as the Board of Directors may deem proper, which shall in
no event be less than the market value as herein defined in Section
(a) of this Article THIRTEENTH nor the par value of such shares,
whichever shall be greater. The value of securities received in
exchange for the issuance of shares shall be that resulting from an
appraisal of such securities by the Board of Directors in such manner
as shall be deemed by it to reflect their fair value. Any excess
received by the Corporation upon the issuance and sale of the shares
of the capital stock of the Corporation over the then par value
thereof shall be carried on the books of the Corporation as paid-in
surplus. Stockholders shall not be entitled to preemptive rights to
subscribe to additional shares except as the Board of Directors may in
each instance specifically determine.
(a) The market value of a share of the capital stock of the
Corporation shall be determined as soon as possible after the close of
business on the New York Stock Exchange on each business day on which
such Exchange is open. The market value of a share of the capital
stock of the Corporation shall be the net asset value thereof, and the
determination shall be made as set forth in Section (d) of this
Article
(b) So long as it has assets legally available to do so and
such right is not suspended under the provisions of the Federal
Investment Company Act of 1940, the Corporation agrees to repurchase
any share of its capital stock tendered to it at the redemption price
in effect one hour after the close of business of the New York Stock
Exchange on the next succeeding business day on which such Exchange is
open. In addition the Corporation and/or the distributors of the
shares of the Corporation's shares may, but are not required to,
maintain a bid to repurchase the shares tendered at the last
previously effective or next calculated and effective redemption
price. The redemption price shall be determined as hereinafter defined
in section (c) of this Article THIRTEENTH. Payment may not be deferred
for periods exceeding seven (7) days after tender, at its home office,
of the shareholder's redemption request and his properly endorsed
stock certificate(s) if any has been issued. Notwithstanding the
foregoing, the Board of Directors of the Corporation may suspend the
right of the holders of the capital stock of the Corporation to
require the Corporation to redeem shares of such capital stock,
(1) for any period (A) during which the New York Stock
Exchange is closed other than the customary weekend and holiday
closings, or (B) during which trading in the New York Stock Exchange
is restricted;
(2) for any period during which an emergency, as defined by
rules of the Securities and Exchange Commission or any successor
thereto, exists as a result of which (A) disposal by the Corporation
of securities owned by it is not reasonably practicable for the
Corporation fairly to determine the value of its net assets; or
(3) for such other periods as the Securities and Exchange
Commission or any successor thereto may by order permit for the
protection of security holders of the Corporation.
(c) The redemption price of a share of the capital stock of
the Corporation shall be determined and become effective each time the
market value of a share is determined and becomes effective under the
provisions of Section (a) of this Article THIRTEENTH. Such redemption
price shall ordinarily be the net asset value thereof, determined as
set forth in Section (d) of this Article THIRTEENTH, but the Board of
Directors may in its discretion deduct therefrom the proportionate
share of broker's commissions, transfer taxes, and other costs
involved in the disposition of portfolio securities, provided however
that such deduction in no event shall exceed one percent of the then
net asset value of such share.
And provided further, that the Board of Directors may, in
its discretion, establish uniform requirements from time to
time, to deduct from the redemption price up to, but not
exceeding, 1% of the redemption price of each share of the
Fund which is redeemed within a period to be determined by
the Board of Directors, but which period shall not exceed
one year from the date of such shares purchased.
(d) The net asset value of a share of the capital stock of
the Corporation shall be the quotient resulting from dividing the net
assets of the Corporation as of the valuation time by the number of
the then outstanding shares. The net assets of the Corporation shall
be calculated in the following manner:
(1) The gross assets shall be valued as follows:
(A) All securities shall be appraised at the most
recent quoted sale prices. If there was no sale on the
day on which such valuation is made, the mean between
the most recent of the quoted bid and the asked prices
shall be used. If such bid and asked prices are not
reasonably available, or, if in the judgment of the
Board of Directors such quoted bid and asked prices do
not reflect he fair value, the securities shall be
appraised in such manner as the Board of Directors of
the Corporation deem will reflect their fair value
pursuant to their authority set out in (a) of this
Article.
(B) All other assets of the Corporation, including cash,
prepaid and accrued items, dividends and other
receivables, shall be appraised in such manner as the
Board of Directors of the Corporation deem will reflect
their fair value.
(2) From the gross assets shall be deducted the liabilities
of the Corporation, including accrued items, and other
payables, and proper reserves, if any, as may be
determined by the Board of Directors.
(3) The resulting difference shall be the net assets of the
Corporation.
FOURTEENTH: The investment of the funds of the Corporation
shall be expressly limited as follows:
(a) The officers and directors of the Corporation, the
managers and general distributors and officers and directors thereof
shall have no dealings on behalf of the Corporation as principal or
agent with themselves or with any corporation or partnership in which
they have a financial interest; except in the case of the purchase or
sale of securities on an agency or commission basis on the commission
that would be paid any independent established and reputable
investment or brokerage firms, or of dealings in shares of the
Corporation, or as otherwise in this Article FOURTEENTH permitted,
except that the officers and directors may have a financial interest
in the Corporation, the general distributors or the manager.
(b) No security may be purchased for the portfolio or
retained in the portfolio if any officer, director or security-holder
of the issuer of such security is at the same time an officer,
director or manager of this Corporation, or a partner or officer or
director of such manager, and owns beneficially more than 1/2 of 1% of
the securities of such issuer provided that the aggregate holdings of
such securities of all of such persons so owning more than 1/2 of 1%
of the outstanding stock or securities of such issuer exceed 5% of the
outstanding stock or securities of such issuer.
(c) Corporation shall make no loans whether of cash or other
assets of the Corporation to any officers, directors or employees of
the Corporation or to the manager or the general distributors or
officers or directors thereof.
(d) The Corporation shall not purchase the securities of any
person, firm, association, corporation, syndicate, combination,
organization, government (other than the United States of America) or
any subdivision thereof, if upon such purchase, more than 5% of its
total assets, determined in such manner as may be approved by the
Board of Directors of the Corporation and applied on a consistent
basis, would consist of the securities of such person, firm,
association, corporation, syndicate, combination, organization,
government or subdivision.
(e) The Corporation shall not purchase the securities of any
person, firm, association, corporation, syndicate, combination,
organization or any subdivision thereof, if, upon such purchase, the
Corporation would own more than 10% of any class of the outstanding
securities of such person, firm, association, corporation, syndicate,
combination, organization, government or subdivision. For the purposes
of this restriction, all kinds of securities of a company representing
debt shall be deemed to constitute a single class, regardless of
relative priorities, maturities, conversion rights and other
differences, and all kinds of stock of a company preferred over the
common stock as to dividends or in liquidation shall be deemed to
constitute a single class regardless of relative priorities, series
designations, conversion rights and other differences.
(f) The Corporation shall not purchase the securities of any
investment company or investment trust (as such terms may reasonably
be understood by the Corporation) except by purchase in the open
market where no commission or profit to a sponsor or dealer results
from such purchase other than the customary broker's commission or
except when such purchase though not made in the open market is part
of a plan or merger or consolidation.
(g) The Corporation shall not borrow or otherwise pledge its
credit under normal circumstances and under no circumstances shall the
Corporation borrow so that its indebtedness after such borrowing shall
exceed 10 percent of its gross assets taken at fair market value or
cost, whichever is lower.
(h) Under no circumstances may the Corporation make itself
or any of its assets liable for the indebtedness of another person or
corporation, nor shall it for any purpose pledge, mortgage or
hypothecate any of its assets for the benefit of the Corporation to an
extent greater than 10 percent of the gross assets of the Corporation,
taken at their fair market value as of the date of such pledge,
mortgage or hypothecation.
(i) The Corporation shall not at any time purchase
securities or other things of value on margin or sell any such
securities or things of value short.
(j) No investment may be made in the securities of any
issuer, other than Federal, State, Territorial, or local governments,
or corporations or authorities established thereby, which, including
predecessors, have not had a record of at least three years'
continuous operation, if such investment, together with all other such
investments would exceed in value 5% of the gross assets of the
Corporation.
(k) No part of the gross assets of the Corporation shall be
invested in assessable securities or securities involving unlimited
liability on the part of the holders thereof.
FIFTEENTH: The Corporation is further expressly empowered
and limited as follows:
(a) The Corporation may enter into a written contract with
any person, including any firm, corporation, trust or association in
which any officer, other employee, director or stockholder of this
Corporation may be interested, to act as investment advisors and
managers of this Corporation and to provide such advice and management
as the Board of Directors of this Corporation may from time to time
consider necessary for the proper management of the investment
portfolio of this Corporation and also to provide such research and
statistical service, office space, and/or bookkeeping services for
this Corporation as the said Board of Directors may deem necessary and
desirable. The compensation payable by this Corporation under such a
contract shall be such as is deemed fair and equitable to both parties
by the said Board of Directors.
(b) The Corporation may appoint one or more distributors or
agents or both for the sale of the shares of the Corporation, may
allow such person or persons a commission on the sale of such shares
and may enter into, such contract or contracts. with such person or
persons as the Board of Directors of this Corporation in its
discretion may deem reasonable and proper. Any such contract or
contracts for the sale of the shares of this Corporation may be made
with any person even though such person may be an officer, other
employee, director or stockholder of this Corporation or a
corporation, partnership, trust or association in which any such
officer, other employee, director or stockholder may be interested, or
such person may be the investment advisor and manager retained
pursuant to the powers granted in Section (a) of this Article
FIFTEENTH.
(c) The Corporation may employ such custodian or custodians
for the safekeeping of the property of the Corporation and of its
shares, such dividend disbursing agent or agents, and such transfer
agent or agents and registrar or registrars for its shares, and may
make and perform such contracts for the aforesaid purposes as in the
opinion of the Board of Directors of this Corporation may be
reasonable, necessary, or proper for the conduct of the affairs of the
Corporation, and may pay the fees and disbursements of such
custodians, dividend disbursing agents, transfer agents, and
registrars out of the income and/or any other property of the
Corporation. Notwithstanding any other provisions of these By-laws,
the Board of Directors may cause any or all of the property of the
Corporation to be transferred or to be acquired and held in the name
of the custodian so appointed or in the name of any nominee or
nominees of this Corporation or nominee or nominees of such custodian
satisfactory to the said Board of Directors.
(d) The Corporation may, by resolution of its Board of
Directors adopted at a meeting thereof within thirty days before or
after the beginning of any fiscal year or within thirty days before
the annual meeting of stockholders, appoint any reputable certified
public accountant or firm of certified public accountants to act as
the independent auditor of the books and records of the Corporation
for such fiscal year provided that such resolution is adopted both by
a majority vote of the directors then in office and a majority vote of
the directors who are neither officers of the Corporation nor
officers, directors, principal owners or otherwise affiliated with any
investment adviser, selling or distributing agent, or principal broker
of the Corporation. Such auditor or firm shall not directly or
indirectly be financially interested in the Corporation as owner or
otherwise, and such appointment shall be subject to ratification by a
majority vote of the stockholders of the Corporation at the next
annual meeting thereof.
(e) No officer other employee or director of this
Corporation and no investment advisor and manager or distributor or
selling agent or any partner, officer, director, or trustee of any
such investment advisor and manager or distributor or selling agent
shall take "long" or "short" positions in purchasing or selling shares
of the Corporation except as permitted by applicable laws and
regulations.
(f) Provided that reasonable care has been exercised in the
selection of the officers, other employees, investment advisors and
managers, distributors, selling agents, custodians, dividend
disbursing agents, transfer agents and registrars, legal counsel,
auditors, and other agents of the Corporation, no director of the
Corporation shall be responsible or liable in any event for any
neglect or wrongdoing of any of the same, nor shall any director be
responsible or liable for the act or omission to act of any other
director, provided, however, that nothing contained in the Certificate
of Incorporation or By-laws of this Corporation shall protect any
director against any liability to which he would otherwise be subject
by reason of his own willful misfeasance, bad faith, gross negligence,
or reckless disregard of the duties involved in the conduct of his
office.
SIXTEENTH: The Corporation reserves the right from time to
time to make any amendment of its Charter, now or hereafter authorized
by law, including any amendment which alters the contract rights, as
expressly set forth in its Charter, of any outstanding stock.
SEVENTEENTH: The duration of the Corporation shall be
perpetual.
IN WITNESS WHEREOF, the undersigned incorporator of DAVID L.
BABSON INVESTMENT FUND, INC. who executed the foregoing Articles of
Incorporation hereby acknowledges the same to be his act and further
acknowledges that to the best of his knowledge the matters and facts
set forth herein are true in all material respects under the penalties
of perjury.
Dated the 11th day of August, 1978.
/s/Alfred J. Hoffman
Alfred J. Hoffman
<PAGE>
EX99.23(a)(1)(B)
DAVID L. BABSON INVESTMENT, FUND, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
David L. Babson Investment Fund, Inc., a Maryland
corporation having its principal. office in Baltimore, Maryland,
and having The Corporation Trust Incorporated as its resident
agent located at First Maryland Building, 25 South Charles
Street, Baltimore, Maryland 21201 hereby certifies to the State
Department of Assessments and Taxation of Maryland, that:
FIRST: The charter of the Corporation is hereby amended by
striking out ARTICLE TENTH of the Articles of Incorporation and
inserting in lieu thereof the following:
TENTH: The Board of Directors in the economic best
interests of the Corporation and in order to reduce
disproportionately burdensome expenses in servicing
stockholder accounts may, from time to time, establish
uniform standards with respect to the minimum value of a
stockholder account or a minimum investment which may be
made by a stockholder. The Board of Directors, by
resolution and without the vote or consent of stockholders,
may require that the aggregate net asset value of a
stockholder account shall not be less than the minimum
initial investment requirement of the Corporation at the
time of the resolution. The resolution may authorize the
Corporation to close those stockholder accounts not meeting
the specified minimum standard of value by redeeming all of
the shares in such accounts, provided that there is mailed
to each affected stockholder account, at least sixty (60)
days prior to the planned redemption date, a notice setting
forth the minimum account size requirement and the date on
which the, account will be closed if the minimum size
requirement is not met prior to said closing date.
and the charter of, the corporation is hereby restated to read
as follows:
SECOND: The name of the Corporation is DAVID L. BABSON
INVESTMENT FUND, INC.
THIRD: The purposes for which the Corporation is
formed are:
To engage generally in the business of an incorporated
investment company of the management type, investing and
reinvesting as more specifically set forth herein, subject to
limitations as set forth elsewhere in these Articles of
Incorporation and in the By-laws of the Corporation, its assets
in all forms of securities and other personal property, of every
kind and description; to consolidate or merge with, to acquire
and take over the assets of, and to assume the liabilities of
any other corporation or trust with similar powers; to make
contracts; and, generally to do any or all acts and things
necessary or desirable in furtherance of any of the corporate
purposes or designed to protect, preserve, or enhance the value
of the corporate assets, or to the extent permitted to business
corporations authorized under the State of Maryland as, now or
may in the future be enforced, and to do any or , all of the
things in furtherance of the above purposes, as natural persons
might do;
To invest and reinvest its capital and/or surplus
and/or reserves, and to acquire by purchase, subscription,
contract or otherwise and to receive, own, hold, guarantee,
sell, assign, exchange, transfer, mortgage, pledge, hypothecate,
or otherwise dispose of and generally deal in and with all forms
of securities and investments of every kind and description,
including, but not by way of limitation, shares of stock
(preferred, common and debenture), notes, bonds, debentures,
script, warrants, participation certificates, mortgages,
commercial papers, choses in action, evidence of indebtedness
and other obligations of every kind and disposition; (a) of any
private, public, quasi-public, municipal, corporation,
syndicate, association, common law trust, firm or individual
existing or carrying an business in the United States or
elsewhere throughout the world; (b) of any government, United
States or foreign, or subdivision thereof, whether state,
county, municipality or other political or government division
or subdivision.
And also, all trust, partnership or other certificates
of rights, evidencing interest in any such securities or
instruments, both within and without the State of Maryland; and
while the owners of any such securities or investments to
exercise, all the rights, powers, privileges of ownership or
interest in respect to the same, including the right to vote, to
subscribe for additional stock, and to purchase or exercise
"rights" in connection therewith; to do any or all acts and
things for the preservation, protection, improvement,
management, and enhancement in value thereof or designated to
accomplish any such purpose, all to such extent as permitted
under the laws of the State of Maryland and not otherwise.
To conduct researches, investigations, and analyses of
enterprises of every kind and description in the United States
and elsewhere throughout the world;
To acquire or become interested in any such securities
or evidences of interest therein as aforesaid by original
subscription, or otherwise, and to make payment thereon as
called for, and to subscribe for the same conditionally or
otherwise.
Subject to limitations as set forth elsewhere in these
Articles of Incorporation and in the By-laws of the Corporation
and other governing laws and regulations, to acquire, and pay
for in cash, stock or evidences of indebtedness of this
Corporation or otherwise, the assets and property, and to
undertake or assume the whole or any part of the obligations or
liabilities of any person, firm, association or corporation;
To acquire, hold, use, sell, assign, lease, grant
licenses in respect of, mortgage or otherwise dispose of letters
patent of the United States or any foreign country, patent
rights, licenses and privileges, inventions, improvements and
processes, copyrights, trademarks and trade names relating to or
useful in connection with any business of this Corporation;
To enter into, make and perform contracts of every
kind and description with any person, firm, association,
corporation, municipality, county, state, body politic or
government or colony or dependency thereof;
Subject to limitations as set forth elsewhere in these
Articles of incorporation and in the By-laws of the Corporation
and other governing laws and regulations, to borrow or raise
moneys for any of the purposes of the Corporation and, from time
to time without. limit as to amount; to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or
non-negotiable instruments and evidences of indebtedness, and to
secure the payment of any thereof and of the interest thereon by
pledge, conveyance or assignment in trust of the whole or any
part of the property of the corporation whether at the time
owned or thereafter acquired, to sell, pledge, or otherwise
dispose of such bonds or other obligations of the Corporation
for its corporate purposes; and to any firm, person or
corporation any of its surplus funds, either with or without
security;
To purchase, hold, sell and transfer the shares of its
own capital stock, provided it shall not use its funds or
property for the purchase of its own shares of capital stock
when such use would cause any impairment of its capital except
as otherwise permitted by law, and provided further that shares
of its own capital stock belonging to it shall not be voted
upon, directly or indirectly.
To have one or more offices in any or all states,
territories, and districts of the United States and any foreign
countries; to carry on all or any of its operations and business
and without restriction or limit as to amount but subject to the
restrictions as set forth elsewhere in these Articles of
Incorporation and in the By-laws of the Corporation; to purchase
or otherwise acquire, hold, own, mortgage, sell, convey or
otherwise dispose of personal property of every class and
description, subject to the limitations as set forth elsewhere
in these Articles of Incorporation and in the By-laws of the
Corporation in any of the states,, districts, territories or
colonies of the United States, and in any and all foreign
countries, subject to the laws of such state, district,
territory, colony or country.
The Corporation shall be authorized to exercise and
enjoy all of the powers, rights and Privileges granted to, or
conferred upon, corporations of a similar character by the
General Laws of the State of Maryland now or hereafter it force,
and the enumeration of the foregoing powers shall not be deemed
to exclude any powers, rights, or privileges so granted or
conferred.
Subject to the restrictions contained elsewhere in
these Articles of incorporation and in the By-laws of the
Corporation, the objects and purposes specified in the foregoing
clauses shall, except where otherwise expressed, be in nowise
limited or restricted by reference to, or inference from, the
terms of any other clauses in these Articles of Incorporation,
but the objects and purposes specified in each of the foregoing
clauses of this Article shall be regarded as independent objects
and purposes.
FOURTH: The post-office address of the principal
office of the Corporation in this state is c/o The Corporation
Trust Incorporated, First Maryland Building, 25 South Charles
Street, Baltimore, Maryland 21201. The name of the resident
agent of the Corporation in this state is The Corporation Trust
incorporated, a corporation of this *state, and the post-office
address of the resident agent is First Maryland Building, 25
South Charles Street, Baltimore, Maryland 21201.
FIFTH: The total number of shares of stock which the
Corporation shall have the authority to issue is one hundred
million (100,000,000) shares, all of one class called Common
Stock, of the par value of one ($1.00) dollar per share each and
of the aggregate par value of One Hundred Million ($100,000,000)
Dollars each of which shall be entitled to full and equal voting
rights.
SIXTH: The shares of the Common Stock of the
Corporation may be issued to such persons and at such prices no
less than the par value thereof as from time to time the Board
of Directors may determine. Such issuance shall be on a non-
assessable basis. No holder of shares of Common Stock or of any
other securities issued by the Corporation shall have preemptive
rights, and the corporation shall have the right to issue and
sell to any person or persons any shares of its Common Stock or
any securities convertible into shares of its Common Stock or
any option rights exercisable for shares of its Common Stock or
any other securities it is authorized to issue without first
offering such shares, rights or securities to the holders of any
shares of its Common Stock or of any other securities of which
it may be the issuer.
SEVENTH: The number of directors of the Corporation
shall be determined from time to time by the directors pursuant
to the By-laws of the Corporation. Such number initially shall
be seven (7), but shall never be less than three (3). The names
of the initial directors are: David L. Babson and James W.
Holman who shall serve until the 1979 annual meeting of stockholders;
Robert H. Lange, Francis C. Rood and William J. Smith who shall serve
until the 1980 annual, meeting of stockholders; and Stephen W. Harris and
Alfred J. Hoffman who shal1 serve until the 1981 annual meeting
of stockholders, and in each instance shall serve until their
respective successors shall have been duly elected and shall have
qualified.
If there be a vacancy on the Board by reason of death,
resignation or otherwise, to fill such vacancy for the unexpired
term by majority vote of the remaining directors; provided that
after filling any such vacancy, at least two-thirds of the
directors shall have been elected by the stockholders, and
provided further that if at any time less than a majority of the
directors then holding office were elected by the stockholders,
a stockholders' meeting shall be called for the purpose of
electing directors to fill existing vacancies.
EIGHTH: Notwithstanding any provision of law requiring
a greater proportion than a majority of the votes of all classes
or of any class of stock entitled to be cast, to take or
authorize any action, the Corporation may take or authorize such
action upon the concurrence of a majority of the aggregate
number of the votes entitled to be cast thereon.
NINTH: The Corporation shall redeem or purchase from
its stockholders shares of it's own stock as provided elsewhere
in these Articles of Incorporation and in the By-laws of the
Corporation; provided that the Corporation shall not pay for
such shares of stock an amount greater than the proportionate
interest in the Corporation represented by such shares of stock.
TENTH: The Board of Directors in the economic best
interests of the Corporation and in order to reduce
disproportionately burdensome expenses in servicing
stockholder accounts may, from time to time, establish
uniform standards with respect to the minimum value of a
stockholder account or a minimum investment be made by a
stockholder. The Board of Directors, by resolution and
without the Vote or consent of stockholders, may require
that the aggregate net asset value of a stockholder account
shall not be less than the minimum initial investment
requirement of the Corporation at the time of the
resolution. The resolution may authorize the Corporation to
close those stockholder accounts not meeting the specified
minimum standard of value by redeeming all of the shares in
such accounts, provided that there is mailed to each
affected stockholder account, at least sixty (60) days prior
to the planned redemption date, a notice setting forth the
minimum account size requirement and the date on which the
account will be closed if the minimum size requirement is
not met prior to said closing date.
ELEVENTH: In furtherance and not in limitation of the
powers conferred by the laws of the State of Maryland, the Board
of Directors is express1y authorized:
To make, alter or repeal the By-laws of the
Corporation except where such power is reserved by the By-laws
to the stockholders and subject to the power of the stockholders
to adopt, alter, or repeal any of the By-laws of the
Corporation.
From time to time to determine whether and to what
extent and at what times and places and under what conditions
and regulations the books and accounts of this Corporation, or
any of them other than the stock ledger, shall be open to the
inspection of the stockholders, and no stockholder shall have
any right to inspect any account or book or document of the
Corporation, except as conferred by law or authorized by
resolution of the directors or of the stockholders.
This Corporation may in its By-laws confer powers
additional to the foregoing upon the directors, in addition to
the powers and authorities expressly conferred upon them by law.
TWELFTH: Meetings of stockholders may be held outside
the State of Maryland, if the By-laws so provide. The books of
the Corporation may be kept (subject to any provision contained
in the statutes) outside the State of Maryland at such place or
places as may be designated from time to time by the Board of
Directors or in the By-laws of the Corporation. Elections of
directors need not be by ballot unless the By-laws of the
Corporation shall so provide.
THIRTEENTH: The shares of the capital stock of the
Corporation may be issued to such persons and at such prices
from time to time as the Board of Directors may determine. Such
issuance shall be on a non-assessable basis and, unless it be
pro rata to the existing stockholders as a stock or optional
dividend, stock split, or stock combination, shall be only in
exchange for cash or for such other securities as the Board of
Directors may deem proper, which shall in no event be less than
the market value as herein defined in Section (a) of this
Article THIRTEENTH nor the par value of such shares, whichever
shall be greater. The value of securities received in exchange
for the issuance of shares shall be that resulting from an
appraisal of such securities by the Board of Directors in such
manner as shall be deemed by it to reflect their fair value. Any
excess received by the Corporation upon the issuance and sale of
the shares of the capital stock of the Corporation over the then
par value thereof shall be carried on the books of the
Corporation as paid in surplus. Stockholders shall not be
entitled to preemptive rights to subscribe, to additional shares
except as the Board of Directors may in each instance
specifically determine.
(a) The market value of a share of the capital stock
of the Corporation shall be determined as soon as possible after
the close of business on the New York Stock Exchange on each
business day on which such Exchange is open. The market value of
a share of the capital stock of the Corporation shall be the net
asset value thereof, and the determination shall be made as set
forth in Section (d) of this Article THIRTEENTH.
(b) So long as it has assets legally available to do
so and such right is not suspended under the provisions of the
Federal Investment Company Act of 1940, the Corporation agrees
to repurchase any share of its capital stock tendered to it at
the redemption price in effect one hour after the close of
business of the New York Stock Exchange on the next succeeding
business day on which such Exchange is open. In addition the
Corporation and/or the distributors the shares of the
Corporation's shares may, but are not required to, maintain a
bid to repurchase the shares tendered at the last previously
effective or next calculated and effective redemption price. The
redemption price shall be determined as hereinafter defined in
section (c) of this Article THIRTEENTH. Payment may not be
deferred for periods exceeding seven (7) days after tender, at
its home office, of the shareholder's redemption request and his
properly endorsed stock certificate(s) if any has been issued.
Notwithstanding the foregoing, the Board of Directors of the
Corporation may suspend the right of the holders of the Capital
stock of the Corporation to require the Corporation stock,
(1) for any period (A) during which the New York Stock
Exchange is closed other than the customary week-end and holiday
closings, or (B) during, which trading in the New York Stock
Exchange is restricted;
(2) for any period during which an emergency, as
defined by rules of the Securities and Exchange Commission or
any successor thereto, exists as a result of which (A) disposal by the
Corporation of securities owned by it is not reasonably
practicable for the Corporation fairly to determine the value of
its net assets; or
(3) for such other periods as the Securities and
Exchange Commission or any successor thereto may by order permit
for the protection of security holders of the Corporation.
(c) The redemption price of a share of the capital
stock of the Corporation shall be determined and become
effective each time the market value of a share is determined
and becomes effective under the provisions of Section (a) of
this Article THIRTEENTH. Such redemption price shall ordinarily
be the net asset value thereof, determined as set forth in
Section (d) of this Article THIRTEENTH, but the Board of
Directors may in its discretion deduct therefrom the
proportionate share of broker's commissions, transfer taxes, and
other costs involved in the disposition of portfolio securities,
provided however that such deduction in no event shall exceed
one percent of the then net asset value of such share.
And provided further, that the Board of
Directors may, in its discretion, establish
uniform requirements from time to time, to
deduct from the redemption price up to, but
not exceeding, 1% of the redemption price
of. each share of the Fund which is redeemed
within a period to be determined by the
Board of Directors, but which period shall
not exceed one year from the date of such
shares purchased.
(d) The net asset value of a share of the capital
stock of the Corporation shall be the quotient resulting from
dividing the net assets of the Corporation as of the valuation
time by the number of the then outstanding shares. The net
assets of the Corporation shall be calculated in the following
manner:
(1) The gross assets shall be valued as follows:
(A) All securities shall be appraised at the
most recent, quoted sale prices. If there
was no sale on the day on which such
valuation is made, the mean between the
most recent of the quoted bid and the
asked prices shall be used. If such bid
and asked prices are not reasonably
available, or, if in the judgment of the
Board of Directors such quoted bid and
asked prices do not reflect the fair
value, the securities shall be appraised
in such manner as the Board of Directors
of the Corporation deem will reflect
their fair value pursuant to their
authority set out in (a) of this Article.
B) All other assets of the Corporation,
including cash, prepaid and accrued
items, dividends and other receivables,
shall be appraised in such manner as the
Board of Directors of the Corporation
deem will reflect their fair value.
(2) From the gross assets shall be deducted the
liabilities of the Corporation, including accrued
items, and other payables, and proper reserves, if
any, as may be determined by the Board of
Directors.
(3) The resulting difference shall be the net assets
of the Corporation.
FOURTEENTH: The investment of the funds of the
Corporation shall be expressly limited as follows:
(a) The officers and directors of the Corporation, the
managers and general distributors and officers and directors
thereof shall have no dealings on behalf of the Corporation as
principal or agent with themselves or with any corporation or
partnership in which they have a financial interest; except in
the case of the purchase or sale of securities on an agency or
commission basis on the commission that would be paid any
independent established and reputable investment or brokerage
firms, or of dealings in shares of the Corporation, or as
otherwise in this Article FOURTEENTH permitted, except that the
officers and directors may have a financial interest in the
Corporation, the general distributors or the manager.
(b) No security may be purchased for the portfolio or
retained in the portfolio if any officer, director or security-
holder of the issuer of such security is at the same time an
officer, director or manager of this Corporation, or a partner
or officer or director of such manager, and owns beneficially
more than 1/2 of 1% of the securities of such issuer provided,
that the aggregate holdings of such securities of all of such
persons so owning more than 1/2 of 1% of the outstanding stock
or securities of such issuer exceed 5% of the outstanding stock
or securities of such issuer.
(c) Corporation shall make 'no loans 'whether of cash
or other assets of the Corporation to any officers, directors or
employees of the Corporation or to the manager or the general
distributors or officers or directors thereof.
(d) The Corporation shall not purchase the securities
of any person, firm, association, corporation, syndicate,
combination, organization, government (other than the United
States of America) or any subdivision thereof, if upon such
purchase, more than 5% of its total assets, determined in such
manner as may be approved by the Board of Directors of the
Corporation and applied on a consistent basis, would consist of
the securities of such person, firm, association, corporation,
syndicate, combination, organization, government or subdivision.
(e) The Corporation shall not purchase the securities
of any person, firm, association, corporation, syndicate,
combination, organization or any subdivision thereof, if, upon
such purchase, the Corporation, would own more than 10% of any
class of the outstanding securities of such person, firm,
association, corporation, syndicate, combination, organization,
government or subdivision. For the purposes of this restriction,
all kinds of securities of a company representing debt shall be
deemed to constitute a single class, regardless of relative
priorities, maturities, conversion rights and other differences,
and all kinds of stock of a company preferred over the 'common
stock as to dividends or in liquidation shall be determined to
constitute a single class regardless of relative priorities,
series designations, conversion rights and other differences.
(f) The Corporation shall not purchase the securities
of any investment company or investment trust (as such terms may
reasonably be understood by the Corporation) except by purchase
in the open market where no commission or profit to a sponsor or dealer
results from such purchase other than the customary broker's commission
or except when such purchase though not made in the open market
is part of a plan or merger or consolidation.
(g) The Corporation shall not borrow or otherwise
pledge its credit under normal circumstances and under no
circumstances shall the Corporation borrow so that its
indebtedness after such borrowing shall exceed 10 percent of its
gross assets taken at fair market value or cost, whichever is
lower.
(h) Under no circumstances may the Corporation make
itself or any of its assets liable for the indebtedness of
another person or corporation, nor shall it for any purpose
pledge, mortgage or hypothecate any of its assets for the
benefit of the Corporation to an extent greater than 10 percent
of the gross assets of the Corporation, taken at their fair
market value as of the date of such pledge, mortgage or
hypothecation.
(i) The Corporation shall not at any time purchase
securities or other things of value on margin or sell any such
securities or things of value short.
(j) No investment may be made in the securities of any
issuer, other than Federal, State, Territorial, or local
governments, or corporations or authorities established thereby,
which, including predecessors, have not had a record of at least
three years continuous operation, if such investment, together
with all other such investments, would exceed in value 5% of the
gross assets of the Corporation.
(k) No part of the gross assets of the Corporation
shall be invested in assessable securities or securities
involving unlimited liability on the part of the holders
thereof.
FIFTEENTH: The Corporation is further expressly
empowered and limited as follows:
(a) The Corporation may enter into a written contract
with any person, including any firm, corporation, trust or
association in which arty officer, other employee, director or
stockholder of this Corporation may be interested to act as
investment advisors and managers of this Corporation and to
provide such advice and management as the Board of Directors of
this Corporation may from time to time consider necessary for
the proper management of the investment portfolio of this
Corporation and also to provide such research and statistical
service, office space, and/or bookkeeping services for this
Corporation as the said Board of Directors may deem necessary
and desirable. The compensation payable by this corporation
under such a contract shall be such as is deemed fair and
equitable to both parties by the said Board of Directors.
(b) The Corporation may appoint one or more
distributors or agents or both for the sale of the shares of the
Corporation, may allow such person or persons a commission on
the sale of such shares and may enter into such contract or
contracts with such person or persons as the Board of Directors
of this Corporation in its discretion may deem reasonable and
proper. Any such contract or contracts for the sale of the
shares of this Corporation may be made with any person even
though such person may be an officer, other employee, director
or stockholder of this Corporation or a corporation,
partnership, trust or association in which any such officer,
other employee, director or stockholder may be
interested, or such person may be the investment advisor and
manager retained pursuant to the powers granted in Section (a)
of this Article FIFTEENTH.
(c) The Corporation may employ such custodian or
custodians for the safekeeping of the property of the
Corporation and of its shares, such dividend disbursing agent or
agents, and such transfer agent or agents and registrar or
registrars for its shares, and may make and perform such
contracts for the aforesaid purposes as in the opinion of the
Board of Directors of the Corporation, may be reasonable,
necessary, or proper for the conduct of the affairs of the
Corporation, and may pay the fees and disbursements of such
custodians, dividend disbursing agents, transfer agents, and
registrars out of the income and/or any other property of the
Corporation. Notwithstanding any other provisions of these By-
laws, the Board of Directors may cause any or all of the
property of the Corporation to be transferred or to be acquired
and held in the name of the custodian so appointed or in the
name of any nominee or nominees of this Corporation or nominee
or nominees of such custodian satisfactory to the said Board of
Directors.
(d) The Corporation may, by resolution of its Board of
Directors adopted at a meeting thereof within thirty days before
or after the beginning of any fiscal year or within thirty days
before the annual meeting of stockholders, appoint any reputable
certified public accountant or firm of certified public
accountants to act as the independent auditor of the books and
records of the Corporation for such fiscal year provided that
such resolution is adopted both by a majority vote of the
directors theft in office and a majority vote of the directors
who are neither officers of the Corporation nor officers,
directors, principal owners or otherwise affiliated with any
investment adviser, selling or distributing agent, or principal
broker of the Corporation. Such auditor or firm shall not
directly or indirectly be financially interested in the
Corporation as owner or otherwise, and such appointment shall be
subject to ratification by a majority vote of the stockholders
of the Corporation at the next annual meeting thereof.
(e) No officer other employee or director of this
Corporation and no investment advisor and manager or distributor
or selling agent or any partner, officer, director, or trustee
of any such investment advisor and manager or distributor or
selling agent shall take "long" or "short" positions in
purchasing or selling shares of the Corporation except as
permitted by applicable laws and regulations.
(f) Provided that reasonable care has been exercised
in the selection of the officers, other employees, investment
advisors managers, distributors, selling agents custodians,
dividend disbursing agents, transfer agents and registrars,
legal counsel, auditors, and other agents of the Corporation, no
director of the Corporation shall be responsible or liable in
any event for any neglect or wrongdoing of any of the same, nor
shall any director be responsible or liable for the act or
omission to act of any other director, provided, however, that
nothing contained in the Certificate of Incorporation or By-laws
of this Corporation shall protect any director against any
liability to which he would otherwise be subject by reason of
his own willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his
office.
SIXTEENTH: The Corporation reserves the right from
time to time to make any amendment of its Charter, now or
hereafter authorized by law, including any amendment which alters the
contract rights, as expressly set forth in its Charter, of any
outstanding stock.
SEVENTEENTH: The duration of the Corporation shall be perpetual.
SECOND: The number of directors of the corporation is
seven. The names of the directors are:
David L. Babson
Stephen W. Harris
Alfred J. Hoffman
James W. Holman
Robert H. Lange
F. C. Rood
William J. Smith
The board of directors of the corporation at a meeting duly
convened and held on September 28, 1978, adopted a resolution in
which was set forth the foregoing amendment to the charter,
declaring that the said amendment and restatement of the charter
was advisable and directing that it be submitted for action
thereon by the stockholder.
THIRD: The amendment and restatement of the charter of the
corporation as hereinabove set forth were approved by a consent
in writing setting forth said amendment and restatement of the
charter signed by all the stockholders entitled to vote on said
amendment, and all the other stockholders entitled to notice of
a meeting of stockholders but not to vote thereat having waived
in writing any rights which they may have to dissent from such
amendment, such consent and waiver having been filed with the
records of the stockholder meeting.
FOURTH: The Articles of Amendment and Restatement shall
become effective on the 29th day of September, 1978.
IN WITNESS WHEREOF, David L. Babson Investment Fund, Inc.
has caused these presents to be signed in its name and on its
behalf by its President, attested by its Secretary on September
29 1978.
DAVID L. BABSON INVESTMENT FUND, INC.
By:/s/ Alfred J. Hoffman
Alfred J. Hoffman, President
Attest:
/s/Jacqueline Willhite
Jacqueline Willhite, Secretary
Coroporate Seal
THE UNDERSIGNED, President of David L. Babson Investment
Fund, Inc., who executed on behalf of said corporation the
foregoing Articles of Amendment and Restatement of Charter, of
which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing
Articles of Amendment and Restatement of Charter to be the
corporate act of said corporation and further certifies that, to
the best of his knowledge, information and belief, the matters
and facts set forth therein, with respect to the approval
thereof are true in all material respects, under the penalties
of perjury.
/s/Alfred J. Hoffman
Alfred J. Hoffman, President
<PAGE>
EX99.23(a)(1)(C)
AGREEMENT AND ARTICLES OF MERGER
AGREEMENT AND ARTICLES OF MERGER dated as of this 30th day
of August,1978, by and between DAVID L. BABSON INVESTMENT
FUND, INC., a Maryland Corporation (hereinafter sometimes
called "Maryland Corporation" or the "Surviving
Corporation"), and DAVID L. BABSON INVESTMENT FUND, INC., a
Delaware Corporation (hereinafter sometimes called "Delaware
Corporation"), said corporations being hereinafter sometimes
collectively called the "Constituent Corporations"
(hereinafter sometimes called "this Agreement").
WHEREAS, Maryland Corporation is a corporation duly
organized and existing under the General Corporation Law of
the State of Maryland, having been incorporated on August 17,
1978, and has authorized capital stock consisting of
100,000,000 common shares, of the par value of $1.00 per
share each, and of the aggregate par value of $100,00,000, of
which 20 shares were issued and outstanding on the date
hereof; and
WHEREAS, Delaware Corporation is a corporation duly
organized and existing under the laws of the State of
Delaware, having been incorporated on June 8, 1959, under the
General Corporation Law of the State of Delaware and has
authorized capital stock consisting of 100,000,000 shares of
common stock, of the par value of $1.00 per share each, and
of the aggregate par value of $100,000,000, of which 20
shares were issued and outstanding (excluding Treasury
shares) on the. date hereof; and
WHEREAS, the principal office of Maryland Corporation in
the State of Maryland located at c/o The Corporation Trust
Incorporated, First Maryland Building, 25 South Charles
Street, Baltimore, Maryland 21201; and
WHEREAS, the principal office of Delaware Corporation in
the State of Delaware is located at c/o The Corporation Trust
Company, 100 West Tenth Street, Wilmington, Delaware 19801;
and
WHEREAS, the Board of Directors of each of the Constituent
Corporations has adopted this Agreement as a Plan of
Reorganization intended to qualify as such under the
provisions of Section 368 (a) (1) (F) of the Internal Revenue
Code of 1954, as amended, and the Constituent Corporations
and their respective Boards of Directors deem it advisable
and to the advantage of the Constituent Corporations and the
respective stockholders that Delaware Corporation be merged
into Maryland Corporation with Maryland Corporation the
Surviving Corporation, under and pursuant to the laws of the
States of Delaware and Maryland and on the terms and
conditions herein contained; and
WHEREAS, the Board of Directors of Maryland Corporation
and the Board of Directors of Delaware Corporation have
approved this Agreement by resolutions duly adopted, and the
Board of Directors of Delaware Corporation and the Board of
Directors of Maryland Corporation have directed that this
Agreement be submitted to their respective stockholders for
their approval;
NOW THEREFORE, in consideration, of the premises and of
mutual agreements covenants, and provisions hereinafter
contained, the parties hereto agree:
Article I
1.1 Delaware Corporation and Maryland Corporation agree
that Delaware Corporation shall be merged into Maryland
Corporation. Maryland Corporation shall be the Surviving
Corporation and shall be governed by the laws of the State of
Maryland. The terms and conditions of the merger and the mode
of carrying the same into effect are as hereinset forth in
this Agreement.
1.2 The Articles of Incorporation of Maryland Corporation
as they shall exist on the effective date of the merger
shall, until further amended as provided by law, constitute
the Articles of Incorporation of the Surviving Corporation.
1.3 The By-laws of Maryland Corporation as they exist on
the effective date of the merger shall, until further amended as
provided by law, constitute the Bylaws of the Surviving
Corporation.
1.4 The Directors of Delaware Corporation on the
effective date of the merger, shall constitute the Board of
Directors of the Surviving Corporation and shall hold office
until the terms of their respective classes expire at the annual
meeting of stockholders of the Surviving Corporation in 1979,
1980, 1981, and until their successors are elected and Shall
qualify.
1.5 Arthur Andersen & Co. shall continue as independent
certified public accountants to report upon the financial
condition of the Surviving Corporation for the fiscal year
ending June 30, 1979, provided such appointment of Arthur
Andersen & Co. is approved by the stockholders of Delaware
Corporation.
Article II
2.1 The manner and basis of converting the issued and
outstanding shares of the common stock of Delaware Corporation
into the shares of common stock of the Surviving Corporation
shall be as hereinafter set forth in this Article II.
2.2 Each share or fraction thereof of common stock of
Delaware Corporation issued and outstanding on the effective
date of the merger (excluding any Treasury shares of Delaware
Corporation which shares shall cease to exist) shall thereupon
be converted into an equal number of whole and fractional shares
of common stock of the Surviving Corporation and each
certificate representing shares of Delaware Corporation shall
represent the same number of shares of Maryland Corporation
subject to the right of each holder of a stock certificate
representing shares of Delaware Corporation to surrender the
same to the Surviving Corporation and to receive in exchange a
certificate representing an equal number of shares of common
stock of the Surviving Corporation.
2.3 Each share of Maryland Corporation stock outstanding
on the effective date of the merger shall be retired and
restored to the status of authorized but unissued.
Article III
3.1 On the effective date of the merger provided for in
this Agreement, the separate existence of Delaware
Corporation shall cease, except to the extent, if any,
continued by statute. All the assets, rights, privileges,
powers and franchises of Delaware Corporation and all debts
due on whatever account to it, shall be taken and deemed to
be transferred to and vested in the Surviving Corporation
without further act or deed; and all such assets, rights,
privileges, powers and franchises, and all and every other
interest of Delaware Corporation shall be thereafter as
effectually the property of the Surviving Corporation as they
were of Delaware Corporation; and the title to and interest
in any real estate vested by deed, lease or otherwise, unto
either of the Constitutent Corporations, shall not revert or
be in any way impaired. The Surviving Corporation shall be
responsible for all the liabilities and obligations of
Delaware Corporation, but the liabilities of the Constituent
Corporations or of their stockholders, directors, or officers
shall not be affected by this merger, nor shall the rights of
the creditors thereof or any persons dealing with such
corporations, or any liens upon the property of such
corporations, be impaired by this merger, and any claim
existing or action or proceeding pending by or against either
of such corporations may be prosecuted to judgment as if this
merger had not taken place, or the Surviving Corporation may
be proceeded against or substituted in place of Delaware
Corporation. Except as otherwise specifically set forth in
this Agreement, the identity, existence, purposes, powers,
franchise, rights, immunities and liabilities of Maryland
Corporation shall continue unaffected and unimpaired by the
merger.
3.2 All corporate acts, plans, policies, resolutions,
approvals, and authorizations of the stockholders, Board of
Directors, committees of the Board of Directors and agents of
Delaware Corporation, which were effective immediately prior to
the effective date of the merger shall be taken for all purposes
as the acts, plans, policies, resolutions, approvals and
authorizations of the Surviving Corporation and shall be as
effective and binding thereon as the same were with respect to
Delaware Corporation.
3.3 Prior to the effective date of the merger the
Constituent Corporations shall take all such action as shall be
necessary or appropriate in order to effectuate the merger. In
case at any time after the effective date of the merger the
Surviving Corporation' shall determine that any further
conveyance, assignment or other documents or any further action
is necessary or desirable to vest in or confirm to the Surviving
Corporation full title to all the properties, assets, rights,
privileges, and franchises of the Constituent Corporations, the
officers and directors of the Constituent Corporations, at the
expense of the Surviving Corporation, shall execute and deliver
all such instruments and take all such action as the Surviving
Corporation may determine to be necessary or desirable in order
to vest in and confirm to the Surviving Corporation title to and
possession of all such cash and securities and other properties,
assets, rights, privileges and franchises, and otherwise to
carry out the purpose of this Agreement.
3.4 The Surviving Corporation hereby (1) agrees that it
may be served with process in the State of Delaware in any
proceeding for the enforcement of any obligation of Delaware
Corporation as well as for the enforcement of any obligation of
the Surviving Corporation arising from the merger herein
provided, including any suit or proceedings to enforce the
right, if any, of any stockholder as determined in appraisal
proceedings pursuant to the provisions of Section 262 of the
General Corporation Law of the State of Delaware, (2) hereby
irrevocably appoints the Secretary of State of the State of
Delaware as its agent to accept service of process in any such
suit or other proceedings, and (3) hereby specifies the
following as the address to which a copy of such process shall
be mailed by the Secretary of State of the State of Delaware:
Alfred J. Hoffman, Esquire, President, David L. Babson
Investment Fund, Inc., 2440 Pershing Road, Kansas City, Missouri
64108.
Article IV
4.1 Each of the Constituent Corporations represents and
warrants to and agrees with the other that:
(a) Such Corporation is duly organized and existing in
good standing under the laws of its jurisdiction of
incorporation.
(b) It has full power and authority to carry on its
business as it is presently being conducted and to enter into
the merger contemplated hereby.
(c) There is no suit, action or legal or
administrative proceeding pending, or to its knowledge
threatened, against it which, if adversely det6mined, might
materially and adversely affect its financial condition or the
conduct of its business.
(d) At the effective date of the merger, consummation
of the transactions contemplated hereby will not result in the
breach of or constitute a default under any agreement or
instrument by which it is bound.
(e) All of its presently outstanding shares are
validly issued, fully paid and C,non-assessable by it.
(f) Immediately prior to the effective date of the
merger such Corporation will have valid and unencumbered title
to its cash, securities, and other assets if any.
Article V
5.1 The obligations of each of the Constituent Corporations
to effectuate the merger hereunder shall be subject to the
following conditions and the Agreement shall become effective as
of the Close of Business on the date all of said conditions have
been met:
(a) The representations and warranties of the other
Constituent Corporation contained herein shall be true as of
and at the effective date of the merger with the same effect
as though made at such date; such other Constituent
Corporation shall have performed all obligations required by
this Agreement to be performed by it prior to the effective
date; and such other Constituent Corporation shall have
delivered to the other a certificate dated the effective date
of the merger signed by its President or Vice President and
by its Secretary or Treasurer to the foregoing effect.
(b) Each of the Constituent Corporations shall have
delivered to the other a certified copy of the resolution
approving this Agreement adopted by at least a majority of
its directors including a majority of its directors who are
not interested persons of Jones and Babson, Inc.
(c) The Securities and Exchange Commission shall not
have issued an unfavorable advisory report under Section
25(b) of the Investment Company Act of 1940, as amended, nor
instituted any proceeding seeking to enjoin consummation of
the merger under Section 25(c) of such Act;
(d) The holders of at least a majority of the
outstanding shares of common stock of Delaware Corporation
and the holders of at least two-thirds of the outstanding
shares of the common stock of Maryland Corporation shall have
voted in favor of the adoption of this Agreement and the
merger contemplated hereby at an annual of special meeting or
any adjournment thereof.
(e) There shall have been received from the Internal
Revenue Service a tax ruling to the effect that:
1. The merger of Delaware Corporation into Maryland
Corporation will be a reorganization within the meaning of
Section 368 (a) (I ) (F) and Delaware Corporation and
Maryland Corporation will be parties to the reorganization.
2. No gain or loss will be recognized to Delaware
Corporation upon the transfer of all of its assets to
Maryland Corporation in the constructive exchange for all
of Maryland Corporation stock and the assumption by
Maryland Corporation of the liabilities of Delaware
Corporation (Sections 361 (a) and 357(a)). No gain or loss
will be recognized to Maryland Corporation as a result
thereof (Section 1032(a)).
3. The basis of Delaware. Corporation. assets in the
hands of Maryland Corporation will be the same as the basis
of such assets in the bands of Delaware Corporation
immediately prior to the transaction (Section 362.(b)).
4. The holding period of Delaware Corporation assets
in the hands of Maryland Corporation will include the
period during which those assets were held by Delaware
Corporation (Section 1223(2)).
5. No gain or loss will be recognized to Delaware
Corporation stockholders upon the constructive exchange of
their Delaware Corporation stock for Maryland Corporation
stock (Section 354(a)(1)).
6. The basis of Maryland Corporation stock to be
received by a Delaware Corporation stockholder will be the
same as the basis of Delaware Corporation stock surrendered
by him in constructive exchange therefor (Section
358(a)(1)).
7. The holding period of Maryland Corporation stock to
be constructively received by a Delaware Corporation
stockholder in the transaction will include the period
during which Delaware Corporation stock exchanged therefor
was held, provided Delaware Corporation stock was held as a
capital asset on the date of the constructive exchange
(Section 1223(l)).
8. Maryland Corporation shall be treated (for purposes
of Section 381) just as Delaware Corporation would have
been treated if there had been no reorganization.
Accordingly, the taxable year of Delaware Corporation shall
not end on the date of the transfer merely because of the
transfer; and the tax attributes of Delaware Corporation
enumerate d in Section 381 (c) shall be taken into account
by Maryland Corporation as if there had been no
reorganization (Section 1.381(b)I(a)(2) of the Income Tax
Regulations).
9. Section 368(a)(F) is not applicable to the
transactions described in the Agreement.
(f) Each of the Constituent Corporations shall have
received an opinion in form and substance satisfactory to it
from Stradley, Ronon, Steven & Young to the effect that:
(i) The corporate existence, good standing and
authorized common stock of each of the Constituent
Corporations are as stated or referred to in this
Agreement;
(ii) The shares of common stock of the Surviving
Corporation to be issued pursuant to the terms of this
Agreement have been duly authorized and, when is sued and
delivered as provided in this Agreement, will be validly
issued, fully paid, and nonassessable by the Surviving
Corporation;
(iii) All corporate and other proceedings required to
be taken by or on the part of either of the Constituent
Corporations to authorize and carry out this Agreement and
to effect the merger contemplated hereby have been duly and
properly taken; and
(iv) This Agreement is the valid obligation of each of
the Constituent Corporations legally binding upon it in
accordance with its terms.
g) This Agreement shall have been duly accepted for
recording with the State Department of Assessments and Taxation
of Maryland, under the General Corporation Law of Maryland, and
this Agreement, duly approved, adopted, certified, executed,
seated and acknowledged, shall have been filed with the office
of the Secretary of State of Delaware in accordance with the
General Corporation Law of the State of Delaware.
Article VI
6.1 Each of the Constituent Corporations agree that each
shall bear such expenses as have been incurred by it in
connection with the transaction described in this Agreement and
that the stockholders of the Constituent Corporations will bear
their own expenses, if any, of said transaction.
Article VII
7.1 Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the merger
abandoned at any time (whether before or after adoption hereof
by the stockholders of the Constituent Corporations) prior to
the effective date of the merger:
(a) by mutual consent of the Constituent Corporations;
(b) by either of the Constituent Corporations if any
condition set forth in Article V hereof has not been fulfilled
or waived by it;
(c) by either of the Constituent Corporations if the merger
shall not have become effective on or before October 31, 1978.
7.2 An election by a Constituent Corporation to terminate
this Agreement and abandon the merger shall be exercised by its
Board of Directors.
7.3 In the event of termination of this Agreement pursuant
to the provisions hereof the same shall without any liability on
the part of either of the Constituent Corporations or persons
who are its directors, officers or stockholders in respect of
this Agreement, become void and have no effect provided that
this provision shall not protect any director or officer of any
of the Constituent Corporations against any liability to such
Corporation or its stock holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office.
7.4 At any time prior to the filing of this Agreement,
any of the terms or conditions of this Agreement may be waived by
the Constituent Corporation entitled to the benefit thereof by
action taken by its Board of Directors, or its President or Vice
President if, in the judgment of the Board of Directors or
President or Vice President taking such action, such waiver will
not have a material adverse effect on the benefits intended
under this Agreement to the stockholders of the Constituent
Corporation on behalf of which such action is taken.
Article VIII
The respective representations and warranties of the
Constituent Corporations contained in Article IV hereof shall
expire with, and be terminated by, the merger contemplated by
this Agreement and neither the respective Constituent
Corporations nor any of their directors or officers shall be
under any liability with respect to any such representations or
warranties after the effective date of the merger. This
provision shall not protect any director or officer of either of
the Constituent Corporations against any liability to such
Corporation or to its stockholders to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office.
Article IX
9.1 These Articles embody the entire agreement between the
parties and there are no agreements, understandings,
restrictions or warranties among the parties other than those
set forth herein or herein provided for.
9.2 These Articles may be executed in any number of
counterparts each of which shall be deemed to be, an original
but all of such counterparts together shall constitute but one
instrument.
IN WITNESS WHEREOF, each of the Constituent Corporations
has caused this Agreement and Articles of Merger to be executed
on its behalf by its President or a Vice-President and its
corporate seal to be affixed thereto and attested by its
Secretary or Assistant Secretary, all as of the day and year
first above written. When the Stockholders of each Constituent
Corporation shall have voted for the adoption of this Agreement
such fact shall be certified on the Agreement by the Secretary
or Assistant Secretary of each such Corporation under the seal
thereof and this Agreement shall then be reexecuted and
acknowledged on behalf of each Constituent Corporation in
accordance with this Agreement.
DAVID L. BABSON INVESTMENT FUND, INC.
A Delware Corpoation
By:/s/ J. William Freeman
Vice President
Attest By:/s/ William C. Hisey
Assistant Secretary
(Corporate Seal)
DAVID L. BABSON INVESTMENT FUND, INC.
A Maryland Corporation
By:/s/ J. William Freeman
Vice President
Attest By:/s/ William C. Hisey
Assistant Secretary
(Corporate Seal)
STATE OF MISSOURI)
COUNTY OF JACKSON)
BE IT REMEMBERED, that, on August 30, 1978, before me, a Notary
Public duly authorized by law to take acknowledgment of deeds,
personally came F. William Freeman, Vice President of David L.'
Babson Investment Fund, Inc., a Delaware Corporation, and F.
William Freeman, Vice President of David L. Babson Investment
Fund, Inc., a Maryland Corporation, who duly signed the
foregoing instrument before me and each acknowledged that such
instrument as executed is the act and deed of that corporation
for which he acted, that his signing of such instrument on
behalf of such corporation is his act and deed, and that the
facts stated therein are true.
GIVEN under my hand on August 30, 1978.
/s/ Jacqueline B. Willhite
My commission expires 2/23/79.
JACQUELINE B. WILLHITE
NOTARY PUBLIC
JACKSON COUNTY, MISSOURI
CERTIFICATION
I, Jacqueline B.. Willhite, Secretary of David-L. Babson Investment Fund,
Inc., a corporation organized and existing under the laws of the State of
Delaware, hereby certify, as such Secretary, that the Agreement of Merger
to which this certificate is attached, after having been first duly signed
on behalf of the said corporation and having been signed on behalf
of David L. Babson Investment Fund, Inc., a corporation of the
State of Maryland, was duly submitted to the stockholders of
said David L. Babson Investment Fund, Inc. at a regular annual
meeting of said stockholders called and held separately from the
meeting of stockholders of any other corporation after at least
20 days' notice by mail as provided by Section 25.2 and Section
251 of Title 8 of the Delaware Code of 1953 on the 23rd day of
October, 1978 for the purpose of considering and taking action
upon the proposed Agreement of Merger; that 22,173,000 shares of
stock of said corporation were on said date issued and
outstanding, having voting power; that the proposed Agreement of
Merger was approved by the stockholders by an affirmative vote
representing at least a majority of the outstanding stock of
said corporation entitled to vote thereon, and that thereby the
Agreement of Merger was at said meeting duly adopted as the act
of the stockholders of David L. Babson Investment Fund, Inc. and
the duly adopted agreement of said corporation.
WITNESS my hand on this 23rd day of October, 1978.
/s/ Jacqueline B. Willhite
DAVID L. BABSON INVESTMENT FUND, INC.
CORPORATE SEAL
DELAWARE
CERTIFICATION
Jacqueline B. Willhite, Secretary,of David L. Babson
Investment Fund, Inc., a corporation organized and existing
under the laws of the State of Maryland, hereby certify as such
Secretary that the Agreement of Merger to which this certificate
is attached, after having been first duly signed on behalf of
said corporation and having been signed on behalf of David L.
Babson Investment Fund, Inc., a corporation of the state of
Delaware, was duly submitted to the stockholder of David L.
Babson Investment Fund, Inc., a Maryland corporation, at a
special meeting on August 30, 1978 for the purpose of
considering and taking action on the proposed Agreement of
Merger; that 20 shares of stock of said corporation were on said
date issued and outstanding, having voting power; that the
proposed Agreement of Merger was approved by the stockholder by an
affirmative vote representing all of the outstanding stock of
said corporation entitled to vote thereon, and that thereby the
Agreement of Merger was at said meeting duly adopted as the act
of the stockholder of David L. Babson Investment Fund, Inc., a
Maryland corporation.
WITNESS my hand on this 23rd day of October, 1978.
/s/ Jacqueline B. Willhite
DAVID.L. BABSON INVESTMENT FUND, INC.
CORPORATE SEAL
MARYLAND
IN WITNESS WHEREOF, David L. Babson Investment Fund, Inc.
(Delaware) and David L. Babson Investment Fund, Inc. (Maryland),
the corporations parties to the merger, have caused these
Articles of Merger to be signed in their respective corporate
names and on their behalf by their respective Vice Presidents
and witnessed or attested by their respective Assistant
Secretaries all as of the 23rd day of October, 1978.
DAVID L. BABSON INVESTMENT FUND, INC.
A Delaware Corporation
By:/s/ F. William Freeman
F. William Freeman, Vice President
Attest:
/s/ William C. Hisey
William C. Hisey, Assistant Secretary:
CORPORATE SEAL
DAVID L. BABSON INVESTMENT FUND, INC.
A Maryland Corporation
By:/s/ F. William Freeman
F. William Freeman, Vice President
Attest:
/s/ William C. Hisey
William C. Hisey, Assistant Secretary:
CORPORATE SEAL
THE UNDERSIGNED, Vice President of David L. Babson
Investment Fund, Inc., a Delaware corporation, who executed on
behalf of said corporation the foregoing Articles of Merger, of
which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing
Articles of Merger to be the corporate act of said corporation
and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein
with respect to the approval thereof are true in all material
respects, under the penalties of perjury.
/s/ F. William Freeman
F. William Freeman, Vice President
JACKSON COUNTY, MISSOURI
STATE OF MISSOURI
COUNTY OF JACKSON
BE IT REMEMBERED, that on October 23, 1978, before me, a Notary
Public duly authorized by law to take acknowledgment of deeds,
personally came F. William Freeman, Vice President of David L.
Babson Investment Fund, Inc., a Delaware corporation, who duly
signed the foregoing instrument before me and acknowledged that
such instrument as executed is the act and deed of that
corporation for which he acted, that his signing of such
instrument on behalf of such corporation is his act and deed,
and that the facts stated therein are true.
GIVEN under my hand on October 23, 1978.
/s/ Jacqueline B. Willhite
My Commission expires 2/23/79.
THE UNDERSIGNED, Vice President of David L. Babson
Investment Fund, Inc., a Maryland corporation, who executed on
behalf of said corporation the foregoing Articles of Merger, of
which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing
Articles of Merger to be the corporate act of said corporation
and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein,
with respect to the approval thereof are true in all material
respects, under the penalties of perjury.
/s/ F. William Freeman
F. William Freeman, Vice President
STATE OF MISSOURI)
COUNTY OF JACKSON)
BE IT REMEMBERED, that on October 23, 1978, before me, a
Notary Public duly authorized by law to take acknowledgment of
deeds, personally came F. William Freeman, Vice President of
David L. Babson Investment Fund, Inc., a Maryland corporation,
who duly signed the foregoing instrument before me and
acknowledged that such instrument as executed is the act and
deed of that corporation for which he acted, that his signing of
such instrument on behalf of such corporation is his act and
deed, and that the facts stated therein are true.
GIVEN under my hand on October 23, 1978.
/s/ Jacqueline B. Willhite
My commission expires 2/23/79.
JACQUELINE B. WILLHITE
NOTARY PUBLIC
JACKSON, COUNTY, MISSOURI
<PAGE>
EX99.23(a)(1)(D)
DAVID L. BABSON INVESTMENT FUND, INC.
ARTICLES OF AMENDMENT
DAVID L. BABSON INVESTMENT FUND, INC., a Maryland
Corporation having its principal office, in Baltimore City,
Maryland (hereinafter called the Corporation), hereby
certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The charter of the Corporation is hereby
amended by striking out the Second article of the Articles
of Incorporation and inserting in lieu thereof the
following: "SECOND: The name of the Corporation is DAVID L.
BABSON GROWTH FUND, INC."
SECOND: The board of directors of the Corporation,
On August 4, 1983, duly adopted a resolution in which was
set forth the foregoing amendment to the charter, declaring
that the said amendment of the charter as proposed was
advisable and directing that it be submitted for action
thereon by the stockholders of the Corporation at the
annual meeting to be held on September 22, 1983.
THIRD: Notice setting forth the said amendment of
the charter and stating that a purpose of the meeting of the
stockholders would be to take action thereon, was given, as
required by law, to all stockholders entitled to vote
thereon. The amendment of the charter of the Corporation as
hereinabove set forth was approved by the stockholders of
the Corporation at said meeting by the affirmative vote of a
majority of each class of stockholders entitled to vote
thereon.
FOURTH: The amendment of the charter of the Corporation as
hereinabove set forth has been duly advised by the board of
directors and approved by the stockholders of the Corporation.
IN WITNESS WHEREOF, DAVID L. BABSON INVESTMENT FUND, INC.
has caused these presents to be signed in its name and on
its behalf by its President and attested by its Secretary
on September 29, 1983.
DAVID L. BABSON INVESTMENT FUND, INC.
ATTEST:
/s/Jacqueline Willhite
Jacqueline Willhite,
Secretary
THE UNDERSIGNED, President of DAVID L, BABSON
INVESTMENT FUND INC., who executed on behalf of said
Corporation the foregoing Articles of Amendment, of which
this certificate is made a part hereby acknowledges, in the
name and on behalf of said corporation, the foregoing
Articles of Amendment to be the corporate act of said
corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts
set forth therein with respect to the approval thereof are
true in all material respects, under the penalties of perjury.
/s/Alfred J. Hoffman
Alfred J. Hoffman
President
EX99.23(a)(2)(A)
ARTICLES OF INCORPORATION
OF
D. L. BABSON MONEY MARKET FUND, INC.
FIRST: I, THE UNDERSIGNED, ALFRED J. HOFFMAN, WHOSE
POST-OFFICE ADDRESS IS 6701 HIGH DRIVE, SHAWNEE MISSION, KANSAS
66208, BEING AT LEAST TWENTY-ONE YEARS OF AGE, D0, UNDER AND
BY VIRTUE OF THE GENERAL LAWS OF THE STATE OF MARYLAND
AUTHORIZING THE FORMATION OF CORPORATIONS, ASSOCIATE MYSELF AS
INCORPORATOR WITH THE INTENTION OF FORMING A CORPORATION
(HEREINAFTER CALLED THE "CORPORATION").
SECOND: THE NAME OF THE CORPORATION IS D. L. BABSON MONEY
MARKET FUND, INC.
THIRD: THE PURPOSE FOR WHICH THE CORPORATION IS FORMED
IS TO ACT AS AN OPEN-END, DIVERSIFIED MANAGEMENT INVESTMENT
COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
AND TO EXERCISE AND ENJOY ALL OF THE POWERS, RIGHTS AND
PRIVILEGES GRANTED TO, OR CONFERRED UPON, CORPORATIONS OF A
SIMILAR CHARACTER BY THE GENERAL LAWS OF THE STATE OF MARYLAND
NOW OR HEREAFTER IN FORCE.
FOURTH: THE POST-OFFICE ADDRESS OF THE PRINCIPAL OFFICE
OF THE CORPORATION IN THIS STATE IS C/O THE CORPORATION TRUST
INCORPORATED FIRST MARYLAND BUILDING, 25 SOUTH CHARLES STREET,
BALTIMORE, MARYLAND 21201. THE NAME OF THE RESIDENT AGENT OF
THE CORPORATION IN THIS STATE IS THE CORPORATION TRUST
INCORPORATED, A CORPORATION OF THIS STATE, AND THE POST-OFFICE
ADDRESS OF THE RESIDENT AGENT IS FIRST MARYLAND BUILDING, 25
SOUTH CHARLES STREET, BALTIMORE, MARYLAND 21201.
FIFTH: THE TOTAL NUMBER OF SHARES OF STOCK WHICH THE
CORPORATION SMALL HAVE AUTHORITY TO ISSUE IS 1,000,000,000
SHARES OF A PAR VALUE OF ONE CENT ($0.01) PER SHARE AND AN
AGGREGATE PAR VALUE OF $10,000,000, ALL OF ONE CLASS CALLED
COMMON STOCK, EACH OF WHICH SHALL BE ENTITLED TO FULL AND
EQUAL VOTING RIGHTS.
(A) THE HOLDERS OF EACH SHARE OF STOCK OF THE
CORPORATION SHALL BE ENTITLED TO ONE VOTE FOR EACH FULL SHARE,
AND A FRACTIONAL VOTE FOR EACH FRACTIONAL SHARE OF STOCK THEN
STANDING IN HIS OR HER NAME ON THE BOOKS OF THE CORPORATION.
(B) THE BOARD OF DIRECTORS MAY FROM TIME TO TIME
DECLARE AND PAY DIVIDENDS OR DISTRIBUTIONS, IN STOCK OR IN
CASH, ON ALL ISSUED AND OUTSTANDING SHARES OF STOCK, THE
AMOUNT OF SUCH DIVIDENDS AND DISTRIBUTIONS AND THE PAYMENT OF
THEM BEING WHOLLY IN THE DISCRETION OF THE BOARD OF DIRECTORS
AND PAYABLE ONLY OUT OF EARNINGS, SURPLUS, OR OTHER LAWFULLY
AVAILABLE ASSETS BELONGING TO THE CORPORATION.
(C) EACH HOLDER OF ANY SHARE OF STOCK OF THE
CORPORATION, WHO SHALL SURRENDER HIS CERTIFICATE IN GOOD
DELIVERY FORM TO THE CORPORATION OR WHO, IF THE SHARES IN
QUESTION ARE NOT REPRESENTED BY CERTIFICATES, SHALL DELIVER TO
THE CORPORATION A WRITTEN REQUEST IN GOOD ORDER SIGNED BY THE
SHAREHOLDER, SHALL BE ENTITLED TO REQUIRE THE CORPORATION, TO
THE EXTENT THAT THE CORPORATION HAS ASSETS LAWFULLY AVAILABLE
THEREFOR AND OUT OF SUCH ASSETS, BUT NOT OTHERWISE, TO REDEEM
ALL OR ANY PART OF THE SHARES OF SUCH STOCK STANDING IN THE
NAME OF SUCH HOLDER ON THE BOOKS OF THE CORPORATION, AT THE
NET ASSET VALUE OF SUCH SHARES, DETERMINED IN THE MANNER AND
AS OF THE TIME, AND PAYABLE AS PROVIDED IN THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED. THE CORPORATION SHALL MAKE
PAYMENT FOR ANY SUCH SHARES TO BE REDEEMED AS AFORESAID, IN
CASH, OR IF IN THE OPINION OF THE BOARD OF DIRECTORS, WHICH
SHALL BE CONCLUSIVE, CONDITIONS EXIST WHICH MAKE PAYMENT
WHOLLY IN CASH UNWISE OR UNDESIRABLE, THE CORPORATION MAY MAKE
PAYMENT WHOLLY OR PARTLY IN SECURITIES OR OTHER PROPERTY
BELONGING TO THE CDRPORATION, THE VALUE OF WHICH SHALL BE
DETERMINED AND IN THE MANNER HEREINAFTER PROVIDED. THE
CORPORATION MAY, TO THE EXTENT NECESSARY, SELL OR CAUSE TO BE
SOLD, ANY SECURITIES BELONGING TO THE CORPORATION TO PROVIDE
CASH FOR SUCH REDEMPTION BY IT OF THE SHARES OF THE
CORPORATION.
(1) THE BOARD OF DIRECTORS OF THE CORPORATION
MAY, IN ACCORDANCE WITH THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED, SUSPEND THE RIGHT OF THE HOLDERS OF ANY SHARES OF
STOCK OF THE CORPORATION TO REQUIRE'THE CORPORATION TO REDEEM
SUCH SHARES.
(2) THE BOARD OF~DIRECTORS, IN THE ECONOMIC
BEST INTERESTS OF THE CORPORATION AND IN ORDER TO REDUCE
DISPROPORTIONATELY BURDENSOME EXPENSES IN SERVICING
STOCKHOLDER ACCOUNTS MAY, FROM TIME TO TIME, ESTABLISH UNIFORM
STANDARDS WITH RESPECT TO THE MINIMUM VALUE OF A STOCKHOLDER
ACCOUNT OR A MINIMUM INVESTMENT WHICH MAY BE MADE BY A
STOCKHOLDER. THE BOARD OF DIRECTORS, BY RESOLUTION AND
WITHOUT: THE VOTE OR CONSENT OF STOCKHOLDERS, MAY REQUIRE THAT
THE AGGREGATE NET ASSET VALUE OF A STOCKHOLDER ACCOUNT SHALL
NOT BE LESS THAN THE MINIMUM INITIAL INVESTMENT REQUIREMENT OF
THE CORPORATION AT THE TIME OF THE RESOLUTION. THE RESOLUTION
MAY AUTHORIZE THE CORPORATION TO CLOSE THOSE STOCKHOLDER
ACCOUNTS NOT MEETING THE SPECIFIED MINIMUM STANDARD OF VALUE
BY REDEEMING ALL OF THE SHARES IN SUCH ACCOUNTS, PROVIDED THAT
THERE IS MAILED TO EACH AFFECTED STOCKHOLDER ACCOUNT, AT LEAST
SIXTY (60) DAYS PRIOR TO THE PLANNED REDEMPTION DATE, A NOTICE
SETTING FORTH THE MINIMUM ACCOUNT SIZE REQUIREMENT AND THE
DATE ON WHICH THE ACCOUNT WILL BE CLOSED IF THE MINIMUM SIZE
REQUIREMENT IS NOT MET PRIOR TO SAID CLOSING: DATE.
(D) THE AGGREGATE NET ASSET VALUE OF THE CORPORATION
SHALL BE DETERMINED IN ACCORDANCE WITH THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED, AND WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, BY DIVIDING THE TOTAL VALUE OF ITS
ASSETS LESS ANY LIABILITIES, BY ITS TOTAL OUTSTANDING SHARES.
SIXTH: THE SHARES OF STOCK OF THE CORPORATION MAY BE
ISSUED TO SUCH PERSONS AND AT SUCH PRICES FROM TIME TO TIME AS
THE BOARD OF DIRECTORS MAY DETERMINE. SUCH ISSUANCE SHALL BE
ON A NON-ASSESSABLE BASIS. NO HOLDER OF SHARES OF STOCK SHALL
HAVE PREEMPTIVE RIGHTS, AND THE CORPORATION SHALL HAVE THE
RIGHT TO ISSUE AND SELL TO ANY PERSON OR PERSONS ANY SHARES OF
ITS STOCK OR ANY OPTION RIGHTS EXERCISABLE FOR, OR SECURITIES
CONVERTIBLE INTO SHARES OF ITS STOCK WITHOUT FIRST OFFERING
SUCH SHARES, RIGHTS OR SECURITIES TO THE HOLDERS OF ANY
SHARES.
SEVENTH: THE NUMBER OF DIRECTORS OF THE CORPORATION AND
THEIR TERMS OF OFFICE SHALL BE DETERMINED FROM TIME TO TIME BY
THE DIRECTORS PURSUANT TO THE TO THE BY-LAWS OF THE
CORPORATION. SUCH NUMBER INITIALLY SHALL BE SEVEN (7) BUT
SHALL NEVER BE LESS THAN THREE, THE NAMES OF THE INITIAL
DIRECTORS ARE:
F. WILLIAM FREEMAN
STEPHEN W. HARRIS
WHO SHALL SERVE UNTIL THE 1980 ANNUAL MEETING OF STOCKHOLDERS9
OR UNTIL THEIR SUCCESSORS SHALL HAVE BEEN DULY ELECTED AND
SHALL HAVE QUALIFIED;
WILLIAM J. SMITH
LEONARD W. JOHNSON
WHO SHALL SERVE UNTIL THE 1981 ANNUAL MEETING OF STOCKHOLDERS,
OR UNTIL THEIR SUCCESSORS SHALL HAVE BEEN DULY ELECTED AND
SHALL HAVE QUALIFIED:
ALFRED J HOFFMAN
JAMES W. HOLMAN
FRANCIS C. ROOD
WHO SHALL SERVE UNTIL THE 1982 ANNUAL MEETING OF STOCKHOLDERS,
OR: UNTIL THEIR SUCCESSORS SHALL HAVE BEEN DULY ELECTED AND
SHALL HAVE QUALIFIED:
(A) IF A VACANCY OCCURS ON THE BOARD OF DIRECTORS BY
REASON OF DEATH, RESIGNATION OR OTHERWISE, THE BOARD OF
DIRECTORS MAY FILL SUCH VACANCY FOR THE REMAINDER OF THE
UNEXPIRED TERM BY MAJORITY VOTE OF THE REMAINING DIRECTORS;
PROVIDED THAT AFTER FILLING ANY SUCH VACANCY, AT LEAST TWO
THIRDS OF THE DIRECTORS SHALL HAVE BEEN ELECTED BY THE
STOCKHOLDERS, AND PROVIDED FURTHER THAT IF AT ANY TIME LESS
THAN A MAJORITY OF THE DIRECTORS THEN HOLDING OFFICE WERE
ELECTED BY THE STOCKHOLDERS, A STOCKHOLDERS' MEETING SHALL BE
CALLED AS PROMPTLY AS POSSIBLE AND, IN ANY EVENT, WITHIN SIXTY
DAYS, FOR THE PURPOSE OF ELECTING DIRECTORS TO FILL EXISTING
VACANCIES.
EIGHTH: THE CORPORATION IS EXPRESSLY EMPOWERED AS
FOLLOWS:
(A) THE CORPORATION MAY ENTER INTO A WRITTEN
CONTRACT OR CONTRACTS WITH ANY PERSON, INCLUDING ANY FIRM,
CORPORATION, TRUST OR ASSOCIATION IN WHICH ANY OFFICER, OTHER
EMPLOYEE, DIRECTOR OR STOCKHOLDER OF THIS CORPORATION MAY BE
INTERESTED, PROVIDING FOR A DELEGATION OF THE MANAGEMENT OF
ALL OR PART OF THIS CORPORATION'S SECURITIES PORTFOLIO AND
ALSO FOR THE DELEGATION OF THE PERFORMANCE OF ADMINISTRATIVE
CORPORATE FUNCTIONS, SUBJECT ALWAYS TO THE DIRECTION OF THE
BOARD OF DIRECTORS OF THIS CORPORATION, THE COMPENSATION
PAYABLE BY THIS CORPORATION UNDER SUCH CONTRACTS SHALL BE SUCH
AS IS DEEMED FAIR AND EQUITABLE TO BOTH PARTIES BY THE SAID
BOARD OF DIRECTORS. EACH SUCH CONTRACT SHALL IN ALL RESPECTS
BE CONSISTENT WITH AND SUBJECT TO THE REQUIREMENTS OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AS THEN IN EFFECT
AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION OR
ANY SUCCEEDING GOVERNMENTAL AUTHORITY PROMULGATED THEREUNDER,
(B) THE CORPORATION MAY APPOINT ONE OR MORE
DISTRIBUTORS OR AGENTS OR BOTH FOR THE SALE OF THE SHARES OF
THE CORPORATION, MAY ALLOW SUCH PERSON OR PERSONS A COMMISSION
ON THE SALE OF SUCH SHARES, AND MAY ENTER INTO SUCH CONTRACT
OR CONTRACTS WITH SUCH PERSON OR PERSONS AS THE BOARD OF
DIRECTORS OF THIS CORPORATION IN ITS DISCRETION MAY DEEM
REASONABLE AND PROPER. ANY SUCH CONTRACT OR CONTRACTS FOR.THE
SALE OF THE SHARES OF THIS CORPORATION MAY BE MADE WITH ANY
PERSON EVEN THOUGH SUCH PERSON MAY BE AN OFFICER, OTHER
EMPLOYEE, DIRECTOR OR STOCKHOLDER OF THIS CORPORATION OR A
CORPORATION, PARTNERSHIP, TRUST OR ASSOCIATION IN WHICH ANY
SUCH OFFICER, OTHER EMPLOYEE, DIRECTOR OR STOCKHOLDER MAY BE
INTERESTED, OR SUCH PERSON MAY BE THE SAME AS THAT PERSON
RETAINED PURSUANT TO THE POWERS GRANTED IN SECTION (A) OF THIS
ARTICLE EIGHTH. EACH SUCH CONTRACT SHALL IN ALL RESPECTS BE
CONSISTENT WITH AND SUBJECT TO THE REQUIREMENTS OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENOED, AS THEN IN EFFECT
AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION OR
ANY SUCCEEDING GOVERNMENTAL AUTHORITY PROMULGATED THEREUNDER.
(C) THE CORPORATION MAY EMPLOY SUCH CUSTODIAN OR
CUSTODIANS FOR THE SAFEKEEPING OF THE PROPERTY OF THE
CORPORATION AND OF ITS SHARES, SUCH DIVIDEND DISBURSING AGENT
OR AGENTS, AND SUCH TRANSFER AGENT OR AGENTS AND REGISTRAR OR
REGISTRARS FOR ITS SHARES, AND MAY MAKE AND PERFORM SUCH
CONTRACTS FOR THE AFORESAID PURPOSES AS IN THE OPINION OF THE
BOARD OF DIRECTORS OF THIS CORPORATION MAY BE REASONABLE,
NECESSARY OR PROPER FOR THE CONDUCT OF THE AFFAIRS OF THE
CORPORATION, AND MAY PAY THE FEES AND DISBURSEMENTS OF SUCH
CUSTODIANS, DIVIDEND DISBURSING AGENTS, TRANSFER AGENTS, AND
REGISTRARS OUT OF THE INCOME AND/OR ANY OTHER PROPERTY OF THE
CORPORATION, NOTWITHSTANDING ANY OTHER PROVISIONS OF THESE
ARTICLES OF INCORPORATION OR THE BY"LAWS OF THE CORPORATION,
THE BOARD OF DIRECTORS MAY CAUSE ANY OR ALL OF THE PROPERTY OF
THE CORPORATION TO BE'TRANSFERRED TO, OR TO BE ACQUIRED AND
HELD IN THE NAME OF, A CUSTODIAN SO APPOINTED OR ANY NOMINEES
OF THIS CORPORATION OR NOMINEE OR NOMINEES OF SUCH CUSTODIAN
SATISFACTORY TO THE BOARD OF DIRECTORS OF THIS CORPORATION,
(D) THE SAME PERSON, PARTNERSHIP (GENERAL OR
LIMITED), ASSOCIATION, TRUST OR CORPORATION MAY BE EMPLOYED IN
ANY MULTIPLE CAPACITY UNDER SUBSECTIONS (A), (B) AND (C) OF
THIS ARTICLE EIGHTH AND MAY RECEIVE COMPENSATION FROM THE
CORPORATION IN AS MANY CAPACITIES IN WHICH SUCH PERSON,
PARTNERSHIP (GENERAL OR LIMITED), ASSOCIATION, TRUST OR
CORPORATION SHALL SERVE THE CORPORATION.
NINTH: (A) THE CORPORATION, SHALL INDEMNIFY ANY PERSON
WHO WAS OR IS A PARTY, OR IS THREATENED TO BE MADE A PARTY, TO
ANY THREATENED, PENDING OR COMPLETED ACTION, SUIT OR
PROCEEDING, WHETHER CIVIL, CRIMINAL, ADMINISTRATIVE OR
INVESTIGATIVE (OTHER THAN AN ACTION BY OR IN RIGHT OF THE
CORPORATION), BY REASON OF THE FACT THAT HE IS OR WAS A
DIRECTOR OR OFFICER OF THE CORPORATION, OR IS OR WAS SERVING
AT THE REQUEST OF THE CORPORATION AS A DIRECTOR OR OFFICER OF
ANOTHER CORPORATION, PARTNERSHIP, JOINT VENTURE, TRUST,
ASSOCIATION OR OTHER ENTERPRISE, AGAINST EXPENSES (INCLUDING
ATTORNEYS' FEES), JUDGEMENTS, FINES AND AMOUNTS PAID IN
SETTLEMENT ACTUALLY AND REASONABLY INCURRED BY HIM IN
CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IF HE ACTED IN
GOOD FAITH AND IN A MANNER HE REASONABLY BELIEVED TO BE IN OR
NOT OPPOSED'TO THE BEST INTERESTS OF THE CORPORATION, AND,
WITH RESPECT TO ANY CRIMINAL ACTION OR PROCEEDING, HAS NO
REASONABLE CAUSE TO BELIEVE HIS CONDUCT WAS UNLAWFUL, THE
TERMINATION OF ANY ACTION, SUIT OR PROCEEDING BY JUDGEMENT,
ORDER, SETTLEMENT OR CONVICTION, OR UPON A PLEA OF NOLO
CONTENDERE OR ITS EQUIVALENT, SHALL NOT, OF ITSELF, CREATE A
PRESUMPTION THAT THE PERSON DID NOT ACT IN GOOD FAITH AND IN A
MANNER WHICH HE REASONABLY BELIEVED TO BE IN, OR NOT OPPOSED
TO, THE BEST INTERESTS OF THE CORPORATION, AND, WITH RESPECT
TO ANY CRIMINAL ACTION OR PROCEEDING, DID NOT HAVE REASONABLE
CAUSE TO BELIEVE THAT HIS CONDUCT WAS UNLAWFUL
(B) THE CORPORATION SHALL INDEMNIFY ANY PERSON
WHO WAS OR IS A PARTY, OR IS THREATENED TO BE MADE A PARTY, TO
ANY THREATENED OR COMPLETED ACTION, SUIT OR PROCEEDING BY OR
IN THE RIGHT OF THE CORPORATION TO PROCURE A JUDGEMENT IN ITS
FAVOR BY REASON OF THE FACT THAT HE IS OR WAS A DIRECTOR OR
OFFICER OF THE CORPORATION9 OR IS OR WAS SERVING AT THE
REQUEST OF, THE CORPORATION AS A DIRECTOR: OR OFFICER OF
ANOTHER CORPORATION, PARTNERSHIP, TRUST, JOINT VENTURE,
ASSOCIATION OR OTHER ENTERPRISE AGAINST EXPENSES (INCLUDING
ATTORNEYS' FEES) ACTUALLY AND REASONABLY INCURRED BY HIM IN
CONNECTION WITH THE DEFENSE OR SETTLEMENT OF SUCH ACTION OR
SUIT IF HE ACTED IN GOOD FAITH AND IN A MANNER HE REASONABLY
BELIEVED TO BE IN OR NOT OPPOSED TO THE BEST INTERESTS OF THE
CORPDRATION, EXCEPT THAT NO SUCH INDEMNIFICATION SHALL BE MADE
IN RESPECT OF ANY CLAIM, ISSUE OR MATTER AS TO WHICH SUCH
PERSON SHALL HAVE BEEN ADJUDGED TO BE LIABLE FOR NEGLIGENCE
OR,MISCONDUCT IN THE PERFORMANCE OF HIS DUTY TO THE
CORPORATION, UNLESS AND ONLY TO THE EXTENT THAT A COURT SHALL
DETERMINE UPON APPLICATION THAT, DESPITE THE ADJUDICATION OF
LIABILITY BUT IN VIEW OF ALL THE CIRCUMSTANCES OF THE CASE,
SUCH PERSON IS FAIRLY AND REASONABLY ENTITLED TO INDEMNITY FOR
SUCH EXPENSES WHICH THE COURT SHALL DEEM PROPER.
(C) TO THE EXTENT THAT A DIRECTOR OR OFFICER OF
THE CORPORATION HAS BEEN SUCCESSFUL ON THE MERITS OR OTHERWISE
IN DEFENSE OF ANY ACTION, SUIT OR PROCEEDING REFERRED TO IN
SUBSECTIONS (A) AND (B), OR IN DEFENSE OF ANY CLAIM, ISSUE OR
MATTER THEREIN, HE SHALL BE INDEMNIFIED AGAINST EXPENSES
(INCLUDING ATTORNEYS' FEES) ACTUALLY AND REASONABLY INCURRED
BY HIM IN CONNECTION THEREWITH.
(D) ANY INDEMNIFICATION UNDER SUBSECTIONS (A) AND
(B) (UNLESS ORDERED BY A COURT OF COMPETENT JURISDICTION)
SHALL BE MADE BY THE CORPORATION ONLY AS AUTHORIZED IN THE
SPECIFIC CASE UPON A DETERMINATION THAT INDEMNIFICATION OF THE
DIRECTOR OR OFFICER IS PROPER IN THE CIRCUMSTANCES BECAUSE HE
HAS MET THE APPLICABLE STANDARD OF CONDUCT SET FORTH IN
SUBSECTIONS (A) AND (B) OF THIS ARTICLE NINTH. SUCH
DETERMINATION SHALL BE MADE BY THE BOARD OF DIRECTORS BY A
MAJORITY VOTE OF A QUORUM CONSISTING OF DIRECTORS WHO WERE NOT
PARTIES TO SUCH ACTION, SUIT, PROCEEDING, OR IF SUCH A QUORUM
IS NOT OBTAINABLE, OR EVEN IF OBTAINABLE, A QUORUM OF
DIRECTORS WHO ARE NOT "INTERESTED PERSONS"' AS DEFINED IN THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED, SO DIRECTS, BY
INDEPENDENT LEGAL COUNSEL IN A WRITTEN OPINION, OR IF SUCH
WRITTEN OPINION IS NOT OBTAINABLE, BY VOTE OF THE STOCKHOLDERS
AT THE ANNUAL MEETING OR A SPECIAL MEETING CALLED FOR THAT
PURPOSE.
(E) EXPENSES INCURRED IN DEFENDING A CIVIL OR
CRIMINAL ACTION, SUIT OR PROCEEDING MAY BE PAID BY THE
CORPORATION IN ADVANCE OF~THE FINAL DISPOSITION OF SUCH
ACTION, SUIT OR PROCEEDING AS AUTHORIZED BY THE BOARD OF
DIRECTORS IN THE SPECIFIC CASE UPON RECEIPT OF ANY UNDERTAKING
BY OR ON BEHALF OF THE DIRECTOR OR OFFICER TO.REPAY SUCH
AMOUNT UNLESS IT SHALL ULTIMATELY BE DETERMINED THAT HE.IS
ENTITLED TO BE INDEMNIFIED BY THE CORPORATION AS AUTHORIZED IN
THIS ARTICLE NINTH.
(F) THE INDEMNIFICATION PROVIDED BY THIS ARTICLE
NINTH SHALL NOT BE DEEMED EXCLUSIVE OF ANY OTHER RIGHTS TO
WHICH THOSE SEEKING INDEMNIFICATION MAY BE ENTITLED UNDER ANY
BY-LAW, AGREEMENT9 VOTE OF STOCKHOLDERS OR DIRECTORS WHO ARE
NOT "INTERESTED PERSONS" AS DEFINED IN THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED, OR OTHERWISE, BOTH AS TO ACTION IN
HIS OFFICIAL CAPACITY AND AS TO ACTION IN ANOTHER CAPACITY
WHILE HOLDING SUCH OFFICE, AND SHALL CONTINUE AS TO A PERSON
WHO HAS CEASED TO BE A DIRECTOR OR OFFICER AND SHALL INURE TO
THE BENEFIT OF THE HEIRS, EXECUTORS AND ADMINISTRATORS OF SUCH
PERSON.
(G) THE CORPORATION MAY PURCHASE AND MAINTAIN
INSURANCE ON ITS BEHALF AND ON BEHALF OF ANY PERSON WHO IS OR
WAS A DIRECTOR OR OFFICER OF THE CORPORATION, OR IS OR WAS
SERVING AT THE REQUEST OF THE CORPORATION AS A DIRECTOR OR
OFFICER OF ANOTHER CORPORATION, PARTNERSHIP, TRUST, JOINT
VENTURE. ASSOCIATION OR OTHER ENTERPRISE AGAINST ANY LIABILITY
ASSERTED AGAINST HIM AND INCURRED BY HIM IN ANY SUCH CAPACITY,
OR ARISING OUT OF HIS STATUS AS SUCH, WHETHER OR NOT THE
CORPORATION WOULD HAVE THE POWER TO INDEMNIFY HIM AGAINST SUCH
LIABILITY UNDER THE PROVISIONS OF THIS ARTICLE NINTH.
(H) ANYTHING TO THE CONTRARY IN THE FOREGOING
CLAUSES (A) THROUGH (G) OF THIS ARTICLE NINTH NOTWITHSTANDING,
NO DIRECTOR OR OFFICER SHALL BE INDEMNIFIED AGAINST ANY
LIABILITY TO THE CORPORATION OR TO ITS SECURITY HOLDERS TO
WHICH HE WOULD OTHERWISE BE SUBJECT BY REASON OF WILLFUL
MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE OR RECKLESS DISREGARD
OF THE DUTIES INVOLVED IN THE CONDUCT OF HIS OFFICE.
TENTH: IN FURTHERANCE, AND NOT IN LIMITATION, OF THE
POWERS CONFERRED BY THE LAWS OF THE STATE OF MARYLAND, THE
BOARD OF DIRECTORS IS EXPRESSLY AUTHORIZED:
(A) TO MAKE, ALTER OR REPEAL THE BY-LAWS OF THE
CORPORATION, EXCEPT WHERE SUCH POWER IS RESERVED BY THE BY-
LAWS TO THE STOCKHOLDERS, AND EXCEPT AS OTHERWISE REQUIRED BY
THE INVESTMENT COMPANY ACT'OF 1940, AS AMENDED.
(B) FROM TIME TO TIME TO DETERMINE WHETHER AND TO
WHAT EXTENT AND AT WHAT TIMES AND PLACES AND UNDER WHAT
CONDITIONS AND REGULATIONS THE BOOKS AND ACCOUNTS.OF THE
CORPORATION, OR ANY OF THEM OTHER THAN THE STOCK LEDGER, SHALL
BE OPEN TO THE INSPECTION OF THE STOCKHOLDERS, AND NO
STOCKHOLDER SHALL HAVE ANY RIGHT TO INSPECT ANY ACCOUNT OR
BOOK OR DOCUMENT OF THE CORPORATION, EXCEPT AS CONFERRED BY
LAW OR AUTHORIZED BY RESOLUTION OF THE BOARD OF DIRECTORS OR
OF THE STOCKHOLDERS.
(C) TO AUTHORIZE AND ISSUE OBLIGATIONS OF THE
CORPORATION, SECURED AND UNSECURED, WITHOUT THE ASSENT OR VOTE
OF THE STOCKHOLDERS, AS THE BOARD OF DIRECTORS MAY DETERMINE,
AND TO AUTHORIZE AND CAUSE TO BE EXECUTED MORTGAGES AND LIENS
UPON THE PROPERTY OF THE CORPORATION, REAL AND/OR PERSONAL,
BUT ONLY TO THE EXTENT PERMITTED BY THE FUNDAMENTAL POLICIES
OF'THE CORPORATION SET OUT IN ITS REGISTRATION STATEMENT FILED
WITH THE FEDERAL SECURITIES AND EXCHANGE COMMISSION OR ANY
SUCCEEDING GOVERNMENTAL AUTHORITY, PURSUANT TO THE INVESTMENT
COMPANY ACT OF 1940. AS AMENDED.
(D) IN AUDITION TO THE POWERS AND AUTHORITIES
GRANTED HEREIN AND BY STATUTE EXPRESSLY CONFERRED UPON IT, THE
BOARD OF DIRECTORS IS AUTHORIZED TO EXERCISE ALL SUCH POWERS
AND DO ALL SUCH ACTS AND THINGS AS MAY BE EXERCISED OR DONE BY
THE CORPORATION, SUBJECT, NEVERTHELESS, TO THE PROVISIONS OF
MARYLAND LAW, THESE ARTICLES OF INCORPORATION, AND THE BY-LAWS
OF THE CORPORATION.
ELEVENTH: THE BOOKS OF THE CORPORATION MAY BE KEPT
(SUBJECT TO ANY PROVISIONS OF MARYLAND LAW) OUTSIDE THE STATE
OF MARYLAND AT SUCH PLACE OR PLACES AS MAY BE DESIGNATED FROM
TIME TO TIME BY SUCH BOARD OF DIRECTORS OR IN THE BY-LAWS OF
THE CORPORATION. ELECTIONS OF DIRECTORS NEED NOT BE BY BALLOT
UNLESS THE BY-LAWS OF THE CORPORATION SHALL SO PROVIDE.
TWELFTH: THE CORPORATION RESERVES THE RIGHT TO AMEND,
ALTER, CHANGE OR REPEAL ANY PROVISION CONTAINED IN THESE
ARTICLES OF INCORPORATION, IN THE MANNER NOW OR HEREAFTER
PRESCRIBED BY STATUTE, AND ALL RIGHTS CONFERRED UPON
STOCKHOLDERS HEREIN ARE GRANTED SUBJECT TO THIS RESERVATION.
THIRTEENTH: NOTWITHSTANDING ANY PROVISION OF MARYLAND
LAW REQUIRING MORE THAN A MAJORITY VOTE UF, THE COMMON STOCK IN
CONNECTION WITH ANY CORPORATE ACTION INCLUDING, BUT NOT
LIMITED TO, AMENDMENT OF THESE ARTICLES OF INCORPORATION,
UNLESS OTHERWISE PROVIDED IN THESE ARTICLES OF INCORPORATION
THE CORPORATION MAY TAKE OR AUTHORIZE SUCH ACTION UPON THE
FAVORABLE VOTE OF THE HOLDERS OF A MAJORITY OF THE OUTSTANDING
SHARES OF COMMON STOCK.
FOURTEENTH: THE DURATION OF THE CORPORATION SHALL BE
PERPETUAL.
IN WITNESS WHEREOF, THE UNDERSIGNED INCORPORATOR OF THE
D. L. BABSON MONEY MARKET FUND, INC. WHO EXECUTED THE
FOREGOING ARTICLES OF INCORPORATION HEREBY ACKNOWLEDGES THE
SAME TO BE HIS ACT AND FURTHER ACKNOWLEDGES THAT TO THE BEST
OF HIS KNOWLEDGE THE MATTERS AND FACTS SET FORTH HEREIN ARE
TRUE IN ALL MATERIAL RESPECTS UNDER THE PENALTIES OF PERJURY.
DATED THE 11TH DAY OF OCTOBER, 1979.
/s/ALFRED J. HOFFMAN
<PAGE>
EX99.23(a)(2)(B)
D.L. BABSON MONEY MARKET FUND, INC.
ARTICLES OF AMENDMENT
The D. L. BABSON MONEY MARKET, INC., a Maryland
Corporation having its principal office in Baltimore City,
Maryland (hereinafter called the Corporation), hereby certifies
to the State Department of Assessments and Taxation of Maryland,
that:
FIRST: The charter of the Corporation is hereby amended by
striking out "ARTICLE FIFTH" of the Articles of incorporation
which reads as follows:
FIFTH: THE TOTAL NUMBER OF SHARES OF STOCK
WHICH THE CORPORATION SHALL HAVE AUTHORITY TO
ISSUE IS 1,000,000,000 SHARES OF A PAR VALUE OF
ONE CENT ($0.01) PER SHARE AND AN AGGREGATE PAR
VALUE OF $10,000,000, ALL OF ONE CLASS CALLED
COMMON STOCK, EACH OF WHICH SHALL BE ENTITLED TO
FULL AND EQUAL VOTING RIGHTS.
(A) THE HOLDERS OF EACH SHARE OF STOCK
OF THE CORPORATION SHALL BE ENTITLED TO ONE VOTE
FOR EACH FULL SHARE, AND A FRACTIONAL VOTE FOR
EACH FRACTIONAL SHARE OF STOCK THEN STANDING IN
HIS OR HER NAME ON THE BOOKS OF THE CORPORATION.
(B) THE BOARD OF DIRECTORS MAY FROM
TIME TO TIME DECLARE AND PAY DIVIDENDS OR
DISTRIBUTIONS, IN STOCK OR IN CASH, ON ALL ISSUED
AND OUTSTANDING SHARES OF STOCKO THE AMOUNT OF
SUCH DIVIDENDS AND DISTRIBUTIONS AND THE PAYMENT
OF THEM BEING WHOLLY IN THE DISCRETION OF THE
BOARD OF DIRECTORS AND PAYABLE ONLY OUT OF
EARNINGS, SURPLUS, OR OTHER LAWFULLY AVAILABLE
ASSETS BELONGING TO THE CORPORATION.
(C) EACH HOLDER OF ANY SHARE
OF STOCK OF THE CORPORATION9 WHO SHALL SURRENDER
HIS CERTIFICATE IN GOOD DELIVERY FORM TO THE
CORPORATION OR WHO, IF THE SHARES IN QUESTION ARE
NOT REPRESENTED BY CERTIFICATES, SHALL DELIVER TO
THE CORPORATION A WRITTEN REQUEST IN GOOD ORDER
SIGNED BY THE SHAREHOLDER, SHALL BE ENTITLED TO
REQUIRE THE CORPORATION, TO THE EXTENT THAT THE
CORPORATION HAS ASSETS LAWFULLY AVAILABLE
THEREFOR AND OUT OF SUCH ASSETS, BUT NOT
OTHERWISE, TO REDEEM ALL OR ANY PART OF THE
SHARES OF SUCH STOCK STANDING IN THE NAME OF SUCH
HOLDER ON THE BOOKS OF THE CORPORATION, AT THE
NET ASSET VALUE OF SUCH SHARES, DETERMINED IN THE
MANNER AND AS OF THE TIME, AND PAYABLE AS
PROVIDED IN THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED. THE CORPORATION SHALL MAKE PAYMENT
FOR ANY SUCH SHARES TO BE REDEEMED AS AFORESAID,
IN CASH, OR IF IN THE OPINION OF THE BOARD OF
DIRECTORS, WHICH SHALL BE CONCLUSIVE, CONDITIONS
EXIST WHICH MAKE PAYMENT WHOLLY IN CASH UNWISE OR
UNDESIRABLE, THE CORPORATION MAY MAKE PAYMENT
WHOLLY OR PARTLY IN SECURITIES OR OTHER PROPERTY
BELONGING TO THE CORPORATION.THE VALUE OF WHICH
SHALL BE DETERMINED AND IN THE MANNER HEREINAFTER
PROVIDED. THE CORPORATION MAY, TO THE EXTENT
NECESSARY, SELL OR CAUSE TO BE SOLD, ANY
SECURITIES BELONGING TO THE CORPORATION TO
PROVIDE CASH FOR SUCH REDEMPTION BY IT OF THE
SHARES OF THE CORPORATION.
(1) THE BOARD OF DIERECTORS OF THE
CORPORATION MAY, IN ACCORDANCE WITH THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
SUSPEND THE RIGHT OF THE HOLDERS OF ANY SHARES OF
STOCK OF THE CORPORATION TO REQUIRE THE
CORPORATION TO REDEEM SUCH SHARES.
(2) THE BOARD OF DIRECTORS, IN THE
ECONOMIC BEST INTERESTS OF THE CORPORATION AND IN
ORDER TO REDUCE DISPROPORTIONATELY BURDENSOME
EXPENSES IN SERVICING STOCKHOLDER ACCOUNTS MAY,
FROM TIME TO TIME, ESTABLISH UNIFORM STANDARDS
WITH RESPECT TO THE MINIMUM VALUE OF A
STOCKHOLDER ACCOUNT OR A MINIMUM INVESTMENT WHICH
MAY BE MADE BY A STOCKHOLDER. THE BOARD OF
DIRECTORS, BY RESOLUTION AND WITHOUT THE VOTE OR
CONSENT OF STOCKHOLDERS, MAY REQUIRE THAT THE
AGGREGATE NET ASSET VALUE OF A STOCKHOLDER
ACCOUNT SHALL NOT BE LESS THAN THE MINIMUM
INITIAL INVESTMENT REQUIREMENT OF THE CORPORATION
AT THE TIME OF THE RESOLUTION. THE RESOLUTION MAY
AUTHORIZE THE CORPORATION TO CLOSE THOSE
STOCKHOLDER ACCOUNTS NOT MEETING THE SPECIFIED
MINIMUM STANDARD OF VALUE BY REDEEMING ALL OF THE
SHARES IN SUCH ACCOUNTS, PROVIDED THAT THERE IS
MAILED TO EACH AFFECTED STOCKHOLDER ACCOUNT, AT
LEAST SIXTY (60) DAYS PRIOR TO THE PLANNED
REDEMPTION DATE, A NOTICE SETTING FORTH THE
MINIMUM ACCOUNT SIZE REQUIREMENT AND THE DATE ON
WHICH THE ACCOUNT WILL BE CLOSED IF THE MINIMUM
SIZE REQUIREMENT IS NOT MET PRIOR TO SAID CLOSING
DATE.
(D) THE AGGREGATE NET ASSET VALUE OF
THE CORPORATION SHALL BE DETERMINED IN ACCORDANCE
WITH THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED, AND WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, BY DIVIDING THE TOTAL VALUE OF ITS
ASSETS LESS ANY LIABILITIES, BY ITS TOTAL
OUTSTANDING SHARES.
and inserting in lieu thereof the following:
FIFTH: THE TOTAL NUMBER OF SHARES OF ALL
CLASSES OF STOCK WHICH THE CORPORATION SHALL HAVE
AUTHORITY TO ISSUE IS 2,OOO,OOO,OOO SHARES OF A
PAR VALUE OF ONE CENT ($0.01) PER SHARE AND AN
AGGREGATE PAR VALUE OF $20,000,000. THE NUMBER OF
THE SHARES OF STOCK OF EACH CLASS IS SUCH NUMBER,
IF ANY, OF SHARES OF UNISSUED STOCK AS IS
CLASSIFIED OR RECLASSIFIED INTO SUCH CLASS BY THE
CORPORATION'S BOARD OF DIRECTORS PURSUANT TO THE
AUTHORITY CONTAINED IN SECTION 2-105 OF THE
MARYLAND GENERAL CORPORATION LAW AS FILED BY THE
CORPORATION AS ARTICLES SUPPLEMENTARY UNDER
SECTION 2-108 OF THE MARYLAND GENERAL CORPORATION
LAW (OR ANY SUCCESSOR PROVISIONS). THE
DESIGNATION OF ALL OF THE ISSUED SHARES OF STOCK
OF THE CORPORATION IS HEREBY CHANGED TO "CAPITAL
STOCK". THE BOARD OF DIRECTORS OF THE CORPORATION
SHALL HAVE THE POWER TO CLASSIFY OR RECLASSIFY
UNISSUED SHARES INTO ONE OR MORE CLASSES WHICH
TOGETHER WITH THE ISSUED SHARES OF STOCK OF THE
CORPORATION SHALL HAVE SUCH DESIGNATIONS AS THE
BOARD MAY DETERMINE AND (SUBJECT TO ANY
APPLICABLE RULE, REGULATION OR ORDER OF THE
SECURITIES AND EXCHANGE COMMISSION OR OTHER
APPLICABLE LAW OR REGULATION) SHALL HAVE SUCH
PREFERENCES, CONVERSION OR OTHER RIGHTS, VOTING
POWERS, RESTRICTIONS, LIMITATIONS AS TO
DIVIDENDS, QUALIFICATIONS, TERMS AND CONDITIONS
OF REDEMPTION AND OTHER CHARACTERISTICS AS THE
BOARD MAY DETERMINE (OR IN THE ABSENCE OF
CONTRARY DETERMINATION, SUCH AS SET FORTH
HEREIN). AT ANY TIME WHEN THERE ARE NO SHARES
OUTSTANDING OR SUBSCRIBED FOR A PARTICULAR CLASS
PREVIOUSLY ESTABLISHED AND DESIGNATED BY THE
BOARD OF DIRECTORS, THE CLASS MAY BE LIQUIDATED
BY SIMILAR MEANS. IF THE BOARD SO DETERMINES, ONE
OR MORE CLASSES OF STOCK MAY BE TREATED FOR ALL
PURPOSES OTHER THAN DIVIDENDS AS IF ALL SHARES OF
SUCH CLASSES WERE SHARES OF ONE CLASS. THE
DIVIDENDS PAYABLE TO THE HOLDERS OF ANY CLASS
(SUBJECT TO ANY APPLICABLE RULE, REGULATION OR
ORDER OF THE SECURITIES AND EXCHANGE COMMISSION
OR ANY OTHER APPLICABLE LAW OR REGULATION) SHALL
BE DETERMINED BY THE BOARD AND NEED NOT BE
INDIVIDUALLY DECLARED, BUT MAY BE DECLARED AND
PAID IN ACCORDANCE WITH A FORMULA ADOPTED BY THE
BOARD. EACH SHARE OF A CLASS SHALL HAVE EQUAL
RIGHTS WITH EACH OTHER SHARE OF THAT CLASS OF
STOCK WITH RESPECT TO THE ASSETS OF THE
CORPORATION PERTAINING TO THAT CLASS. ANY
FRACTIONAL SHARES OFCAPITAL STOCK ISSUED BY THE
CORPORATION SHALL HAVE PROPORTIONATELY, ALL THE
RIGHTS OF FULL SHARES.EXCEPT AS OTHERWISE
PROVIDED HEREIN, ALL REFERENCES IN THESE ARTICLES
OF INCORPORATION TO CAPITAL STOCK OR CLASS OF
STOCK SHALL APPLY WITHOUT DISCRIMINATION TO THE
SHARES OF EACH CLASS OF STOCK.
(A) THE HOLDERS OF EACH SHARE OF STOCK
OF THE CORPORATION SHALL BE ENTITLED TO ONE VOTE
FOR EACH FULL SHARE, AND A FRACTIONAL VOTE FOR
EACH FRACTIONAL SHARE OF STOCK, IRRESPECTIVE OF
THE CLASS THEN STANDING IN HIS OR HER NAME IN THE
BOOKS OF THE CORPORATION. ON ANY MATTER SUBMITTED
TO A VOTE OF SHAREHOLDERS, ALL SHARES OF THE
CORPORATION THEN ISSUED AND OUTSTANDING AND
ENTITLED TO VOTE, IRRESPECTIVE OF THE CLASS,
SHALL BE VOTED IN THE AGGREGATE AND NOT BY CLASS,
EXCEPT (1) WHEN OTHERWISE EXPRESSLY PROVIDED BY
THE MARYLAND GENERAL CORPORATION LAW OR (2) WHEN
REQUIRED BY THE INVESTMEMENT COMPANY ACT OF 1940v
AS AMENDED, SHARES SHALL BE VOTED BY INDIVIDUAL
CLASS; AND (3) WHEN THE MATTER DOES NOT AFFECT
ANY INTEREST OF A PARTICULAR CLASS, THEN ONLY
SHAREHOLDERS OF THE AFFECTED CLASS OR CLASSES
SHALL BE ENTITLED TO VOTE THEREON.
(B) EACH CLASS OF STOCK OF THE
CORPORATION SHALL HAVE THE FOLLOWING POWERS,
PREFERENCES AND PARTICIPATING, VOTING, OR OTHER
SPECIAL RIGHTS AND THE QUALIFICATIONS,
RESTRICTIONS, AND LIMITATIONS THEREOF SHALL BE AS
FOLLOWS:
(1) ALL CONSIDERATION RECEIVED BY
THE CORPORATION FOR THE ISSUE OR SALE OF STOCK OF
EACH CLASS, TOGETHER WITH ALL INCOME, EARNINGS,
PROFITS, AND PROCEEDS THEREOF, INCLUDING ANY
PROCEEDS DERIVED FROM THE SALE, EXCHANGE OR
LIQUIDATION THEREOF, AND ANY FUNDS OR PAYMENTS
DERIVED FROM ANY REINVESTMENT OF SUCH PROCEEDS IN
WHATEVER FORM THE SAME MAY BE, SHALL IRREVOCABLY
BELONG TO THE CLASS OF SHARES OF STOCK WITH
RESPECT TO WHICH SUCH ASSETS, PAYMENTS OR FUNDS
WERE RECEIVED BY THE CORPORATION FOR ALL
PURPOSES, SUBJECT ONLY TO THE RIGHTS OF
CREDITORS, AND SHALL BE SO HANDLED UPON THE BOOKS
OF ACCOUNT OF THE CORPORATION. SUCH ASSETS,
INCOME, EARNINGS, PROFITS AND PROCEEDS THEREOF,
INCLUDING ANY PROCEEDS DERIVED FROM THE SALE,
EXCHANGE OR LIQUIDATION THEREOF AND ANY ASSETS
DERIVED FROM ANY REINVESTMENT OF SUCH PROCEEDS,
IN WHATEVER FORM THE SAME MAY BE, ARE HEREIN
REFERRED TO AS "ASSETS BELONGING TO" SUCH CLASS.
(2) THE BOARD OF DIRECTORS MAY
FROM TIME TO TIME DECLARE AND PAY DIVIDENDS OR
DISTRIBUTIONS, IN STOCK OR IN CASH, ON ANY OR ALL
CLASSES OF STOCK9 THE AMOUNT OF SUCH DIVIDENDS
AND THE PAYMENT OF THEM BEING WHOLLY IN THE
DISCRETION OF THE BOARD OF DIRECTORS.
(I) DIVIDENDS OR DISTRIBUTIONS ON
SHARES OF ANY CLASS OF STOCK SHALL BE PAID ONLY
OUT OF EARNINGS, SURPLUS, OR OTHER LAWFULLY
AVAILABLE ASSETS BELONGING TO SUCH CLASS.
(II) INASMUCH AS ONE GOAL OF THE
CORPORATION IS TO QUALIFY 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; AND 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 CORPORATION, THE
BOARD OF DIRECTORS SHALL HAVE THE POWER IN ITS
DISCRETION TO DISTRIBUTE IN ANY FISCAL YEAR AS
DIVIDENDS, INCLUDING DIVIDENDS DESIGNATED IN
WHOLE OR IN PART AS CAPITAL GAIN DISTRIBUTIONS,
AMOUNTS SUFFICIENT, IN THE OPINION OF THE BOARD
OF DIRECTORS, TO ENABLE THE CORPORATION TO
QUALIFY AS A REGULATED INVESTMENT COMPANY AND TO
AVOID LIABILITY FOR THE CORPORATION FOR FEDERAL
INCOME TAX IN RESPECT OF THAT YEAR. IN
FURTHERANCE, AND NOT IN LIMITATION OF THE
FOREGOING, IN THE EVENT THAT A CLASS OF SHARES
HAS A NET CAPITAL LOSS FOR A FISCAL YEAR, AND TO
THE EXTENT THAT THE NET CAPITAL LOSS OFFSETS NET
CAPITAL GAINS FROM THE OTHER CLASS, THE AMOUNTS
TO BE DEEMED AVAILABLE FOR DISTRIBUTION TO THE
CLASS WITH THE NET CAPITAL GAIN SHALL BE REDUCED
BY THE AMOUNT OF OFFSET.THE SHAREHOLDERS OF THE
CLASS WITH THE NET CAPITAL GAIN SHALL BE ENTITLED
TO A FULL DISTRIBUTION OF THE NET INCOME AND THE
NET CAPITAL GAIN TO THE EXTENT EARNED OR
REALIZED. IF THE NET CAPITAL LOSS OF A CLASS
EXCEEDS THE NET CAPITAL GAIN FROM ANOTHER CLASS,
THE EXCESS LOSS SHALL NOT REDUCE THE NET
INVESTMENT INCOME AVAILABLE FOR DISTRIBUTION TO
THE CLASS WITH THE LOSS, BUT SHALL BE CARRIED
FORWARD.
(3) IN THE EVENT OF THE
LIQUIDATION OR DISSOLUTION OF THE CORPORATION,
SHAREHOLDERS OF EACH CLASS SHALL BE ENTITLED TO
RECEIVE, AS A CLASS, OUT OF THE ASSETS OF THE
CORPORATION AVAILABLE FOR DISTRIBUTION TO
SHAREHOLDERS, BUT OTHER THAN GENERAL ASSETS NOT
BELONGING TO ANY PARTICULAR CLASS OF STOCK, THE
ASSETS BELONGING TO SUCH CLASS; AND THE ASSETS SO
DISTRIBUTABLE TO THE SHAREHOLDERS OF ANY CLASS
SHALL BE DISTRIBUTED AMONG SUCH SHAREHOLDERS IN
PROPORTION TO THE NUMBER OF SHARES OF SUCH CLASS
HELD BY THEM AND RECORDED ON THE BOOKS OF THE
CORPORATION. IN THE EVENT THAT THERE ARE ANY
GENERAL ASSETS NOT BELONGING TO ANY PARTICULAR
CLASS OF STOCK AND AVAILABLE FOR DISTRIBUTION,
SUCH DISTRIBUTION SHALL BE MADE TO THE HOLDERS OF
STOCK OF ALL CLASSES IN PROPORTION TO THE ASSET
VALUE OF THE RESPECTIVE CLASSES DETERMINED AS
HEREINAFTER PROVIDED.
(4) THE ASSETS BELONGING TO
ANY CLASS OF STOCK SHALL BE CHARGED WITH THE
LIABILITIES IN RESPECT TO SUCH CLASS, AND SHALL
ALSO BE CHARGED WITH ITS SHARE OF THE GENERAL
LIABILITIES OF THE CORPORATION, IN PROPORTION TO
THE ASSET VALUE OF THE RESPECTIVE CLASSES
DETERMINED AS HEREINAFTER SET OUT.THE
DETERMINATION OF THE BOARD OF DIRECTORS SHALL BE
CONCLUSIVE AS TO THE AMOUNT OF LIABILITIES,
INCLUDING ACCRUED EXPENSES AND RESERVES, AS TO
THE ALLOCATION OF THE SAME AS TO A GIVEN CLASS,
AND AS TO WHETHER THE SAME OR GENERAL ASSETS OF
THE CORPORATION ARE ALLOCABLE TO ONE OR MORE
CLASSES.
(C) EACH HOLDER OF ANY CLASS OF STOCK
OF THE CORPORATION, WHO SHALL SURRENDER HIS
CERTIFICATE IN GOOD DELIVERY FORM TO THE
CORPORATION OR WHO, IF THE SHARES IN QUESTION ARE
NOT REPRESENTED BY CERTIFICATES, SHALL DELIVER TO
THE CORPORATION A WRITTEN REQUEST IN GOOD ORDER
SIGNED BY THE SHAREHOLDER, SHALL BE ENTITLED TO
REQUIRE THE CORPORATION, TO THE EXTENT THAT THE
CLASS OF STOCK IN QUESTION HAS ASSETS LAWFULLY
AVAILABLE THEREFORE AND OUT OF SUCH ASSETS, BUT
NOT OTHERWISE, TO REDEEM ALL OR ANY PART OF THE
SHARES OF SUCH STOCK STANDING IN THE NAME OF SUCH
HOLDER ON THE BOOKS OF THE CORPORATIONO AT THE
NET ASSET VALUE OF SUCH SHARES, DETERMINED IN THE
MANNER AND AS OF THE TIME, AND PAYABLE AS
PROVIDED IN THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED. THE CORPORATION SHALL MAKE PAYMENT
FOR ANY SUCH SHARES TO BE REDEEMED AS AFORESAID.
IN CASH, OR IF IN THE OPINION OF THE BOARD OF
DIRECTORS, WHICH SHALL BE CONCLUSIVE, CONDITIONS
EXIST WHICH MAKE PAYMENT WHOLLY IN CASH UNWISE OR
UNDESIRABLE, THE CORPORATION MAY MAKE PAYMENT
WHOLLY OR PARTLY IN SECURITIES OR OTHER PROPERTY
BELONGING TO THE CLSS, THE VALUE OF WHICH SHALL
BE DETERMINED AND IN THE MANNER HEREINAFTER
PROVIDED. THE CORPORATION MAY, TO THE EXTENT
NECESSARY, SELL OR CAUSE TO BE SOLD ANY
SECURITIES BELONING TO THE CLASS TO PROVIDE CASH
FOR SUCH REDEMPTION BY IT OF THE SHARES OF SUCH
CLASS.
(1) THE BOARD OF DIRECTORS OF THE
CORPORATION MAY, IN ACCORDANCE WITH THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
SUSPEND THE RIGHT OF THE HOLDERS OF ANY CLASS OF
STOCK OF THE CORPORATION TO REQUIRE THE
CORPORATION TO REDEEM SHARES OF SUCH CLASS.
(2) THE BOARD OF DIRECTORS, IN THE
ECONOMIC BEST INTEREST OF THE CORPORATION AND IN
ORDER TO REDUCE THE DISPROPORTIONATELY BURDENSOME
EXPENSES IN SERVICING SHAREHOLDER ACCOUNTS, MAY
FROM TIME TO TIME, ESTABLISH UNIFORM STANDARDS
WITH RESPECT TO THE MINIMUM VALUE OF A
STOCKHOLDER ACCOUNT OR A MINIMUM INVESTMENT WHICH
MAY BE MADE BY A STOCKHOLDER. THE BOARD OF
DIRECTORS, BY RESOLUTION AND WITHOUT THE VOTE OR
CONSENT OF STOCKHOLDERS, MAY REQUIRE THAT THE
AGGREGATE NET ASSET VALUE OF A STOCKHOLDER
ACCOUNT SHALL NOT BE LESS THAN THE MINIMUM
INITIAL INVESTMENT REQUIREMENT OF THE CORPORATION
AT THE TIME OF THE RESOLUTION. THE RESOLUTION MAY
AUTHORIZE THE CORPORATION TO CLOSE THOSE
STOCKHOLDER ACCOUNTS NOT MEETING THE SPECIFIED
MINIMUM STANDARD OF VALUE BY REDEEMING ALL OF THE
SHARES IN SUCH ACCOUNTS, PROVIDED THERE IS MAILED
TO EACH AFFECTED STOCKHOLDER ACCOUNT. AT LEAST
SIXTY (60) DAYS PRIOR TO THE PLANNED REDEMPTION
DATE, A NOTICE SETTING FORTH THE MINIMUM ACCOUNT
SIZE REQUIREMENT AND THE DATE ON WHICH THE
ACCOUNT WILL BE CLOSED IF THE MINIMUM SIZE
REQUIREMENT IS NOT MET PRIOR TO SAID CLOSING
DATE.
(D) EACH HOLDER OF ANY CLASS OF STOCK
OF THE CORPORATION, WHO SURRENDERS HIS
CERTIFICATE IN GOOD DELIVERY FORM TO THE
CORPORATION OR, IF THE SHARES IN QUESTION ARE NOT
REPRESENTED BY CERTIFICATES, WHO DELIVERS TO THE
CORPORATION A WRITTEN REQUEST IN GOOD ORDER
SIGNED BY THE SHAREHOLDER, SHALL BE ENTITLED TO
CONVERT THE SHARES IN QUESTION ON THE BASIS
HEREINAFTER SET FORTH, INTO SHARES OF STOCK OF
ANY OTHER CLASS OF THE CORPORATION. THE
CORPORATION SHALL DETERMINE THE NET ASSET VALUE,
AS HEREINAFTER DEFINEDO OF THE SHARES TO BE
CONVERTED AND SHALL DEDUCT THEREFROM SUCH
CONVERSION COST, HEREINAFTER DESCRIBED AND9
WITHIN FIVE (5) BUSINESS DAYS AFTER SUCH
SURRENDER AND PAYMENT SHALL ISSUE TO THE
SHAREHOLDER SUCH NUMBER OF SHARES OF STOCK OF THE
CLASS DESIRED, TAKEN AT THE NET ASSET VALUE
THEREOF DETERMINED IN THE SAME MANNER AND AT THE
SAME TIME AS THAT OF THE SHARES SURRENDERED,
WHICH SHALL EQUAL THE NET ASSET VALUE OF THE
SHARES SURRENDERED LESS CONVERSION COST AS
AFORESAID. ANY AMOUNT REPRESENTING A FRACTION OF
A SHARE MAY BE PAID IN CASH AT THE OPTION OF THE
CORPORATION. THE CONVERSION COST ABOVE MENTIONED
SHALL BE DETERMINED BY ADDING A TRANSACTION
CHARGE AS DETERMINED BY THE BOARD OF DIRECTORS.
THE TRANSACTION CHARGE MAY BE PAID AND/OR
ASSIGNED BY THE CORPORATION TO THE UNDERWRITER
AND/OR ANY OTHER AGENCY, AS IT MAY ELECT. UPON
ANY CONVERSION TAKING PLACE, PROPER TRANSFER
SHALL BE MADE BETWEEN THE ASSETS BELONGING TO THE
RESPECTIVE CLASSES OF STOCK. THE BOARD OF
DIRECTORS MAY LIMIT THIS CONVERSION PRIVILEGE TO
SHARES WHICH HAVE BEEN HELD FOR SUCH REASONABLE
PERIOD OF TIME AS THE DIRECTORS MAY DETERMINE.
(E) THE AGGREGATE NET ASSET VALUE PER
SHARE OF A CLASS OF THE CORPORATION'S CAPITAL
STOCK SHALL BE DETERMINED IN ACCORDANCE WITH THE
INVESTMENT COMPANY ACT OF 1940 AS AMENDED, AND
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, BY
ADDING THE MARKET OR APPRAISED VALUE OF ALL
SECURITIES9 CASH AND OTHER ASSETS OF THE
CORPORATION PERTAINING TO THAT CLASS, SUBTRACTING
THE LIABILITIES DETERMINED BY THE BOARD OF
DIRECTORS TO BE APPLICABLE TO THAT CLASS, AND
DIVIDING THE NET RESULT BY THE NUMBER OF SHARES
OF THAT CLASS OUTSTANDING. SECURITIES AND OTHER
INVESTMENTS AND ASSETS WILL BE VALUED AT FAIR
VALUE AS DETERMINED IN GOOD FAITH BY THE BOARD OF
DIRECTORS.
SECOND: The board of directors of the Corporation on
January 14, 1982, duly adopted a resolution in which was set
forth the foregoing amendment to the charter, declaring that
the said amendment of the charter as proposed was advisable and
directing that it be submitted for action thereon by the stock-
holders of the Corporation at a special meeting of the stockholders
to be held on April 13, 1982.
THIRD: Notice setting forth the said amendment of the
charter and stating that a purpose of the meeting of the stockholders
would be to take action thereon, was given, as required by law,
to all stockholders entitled to vote thereon. The amendment of
the charter of the Corporation as hereinabove set forth was,
approved by the stockholders of the Corporation at said meeting
by the affirmative vote of a majority of all the votes entitled
to be cast thereon.
FOURTH: The amendment of the charter of the Corporation as
hereinabove set forth has been duly advised by the board of
directors and approved by the stockholders of the Corporation.
IN WITNESS WHEREOF, The D. L. BABSON MONEY MARKET FUND, INC. has
caused these presents to be signed in its name and on its behalf
by its President and witnessed (or attested) by its Secretary on
April 13, 1982.
D.L. BABSON MONEY MARKET FUND, INC.
by /s/Alfred J. Hoffman
President, Alfred J. Hoffman
Witness: (Attest)
Jacqueline B. Willhite
/s/Jacqueline B. Willhite
Secretary
THE UNDERSIGNED, President of D.L. BABSON MONEY MARKET FUND,
INC., who executed an behalf of said corporation the foregoing
Articles of Amendment, of which this certificate is made a part,
hereby acknowledges, in the name and an behalf of said
corporation, the foregoing Articles of Amendment to be the
corporate act of said corporation and further certifies that, to
the best of his knowledge information and belief, the matters
and facts set forth therein with respect to the approval thereof
are true in all material respects, under the penalties of
perjury.
/s/Alfred J. Hoffman
Alfred J. Hoffman
<PAGE>
EX99.23(a)(2)(C)
D.L. BABSON MONEY MARKET FUND, INC
ARTICLES SUPPLEMENTARY TO THE CHARTER
The D. L. BABSON MONEY MARKET FUND, INC., a Maryland Corporation
having its principal office in Baltimore City Maryland (hereinafter
called the Corporation), hereby certifies to the State Department of
Assessments and Taxation of Maryland, that:
FIRST: The board of directors of the Corporation, at a meeting
duly convened and held on January 14, 1982, adopted a resolution
classifying or reclassifying one billion (1,000,000,000) unissued
shares of the par value of one cent ($0.01) per share of the Capital
Stock of the Corporation as All Government Portfolio Stock by setting
or changing before the issuance of such shares, the preferences,
rights voting powers, restrictions, limitations as to dividends,
qualification or terms of redemption of, and the conversion or other
rights, thereof as hereinafter set forth.
SECOND: A description of the shares so classified with the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions
of redemption as set or changed by the board of directors of the
Corporation is a follows:
(A) THE HOLDERS OF EACH SHARE OF STOCK OF THE CORPORATION
SHALL BE ENTITLED TO ONE VOTE FOR EACH FULL SHARE AND A FRACTIONAL
VOTE FOR EACH FRACTIONAL SHARE OF STOCK, IRRESPECTIVE OF THE CLASS
THEN STANDING IN HIS OR HER NAME IN THE BOOKS OF THE CORPORATION. ON
ANY MATTER SUBMITTED TO A VOTE OF SHAREHOLDERS, ALL SHARES OF THE
CORPORATION THEN ISSUED AND OUTSTANDING AND ENTITLED TO VOTE,
IRRESPECTIVE OF THE CLASS, SHALL BE VOTED IN THE AGGREGATE AND NOT BY
CLASS, EXCEPT (1) WHEN OTHERWISE EXPRESSLY PROVIDED BY THE MARYLAND
GENERAL CORPORATION LAW OR (2) WHEN REQUIRED BY THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED, SHARES SHALL BE VOTED BY INDIVIDUAL CLASS;
AND (3) WHEN THE MATTER DOES NOT AFFECT ANY INTEREST OF A PARTICULAR
CLASS, THEN ONLY SHAREHOLDERS OF THE AFFECTED CLASS OR CLASSES SHALL
BE ENTITLED TO VOTE THEREON.
(B) EACH CLASS OF STOCK OF THE CORPORATION SHALL HAVE THE
FOLLOWING POWERS, PREFERENCES AND PARTICIPATING, VOTING, OR OTHER
SPECIAL RIGHTS AND THE QUALIFICATIONS, RESTRICTIONS, AND LIMITATIONS
THEREOF SHALL BE AS FOLLOWS:
(1) ALL CONSIDERATION RECEIVED BY THE CORPORATION
FOR THE ISSUE OR SALE OF STOCK OF EACH CLASS, TOGETHER WITH ALL
INCOME, EARNINGS, PROFITS, AND PROCEEDS THEREOF, INCLUDING ANY
PROCEEDS DERIVED FROM THE SALE, EXCHANGE OR LIQUIDATION THEREOF,
AND ANY FUNDS OR PAYMENTS DERIVED FROM ANY REINVESTMENT OF SUCH
PROCEEDS IN WHATEVER FORM THE SAME MAY BE, SHALL IRREVOCABLY BELONG
TO THE CLASS OF SHARES OF STOCK WITH RESPECT TO WHICH SUCH ASSETS,
PAYMENTS OR FUNDS WERE RECEIVED BY THE CORPORATION FOR ALL
PURPOSES, SUBJECT ONLY TO THE RIGHTS OF CREDITORS, AND SHALL BE SO
HANDLED UPON THE BOOKS OF ACCOUNT OF THE CORPORATION. SUCH ASSETS,
INCOME, EARNINGS, PROFITS AND PROCEEDS THEREOF, INCLUDING ANY
PROCEEDS DERIVED FROM THE SALE, EXCHANGE OR LIQUIDATION THEREOF AND
ANY ASSETS DERIVED FROM ANY REINVESTMENT OF SUCH PROCEEDS, IN
WHATEVER FORM THE SAME MAY BE, ARE HEREIN REFERRED TO AS "ASSETS
BELONGING TO" SUCH CLASS.
(2) THE BOARD OF DIRECTORS MAY FROM TIME TO TIME
DECLARE AND PAY DIVIDENDS OR DISTRIBUTIONS, IN STOCK OR IN CASH, ON ANY OR ALL
CLASSES OF STOCK, THE AMOUNT OF SUCH DIVIDENDS AND THE PAYMENT OF THEM
BEING WHOLLY IN THE DISCRETION OF THE BOARD OF DIRECTORS.
(I) DIVIDENDS OR DISTRIBUTIONS ON SHARES OF ANY
CLASS OF STOCK SHALL BE PAID ONLY OUT OF EARNINGS, SURPLUS, OR OTHER
LAWFULLY AVAILABLE ASSETS BELONGING TO SUCH CLASS.
(II) INASMUCH AS ONE GOAL OF THE CORPORATION IS
TO QUALIFY 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; AND 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
CORPORATION, THE BOARD OF DIRECTORS SHALL HAVE THE POWER IN ITS
DISCRETION TO DISTRIBUTE IN ANY FISCAL YEAR AS DIVIDENDS, INCLUDING
DIVIDENDS DESIGNATED IN WHOLE OR IN PART AS CAPITAL GAIN
DISTRIBUTIONS, AMOUNTS SUFFICIENT, IN THE OPINION OF THE BOARD OF
DIRECTORS, TO ENABLE THE CORPORATION TO QUALIFY AS A REGULATED
INVESTMENT COMPANY AND TO AVOID LIABILITY FOR THE CORPORATION FOR
FEDERAL INCOME TAX IN RESPECT OF THAT YEAR. IN FURTHERANCE, AND NOT IN
LIMITATION OF THE FOREGOING, IN THE EVENT THAT A CLASS OF SHARES HAS A
NET CAPITAL LOSS FOR A FISCAL YEAR, AND TO THE EXTENT THAT THE NET
CAPITAL LOSS OFFSETS NET CAPITAL GAINS FROM THE OTHER CLASS, THE
AMOUNTS TO BE DEEMED AVAILABLE FOR DISTRIBUTION TO THE CLASS WITH THE
NET CAPITAL GAIN SHALL BE REDUCED BY THE AMOUNT OF OFFSET. THE
SHAREHOLDERS OF THE CLASS WITH THE NET CAPITAL GAIN SHALL BE ENTITLED
TO A FULL DISTRIBUTION OF THE NET INCOME AND THE NET CAPITAL GAIN TO
THE EXTENT EARNED OR REALIZED. IF THE NET CAPITAL LOSS OF A CLASS
EXCEEDS THE NET CAPITAL GAIN FROM ANOTHER CLASS, THE EXCESS LOSS SHALL
NOT REDUCE THE NET INVESTMENT INCOME AVAILABLE FOR DISTRIBUTION TO THE
CLASS WITH THE LOSS, BUT SHALL BE CARRIED FORWARD.
(3) IN THE EVENT OF THE LIQUIDATION OR DISSOLUTION OF
THE CORPORATION, SHAREHOLDERS OF EACH CLASS SHALL BE ENTITLED TO
RECEIVE, AS A CLASS, OUT OF THE ASSETS OF THE CORPORATION AVAILABLE
FOR DISTRIBUTION TO SHAREHOLDERS, BUT OTHER THAN GENERAL ASSETS NOT
BELONGING TO ANY PARTICULAR CLASS OF STOCK, THE ASSETS BELONGING TO
SUCH CLASS; AND THE ASSETS SO DISTRIBUTABLE TO THE SHAREHOLDERS OF ANY
CLASS SHALL BE DISTRIBUTED AMONG SUCH SHAREHOLDERS IN PROPORTION TO
THE NUMBER OF SHARES OF SUCH CLASS HELD BY THEM AND RECORDED ON THE
BOOKS OF THE CORPORATION. IN THE EVENT THAT THERE ARE ANY GENERAL
ASSETS NOT BELONGING TO ANY PARTICULAR CLASS OF STOCK AND AVAILABLE
FOR DISTRIBUTION, SUCH DISTRIBUTION SHALL BE MADE TO THE HOLDERS OF
STOCK OF ALL CLASSES IN PROPORTION TO THE ASSET VALUE OF THE
RESPECTIVE CLASSES DETERMINED AS HEREINAFTER PROVIDED.
(4) THE ASSETS BELONGING TO ANY CLASS OF STOCK SHALL BE
CHARGED WITH THE LIABILITIES IN RESPECT TO SUCH CLASS, AND SHALL ALSO
BE CHARGED WITH ITS SHARE OF THE GENERAL LIABILITIES OF THE
CORPORATIONO IN PROPORTION TO THE ASSET VALUE OF THE RESPECTIVE
CLASSES DETERMINED AS HEREINAFTER SET OUT. THE DETERMINATION OF THE
BOARD OF DIRECTORS SHALL BE CONCLUSIVE AS TO THE AMOUNT OF
LIABILITIES, INCLUDING ACCRUED EXPENSES AND RESERVES, AS TO THE
ALLOCATION OF THE SAME AS TO A GIVEN CLASS, AND AS TO WHETHER THE SAME
OR GENERAL ASSETS OF THE CORPORATION ARE ALLOCABLE TO ONE OR MORE
CLASSES.
(C) EACH HOLDER OF ANY CLASS OF STOCK OF THE CORPORATION,
WHO SHALL SURRENDER HIS CERTIFICATE IN GOOD DELIVERY FORM TO THE
CORPORATION OR WHO, IF THE SHARES IN QUESTION ARE NOT REPRESENTED BY
CERTIFICATES, SHALL DELIVER TO THE CORPORATION A WRITTEN REQUEST IN
GOOD ORDER SIGNED BY THE SHAREHOLDER, SHALL BE ENTITLED TO REQUIRE THE
CORPORATION, TO THE EXTENT THAT THE CLASS OF STOCK IN QUESTION HAS
ASSETS LAWFULLY AVAILABLE THEREFORE AND OUT OF SUCH ASSETS, BUT NOT
OTHERWISE, TO REDEEM ALL OR ANY PART OF THE SHARES OF SUCH STOCK
STANDING IN THE NAME OF SUCH HOLDER ON THE BOOKS OF THE CORPORATION,
AT THE NET ASSET VALUE OF SUCH SHARES, DETERMINED IN THE MANNER AND AS
OF THE TIME AND PAYABLE AS PROVIDED IN THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED. THE CORPORATION SHALL MAKE PAYMENT FOR ANY SUCH
SHARES TO BE REDEEMED AS AFORESAID, IN CASH, OR IF IN THE OPINION OF
THE BOARD OF DIRECTORS, WHICH SHALL BE CONCLUSIVE, CONDITIONS EXIST
WHICH MAKE PAYMENT WHOLLY IN CASH UNWISE OR UNDESIRABLE, THE
CORPORATION MAY MAKE PAYMENT WHOLLY OR PARTLY IN SECURITIES OR OTHER
PROPERTY BELONGING TO THE CLASS, THE VALUE OF WHICH SHALL BE
DETERMINED AND IN THE MANNER HEREINAFTER PROVIDED. THE CORPORATION
MAY, TO THE EXTENT NECESSARY, SELL OR CAUSE TO BE SOLD ANY SECURITIES
BELONGING TO THE CLASS TO PROVIDE CASH FOR SUCH REDEMPTION BY IT OF
THE SHARES OF SUCH CLASS.
(1) THE BOARD OF DIRECTORS OF THE CORPORATION MAY, IN
ACCORDANCE WITH THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
SUSPEND THE RIGHT OF THE HOLDERS OF ANY CLASS OF STOCK OF THE
CORPORATION TO REQUIRE THE CORPORATION TO REDEEM SHARES OF SUCH CLASS.
(2) THE BOARD OF DIRECTORS, IN THE ECONOMIC BEST
INTEREST OF THE CORPORATION AND IN ORDER TO REDUCE THE
DISPROPORTIONATELY BURDENSOME EXPENSES IN SERVICING SHAREHOLDER
ACCOUNTS, MAY FROM TIME TO TIME, ESTABLISH UNIFORM STANDARDS WITH
RESPECT TO THE MINIMUM VALUE OF A STOCKHOLDER ACCOUNT OR A MINIMUM
INVESTMENT WHICH MAY BE MADE BY A STOCKHOLDER. THE BOARD OF DIRECTORS,
BY RESOLUTION AND WITHOUT THE VOTE OR CONSENT OF STOCKHOLDERS, MAY
REQUIRE THAT THE AGGREGATE NET ASSET VALUE OF A STOCKHOLDER ACCOUNT
SHALL NOT BE LESS THAN THE MINIMUM INITIAL INVESTMENT REQUIREMENT OF
THE CORPORATION AT THE TIME OF THE RESOLUTION. THE RESOLUTION MAY
AUTHORIZE THE CORPORATION TO CLOSE THOSE STOCKHOLDER ACCOUNTS NOT
MEETING THE SPECIFIED MINIMUM STANDARD OF VALUE BY REDEEMING ALL OF
THE SHARES IN SUCH ACCOUNTS, PROVIDED THERE IS MAILED TO EACH AFFECTED
STOCKHOLDER ACCOUNT, AT LEAST SIXTY (60) DAYS PRIOR TO THE PLANNED
REDEMPTION DATE, A NOTICE SETTING FORTH THE MINIMUM ACCOUNT SIZE
REQUIREMENT AND THE DATE ON WHICH THE ACCOUNT WILL BE CLOSED IF THE
MINIMUM SIZE REQUIREMENT IS NOT MET PRIOR TO SAID CLOSING DATE.
(D) EACH HOLDER OF ANY CLASS OF STOCK OF THE CORPORATION,
WHO SURRENDERS HIS CERTIFICATE IN GOOD DELIVERY FORM TO THE
CORPORATION OR, IF THE SHARES IN QUESTION ARE NOT REPRESENTED BY
CERTIFICATES, WHO DELIVERS TO THE CORPORATION A WRITTEN REQUEST IN
GOOD ORDER SIGNED BY THE SHAREHOLDER, SHALL BE ENTITLED TO CONVERT THE
SHARES IN QUESTION ON THE BASIS HEREINAFTER SET FORTH, INTO SHARES OF
STOCK OF ANY OTHER CLASS OF THE CORPORATION. THE CORPORATION SHALL
DETERMINE THE NET ASSET VALUE, AS HEREINAFTER DEFINED, OF THE SHARES
TO BE CONVERTED AND SHALL DEDUCT THEREFROM SUCH CONVERSION COST,
HEREINAFTER DESCRIBED AND, WITHIN FIVE (5) BUSINESS DAYS AFTER SUCH
SURRENDER AND PAYMENT, SHALL ISSUE TO THE SHAREHOLDER SUCH NUMBER OF
SHARES OF STOCK OF THE CLASS DESIRED, TAKEN AT THE NET ASSET VALUE
THEREOF DETERMINED IN THE SAME MANNER AND AT THE SAME TIME AS THAT OF
THE SHARES SURRENDEREDO WHICH SHALL EQUAL THE NET ASSET VALUE OF THE
SHARES SURRENDERED LESS CONVERSION COST AS AFORESAID. ANY AMOUNT
REPRESENTING A FRACTION OF A SHARE MAY BE PAID IN CASH AT THE OPTION
OF THE CORPORATION. THE CONVERSION COST ABOVE MENTIONED SHALL BE
DETERMINED BY ADDING A TRANSACTION CHARGE AS DETERMINED BY THE BOARD
OF DIRECTORS. THE TRANSACTION CHARGE MAY BE PAID AND/OR ASSIGNED BY
THE CORPORATION TO THE UNDERWRITER AND/OR ANY OTHER AGENCY, AS IT MAY
ELECT. UPON ANY CONVERSION TAKING PLACE, PROPER TRANSFER SHALL BE MADE
BETWEEN THE ASSETS BELONGING TO THE RESPECTIVE CLASSES OF STOCK. THE
BOARD OF DIRECTORS MAY LIMIT THIS CONVERSION PRIVILEGE TO SHARES WHICH
HAVE BEEN HELD FOR SUCH REASONABLE PERIOD OF TIME AS THE DIRECTORS MAY
DETERMINE.
(E) THE AGGREGATE NET ASSET VALUE PER SHARE OF A CLASS OF
THE CORPORATION'S CAPITAL STOCK SHALL BE DETERMINED IN ACCORDANCE WITH
THE INVESTMENT COMPANY ACT OF 1940 AS AMENDED, AND WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES, BY ADDING THE MARKET OR APPRAISED
VALUE OF ALL SECURITIES, CASH AND OTHER ASSETS OF THE CORPORATION
PERTAINING `TO THAT CLASS, SUBTRACTING THE LIABILITIES DETERMINED BY
THE BOARD OF DIRECTORS TO BE APPLICABLE TO THAT CLASS, AND DIVIDING
THE NET RESULT BY THE NUMBER OF SHARES OF THAT CLASS OUTSTANDING.
SECURITIES AND OTHER INVESTMENTS AND ASSETS WILL BE VALUED AT FAIR
VALUE AS DETERMINED IN GOOD FAITH BY THE BOARD OF DIRECTORS.
THIRD: The shares aforesaid have been duly classified by the board of
directors pursuant to authority and power contained in the charter of
the Corporation.
IN WITNESS WHEREOF, The D. L. BABSON MONEY MARKET FUND, INC. has
caused these presents to be signed in its name and on its behalf by
its President and witnessed (or attested) by its Secretary on April
20, 1982.
D.L. BABSON MONEY MARKET FUND, INC.
by Alfred J. Hoffman
President, Alfred J. Hoffman
Witness: (Attest)
/s/Jacqueline B. Willhite, Secretary
Jacqueline B. Willhite
Secretary
THE UNDERSIGNED, President of D.L. BABSON MONEY MARKET FUND9 INC., who
executed on behalf of said corporation the foregoing Articles
Supplementary to the Charter, of which this certificate is made a
part, hereby acknowledges, in the name and an behalf of said
corporation, the, foregoing Articles Supplementary to be the corporate
act of said corporation and further certifies that, to the best of his
knowledge,information and belief, the matters and facts set forth therein
with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
/s/Alfred J. Hoffman
Alfred J. Hoffman
EX99.23(a)(3)(A)
ARTICLES OF INCORPORATION
OF
THE D. L. BABSON TAX-FREE INCOME FUND, INC.
FIRST: I, THE UNDERSIGNED, ALFRED J. HOFFMAN, WHOSE POST-OFFICE
ADDRESS IS 6701 HIGH DRIVE, SHAWNEE, MISSION, KANSAS, 66208, BEING AT
LEAST TWENTY-ONE YEARS OF AGE, DO, UNDER AND BY VIRTUE OF THE GENERAL LAWS
OF THE STATE OF MARYLAND AUTHORIZING THE FORMATION OF CORPORATIONS,
ASSOCIATE MYSELF AS INCORPORATOR WITH THE INTENTION OF FORMING A
CORPORATION (HEREINAFTER CALLED THE "CORPORATION").
SECOND: THE NAME OF THE CORPORATION IS THE D.L. BABSON TAX-FREE
INCOME FUND, INC.
THIRD: THE PURPOSE FOR WHICH THE CORPORATION IS FORMED IS TO ACT AS
AN OPEN-END, DIVERSIFIED MANAGEMENT INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AND TO EXERCISE AND ENJOY ALL
OF THE POWERS, RIGHTS AND PRIVILEGES GRANTED TO, OR CONFERRED UPON,
CORPORATIONS OF A SIMILAR CHARACTER BY THE GENERAL LAWS OF THE STATE OF
MARYLAND NOW OR HEREAFTER IN FORCE.
FOURTH: THE POST-OFFICE ADDRESS OF THE PRINCIPAL OFFICE OF THE
CORPORATION IN THIS STATE IS C/O THE CORPORATION TRUST INCURPORATEDV FIRST
MARYLAND BUILDING 25 SOUTH CHARLES STREET, BALTIMORE, MARYLAND 21201. THE
NAME OF THE~RESIDENT AGENT OF THE CORPORATION IN THIS STATE IS THE
CORPORATION TRUST INCORPORATED, A CORPORATION OF THIS STATE, AND THE POST-
OFFICE ADDRESS OF THE RESIDENT AGENT IS FIRST MARYLAND BUILDING, 25 SOUTH
CHARLES STREET, BALTIMORE, MARYLAND 21201.
FIFTH: THE TOTAL NUMBER OF SHARES OF ALL CLASSES OF STOCK WHICH THE
CORPORATION SHALL HAVE AUTHORITY TO ISSUE IS 100,000,000 SHARES OF A PAR
VALUE OF TEN CENTS ($0.10) PER SHARE AND AN AGGREGATE PAR VALUE OF
$10,000,000. THE SHARES SHALL BE DIVIDED INTO TWO CLASSES OF 50,000,000
SHARES EACH TO BE KNOWN AS THE SHORT-TERM PORTFOLIO, AND THE LONG-TERM
PORTFOLIO. THE BOARD OF DIRECTORS OF THE CORPORATION SHALL HAVE THE POWER
TO CLASSIFY OR, RECLASSIFY ANY UNISSUED SHARES BY FIXING THE NUMBER OF
SHARES IN EACH OF THE AFORESAID CLASSES OR BY ALTERING IN ANY ONE OR MORE
RESPECTS, FROM TIME TO TIME~BEFORE ISSUANCE OF SUCH SHARES, THE
PREFERENCES, RIGHTS, VOTING POWERS, RESTRICTIONS OR QUALIFICATIONS OF ANY
UNISSUED SHARES.
(A) THE HOLDERS OF EACH SHARE.OF STOCK OF THE CORPORATION SHALL
BE ENTITLED TO ONE VOTE FOR EACH FULL SHARE, AND A FRACTIONAL VOTE FOR
EACH FRACTIONAL SHARE OF STOCK, IRRESPECTIVE OF THE CLASS THEN STANDING IN
HIS OR HER NAME IN THE BOOKS OF THE CORPORATION, ON ANY MATTER SUBMITTED
TO A VOTE OF SHAREHOPERS, ALL SHARES OF THE CORPORATION THEN ISSUED AND
OUTSTANDING AND ENTITLED TO VOTE, IRRESPECTIVE OF THE CLASS, SHALL~BE
VOTED IN THE AGGREGATE AND NOT BY CLASS, EXCEPT (1) WHEN OTHERWISE
EXPRESSLY PROVIDED BY THE MARYLAND GENERAL CORPORATION LAW OR (2) WHEN
REQUIRED BY THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, SHARES SHALL
BE VOTED BY INDIVIDUAL CLASS, AND (3) WHEN THE MATTER DOES NOT AFFECT ANY
INTEREST OF A PARTICULAR CLASS, THEN ONLY SHAREHOLDERS OF THE AFFECTED
CLASS OR CLASSES'SHALL BE ENTITLED TO VOTE THEREON.
(B) EACH CLASS OF STOCK OF THE CORPORATION SHALL HAVE THE
FOLLOWING POWERS, PREFERENCES AND PARTICIPATING, OPTIONAL RELATIVE,
VOTING OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS, RESTRICTIONS,
AND LIMITATIONS THEREOF SMALL BE AS FOLLOWS:
(1) ALL CONSIDERATION RECEIVED BY THE CORPORATION FOR THE ISSUE
OR SALE OF STOCK OF EACH CLASS, TOGETHER WITH ALL INCOME, EARNINGS,
PROFITS, AND PROCEEDS THEREOF, INCLUDING ANY PROCEEDS DERIVED FROM THE
SALE, EXCHANGE OR LIQUIDATION THEREOF, AND ANY FUNDS OR PAYMENTS DERIVED
FROM ANY REINVESTMENT OF SUCH PROCEEDS IN WHATEVER FORM THE SAME MAY BE,
SMALL IRREVOCABLY BELONG TO THE CLASS OF SHARES OF STOCK WITH RESPECT TO
WHICH SUCH ASSETS, PAYMENTS OR FUNDS WERE RECEIVED BY THE CORPORATION FOR
ALL PURPOSES, SUBJECT ONLY TO THE RIGHTS OF CREDITORS, AND SHALL BE SO
HANDLED UPON THE BOOKS OF ACCOUNT OF THE CORPORATION. SUCH ASSETS, INCOME,
EARNINGS, PROFITS AND PROCEEDS THEREOF, INCLUDING ANY PROCEEDS DERIVED
FROM THE SALE, EXCHANGE OR LIQUIDATION THEREOF AND ANY ASSET DERIVED FROM
ANY REINVESTMENT OF SUCH PROCEEDS IN WHATEVER FORM THE SAME MAY BE, ARE
HEREIN REFERRED TO AS "ASSETS BELONGING TO" SUCH CLASS.
(2) THE BOARD OF DIRECTORS MAY FROM TIME TO TIME DECLARE AND PAY
DIVIDENDS OR DISTRIBUTIONS, IN STOCK OR IN CASH, ON ANY OR ALL CLASSES OF
STOCK, THE AMOUNT OF SUCH DIVIDENDS AND THE PAYMENT OF THEM, BEING WHOLLY
IN THE DISCRETION OF THE BOARD OF DIRECTORS.
(I) DIVIDENDS OR DISTRIBUTIONS ON SHARES OF ANY CLASS OF
STOCK SHALL BE PAID ONLY OUT OF EARNINGS, SURPLUS, OR OTHER, LAWFULLY
AVAILABLE ASSETS BELONGING TO SUCH CLASS.
(II) INASMUCH AS ONE GOAL OF THE CORPORATION IS TO QUALIFY
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, AND 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 CORPORATION, THE BOARD OF
DIRECTORS SHALL HAVE THE POWER IN ITS DISCRETION TO DISTRIBUTE IN ANY
FISCAL YEAR AS DIVIDENDS9 INCLUDING DIVIDENDS DESIGNATED IN WHOLE OR IN
PART AS CAPITAL GAINS DISTRIBUTIONS9 AMOUNTS SUFFICIENT, IN THE OPINION OF
THE BOARD OF,DIRECTORS, TO ENABLE THE CORPORATION TO QUALIFY AS A
REGULATED INVESTMENT COMPANY AND TO AVOID LIABILITY FOR THE CORPORATION
FOR FEDERAL INCOME TAX IN RESPECT OF THAT YEAR. IN FURTHERANCE, AND NOT IN
LIMITATION OF THE FOREGOING, IN THE EVENT THAT A CLASS OF SHARES HAS A NET
CAPITAL LOSS FOR A FISCAL YEAR, AND TO THE EXTENT THAT THE NET CAPITAL
LOSS OFFSET NET CAPITAL GAINS FROM THE OTHER CLASS, THE AMOUNT TO BE
DEEMED AVAILABLE FOR DISTRIBUTION TO THE CLASS WITH THE NET CAPITAL LOSS
SHALL BE REDUCED BY THE AMOUNT OF OFFSET. THE SHAREHOLDERS OF THE CLASS
WITH THE NET CAPITAL GAIN SHALL BE ENTITLED TO A FULL DISTRIBUTION OF THE
NET INCOME AND THE NET CAPITAL GAIN TO THE EXTENT EARNED OR REALIZED. IF
THE NET CAPITAL LOSS OF A CLASS EXCEEDS THE NET CAPITAL GAIN FROM THE
OTHER CLASS, THE EXCESS LOSS SHALL NOT REDUCE THE NET INVESTMENT INCOME
AVAILABLE FOR DISTRIBUTION TO THE CLASS WITH THE LOSS, BUT SHALL BE
CARRIED FORWARD.
(3) IN THE EVENT OF THE LIQUIDATION OR DISSOLUTION OF THE
CORPORATION, SHAREHOLDERS OF EACH CLASS SHALL BE ENTITLED TO RECEIVE, AS A
CLASS, OUT OF THE ASSETS OF THE CORPORATION AVAILABLE FOR DISTRIBUTION TO
SMAREHOLDERS, BUT OTHER THAN GENERAL ASSETS NOT BELONGING TO ANY
PARTICULAR CLASS OF STOCK, THE ASSETS BELONGING TO SUCH CLASS; AND THE
ASSETS SO DISTRIBUTABLE TO THE SHAREHOLDERS OF ANY CLASS SHALL BE
DISTRIBUTED AMONG SUCH SHAREHOLDERS IN PROPORTION TO THE
NUMBER OF SHARES OF SUCH CLASS HELD BY THEM AND RECORDED ON THE BOOKS OF
THE CORPORATION. IN THE EVENT THAT THERE ARE ANY GENERAL ASSETS NOT
BELONGING TO ANY PARTICULAR CLASS OF STOCK AND AVAILABLE FOR DISTRIBUTION,
SUCH DISTRIBUTION SHALL BE MADE TO THE HOLDERS OF STOCK OF ALL CLASSES IN
PROPORTION TO THE ASSET VALUE OF THE RESPECTIVE CLASSES DETERMINED AS
HEREINAFTER PROVIDED.
(4) THE ASSETS BELONGING TO ANY CLASS OF STOCK SHALL BE CHARGED
WITH THE LLIABILITIES IN RESPECT TO SUCH CLASS, AND SHALL ALSO BE CHARGED
WITH ITS SHARE OF THE GENERAL LIABILITIES OF THE CORPORATION, IN
PROPORTION TO THE ASSET VALUE OF THE RESPECTIVE CLSSES DETERMINED AS
HEREINAFTER SET OUT. THE DETERMINATION OF THE BOARD OF DIRECTORS SHALL BE
CONCLUSIVE AS TO THE AMOUNT OF LIABILITIES, INCLUDING ACCRUED EXPENSES AND
RESERVES, AS TO THE ALLOCATIO TO THE SAME AS TO A GIVEN CLASS, AND AS TO
WHETHER THE SAME OR GENERAL ASSETS OF THE CORPORATION ARE ALLOCABLE TO ONE
OR MORE CLASSES.
(C) EACH HOLDER OF ANY CLASS OF STOCK FO THE CORPORATION, WHO SHALL
SURRENDER HIS CERTIFICATE IN GOOD DELIVERY FORM TO THE CORPORTION OR WHO,
IF THE SHARE S IN QUESTIONS ARE NOT REPRESENTED BY CERTIFICATES, SHALL
DELIVER TO THE CORPORATION A WRITTEN REQUEST IN GOOD ORDER SIGNED BY THE
SHAREHOLDER, SHALL BE ENTITLED TO REQUIRE THE CORPORATION, TO THE EXTENT
THAT THE CLASS OF STOCK IN QUESTION HAS ASSETS LAWFULLY AVAILABLE THEREFOR
AND OUT OF SUCH ASSETS, BUT NOT OTHERWISE TO REDEEM ALL OR ANY PART OF THE
SHARE OF SUCH STOCK STANDING IN THE NAME OF SUCH HOLDER ON THE BOOKS OF
THE CORPORATION, AT THE NET ASSET VALUE OF SUCH SHARES, DETERMINED IN THE
MANNER AND AS FO THE TIME,A ND PAYABLE AS PROVIDED IN THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED. THE CORPORATION SHALL MAKE PAYMENT FOR
ANY SUCH SHARES TO BE REDEEMED AS AFORESAID, IN CASH, OR IF IN THE OPINION
OF THE BOARD OF DIRECTORS, WHICH SHALL BE CONCLUSIVE, CONDITIONS EXIST
WHICH MAKE PAYMENT WHOLLY IN CASH UNWISE OR UNDESIRABLE, THE CORPORATION
MAY MAKE PAYMENT WHOLLY OR PARTLY IN SECURITIES OR OTHER PROPERTY
BELONGING TO THE CLASS THE VALUE OF WHICH SHALL BE DETERMINED AND IN THE
MANNER HEREINAFTER PROVIDED. THE CORPORAITON MAY, TO THE EXTENT
NECESSARTM SELL OR CAUSE TO BE SOLD ANY SECURITIES BELONGING TO THE CLASS
TO PROVIDE CASH FOR SUCH REDEMPTION BY IT OF THE SHARE OF SUCH CLASS.
(1) THE BOARD OF DIRECTORS OF THE CORPORATION MAY, IN ACCORDANCE
WITH THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, SUSPEND THE RIGHT OF
THE HOLDERS OF ANY CLASS OF STOCK OF THE CORPORATION TO REQURE THE
CORPORAITON TO REDEEM SHARES OF SUCH CLASS.
(2) THE BOARD OF DIRECTORS, IN THE ECONOMIC BEST INTERESTS OF
THE CORPORATION AND IN ORDER TO REDUCE DISPROPORTIONATELY BURDENSOME
EXPENSES IN SERVICING STOCKHOLDER ACCOUNTS MAY, FROM TIEM TO TIME,
ESTABLISH UNIFORM STANDARDS WITH RESPECT TO THE MINIMUM VALUE OF A
STOCKHOLDER ACCOUNT OR A MINIMUM INVESTMENT WHICH MAY BE MADE BY A
STOCKHOLDER. THE BOARD OF DIRECTORS, BY RESOLUTION AND WITHOUT THE VOTE
OR CONSENT OF STOCKHOLDERS, MAY REQUIRE THAT THE AGGREGATE NET ASSET VALUE
OF A STOCKHOLDER ACCOUNT SHALL NOT BE LESS THAN THE MINIMUM INITIAL
INVESTMENT REQUIREMENT OF THE CORPORATION AT THE TIME OF THE RESOLUTION.
THE RESOLUTION MAY AUTHORIZE THE CORPORATION TO CLOSE THOSE STOCKHOLDER
ACCOUNTS NOT MEETING THE SPECIFIED MINIMUM STANDARD OF VALUE BY
REDEEMING ALL OF THE SHARE IN SUCH ACCOUNTS PROVIDED THAT THERE IS MAILED
TO EACH AFFECTED STOCKHOLER ACCOUNT, AT LEAST SIXTY (60) DAYS PRIOR TO THE
PLANNED REDEMPTION DATE A NOTICE SETTING FORTH THE MINIMUM ACCOUNT SIZE
REQUIREMENT AND THE DATE ON WHICH THE ACCOUNT WILL BE CLOSED IF THE
MINIMUM SIZE REQUIREMENT IS NOT MET PRIOR TO SAID CLOSING DATE.
(D) EACH HOLDER OF ANY CLASS OF STOCK OF THE CORPORATION, WHO
SURRENDERS HIS CERTIFICATE IN GOOD DELIVERY FORM TO THE CORPORATION OR, IF
THE SHARES IN QUESTION ARE NOT REPRESENTED BY CERTIFICATES, WHO DELIVERS
TO THE CORPORATION A WRITTEN REQUEST IN GOOD ORDER SIGNED BY THE
SHAREHOLDER, SHALL, BE ENTITLED TO CONVERT THE SHARES IN QUESTION ON THE
BASIS HEREINAFTER SET FORTH, INTO SHARES OF STOCK OF THE OTHER CLASS OF
THE CORPORATION, THE CORPORATION SHALL DETERMINE THE NET ASSET VALUE, AS
HEREINAFTER DEFINED, OF THE SHARES TO BE CONVERTED AND SHALL DEDUCT
THEREFROM SUCH CONVERSION COST, HEREINAFTER DESCRIBED AND, WITHIN FIVE (5)
BUSINESS DAYS AFTER SUCH SURRENDER AND PAYMENT, SHALL ISSUE TO THE
SHAREHOLDER SUCH NUMBER OF SHARES OF STOCK OF THE CLASS DESIRED, TAKEN AT
THE NET ASSET VALUE THEREOF DETERMINED IN THE SAME MANNER AND AT THE SAME
TIME AS THAT OF THE SHARES SURRENDERED, SHALL EQUAL THE NET ASSET VALUE OF
THE SHARES SURRENDERED LESS THE CONVERSION COST AS AFORESAID. ANY AMOUNT
REPRESENTING A FRACTION OF A SHARE MAY BE PAID IN CASH AT THE OPTION OF
THE CORPORATION. THE CONVERSION COST ABOVE MENTIONED SHALL BE DETERMINED
BY ADDING A TRANSACTION CHARGE AS DETERMINED BY THE BOARD OF DIRECTORS.
THE TRANSACTION CHARGE MAY BE PAID AND/OR ASSIGNED BY THE CORPORATION TO
THE UNDERWRITER AND/OR TO ANY OTHER AGENCY, AS IT MAY ELECT, UPON ANY
CONVERSION TAKING PLACE, PROPER TRANSFER SHALL BE MADE BETWEEN THE ASSETS
BELONGING TO THE RESPECTIVE CLASSES OF STOCK. THE BOARD OF DIRECTORS MAY
LIMIT THIS CONVERSION PRIVILEGE TO SHARES WHICH HAVE BEEN HELD FOR SUCH
REASONABLE PERIOD OF TIME AS THE DIRECTORS MAY DETERMINE.
(E) THE NET ASSET VALUE OF EACH CLASS OF STOCK SHALL BE
DETERMINED IN ACCORDANCE WITH THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED, AND WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, BY DIVIDING
THE TOTAL VALUE OF ITS ASSETS LESS ANY LIABILITIES, BY ITS TOTAL
OUTSTANDING SHARES.
SIXTH: THE SHARES OF STOCK OF THE CORPORATION MAY BE ISSUED TO SUCH
PERSONS AND AT SUCH PRICES FROM TIME TO TIME AS THE BOARD OF DIRECTORS MAY
DETERMINE. SUCH ISSUANCE SHALL BE ON A NON-ASSESSABLE BASIS. NO HOLDER
OF SHARES OF STOCK SHALL HAVE PREEMPTIVE RIGHTS, AND THE CORPORATION SHALL
HAVE THE RIGHT TO ISSUE AND SELL TO ANY PERSON OR PERSONS ANY SHARES OF
ITS STOCK OR ANY OPTION RIGHTS EXERCISABLE FOR, OR SECURITIES CONVERTIBLE
INTO SHARES OF ITS STOCK WITHOUT FIRST OFFERING SUCH SHARES, RIGHTS OR
SECURITIES TO THE HOLDERS OF ANY SHARES.
SEVENTH: THE NUMBER OF DIRECTORS OF THE CORPORATION AND THEIR TERMS
OF OFFICE SHALL BE DETERMINED FROM TIME TO TIME BY THE DIRECTORS PURSUANT
TO THE TO THE BY-LAWS OF THE CORPORATION, SUCH NUMBER INITIALLY SHALL BE
SEVEN (7) BUT SMALL NEVER BE LESS THAN THREE. THE NAMES OF THE INITIAL
DIRECTORS ARE:
E. J. STONNER
STEPHEN W. HARRIS
WHO SHALL SERVE UNTIL THE 1980 ANNUAL MEETING OF STOCKHOLDERS, OR UNTIL
THEIR SUCCESSORS SHALL HAVE BEEN DULY ELECTED AND SHALL HAVE QUALIFIED:
WILLIAM J. SMITH
LEONARD W. JOHNSON
WHO SHALL SERVE UNTIL THE 1981 ANNUAL MEETING OF STOCKHOLDERS, OR UNTIL
THEIR SUCCESSORS SHALL HAVE BEEN DULY ELECTED AND SHALL HAVE QUALIFIED:
ALFRED J. HOFFMAN
JAMES W. HOLMAN
FRANCIS C. ROOD
WHO SMALL SERVE UNTIL THE 1982 ANNUAL MEETING OF STOCKHOLDERS, OR UNTIL
THEIR SUCCESSORS SHALL HAVE BEEN DULY ELECTED AND SHALL HAVE QUALIFIED:
(A) IF A VACANCY OCCURS ON THE BOARD OF DIRECTORS BY REASON OF
DEATH, RESIGNATION DR OTHERWISE, THE BOARD OF DIRECTORS MAY FILL SUCH
VACANCY FOR THE REMAINDER OF THE UNEXPIRED TERM BY MAJORITY VOTE OF THE
REMAINING DIRECTORS: PROVIDED THAT AFTER FILLING ANY SUCH VACANCY, AT
LEAST TWO THIRDS OF THE DIRECTORS.SMALL HAVE BEEN ELECTED BY THE
STOCKHOLDERS, AND PROVIDED FURTHER THAT IF AT ANY TIME LESS THAN A
MAJORITY OF THE DIRECTORS THEN HOLDING OFFICE WERE ELECTED BY THE
STOCKHOLDERS, A STOCKHOLDERS, MEETING SHALL BE CALLED AS PROMPTLY AS
POSSIBLE AND, IN ANY EVENT, WITHIN SIXTY DAYS, FOR THE PURPOSE OF ELECTING
DIRECTORS TO FILL EXISTING VACANCIES.
EIGHTH: THE CORPORATION IS EXPRESSLY EMPOWERED AS FOLLOWS:
(A) THE CORPORATION MAY ENTER INTO A WRITTEN CONTRACT OR
CONTRACTS WITH ANY PERSON, INCLUDING ANY FIRM, CORPORATION, TRUST OR
ASSOCIATION IN WHICH ANY OFFICER, OTHER EMPLOYEE, DIRECTOR OR STOCKHOLDER
OF THIS CORPORATION MAY BE INTERESTED, PROVIDING FOR A DELEGATION OF THE
MANAGEMENT OF ALL OR PART OF THIS CORPORATION'S SECURITIES PORTFOLIO AND
ALSO FOR THE DELEGATION OF THE PERFORMANCE OF ADMINISTRATIVE CORPORATE
FUNCTIONS, SUBJECT ALWAYS TO THE DIRECTION OF THE BOARD OF DIRECTORS OF
THIS CORPORATION. THE COMPENSATION PAYABLE BY THIS CORPORATION UNDER SUCH
CONTRACTS SHALL BE SUCH AS IS DEEMED FAIR AND EQUITABLE TO BOTH PARTIES BY
THE SAID BOARD OF DIRECTORS. EACH SUCH CONTRACT SHALL IN ALL: RESPECTS BE
CONSISTENT WITH AND SUBJECT TO THE REQUIREMENTS OF THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED, AS THEN IN EFFECT AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION OR ANY SUCCEEDING GOVERNMENTAL
AUTHORITY PROMULGATED THEREUNDER.
(B) THE CORPORATION MAY APPOINT ONE OR MORE DISTRIBUTORS OR
AGENTS OR BOTH FOR THE SALE OF THE SHARES OF THE CORPORATION9 MAY ALLOW
SUCH PERSON OR PERSONS.A COMMISSION ON THE SALE OF SUCH SHARES, AND MAY
ENTER INTO SUCH CONTRACT OR CONTRACTS WITH SUCH PERSON OR PERSONS AS THE
BOARD OF DIRECTORS OF THIS CORPORATION IN ITS DISCRETION MAY DEEM
REASONABLE AND PROPER* ANY SUCH CONTRACT OR CONTRACTS FOR THE SALE OF THE
SHARES OF THIS CORPORATION MAY BE MADE WITH ANY PERSON EVEN THOUGH SUCH
PERSON MAY BE AN OFFICER, OTHER EMPLOYEE, DIRECTOR OR STOCKHOLDER OF THIS
CORPORATION OR A CORPORATION, PARTNERSHIP, TRUST OR ASSOCIATION IN WHICH
ANY SUCH OFFICER9 OTHER EMPLOYEE, DIRECTOR;OR STOCKHOLDER MAY BE
INTERESTED, OR SUCH PERSON MAY BE THE SAME AS THAT PERSON RETAINED
PURSUANT TO THE POWERS GRANTED IN SECTION (A) OF THIS ARTICLE EIGHTH.
EACH SUCH CONTRACT SHALL IN ALL RESPECTS BE CONSISTENT WITH AND SUBJECT TO
THE REQUIREMENTS OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AS
THEN IN EFFECT AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION
OR ANY SUCCEEDING GOVERNMENTAL AUTHORITY PROMULGATED THEREUNDER.
(C) THE CORPORATION MAY EMPLOY SUCH CUSTODIAN OR CUSTODIANS FOR
THE SAFEKEEPING OF THE PROPERTY OF THE CORPORATION AND OF ITS SHARES, SUCH
DIVIDEND DISBURSING AGENT OR AGENTS, AND SUCH TRANSFER AGENT OR AGENTS AND
REGISTRAR OR REGISTRARS FOR ITS SHARES, AND MAY MAKE AND PERFORM SUCH
CONTRACTS FOR THE AFORESAID PURPOSES AS IN THE OPINION OF THE BOARD OF
DIRECTORS OF THIS CORPORATION MAY BE REASONABLE, NECESSARY OR PROPER FOR
THE CONDUCT OF THE AFFAIRS OF THE CORPORATION, AND MAY PAY THE FEES AND
DISBURSEMENTS OF SUCH CUSTODIANS, DIVIDEND DISBURSING AGENTS, TRANSFER
AGENTS, AND REGISTRARS OUT OF THE INCOME AND/OR ANY OTHER PROPERTY OF THE
CORPORATION. NOTWITHSTANDING ANY OTHER PROVISIONS OF THESE ARTICLES OF
INCORPORATION OR THE BY-LAWS OF THE CORPORATION, THE BOARD OF DIRECTORS
MAY CAUSE ANY OR ALL OF THE PROPERTY OF THE CORPORATION TO BE TRANSFERRED
TO, OR TO BE ACQUIRED AND HELD IN THE NAME OF, A CUSTODIAN SO APPOINTED OR
ANY NOMINEES OF, THIS CORPORATION OR NOMINEE OR NOMINEES OF SUCH CUSTODIAN
SATISFACTORY TO THE BOARD OF DIRECTORS OF THIS CORPORATIONL.
(D) THE SAME PERSON, PARTNERSHIP (GENERAL OR LIMITED),
ASSOCIATION, TRUST OR CORPORATION MAY BE EMPLOYED IN: ANY MULTIPLE
CAPACITY UNDER SUBSECTIONS (A), (B) AND (C) OF THIS ARTICLE EIGHTH AND MAY
RECEIVE COMPENSATION FROM THE CORPORATION IN AS MANY CAPACITIES IN WHICH
SUCH PERSON, PARTNERSHIP (GENERAL OR LIMITED), ASSOCIATION, TRUST OR
CORPORATION SHALL SERVE THE CORPORATION.
NINTH: (A) THE CORPORATION SHALL INDEMNIFY ANY PERSON WHO WAS OR IS A
PARTY, OR IS THREATENED TO BE MADE A PARTY, TO ANY THREATENED, PENDING OR
COMPLETED ACTION, SUIT OR PROCEEDING, WHETHER CIVIL, CRIMINAL,
ADMINISTRATIVE OR INVESTIGATIVE (OTHER THAN AN ACTION BY OR IN RIGHT OF
THE CORPORATION), BY REASON OF THE FACT THAT HE IS OR WAS A DIRECTOR OR
OFFICER OF THE CORPORATION, OR IS OR WAS SERVING AT THE REQUEST OF THE
CORPORATION AS A DIRECTOR OR OFFICER OF ANOTHER CORPORATION, PARTNERSHIP,
JOINT VENTURE, TRUST, ASSOCIATION OR OTHER ENTERPRISE, AGAINST EXPENSES
(INCLUDING ATTORNEYS' FEES), JUDGEMENTS, FINES AND AMOUNTS PAID IN
SETTLEMENT ACTUALLY AND REASONABLY INCURRED BY HIM IN CONNECTION WITH SUCH
ACTION, SUIT OR PROCEEDING IF HE ACTED IN GOOD FAITH AND IN A MANNER HE
REASONABLY BELIEVED TO BE IN OR NOT OPPOSED TO THE BEST INTERESTS OF THE
CORPORATION, AND, WITH RESPECT TO ANY CRIMINAL ACTION OR PROCEEDING, HAS
NO REASONABLE CAUSE TO BELIEVE HIS CONDUCT WAS UNLAWFUL. THE TERMINATION
OF ANY ACTION, SUIT OR PROCEEDING BY JUDGEMENT, ORDER, SETTLEMENT OR
CONVICTION, OR UPON A PLEA OF NOLO CONTENDERE OR ITS EQUIVALENT, SHALL
NOT, OF ITSELF, CREATE A PRESUMPTION THAT THE PERSON DID NOT ACT IN GOOD
FAITH AND IN A MANNER WHICH HE REASONABLY BELIEVED TO BE IN, OR NOT
OPPOSED TO, THE BEST INTERESTS OF THE CORPORATION, AND, WITH RESPECT TO
ANY CRIMINAL ACTION OR PROCEEDING, DID NOT HAVE REASONABLE, CAUSE TO
BELIEVE THAT HIS CONDUCT WAS UNLAWFUL.
(B) THE CORPORATION SHALL INDEMNIFY ANY PERSON WHO WAS OR IS A
PARTY, OR IS THREATENED TO BE MADE A PARTY, TO ANY THREATENED OR COMPLETED
ACTION, SUIT OR PROCEEDING BY OR IN THE RIGHT OF THE CORPORATION TO
PROCURE A JUDGEMENT IN ITS FAVOR BY REASON OF THE FACT THAT HE IS OR WAS A
DIRECTOR OR OFFICER OF THE CORPORATION, OR IS OR WAS SERVING AT THE
REQUEST OF THE CORPORATION AS A DIRECTOR OR OFFICER OF ANOTHER
CORPORATION, PARTNERSHIP, TRUST, JOINT VENTURE, ASSOCIATION OR OTHER
ENTERPRISE AGAINST EXPENSES (INCLUDING ATTORNEYS' FEES) ACTUALLY AND
REASONABLY INCURRED BY HIM IN CONNECTION WITH THE DEFENSE,OR SETTLEMENT OF
SUCH ACTION OR SUIT IF HE ACTED IN GOOD FAITH AND IN A MANNER HE
REASONABLY BELIEVED TO:BE IN OR NOT OPPOSED TO THE BEST INTERESTS OF THE
CORPORATION: EXCEPT THAT NO SUCH INDEMNIFICATION SHALL BE MADE IN RESPECT
OF ANY CLAIM, ISSUE OR MATTER AS TO
WHICH SUCH PERSON SHALL HAVE BEEN ADJUDGED TO BE LIABLE FOR NEGLIGENCE OR
MISCONDUCT IN THE PERFORMANCE OF HIS DUTY TO THE CORPORATION. UNLESS AND
ONLY TO THE EXTENT THAT A COURT SHALL DETERMINE UPON APPLICATION THAT,
DESPITE THE ADJUDICATION OF LIABILITY BUT IN VIEW OF ALL THE CIRCUMSTANCES
OF THE CASE, SUCH PERSON IS FAIRLY AND REASONABLY ENTITLED TO INDEMNITY
FOR SUCH EXPENSES WHICH THE COURT SMALL DEEM PROPER.
(C) TO THE EXTENT THAT A DIRECTOR OR OFFICER OF THE CORPORATION
HAS BEEN SUCCESSFUL ON THE MERITS OR OTHERWISE IN DEFENSE OF ANY ACTION,
SUIT OR PROCEEDING REFERRED TO IN SUBSECTIONS (A) AND (B), OR IN DEFENSE
OF ANY CLAIM, ISSUE OR MATTER THEREIN, HE SHALL BE INDEMNIFIED AGAINST
EXPENSES (INCLUDING ATTORNEYS' FEES) ACTUALLY AND REASONABLY INCURRED BY
HIM IN CONNECTION THEREWITH.
(D) ANY INDEMNIFICATION UNDER SUBSECTIONS (A) AND (B) (UNLESS
ORDERED BY A COURT OF COMPETENT JURISDICTION) SHALL BE MADE BY THE
CORPORATION ONLY AS AUTHORIZED IN THE SPECIFIC CASE UPON A DETERMINATION
THAT INDEMNIFICATION OF THE DIRECTOR OR OFFICER IS PROPER IN THE
CIRCUMSTANCES BECAUSE HE HAS MET THE APPLICABLE STANDARD OF CONDUCT SET
FORTH IN SUBSECTIONS (A) AND (B) OF THIS ARTICLE NINTM. SUCH
DETERMINATION SHALL BE MADE BY THE BOARD OF DIRECTORS BY A MAJORITY VOTE
OF A QUORUM CONSISTING OF DIRECTORS WHO WERE NOT PARTIES TO SUCH ACTION,
SUIT, OR PROCEEDING, OR IF SUCH A QUORUM IS NOT OBTAINABLE, OR EVEN IF
OBTAINABLE, A QUORUM OF DIRECTORS WHO ARE NOT "INTERESTED PERSONS" AS
DEFINED IN THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, SO DIRECTS, BY
INDEPENDENT LEGAL COUNSEL IN A WRITTEN OPINION, OR IF SUCH WRITTEN OPINION
IS NOT OBTAINABLE, BY VOTE OF THE STOCKHOLDERS AT THE ANNUAL MEETING OR A
SPECIAL MEETING CALLED FOR THAT PURPOSE.
(E) EXPENSES INCURRED IN DEFENDING A CIVIL OR CRIMINAL ACTION,
SUIT OR PROCEEDING MAY BE PAID BY THE CORPORATION IN ADVANCE OF THE FINAL
DISPOSITION OF SUCH ACTION, SUIT OR PROCEEDING AS AUTHORIZED BY THE BOARD
OF DIRECTORS IN THE SPECIFIC CASE UPON RECEIPT OF ANY UNDERTAKING BY OR ON
BEHALF OF THE DIRECTOR OR OFFICER TO REPAY SUCH AMOUNT UNLESS IT SHALL
ULTIMATELY BE DETERMINED THAT HE IS ENTITLED TO BE INDEMNIFIED BY THE
CORPORATION AS AUTHORIZED IN THIS ARTICLE NINTH.
(F) THE INDEMNIFICATION PROVIDED BY THIS ARTICLE NINTH SHALL NOT
BE DEEMED EXCLUSIVE OF ANY OTHER RIGHTS TO WHICH THOSE SEEKING
INDEMNIFICATION MAY BE ENTITLED UNDER ANY BY-LAW, AGREEMENT, VOTE OF
STOCKHOLDERS OR DIRECTORS WHO ARE NOT "INTERESTED PERSONS" AS DEFINED IN
THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, OR OTHERWISE, BOTH AS TO
ACTION IN HIS OFFICIAL CAPACITY AND AS TO ACTION IN ANOTHER CAPACITY WHILE
HOLDING SUCH OFFICE, AND SHALL CONTINUE AS TO A PERSON WHO HAS CEASED TO
BE A DIRECTOR OR OFFICER AND SHALL INURE TO THE BENEFIT OF THE HEIRS,
EXECUTORS AND ADMINISTRATOR$ OF SUCH PERSON.
(G) THE CORPORATION MAY PURCHASE AND MAINTAIN INSURANCE ON ITS
BEHALF AND ON BEHALF OF ANY PERSON WHO IS OR WAS A DIRECTOR OR OFFICER OF
THE CORPORATION, OR IS OR WAS SERVING AT THE REQUEST OF THE CORPORATION AS
A DIRECTOR OR OFFICER OF ANOTHER CORPORATION, PARTNERSHIP, TRUST, JOINT
VENTURE, ASSOCIATION OR OTHER ENTERPRISE AGAINST ANY LIABILITY ASSERTED
AGAINST HIM AND INCURRED BY HIM IN ANY SUCH CAPACITY, OR ARISING OUT OF
HIS STATUS AS SUCH, WHETHER OR NOT THE CORPORATION WOULD HAVE THE POWER TO
INDEMNIFY HIM AGAINST SUCH LIABILITY UNDER THE PROVISIONS OF THIS ARTICLE
NINTH.
(H) ANYTHING TO THE CONTRARY IN THE FOREGOING CLAUSES (A)
THROUGH G) OF THIS ARTICLE NINTH NOTWITHSTANDING, NO DIRECTOR OR OFFICER
SHALL BE INDEMNIFIED AGAINST ANY LIABILITY TO THE CORPORATION OR TO ITS
SECURITY HOLDERS TO WHICH HE WOULD OTHERWISE BE SUBJECT BY REASON OF
WILLFUL MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE OR RECKLESS DISREGARD OF
THE DUTIES INVOLVED IN THE CONDUCT OF HIS OFFICE.
TENTH: IN, FURTHERANCE, AND NOT IN LIMITATION, OF THE POWERS
CONFERRED BY THE LAWS OF THE STATE OF MARYLAND, THE BOARD OF DIRECTORS IS
EXPRESSLY AUTHORIZED:
(A) TO MAKE, ALTER OR REPEAL THE BY-LAWS OF THE CORPORATION,
EXCEPT WHERE SUCH POWER IS RESERVED BY THE BY-LAWS TO THE STUCKHOLDERS,
AND EXCEPT AS OTHERWISE REQUIRED BY THE INVESTMENT COMPANY ACT OF 1940 AS
AMENDED.
(B) FROM TIME TO TIME TO DETERMINE WHETHER AND TO WHAT EXTENT
AND AT WHAT TIMES AND PLACES AND UNDER WHAT CONDITIONS AND REGULATIONS THE
BOOKS AND ACCOUNTS OF THE CORPORATION, OR ANY OF THEM OTHER THAN THE STOCK
LEDGER, SHALL BE OPEN TO THE INSPECTION OF THE STOCKHOLDERS, AND NO
STOCKHOLDER SHALL, HAVE ANY RIGHT TO INSPECT ANY ACCOUNT OR BOOK OR
DOCUMENT OF THE CORPORATION EXCEPT AS CONFERRED BY LAW OR AUTHORIZED BY
RESOLUTION OF THE BOARD OF DIRECTORS OR OF THE STOCKHOLDERS.
(C) TO AUTHORIZE AND ISSUE OBLIGATIONS OF THE CORPORATION,
SECURED AND UNSECURED, WITHOUT THE ASSENT OR VOTE OF THE STOCKHOLDERS, AS
THE BOARD OF DIRECTORS MAY DETERMINE, AND TO AUTHORIZE AND CAUSE TO BE
EXECUTED MORTGAGES AND LIENS UPON THE PROPERTY OF THE CORPORATION, REAL
AND/OR PERSONAL, BUT ONLY TO THE EXTENT PERMITTED BY THE FUNDAMENTAL
POLICIES OF THE CORPORATION SET OUT IN ITS REGISTRATION STATEMENT FILED
WITH THE FEDERAL SECURITIES AND EXCHANGE COMMISSION OR ANY SUCCEEDING
GOVERNMENTAL AUTHORITY, PURSUANT TO THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED.
(D) IN ADDITION TO THE POWERS AND AUTHORITIES GRANTED HEREIN AND
BY STATUTE EXPRESSLY CONFERRED UPON IT, THE BOARD OF DIRECTORS IS
AUTHORIZED TO EXERCISE ALL SUCH POWERS AND DO ALL SUCH ACTS AND THINGS AS
MAY BE EXERCISED OR DONE BY THE CORPORATIONP SUBJECT, NEVERTHELESS, TO THE
PROVISIONS OF MARYLAND LAW, THESE ARTICLES OF INCORPORATION, AND THE BY-
LAWS OF THE CORPORATION.
ELEVENTH: THE BOOKS OF THE CORPORATION MAY BE KEPT (SUBJECT TO ANY
PROVISIONS OF MARYLAND LAW) OUTSIDE THE STATE OF MARYLAND AT SUCH PLACE,
OR PLACES AS MAY BE DESIGNATED FROM TIME TO TIME BY SUCH BOARD OF
DIRECTORS OR IN THE BY-LAWS OF THE CORPORATION. ELECTIONS OF DIRECTORS
NEED NOT BE BY BALLOT UNLESS THE BY-LAWS OF THE CORPORATION SHALL SO
PROVIDE.
TWELFTH: THE CORPORATION RESERVES THE RIGHT TO AMEND, ALTER, CHANGE
OR REPEAL ANY PROVISION CONTAINED IN THESE ARTICLES OF INCORPORATION, IN
THE MANNER NOW OR HEREAFTER PRESCRIBED BY STATUTE, AND ALL RIGHTS
CONFERRED UPON STOCKHOLDERS HEREIN ARE GRANTED SUBJECT TO THIS
RESERVATION.
THIRTEENTH: NOTWITHSTANDING ANY PROVISION OF MARYLAND LAW REQUIRING
MORE THAN A MAJORITY VOTE OF THE COMMON STOCK IN CONNECTION WITH ANY
CORPORATE ACTION INCLUDING, BUT NOT LIMITED TO, AMENDMENT OF THESE
ARTICLES OF INCORPORATION,
UNLESS OTHERWISE PROVIDED IN THESE ARTICLES OF INCORPORATION THE
CORPORATION MAY TAKE OR AUTHORIZE SUCH ACTION UPON THE FAVORABLE VOTE OF
THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK.
FOURTEENTH: THE DURATION OF THE CORPORATION SMALL BE PERPETUAL.
IN WITNESS WHEREOF, THE UNDERSIGNED INCORPORATOR OF THE D. L. BABSON
TAX-FREE INCOME FUND, INC. WHO EXECUTED THE FOREGOING ARTICLES OF
INCORPORATION HEREBY ACKNOWLEDGES THE SAME TO BE HIS ACT AND FURTHER
ACKNOWLEDGES THAT TO THE BEST OF HIS KNOWLEDGE THE MATTERS AND FACTS SET
FORTH HEREIN ARE TRUE IN ALL MATERIAL RESPECTS UNDER THE PENALTIES OF
PERJURY.
DATED THE 16th DAY OF JULY, 1979.
/S/ ALFRED J. HOFFMAN
ALFRED J. HOFFMAN
<PAGE>
EX99.23(a)(3)(B)
THE D. L. BABSON TAX-FREE INCOME FUND, INC.
ARTICLES OF AMENDMENT
THE D. L. BABSON TAX-FREE INCOME FUND, INC., a Maryland Corporation having
its principal office in Baltimore City, Maryland (hereinafter called the
Corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The charter of the Corporation is hereby amended by
striking out "ARTICLE SECOND" of the Articles of Incorporation and
inserting in lieu thereof the following:
"SECOND: The name of the Corporation is D. L. BABSON TAX-FREE
INCOME FUND, INC."
SECOND: The board of directors of the Corporation on October
25th, 1979, duly adopted a resolution in which was set forth the
foregoing amendment to the charter, declaring that the said amendment
of the charter as proposed was advisable and directing that it be
submitted to the State of Maryland in accordance with the provisions
of Section 2-605(1) of the Corporations and Associations Article of
the annotated code of Maryland.
THIRD: The amendment of the charter of the Corporation as
hereinabove set forth has been duly approved by the board of directors
of the Corporation.
IN WITNESS WHEREOF, THE D. L. BABSON TAX-FREE INCOME FUND, INC.
has caused these presents to be signed in its name and on its behalf
by its President and witnessed (or attested) by its Secretary on
November 19, 1979.
THE D. L BABSON TAX-FREE INCOME FUND, INC.
by /s/Alfred J. Hoffman
President, Alfred J. Hoffman
Witness: (Attest)
/s/Jacqueline B. Willhite
Jacqueline B. Willhite, Secretary
THE UNDERSIGNED, President of THE D. L. BABSON TAX-FREE INCOME
FUND, INC., who executed on behalf of said Corporation the foregoing
Articles of Amendment, of which this certificate is made a part,
hereby acknowledges, in the name and on behalf of said Corporation,
the foregoing Articles of Amendment to be the corporate act of said
Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters set forth therein with respect to
the approval thereof are true in all material respects, under the
penalties of perjury.
/s/Alfred J. Hoffman
Alfred J. Hoffman
<PAGE>
EX99.23(a)(3)(C)
D.L. BABSON TAX-FREE INCOME FUND, INC.
ARTICLES OF AMENDMENT
The D. L. BABSON TAX-FREE INCOME FUND, INC., a Maryland
Corporation having its principal office in Baltimore City,
Maryland (hereinafter called the Corporation), hereby certifies
to the State Department of Assessments and Taxation of Maryland,
that:
FIRST: The charter of the Corporation is hereby amended by
striking out "ARTICLE FIFTH" of the Articles of Incorporation
which reads as follows:
FIFTH: THE TOTAL NUMBER OF SHARES OF ALL CLASSES
OF STOCK WHICH THE CORPORATION SHALL HAVE
AUTHORITY TO ISSUE IS 100,000,000 SHARES OF A PAR
VALUE OF TEN CENTS ($0.10) PER SHARE AND AN
AGGREGATE PAR VALUE OF $10,000,000. THE SHARES
SHALL BE DIVIDED INTO TWO CLASSES OF 50,000,000
SHARES OF EACH TO BE KNOWN AS THE SHORT-TERM
PORTFOLIO, AND THE LONG-TERM PORTFOLIO. THE BOARD
OF DIRECTORS OF THE CORPORATION SHALL HAVE THE
POWER TO CLASSIFY OR RECLASSIFY ANY UNISSUED
SHARES BY FIXING THE NUMBER OF SHARES IN EACH OF
THEAFORESAID CLASSES OR BY ALTERING IN ANY ONE OR
MORE RESPECTS, FROM TIME TO TIME BEFORE ISSUANCE
OF SUCH SHARES, THE PREFERENCES, RIGHTS, VOTING
POWERS, RESTRICTIONS OR QUALIFICATIONS OF ANY
UNISSUED SHARES.
and inserting in lieu thereof the following:
FIFTH: THE TOTAL NUMBER OF SHARES OF ALL
CLASSES OF STOCK WHICH THE CORPORATION SHALL HAVE
AUTHORITY TO ISSUE IS TWO HUNDRED MILLION
(200,000,000) SHARES OF A PAR VALUE OF TEN CENTS
($0.10) PER SHARE AND AN AGGREGATE PAR VALUE OF
TWENTY MILLION DOLLARS ($20,000,000). THE SHARES
SHALL BE DIVIDED INTO THREE CLASSES DESIGNATED AS
FOLLOWS: ONE HUNDRED MILLION (100,000,000) SHARES
TO BE KNOWN AS THE MONEY MARKET PORTFOLIO, FIFTY
MILLION (50,000,000) SHARES TO BE KNOWN AS THE
SHORTER TERM PORTFOLIO, AND FIFTY MILLION
(50,000,000) SHARES TO BE KNOWN AS THE LONGER
TERM PORTFOLIO. THE BOARD OF DIRECTORS OF THE
CORPORATION SHALL HAVE THE POWER TO CLASSIFY OR
RECLASSIFY ANY UNISSUED SHARES BY FIXING THE
NUMBER OF SHARES IN EACH OF THE AFORESAID CLASSES
OR BY ALTERING IN ANY ONE OR MORE RESPECTS, FROM
TIME TO TIME BEFORE ISSUANCE OF SUCH SHARES, THE
PREFERENCES, RIGHTS, VOTING POWERS, RESTRICTIONS
OR QUALIFICATIONS OF ANY UNISSUED SHARES.
SECOND: The board of directors of the Corporation on
November 19, 1980, duly adopted a resolution in which was set
forth the foregoing amendment to the charter, declaring that
the said amendment of the charter as proposed was advisable and
directing that it be submitted for action thereon by the stockholders
of the Corporation at a special meeting of the stockholders to be
held on December 8, 1980.
THIRD: Notice setting forth the said amendment of the charter
and stating that a purpose of the meeting of the stockholders
would be to take action thereon, was given, as required by law,
to all stockholders entitled to vote thereon. The amendment of
the charter of the Corporation as hereinabove set forth was
approved by the stockholders of the Corporation at said meeting
by the affirmative vote of a majority of all the votes entitled
to be cast thereon.
FOURTH: The amendment of the charter of the Corporation as
hereinabove set forth has been duly advised by the board of
directors and approved by the stockholders of the Corporation.
IN WITNESS WHEREOF, The D. L. BABSON TAX-FREE INCOME FUND, INC.
has caused these presents to be signed in its name and on its
behalf by its President and witnessed (or attested) by its
Secretary on December 22, 1980.
D.L.BABSON TAX-FREE INCOME FUND, INC.
By /s/ Alfred J. Hoffman
President, Alfred A. Hoffman
(Witness) (Attest)
/s/Jacqueline B. Willhite
Jacqueline B. Willhite
Secretary
THE UNDERSIGNED, President of D.L. BABSON TAX-FREE INCOME FUND,
INC., who executed on behalf of said corporation the foregoing
Articles of Amendment, of which this certificate is made a part,
hereby acknowledges, in the name and on behalf of said
corporation, the foregoing Articles of Amendment to be the
corporate act of said corporation and further certifies that, to
the best of his knowledge, information and belief, the matters
and facts set forth therein with respect to the approval thereof
are true in all material respects, under the penalties of
perjury.
/s/ Alfred J. Hoffman
Alfred J. Hoffman
Page 2
EX99.23(a)(4)(A)
ARTICLES OF INCORPORATION
OF
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
FIRST: I, the undersigned, John G. Dyer, whose Post-Office
Address is L-36 Route 1, Lake Lotawana, Missouri, 64063, being
at Least twenty-one years of age, do, under and by virtue of the
general laws of the state of Maryland authorizing the formation
of corporations, associate myself as Incorporator with the
intention of forming a corporation (hereinafter called the
"Corporation").
SECOND: The name of the Corporation is BABSON-STEWART IVORY
INTERNATIONAL FUND, INC.
THIRD: The purpose for which the Corporation is formed is
to act as an open-end, diversified management investment company
under the Investment Company Act of 1940, as amended, and to
exercise and enjoy all of the powers, rights and privileges
granted to, or conferred upon, corporations of a similar
character by the general laws of the state of Maryland now or
hereafter in force.
FOURTH: The Post-Office address of the principal office of
the Corporation in this state is C/O the Corporation Trust
incorporated, 32 South Street, Baltimore, Maryland, 21202. The
name of the Resident Agent of the Corporation in this state is
the Corporation Trust Incorporated, a corporation of this state,
and the Post-office address of the Resident Agent is 32 South
Street, Baltimore, Maryland, 21202.
FIFTH: The total number of shares of all classes of stock
which the Corporation shall have authority to issue is
10,000,000 shares of a par value of one dollar ($1.00) per share
and an aggregate par value of $10,000,000. The number of the
shares of stock of each class is such number, if any, of shares
of unissued stock as is classified or reclassified into such
class by the Corporation's Board of Directors pursuant to the
authority contained in Section 2-105 of the Maryland General
Corporation Law as filed by the Corporation as Articles
Supplementary under Section 2-108 of the Maryland General
Corporation Law (or any successor provisions). The Board of
Directors of the Corporation shall have the power to classify or
reclassify unissued shares into one or more classes which
together with the issued shares of stock of the corporation
shall have such designations as the board may determine and
(subject to any applicable rule, regulation or order of the
Securities and Exchange Commission or other applicable law or
regulation) shall have such preferences, conversion or other
rights, voting powers, restrictions, limitations as to
dividends, qualifications, terms and conditions of redemption
and other characteristics as the Board may determine (or in the
when there are no shares outstanding, or subscribed for a
particular class previously established and designated by the
Board of Directors, the class may be liquidated by similar means.
If the Board so determines, one or more classes of stock may be
treated for all purposes other than dividends as if all shares of
such classes were shares of one class. The dividends payable to the
holders of any class (subject to any applicable rule, regulation or
order of the Securities and Exchange Commission or any other
applicable law or regulation) shall be determined by the Board
and need not be individually declared, but may be declared and
paid in accordance with a formula adopted by the Board. Each
share of a class shall have equal rights with each other share
of that class of stock with respect to the assets of the
Corporation pertaining to that class. Any fractional shares of
capital stock issued by the corporation shall have
proportionately, all the rights of full shares. Except as
otherwise provided herein, all references in these articles of
incorporation to capital stock or class of stock shall apply
without discrimination to the shares of each class of stock.
(A) The holders of each share of stock of the
Corporation shall be entitled to one vote for each full and a
fractional vote for each fractional share of stock, irrespective
of the class then standing in his or her name in the books of
the Corporation. On any matter submitted to a vote of
shareholders, all shares of the Corporation then issued and
outstanding and entitled to vote, irrespective of the class,
shall be voted in the aggregate and not by class, except (1)
when otherwise expressly provided by the Maryland General
Corporation Law or (2) when required by the Investment Company
Act of 1940, as amended, shares shall be voted by individual
class; and (3) when the matter does not affect any interest of a
particular class, then only shareholders of the affected class
or classes shall be entitled to vote thereon.
(B) Each class of stock of the Corporation shall have
the following powers, preferences and participating, voting, or
other special rights and the qualifications, restrictions, and
limitations thereof shall be as follows:
(1) All consideration received by the Corporation
for the issue or sale of stock of each class, together with all
income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably
belong to the class of shares of stock with respect to which
such assets, payments or funds were received by the Corporation
for all purposes, subject only to the rights of creditors, and
shall be so handled upon the books of account of the
Corporation. Such assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange
or liquidation thereof and any assets derived from any
reinvestment of such proceeds, in whatever form the same may be,
are herein referred to as "assets belonging to" such class.
(2) The Board of Directors may from time to time
declare and pay dividends or distributions, in stock or in cash,
on any or all classes of stock, the amount of such dividends and
the payment of them being wholly in the discretion of the Board
of Directors.
(I) Dividends or distributions on shares of
any class of stock shall be paid only out of earnings, surplus,
or other lawfully available assets belonging to such class.
(II) Inasmuch as one goal of the corporation
is to qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended, or any successor or
comparable statute thereto, and regulations promulgated
thereunder; and 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 corporation, the Board
of Directors shall have the power in its discretion to
distribute in any fiscal year as dividends, including designated
in whole or in part as capital gain distributions, amounts
sufficient, in the opinion of the Board of Directors, to enable
the Corporation to qualify as a regulated investment company and
to avoid liability for the Corporation for federal income tax in
respect of that year.
(3) In the event of the liquidation or
dissolution of the Corporation, shareholders of each class shall
be entitled to receive, as a class, out of the assets of the
Corporation available for distribution to shareholders, but
other than general assets not belonging to any particular class
of stock, the assets belonging to such class; and the assets so
distributable to the shareholders of any class shall, be
distributed among such shareholders in proportion to the number
of shares of such class held by them and recorded on the books
of the Corporation. In the event that there are any general
assets not belonging to any particular class of stock and
available for distribution, such distribution shall be made to
the holders of stock of all classes in proportion to the asset
value of the respective classes determined as hereinafter
provided.
(4) The assets belonging to any class of stock
shall be charged with the liabilities in respect to such class,
and shall also be charged with its share of the general
liabilities of the Corporation, in proportion to the asset value
of the respective classes determined as hereinafter set out. The
determination of the Board of Directors shall be conclusive as
to the amount of liabilities, including accrued expenses and
reserves, as to the allocation of the same as to a given class,
and as to whether the same or general assets of the Corporation
are allocable to one or more classes.
(C) Each holder of any class of stock of the
Corporation, who shall surrender his certificate in good
delivery form to the Corporation or who, if the shares in question
are not represented by certificates, shall deliver to the Corporation
a written request in good order signed by the shareholder, shall be
entitled to require the Corporation, to the extent that the class
of stock in question has assets lawfully available therefor and out
of such assets, but not otherwise, to redeem all or any part of the
shares of such stock standing in the name of such holder on the
books of the Corporation, at the net asset value of such shares,
determined in the manner and as of the time, and payable as
provided in the Investment Company Act of 1940, as amended. The
Corporation shall make payment for any such shares to be
redeemed as aforesaid, in cash, or if in the opinion of the
Board of Directors, which shall be conclusive, conditions exist
which make payment wholly in cash unwise or undesirable, the
Corporation may make payment wholly or partly in securities
belonging to the class to provide for such redemption by it of
the shares of such class.
(1) The Board of Directors of the Corporation
may, in accordance with the Investment Company Act of 1940, as
amended, suspend the right of the holders of any class of stock
of the corporation to require the Corporation to redeem shares
of such class.
(2) The Board of Directors, in the economic best
interest of the Corporation and in order to reduce the
disproportionately burdensome expenses in servicing shareholder
accounts, may from time to time, establish uniform standards
with respect to the minimum value of a stockholder account or a
minimum investment which may be made by a stockholder. The Board
of Directors, by resolution and without the vote or consent of
stockholders, may require that the aggregate net asset value of
a stockholder account shall not be less than the minimum initial
investment requirement of the Corporation at the time of the
resolution. The resolution may authorize the Corporation to
close those stockholder accounts not meeting the specified
minimum standards of value by redeeming all of the shares in
such accounts, provided there is mailed to each affected
stockholder account, at least sixty (60') days prior to the
planned redemption date, a notice setting forth the minimum
account size requirement and the date on which the account will
be closed if the minimum size requirement is not met prior to
said closing date.
(D) Each holder of any class of stock of the
Corporation, who surrenders his certificate in good delivery
form to the Corporation or, if the shares in question are not
represented by certificates, who delivers to the Corporation a
written request in good order signed by the shareholder, shall
be entitled to convert the shares in question on the basis
hereinafter set forth, into shares of stock of any other class
of the Corporation. The Corporation shall determine the net
asset value, as hereinafter defined, of the shares to be
converted and shall deduct therefrom such conversion cost,
hereinafter described and within five (5)
business days after such surrender and payment, shall issue to
the shareholder such number of shares of stock of the class desired
taken at the net asset value thereof determined in the same
manner and at the same time as that of the shares surrendered,
which shall equal the net asset value of the shares surrendered
less conversion cost as aforesaid. Any amount representing a
fraction of a share may be paid in cash at the option of the
Corporation. The conversion cost above mentioned shall be
determined by adding a transaction charge as determined by the
Board of Directors. The transaction charge may be paid and/or
assigned by the Corporation to the underwriter and/or any other
agency, as it may elect. Upon any conversion taking place,
proper transfer shall be made between
the asset as belonging to the respective classes of stock. The
Board of Directors may limit this conversion privilege to shares
which have been held for such reasonable period of time as the
Directors may determine.
(E) The aggregate net asset value per share of a class
of the Corporation's capital stock shall be determined in
accordance with the Investment Company Act of 1940, as amended,
and with generally accepted accounting principles. by adding the
market or appraised value of all securities, cash and other
assets of the Corporation pertaining to that class, subtracting
the liabilities determined by the Board of Directors to be
applicable to that class, and dividing the net result by the
number of shares of the class outstanding. securities and other
investments and assets will be valued at fair value as
determined in good faith by the Board of Directors.
SIXTH: The shares of stock of the Corporation may be issued
to such persons and at such prices from time to time as the
Board of Directors may determine. Such issuance shall be on a
non-assessable basis. No holder of shares of stock shall have
pre-emptive rights and the Corporation shall have the right to
issue and sell to any person or persons and shares of its stock
or any option rights exercisable for, or securities convertible
into shares of its stock without first offering such shares,
rights or securities to the holders of any shares.
SEVENTH: The number of Directors of the Corporation and
their terms of office shall be determined from time to time by
the Directors pursuant to the by-laws of the Corporation. Such
number initially shall be seven and shall never be less than
three. The names of the initial Directors are:
William H. Russell
James Jensen
who shall serve until the 1988 annual meeting of stockholders,
or until their successors shall have been duly elected and shall
have qualified;
J.W.A. Shaw Stewart
Richard J. Phelps
who shall serve until the 1989 annual meeting of stockholders,
or until their successors shall have been duly elected and shall
have qualified;
Larry D. Armel
Stephen W. Harris
Martin Begien
who shall serve until the 1990 annual meeting of stockholders,
or until their successors shall have been duly elected and shall
have qualified.
(A) If a vacancy occurs on the Board of Directors by
reason of death, resignation, or otherwise, the Board of
Directors may fill such vacancy for the remainder of the
unexpired term by majority vote of the remaining directors;
provided that after filling any such vacancy, at least two
thirds of the Directors shall have been elected by the
stockholders, and provided further that if at any time less than
a majority of the Directors then holding office were elected by
the stockholders, a stockholders' meeting shall be called as
promptly as possible and, in any event, within sixty days, for
the purpose of electing Directors to fill existing vacancies.
EIGHTH: The Corporation is expressly empowered as follows:
(A) The Corporation may enter into a written contract
or contracts with any person, including any firm, corporation,
trust, or association in which any officer, other employee,
director or stockholder of this corporation may be interested,
providing for a delegation of the management of all or part of
this corporation's securities portfolio (or portfolios) and also
for the delegation of the performance of administrative
corporate functions, subject always to the direction of the
Board of Directors of this corporation. The compensation payable
by this corporation under such contracts shall be such as is
deemed fair and equitable to both parties by the said Board of
Directors. Each such contract shall in all respects be
consistent with and subject to the requirements of the
Investment Company Act of 1940, as amended, as then in effect
and regulations of the securities and exchange commission or any
succeeding governmental authority promulgated thereunder.
(B) The Corporation may appoint one or more
distributors or agents or both for the sale of the shares of the
Corporation, may allow such person or persons a commission on
the sale of such shares, and may enter into such contract or
contracts with such person or persons as the Board of Directors
of this Corporation in its discretion may deem reasonable and
proper. Any such contract or contracts for the sale of the
shares of this corporation may be made with any person even
though such person may be an officer, other employee, director
or stockholder of this corporation or a corporation,
partnership, trust or association in which any such officer,
other employee, director or stockholder may be
interested, or such person may be the same as that person
retained pursuant to the powers granted in Section (A) of this
Article EIGHTH. Each such contract shall in all respects be
consistent with and subject to the requirements of the Investment
Company Act of 1940, as amended, as then in effect and regulations
of the Securities and Exchange Commission or any succeeding
governmental authority promulgated thereunder.
(C) The Corporation may employ such custodian or
custodians for the safekeeping of the property of the
corporation and of its shares, such dividend disbursing agent or
agents, and such transfer agent or agents and registrar or
registrars for its shares, and may make and perform such
contracts for the aforesaid purposes as in the opinion of the
Board of Directors of this Corporation may be reasonable,
necessary or proper for the conduct of the affairs of the
Corporation, and may pay the fees and disbursements of such
custodians, dividend disbursing agents, transfer agents, and
registrars out of the income and/or any other property of the
Corporation. Notwithstanding any other provisions of these
articles of incorporation or the by-laws of any or all of to, or
be the Corporation, the Board of Directors may cause the
property of the Corporation to be transferred acquired and held
in the name of, a custodian so appointed or any nominees of this
Corporation or nominee or nominees of such custodian
satisfactory to the Board of Directors of this Corporation.
(D) The same person, partnership (general or limited),
association, trust or corporation may be employed in any
multiple capacity under subsections (A), (B) and (C) of this
article EIGHTH and may receive compensation from the Corporation
in as many capacities in which such person, partnership (general
or limited), association, trust or corporation shall serve the
Corporation.
NINTH: (A) The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in right of the Corporation), by reason of
the fact that he is or was a director or officer of the
Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation,
partnership, joint venture, trust association or other
enterprise, against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Corporation, and with respect to any criminal
action or proceeding, has no reasonable cause to believe his
conduct was unlawful. If the proceeding is one by or in the
right of the Corporation, indemnification shall be made only
against reasonable expenses and shall not be made in respect of
any proceeding in which the director or officer shall have been
adjudged to be liable to the Corporation. The termination of any
action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent,
creates a rebuttable presumption that the person did not act in
good faith and in a manner which he reasonably believed to be in,
or not opposed to,the best interests of the Corporation, and with
respect to anycriminal action or proceeding, did not have reasonable
cause to believe that his conduct was unlawful.
(B) The Corporation shall not indemnify a director or
officer under subsection (A) in respect of any proceeding
charging improper personal benefit to such director or officer,
whether or not involving action in the director's or officer's
official capacity, in which the director or officer was adjudged
to be liable on the basis that personal benefit was improperly
received.
(C) To the extent that a director or officer of the
Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
subsection (A), or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(D) Any indemnification under subsection (A) (unless
ordered by a court of competent jurisdiction) shall be made by
the Corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is
proper in the circumstances because he has met the applicable
standard of conduct set forth in subsection (A) of this Article
NINTH. Such determination shall bemade by: (i) the Board of
Directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or if
such a quorum is not obtainable, then by a majority vote of a
committee of the Board consisting solely of two or more
directors not at the time parties to such proceeding and who
were duly designated to act in the matter by a majority vote of
the full Board in which the designated directors who are parties
may participate; or (ii) by special legal counsel selected by a
quorum of directors who are not "interested persons" as defined
in the Investment Company Act of 1940, as amended; or (iii) by
vote of the stockholders at the annual meeting or a special
meeting called for that purpose.
(E) Reasonable expenses incurred in defending a civil
or criminal action, suit or proceeding may be paid or reimbursed
by the Corporation in advance of the final disposition of such
action, suit or proceeding, after a determination by the Board
of Directors that the facts then known to the Board would not
preclude indemnification under this article NINTH, upon receipt
by the Corporation of: (i) a written affirmation by the director
or officer of the director's or officer's good faith belief that
the standard of conduct necessary for indemnification by the
Corporation as authorized in this article NINTH has been met;
and (ii) a written undertaking by or on behalf of the director or
officer to repay the amount if it shall be determined that the
standard of conduct has not been met. The undertaking required by this
subsection (E) shall be an unlimited general obligation or the
director or officer, but need not be secured and may be accepted
without reference to financial ability to make the repayment.
(F) The indemnification provided by this article NINTH
shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law,
agreement, vote of stockholders or directors who are not
"interested persons" as defined in the Investment Company Act of
1940, as amended, or otherwise, both as to action in his
official capacity as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to
be a director or officer and shall inure to the benefit of the
heirs, executors and administrators of such person.
(G) The Corporation may purchase and maintain
insurance on its behalf and on behalf of any person who is or
was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director or
officer of another corporation, partnership, trust, joint
venture, association or other enterprise against any liability
asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such
liability under the provisions of this article NINTH.
(H) Anything to contrary in the foregoing clauses (A)
through (G) of this article NINTH notwithstanding, no director
or officer shall be indemnified against any liability to the
Corporation or to its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
TENTH: In furtherance, and not in limitation, of the powers
conferred by the laws of the state of Maryland, the Board of
Directors is expressly authorized:
(A) To make, alter or repeal the by-laws of the
Corporation, except where such power is reserved by the by-laws
to the stockholders, and except as otherwise required by the
Investment Company Act of 1940, as amended.
(B) From time to time to determine whether and to what
extent and at what times and places and under what conditions
and regulations the books and accounts of the Corporation, or
any of them other than the stock ledger, shall be open to the
inspection of the stockholder, and no stockholder shall have any
right to inspect any account or book or document of the
Corporation, except as conferred by law or authorized by
resolution of the Board of Directors or of the stockholders.
(C) To authorize and issue obligations of the
Corporation, secured and unsecured, without assent or vote of
the stockholders, as the Board of Directors may determine, and
to authorize and cause to be executed mortgages and liens upon
the property of the Corporation, real and/or personal, but only
to the extent permitted by the fundamental policies of the
Corporation set out in its registration statement filed with the
Federal Securities and Exchange Commission or any succeeding
governmental authority, pursuant to the Investment Company Act
of 1940, as amended.
(D) In addition to the powers and authorities granted
herein and by statute expressly conferred upon it, the Board of
Directors is authorized to exercise all such powers and do all
such acts and things as may be exercised or done by the
Corporation, subject, nevertheless, to the provisions of
Maryland law, these Articles of Incorporation, and the by-laws
of the Corporation.
ELEVENTH: The books of the Corporation may be kept (subject
to any provisions of Maryland law) outside the state of Maryland
at such place or places as may be designated from time to time
by the Board of Directors or in the by-laws of the Corporation.
Elections of directors need not be by ballot unless the by-laws
of the Corporation so provide.
TWELFTH: The Corporation reserves the right to amend,
alter, change or repeal any provision contained in these
Articles of Incorporation, in the manner how or hereafter
prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
THIRTEENTH: Notwithstanding any provision of Maryland law
requiring more than a majority vote of the common stock in
connection with any corporate action including, but not limited
to, amendment of these Articles of Incorporation, unless
otherwise provided in these Articles of Incorporation the
Corporation may take or authorize such action upon the favorable
vote of the holders of a majority of the outstanding shares of
common stock.
FOURTEENTH: The duration of the Corporation shall be
perpetual.
IN WITNESS WHEREOF, the undersigned Incorporator of the
BABSON- STEWART IVORY INTERNATIONAL FUND, INC. who executed the
foregoing Articles of Incorporation hereby acknowledges that to
the best of his knowledge the matters and facts set forth herein
are true in all material respects under penalties of perjury.
Dated the first day of October, 1987.
/s/ John G. Dyer
<PAGE>
EX99.23(a)(4)(B)
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
BABSON-STEWART IVORY INTERNATIONAL FUND, INC., a
corporation organized and existing under and by virtue of the
General Corporation Law of the State of Maryland DOES HEREBY
CERTIFY:
FIRST: That at the duly called organization meeting of the
Board of Directors of BABSON-STEWART IVORY INTERNATIONAL FUND,
INC., held on December 1, 1987, resolutions setting forth a
proposed amendment to the Articles of Incorporation of said
Corporation, were duly approved by a majority of the entire
Board of Directors.
SECOND: That there was no stock outstanding or subscribed
for entitled to be voted on the Charter Amendment.
AMENDMENT
1. The Charter of the Corporation is hereby amended,
effective the date on which these Articles of Amendment are
accepted for record by the State Department of Assessments and
Taxation, by striking out paragraph (F) of Article NINTH of the
Corporation's Articles of Incorporation in its entirety, which
reads as follows:
"(F) The indemnification provided by this Article NINTH
shall not be deemed exclusive of any other rights to which
those seeking indemnification may be entitled under any
by-law, agreement, vote of stockholders or directors who
are not "interested persons" as defined in the Investment
Company Act of 1940, as amended, or otherwise, both as to
action in his official capacity as to action in another
capacity while holding such office, and shall continue as
to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and
administrators of such person."
2. The Charter of the Corporation is further amended to
designate the existing paragraph (G) of Article NINTH as
paragraph (F) and to designate the existing paragraph (H) of
Article NINTH as paragraph (G) wherever references to such
paragraphs appear in the Articles of Incorporation.
IN WITNESS WHEREOF, said BABSON-STEWART IVORY
INTERNATIONAL FUND, INC. has caused its corporate seal to be
hereunto affixed and this certificate to be signed by Larry D.
Armel, its President and attested by Jacqueline B. Willhite, its
Secretary, this 7th day of December, 1987.
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
By: /s/Larry D. Armel
Larry D. Armel
President
ATTEST:
Jacqueline B. Willhite
/s/Jacqueline B. Willhite
Secretary
THE UNDERSIGNED, President of BABSON-STEWART IVORY
INTERNATIONAL FUND, INC. who executed on behalf of said
Corporation the foregoing Articles of Amendment, of which this
certificate is made a part, hereby acknowledges, in the name and
on behalf of said Corporation, the foregoing Articles of
Amendment to be the corporate act of said Corporation and
further certifies that to the best of his knowledge, information
and belief, the matters and facts set forth therein with respect
to approval Thereof, are true in all material respects, under
penalties of perjury.
/s/Larry D. Armel
Larry D. Armel
STATE OF MISSOURI)
) ss
COUNTY OF JACKSON)
THIS IS TO CERTIFY THAT on this 7th day of December,
1987, before me, R. Jean Whaler, a Notary Public in and for the
said County and State, personally appeared, LARRY D. ARMEL and
JACQUELINE B. WILLHITE, to me personally known, who being by me
sworn and did say that they are the President and Secretary,
respectively, of BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
that the Articles of Amendment attached hereto was signed and
sealed on behalf of the Corporation by authority of its Board of
Directors, and that the matters and facts set forth in the
Articles of Amendment attached hereto are true and correct.
/s/ R. Jean Whaler
Notary Public
My Commission
Expires: 12/6/90
(SEAL)
EX99.23(a)(5)(A)
ARTICLES OF INCORPORATION
OF
SHADOW STOCK FUND, INC.
FIRST: I, the undersigned, John G. Dyer, whose Post-office
address is L-36 Route 1, Lake Lotawana, Missouri, 64063, being
at least twenty-one years of age, do, under and by virtue of the
general laws of the state of Maryland authorizing the formation
of corporations, associate myself as Incorporator with the
intention of forming a corporation (hereinafter called the
"Corporation).
SECOND: The name of the Corporation is SHADOW STOCK FUND,
THIRD: The purpose for which the Corporation is formed
is to act as an open-end, diversified management investment
company under the Investment Company Act of 1940, as amended,
and to exercise and enjoy all of the powers, rights and
privileges granted to, or conferred upon, corporations of a
similar character by the general laws of the state of Maryland
now or hereafter in force.
FOURTH: The Post-Office address of the principal office of
the Corporation in this state is C/O the Corporation Trust
incorporated, 32 South Street, Baltimore, Maryland, 21202. The
name of the Resident Agent of the Corporation in this state is
the Corporation Trust Incorporated, a corporation of this state,
and the Post-office address of the Resident Agent is 32 South
Street, Baltimore, Maryland, 21202.
FIFTH: The total number of shares of all classes of stock
which the Corporation shall have authority to issue is
10,000,000 shares of a par value of one dollar ($1.00) per share
and an aggregate par value of $10,000,000. The number of the
shares of stock of each class is such number, if any, of shares
of unissued stock as is classified or reclassified into such
class by the Corporation's Board of Directors pursuant to the
authority contained in Section 2-105 of the Maryland General
Corporation Law as filed by the Corporation as Article
Supplementary under Section 2-108 of the Maryland General
Corporation Law (or any successor provisions). The Board of
Directors of the Corporation shall have the power to classify or
reclassify unissued shares into one or more classes which
together with the issued shares of stock of the corporation
shall have such designations as the board may determine and
(subject to any applicable rule, regulation or order of the
Securities and Exchange Commission or other applicable law or
regulation) shall have such preferences, conversion or other
rights, voting powers, restrictions, limitations as to
dividends, qualifications, terms and conditions of redemption
and other characteristics as the Board may determine (or in the
absence of contrary determination, such as set forth herein).
At any time when there are no shares outstanding or subscribed
for a particular class previously established and designated by
the Board of Directors, the class may be liquidated by similar
means. If the Board so determines, one or more classes of stock
may be treated for all purposes other than dividends as if all
shares of such classes were shares of one class. The dividends
payable to the holders of any class (subject to any applicable
rule, regulation or order of the Securities and Exchange
Commission or any other applicable law or regulation) shall be
determined by the Board and need not be individually declared,
but may be declared and paid in accordance with a formula adopted
by the Board. Each share of a class shall have equal rights with
each other share of that class of stock with respect to the assets
of the Corporation pertaining to that class. Any fractional shares
of capital stock issued by the corporation shall have proportionately,
all the rights of full shares. Except as otherwise provided herein,
all references in these articles of incorporation to capital stock
or class of stock shall apply without discrimination to the
shares of each class of stock.
(A) The holders of each share of stock of the
Corporation shall be entitled to one vote for each full share,
and a fractional vote for each fractional share of stock,
irrespective of the class then standing in his or her name in
the books of the Corporation. On any matter submitted to a vote
of shareholders, all shares of the Corporation then issued and
outstanding and entitled to vote, irrespective of the class
shall be voted in the aggregate and not by class, except (1)
when otherwise expressly provided by the Maryland General
Corporation Law or (2) when required by the Investment Company
Act of 1940, as amended, shares shall be voted by individual
class; and (3) when the matter does not affect any interest of a
particular class, then only shareholders of the affected class
or classes shall be entitled to vote thereon.
(B) Each class of stock of the Corporation shall have
the following powers, preferences and participating, voting, or
other special rights and the qualifications, restrictions, and
limitations thereof shall be as follows:
(1) All consideration received by the Corporation
for the issue or sale of stock of each class, together with all
income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably
belong to the class of shares of stock with respect to which
such assets, payments or funds were received by the Corporation
for all purposes, subject only to the rights of creditors, and
shall be so handled upon the books of account of the
Corporation. Such assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange
or liquidation thereof and any assets derived from any reinvestment
of such proceeds, in whatever form the same may be, are herein
referred to as "assets belonging to" such class.
(2) The Board of Directors may from time to time
declare and pay dividends or distributions, in stock or in cash,
on any or all classes of stock, the amount of such dividends and
the payment of them being wholly in the discretion of the Board
of Directors.
(I) Dividends or distributions on shares of
any class of stock shall be paid only out of earnings, surplus,
or other lawfully available assets belonging to such class.
(II) Inasmuch as one goal of the corporation
is to qualify 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; and 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 corporation, the Board
of Directors shall have the power in its discretion to
distribute in any fiscal year as dividends, including designated
in whole or in part as capital gain distributions, amounts
sufficient, in the opinion of the Board of Directors, to enable
the Corporation to qualify as a regulated investment company and
to avoid liability for the Corporation for federal income tax in
respect of that year. In furtherance, and not in limitation of
the foregoing, in the event that a class of shares has a net
capital loss for a fiscal year, and to the extent that the net
capital loss offsets net capital gains from another class, the
amounts to be deemed available for distribution to the class
with the net capital gain shall be reduced by the amount of
offset. The shareholders of the class with the net capital gain
shall be entitled to a full distribution of the net income and
the net capital gain to the extent earned or realized. If the
net capital loss of a class exceeds the net capital gain from
another class, the excess loss shall not reduce the net
investment income available for distribution to the class with
the loss, but shall be carried forward.
(3) In the event of the liquidation or
dissolution of the Corporation, shareholders of each class shall
be entitled to receive, as a class, out of the assets of the
Corporation available for distribution to shareholders but other
than general assets not belonging to any particular class of
stock, the assets belonging to such class and the assets so
distributable to the shareholders of any class shall be
distributed among such shareholders in proportion to the number
of shares of such class held by them and recorded on the books
of the Corporation. In the event that there are any general
assets not belonging to any particular class of stock and
available for distribution, such distribution shall be made to
the holders of stock of all classes in proportion to the asset
value of the respective classes determined as hereinafter
provided.
(4) The assets belonging to any class of stock
shall be charged with the liabilities in respect to such class,
and shall also be charged with its share of the general
liabilities of the Corporation, in proportion to the asset value
of the respective classes determined as hereinafter set out. The
determination of the Board of Directors shall be conclusive as
to the amount of liabilities, including accrued expenses and
reserves, as to the allocation of the same as to a given class,
and as to whether the same or general assets of the Corporation
are allocable to one or more classes.
(C) Each holder of any class of stock of the
Corporation, who shall surrender his certificate in good
delivery form to the Corporation or who, if the shares in
question are not represented by certificates, shall deliver to
the Corporation a written request in good order signed by the
shareholder, shall be entitled to require the Corporation, to
the ex-tent that the class of stock in question has assets
lawfully available therefor and out of such assets, but not
otherwise, to redeem all or any part of the shares of such stock
standing in the name of such holder on the books of the
Corporation, at the net asset value of such shares, determined
in the manner and as of the time, and payable as provided in the
Investment Company Act of 1940, as amended. The Corporation
shall make payment for any such shares to be redeemed as
aforesaid, in cash, or if in the opinion of the Board of
Directors which shall be conclusive, conditions exist which make
payment wholly in cash unwise or undesirable, the Corporation
may make payment wholly or partly in securities belonging to the
class to provide for such redemption by it of the shares of such
class.
(1) The Board of Directors of the Corporation
may, in accordance with the Investment Company Act of 1940, as
amended, suspend the right of the holders of any class of stock
of the Corporation to require the Corporation to redeem shares
of such class.
(2) The Board of Directors, in the economic best
interest of the Corporation and in order to reduce the
disproportionately burdensome expenses in servicing shareholder
accounts, may from time to time, establish uniform standards
with respect to the minimum value of a stockholder account or a
minimum investment which may be made by a stockholder. The Board
of Directors, by resolution and without the vote or consent of
stockholders, may require that the aggregate net asset value of
a stockholder account shall not be less than the minimum initial
investment requirement of the Corporation at the time of the
resolution. The resolution may authorize the Corporation to
close those stockholder accounts not meeting the specified
minimum standards of value by redeeming all of the shares in
such accounts, provided there is mailed to each affected
stockholder account, at least sixty (60) days prior to the
planned redemption date, a notice setting forth the minimum
account size requirement and the date on which the account will
be closed if the minimum size requirement is not met prior to
said closing date.
(D) Each holder of any class of stock of the
Corporation, who surrenders his certificate in good delivery
form to the Corporation or, if the shares in question are not
represented by certificates, who delivers to the Corporation a
written request in good order signed by the shareholder, shall
be entitled to convert the shares in question on the basis
hereinafter set forth, into shares of stock of any other class of
the Corporation. The corporation shall determine the net asset
value, as hereinafter defined, of the shares to be converted and
shall deduct therefrom such conversion cost, hereinafter
described and within five (5) business days after such surrender
and payment, shall issue to the shareholder such number of
shares of stock of the class desired taken at the net asset
value thereof determined in the same manner and at the same time
as that of the shares surrendered, which shall equal the net asset
value of the shares surrendered less conversion cost as
aforesaid. Any amount representing a fraction of a share may be
paid in cash at the option of the Corporation. The conversion
cost above mentioned shall be determined by adding a transaction
charge as determined by the Board of Directors. The transaction
charge may be paid and/or assigned by the Corporation to the
underwriter and/or any other agency, as it may elect. Upon any
conversion taking place, proper transfer shall be made between
the assets belonging to the respective classes of stock. The
Board of Directors may limit this conversion privilege to shares
which have been held for such reasonable period of time as the
Directors may determine.
(E) The aggregate net asset value per share of a class
of the Corporation's capital stock shall be determined in
accordance with the Investment Company Act of 1940, as amended,
and with generally accepted accounting principles by adding the
market or appraised value of all securities, cash and other
assets of the Corporation pertaining to that class, subtracting
the liabilities determined by the Board of Directors to be
applicable to that class, and dividing the net result by the
number of shares of the class outstanding. Securities and other
investments and assets will be valued at fair value as
determined in good faith by the Board of Directors.
SIXTH: The shares of stock of the Corporation may be
issued to such persons and at such prices from time to time as
the Board of Directors may determine. Such issuance shall be on
a non-assessable basis. No holder of shares of stock shall have
pre-emptive rights and the Corporation shall have the right to
issue and sell to any person or persons and shares of its stock.
or any option rights exercisable for, or securities convertible
into shares of its stock without first offering such shares,
rights or securities to the holders of any shares.
SEVENTH: The number of Directors of the Corporation and
their terms of office shall be determined from time to time by
the Directors pursuant to the by-laws of the Corporation. Such
number initially shall be seven and shall never be less than three.
The names of the initial Directors are:
H. Bradlee Perry
Marjorie Powell Allen
who shall serve until the 1988 annual meeting of stockholders,
or until their successors shall have been duly elected and shall
have qualified;
James B. Cloonan
William H. Russell
who shall serve until the 1989 annual meeting of stockholders,
or until their successors shall have been duly elected and shall
have qualified;
Larry D. Armel
Stephen W. Harris
Francis C. Rood
who shall serve until the 1990 annual meeting of stockholders,
or until their successors shall have been duly elected and shall
have qualified.
(A) If a vacancy occurs on the Board of Directors by
reason of death, resignation, or otherwise, the Board of
Directors may fill such vacancy for the remainder of the
unexpired term by majority vote of the remaining directors;
provided that after filling any such vacancy, at least two
thirds of the Directors shall have been elected by the
stockholders, and provided further that if at any time less than
a majority of the Directors then holding office were elected by
the stockholders, a stockholders meeting shall be called as
promptly as possible and, in any event, within sixty days, for
the purpose of electing Directors to fill existing vacancies.
EIGHTH: The Corporation is expressly empowered as follows:
(A) The Corporation may enter into a written contract
or contracts with any person, including any firm, corporation,
trust, or association in which any officer, other employee,
director or stockholder of this corporation may be interested
providing for a delegation of the management of all or part of,
this corporation's securities portfolio (or portfolios) and also
for the delegation of the performance of administrative
corporate. functions, subject always to the direction of the
Board of Directors of this corporation. The compensation payable
by this corporation under such contracts shall be such as is
deemed fair and equitable to both parties by the said Board of
Directors. Each such contract shall in all respects be
consistent with and subject to the requirements of the
Investment Company Act of 1940, as amended, as then in effect
and regulations of the securities and exchange commission or any
succeeding governmental authority promulgated thereunder.
(B) The Corporation may appoint one or more
distributors or agents or both for the sale of the shares of the
Corporation, may allow such person or persons a commission on
the sale of such shares, and may enter into such contract or
contracts with such person or persons as the Board of Directors
of this Corporation in its discretion may deem reasonable and
proper. Any such contract or contracts for the sale of the
shares of this corporation may be made with any person even
though such person may be an officer, other employee, director
or stockholder of this corporation or a corporation,
partnership, trust or association in which any such officer,
other employee, director or stockholder may be interested, or
such person may be the same as that person retained pursuant to
the powers granted in Section (A) of this Article EIGHTH. Each
such contract shall in all respects be consistent with and
subject to the requirements of the Investment Company Act of
1940, as amended, as then in effect and regulations of the
Securities and Exchange Commission or any succeeding
governmental authority promulgated thereunder.
(C) The Corporation may employ such custodian or
custodians for the safekeeping of the property of the
corporation and of its shares, such dividend disbursing agent or
agents, and such transfer agent or agents and registrar or
registrars for its shares, and may make and perform such
contracts for the aforesaid purposes as in the opinion of the
Board of Directors of this Corporation may be reasonable,
necessary or proper for the conduct of the affairs of the
Corporation, and may pay the fees
and disbursements of such custodians, dividend disbursing
agents, transfer agents, and registrars out of the income and/or
any other property of the Corporation. Notwithstanding any other
provisions of these articles of incorporation or the by-laws of
the Corporation, the Board of Directors may cause any or all of
the property of the Corporation to be transferred to, or be
acquired and held in the name of, a custodian so appointed or
any nominees of this Corporation or nominee or nominees of such
custodian satisfactory to the Board of Directors of this
Corporation.
(D) The same person, partnership (general or limited),
association, trust or corporation may be employed in any multiple
capacity under subsections (A), (B) and (C) of this article
EIGHTH and-may receive compensation from the Corporation in as
many capacities in which such person, partnership (general or
limited), association, trust or corporation shall serve the
Corporation.
NINTH: (A) The Corporation shall indemnify any person who
was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in right of the Corporation), by reason of
the fact that he is or was a director or officer of the
corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation,
partnership, joint venture, trust, association or other enterprise,
against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and incurred by him in
connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, has no reasonable
cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonable
believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal action or
proceeding, did not have reasonable cause to believe that his
conduct was unlawful.
(B) The Corporation shall indemnify any person who was
or is a party, or is threatened to be made a party, to any
threatened or completed action, suit or proceeding by or in the
right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation,
partnership, trust, joint venture, association or other
enterprise against expenses (including attorneys' fees actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation; except that no such
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his
duty to the Corporation, unless and only to the extent that a
court shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
(C) To the extent that a director or officer of the
Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
subsections (A) and (B), or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses
(including attorneys' fees) actua1ly and reasonably incurred by
him in connection therewith.
(D) Any indemnification under subsections (A) and (B)
(unless ordered by a court of competent jurisdiction) shall be
made by the Corporation only as authorized in the specific case
upon a determination that indemnification of the director or
officer is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (A) and
(B) of this article NINTH. Such determination shall be made by
the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit or proceeding,
or if such a quorum is not obtainable, or even if obtainable, a
quorum of directors who are not "interested persons" as defined
in the Investment Company Act of 1940, as amended, so directs,
by independent legal counsel in a written opinion, or if such
written opinion is not obtainable, by vote of the stockholders
at the annual meeting or a special meeting called for that purpose.
(E) Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in the
specific case upon receipt of any undertaking by or on behalf of
the director or officer to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified
by the Corporation as authorized in this article NINTH.
(F) The indemnification provided by this article NINTH
shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law,
agreement, vote of stockholders or directors who are not
"interested persons" as defined in the Investment Company Act of
1940, as amended, or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has
ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such
person.
(G) The Corporation may purchase and maintain
insurance on its behalf and on behalf of any person who is or
was a director or officer of the Corporation, or is or was
serving at the request of the corporation as a director or
officer of another corporation, partnership, trust, joint
venture, association or other enterprise against any liability
asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such
liability under the provisions of this article NINTH.
(H) Anything to the contrary in the foregoing clauses
(A) through (G) of this article NINTH notwithstanding, no
director or officer shall be indemnified against any liability
to the Corporation or to its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
TENTH: In furtherance, and not in limitation, of the powers
conferred by the laws of the state of Maryland, the Board of
Directors is expressly authorized:
(A) To make, alter or repeal the by-laws of the
Corporation, except where such power is reserved by the by-laws
to the stockholders, and except as otherwise required by the
Investment Company Act of 1940, as amended
(B) From time to time to determine whether and to what
extent and at what times and places and under what conditions
and regulations the books and accounts of the Corporation, or
any of them other than the stock ledger, shall be open to the
inspection of the stockholder, and no stockholder shall have any
right to inspect any account or book or document of the
Corporation, except as conferred by law or authorized by
resolution of the Board of Directors or of the stockholders.
(C) To authorize and issue obligations of the
Corporation, secured and unsecured, without assent or vote of
the stockholders, as the Board of Directors may determine, and
to authorize and cause to be executed mortgages and liens upon
the property of the Corporation, real and/or personal, but only
to the extent permitted by the fundamental policies of the
Corporation set out in its registration statement filed with the
Federal Securities and Exchange Commission or any succeeding
governmental authority, pursuant to the Investment Company Act
of 1940, as amended.
(D) In addition to the powers and authorities granted
herein and by statute expressly conferred upon it, the Board of
Directors is authorized to exercise all such powers and do all
such acts and things as may be exercised or done by the
Corporation, subject, nevertheless, to the provisions of
Maryland law, these Articles of Incorporation, and the by-laws
of the Corporation.
ELEVETNH: The books of the Corporation may be kept
(subject to any provisions of Maryland law) outside the state of
Maryland at such place or places as may be designated from time
to time by the Board of Directors or in the by-laws of the
Corporation. Elections of directors need not be by ballot unless
the by-laws of the Corporation so provide.
TWELFTH: The Corporation reserves the right to amend,
alter, change or repeal any provision contained in these
Articles of Incorporation, in the manner how or hereafter
prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
THIRTEENTH: Notwithstanding any provision of Maryland law
requiring more than a majority vote of the common stock in,
connection with any corporate action including, but not limited
to, amendment of these Articles of Incorporation, unless
otherwise provided in these Articles of Incorporation the
Corporation may take or authorize such action upon the favorable
vote of the holders of a majority of the outstanding shares of
common stock.
FOURTEENTH: The duration of the Corporation shall be
perpetual.
IN WITNESS WHEREOF, the undersigned Incorporator of the
SHADOW STOCK FUND, INC. who executed the foregoing Articles of
Incorporation hereby acknowledges that to the best of his
knowledge the matters and facts set forth herein are true in all
material respects under penalties of perjury.
Dated the 29th day of May, 1987.
/s/John G. Dyer
John G. Dyer
EX99.23(b)(1)
AMENDED AND RESTATED BY-LAWS
AS OF NOVEMBER 30, 1996
OF
DAVID L. BABSON GROWTH FUND, INC.
ARTICLE I
FISCAL YEAR AND OFFICES
Section 1. Fiscal Year. Unless otherwise provided
by resolution of the Board of Directors, the fiscal year of
the corporation shall begin on the first day of July and
end on the last day of June.
Section 2. Registered Office. The registered office
of the corporation in Maryland shall be C/O the CORPORATION
TRUST, INCORPORATED, 32 South Street, Baltimore, Maryland,
21202.
Section 3. Other Offices. The corporation shall have
a place of business in the State of Missouri, and the
corporation shall have the power to open additional
offices for the conduct of its business, either within or
outside the states of Maryland and Missouri, at such
places as the Board of Directors may from time to time
designate.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meeting. Meetings of the
stockholders for the election of directors shall be held in
such place as the Board of Directors may by resolution
establish. In the absence of any specific resolution,
annual meetings of stockholders shall be held at the
corporation's principal office in the State of Missouri.
Meetings of stockholders for any other purpose may be held
at such place and time as shall be stated in the notice of
the meeting, or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of
stockholders, if held, shall be held at such time during
the month of September as may be fixed by the Board of
Directors by resolution each year. At any annual meeting,
the stockholders shall elect a Board of Directors and
transact any other business which may properly be brought
before the meeting. No annual meeting of stockholders shall
be required in any year in which the only business to be
transacted at such meeting does not require action by
stockholders on any one or more of the following:
(1) the election of directors;
(2) approval of the investment advisory agreement;
(3) ratification of the selection of independent
public accountants;
(4) approval of a distribution agreement.
Section 3. Special Meetings. At any time in the
interval between annual meetings, special meetings of the
stockholders may be called by the president or by a majority
of the Board of Directors and shall be called by the
president or secretary upon written request of the
holders of shares entitled to cast not less than ten percent
of all the votes entitled to be cast at such meeting.
Section 4. Notice. Not less than ten nor more than
ninety days before the date of every annual or special
stockholders' meeting, the secretary shall give to each
stockholder entitled to vote at such meeting written notice
stating the time and place of the meeting and, in the case
of a special meeting, the purpose or purposes for which the
meeting is called. Business transacted at any special
meeting of stockholders shall be limited to the purposes
stated in the notice.
Section 5. Record Date for Meetings. The Board of
Directors may fix in advance a date not more than ninety
days, nor less than ten days, prior to the date of any
annual or special meeting of the stockholders as a record
date for the determination of the stockholders entitled to
receive notice of, and to vote at any meeting and any
adjournment thereof; and in such case such stockholders and
only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to receive notice of and
to vote only such shares held and outstanding on such record
date that continue to be held and outstanding at the time of
voting.
Section 6. Quorum. At any meeting of stockholders,
the presence in person or by proxy of the holders of a
majority of the aggregate shares of stock at the time
outstanding shall constitute a quorum. If, however, such
quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote
thereat, present in person or represented by proxy, shall
have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented
any business may be transacted which might have been
transacted at the meeting originally notified.
Section 7. Majority. The vote of the holders of a
majority of the stock having voting power, as measured by
the applicable quorum requirements set forth in Section 6,
present in person or represented by proxy, at a meeting
duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter
which may properly come before the meeting, unless otherwise
required by the Investment Company Act of 1940, as amended.
Section 8. Voting. Each stockholder shall have one
vote for each full share and a fractional vote for each
fractional share of stock having voting power held by such
stockholder on each matter submitted to a vote at a meeting
of stockholders. A stockholder may cast his vote in person
or by proxy, but no proxy shall be valid after eleven
months from its date, unless otherwise provided in the
proxy. At all meetings of stockholders, unless the voting
is conducted by inspectors, all questions relating to the
qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the
chairman of the meeting.
Section 9. Inspectors. At any election of directors,
the Board of Directors prior thereto may, or, if they have
not so acted, the chairman of the meeting may, and upon
the request of the holders of ten percent (10%) of the
shares entitled to vote at such election shall, appoint
two inspectors of election who shall first subscribe an oath
of affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and
according to the best of their ability, and shall after
the election make a certificate of the result of the vote
taken. No candidate for the office of director shall be
appointed such inspector. The chairman of the meeting may
cause a vote by ballot to be taken upon any election or
matter, and such vote shall be taken upon the request of
the holders of ten percent (10%) of the stock entitled to
vote on such election or matter.
Section 10. Stockholder List. The officer who has
charge of the stock ledger of the corporation shall, at
least ten days before every election of directors,
prepare and make a complete list of the stockholders
entitled to vote at said election, arranged in
alphabetical order, showing the address and the number of
shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder,
during ordinary business hours, for a period of at least
ten days prior to the election, either at a place within the
city, town or village where the election is to be
held and which place shall be specified in the notice of
meeting, or if not specified, at the place where said
meeting is to be held, and the list shall be produced and
kept at the time and place of election during the whole
time thereof, and subject to the inspection of any
stockholder who may be present.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business of the
corporation shall be managed by its Board of Directors,
which may exercise all powers of the corporation, except
such as are by statute, or the Articles of Incorporation, or
by these By-laws conferred upon or reserved to the
stockholders.
Section 2. Number and Term of Office. The number of
directors which shall constitute the whole Board shall be
determined from time to time by the Board of Directors, but
shall not be fewer than three. Each director elected shall
hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 3. Elections. The Directors shall all be of
one class and shall serve until their respective
successors are elected and qualified.
Section 4. Place of Meeting. Meetings of the Board
of Directors, regular or special, may be held at any place
in or out of the State of Maryland as the Board may from
time to time determine.
Section 5. Quorum. At all meetings of the Board of
Directors a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business and
the action of a majority of the directors present at any
meeting at which a quorum is present shall be the action of
the Board of Directors unless the concurrence of a
greater proportion is required for such action by the laws
of the State of Maryland, these By-laws or the Articles of
Incorporation or a different number is required by the
Investment Company Act of 1940, as amended. If a quorum
shall not be present at any meeting of directors, the
directors present thereat may by a majority vote adjourn the
meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be
present.
Section 6. First Meeting. The first meeting of each
newly constituted Board of Directors shall be held as soon
as practicable after the annual meeting of stockholders in
each year, at such time and place as shall be specified
in a notice given as hereinafter provided for meetings of
the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 7. Regular Meetings. Regular meetings of the
Board of Directors may be held without notice at such time
and place as shall from time to time be determined by the
Board of Directors.
Section 8. Special Meetings. Special meetings of the
Board of Directors may be called by the president on one
day's notice to each director; special meetings shall be
called by the president or secretary in like manner and on
like notice on the written request of two directors.
Section 9. Telephonic Meetings. Regular or special
meetings, except for meetings to approve an investment
advisory agreement or a distribution plan, of the Board of
Directors or any committee thereof, may be held by means of
a conference telephone or similar communications equipment
so that all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by
these means constitutes presence in person at the meeting.
Section 10. Informal Actions. Any action, except
approval of an investment advisory agreement, or a
distribution plan, required or permitted to be taken at any
meeting of the Board of Directors or any committee
thereof may be taken without a meeting, if written consent
to such action is signed in one or more counterparts by all
members of the Board or of such committee, as the case may
be, and such written consent is filed with the minutes of
proceedings of the Board or committee.
Section 11. Committees. The Board of Directors may
by resolution passed by a majority of the whole Board
appoint from among its members an executive committee and
other committees composed of two or more directors, and may
delegate to such committees, in the intervals between
meetings of the Board of Directors, any or all of the
power of the Board of Directors in the management of the
business and affairs of the corporation, except the power to
declare dividends, to issue stock or to recommend to
stockholders any action requiring stockholders' approval.
In the absence of any member of such committee, the
members thereof present at any meeting, whether or not
they constitute a quorum, may appoint a member of the Board
of Directors to act in the place of such absent member.
Section 12. Action of Committees. The committees
shall keep minutes of their proceedings and shall report
the same to the Board of Directors at the meeting next
succeeding, and any action by committees shall be subject
to revision and alteration by the Board of Directors,
provided that no rights of third persons shall be affected
by any such revision or alteration.
Section 13. Compensation. Any director, whether or
not he is a salaried officer or employee of the
corporation, may be compensated for his services as a
director or as a member of a committee of directors, or as
chairman of the Board or chairman of a committee by fixed or
periodic payments or by fees for attendance at meetings or
by both, and in addition may be reimbursed for
transportation and other expenses, all in such manner and
amounts as the Board of Directors may from time to time
determine.
Section 14. Removal. The stockholders of this
corporation may remove any director with or without cause by
the affirmative vote of a majority of all the votes
entitled to be cast for the election of directors.
ARTICLE IV
NOTICES
Section 1. Form. Notices to stockholders shall be in
writing and delivered personally or mailed to the
stockholders at their addresses appearing on the books of
the corporation. Notice by mail shall be deemed to be given
at the time when the same shall be mailed. Notice to
directors need not state the purpose of a regular or special
meeting.
Section 2. Waiver. Whenever any notice of the time,
place or purpose of any meeting of stockholders, directors
or committee is required to be given under the provisions of
Maryland law or under the provisions of the Articles of
Incorporation or these By-laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice and
filed with the records of the meeting, whether before or
after the holding thereof, or actual attendance at the
meeting of stockholders in person or by proxy, or at the
meeting of directors or committee in person, shall be
deemed equivalent to the giving of such notice to such
persons.
ARTICLE V
OFFICERS
Section 1. Officers of the Corporation. The officers
of the corporation shall be elected by the Board of
Directors and shall include a president, who shall be a
director, a secretary and a treasurer. The Board of
Directors may, from time to time, elect or appoint a
controller, one or more vice-presidents, assistant
secretaries and assistant treasurers. The president shall
preside at meetings of the Board of Directors, unless the
Board of Directors, at its discretion, elects a chairman
of the Board to preside at such meetings. In addition,
such chairman shall perform and execute such executive and
administrative duties and have such powers as the Board of
Directors may from time to time prescribe. Two or more
offices may be held by the same person but no officer
shall execute, acknowledge or verify any instrument in more
than one capacity, if such instrument is required by law,
the Articles of Incorporation or these By-laws to be
executed, acknowledged or verified by two or more officers.
Section 2. Election. The Board of Directors at its
first meeting after each annual meeting of stockholders
shall choose a president, a secretary and a treasurer.
Section 3. Compensation. The salaries or other
compensation of all officers and agents of the corporation
paid directly by the corporation shall be fixed by the
Board of Directors, except that the Board of Directors may
delegate to any person or group of persons the power to
fix such salaries or other compensation.
Section 4. Tenure. The officers of the corporation
shall serve for one year and until the successors are
chosen and qualify. Any officer or agent may be removed by
the affirmative vote of a majority of the Board of Directors
whenever, in its judgment, the best interests of the
corporation will be served thereby. Any vacancy occurring
in any office of the corporation by death, resignation,
removal or otherwise shall be filled by the Board of
Directors.
Section 5. President. The president, unless the
chairman has been so designated, shall be the chief
executive officer of the corporation. He shall preside at
all meetings of the stockholders and directors and shall see
that all orders and resolutions of the Board are carried
into effect. The president shall also be the chief
administrative officer of the corporation and shall
perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 6. Vice-Presidents. The vice-presidents, in
the order of their seniority, shall in the absence or
disability of the president, perform the duties and
exercise the powers of the president and shall perform such
other duties as the Board of Directors may from time to
time prescribe.
Section 7. Secretary. The secretary shall attend all
meetings of the Board of Directors and all meetings of
the stockholders and record all the proceedings thereof and
shall perform like duties for any committee when required.
In the absence of the secretary or an assistant secretary,
proceedings of such meetings shall be recorded by a person
selected by the chairman of the meeting. He shall give,
or cause to be given, notice of meetings of the stockholders
and of the Board of Directors, and shall perform such
other duties as may be prescribed by the Board of Directors
or president, under whose supervision he shall be. He shall
keep in safe custody the seal of the corporation and, when
authorized by the Board of Directors, affix and attest the
same to any instrument requiring it. The Board of Directors
may give general authority to any other officer to affix the
seal of the corporation and to attest the same by affixing
his signature.
Section 8. Assistant Secretaries. The assistant
secretaries, in order of their seniority, shall in the
absence or disability of the secretary, perform the duties
and exercise the powers of the secretary and shall
perform such other duties as the Board of Directors shall
prescribe.
Section 9. Treasurer. The treasurer, unless another
officer has been so designated, shall be the chief
financial officer of the corporation. He shall be
responsible for the maintenance of its accounting records
and shall render to the Board of Directors, at its regular
meetings, or when the Board of Directors so requires, an
account of all the corporation's financial transactions
and a report of the financial condition of the corporation.
Section 10. Controller. The controller shall be under
the direct supervision of the treasurer. He shall maintain
adequate records of all assets, liabilities and
transactions of the corporation, establish and maintain
internal accounting control and, in cooperation with the
independent public accountants selected by the Board of
Directors, shall supervise internal auditing. He shall have
such further powers and duties as may be conferred upon
him from time to time by the president or the Board of
Directors.
Section 11. Assistant Treasurers. The assistant
treasurers, in the order of their seniority, shall in the
absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall
perform such other duties as the president or the
Board of Directors may from time to time prescribe.
Section 12. Other Officers. The Board of Directors
from time to time may appoint such other officers and
agents as it shall deem advisable, who shall hold their
offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to
time by the Board of Directors. The Board of Directors from
time to time may delegate to one or more officers or
agents the power to appoint any such subordinate officers or
agents, except assistant treasurers and to prescribe the
respective rights, terms of office, authorities and duties.
ARTICLE VI
NET ASSET VALUE
The net asset value per share of stock of the corporation
shall be determined at least once each day at the close of
business on the New York Stock Exchange on each day the
New York Stock Exchange is open for trading. Net asset
value shall be calculated by adding the value of all
securities and other assets of the Fund, deducting its
liabilities and dividing by the number of shares
outstanding.
ARTICLE VII
INVESTMENT RESTRICTIONS
The following investment restriction cannot be
changed without the consent of the holders of a
majority of the corporation's outstanding shares of stock;
the corporation shall not:
(1) purchase the securities of any one issuer, except the
United States government, if immediately after and as a
result of such purchase (a) the value of the holdings of the
Fund in the securities of such issuer exceeds 5% of the
value of the Fund's total assets, or (b) the Fund owns more
than 10% of the outstanding voting securities, or any other
class of securities, of such issuer; (2) engage in the
purchase or sale of real estate or commodities; (3)
underwrite the securities of other issuers; (4) make loans
to any of its officers, directors, or employees, or to its
manager, or general distributor, or officers or directors
thereof; (5) make any loan (the purchase of a security
subject to a repurchase agreement or the purchase of a
portion of an issue of publicly distributed debt securities
is not considered the making of a loan); (6) invest in
companies for the purpose of exercising control of
management; (7) purchase securities on margin, or sell
securities short; (8) purchase shares of other investment
companies except in the open market at ordinary broker's
commission or pursuant to a plan of merger or consolidation;
(9) invest in the aggregate more than 5% of the value of its
gross assets in the securities of issuers (other than
federal, state, territorial, or local governments, or
corporations, or authorities established thereby), which,
including predecessors, have not had at least three years'
continuous operations; (10) except for transactions in its
shares or other securities through brokerage practices which
are considered normal and generally accepted under the
circumstances existing at the time, enter into dealings with
its officers or directors, its manager or underwriter, or
their officers or directors, or any organization in which
such persons have a financial interest; (11) purchase or
retain securities of any company in which any Fund officers
or directors, or Fund manager, its partner, officer, or
director beneficially own more than 1/2 of 1% of said
company's securities, if all such persons owning more than
1/2 of 1% of such company's securities, own in the aggregate
more than 5% of the outstanding securities of such company;
(12) borrow or pledge its credit under normal circumstances,
except up to 10% of its gross assets (computed at the lower
of fair market value or cost) for temporary or emergency
purposes, and not for the purpose of leveraging its
investments, and provided further that any borrowing in
excess of 5% of the total assets of the Fund shall have
asset coverage of at least 3 to 1 (the Fund has never
borrowed against its assets and does not intend to do so);
(13) make itself or its assets liable for the indebtedness
of others; or (14) invest in securities which are assessable
or involve unlimited liability.
ARTICLE VIII
OTHER RESTRICTIONS
Section 1. Dealings. The officers and directors of
the corporation and its investment adviser shall have no
dealings for or on behalf of the corporation with
themselves as principal or agent, or with any
corporation, partnership, trust, joint venture or
association in which they have a financial interest,
provided that this section shall not prevent:
(A) Officers or directors of the corporation
from having a financial interest in the corporation, in
any sponsor, manager, investment adviser or promoter of the
corporation, or in any underwriter or securities issued by
the corporation.
(B) The purchase of securities for the portfolio of
the corporation, or sale of securities owned by the
corporation through a security dealer, one or more of
whose partners, officers, directors or security holders is
an officer or director of the corporation, provided such
transactions are handled in a brokerage capacity only, and
provided commissions charged do not exceed customary
brokerage charges for such services.
(C) The employment of any legal counsel, registrar,
transfer agent, dividend disbursing agent or custodian
having a partner, officer, director or security holder
who is an officer or director of the corporation; provided
only customary fees are charged for services rendered to
or for the benefit of the corporation.
(D) The purchase for the portfolio of the
corporation of securities issued by an issuer having an
officer, director or security holder who is an officer or
director of the corporation or of any manager of the
corporation, unless the retention of such securities in the
portfolio of the corporation would otherwise be a violation
of these By-laws or the Articles of Incorporation of the
corporation.
ARTICLE IX
STOCK
Section 1. Certificates. Each stockholder shall be
entitled to a certificate or certificates which shall
certify the number of shares owned by him in the
corporation. Each certificate shall be signed by the
president or a vice-president and countersigned by the
secretary or an assistant secretary or the treasurer or an
assistant treasurer and shall be sealed with the corporate
seal.
Section 2. Signature. When a certificate is signed by
a transfer agent or an assistant transfer agent or by a
transfer clerk acting on behalf of the corporation and a
registrar, the signature of any such president, vice-
president, treasurer, assistant treasurer, secretary or
assistant secretary may be facsimile. In case any
officer who has signed any certificate ceases to be an
officer of the corporation before the certificate is issued,
the certificate may nevertheless be issued by the
corporation with the same effect as if the officer had not
ceased to be such officer as of the date of its issue.
Section 3. Recording and Transfer Without
Certificates. Notwithstanding the foregoing provisions of
this article, the corporation shall have full power to
participate in any program approved by the Board of
Directors providing for the recording and transfer of
ownership of shares of the corporation's stock by
electronic or other means without the issuance of
certificates.
Section 4. Lost Certificates. The Board of Directors
may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued
by the corporation alleged to have been stolen, lost or
destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be
stolen, lost or destroyed, or upon other satisfactory
evidence of such loss or destruction. When authorizing
such issuance of a new certificate or certificates, the
Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require
the owner of such stolen, lost or destroyed certificate or
certificates, or his legal representative to advertise
the same in such manner as it shall require and to give the
corporation a bond with sufficient surety, to the
corporation to indemnify it against any loss or claim that
may be made by reason of the issuance of a new certificate.
Section 5. Registered Stockholders. The corporation
shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any
other person, whether or not it shall have express or
other notice thereof, except, as otherwise provided by
the laws of Maryland.
Section 6. Transfer Agents and Registrars. The
corporation may act as its own transfer agent and/or
registrar, or it may delegate those duties to others. The
Board of Directors may from time to time, appoint or remove
transfer agents and/or registrars of stock of the
corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment
being made all certificates representing shares of stock
thereafter issued shall be countersigned by one of such
transfer agents or by one of such registrars or by both and
shall not be valid unless so countersigned. If the same
person shall be both transfer agent and registrar, only
countersignature by such person shall be required.
Section 7. Stock Ledger. The corporation shall
maintain an original stock ledger containing the names and
addresses of all stockholders and the number and
class of shares held by each stockholder. Such stock ledger
may be in written form or any other form capable of
being converted into written form within a reasonable time
for visual inspection.
Section 8. Transfers of Stock. The corporation shall
transfer or otherwise change the registration of its issued
and outstanding shares in its stock ledger upon receipt of
an authorization in a form proper and acceptable to it or
its duly appointed agent. To the extent such shares are
evidenced by a certificate or certificates, the surrender
of such certificate properly endorsed shall be required
where necessary. Upon receipt of the transfer
instructions in proper order by the corporation, the
corporation shall change its stock ledger records
accordingly and record the transaction upon its books.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. With respect to dividends
(including "dividends" designated as "short" or "long" term
"capital gains" distributions to satisfy requirements of
the Investment Company Act of 1940, as amended, or the
Internal Revenue Code of 1954, as amended from time to
time):
(A) Such dividends, at the election of the
stockholders, may be automatically reinvested in additional
shares (or fractions thereof) of the corporation at the
"net asset value" determined on the reinvestment date fixed
by the Board of Directors.
(B) The Board of Directors in declaring any dividend,
may fix a record date not earlier than the date of
declaration or more than 40 days prior to the date of
payment, as of which the stockholders entitled to
receive such dividend shall be determined, notwithstanding
any transfer or the repurchase or issue (or sale) of any
shares after such record date.
(C) Dividends or distributions on shares of stock
whether payable in stock or cash, shall be paid out of
earnings, surplus or other lawfully available assets;
provided that no dividend payment, or distribution in the
nature of a dividend payment, may be made wholly or partly
from any source other than accumulated, undistributed net
income, determined in accordance with good accounting
practice, and not including profits or losses realized in
the sale of securities or other properties, unless such
payment is accompanied by a written statement clearly
indicating what portion of such payment per share is made
from the following sources:
(i) accumulated or undistributed net income
not including profits or losses from the sale of
securities or other properties;
(ii) accumulated undistributed net profits from
the sale of securities or other properties;
(iii) net profits from the sale of
securities or other properties during the then current
fiscal year; and
(iv) paid-in surplus or other capital source.
(D) In declaring dividends and in recognition that the
one goal of the corporation is to qualify as a "regulated
investment company" under the Internal Revenue Code of
1954, as amended, the Board of Directors shall be
entitled to rely upon estimates made in the last two months
of the fiscal year as to the amounts of distribution
necessary for this purpose; and the Board of Directors,
acting consistently with good accounting practice and with
the express provisions of these By-laws, may credit receipts
and charge payments to income or otherwise, as it may
seem proper.
(E) Any dividends declared, except as aforesaid,
shall be deemed liquidating dividends and the stockholders
shall be so informed to whatever extent may be required
by law. A notice that dividends have been paid from paid-in
surplus, or a notice that dividends have been paid from
paid-in capital, shall be deemed to be a sufficient notice
that the same constitutes liquidating dividends.
(F) Anything in these By-laws to the contrary
notwithstanding, the Board of Directors may at any time
declare and distribute pro rata among the stockholders of a
record date fixed as above, a "stock dividend" out of
either authorized but unissued, or treasury shares of the
corporation, or both.
Section 2. Rights in Securities. The Board of
Directors, on behalf of the corporation, shall have the
authority to exercise all of the rights of the
corporation as owners of any securities which might be
exercised by any individual owning such securities in his
own right; including but not limited to, the rights to
vote by proxy for any and all purposes (including the
right to authorize any officer of the manager to
execute proxies), to consent to the reorganization, merger
or consolidation of any company or to consent to the sale,
lease or mortgage of all or substantially all of the
property and assets of any company; and to exchange any of
the shares of stock of any company for shares of stock
issued therefor upon any such reorganization, merger,
consolidation, sale, lease or mortgage.
Section 3. Custodianship. Securities owned by the
corporation and cash representing (A) the proceeds
from sales of securities owned by the corporation and of
shares issued by the corporation, (B) payments of
principal upon securities owned by the corporation, or (C)
capital distributions in respect of securities owned by
the corporation shall be held by one or more custodians, as
permitted by the Investment Company Act of 1940, as
amended, to be selected by the Board of Directors. Each
bank and/or trust company selected as a custodian shall be
organized and existing under a state banking and/or trust
company law, or shall be a national banking association
incorporated under the laws of the United States of
America and qualified to act as a trust company, and shall
have an aggregate capital, surplus and undivided profits
of not less than $2,000,000. Each custodian shall enter
into an agreement with the corporation to serve as a
custodian of such securities and cash on terms consistent
with the provisions of these By-laws. From the time any
such trust company, banking association or other
permissible entity becomes a custodian of such securities
and cash, it shall:
(A) Deliver securities owned by the corporation,
only upon sale of such securities for the account of the
corporation and receipt of payment therefor by the
custodian, or when such securities may be called,
redeemed, retired or otherwise become payable, provided
that this provision shall not prevent:
(i) Delivery of securities for examination to
the broker selling the same, in accordance with the
"street delivery" custom, whereby such securities are
delivered to such broker in exchange for a delivery
receipt exchanged on the same day for an uncertified
check of such broker to be presented on the same day
for certification.
(ii) Delivery of securities of an issuer in
exchange for or for conversion into, other
securities alone, or cash and other securities,
pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment of
the securities of such issuer or for deposit with a
reorganization committee or protective committee,
pursuant to a deposit agreement.
(iii) The conversion by the custodian of
securities owned by the corporation, pursuant to
the provisions of such securities into other
securities.
(iv) The surrender by the custodian of
warrants, rights or similar securities owned by the
corporation in the exercise of such warrants, rights
or similar securities, or the surrender of interim
receipts or temporary securities for definitive
securities.
(v) The delivery of securities as collateral
on borrowing affected by the corporation, subject to
the limitations of Article VII of these By-laws.
(vi) The delivery of securities owned by the
corporation, as a complete or partial redemption
in kind of securities issued by the corporation.
(B) Deliver funds on the corporation only upon the
purchase of securities for the portfolio of the corporation,
and the delivery of such securities to the custodian;
provided always, that such limitation shall not prevent the
release of funds by the custodian for redemption of
shares issued by the corporation, for payment of interest,
dividend disbursements, taxes, management fees, custodian
fees, other operating expenses properly authorized by an
officer or officers as required by the custodian agreement,
payments in connection with conversion, exchange or
surrender of securities owned by the corporation (as set
forth in Subsection A of this Section) and for
organizational and such other obligations as approved by
the Board of Directors certified in writing.
(C) Upon the resignation or inability of a custodian
to serve as custodian of the assets of the corporation, the
corporation shall use its best efforts to obtain a
successor custodian, to require that the cash and securities
owned by the corporation be delivered directly to such
successor custodian and, in the event that no such
successor can be found, to submit to the stockholders --
before permitting delivery of the cash and securities owned
by the corporation to anyone other than a successor
custodian -- the question of whether the corporation shall
be liquidated or shall function without such custodian.
(D) Nothing hereinbefore contained shall prevent
any such custodian from delivering assets of the corporation
to a successor custodian having the qualifications
hereinabove prescribed.
(E) No directors, officers, employees or agents of
the corporation shall be authorized or permitted to
withdraw any assets held by the custodian, except as
permitted in this Article X and in the Custodian Agreement.
Directions, notices or instructions to the custodian,
with respect to delivery of securities, payment of cash or
otherwise, shall be given by such officer or officers
and/or such person or persons, and in such manner, as the
Board of Directors may from time to time designate.
Section 4. Reports. The corporation shall transmit to
the stockholders, at least semiannually, a report of the
operations of the corporation based at least annually upon
an audit by independent public accountants. Said report
shall clearly set forth the information customarily
furnished in a balance sheet and profit and loss
statement, and in addition, shall clearly set forth a
statement of all amounts paid directly to securities
dealers, legal counsel, transfer agents, disbursing
agents, registrars, custodians or trustees, where such
payments are made to a firm, corporation, bank or trust
company having an officer, director or partner who is also
an officer or director of this corporation. A copy or
copies, of all reports submitted to the stockholders of this
corporation shall also be sent, as required to the
regulatory agencies of the United States of America and the
states in which the securities of this corporation are
registered and sold.
Section 5. Bonding of Officers and Employees. All
officers and employees of the corporation shall be bonded to
such extent, and in such manner, as may be required by law.
Section 6. Seal. The corporate seal shall have
inscribed thereon the name of the corporation, the year of
its organization and the words "Corporate Seal, Maryland."
The seal may be used by causing it or a facsimile thereof
to be impressed or affixed or otherwise reproduced.
ARTICLE XI
AMENDMENTS
These By-laws may be altered, amended, repealed or restated
at any regular or special meeting of the Board of
Directors, provided that the provisions of Article VII may
not be altered, amended, repealed or restated without
the consent of a majority of the holders of the
corporation's outstanding common stock (as defined in the
Investment Company Act of 1940, as amended, and the
corporation's Articles of Incorporation) and provided
further that the right of the Board of Directors to alter,
amend, repeal or restate and the procedures therefor meet
the requirements of the Investment Company Act of 1940, as
amended, if any.
<PAGE>
EX99.23(b)(2)
AMENDED AND RESTATED BY-LAWS
AS OF NOVEMBER 30, 1996
OF
D. L. BABSON MONEY MARKET FUND, INC.
ARTICLE I
FISCAL YEAR AND OFFICES
Section 1. Fiscal Year. Unless otherwise provided
by resolution of the Board of Directors, the fiscal year of
the corporation shall begin on the first day of July and
end on the last day of June.
Section 2. Registered Office. The registered office
of the corporation in Maryland shall be C/O the CORPORATION
TRUST, INCORPORATED, 32 South Street, Baltimore, Maryland,
21202.
Section 3. Other Offices. The corporation shall have
a place of business in the State of Missouri, and the
corporation shall have the power to open additional
offices for the conduct of its business, either within or
outside the states of Maryland and Missouri, at such
places as the Board of Directors may from time to time
designate.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meeting. Meetings of the
stockholders for the election of directors shall be held in
such place as the Board of Directors may by resolution
establish. In the absence of any specific resolution,
annual meetings of stockholders shall be held at the
corporation's principal office in the State of Missouri.
Meetings of stockholders for any other purpose may be held
at such place and time as shall be stated in the notice of
the meeting, or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of
stockholders, if held, shall be held at such time during
the month of September as may be fixed by the Board of
Directors by resolution each year. At any annual meeting,
the stockholders shall elect a Board of Directors and
transact any other business which may properly be brought
before the meeting. No annual meeting of stockholders shall
be required in any year in which the only business to be
transacted at such meeting does not require action by
stockholders on any one or more of the following:
(1) the election of directors;
(2) approval of the investment advisory agreement;
(3) ratification of the selection of independent
public accountants;
(4) approval of a distribution agreement.
Section 3. Special Meetings. At any time in the
interval between annual meetings, special meetings of the
stockholders may be called by the president or by a majority
of the Board of Directors and shall be called by the
president or secretary upon written request of the
holders of shares entitled to cast not less than ten percent
of all the votes entitled to be cast at such meeting.
Section 4. Notice. Not less than ten nor more than
ninety days before the date of every annual or special
stockholders' meeting, the secretary shall give to each
stockholder entitled to vote at such meeting written notice
stating the time and place of the meeting and, in the case
of a special meeting, the purpose or purposes for which the
meeting is called. Business transacted at any special
meeting of stockholders shall be limited to the purposes
stated in the notice.
Section 5. Record Date for Meetings. The Board of
Directors may fix in advance a date not more than ninety
days, nor less than ten days, prior to the date of any
annual or special meeting of the stockholders as a record
date for the determination of the stockholders entitled to
receive notice of, and to vote at any meeting and any
adjournment thereof; and in such case such stockholders and
only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to receive notice of and
to vote only such shares held and outstanding on such record
date that continue to be held and outstanding at the time of
voting.
Section 6. Quorum. At any meeting of stockholders,
the presence in person or by proxy of the holders of a
majority of the aggregate shares of stock at the time
outstanding shall constitute a quorum. If, however, such
quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote
thereat, present in person or represented by proxy, shall
have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented
any business may be transacted which might have been
transacted at the meeting originally notified.
Section 7. Majority. The vote of the holders of a
majority of the stock having voting power, as measured by
the applicable quorum requirements set forth in Section 6,
present in person or represented by proxy, at a meeting
duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter
which may properly come before the meeting, unless otherwise
required by the Investment Company Act of 1940, as amended.
Section 8. Voting. Each stockholder shall have one
vote for each full share and a fractional vote for each
fractional share of stock having voting power held by such
stockholder on each matter submitted to a vote at a meeting
of stockholders. A stockholder may cast his vote in person
or by proxy, but no proxy shall be valid after eleven
months from its date, unless otherwise provided in the
proxy. At all meetings of stockholders, unless the voting
is conducted by inspectors, all questions relating to the
qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the
chairman of the meeting.
Section 9. Inspectors. At any election of directors,
the Board of Directors prior thereto may, or, if they have
not so acted, the chairman of the meeting may, and upon
the request of the holders of ten percent (10%) of the
shares entitled to vote at such election shall, appoint
two inspectors of election who shall first subscribe an oath
of affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and
according to the best of their ability, and shall after
the election make a certificate of the result of the vote
taken. No candidate for the office of director shall be
appointed such inspector. The chairman of the meeting may
cause a vote by ballot to be taken upon any election or
matter, and such vote shall be taken upon the request of
the holders of ten percent (10%) of the stock entitled to
vote on such election or matter.
Section 10. Stockholder List. The officer who has
charge of the stock ledger of the corporation shall, at
least ten days before every election of directors,
prepare and make a complete list of the stockholders
entitled to vote at said election, arranged in
alphabetical order, showing the address and the number of
shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder,
during ordinary business hours, for a period of at least
ten days prior to the election, either at a place within the
city, town or village where the election is to be
held and which place shall be specified in the notice of
meeting, or if not specified, at the place where said
meeting is to be held, and the list shall be produced and
kept at the time and place of election during the whole
time thereof, and subject to the inspection of any
stockholder who may be present.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business of the
corporation shall be managed by its Board of Directors,
which may exercise all powers of the corporation, except
such as are by statute, or the Articles of Incorporation, or
by these By-laws conferred upon or reserved to the
stockholders.
Section 2. Number and Term of Office. The number of
directors which shall constitute the whole Board shall be
determined from time to time by the Board of Directors, but
shall not be fewer than three. Each director elected shall
hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 3. Elections. The Directors shall all be of
one class and shall serve until their respective
successors are elected and qualified.
Section 4. Place of Meeting. Meetings of the Board
of Directors, regular or special, may be held at any place
in or out of the State of Maryland as the Board may from
time to time determine.
Section 5. Quorum. At all meetings of the Board of
Directors a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business and
the action of a majority of the directors present at any
meeting at which a quorum is present shall be the action of
the Board of Directors unless the concurrence of a
greater proportion is required for such action by the laws
of the State of Maryland, these By-laws or the Articles of
Incorporation or a different number is required by the
Investment Company Act of 1940, as amended. If a quorum
shall not be present at any meeting of directors, the
directors present thereat may by a majority vote adjourn the
meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be
present.
Section 6. First Meeting. The first meeting of each
newly constituted Board of Directors shall be held as soon
as practicable after the annual meeting of stockholders in
each year, at such time and place as shall be specified
in a notice given as hereinafter provided for meetings of
the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 7. Regular Meetings. Regular meetings of the
Board of Directors may be held without notice at such time
and place as shall from time to time be determined by the
Board of Directors.
Section 8. Special Meetings. Special meetings of the
Board of Directors may be called by the president on one
day's notice to each director; special meetings shall be
called by the president or secretary in like manner and on
like notice on the written request of two directors.
Section 9. Telephonic Meetings. Regular or special
meetings, except for meetings to approve an investment
advisory agreement or a distribution plan, of the Board of
Directors or any committee thereof, may be held by means of
a conference telephone or similar communications equipment
so that all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by
these means constitutes presence in person at the meeting.
Section 10. Informal Actions. Any action, except
approval of an investment advisory agreement, or a
distribution plan, required or permitted to be taken at any
meeting of the Board of Directors or any committee
thereof may be taken without a meeting, if written consent
to such action is signed in one or more counterparts by all
members of the Board or of such committee, as the case may
be, and such written consent is filed with the minutes of
proceedings of the Board or committee.
Section 11. Committees. The Board of Directors may
by resolution passed by a majority of the whole Board
appoint from among its members an executive committee and
other committees composed of two or more directors, and may
delegate to such committees, in the intervals between
meetings of the Board of Directors, any or all of the
power of the Board of Directors in the management of the
business and affairs of the corporation, except the power to
declare dividends, to issue stock or to recommend to
stockholders any action requiring stockholders' approval.
In the absence of any member of such committee, the
members thereof present at any meeting, whether or not
they constitute a quorum, may appoint a member of the Board
of Directors to act in the place of such absent member.
Section 12. Action of Committees. The committees
shall keep minutes of their proceedings and shall report
the same to the Board of Directors at the meeting next
succeeding, and any action by committees shall be subject
to revision and alteration by the Board of Directors,
provided that no rights of third persons shall be affected
by any such revision or alteration.
Section 13. Compensation. Any director, whether or
not he is a salaried officer or employee of the
corporation, may be compensated for his services as a
director or as a member of a committee of directors, or as
chairman of the Board or chairman of a committee by fixed or
periodic payments or by fees for attendance at meetings or
by both, and in addition may be reimbursed for
transportation and other expenses, all in such manner and
amounts as the Board of Directors may from time to time
determine.
Section 14. Removal. The stockholders of this
corporation may remove any director with or without cause by
the affirmative vote of a majority of all the votes
entitled to be cast for the election of directors.
ARTICLE IV
NOTICES
Section 1. Form. Notices to stockholders shall be in
writing and delivered personally or mailed to the
stockholders at their addresses appearing on the books of
the corporation. Notice by mail shall be deemed to be given
at the time when the same shall be mailed. Notice to
directors need not state the purpose of a regular or special
meeting.
Section 2. Waiver. Whenever any notice of the time,
place or purpose of any meeting of stockholders, directors
or committee is required to be given under the provisions of
Maryland law or under the provisions of the Articles of
Incorporation or these By-laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice and
filed with the records of the meeting, whether before or
after the holding thereof, or actual attendance at the
meeting of stockholders in person or by proxy, or at the
meeting of directors or committee in person, shall be
deemed equivalent to the giving of such notice to such
persons.
ARTICLE V
OFFICERS
Section 1. Officers of the Corporation. The officers
of the corporation shall be elected by the Board of
Directors and shall include a president, who shall be a
director, a secretary and a treasurer. The Board of
Directors may, from time to time, elect or appoint a
controller, one or more vice-presidents, assistant
secretaries and assistant treasurers. The president shall
preside at meetings of the Board of Directors, unless the
Board of Directors, at its discretion, elects a chairman
of the Board to preside at such meetings. In addition,
such chairman shall perform and execute such executive and
administrative duties and have such powers as the Board of
Directors may from time to time prescribe. Two or more
offices may be held by the same person but no officer
shall execute, acknowledge or verify any instrument in more
than one capacity, if such instrument is required by law,
the Articles of Incorporation or these By-laws to be
executed, acknowledged or verified by two or more officers.
Section 2. Election. The Board of Directors at its
first meeting after each annual meeting of stockholders
shall choose a president, a secretary and a treasurer.
Section 3. Compensation. The salaries or other
compensation of all officers and agents of the corporation
paid directly by the corporation shall be fixed by the
Board of Directors, except that the Board of Directors may
delegate to any person or group of persons the power to
fix such salaries or other compensation.
Section 4. Tenure. The officers of the corporation
shall serve for one year and until the successors are
chosen and qualify. Any officer or agent may be removed by
the affirmative vote of a majority of the Board of Directors
whenever, in its judgment, the best interests of the
corporation will be served thereby. Any vacancy occurring
in any office of the corporation by death, resignation,
removal or otherwise shall be filled by the Board of
Directors.
Section 5. President. The president, unless the
chairman has been so designated, shall be the chief
executive officer of the corporation. He shall preside at
all meetings of the stockholders and directors and shall see
that all orders and resolutions of the Board are carried
into effect. The president shall also be the chief
administrative officer of the corporation and shall
perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 6. Vice-Presidents. The vice-presidents, in
the order of their seniority, shall in the absence or
disability of the president, perform the duties and
exercise the powers of the president and shall perform such
other duties as the Board of Directors may from time to
time prescribe.
Section 7. Secretary. The secretary shall attend all
meetings of the Board of Directors and all meetings of
the stockholders and record all the proceedings thereof and
shall perform like duties for any committee when required.
In the absence of the secretary or an assistant secretary,
proceedings of such meetings shall be recorded by a person
selected by the chairman of the meeting. He shall give,
or cause to be given, notice of meetings of the stockholders
and of the Board of Directors, and shall perform such
other duties as may be prescribed by the Board of Directors
or president, under whose supervision he shall be. He shall
keep in safe custody the seal of the corporation and, when
authorized by the Board of Directors, affix and attest the
same to any instrument requiring it. The Board of Directors
may give general authority to any other officer to affix the
seal of the corporation and to attest the same by affixing
his signature.
Section 8. Assistant Secretaries. The assistant
secretaries, in order of their seniority, shall in the
absence or disability of the secretary, perform the duties
and exercise the powers of the secretary and shall
perform such other duties as the Board of Directors shall
prescribe.
Section 9. Treasurer. The treasurer, unless another
officer has been so designated, shall be the chief
financial officer of the corporation. He shall be
responsible for the maintenance of its accounting records
and shall render to the Board of Directors, at its regular
meetings, or when the Board of Directors so requires, an
account of all the corporation's financial transactions
and a report of the financial condition of the corporation.
Section 10. Controller. The controller shall be under
the direct supervision of the treasurer. He shall maintain
adequate records of all assets, liabilities and
transactions of the corporation, establish and maintain
internal accounting control and, in cooperation with the
independent public accountants selected by the Board of
Directors, shall supervise internal auditing. He shall have
such further powers and duties as may be conferred upon
him from time to time by the president or the Board of
Directors.
Section 11. Assistant Treasurers. The assistant
treasurers, in the order of their seniority, shall in the
absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall
perform such other duties as the president or the
Board of Directors may from time to time prescribe.
Section 12. Other Officers. The Board of Directors
from time to time may appoint such other officers and
agents as it shall deem advisable, who shall hold their
offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to
time by the Board of Directors. The Board of Directors from
time to time may delegate to one or more officers or
agents the power to appoint any such subordinate officers or
agents, except assistant treasurers and to prescribe the
respective rights, terms of office, authorities and duties.
ARTICLE VI
NET ASSET VALUE
The net asset value per share of stock of the corporation
shall be determined at least once each day at the close of
business on the New York Stock Exchange on each day the
New York Stock Exchange is open for trading. Net asset
value shall be calculated by adding the value of all
securities and other assets of the Fund, deducting its
liabilities and dividing by the number of shares
outstanding.
ARTICLE VII
INVESTMENT RESTRICTIONS
The following investment restriction cannot be
changed without the consent of the holders of a
majority of the corporation's outstanding shares of stock;
the corporation shall not:
(1) invest in equity securities or securities convertible
into equities; (2) purchase the securities of any issuer
(other than obligations issued or guaranteed as to principal
and interest by the government of the United States, its
agencies or instrumentalities) if, as a result, (a) more
than 5% of the Fund's total assets (taken at current value)
would be invested in the securities of such issuer, or (b)
the Fund would hold more than 10% of any class of securities
of such issuer (for this purpose, all debts and obligations
of an issuer maturing in less than one year are treated as a
single class of securities); (3) borrow money in excess of
15% of its total assets taken at market value, and then only
from banks as a temporary measure for extraordinary or
emergency purposes; the Fund will not borrow to increase
income (leveraging) but only to facilitate redemption
requests which might otherwise require untimely dispositions
of Portfolio securities; the Fund will repay all borrowings
before making additional investments, and interest paid on
such borrowings will reduce net income; (4) mortgage, pledge
or hypothecate its assets except in an amount up to 15% (10%
as long as the Fund's shares are registered for sale in
certain states) of the value of its total assets but only to
secure borrowings for temporary or emergency purposes; (5)
issue senior securities, as defined in the Investment
Company Act of 1940, as amended; (6) underwrite securities
issued by other persons; (7) purchase or sell real estate,
but this shall not prevent investment in obligations secured
by real estate; (8) make loans to other persons, except by
the purchase of debt obligations which are permitted under
its investment policy; (9) purchase securities on margin or
sell short; (10) purchase or retain securities of an issuer
if to the knowledge of the Fund's management those directors
of the Fund, each of whom owns more than one-half of one
percent (.5%) of such securities, together own more than
five percent (5%) of the securities of such issuer; (11)
purchase or sell commodities or commodity contracts; (12)
write or invest in put, call, straddle or spread options or
invest in interests in oil, gas or other mineral exploration
or development programs; (13) invest in companies for the
purpose of exercising control; (14) invest in securities of
other investment companies, except as they may be acquired
as part of a merger, consolidation or acquisition of assets;
(15) invest more than 5% of the value of its total assets at
the time of investment in the securities of any issuer or
issuers which have records of less than three years
continuous operation, including the operation of any
predecessor, but this limitation does not apply to
securities issued or guaranteed as to interest and principal
by the United States government or its agencies or
instrumentalities; or (16) purchase any securities which
would cause more than 25% of the value of a Portfolio's
total net assets at the time of such purchase to be invested
in any one industry; provided, however, the Prime Portfolio
reserves freedom of action to invest up to 100% of its
assets in certificates of deposit or bankers' acceptances of
domestic branches of U.S. banks.
ARTICLE VIII
OTHER RESTRICTIONS
Section 1. Dealings. The officers and directors of
the corporation and its investment adviser shall have no
dealings for or on behalf of the corporation with
themselves as principal or agent, or with any
corporation, partnership, trust, joint venture or
association in which they have a financial interest,
provided that this section shall not prevent:
(A) Officers or directors of the corporation
from having a financial interest in the corporation, in
any sponsor, manager, investment adviser or promoter of the
corporation, or in any underwriter or securities issued by
the corporation.
(B) The purchase of securities for the portfolio of
the corporation, or sale of securities owned by the
corporation through a security dealer, one or more of
whose partners, officers, directors or security holders is
an officer or director of the corporation, provided such
transactions are handled in a brokerage capacity only, and
provided commissions charged do not exceed customary
brokerage charges for such services.
(C) The employment of any legal counsel, registrar,
transfer agent, dividend disbursing agent or custodian
having a partner, officer, director or security holder
who is an officer or director of the corporation; provided
only customary fees are charged for services rendered to
or for the benefit of the corporation.
(D) The purchase for the portfolio of the
corporation of securities issued by an issuer having an
officer, director or security holder who is an officer or
director of the corporation or of any manager of the
corporation, unless the retention of such securities in the
portfolio of the corporation would otherwise be a violation
of these By-laws or the Articles of Incorporation of the
corporation.
ARTICLE IX
STOCK
Section 1. Certificates. Each stockholder shall be
entitled to a certificate or certificates which shall
certify the number of shares owned by him in the
corporation. Each certificate shall be signed by the
president or a vice-president and countersigned by the
secretary or an assistant secretary or the treasurer or an
assistant treasurer and shall be sealed with the corporate
seal.
Section 2. Signature. When a certificate is signed by
a transfer agent or an assistant transfer agent or by a
transfer clerk acting on behalf of the corporation and a
registrar, the signature of any such president, vice-
president, treasurer, assistant treasurer, secretary or
assistant secretary may be facsimile. In case any
officer who has signed any certificate ceases to be an
officer of the corporation before the certificate is issued,
the certificate may nevertheless be issued by the
corporation with the same effect as if the officer had not
ceased to be such officer as of the date of its issue.
Section 3. Recording and Transfer Without
Certificates. Notwithstanding the foregoing provisions of
this article, the corporation shall have full power to
participate in any program approved by the Board of
Directors providing for the recording and transfer of
ownership of shares of the corporation's stock by
electronic or other means without the issuance of
certificates.
Section 4. Lost Certificates. The Board of Directors
may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued
by the corporation alleged to have been stolen, lost or
destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be
stolen, lost or destroyed, or upon other satisfactory
evidence of such loss or destruction. When authorizing
such issuance of a new certificate or certificates, the
Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require
the owner of such stolen, lost or destroyed certificate or
certificates, or his legal representative to advertise
the same in such manner as it shall require and to give the
corporation a bond with sufficient surety, to the
corporation to indemnify it against any loss or claim that
may be made by reason of the issuance of a new certificate.
Section 5. Registered Stockholders. The corporation
shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any
other person, whether or not it shall have express or
other notice thereof, except, as otherwise provided by
the laws of Maryland.
Section 6. Transfer Agents and Registrars. The
corporation may act as its own transfer agent and/or
registrar, or it may delegate those duties to others. The
Board of Directors may from time to time, appoint or remove
transfer agents and/or registrars of stock of the
corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment
being made all certificates representing shares of stock
thereafter issued shall be countersigned by one of such
transfer agents or by one of such registrars or by both and
shall not be valid unless so countersigned. If the same
person shall be both transfer agent and registrar, only
countersignature by such person shall be required.
Section 7. Stock Ledger. The corporation shall
maintain an original stock ledger containing the names and
addresses of all stockholders and the number and
class of shares held by each stockholder. Such stock ledger
may be in written form or any other form capable of
being converted into written form within a reasonable time
for visual inspection.
Section 8. Transfers of Stock. The corporation shall
transfer or otherwise change the registration of its issued
and outstanding shares in its stock ledger upon receipt of
an authorization in a form proper and acceptable to it or
its duly appointed agent. To the extent such shares are
evidenced by a certificate or certificates, the surrender
of such certificate properly endorsed shall be required
where necessary. Upon receipt of the transfer
instructions in proper order by the corporation, the
corporation shall change its stock ledger records
accordingly and record the transaction upon its books.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. With respect to dividends
(including "dividends" designated as "short" or "long" term
"capital gains" distributions to satisfy requirements of
the Investment Company Act of 1940, as amended, or the
Internal Revenue Code of 1954, as amended from time to
time):
(A) Such dividends, at the election of the
stockholders, may be automatically reinvested in additional
shares (or fractions thereof) of the corporation at the
"net asset value" determined on the reinvestment date fixed
by the Board of Directors.
(B) The Board of Directors in declaring any dividend,
may fix a record date not earlier than the date of
declaration or more than 40 days prior to the date of
payment, as of which the stockholders entitled to
receive such dividend shall be determined, notwithstanding
any transfer or the repurchase or issue (or sale) of any
shares after such record date.
(C) Dividends or distributions on shares of stock
whether payable in stock or cash, shall be paid out of
earnings, surplus or other lawfully available assets;
provided that no dividend payment, or distribution in the
nature of a dividend payment, may be made wholly or partly
from any source other than accumulated, undistributed net
income, determined in accordance with good accounting
practice, and not including profits or losses realized in
the sale of securities or other properties, unless such
payment is accompanied by a written statement clearly
indicating what portion of such payment per share is made
from the following sources:
(i) accumulated or undistributed net income
not including profits or losses from the sale of
securities or other properties;
(ii) accumulated undistributed net profits from
the sale of securities or other properties;
(iii) net profits from the sale of
securities or other properties during the then current
fiscal year; and
(iv) paid-in surplus or other capital source.
(D) In declaring dividends and in recognition that the
one goal of the corporation is to qualify as a "regulated
investment company" under the Internal Revenue Code of
1954, as amended, the Board of Directors shall be
entitled to rely upon estimates made in the last two months
of the fiscal year as to the amounts of distribution
necessary for this purpose; and the Board of Directors,
acting consistently with good accounting practice and with
the express provisions of these By-laws, may credit receipts
and charge payments to income or otherwise, as it may
seem proper.
(E) Any dividends declared, except as aforesaid,
shall be deemed liquidating dividends and the stockholders
shall be so informed to whatever extent may be required
by law. A notice that dividends have been paid from paid-in
surplus, or a notice that dividends have been paid from
paid-in capital, shall be deemed to be a sufficient notice
that the same constitutes liquidating dividends.
(F) Anything in these By-laws to the contrary
notwithstanding, the Board of Directors may at any time
declare and distribute pro rata among the stockholders of a
record date fixed as above, a "stock dividend" out of
either authorized but unissued, or treasury shares of the
corporation, or both.
Section 2. Rights in Securities. The Board of
Directors, on behalf of the corporation, shall have the
authority to exercise all of the rights of the
corporation as owners of any securities which might be
exercised by any individual owning such securities in his
own right; including but not limited to, the rights to
vote by proxy for any and all purposes (including the
right to authorize any officer of the manager to
execute proxies), to consent to the reorganization, merger
or consolidation of any company or to consent to the sale,
lease or mortgage of all or substantially all of the
property and assets of any company; and to exchange any of
the shares of stock of any company for shares of stock
issued therefor upon any such reorganization, merger,
consolidation, sale, lease or mortgage.
Section 3. Custodianship. Securities owned by the
corporation and cash representing (A) the proceeds
from sales of securities owned by the corporation and of
shares issued by the corporation, (B) payments of
principal upon securities owned by the corporation, or (C)
capital distributions in respect of securities owned by
the corporation shall be held by one or more custodians, as
permitted by the Investment Company Act of 1940, as
amended, to be selected by the Board of Directors. Each
bank and/or trust company selected as a custodian shall be
organized and existing under a state banking and/or trust
company law, or shall be a national banking association
incorporated under the laws of the United States of
America and qualified to act as a trust company, and shall
have an aggregate capital, surplus and undivided profits
of not less than $2,000,000. Each custodian shall enter
into an agreement with the corporation to serve as a
custodian of such securities and cash on terms consistent
with the provisions of these By-laws. From the time any
such trust company, banking association or other
permissible entity becomes a custodian of such securities
and cash, it shall:
(A) Deliver securities owned by the corporation,
only upon sale of such securities for the account of the
corporation and receipt of payment therefor by the
custodian, or when such securities may be called,
redeemed, retired or otherwise become payable, provided
that this provision shall not prevent:
(i) Delivery of securities for examination to
the broker selling the same, in accordance with the
"street delivery" custom, whereby such securities are
delivered to such broker in exchange for a delivery
receipt exchanged on the same day for an uncertified
check of such broker to be presented on the same day
for certification.
(ii) Delivery of securities of an issuer in
exchange for or for conversion into, other
securities alone, or cash and other securities,
pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment of
the securities of such issuer or for deposit with a
reorganization committee or protective committee,
pursuant to a deposit agreement.
(iii) The conversion by the custodian of
securities owned by the corporation, pursuant to
the provisions of such securities into other
securities.
(iv) The surrender by the custodian of
warrants, rights or similar securities owned by the
corporation in the exercise of such warrants, rights
or similar securities, or the surrender of interim
receipts or temporary securities for definitive
securities.
(v) The delivery of securities as collateral
on borrowing affected by the corporation, subject to
the limitations of Article VII of these By-laws.
(vi) The delivery of securities owned by the
corporation, as a complete or partial redemption
in kind of securities issued by the corporation.
(B) Deliver funds on the corporation only upon the
purchase of securities for the portfolio of the corporation,
and the delivery of such securities to the custodian;
provided always, that such limitation shall not prevent the
release of funds by the custodian for redemption of
shares issued by the corporation, for payment of interest,
dividend disbursements, taxes, management fees, custodian
fees, other operating expenses properly authorized by an
officer or officers as required by the custodian agreement,
payments in connection with conversion, exchange or
surrender of securities owned by the corporation (as set
forth in Subsection A of this Section) and for
organizational and such other obligations as approved by
the Board of Directors certified in writing.
(C) Upon the resignation or inability of a custodian
to serve as custodian of the assets of the corporation, the
corporation shall use its best efforts to obtain a
successor custodian, to require that the cash and securities
owned by the corporation be delivered directly to such
successor custodian and, in the event that no such
successor can be found, to submit to the stockholders --
before permitting delivery of the cash and securities owned
by the corporation to anyone other than a successor
custodian -- the question of whether the corporation shall
be liquidated or shall function without such custodian.
(D) Nothing hereinbefore contained shall prevent
any such custodian from delivering assets of the corporation
to a successor custodian having the qualifications
hereinabove prescribed.
(E) No directors, officers, employees or agents of
the corporation shall be authorized or permitted to
withdraw any assets held by the custodian, except as
permitted in this Article X and in the Custodian Agreement.
Directions, notices or instructions to the custodian,
with respect to delivery of securities, payment of cash or
otherwise, shall be given by such officer or officers
and/or such person or persons, and in such manner, as the
Board of Directors may from time to time designate.
Section 4. Reports. The corporation shall transmit to
the stockholders, at least semiannually, a report of the
operations of the corporation based at least annually upon
an audit by independent public accountants. Said report
shall clearly set forth the information customarily
furnished in a balance sheet and profit and loss
statement, and in addition, shall clearly set forth a
statement of all amounts paid directly to securities
dealers, legal counsel, transfer agents, disbursing
agents, registrars, custodians or trustees, where such
payments are made to a firm, corporation, bank or trust
company having an officer, director or partner who is also
an officer or director of this corporation. A copy or
copies, of all reports submitted to the stockholders of this
corporation shall also be sent, as required to the
regulatory agencies of the United States of America and the
states in which the securities of this corporation are
registered and sold.
Section 5. Bonding of Officers and Employees. All
officers and employees of the corporation shall be bonded to
such extent, and in such manner, as may be required by law.
Section 6. Seal. The corporate seal shall have
inscribed thereon the name of the corporation, the year of
its organization and the words "Corporate Seal, Maryland."
The seal may be used by causing it or a facsimile thereof
to be impressed or affixed or otherwise reproduced.
ARTICLE XI
AMENDMENTS
These By-laws may be altered, amended, repealed or restated
at any regular or special meeting of the Board of
Directors, provided that the provisions of Article VII may
not be altered, amended, repealed or restated without
the consent of a majority of the holders of the
corporation's outstanding common stock (as defined in the
Investment Company Act of 1940, as amended, and the
corporation's Articles of Incorporation) and provided
further that the right of the Board of Directors to alter,
amend, repeal or restate and the procedures therefor meet
the requirements of the Investment Company Act of 1940, as
amended, if any.
<PAGE>
EX99.23(b)(3)
AMENDED AND RESTATED BY-LAWS
AS OF NOVEMBER 30, 1996
OF
D. L. BABSON TAX-FREE INCOME FUND, INC.
ARTICLE I
FISCAL YEAR AND OFFICES
Section 1. Fiscal Year. Unless otherwise provided
by resolution of the Board of Directors, the fiscal year of
the corporation shall begin on the first day of July and
end on the last day of June.
Section 2. Registered Office. The registered office
of the corporation in Maryland shall be C/O the CORPORATION
TRUST, INCORPORATED, 32 South Street, Baltimore, Maryland,
21202.
Section 3. Other Offices. The corporation shall have
a place of business in the State of Missouri, and the
corporation shall have the power to open additional
offices for the conduct of its business, either within or
outside the states of Maryland and Missouri, at such
places as the Board of Directors may from time to time
designate.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meeting. Meetings of the
stockholders for the election of directors shall be held in
such place as the Board of Directors may by resolution
establish. In the absence of any specific resolution,
annual meetings of stockholders shall be held at the
corporation's principal office in the State of Missouri.
Meetings of stockholders for any other purpose may be held
at such place and time as shall be stated in the notice of
the meeting, or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of
stockholders, if held, shall be held at such time during
the month of September as may be fixed by the Board of
Directors by resolution each year. At any annual meeting,
the stockholders shall elect a Board of Directors and
transact any other business which may properly be brought
before the meeting. No annual meeting of stockholders shall
be required in any year in which the only business to be
transacted at such meeting does not require action by
stockholders on any one or more of the following:
(1) the election of directors;
(2) approval of the investment advisory agreement;
(3) ratification of the selection of independent
public accountants;
(4) approval of a distribution agreement.
Section 3. Special Meetings. At any time in the
interval between annual meetings, special meetings of the
stockholders may be called by the president or by a majority
of the Board of Directors and shall be called by the
president or secretary upon written request of the
holders of shares entitled to cast not less than ten percent
of all the votes entitled to be cast at such meeting.
Section 4. Notice. Not less than ten nor more than
ninety days before the date of every annual or special
stockholders' meeting, the secretary shall give to each
stockholder entitled to vote at such meeting written notice
stating the time and place of the meeting and, in the case
of a special meeting, the purpose or purposes for which the
meeting is called. Business transacted at any special
meeting of stockholders shall be limited to the purposes
stated in the notice.
Section 5. Record Date for Meetings. The Board of
Directors may fix in advance a date not more than ninety
days, nor less than ten days, prior to the date of any
annual or special meeting of the stockholders as a record
date for the determination of the stockholders entitled to
receive notice of, and to vote at any meeting and any
adjournment thereof; and in such case such stockholders and
only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to receive notice of and
to vote only such shares held and outstanding on such record
date that continue to be held and outstanding at the time of
voting.
Section 6. Quorum. At any meeting of stockholders,
the presence in person or by proxy of the holders of a
majority of the aggregate shares of stock at the time
outstanding shall constitute a quorum. If, however, such
quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote
thereat, present in person or represented by proxy, shall
have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented
any business may be transacted which might have been
transacted at the meeting originally notified.
Section 7. Majority. The vote of the holders of a
majority of the stock having voting power, as measured by
the applicable quorum requirements set forth in Section 6,
present in person or represented by proxy, at a meeting
duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter
which may properly come before the meeting, unless otherwise
required by the Investment Company Act of 1940, as amended.
Section 8. Voting. Each stockholder shall have one
vote for each full share and a fractional vote for each
fractional share of stock having voting power held by such
stockholder on each matter submitted to a vote at a meeting
of stockholders. A stockholder may cast his vote in person
or by proxy, but no proxy shall be valid after eleven
months from its date, unless otherwise provided in the
proxy. At all meetings of stockholders, unless the voting
is conducted by inspectors, all questions relating to the
qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the
chairman of the meeting.
Section 9. Inspectors. At any election of directors,
the Board of Directors prior thereto may, or, if they have
not so acted, the chairman of the meeting may, and upon
the request of the holders of ten percent (10%) of the
shares entitled to vote at such election shall, appoint
two inspectors of election who shall first subscribe an oath
of affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and
according to the best of their ability, and shall after
the election make a certificate of the result of the vote
taken. No candidate for the office of director shall be
appointed such inspector. The chairman of the meeting may
cause a vote by ballot to be taken upon any election or
matter, and such vote shall be taken upon the request of
the holders of ten percent (10%) of the stock entitled to
vote on such election or matter.
Section 10. Stockholder List. The officer who has
charge of the stock ledger of the corporation shall, at
least ten days before every election of directors,
prepare and make a complete list of the stockholders
entitled to vote at said election, arranged in
alphabetical order, showing the address and the number of
shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder,
during ordinary business hours, for a period of at least
ten days prior to the election, either at a place within the
city, town or village where the election is to be
held and which place shall be specified in the notice of
meeting, or if not specified, at the place where said
meeting is to be held, and the list shall be produced and
kept at the time and place of election during the whole
time thereof, and subject to the inspection of any
stockholder who may be present.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business of the
corporation shall be managed by its Board of Directors,
which may exercise all powers of the corporation, except
such as are by statute, or the Articles of Incorporation, or
by these By-laws conferred upon or reserved to the
stockholders.
Section 2. Number and Term of Office. The number of
directors which shall constitute the whole Board shall be
determined from time to time by the Board of Directors, but
shall not be fewer than three. Each director elected shall
hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 3. Elections. The Directors shall all be of
one class and shall serve until their respective
successors are elected and qualified.
Section 4. Place of Meeting. Meetings of the Board
of Directors, regular or special, may be held at any place
in or out of the State of Maryland as the Board may from
time to time determine.
Section 5. Quorum. At all meetings of the Board of
Directors a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business and
the action of a majority of the directors present at any
meeting at which a quorum is present shall be the action of
the Board of Directors unless the concurrence of a
greater proportion is required for such action by the laws
of the State of Maryland, these By-laws or the Articles of
Incorporation or a different number is required by the
Investment Company Act of 1940, as amended. If a quorum
shall not be present at any meeting of directors, the
directors present thereat may by a majority vote adjourn the
meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be
present.
Section 6. First Meeting. The first meeting of each
newly constituted Board of Directors shall be held as soon
as practicable after the annual meeting of stockholders in
each year, at such time and place as shall be specified
in a notice given as hereinafter provided for meetings of
the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 7. Regular Meetings. Regular meetings of the
Board of Directors may be held without notice at such time
and place as shall from time to time be determined by the
Board of Directors.
Section 8. Special Meetings. Special meetings of the
Board of Directors may be called by the president on one
day's notice to each director; special meetings shall be
called by the president or secretary in like manner and on
like notice on the written request of two directors.
Section 9. Telephonic Meetings. Regular or special
meetings, except for meetings to approve an investment
advisory agreement or a distribution plan, of the Board of
Directors or any committee thereof, may be held by means of
a conference telephone or similar communications equipment
so that all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by
these means constitutes presence in person at the meeting.
Section 10. Informal Actions. Any action, except
approval of an investment advisory agreement, or a
distribution plan, required or permitted to be taken at any
meeting of the Board of Directors or any committee
thereof may be taken without a meeting, if written consent
to such action is signed in one or more counterparts by all
members of the Board or of such committee, as the case may
be, and such written consent is filed with the minutes of
proceedings of the Board or committee.
Section 11. Committees. The Board of Directors may
by resolution passed by a majority of the whole Board
appoint from among its members an executive committee and
other committees composed of two or more directors, and may
delegate to such committees, in the intervals between
meetings of the Board of Directors, any or all of the
power of the Board of Directors in the management of the
business and affairs of the corporation, except the power to
declare dividends, to issue stock or to recommend to
stockholders any action requiring stockholders' approval.
In the absence of any member of such committee, the
members thereof present at any meeting, whether or not
they constitute a quorum, may appoint a member of the Board
of Directors to act in the place of such absent member.
Section 12. Action of Committees. The committees
shall keep minutes of their proceedings and shall report
the same to the Board of Directors at the meeting next
succeeding, and any action by committees shall be subject
to revision and alteration by the Board of Directors,
provided that no rights of third persons shall be affected
by any such revision or alteration.
Section 13. Compensation. Any director, whether or
not he is a salaried officer or employee of the
corporation, may be compensated for his services as a
director or as a member of a committee of directors, or as
chairman of the Board or chairman of a committee by fixed or
periodic payments or by fees for attendance at meetings or
by both, and in addition may be reimbursed for
transportation and other expenses, all in such manner and
amounts as the Board of Directors may from time to time
determine.
Section 14. Removal. The stockholders of this
corporation may remove any director with or without cause by
the affirmative vote of a majority of all the votes
entitled to be cast for the election of directors.
ARTICLE IV
NOTICES
Section 1. Form. Notices to stockholders shall be in
writing and delivered personally or mailed to the
stockholders at their addresses appearing on the books of
the corporation. Notice by mail shall be deemed to be given
at the time when the same shall be mailed. Notice to
directors need not state the purpose of a regular or special
meeting.
Section 2. Waiver. Whenever any notice of the time,
place or purpose of any meeting of stockholders, directors
or committee is required to be given under the provisions of
Maryland law or under the provisions of the Articles of
Incorporation or these By-laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice and
filed with the records of the meeting, whether before or
after the holding thereof, or actual attendance at the
meeting of stockholders in person or by proxy, or at the
meeting of directors or committee in person, shall be
deemed equivalent to the giving of such notice to such
persons.
ARTICLE V
OFFICERS
Section 1. Officers of the Corporation. The officers
of the corporation shall be elected by the Board of
Directors and shall include a president, who shall be a
director, a secretary and a treasurer. The Board of
Directors may, from time to time, elect or appoint a
controller, one or more vice-presidents, assistant
secretaries and assistant treasurers. The president shall
preside at meetings of the Board of Directors, unless the
Board of Directors, at its discretion, elects a chairman
of the Board to preside at such meetings. In addition,
such chairman shall perform and execute such executive and
administrative duties and have such powers as the Board of
Directors may from time to time prescribe. Two or more
offices may be held by the same person but no officer
shall execute, acknowledge or verify any instrument in more
than one capacity, if such instrument is required by law,
the Articles of Incorporation or these By-laws to be
executed, acknowledged or verified by two or more officers.
Section 2. Election. The Board of Directors at its
first meeting after each annual meeting of stockholders
shall choose a president, a secretary and a treasurer.
Section 3. Compensation. The salaries or other
compensation of all officers and agents of the corporation
paid directly by the corporation shall be fixed by the
Board of Directors, except that the Board of Directors may
delegate to any person or group of persons the power to
fix such salaries or other compensation.
Section 4. Tenure. The officers of the corporation
shall serve for one year and until the successors are
chosen and qualify. Any officer or agent may be removed by
the affirmative vote of a majority of the Board of Directors
whenever, in its judgment, the best interests of the
corporation will be served thereby. Any vacancy occurring
in any office of the corporation by death, resignation,
removal or otherwise shall be filled by the Board of
Directors.
Section 5. President. The president, unless the
chairman has been so designated, shall be the chief
executive officer of the corporation. He shall preside at
all meetings of the stockholders and directors and shall see
that all orders and resolutions of the Board are carried
into effect. The president shall also be the chief
administrative officer of the corporation and shall
perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 6. Vice-Presidents. The vice-presidents, in
the order of their seniority, shall in the absence or
disability of the president, perform the duties and
exercise the powers of the president and shall perform such
other duties as the Board of Directors may from time to
time prescribe.
Section 7. Secretary. The secretary shall attend all
meetings of the Board of Directors and all meetings of
the stockholders and record all the proceedings thereof and
shall perform like duties for any committee when required.
In the absence of the secretary or an assistant secretary,
proceedings of such meetings shall be recorded by a person
selected by the chairman of the meeting. He shall give,
or cause to be given, notice of meetings of the stockholders
and of the Board of Directors, and shall perform such
other duties as may be prescribed by the Board of Directors
or president, under whose supervision he shall be. He shall
keep in safe custody the seal of the corporation and, when
authorized by the Board of Directors, affix and attest the
same to any instrument requiring it. The Board of Directors
may give general authority to any other officer to affix the
seal of the corporation and to attest the same by affixing
his signature.
Section 8. Assistant Secretaries. The assistant
secretaries, in order of their seniority, shall in the
absence or disability of the secretary, perform the duties
and exercise the powers of the secretary and shall
perform such other duties as the Board of Directors shall
prescribe.
Section 9. Treasurer. The treasurer, unless another
officer has been so designated, shall be the chief
financial officer of the corporation. He shall be
responsible for the maintenance of its accounting records
and shall render to the Board of Directors, at its regular
meetings, or when the Board of Directors so requires, an
account of all the corporation's financial transactions
and a report of the financial condition of the corporation.
Section 10. Controller. The controller shall be under
the direct supervision of the treasurer. He shall maintain
adequate records of all assets, liabilities and
transactions of the corporation, establish and maintain
internal accounting control and, in cooperation with the
independent public accountants selected by the Board of
Directors, shall supervise internal auditing. He shall have
such further powers and duties as may be conferred upon
him from time to time by the president or the Board of
Directors.
Section 11. Assistant Treasurers. The assistant
treasurers, in the order of their seniority, shall in the
absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall
perform such other duties as the president or the
Board of Directors may from time to time prescribe.
Section 12. Other Officers. The Board of Directors
from time to time may appoint such other officers and
agents as it shall deem advisable, who shall hold their
offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to
time by the Board of Directors. The Board of Directors from
time to time may delegate to one or more officers or
agents the power to appoint any such subordinate officers or
agents, except assistant treasurers and to prescribe the
respective rights, terms of office, authorities and duties.
ARTICLE VI
NET ASSET VALUE
The net asset value per share of stock of the corporation
shall be determined at least once each day at the close of
business on the New York Stock Exchange on each day the
New York Stock Exchange is open for trading. Net asset
value shall be calculated by adding the value of all
securities and other assets of the Fund, deducting its
liabilities and dividing by the number of shares
outstanding.
ARTICLE VII
INVESTMENT RESTRICTIONS
The following investment restriction cannot be
changed without the consent of the holders of a
majority of the corporation's outstanding shares of stock;
the corporation shall not:
(1) invest in equity securities or securities convertible
into equities; (2) purchase more than 10% of the outstanding
publicly issued debt obligations of any issuer; (3) borrow
money in any Portfolio except for temporary emergency
purposes, and then only in an amount not exceeding 10% of
the value of the total assets of that Portfolio; (4) pledge,
mortgage or hypothecate the assets of any Portfolio to an
extent greater than 10% of the value of the net assets of
that Portfolio; (5) issue senior securities, as defined in
the Investment Company Act of 1940, as amended; (6)
underwrite any issue of securities; (7) purchase or sell
real estate, but this shall not prevent investment in
municipal bonds secured by real estate; (8) make loans to
other persons, except by the purchase of bonds, debentures
or similar obligations which are publicly distributed; (9)
purchase on margin or sell short; (10) purchase or retain
securities of an issuer if to the knowledge of the Fund's
management those directors of the Fund, each of whom owns
more than one-half of one percent (.5%) of such securities,
together own more than five percent (5%) of the securities
of such issuer; (11) purchase or sell commodities or
commodity contracts; (12) invest in put, call, straddle or
special options; (13) purchase securities of any issuer
(except the United States government, its agencies and
instrumentalities, and any municipal bond guaranteed by the
United States government) in any Portfolio if, as a result,
more than 5% of the total assets of that Portfolio would be
invested in the securities of such issuer; for purposes of
this limitation, "issuer" will be based on a determination
of the source of assets and revenues committed to meeting
interest and principal payments of each security, and a
government entity which guarantees the securities issued by
another entity is also considered an issuer of that
security; (14) invest in companies for the purpose of
exercising control; (15) invest in securities of other
investment companies, except as they may be acquired as part
of a merger, consolidation or acquisition of assets; or (16)
invest more than 5% of the value of its total assets at the
time of investment in the securities of any issuer or
issuers which have records of less than three years
continuous operation, including the operation of any
predecessor, but this limitation does not apply to
securities issued or guaranteed as to interest and principal
by the United States government or its agencies or
instrumentalities.
ARTICLE VIII
OTHER RESTRICTIONS
Section 1. Dealings. The officers and directors of
the corporation and its investment adviser shall have no
dealings for or on behalf of the corporation with
themselves as principal or agent, or with any
corporation, partnership, trust, joint venture or
association in which they have a financial interest,
provided that this section shall not prevent:
(A) Officers or directors of the corporation
from having a financial interest in the corporation, in
any sponsor, manager, investment adviser or promoter of the
corporation, or in any underwriter or securities issued by
the corporation.
(B) The purchase of securities for the portfolio of
the corporation, or sale of securities owned by the
corporation through a security dealer, one or more of
whose partners, officers, directors or security holders is
an officer or director of the corporation, provided such
transactions are handled in a brokerage capacity only, and
provided commissions charged do not exceed customary
brokerage charges for such services.
(C) The employment of any legal counsel, registrar,
transfer agent, dividend disbursing agent or custodian
having a partner, officer, director or security holder
who is an officer or director of the corporation; provided
only customary fees are charged for services rendered to
or for the benefit of the corporation.
(D) The purchase for the portfolio of the
corporation of securities issued by an issuer having an
officer, director or security holder who is an officer or
director of the corporation or of any manager of the
corporation, unless the retention of such securities in the
portfolio of the corporation would otherwise be a violation
of these By-laws or the Articles of Incorporation of the
corporation.
ARTICLE IX
STOCK
Section 1. Certificates. Each stockholder shall be
entitled to a certificate or certificates which shall
certify the number of shares owned by him in the
corporation. Each certificate shall be signed by the
president or a vice-president and countersigned by the
secretary or an assistant secretary or the treasurer or an
assistant treasurer and shall be sealed with the corporate
seal.
Section 2. Signature. When a certificate is signed by
a transfer agent or an assistant transfer agent or by a
transfer clerk acting on behalf of the corporation and a
registrar, the signature of any such president, vice-
president, treasurer, assistant treasurer, secretary or
assistant secretary may be facsimile. In case any
officer who has signed any certificate ceases to be an
officer of the corporation before the certificate is issued,
the certificate may nevertheless be issued by the
corporation with the same effect as if the officer had not
ceased to be such officer as of the date of its issue.
Section 3. Recording and Transfer Without
Certificates. Notwithstanding the foregoing provisions of
this article, the corporation shall have full power to
participate in any program approved by the Board of
Directors providing for the recording and transfer of
ownership of shares of the corporation's stock by
electronic or other means without the issuance of
certificates.
Section 4. Lost Certificates. The Board of Directors
may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued
by the corporation alleged to have been stolen, lost or
destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be
stolen, lost or destroyed, or upon other satisfactory
evidence of such loss or destruction. When authorizing
such issuance of a new certificate or certificates, the
Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require
the owner of such stolen, lost or destroyed certificate or
certificates, or his legal representative to advertise
the same in such manner as it shall require and to give the
corporation a bond with sufficient surety, to the
corporation to indemnify it against any loss or claim that
may be made by reason of the issuance of a new certificate.
Section 5. Registered Stockholders. The corporation
shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any
other person, whether or not it shall have express or
other notice thereof, except, as otherwise provided by
the laws of Maryland.
Section 6. Transfer Agents and Registrars. The
corporation may act as its own transfer agent and/or
registrar, or it may delegate those duties to others. The
Board of Directors may from time to time, appoint or remove
transfer agents and/or registrars of stock of the
corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment
being made all certificates representing shares of stock
thereafter issued shall be countersigned by one of such
transfer agents or by one of such registrars or by both and
shall not be valid unless so countersigned. If the same
person shall be both transfer agent and registrar, only
countersignature by such person shall be required.
Section 7. Stock Ledger. The corporation shall
maintain an original stock ledger containing the names and
addresses of all stockholders and the number and
class of shares held by each stockholder. Such stock ledger
may be in written form or any other form capable of
being converted into written form within a reasonable time
for visual inspection.
Section 8. Transfers of Stock. The corporation shall
transfer or otherwise change the registration of its issued
and outstanding shares in its stock ledger upon receipt of
an authorization in a form proper and acceptable to it or
its duly appointed agent. To the extent such shares are
evidenced by a certificate or certificates, the surrender
of such certificate properly endorsed shall be required
where necessary. Upon receipt of the transfer
instructions in proper order by the corporation, the
corporation shall change its stock ledger records
accordingly and record the transaction upon its books.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. With respect to dividends
(including "dividends" designated as "short" or "long" term
"capital gains" distributions to satisfy requirements of
the Investment Company Act of 1940, as amended, or the
Internal Revenue Code of 1954, as amended from time to
time):
(A) Such dividends, at the election of the
stockholders, may be automatically reinvested in additional
shares (or fractions thereof) of the corporation at the
"net asset value" determined on the reinvestment date fixed
by the Board of Directors.
(B) The Board of Directors in declaring any dividend,
may fix a record date not earlier than the date of
declaration or more than 40 days prior to the date of
payment, as of which the stockholders entitled to
receive such dividend shall be determined, notwithstanding
any transfer or the repurchase or issue (or sale) of any
shares after such record date.
(C) Dividends or distributions on shares of stock
whether payable in stock or cash, shall be paid out of
earnings, surplus or other lawfully available assets;
provided that no dividend payment, or distribution in the
nature of a dividend payment, may be made wholly or partly
from any source other than accumulated, undistributed net
income, determined in accordance with good accounting
practice, and not including profits or losses realized in
the sale of securities or other properties, unless such
payment is accompanied by a written statement clearly
indicating what portion of such payment per share is made
from the following sources:
(i) accumulated or undistributed net income
not including profits or losses from the sale of
securities or other properties;
(ii) accumulated undistributed net profits from
the sale of securities or other properties;
(iii) net profits from the sale of
securities or other properties during the then current
fiscal year; and
(iv) paid-in surplus or other capital source.
(D) In declaring dividends and in recognition that the
one goal of the corporation is to qualify as a "regulated
investment company" under the Internal Revenue Code of
1954, as amended, the Board of Directors shall be
entitled to rely upon estimates made in the last two months
of the fiscal year as to the amounts of distribution
necessary for this purpose; and the Board of Directors,
acting consistently with good accounting practice and with
the express provisions of these By-laws, may credit receipts
and charge payments to income or otherwise, as it may
seem proper.
(E) Any dividends declared, except as aforesaid,
shall be deemed liquidating dividends and the stockholders
shall be so informed to whatever extent may be required
by law. A notice that dividends have been paid from paid-in
surplus, or a notice that dividends have been paid from
paid-in capital, shall be deemed to be a sufficient notice
that the same constitutes liquidating dividends.
(F) Anything in these By-laws to the contrary
notwithstanding, the Board of Directors may at any time
declare and distribute pro rata among the stockholders of a
record date fixed as above, a "stock dividend" out of
either authorized but unissued, or treasury shares of the
corporation, or both.
Section 2. Rights in Securities. The Board of
Directors, on behalf of the corporation, shall have the
authority to exercise all of the rights of the
corporation as owners of any securities which might be
exercised by any individual owning such securities in his
own right; including but not limited to, the rights to
vote by proxy for any and all purposes (including the
right to authorize any officer of the manager to
execute proxies), to consent to the reorganization, merger
or consolidation of any company or to consent to the sale,
lease or mortgage of all or substantially all of the
property and assets of any company; and to exchange any of
the shares of stock of any company for shares of stock
issued therefor upon any such reorganization, merger,
consolidation, sale, lease or mortgage.
Section 3. Custodianship. Securities owned by the
corporation and cash representing (A) the proceeds
from sales of securities owned by the corporation and of
shares issued by the corporation, (B) payments of
principal upon securities owned by the corporation, or (C)
capital distributions in respect of securities owned by
the corporation shall be held by one or more custodians, as
permitted by the Investment Company Act of 1940, as
amended, to be selected by the Board of Directors. Each
bank and/or trust company selected as a custodian shall be
organized and existing under a state banking and/or trust
company law, or shall be a national banking association
incorporated under the laws of the United States of
America and qualified to act as a trust company, and shall
have an aggregate capital, surplus and undivided profits
of not less than $2,000,000. Each custodian shall enter
into an agreement with the corporation to serve as a
custodian of such securities and cash on terms consistent
with the provisions of these By-laws. From the time any
such trust company, banking association or other
permissible entity becomes a custodian of such securities
and cash, it shall:
(A) Deliver securities owned by the corporation,
only upon sale of such securities for the account of the
corporation and receipt of payment therefor by the
custodian, or when such securities may be called,
redeemed, retired or otherwise become payable, provided
that this provision shall not prevent:
(i) Delivery of securities for examination to
the broker selling the same, in accordance with the
"street delivery" custom, whereby such securities are
delivered to such broker in exchange for a delivery
receipt exchanged on the same day for an uncertified
check of such broker to be presented on the same day
for certification.
(ii) Delivery of securities of an issuer in
exchange for or for conversion into, other
securities alone, or cash and other securities,
pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment of
the securities of such issuer or for deposit with a
reorganization committee or protective committee,
pursuant to a deposit agreement.
(iii) The conversion by the custodian of
securities owned by the corporation, pursuant to
the provisions of such securities into other
securities.
(iv) The surrender by the custodian of
warrants, rights or similar securities owned by the
corporation in the exercise of such warrants, rights
or similar securities, or the surrender of interim
receipts or temporary securities for definitive
securities.
(v) The delivery of securities as collateral
on borrowing affected by the corporation, subject to
the limitations of Article VII of these By-laws.
(vi) The delivery of securities owned by the
corporation, as a complete or partial redemption
in kind of securities issued by the corporation.
(B) Deliver funds on the corporation only upon the
purchase of securities for the portfolio of the corporation,
and the delivery of such securities to the custodian;
provided always, that such limitation shall not prevent the
release of funds by the custodian for redemption of
shares issued by the corporation, for payment of interest,
dividend disbursements, taxes, management fees, custodian
fees, other operating expenses properly authorized by an
officer or officers as required by the custodian agreement,
payments in connection with conversion, exchange or
surrender of securities owned by the corporation (as set
forth in Subsection A of this Section) and for
organizational and such other obligations as approved by
the Board of Directors certified in writing.
(C) Upon the resignation or inability of a custodian
to serve as custodian of the assets of the corporation, the
corporation shall use its best efforts to obtain a
successor custodian, to require that the cash and securities
owned by the corporation be delivered directly to such
successor custodian and, in the event that no such
successor can be found, to submit to the stockholders --
before permitting delivery of the cash and securities owned
by the corporation to anyone other than a successor
custodian -- the question of whether the corporation shall
be liquidated or shall function without such custodian.
(D) Nothing hereinbefore contained shall prevent
any such custodian from delivering assets of the corporation
to a successor custodian having the qualifications
hereinabove prescribed.
(E) No directors, officers, employees or agents of
the corporation shall be authorized or permitted to
withdraw any assets held by the custodian, except as
permitted in this Article X and in the Custodian Agreement.
Directions, notices or instructions to the custodian,
with respect to delivery of securities, payment of cash or
otherwise, shall be given by such officer or officers
and/or such person or persons, and in such manner, as the
Board of Directors may from time to time designate.
Section 4. Reports. The corporation shall transmit to
the stockholders, at least semiannually, a report of the
operations of the corporation based at least annually upon
an audit by independent public accountants. Said report
shall clearly set forth the information customarily
furnished in a balance sheet and profit and loss
statement, and in addition, shall clearly set forth a
statement of all amounts paid directly to securities
dealers, legal counsel, transfer agents, disbursing
agents, registrars, custodians or trustees, where such
payments are made to a firm, corporation, bank or trust
company having an officer, director or partner who is also
an officer or director of this corporation. A copy or
copies, of all reports submitted to the stockholders of this
corporation shall also be sent, as required to the
regulatory agencies of the United States of America and the
states in which the securities of this corporation are
registered and sold.
Section 5. Bonding of Officers and Employees. All
officers and employees of the corporation shall be bonded to
such extent, and in such manner, as may be required by law.
Section 6. Seal. The corporate seal shall have
inscribed thereon the name of the corporation, the year of
its organization and the words "Corporate Seal, Maryland."
The seal may be used by causing it or a facsimile thereof
to be impressed or affixed or otherwise reproduced.
ARTICLE XI
AMENDMENTS
These By-laws may be altered, amended, repealed or restated
at any regular or special meeting of the Board of
Directors, provided that the provisions of Article VII may
not be altered, amended, repealed or restated without
the consent of a majority of the holders of the
corporation's outstanding common stock (as defined in the
Investment Company Act of 1940, as amended, and the
corporation's Articles of Incorporation) and provided
further that the right of the Board of Directors to alter,
amend, repeal or restate and the procedures therefor meet
the requirements of the Investment Company Act of 1940, as
amended, if any.
<PAGE>
EX99.23(b)(4)
AMENDED AND RESTATED BY-LAWS
AS OF NOVEMBER 30, 1996
OF
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
ARTICLE I
FISCAL YEAR AND OFFICES
Section 1. Fiscal Year. Unless otherwise provided
by resolution of the Board of Directors, the fiscal year of
the corporation shall begin on the first day of July and
end on the last day of June.
Section 2. Registered Office. The registered office
of the corporation in Maryland shall be C/O the CORPORATION
TRUST, INCORPORATED, 32 South Street, Baltimore, Maryland,
21202.
Section 3. Other Offices. The corporation shall have
a place of business in the State of Missouri, and the
corporation shall have the power to open additional
offices for the conduct of its business, either within or
outside the states of Maryland and Missouri, at such
places as the Board of Directors may from time to time
designate.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meeting. Meetings of the
stockholders for the election of directors shall be held in
such place as the Board of Directors may by resolution
establish. In the absence of any specific resolution,
annual meetings of stockholders shall be held at the
corporation's principal office in the State of Missouri.
Meetings of stockholders for any other purpose may be held
at such place and time as shall be stated in the notice of
the meeting, or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of
stockholders, if held, shall be held at such time during
the month of September as may be fixed by the Board of
Directors by resolution each year. At any annual meeting,
the stockholders shall elect a Board of Directors and
transact any other business which may properly be brought
before the meeting. No annual meeting of stockholders shall
be required in any year in which the only business to be
transacted at such meeting does not require action by
stockholders on any one or more of the following:
(1) the election of directors;
(2) approval of the investment advisory agreement;
(3) ratification of the selection of independent
public accountants;
(4) approval of a distribution agreement.
Section 3. Special Meetings. At any time in the
interval between annual meetings, special meetings of the
stockholders may be called by the president or by a majority
of the Board of Directors and shall be called by the
president or secretary upon written request of the
holders of shares entitled to cast not less than ten percent
of all the votes entitled to be cast at such meeting.
Section 4. Notice. Not less than ten nor more than
ninety days before the date of every annual or special
stockholders' meeting, the secretary shall give to each
stockholder entitled to vote at such meeting written notice
stating the time and place of the meeting and, in the case
of a special meeting, the purpose or purposes for which the
meeting is called. Business transacted at any special
meeting of stockholders shall be limited to the purposes
stated in the notice.
Section 5. Record Date for Meetings. The Board of
Directors may fix in advance a date not more than ninety
days, nor less than ten days, prior to the date of any
annual or special meeting of the stockholders as a record
date for the determination of the stockholders entitled to
receive notice of, and to vote at any meeting and any
adjournment thereof; and in such case such stockholders and
only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to receive notice of and
to vote only such shares held and outstanding on such record
date that continue to be held and outstanding at the time of
voting.
Section 6. Quorum. At any meeting of stockholders,
the presence in person or by proxy of the holders of a
majority of the aggregate shares of stock at the time
outstanding shall constitute a quorum. If, however, such
quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote
thereat, present in person or represented by proxy, shall
have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented
any business may be transacted which might have been
transacted at the meeting originally notified.
Section 7. Majority. The vote of the holders of a
majority of the stock having voting power, as measured by
the applicable quorum requirements set forth in Section 6,
present in person or represented by proxy, at a meeting
duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter
which may properly come before the meeting, unless otherwise
required by the Investment Company Act of 1940, as amended.
Section 8. Voting. Each stockholder shall have one
vote for each full share and a fractional vote for each
fractional share of stock having voting power held by such
stockholder on each matter submitted to a vote at a meeting
of stockholders. A stockholder may cast his vote in person
or by proxy, but no proxy shall be valid after eleven
months from its date, unless otherwise provided in the
proxy. At all meetings of stockholders, unless the voting
is conducted by inspectors, all questions relating to the
qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the
chairman of the meeting.
Section 9. Inspectors. At any election of directors,
the Board of Directors prior thereto may, or, if they have
not so acted, the chairman of the meeting may, and upon
the request of the holders of ten percent (10%) of the
shares entitled to vote at such election shall, appoint
two inspectors of election who shall first subscribe an oath
of affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and
according to the best of their ability, and shall after
the election make a certificate of the result of the vote
taken. No candidate for the office of director shall be
appointed such inspector. The chairman of the meeting may
cause a vote by ballot to be taken upon any election or
matter, and such vote shall be taken upon the request of
the holders of ten percent (10%) of the stock entitled to
vote on such election or matter.
Section 10. Stockholder List. The officer who has
charge of the stock ledger of the corporation shall, at
least ten days before every election of directors,
prepare and make a complete list of the stockholders
entitled to vote at said election, arranged in
alphabetical order, showing the address and the number of
shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder,
during ordinary business hours, for a period of at least
ten days prior to the election, either at a place within the
city, town or village where the election is to be
held and which place shall be specified in the notice of
meeting, or if not specified, at the place where said
meeting is to be held, and the list shall be produced and
kept at the time and place of election during the whole
time thereof, and subject to the inspection of any
stockholder who may be present.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business of the
corporation shall be managed by its Board of Directors,
which may exercise all powers of the corporation, except
such as are by statute, or the Articles of Incorporation, or
by these By-laws conferred upon or reserved to the
stockholders.
Section 2. Number and Term of Office. The number of
directors which shall constitute the whole Board shall be
determined from time to time by the Board of Directors, but
shall not be fewer than three. Each director elected shall
hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 3. Elections. The Directors shall all be of
one class and shall serve until their respective
successors are elected and qualified.
Section 4. Place of Meeting. Meetings of the Board
of Directors, regular or special, may be held at any place
in or out of the State of Maryland as the Board may from
time to time determine.
Section 5. Quorum. At all meetings of the Board of
Directors a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business and
the action of a majority of the directors present at any
meeting at which a quorum is present shall be the action of
the Board of Directors unless the concurrence of a
greater proportion is required for such action by the laws
of the State of Maryland, these By-laws or the Articles of
Incorporation or a different number is required by the
Investment Company Act of 1940, as amended. If a quorum
shall not be present at any meeting of directors, the
directors present thereat may by a majority vote adjourn the
meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be
present.
Section 6. First Meeting. The first meeting of each
newly constituted Board of Directors shall be held as soon
as practicable after the annual meeting of stockholders in
each year, at such time and place as shall be specified
in a notice given as hereinafter provided for meetings of
the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 7. Regular Meetings. Regular meetings of the
Board of Directors may be held without notice at such time
and place as shall from time to time be determined by the
Board of Directors.
Section 8. Special Meetings. Special meetings of the
Board of Directors may be called by the president on one
day's notice to each director; special meetings shall be
called by the president or secretary in like manner and on
like notice on the written request of two directors.
Section 9. Telephonic Meetings. Regular or special
meetings, except for meetings to approve an investment
advisory agreement or a distribution plan, of the Board of
Directors or any committee thereof, may be held by means of
a conference telephone or similar communications equipment
so that all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by
these means constitutes presence in person at the meeting.
Section 10. Informal Actions. Any action, except
approval of an investment advisory agreement, or a
distribution plan, required or permitted to be taken at any
meeting of the Board of Directors or any committee
thereof may be taken without a meeting, if written consent
to such action is signed in one or more counterparts by all
members of the Board or of such committee, as the case may
be, and such written consent is filed with the minutes of
proceedings of the Board or committee.
Section 11. Committees. The Board of Directors may
by resolution passed by a majority of the whole Board
appoint from among its members an executive committee and
other committees composed of two or more directors, and may
delegate to such committees, in the intervals between
meetings of the Board of Directors, any or all of the
power of the Board of Directors in the management of the
business and affairs of the corporation, except the power to
declare dividends, to issue stock or to recommend to
stockholders any action requiring stockholders' approval.
In the absence of any member of such committee, the
members thereof present at any meeting, whether or not
they constitute a quorum, may appoint a member of the Board
of Directors to act in the place of such absent member.
Section 12. Action of Committees. The committees
shall keep minutes of their proceedings and shall report
the same to the Board of Directors at the meeting next
succeeding, and any action by committees shall be subject
to revision and alteration by the Board of Directors,
provided that no rights of third persons shall be affected
by any such revision or alteration.
Section 13. Compensation. Any director, whether or
not he is a salaried officer or employee of the
corporation, may be compensated for his services as a
director or as a member of a committee of directors, or as
chairman of the Board or chairman of a committee by fixed or
periodic payments or by fees for attendance at meetings or
by both, and in addition may be reimbursed for
transportation and other expenses, all in such manner and
amounts as the Board of Directors may from time to time
determine.
Section 14. Removal. The stockholders of this
corporation may remove any director with or without cause by
the affirmative vote of a majority of all the votes
entitled to be cast for the election of directors.
ARTICLE IV
NOTICES
Section 1. Form. Notices to stockholders shall be in
writing and delivered personally or mailed to the
stockholders at their addresses appearing on the books of
the corporation. Notice by mail shall be deemed to be given
at the time when the same shall be mailed. Notice to
directors need not state the purpose of a regular or special
meeting.
Section 2. Waiver. Whenever any notice of the time,
place or purpose of any meeting of stockholders, directors
or committee is required to be given under the provisions of
Maryland law or under the provisions of the Articles of
Incorporation or these By-laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice and
filed with the records of the meeting, whether before or
after the holding thereof, or actual attendance at the
meeting of stockholders in person or by proxy, or at the
meeting of directors or committee in person, shall be
deemed equivalent to the giving of such notice to such
persons.
ARTICLE V
OFFICERS
Section 1. Officers of the Corporation. The officers
of the corporation shall be elected by the Board of
Directors and shall include a president, who shall be a
director, a secretary and a treasurer. The Board of
Directors may, from time to time, elect or appoint a
controller, one or more vice-presidents, assistant
secretaries and assistant treasurers. The president shall
preside at meetings of the Board of Directors, unless the
Board of Directors, at its discretion, elects a chairman
of the Board to preside at such meetings. In addition,
such chairman shall perform and execute such executive and
administrative duties and have such powers as the Board of
Directors may from time to time prescribe. Two or more
offices may be held by the same person but no officer
shall execute, acknowledge or verify any instrument in more
than one capacity, if such instrument is required by law,
the Articles of Incorporation or these By-laws to be
executed, acknowledged or verified by two or more officers.
Section 2. Election. The Board of Directors at its
first meeting after each annual meeting of stockholders
shall choose a president, a secretary and a treasurer.
Section 3. Compensation. The salaries or other
compensation of all officers and agents of the corporation
paid directly by the corporation shall be fixed by the
Board of Directors, except that the Board of Directors may
delegate to any person or group of persons the power to
fix such salaries or other compensation.
Section 4. Tenure. The officers of the corporation
shall serve for one year and until the successors are
chosen and qualify. Any officer or agent may be removed by
the affirmative vote of a majority of the Board of Directors
whenever, in its judgment, the best interests of the
corporation will be served thereby. Any vacancy occurring
in any office of the corporation by death, resignation,
removal or otherwise shall be filled by the Board of
Directors.
Section 5. President. The president, unless the
chairman has been so designated, shall be the chief
executive officer of the corporation. He shall preside at
all meetings of the stockholders and directors and shall see
that all orders and resolutions of the Board are carried
into effect. The president shall also be the chief
administrative officer of the corporation and shall
perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 6. Vice-Presidents. The vice-presidents, in
the order of their seniority, shall in the absence or
disability of the president, perform the duties and
exercise the powers of the president and shall perform such
other duties as the Board of Directors may from time to
time prescribe.
Section 7. Secretary. The secretary shall attend all
meetings of the Board of Directors and all meetings of
the stockholders and record all the proceedings thereof and
shall perform like duties for any committee when required.
In the absence of the secretary or an assistant secretary,
proceedings of such meetings shall be recorded by a person
selected by the chairman of the meeting. He shall give,
or cause to be given, notice of meetings of the stockholders
and of the Board of Directors, and shall perform such
other duties as may be prescribed by the Board of Directors
or president, under whose supervision he shall be. He shall
keep in safe custody the seal of the corporation and, when
authorized by the Board of Directors, affix and attest the
same to any instrument requiring it. The Board of Directors
may give general authority to any other officer to affix the
seal of the corporation and to attest the same by affixing
his signature.
Section 8. Assistant Secretaries. The assistant
secretaries, in order of their seniority, shall in the
absence or disability of the secretary, perform the duties
and exercise the powers of the secretary and shall
perform such other duties as the Board of Directors shall
prescribe.
Section 9. Treasurer. The treasurer, unless another
officer has been so designated, shall be the chief
financial officer of the corporation. He shall be
responsible for the maintenance of its accounting records
and shall render to the Board of Directors, at its regular
meetings, or when the Board of Directors so requires, an
account of all the corporation's financial transactions
and a report of the financial condition of the corporation.
Section 10. Controller. The controller shall be under
the direct supervision of the treasurer. He shall maintain
adequate records of all assets, liabilities and
transactions of the corporation, establish and maintain
internal accounting control and, in cooperation with the
independent public accountants selected by the Board of
Directors, shall supervise internal auditing. He shall have
such further powers and duties as may be conferred upon
him from time to time by the president or the Board of
Directors.
Section 11. Assistant Treasurers. The assistant
treasurers, in the order of their seniority, shall in the
absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall
perform such other duties as the president or the
Board of Directors may from time to time prescribe.
Section 12. Other Officers. The Board of Directors
from time to time may appoint such other officers and
agents as it shall deem advisable, who shall hold their
offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to
time by the Board of Directors. The Board of Directors from
time to time may delegate to one or more officers or
agents the power to appoint any such subordinate officers or
agents, except assistant treasurers and to prescribe the
respective rights, terms of office, authorities and duties.
ARTICLE VI
NET ASSET VALUE
The net asset value per share of stock of the corporation
shall be determined at least once each day at the close of
business on the New York Stock Exchange on each day the
New York Stock Exchange is open for trading. Net asset
value shall be calculated by adding the value of all
securities and other assets of the Fund, deducting its
liabilities and dividing by the number of shares
outstanding.
ARTICLE VII
INVESTMENT RESTRICTIONS
The following investment restriction cannot be
changed without the consent of the holders of a
majority of the corporation's outstanding shares of stock;
the corporation shall not:
(1) purchase the securities of any one issuer, except the
United States government, if immediately after and as a
result of such purchase (a) the value of the holdings of the
Fund in the securities of such issuer exceeds 5% of the
value of the Fund's total assets, or (b) the Fund owns more
than 10% of the outstanding voting securities, or any other
class of securities, of such issuer; (2) engage in the
purchase or sale of real estate or commodities; (3)
underwrite the securities of other issuers; (4) make loans
to any of its officers, directors, or employees, or to its
manager, or general distributor, or officers or directors
thereof; (5) make loans to other persons, except by the
purchase of debt obligations which are permitted under its
investment policy; (6) invest in companies for the purpose
of exercising control of management; (7) purchase securities
on margin, or sell securities short; (8) purchase shares of
other investment companies except shares of closed-end
investment companies, purchased in the open market at
ordinary broker's commission, but not in excess of 5% of the
Fund's assets, or investment company shares acquired
pursuant to a plan of merger or consolidation; (9) invest in
the aggregate more than 5% of the value of its gross assets
in the securities of issuers (other than federal, state,
territorial, or local governments, or corporations, or
authorities established thereby), which, including
predecessors, have not had at least three years' continuous
operations nor invest more than 25% of the Fund's assets
in any one industry; (10) enter into dealings with its
officers or directors, its manager or underwriter, or their
officers or directors, or any organization in which such
persons have a financial interest except for transactions in
the Fund's own shares or other securities through brokerage
practices which are considered normal and generally accepted
under circumstances existing at the time; (11) purchase or
retain securities of any company in which any Fund officers
or directors, or Fund manager, its partner, officer, or
director beneficially owns more than 1/2 of 1% of said
company's securities, if all such persons owning more than
1/2 of 1% of such company's securities, own in the aggregate
more than 5% of the outstanding securities of such company;
(12) borrow or pledge its credit under normal circumstances,
except up to 10% of its gross assets (computed at the lower
of fair market value or cost) for temporary or emergency
purposes, and not for the purpose of leveraging its
investments, and provided further that any borrowing in
excess of 5% of the total assets of the Fund shall have
asset coverage of at least 3 to 1; (13) make itself or its
assets liable for the indebtedness of others; (14) invest in
securities which are assessable or involve unlimited
liability; or (15) issue senior securities except for those
investment procedures permissible under the Fund's other
restrictions.
ARTICLE VIII
OTHER RESTRICTIONS
Section 1. Dealings. The officers and directors of
the corporation and its investment adviser shall have no
dealings for or on behalf of the corporation with
themselves as principal or agent, or with any
corporation, partnership, trust, joint venture or
association in which they have a financial interest,
provided that this section shall not prevent:
(A) Officers or directors of the corporation
from having a financial interest in the corporation, in
any sponsor, manager, investment adviser or promoter of the
corporation, or in any underwriter or securities issued by
the corporation.
(B) The purchase of securities for the portfolio of
the corporation, or sale of securities owned by the
corporation through a security dealer, one or more of
whose partners, officers, directors or security holders is
an officer or director of the corporation, provided such
transactions are handled in a brokerage capacity only, and
provided commissions charged do not exceed customary
brokerage charges for such services.
(C) The employment of any legal counsel, registrar,
transfer agent, dividend disbursing agent or custodian
having a partner, officer, director or security holder
who is an officer or director of the corporation; provided
only customary fees are charged for services rendered to
or for the benefit of the corporation.
(D) The purchase for the portfolio of the
corporation of securities issued by an issuer having an
officer, director or security holder who is an officer or
director of the corporation or of any manager of the
corporation, unless the retention of such securities in the
portfolio of the corporation would otherwise be a violation
of these By-laws or the Articles of Incorporation of the
corporation.
ARTICLE IX
STOCK
Section 1. Certificates. Each stockholder shall be
entitled to a certificate or certificates which shall
certify the number of shares owned by him in the
corporation. Each certificate
shall be signed by the president or a vice-president
and countersigned by the secretary or an assistant
secretary or the treasurer or an assistant treasurer and
shall be sealed with the corporate seal.
Section 2. Signature. When a certificate is signed by
a transfer agent or an assistant transfer agent or by a
transfer clerk acting on behalf of the corporation and a
registrar, the signature of any such president, vice-
president, treasurer, assistant treasurer, secretary or
assistant secretary may be facsimile. In case any
officer who has signed any certificate ceases to be an
officer of the corporation before the certificate is issued,
the certificate may nevertheless be issued by the
corporation with the same effect as if the officer had not
ceased to be such officer as of the date of its issue.
Section 3. Recording and Transfer Without
Certificates. Notwithstanding the foregoing provisions of
this article, the corporation shall have full power to
participate in any program approved by the Board of
Directors providing for the recording and transfer of
ownership of shares of the corporation's stock by
electronic or other means without the issuance of
certificates.
Section 4. Lost Certificates. The Board of Directors
may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued
by the corporation alleged to have been stolen, lost or
destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be
stolen, lost or destroyed, or upon other satisfactory
evidence of such loss or destruction. When authorizing
such issuance of a new certificate or certificates, the
Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require
the owner of such stolen, lost or destroyed certificate or
certificates, or his legal representative to advertise
the same in such manner as it shall require and to give the
corporation a bond with sufficient surety, to the
corporation to indemnify it against any loss or claim that
may be made by reason of the issuance of a new certificate.
Section 5. Registered Stockholders. The corporation
shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any
other person, whether or not it shall have express or
other notice thereof, except, as otherwise provided by
the laws of Maryland.
Section 6. Transfer Agents and Registrars. The
corporation may act as its own transfer agent and/or
registrar, or it may delegate those duties to others. The
Board of Directors may from time to time, appoint or remove
transfer agents and/or registrars of stock of the
corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment
being made all certificates representing shares of stock
thereafter issued shall be countersigned by one of such
transfer agents or by one of such registrars or by both and
shall not be valid unless so countersigned. If the same
person shall be both transfer agent and registrar, only
countersignature by such person shall be required.
Section 7. Stock Ledger. The corporation shall
maintain an original stock ledger containing the names and
addresses of all stockholders and the number and
class of shares held by each stockholder. Such stock ledger
may be in written form or any other form capable of
being converted into written form within a reasonable time
for visual inspection.
Section 8. Transfers of Stock. The corporation shall
transfer or otherwise change the registration of its issued
and outstanding shares in its stock ledger upon receipt of
an authorization in a form proper and acceptable to it or
its duly appointed agent. To the extent such shares are
evidenced by a certificate or certificates, the surrender
of such certificate properly endorsed shall be required
where necessary. Upon receipt of the transfer
instructions in proper order by the corporation, the
corporation shall change its stock ledger records
accordingly and record the transaction upon its books.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. With respect to dividends
(including "dividends" designated as "short" or "long" term
"capital gains" distributions to satisfy requirements of
the Investment Company Act of 1940, as amended, or the
Internal Revenue Code of 1954, as amended from time to
time):
(A) Such dividends, at the election of the
stockholders, may be automatically reinvested in additional
shares (or fractions thereof) of the corporation at the
"net asset value" determined on the reinvestment date fixed
by the Board of Directors.
(B) The Board of Directors in declaring any dividend,
may fix a record date not earlier than the date of
declaration or more than 40 days prior to the date of
payment, as of which the stockholders entitled to
receive such dividend shall be determined, notwithstanding
any transfer or the repurchase or issue (or sale) of any
shares after such record date.
(C) Dividends or distributions on shares of stock
whether payable in stock or cash, shall be paid out of
earnings, surplus or other lawfully available assets;
provided that no dividend payment, or distribution in the
nature of a dividend payment, may be made wholly or partly
from any source other than accumulated, undistributed net
income, determined in accordance with good accounting
practice, and not including profits or losses realized in
the sale of securities or other properties, unless such
payment is accompanied by a written statement clearly
indicating what portion of such payment per share is made
from the following sources:
(i) accumulated or undistributed net income
not including profits or losses from the sale of
securities or other properties;
(ii) accumulated undistributed net profits from
the sale of securities or other properties;
(iii) net profits from the sale of
securities or other properties during the then current
fiscal year; and
(iv) paid-in surplus or other capital source.
(D) In declaring dividends and in recognition that the
one goal of the corporation is to qualify as a "regulated
investment company" under the Internal Revenue Code of
1954, as amended, the Board of Directors shall be
entitled to rely upon estimates made in the last two months
of the fiscal year as to the amounts of distribution
necessary for this purpose; and the Board of Directors,
acting consistently with good accounting practice and with
the express provisions of these By-laws, may credit receipts
and charge payments to income or otherwise, as it may
seem proper.
(E) Any dividends declared, except as aforesaid,
shall be deemed liquidating dividends and the stockholders
shall be so informed to whatever extent may be required
by law. A notice that dividends have been paid from paid-in
surplus, or a notice that dividends have been paid from
paid-in capital, shall be deemed to be a sufficient notice
that the same constitutes liquidating dividends.
(F) Anything in these By-laws to the contrary
notwithstanding, the Board of Directors may at any time
declare and distribute pro rata among the stockholders of a
record date fixed as above, a "stock dividend" out of
either authorized but unissued, or treasury shares of the
corporation, or both.
Section 2. Rights in Securities. The Board of
Directors, on behalf of the corporation, shall have the
authority to exercise all of the rights of the
corporation as owners of any securities which might be
exercised by any individual owning such securities in his
own right; including but not limited to, the rights to
vote by proxy for any and all purposes (including the
right to authorize any officer of the manager to
execute proxies), to consent to the reorganization, merger
or consolidation of any company or to consent to the sale,
lease or mortgage of all or substantially all of the
property and assets of any company; and to exchange any of
the shares of stock of any company for shares of stock
issued therefor upon any such reorganization, merger,
consolidation, sale, lease or mortgage.
Section 3. Custodianship. Securities owned by the
corporation and cash representing (A) the proceeds
from sales of securities owned by the corporation and of
shares issued by the corporation, (B) payments of
principal upon securities owned by the corporation, or (C)
capital distributions in respect of securities owned by
the corporation shall be held by one or more custodians, as
permitted by the Investment Company Act of 1940, as
amended, to be selected by the Board of Directors. Each
bank and/or trust company selected as a custodian shall be
organized and existing under a state banking and/or trust
company law, or shall be a national banking association
incorporated under the laws of the United States of
America and qualified to act as a trust company, and shall
have an aggregate capital, surplus and undivided profits
of not less than $2,000,000. Each custodian shall enter
into an agreement with the corporation to serve as a
custodian of such securities and cash on terms consistent
with the provisions of these By-laws. From the time any
such trust company, banking association or other
permissible entity becomes a custodian of such securities
and cash, it shall:
(A) Deliver securities owned by the corporation,
only upon sale of such securities for the account of the
corporation and receipt of payment therefor by the
custodian, or when such securities may be called,
redeemed, retired or otherwise become payable, provided
that this provision shall not prevent:
(i) Delivery of securities for examination to
the broker selling the same, in accordance with the
"street delivery" custom, whereby such securities are
delivered to such broker in exchange for a delivery
receipt exchanged on the same day for an uncertified
check of such broker to be presented on the same day
for certification.
(ii) Delivery of securities of an issuer in
exchange for or for conversion into, other
securities alone, or cash and other securities,
pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment of
the securities of such issuer or for deposit with a
reorganization committee or protective committee,
pursuant to a deposit agreement.
(iii) The conversion by the custodian of
securities owned by the corporation, pursuant to
the provisions of such securities into other
securities.
(iv) The surrender by the custodian of
warrants, rights or similar securities owned by the
corporation in the exercise of such warrants, rights
or similar securities, or the surrender of interim
receipts or temporary securities for definitive
securities.
(v) The delivery of securities as collateral
on borrowing affected by the corporation, subject to
the limitations of Article VII of these By-laws.
(vi) The delivery of securities owned by the
corporation, as a complete or partial redemption
in kind of securities issued by the corporation.
(B) Deliver funds on the corporation only upon the
purchase of securities for the portfolio of the corporation,
and the delivery of such securities to the custodian;
provided always, that such limitation shall not prevent the
release of funds by the custodian for redemption of
shares issued by the corporation, for payment of interest,
dividend disbursements, taxes, management fees, custodian
fees, other operating expenses properly authorized by an
officer or officers as required by the custodian agreement,
payments in connection with conversion, exchange or
surrender of securities owned by the corporation (as set
forth in Subsection A of this Section) and for
organizational and such other obligations as approved by
the Board of Directors certified in writing.
(C) Upon the resignation or inability of a custodian
to serve as custodian of the assets of the corporation, the
corporation shall use its best efforts to obtain a
successor custodian, to require that the cash and securities
owned by the corporation be delivered directly to such
successor custodian and, in the event that no such
successor can be found, to submit to the stockholders --
before permitting delivery of the cash and securities owned
by the corporation to anyone other than a successor
custodian -- the question of whether the corporation shall
be liquidated or shall function without such custodian.
(D) Nothing hereinbefore contained shall prevent
any such custodian from delivering assets of the corporation
to a successor custodian having the qualifications
hereinabove prescribed.
(E) No directors, officers, employees or agents of
the corporation shall be authorized or permitted to
withdraw any assets held by the custodian, except as
permitted in this Article X and in the Custodian Agreement.
Directions, notices or instructions to the custodian,
with respect to delivery of securities, payment of cash or
otherwise, shall be given by such officer or officers
and/or such person or persons, and in such manner, as the
Board of Directors may from time to time designate.
Section 4. Reports. The corporation shall transmit to
the stockholders, at least semiannually, a report of the
operations of the corporation based at least annually upon
an audit by independent public accountants. Said report
shall clearly set forth the information customarily
furnished in a balance sheet and profit and loss
statement, and in addition, shall clearly set forth a
statement of all amounts paid directly to securities
dealers, legal counsel, transfer agents, disbursing
agents, registrars, custodians or trustees, where such
payments are made to a firm, corporation, bank or trust
company having an officer, director or partner who is also
an officer or director of this corporation. A copy or
copies, of all reports submitted to the stockholders of this
corporation shall also be sent, as required to the
regulatory agencies of the United States of America and the
states in which the securities of this corporation are
registered and sold.
Section 5. Bonding of Officers and Employees. All
officers and employees of the corporation shall be bonded to
such extent, and in such manner, as may be required by law.
Section 6. Seal. The corporate seal shall have
inscribed thereon the name of the corporation, the year of
its organization and the words "Corporate Seal, Maryland."
The seal may be used by causing it or a facsimile thereof
to be impressed or affixed or otherwise reproduced.
ARTICLE XI
AMENDMENTS
These By-laws may be altered, amended, repealed or restated
at any regular or special meeting of the Board of
Directors, provided that the provisions of Article VII may
not be altered, amended, repealed or restated without
the consent of a majority of the holders of the
corporation's outstanding common stock (as defined in the
Investment Company Act of 1940, as amended, and the
corporation's Articles of Incorporation) and provided
further that the right of the Board of Directors to alter,
amend, repeal or restate and the procedures therefor meet
the requirements of the Investment Company Act of 1940, as
amended, if any.
<PAGE>
EX99.23(b)(5)
AMENDED AND RESTATED BY-LAWS
AS OF NOVEMBER 30, 1996
OF
SHADOW STOCK FUND, INC.
ARTICLE I
FISCAL YEAR AND OFFICES
Section 1. Fiscal Year. Unless otherwise provided
by resolution of the Board of Directors, the fiscal year of
the corporation shall begin on the first day of July and
end on the last day of June.
Section 2. Registered Office. The registered office
of the corporation in Maryland shall be C/O the CORPORATION
TRUST, INCORPORATED, 32 South Street, Baltimore, Maryland,
21202.
Section 3. Other Offices. The corporation shall have
a place of business in the State of Missouri, and the
corporation shall have the power to open additional
offices for the conduct of its business, either within or
outside the states of Maryland and Missouri, at such
places as the Board of Directors may from time to time
designate.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meeting. Meetings of the
stockholders for the election of directors shall be held in
such place as the Board of Directors may by resolution
establish. In the absence of any specific resolution,
annual meetings of stockholders shall be held at the
corporation's principal office in the State of Missouri.
Meetings of stockholders for any other purpose may be held
at such place and time as shall be stated in the notice of
the meeting, or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of
stockholders, if held, shall be held at such time during
the month of September as may be fixed by the Board of
Directors by resolution each year. At any annual meeting,
the stockholders shall elect a Board of Directors and
transact any other business which may properly be brought
before the meeting. No annual meeting of stockholders shall
be required in any year in which the only business to be
transacted at such meeting does not require action by
stockholders on any one or more of the following:
(1) the election of directors;
(2) approval of the investment advisory agreement;
(3) ratification of the selection of independent
public accountants;
(4) approval of a distribution agreement.
Section 3. Special Meetings. At any time in the
interval between annual meetings, special meetings of the
stockholders may be called by the president or by a majority
of the Board of Directors and shall be called by the
president or secretary upon written request of the
holders of shares entitled to cast not less than ten percent
of all the votes entitled to be cast at such meeting.
Section 4. Notice. Not less than ten nor more than
ninety days before the date of every annual or special
stockholders' meeting, the secretary shall give to each
stockholder entitled to vote at such meeting written notice
stating the time and place of the meeting and, in the case
of a special meeting, the purpose or purposes for which the
meeting is called. Business transacted at any special
meeting of stockholders shall be limited to the purposes
stated in the notice.
Section 5. Record Date for Meetings. The Board of
Directors may fix in advance a date not more than ninety
days, nor less than ten days, prior to the date of any
annual or special meeting of the stockholders as a record
date for the determination of the stockholders entitled to
receive notice of, and to vote at any meeting and any
adjournment thereof; and in such case such stockholders and
only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to receive notice of and
to vote only such shares held and outstanding on such record
date that continue to be held and outstanding at the time of
voting.
Section 6. Quorum. At any meeting of stockholders,
the presence in person or by proxy of the holders of a
majority of the aggregate shares of stock at the time
outstanding shall constitute a quorum. If, however, such
quorum shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote
thereat, present in person or represented by proxy, shall
have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented
any business may be transacted which might have been
transacted at the meeting originally notified.
Section 7. Majority. The vote of the holders of a
majority of the stock having voting power, as measured by
the applicable quorum requirements set forth in Section 6,
present in person or represented by proxy, at a meeting
duly called and at which a quorum is present, shall be
sufficient to take or authorize action upon any matter
which may properly come before the meeting, unless otherwise
required by the Investment Company Act of 1940, as amended.
Section 8. Voting. Each stockholder shall have one
vote for each full share and a fractional vote for each
fractional share of stock having voting power held by such
stockholder on each matter submitted to a vote at a meeting
of stockholders. A stockholder may cast his vote in person
or by proxy, but no proxy shall be valid after eleven
months from its date, unless otherwise provided in the
proxy. At all meetings of stockholders, unless the voting
is conducted by inspectors, all questions relating to the
qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the
chairman of the meeting.
Section 9. Inspectors. At any election of directors,
the Board of Directors prior thereto may, or, if they have
not so acted, the chairman of the meeting may, and upon
the request of the holders of ten percent (10%) of the
shares entitled to vote at such election shall, appoint
two inspectors of election who shall first subscribe an oath
of affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and
according to the best of their ability, and shall after
the election make a certificate of the result of the vote
taken. No candidate for the office of director shall be
appointed such inspector. The chairman of the meeting may
cause a vote by ballot to be taken upon any election or
matter, and such vote shall be taken upon the request of
the holders of ten percent (10%) of the stock entitled to
vote on such election or matter.
Section 10. Stockholder List. The officer who has
charge of the stock ledger of the corporation shall, at
least ten days before every election of directors,
prepare and make a complete list of the stockholders
entitled to vote at said election, arranged in
alphabetical order, showing the address and the number of
shares registered in the name of each stockholder. Such
list shall be open to the examination of any stockholder,
during ordinary business hours, for a period of at least
ten days prior to the election, either at a place within the
city, town or village where the election is to be
held and which place shall be specified in the notice of
meeting, or if not specified, at the place where said
meeting is to be held, and the list shall be produced and
kept at the time and place of election during the whole
time thereof, and subject to the inspection of any
stockholder who may be present.
ARTICLE III
DIRECTORS
Section 1. General Powers. The business of the
corporation shall be managed by its Board of Directors,
which may exercise all powers of the corporation, except
such as are by statute, or the Articles of Incorporation, or
by these By-laws conferred upon or reserved to the
stockholders.
Section 2. Number and Term of Office. The number of
directors which shall constitute the whole Board shall be
determined from time to time by the Board of Directors, but
shall not be fewer than three. Each director elected shall
hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 3. Elections. The Directors shall all be of
one class and shall serve until their respective
successors are elected and qualified.
Section 4. Place of Meeting. Meetings of the Board
of Directors, regular or special, may be held at any place
in or out of the State of Maryland as the Board may from
time to time determine.
Section 5. Quorum. At all meetings of the Board of
Directors a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business and
the action of a majority of the directors present at any
meeting at which a quorum is present shall be the action of
the Board of Directors unless the concurrence of a
greater proportion is required for such action by the laws
of the State of Maryland, these By-laws or the Articles of
Incorporation or a different number is required by the
Investment Company Act of 1940, as amended. If a quorum
shall not be present at any meeting of directors, the
directors present thereat may by a majority vote adjourn the
meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be
present.
Section 6. First Meeting. The first meeting of each
newly constituted Board of Directors shall be held as soon
as practicable after the annual meeting of stockholders in
each year, at such time and place as shall be specified
in a notice given as hereinafter provided for meetings of
the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 7. Regular Meetings. Regular meetings of the
Board of Directors may be held without notice at such time
and place as shall from time to time be determined by the
Board of Directors.
Section 8. Special Meetings. Special meetings of the
Board of Directors may be called by the president on one
day's notice to each director; special meetings shall be
called by the president or secretary in like manner and on
like notice on the written request of two directors.
Section 9. Telephonic Meetings. Regular or special
meetings, except for meetings to approve an investment
advisory agreement or a distribution plan, of the Board of
Directors or any committee thereof, may be held by means of
a conference telephone or similar communications equipment
so that all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by
these means constitutes presence in person at the meeting.
Section 10. Informal Actions. Any action, except
approval of an investment advisory agreement, or a
distribution plan, required or permitted to be taken at any
meeting of the Board of Directors or any committee
thereof may be taken without a meeting, if written consent
to such action is signed in one or more counterparts by all
members of the Board or of such committee, as the case may
be, and such written consent is filed with the minutes of
proceedings of the Board or committee.
Section 11. Committees. The Board of Directors may
by resolution passed by a majority of the whole Board
appoint from among its members an executive committee and
other committees composed of two or more directors, and may
delegate to such committees, in the intervals between
meetings of the Board of Directors, any or all of the
power of the Board of Directors in the management of the
business and affairs of the corporation, except the power to
declare dividends, to issue stock or to recommend to
stockholders any action requiring stockholders' approval.
In the absence of any member of such committee, the
members thereof present at any meeting, whether or not
they constitute a quorum, may appoint a member of the Board
of Directors to act in the place of such absent member.
Section 12. Action of Committees. The committees
shall keep minutes of their proceedings and shall report
the same to the Board of Directors at the meeting next
succeeding, and any action by committees shall be subject
to revision and alteration by the Board of Directors,
provided that no rights of third persons shall be affected
by any such revision or alteration.
Section 13. Compensation. Any director, whether or
not he is a salaried officer or employee of the
corporation, may be compensated for his services as a
director or as a member of a committee of directors, or as
chairman of the Board or chairman of a committee by fixed or
periodic payments or by fees for attendance at meetings or
by both, and in addition may be reimbursed for
transportation and other expenses, all in such manner and
amounts as the Board of Directors may from time to time
determine.
Section 14. Removal. The stockholders of this
corporation may remove any director with or without cause by
the affirmative vote of a majority of all the votes
entitled to be cast for the election of directors.
ARTICLE IV
NOTICES
Section 1. Form. Notices to stockholders shall be in
writing and delivered personally or mailed to the
stockholders at their addresses appearing on the books of
the corporation. Notice by mail shall be deemed to be given
at the time when the same shall be mailed. Notice to
directors need not state the purpose of a regular or special
meeting.
Section 2. Waiver. Whenever any notice of the time,
place or purpose of any meeting of stockholders, directors
or committee is required to be given under the provisions of
Maryland law or under the provisions of the Articles of
Incorporation or these By-laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice and
filed with the records of the meeting, whether before or
after the holding thereof, or actual attendance at the
meeting of stockholders in person or by proxy, or at the
meeting of directors or committee in person, shall be
deemed equivalent to the giving of such notice to such
persons.
ARTICLE V
OFFICERS
Section 1. Officers of the Corporation. The officers
of the corporation shall be elected by the Board of
Directors and shall include a president, who shall be a
director, a secretary and a treasurer. The Board of
Directors may, from time to time, elect or appoint a
controller, one or more vice-presidents, assistant
secretaries and assistant treasurers. The president shall
preside at meetings of the Board of Directors, unless the
Board of Directors, at its discretion, elects a chairman
of the Board to preside at such meetings. In addition,
such chairman shall perform and execute such executive and
administrative duties and have such powers as the Board of
Directors may from time to time prescribe. Two or more
offices may be held by the same person but no officer
shall execute, acknowledge or verify any instrument in more
than one capacity, if such instrument is required by law,
the Articles of Incorporation or these By-laws to be
executed, acknowledged or verified by two or more officers.
Section 2. Election. The Board of Directors at its
first meeting after each annual meeting of stockholders
shall choose a president, a secretary and a treasurer.
Section 3. Compensation. The salaries or other
compensation of all officers and agents of the corporation
paid directly by the corporation shall be fixed by the
Board of Directors, except that the Board of Directors may
delegate to any person or group of persons the power to
fix such salaries or other compensation.
Section 4. Tenure. The officers of the corporation
shall serve for one year and until the successors are
chosen and qualify. Any officer or agent may be removed by
the affirmative vote of a majority of the Board of Directors
whenever, in its judgment, the best interests of the
corporation will be served thereby. Any vacancy occurring
in any office of the corporation by death, resignation,
removal or otherwise shall be filled by the Board of
Directors.
Section 5. President. The president, unless the
chairman has been so designated, shall be the chief
executive officer of the corporation. He shall preside at
all meetings of the stockholders and directors and shall see
that all orders and resolutions of the Board are carried
into effect. The president shall also be the chief
administrative officer of the corporation and shall
perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 6. Vice-Presidents. The vice-presidents, in
the order of their seniority, shall in the absence or
disability of the president, perform the duties and
exercise the powers of the president and shall perform such
other duties as the Board of Directors may from time to
time prescribe.
Section 7. Secretary. The secretary shall attend all
meetings of the Board of Directors and all meetings of
the stockholders and record all the proceedings thereof and
shall perform like duties for any committee when required.
In the absence of the secretary or an assistant secretary,
proceedings of such meetings shall be recorded by a person
selected by the chairman of the meeting. He shall give,
or cause to be given, notice of meetings of the stockholders
and of the Board of Directors, and shall perform such
other duties as may be prescribed by the Board of Directors
or president, under whose supervision he shall be. He shall
keep in safe custody the seal of the corporation and, when
authorized by the Board of Directors, affix and attest the
same to any instrument requiring it. The Board of Directors
may give general authority to any other officer to affix the
seal of the corporation and to attest the same by affixing
his signature.
Section 8. Assistant Secretaries. The assistant
secretaries, in order of their seniority, shall in the
absence or disability of the secretary, perform the duties
and exercise the powers of the secretary and shall
perform such other duties as the Board of Directors shall
prescribe.
Section 9. Treasurer. The treasurer, unless another
officer has been so designated, shall be the chief
financial officer of the corporation. He shall be
responsible for the maintenance of its accounting records
and shall render to the Board of Directors, at its regular
meetings, or when the Board of Directors so requires, an
account of all the corporation's financial transactions
and a report of the financial condition of the corporation.
Section 10. Controller. The controller shall be under
the direct supervision of the treasurer. He shall maintain
adequate records of all assets, liabilities and
transactions of the corporation, establish and maintain
internal accounting control and, in cooperation with the
independent public accountants selected by the Board of
Directors, shall supervise internal auditing. He shall have
such further powers and duties as may be conferred upon
him from time to time by the president or the Board of
Directors.
Section 11. Assistant Treasurers. The assistant
treasurers, in the order of their seniority, shall in the
absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall
perform such other duties as the president or the
Board of Directors may from time to time prescribe.
Section 12. Other Officers. The Board of Directors
from time to time may appoint such other officers and
agents as it shall deem advisable, who shall hold their
offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to
time by the Board of Directors. The Board of Directors from
time to time may delegate to one or more officers or
agents the power to appoint any such subordinate officers or
agents, except assistant treasurers and to prescribe the
respective rights, terms of office, authorities and duties.
ARTICLE VI
NET ASSET VALUE
The net asset value per share of stock of the corporation
shall be determined at least once each day at the close of
business on the New York Stock Exchange on each day the
New York Stock Exchange is open for trading. Net asset
value shall be calculated by adding the value of all
securities and other assets of the Fund, deducting its
liabilities and dividing by the number of shares
outstanding.
ARTICLE VII
INVESTMENT RESTRICTIONS
The following investment restriction cannot be
changed without the consent of the holders of a
majority of the corporation's outstanding shares of stock;
the corporation shall not:
(1) purchase the securities of any one issuer, except the
United States government, if immediately after and as a
result of such purchase (a) the value of the holdings of the
Fund in the securities of such issuer exceeds 5% of the
value of the Fund's total assets, or (b) the Fund owns more
than 10% of the outstanding voting securities, or any other
class of securities, of such issuer; (2) engage in the
purchase or sale of real estate or commodities; (3)
underwrite the securities of other issuers; (4) make loans
to any of its officers, directors, or employees, or to its
manager, or general distributor, or officers or directors
thereof; (5) make loans to other persons, except by the
purchase of debt obligations which are permitted under its
investment policy; (6) invest in companies for the purpose
of exercising control of management; (7) purchase securities
on margin, or sell securities short; (8) purchase shares of
other investment companies except in the open market at
ordinary broker's commission, but not in excess of 5% of the
Fund's assets, or pursuant to a plan of merger or
consolidation; (9) invest in the aggregate more than 5% of
the value of its gross assets in the securities of issuers
(other than federal, state, territorial, or local
governments, or corporations, or authorities established
thereby), which, including predecessors, have not had at
least three years' continuous operations nor invest more
than 25% of the Fund's assets in any one industry; (10)
enter into dealings with its officers or directors, its
manager or underwriter, or their officers or directors, or
any organization in which such persons have a financial
interest except for transactions in the Fund's own shares or
other securities through brokerage practices which are
considered normal and generally accepted under circumstances
existing at the time; (11) purchase or retain securities of
any company in which any Fund officers or directors, or Fund
manager, its partner, officer, or director beneficially owns
more than 1/2 of 1% of said company's securities, if all
such persons owning more than 1/2 of 1% of such company's
securities, own in the aggregate more than 5% of the
outstanding securities of such company; (12) borrow or
pledge its credit under normal circumstances, except up to
10% of its gross assets (computed at the lower of fair
market value or cost) for temporary or emergency purposes,
and not for the purpose of leveraging its investments, and
provided further that any borrowing in excess of 5% of the
total assets of the Fund shall have asset coverage of at
least 3 to 1; (13) make itself or its assets liable for the
indebtedness of others; (14) invest in securities which are
assessable or involve unlimited liability; or (15) issue
senior securities except for those investment procedures
permissible under the Fund's other restrictions.
ARTICLE VIII
OTHER RESTRICTIONS
Section 1. Dealings. The officers and directors of
the corporation and its investment adviser shall have no
dealings for or on behalf of the corporation with
themselves as principal or agent, or with any
corporation, partnership, trust, joint venture or
association in which they have a financial interest,
provided that this section shall not prevent:
(A) Officers or directors of the corporation
from having a financial interest in the corporation, in
any sponsor, manager, investment adviser or promoter of the
corporation, or in any underwriter or securities issued by
the corporation.
(B) The purchase of securities for the portfolio of
the corporation, or sale of securities owned by the
corporation through a security dealer, one or more of
whose partners, officers, directors or security holders is
an officer or director of the corporation, provided such
transactions are handled in a brokerage capacity only, and
provided commissions charged do not exceed customary
brokerage charges for such services.
(C) The employment of any legal counsel, registrar,
transfer agent, dividend disbursing agent or custodian
having a partner, officer, director or security holder
who is an officer or director of the corporation; provided
only customary fees are charged for services rendered to
or for the benefit of the corporation.
(D) The purchase for the portfolio of the
corporation of securities issued by an issuer having an
officer, director or security holder who is an officer or
director of the corporation or of any manager of the
corporation, unless the retention of such securities in the
portfolio of the corporation would otherwise be a violation
of these By-laws or the Articles of Incorporation of the
corporation.
ARTICLE IX
STOCK
Section 1. Certificates. Each stockholder shall be
entitled to a certificate or certificates which shall
certify the number of shares owned by him in the
corporation. Each certificate shall be signed by the
president or a vice-president and countersigned by the
secretary or an assistant secretary or the treasurer or an
assistant treasurer and shall be sealed with the corporate
seal.
Section 2. Signature. When a certificate is signed by
a transfer agent or an assistant transfer agent or by a
transfer clerk acting on behalf of the corporation and a
registrar, the signature of any such president, vice-
president, treasurer, assistant treasurer, secretary or
assistant secretary may be facsimile. In case any
officer who has signed any certificate ceases to be an
officer of the corporation before the certificate is issued,
the certificate may nevertheless be issued by the
corporation with the same effect as if the officer had not
ceased to be such officer as of the date of its issue.
Section 3. Recording and Transfer Without
Certificates. Notwithstanding the foregoing provisions of
this article, the corporation shall have full power to
participate in any program approved by the Board of
Directors providing for the recording and transfer of
ownership of shares of the corporation's stock by
electronic or other means without the issuance of
certificates.
Section 4. Lost Certificates. The Board of Directors
may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued
by the corporation alleged to have been stolen, lost or
destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be
stolen, lost or destroyed, or upon other satisfactory
evidence of such loss or destruction. When authorizing
such issuance of a new certificate or certificates, the
Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require
the owner of such stolen, lost or destroyed certificate or
certificates, or his legal representative to advertise
the same in such manner as it shall require and to give the
corporation a bond with sufficient surety, to the
corporation to indemnify it against any loss or claim that
may be made by reason of the issuance of a new certificate.
Section 5. Registered Stockholders. The corporation
shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any
other person, whether or not it shall have express or
other notice thereof, except, as otherwise provided by
the laws of Maryland.
Section 6. Transfer Agents and Registrars. The
corporation may act as its own transfer agent and/or
registrar, or it may delegate those duties to others. The
Board of Directors may from time to time, appoint or remove
transfer agents and/or registrars of stock of the
corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment
being made all certificates representing shares of stock
thereafter issued shall be countersigned by one of such
transfer agents or by one of such registrars or by both and
shall not be valid unless so countersigned. If the same
person shall be both transfer agent and registrar, only
countersignature by such person shall be required.
Section 7. Stock Ledger. The corporation shall
maintain an original stock ledger containing the names and
addresses of all stockholders and the number and
class of shares held by each stockholder. Such stock ledger
may be in written form or any other form capable of
being converted into written form within a reasonable time
for visual inspection.
Section 8. Transfers of Stock. The corporation shall
transfer or otherwise change the registration of its issued
and outstanding shares in its stock ledger upon receipt of
an authorization in a form proper and acceptable to it or
its duly appointed agent. To the extent such shares are
evidenced by a certificate or certificates, the surrender
of such certificate properly endorsed shall be required
where necessary. Upon receipt of the transfer
instructions in proper order by the corporation, the
corporation shall change its stock ledger records
accordingly and record the transaction upon its books.
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. With respect to dividends
(including "dividends" designated as "short" or "long" term
"capital gains" distributions to satisfy requirements of
the Investment Company Act of 1940, as amended, or the
Internal Revenue Code of 1954, as amended from time to
time):
(A) Such dividends, at the election of the
stockholders, may be automatically reinvested in additional
shares (or fractions thereof) of the corporation at the
"net asset value" determined on the reinvestment date fixed
by the Board of Directors.
(B) The Board of Directors in declaring any dividend,
may fix a record date not earlier than the date of
declaration or more than 40 days prior to the date of
payment, as of which the stockholders entitled to
receive such dividend shall be determined, notwithstanding
any transfer or the repurchase or issue (or sale) of any
shares after such record date.
(C) Dividends or distributions on shares of stock
whether payable in stock or cash, shall be paid out of
earnings, surplus or other lawfully available assets;
provided that no dividend payment, or distribution in the
nature of a dividend payment, may be made wholly or partly
from any source other than accumulated, undistributed net
income, determined in accordance with good accounting
practice, and not including profits or losses realized in
the sale of securities or other properties, unless such
payment is accompanied by a written statement clearly
indicating what portion of such payment per share is made
from the following sources:
(i) accumulated or undistributed net income
not including profits or losses from the sale of
securities or other properties;
(ii) accumulated undistributed net profits from
the sale of securities or other properties;
(iii) net profits from the sale of
securities or other properties during the then current
fiscal year; and
(iv) paid-in surplus or other capital source.
(D) In declaring dividends and in recognition that the
one goal of the corporation is to qualify as a "regulated
investment company" under the Internal Revenue Code of
1954, as amended, the Board of Directors shall be
entitled to rely upon estimates made in the last two months
of the fiscal year as to the amounts of distribution
necessary for this purpose; and the Board of Directors,
acting consistently with good accounting practice and with
the express provisions of these By-laws, may credit receipts
and charge payments to income or otherwise, as it may
seem proper.
(E) Any dividends declared, except as aforesaid,
shall be deemed liquidating dividends and the stockholders
shall be so informed to whatever extent may be required
by law. A notice that dividends have been paid from paid-in
surplus, or a notice that dividends have been paid from
paid-in capital, shall be deemed to be a sufficient notice
that the same constitutes liquidating dividends.
(F) Anything in these By-laws to the contrary
notwithstanding, the Board of Directors may at any time
declare and distribute pro rata among the stockholders of a
record date fixed as above, a "stock dividend" out of
either authorized but unissued, or treasury shares of the
corporation, or both.
Section 2. Rights in Securities. The Board of
Directors, on behalf of the corporation, shall have the
authority to exercise all of the rights of the
corporation as owners of any securities which might be
exercised by any individual owning such securities in his
own right; including but not limited to, the rights to
vote by proxy for any and all purposes (including the
right to authorize any officer of the manager to
execute proxies), to consent to the reorganization, merger
or consolidation of any company or to consent to the sale,
lease or mortgage of all or substantially all of the
property and assets of any company; and to exchange any of
the shares of stock of any company for shares of stock
issued therefor upon any such reorganization, merger,
consolidation, sale, lease or mortgage.
Section 3. Custodianship. Securities owned by the
corporation and cash representing (A) the proceeds
from sales of securities owned by the corporation and of
shares issued by the corporation, (B) payments of
principal upon securities owned by the corporation, or (C)
capital distributions in respect of securities owned by
the corporation shall be held by one or more custodians, as
permitted by the Investment Company Act of 1940, as
amended, to be selected by the Board of Directors. Each
bank and/or trust company selected as a custodian shall be
organized and existing under a state banking and/or trust
company law, or shall be a national banking association
incorporated under the laws of the United States of
America and qualified to act as a trust company, and shall
have an aggregate capital, surplus and undivided profits
of not less than $2,000,000. Each custodian shall enter
into an agreement with the corporation to serve as a
custodian of such securities and cash on terms consistent
with the provisions of these By-laws. From the time any
such trust company, banking association or other
permissible entity becomes a custodian of such securities
and cash, it shall:
(A) Deliver securities owned by the corporation,
only upon sale of such securities for the account of the
corporation and receipt of payment therefor by the
custodian, or when such securities may be called,
redeemed, retired or otherwise become payable, provided
that this provision shall not prevent:
(i) Delivery of securities for examination to
the broker selling the same, in accordance with the
"street delivery" custom, whereby such securities are
delivered to such broker in exchange for a delivery
receipt exchanged on the same day for an uncertified
check of such broker to be presented on the same day
for certification.
(ii) Delivery of securities of an issuer in
exchange for or for conversion into, other
securities alone, or cash and other securities,
pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment of
the securities of such issuer or for deposit with a
reorganization committee or protective committee,
pursuant to a deposit agreement.
(iii) The conversion by the custodian of
securities owned by the corporation, pursuant to
the provisions of such securities into other
securities.
(iv) The surrender by the custodian of
warrants, rights or similar securities owned by the
corporation in the exercise of such warrants, rights
or similar securities, or the surrender of interim
receipts or temporary securities for definitive
securities.
(v) The delivery of securities as collateral
on borrowing affected by the corporation, subject to
the limitations of Article VII of these By-laws.
(vi) The delivery of securities owned by the
corporation, as a complete or partial redemption
in kind of securities issued by the corporation.
(B) Deliver funds on the corporation only upon the
purchase of securities for the portfolio of the corporation,
and the delivery of such securities to the custodian;
provided always, that such limitation shall not prevent the
release of funds by the custodian for redemption of
shares issued by the corporation, for payment of interest,
dividend disbursements, taxes, management fees, custodian
fees, other operating expenses properly authorized by an
officer or officers as required by the custodian agreement,
payments in connection with conversion, exchange or
surrender of securities owned by the corporation (as set
forth in Subsection A of this Section) and for
organizational and such other obligations as approved by
the Board of Directors certified in writing.
(C) Upon the resignation or inability of a custodian
to serve as custodian of the assets of the corporation, the
corporation shall use its best efforts to obtain a
successor custodian, to require that the cash and securities
owned by the corporation be delivered directly to such
successor custodian and, in the event that no such
successor can be found, to submit to the stockholders --
before permitting delivery of the cash and securities owned
by the corporation to anyone other than a successor
custodian -- the question of whether the corporation shall
be liquidated or shall function without such custodian.
(D) Nothing hereinbefore contained shall prevent
any such custodian from delivering assets of the corporation
to a successor custodian having the qualifications
hereinabove prescribed.
(E) No directors, officers, employees or agents of
the corporation shall be authorized or permitted to
withdraw any assets held by the custodian, except as
permitted in this Article X and in the Custodian Agreement.
Directions, notices or instructions to the custodian,
with respect to delivery of securities, payment of cash or
otherwise, shall be given by such officer or officers
and/or such person or persons, and in such manner, as the
Board of Directors may from time to time designate.
Section 4. Reports. The corporation shall transmit to
the stockholders, at least semiannually, a report of the
operations of the corporation based at least annually upon
an audit by independent public accountants. Said report
shall clearly set forth the information customarily
furnished in a balance sheet and profit and loss
statement, and in addition, shall clearly set forth a
statement of all amounts paid directly to securities
dealers, legal counsel, transfer agents, disbursing
agents, registrars, custodians or trustees, where such
payments are made to a firm, corporation, bank or trust
company having an officer, director or partner who is also
an officer or director of this corporation. A copy or
copies, of all reports submitted to the stockholders of this
corporation shall also be sent, as required to the
regulatory agencies of the United States of America and the
states in which the securities of this corporation are
registered and sold.
Section 5. Bonding of Officers and Employees. All
officers and employees of the corporation shall be bonded to
such extent, and in such manner, as may be required by law.
Section 6. Seal. The corporate seal shall have
inscribed thereon the name of the corporation, the year of
its organization and the words "Corporate Seal, Maryland."
The seal may be used by causing it or a facsimile thereof
to be impressed or affixed or otherwise reproduced.
ARTICLE XI
AMENDMENTS
These By-laws may be altered, amended, repealed or restated
at any regular or special meeting of the Board of
Directors, provided that the provisions of Article VII may
not be altered, amended, repealed or restated without
the consent of a majority of the holders of the
corporation's outstanding common stock (as defined in the
Investment Company Act of 1940, as amended, and the
corporation's Articles of Incorporation) and provided
further that the right of the Board of Directors to alter,
amend, repeal or restate and the procedures therefor meet
the requirements of the Investment Company Act of 1940, as
amended, if any.
EX99.23(d)(1)(A)
MANAGEMENT AGREEMENT
Between
JONES & BABSON, INC.
and
DAVID L. BABSON GROWTH FUND, INC.
THIS AGREEMENT, made and entered into this 30th day of
June, 1995, by and between DAVID L. BABSON GROWTH FUND,
INC., (a Maryland corporation, hereinafter referred to as
the "Fund") and JONES & BABSON, INC., a corporation
organized under the laws of the State of Missouri
(hereinafter referred to as the "Manager"), and which
Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of
which together shall constitute but one instrument.
WHEREAS the Fund was founded and incorporated by the
Manager for the purpose of engaging in the business of
investing and reinvesting its property and assets and to
operate as an open-end diversified, management investment
company, as defined in the Investment Company Act of 1940 as
amended (Act), under which it is registered with the
Securities and Exchange Commission, and
WHEREAS the Manager was formed for and is engaged in
the business of supplying investment advice and management
service to the Fund, as an independent contractor and,
WHEREAS the Manager desires to enter into a contractual
arrangement whereby the Manager provides investment advice
and management service to the Fund for a fee.
NOW THEREFORE, in consideration of the mutual promises
herein contained, and other good and valuable consideration,
receipt of which is hereby acknowledged, it is mutually
agreed and contracted by and between the parties hereto
that:
1. The Fund hereby employs the Manager, for the period
set forth in Paragraph 5 hereof, and on the terms set forth
herein, to render investment advice and management service
to the Fund, subject to the supervision and direction of the
Board of Directors of the Fund. The Manager hereby accepts
such employment and agrees, during such period, to render
the services and assume the obligations herein set forth,
for the compensation herein provided. The Management shall,
for all purposes herein, be deemed to be an independent
contractor, and shall, except as provided in the
Underwriting Agreement between the Manager and the Fund or
unless otherwise expressly provided and authorized, have no
authority to act for or represent the Fund in any way, or in
any other way be deemed an agent of the Fund.
The Manager shall furnish the Fund investment
management and administrative services. Investment
management shall include analysis, research and portfolio
recommendations consistent with the Fund's objectives and
policies. Administrative services shall include the services
and compensation of such members of the Manager's
organization as shall be duly elected officers and/or
Directors of the Fund and such other personnel as shall be
necessary to carry out its normal operations; fees of the
independent Directors, the custodian, the independent public
accountant, investment counsel and legal counsel (but not
legal and audit fees and other costs in contemplation of or
arising out of litigation or administrative actions to which
the Fund, its officers or Directors are a party or incurred
in anticipation of becoming a party); rent; the cost of a
transfer and dividend disbursing agent or similar in-house
services; bookkeeping; accounting; and all other clerical
and administrative functions as may be reasonable and
necessary to maintain the Fund's records and for it to
operate as an open-end management investment company.
Exclusive of the management fee, the Fund shall bear the
cost of any interest, taxes, dues, fees and other charges of
governments and their agencies including the cost of
qualifying the Fund's shares for sale in any jurisdiction,
brokerage commissions, or any other expenses incurred by it
which are not assumed herein by the Manager.
All property, equipment and information used by the
Manager in the management and administration of the Fund
shall belong to the Manager. Should the management and
administrative relationship between the Fund and the Manager
terminate, the Fund shall be entitled to, and the Manager
shall provide the Fund, a copy of all information and
records in the Manager's file necessary for the Fund to
continue its functions, which shall include computer systems
and programs in use as of the date of such termination; but
nothing herein shall prohibit thereafter the use of such
information, systems or programs by the Manager, so long as
such does not unfairly interfere with the continued
operation of the Fund.
2. As compensation for the services to be rendered to
the Fund by the Manager under the provisions of this
agreement, the Fund agrees to pay semimonthly to the Manager
an annual fee based on the average total net assets of the
Fund computed daily in accordance with its Certificate of
Incorporation and By-Laws as follows:
a. Eighty-five one-hundredths of one percent
(85/100 of 1%) of the average total net assets of
the Fund that do not exceed two hundred fifty
million dollars ($250,000,000).
b. Seventy one-hundredths (70/100 of 1%) of
the average total net assets of the Fund that
exceed two hundred fifty million dollars
($250,000,000).
c. Should the Fund's normal operating
expenses except for taxes, fees and other charges
of governments and their agencies including the
cost of qualifying the Fund's shares for sale in
any jurisdiction, interest, brokerage commissions
and costs arising out of litigation or
administrative actions, all as described in
Paragraph 1, exceed the limits set out in sub-
paragraphs a and b of this Paragraph 2, the
Investment Manager shall reimburse the Fund in the
amount of the excess.
3. It is understood and agreed that the services to be
rendered by the Manager to the Fund under the provisions of
the Agreement are not to be deemed exclusive, and the
Manager shall be free to render similar or different
services to others so long as its ability to render the
services provided for in this Agreement shall not be
impaired thereby.
4. It is understood and agreed that the Directors,
officers, agents, employees, and shareholders of the Fund
may be interested in the Manager as owners, employees,
agents or otherwise, and that owners, employees and agents
of the Manager may be interested in the Fund as shareholders
or otherwise. It is understood and agreed that shareholders,
officers, Directors, and other personnel of the Manager are
and may continue to be officers and Directors of the Fund,
but that they receive no remuneration from the Fund solely
for acting in those capacities.
5. This Agreement shall be executed and become
effective pursuant to its approval by the Fund's Board of
Directors and by the vote of a majority of the outstanding
shares of the Fund as prescribed by the Act. It shall remain
in force through the 31st day of October, 1996, and
thereafter may be renewed for successive periods not
exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by
the Board of Directors or by vote of a majority of the
outstanding shares of the Fund as prescribed by the Act, and
only if the terms and the renewal of this Agreement have
been approved by a vote of a majority of the Directors of
the Fund including a majority of the Directors who are not
parties to the Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of
voting on such approval. No amendment to this Agreement
shall be effective unless the terms thereof have been
approved by the vote of a majority of outstanding shares of
the Fund as prescribed by the Act and by vote of a majority
of the Directors of the Fund who are not parties to the
Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval. It shall be the duty of the Directors of the Fund
to request and evaluate, and the duty of the Manager to
furnish, such information as may reasonably be necessary to
evaluate the terms of this Agreement and any amendment
thereto. This Agreement may be terminated at any time,
without the payment of any penalty, by the Directors of the
Fund, or by the vote of a majority of the outstanding voting
shares of the Fund as prescribed by the Act on not more than
sixty days written notice to the Manager, and it may be
terminated by the Manager upon not less than sixty days
written notice to the Fund. It shall terminate automatically
in the event of its assignment by either party unless the
parties hereby, by agreement, obtain an exemption from the
Securities and Exchange Commission from the provisions of
the Act pertaining to the subject matter of this paragraph.
Any notice, request or instruction provided for herein, or
for the giving of which, the occasion may arise hereunder,
shall be deemed duly given, if in writing and mailed by
registered mail, postage prepaid, addressed to the regular
executive office of the Fund or the Manager as the case may
be. As used in this Agreement, the terms "assignment", "a
majority of the outstanding voting shares", and "interested
persons" shall have the same meaning as similar terms
contained in the Act.
6. It is specifically provided in this Agreement that
the Manager is to secure the services of DAVID L. BABSON &
CO. INC. of Cambridge, Massachusetts (at the sole expense of
the Manager), as its Investment Counsel to furnish advice
and recommendations with respect to the purchase and sale of
securities and the making of portfolio commitments; to place
at the disposal of the Manager such statistical information
as may reasonably be required and in general to superintend
the investments of the Fund, subject to the control and
approval of the Board of Directors of the Manager and the
Board of Directors of the Fund.
7. As a condition of this agreement, the Manager will
provide in its Investment Counsel agreement with DAVID L.
BABSON & CO. INC. for the exclusive right of the Fund to use
the name "Babson" as part of its name, so long as JONES &
BABSON, INC., or any successor in interest, continues as its
Manager and DAVID L. BABSON & CO. INC., or any successor in
interest, continues as an Investment Counsel to the Manager.
The term "exclusive right of the Fund" appearing in the
preceding sentence means that no other investment company,
whether or not registered under the Investment Company Act
of 1940, as amended, will be entitled to use the precise
name "Babson" so long as the Fund has the right to use it as
a part of its name. However, nothing herein shall prohibit
the right of JONES & BABSON, INC., Mr. Babson, or DAVID L.
BABSON & CO. INC. from granting to another investment
company managed by JONES & BABSON, INC. with DAVID L. BABSON
& CO. INC. as its Investment Counsel, and which has
investment objectives and policies different from those of
the Fund, to use in its name either the name "Babson" or "D.
L. Babson" or "Babson (D. L.)" or "Jones & Babson" or any
combination of these names. Should the Fund terminate
either JONES & BABSON, INC. or its successor as Manager for
the Fund, or DAVID L. BABSON & CO. INC., or its successor,
as its Investment Counsel, either JONES & BABSON, INC. or
DAVID L. BABSON & CO. INC., or their respective successors
in interest, may elect to notify the Fund in writing that
permission to use the name "David L. Babson" (or any part
thereof) has been withdrawn, whereupon the Fund, its
officers, directors and shareholders, expressly agree to
take all necessary corporate action and to proceed
expeditiously to change the name of the Fund and not use any
other name or take any other action which would indicate the
Fund's continued association with DAVID L. BABSON & CO.
Inc., Mr. Babson, or JONES & BABSON, INC. If the use of the
name "David L. Babson" (or any part thereof) is so withdrawn
as aforesaid, the Fund, its officers, directors and
shareholders, understand and agree that there shall be no
limitation with respect to the future use of the name "David
L. Babson" (or any part thereof) by DAVID L. BABSON & CO.
INC., or its successor in interest, or with the permission
of DAVID L. BABSON & CO. INC., or its successor, by JONES &
BABSON, INC. or its successor.
8. The agreement between JONES & BABSON, INC. and
DAVID L. BABSON & CO. INC. also shall provide that, although
it is not anticipated, there may occur some unforeseen
reason which would prohibit DAVID L. BABSON & CO. INC., as a
matter of reasonable business necessity, continuing as an
Investment Counsel to JONES & BABSON, INC. Should such
circumstances occur, DAVID L. BABSON GROWTH FUND, INC., or
its successor may elect to terminate its services, even
though the Fund would want to continue to use the name
"Babson" and continue JONES & BABSON, INC., or its
successor, as Manager. Upon receipt of such a written
notice, the Fund, its officers, directors and shareholders,
agree to take all necessary corporate action and proceed
expeditiously to change the name of the Fund not later than
one year after the effective date of the termination notice,
and not use any other name or take any other action which
would indicate the Fund's continued association with DAVID
L. BABSON & CO. INC., Mr. Babson or JONES & BABSON, INC. In
consideration for this right, DAVID L. BABSON & CO. INC. and
JONES & BABSON, INC. agree that should the name "Babson" be
withdrawn, they will not permit another investment company,
whether or not registered under the Investment Company Act
of 1940, to use the name "Babson" as part of its name for a
period of five years subsequent to the effective date of the
written withdrawal request, unless this prohibition is
waived or modified by a majority vote of the Fund's
shareholders entitled to vote at the next annual meeting of
the Fund's shareholders following receipt of the request,
and if any such action is also approved by the majority of
shares entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC. For this right to
withdraw the name "Babson" from the use of the Fund, DAVID
L. BABSON & CO. INC. will agree in its contract with JONES &
BABSON, INC. that it will not compete with JONES & BABSON,
INC. for the management of the Fund during said five-year
period, unless this no-compete provision is waived by a
majority of the shares entitled to vote at a duly
constituted meeting of the shareholders of JONES & BABSON,
INC.
9. It is further agreed that the provisions of
Paragraphs 7 and 8 shall inure to the benefit of DAVID L.
BABSON & CO. INC. and may be imposed by it or any successor
in interest as if it or such successor in interest were
parties to this Agreement.
10. The Manager shall not be liable for any error in
judgment or mistake at law for any loss suffered by the Fund
in connection with any matters to which this Agreement
relates, except that nothing herein contained shall be
construed to protect the Investment Manager against any
liability by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reckless
disregard of its obligations or duties under this Agreement.
11. This Agreement may not be amended, transferred,
assigned, sold or in any manner hypothecated or pledged nor
may any new Agreement become effective without affirmative
vote or written consent of the holders of a majority of the
shares of the Fund.
DAVID L. BABSON GROWTH FUND, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
JONES & BABSON, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
<PAGE>
EX99.23(d)(1)(B)
INVESTMENT COUNSEL AGREEMENT
Between
JONES & BABSON, INC.
and
DAVID L. BABSON & CO. INC.
THIS AGREEMENT made this 30th day of June, 1995 by and
between JONES & BABSON, INC. (hereinafter referred to as the
"Manager"), and DAVID L. BABSON & CO. INC. (hereinafter referred
to as the "Investment Counsel"), and which Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall
constitute but one instrument.
WITNESSETH:
WHEREAS, the Directors of the Manager want to enter into a
contract with the Investment Counsel to render the Manager the
following services:
To furnish research, analysis, advice and recommendations
with respect to the purchase and sale of securities and the
making of investment commitments; to place at the disposal of the
Manager such statistical information and reports as may
reasonably be required, and in general to superintend the
investments of the DAVID L. BABSON GROWTH FUND, INC. (Fund),
subject to the control of the Directors of the Fund and JONES &
BABSON, INC.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties agree as follows:
1. During the term of this Agreement, or any extension or
extensions thereof, the Investment Counsel will, to the best of
its ability, furnish the foregoing services.
2. As compensation, JONES & BABSON, INC. will pay
Investment Counsel for its services the following annual fee
computed daily as determined by the Fund's price make-up sheet
and which shall be payable monthly or at such other intervals as
agreed by the parties.
a.Thirty one-hundredths of one percent (30/100 of 1%) of
the average daily total net assets of the Fund which do
not exceed one hundred million dollars ($100,000,000).
b.Twenty-five one-hundredths of one percent (25/100 of 1%)
of the average daily total net assets of the Fund which
exceed one hundred million dollars ($100,000,000), but
that do not exceed two hundred fifty million dollars
($250,000,000).
c.Twenty one-hundredths of one percent (20/100 of 1%) of
the average total net assets of the Fund that exceed two
hundred fifty million dollars ($250,000,000).
3. This Agreement shall become effective concurrently with
the investment Management Agreement between JONES & BABSON, INC.
and the DAVID L. BABSON GROWTH FUND, INC. . pursuant to the
approval of the shareholders of the Fund according to the
provisions of the Investment Company Act of 1940 (Act).
4. This Agreement shall continue for a period ending
October 31, 1996. It may be renewed thereafter for successive
periods not exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by the
Board of Directors of the Fund or by a vote of the majority of
the outstanding voting securities of the Fund as prescribed by
the Act and provided further that such continuance is approved at
least annually thereafter by a vote of a majority of the
Directors who are not parties to such Agreement or interested
persons of such party, cast in person at a meeting called for the
purpose of voting on such approval. The Investment Counsel shall
provide the Manager such information as may be reasonably
necessary to assist the Directors of the Fund to evaluate the
terms of the Management Agreement. This Agreement automatically
will terminate with the Management Agreement without the payment
of any penalty, upon sixty days written notice by the Fund to the
Manager that the Board of Directors or the shareholders by vote
of a majority of the outstanding voting securities of the Fund,
as provided by the Act, has terminated the Management Agreement.
This Agreement shall automatically terminate in the event of
its assignment or assignment of the Management Agreement unless
such assignment is approved by the Directors and the shareholders
of the Fund as herein before provided or unless an exemption is
obtained from the Securities and Exchange Commission from the
provisions of the Act pertaining to the subject matter of this
paragraph.
5. It is expressly understood and agreed that the services
to be rendered by the Investment Counsel to the Manager under the
provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Counsel shall be free to render
similar or different services to others so long as its ability to
render the services provided for in this Agreement shall not be
impaired thereby, and provided further that the services to be
rendered by the Investment Counsel to the Manager under this
Agreement and the compensation provided for in Paragraph 2 hereof
shall be limited solely to services with reference to the Fund.
6. The Manager agrees that it will furnish currently to
Investment Counsel all information reasonably necessary to permit
Investment Counsel to give the advice called for under this
Agreement and such information with reference to the Fund that is
reasonably necessary to permit Investment Counsel to carry out
its responsibilities under this Agreement, and the parties agree
that they will from time to time consult and make appropriate
arrangements as to specific information that is required under
this paragraph and the frequency and manner with which it shall
be supplied.
7. The Investment Counsel shall not be liable for any
error of judgment or mistake at law or for any loss suffered by
the Manager or the Fund in connection with any matters to which
this Agreement relates except that nothing herein contained shall
be construed to protect the Investment Counsel against any
liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reckless
disregard of its obligations or duties under this agreement.
8. In compliance with the provisions of the Management
Agreement between the Fund and JONES & BABSON, INC., Investment
Counsel agrees with Manager that subject to the terms and
conditions of this Paragraph 8, the Fund may use the name of
"David L. Babson "(or any part thereof) as part of its name so
long as JONES & BABSON, INC., or any successor in interest,
continues as Manager and DAVID L. BABSON & CO. INC., or any
successor in interest, continues as Investment Counsel. Should
the Fund terminate either JONES & BABSON, INC., or its successor
as Manager, or DAVID L. BABSON & CO. INC., or its successor as
Investment Counsel, either JONES & BABSON, INC., or DAVID L.
BABSON & CO. INC., or their respective successors in interest,
may elect to notify the Fund in writing that permission to use
the name "David L. Babson" (or any part thereof) has been
withdrawn. It is understood that the Fund has, in its Management
Agreement with JONES & BABSON, INC., expressly agreed that it,
its officers, directors and shareholders will take all necessary
corporate action and proceed expeditiously to change the name of
the Fund and not use any other name or take any action which
would indicate the Fund's continued association with DAVID L.
BABSON & CO. INC. If the use of the name "David L. Babson" (or
any part thereof) is so withdrawn as aforesaid, it is understood
and agreed that there shall be no limitation with respect to the
future use of the name "David L. Babson" (or any part thereof) by
DAVID L. BABSON & CO. INC., or its successor in interest, or by
JONES & BABSON, INC. or its successor in interest.
9. Although it is not anticipated, there may occur some
unforeseen reason which would prohibit DAVID L. BABSON & CO.
INC., as a matter of reasonable business necessity, continuing as
Investment Counsel. Should such circumstances occur, DAVID L.
BABSON & CO. INC., or its successor may elect to terminate its
services, even though the Fund would want to continue to use the
name "David L. Babson" (or any part thereof) and continue JONES &
BABSON, INC., or its successor, as manager with DAVID L. BABSON &
CO. INC., or its successor, as Investment Counsel. Upon receipt
of such a written notice, the Fund, its officers, directors and
shareholders, have agreed in the Management Agreement between the
Fund and JONES & BABSON, INC., for the benefit of DAVID L. BABSON
& CO. INC., to take all necessary corporate action and proceed
expeditiously to change the name of the Fund (but if necessary,
take up to one year from the effective date of the termination of
the Management Agreement) and not use any other name or take any
other action which would indicate the Fund's continued
association with DAVID L. BABSON & CO. INC. In consideration for
this right, DAVID L. BABSON & CO. INC. agrees that should it so
request the withdrawal of the name "David L. Babson" (or any part
thereof) it will not permit another investment company, whether
or not registered under the Investment Company Act of 1940, to
use the name "David L. Babson" (or any part thereof) as part of
its name for a period of five years subsequent to the effective
date of the written withdrawal request, unless this prohibition
is waived or modified by a majority vote of the Fund's
shareholders entitled to vote at a duly constituted meeting of
the Fund's shareholders following receipt of the request, and if
any such action is also approved by the majority of shares
entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC. For this right to withdraw
the name "David L. Babson" (or any part thereof) from the use of
the Fund, DAVID L. BABSON & CO. INC. agrees that it will not
compete with JONES & BABSON, INC. for the management of the Fund
during said five-year period, unless this no-compete provision is
waived by a majority of the shares entitled to vote at a duly
constituted meeting of the shareholders of JONES & BABSON,
INC.
Each party hereby executes this Agreement as of the 30th day
of June, 1995, pursuant to the authority granted by its Board of
Directors.
DAVID L. BABSON & CO. INC.
By /s/ Peter C. Thompson
ATTEST:
/s/ Paula C. Howell
JONES & BABSON, INC.
By /s/ Larry D. Armel
ATTEST:
/s/ Martin A. Cramer
EX99.23(d)(2)(A)
MANAGEMENT AGREEMENT
Between
JONES & BABSON, INC.
and
D. L. BABSON MONEY MARKET FUND, INC.
THIS AGREEMENT, made and entered into this 30th day of
June, 1995, by and between D. L. BABSON MONEY MARKET FUND,
INC., (a Maryland corporation, hereinafter referred to as
the "Fund") and JONES & BABSON, INC. , a corporation
organized under the laws of the State of Missouri
(hereinafter referred to as the "Manager"), and which
Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of
which together shall constitute but one instrument.
WHEREAS the Fund was founded and incorporated by the
Manager for the purpose of engaging in the business of
investing and reinvesting its property and assets and to
operate as an open-end, diversified , management investment
company, as defined in the Investment Company Act of 1940 as
amended (Act), under which it is registered with the
Securities and Exchange Commission, and
WHEREAS the Manager was formed for and is engaged in
the business of supplying investment advice and management
service to the Fund, as an independent contractor and,
WHEREAS the Manager desires to enter into a contractual
arrangement whereby the Manager provides investment advice
and management service to the Fund for a fee.
NOW THEREFORE, in consideration of the mutual promises
herein contained, and other good and valuable consideration,
receipt of which is hereby acknowledged, it is mutually
agreed and contracted by and between the parties hereto
that:
1. The Fund hereby employs the Manager, for the period
set forth in Paragraph 5 hereof, and on the terms set forth
herein, to render investment advice and management service
to the Fund, subject to the supervision and direction of the
Board of Directors of the Fund. The Manager hereby accepts
such employment and agrees, during such period, to render
the services and assume the obligations herein set forth,
for the compensation herein provided. The Management shall,
for all purposes herein, be deemed to be an independent
contractor, and shall, except as provided in the
Underwriting Agreement between the Manager and the Fund or
unless otherwise expressly provided and authorized, have no
authority to act for or represent the Fund in any way, or in
any other way be deemed an agent of the Fund.
The Manager shall furnish the Fund investment
management and administrative services. Investment
management shall include analysis, research and portfolio
recommendations consistent with the Fund's objectives and
policies. Administrative services shall include the services
and compensation of such members of the manager's
organization as shall be duly elected officers and/or
Directors of the Fund and such other personnel as shall be
necessary to carry out its normal operations; fees of the
independent Directors, the custodian, the independent public
accountant, investment counsel and legal counsel (but not
legal and audit fees and other costs in contemplation of or
arising out of litigation or administrative actions to which
the Fund, its officers or Directors are a party or incurred
in anticipation of becoming a party); rent; the cost of a
transfer and dividend disbursing agent or similar in-house
services; bookkeeping; accounting; and all other clerical
and administrative functions as may be reasonable and
necessary to maintain the Fund's records and for it to
operate as an open-end management investment company.
Exclusive of the management fee, the Fund shall bear the
cost of any interest, taxes, dues, fees and other charges of
governments and their agencies including the cost of
qualifying the Fund's shares for sale in any jurisdiction,
brokerage commissions, or any other expenses incurred by it
which are not assumed herein by the Manager.
All property, equipment and information used by the
Manager in the management and administration of the Fund
shall belong to the manager. Should the management and
administrative relationship between the Fund and the manager
terminate, the Fund shall be entitled to, and the manager
shall provide the Fund, a copy of all information and
records in the Manager's file necessary for the Fund to
continue its functions, which shall include computer systems
and programs in use as of the date of such termination; but
nothing herein shall prohibit thereafter the use of such
information, systems or programs by the manager, so long as
such does not unfairly interfere with the continued
operation of the Fund.
2. As compensation for the services to be rendered to
the Fund by the Manager under the provisions of this
agreement, the Fund agrees to pay semimonthly to the Manager
an annual fee based on the average total net assets of the
Fund computed daily in accordance with its Certificate of
Incorporation and By-Laws as follows:
a. Eighty-five one-hundredths of one percent
(85/100 of 1%) of the average total net assets of
the Fund.
b. Should the Fund's normal operating
expenses except for taxes, fees and other charges
of governments and their agencies including the
cost of qualifying the Fund's shares for sale in
any jurisdiction, interest, brokerage commissions
and costs arising out of litigation or
administrative actions, all as described in
Paragraph 1, exceed the limits set out in sub-
paragraphs a and b of this Paragraph 2, the
Investment Manager shall reimburse the Fund in the
amount of the excess.
3. It is understood and agreed that the services to be
rendered by the Manager to the Fund under the provisions of
the Agreement are not to be deemed exclusive, and the
Manager shall be free to render similar or different
services to others so long as its ability to render the
services provided for in this Agreement shall not be
impaired thereby.
4. It is understood and agreed that the Directors,
officers, agents, employees, and shareholders of the Fund
may be interested in the Manager as owners, employees,
agents or otherwise, and that owners, employees and agents
of the Manager may be interested in the Fund as shareholders
or otherwise. It is understood and agreed that shareholders,
officers, Directors, and other personnel of the Manager are
and may continue to be officers and Directors of the Fund,
but that they receive no remuneration from the Fund solely
for acting in those capacities.
5. This Agreement shall be executed and become
effective pursuant to its approval by the Fund's Board of
Directors and by the vote of a majority of the outstanding
shares of the Fund as prescribed by the Act. It shall remain
in force through the 31st day of October, 1995, and
thereafter may be renewed for successive periods not
exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by
the Board of Directors or by vote of a majority of the
outstanding shares of the Fund as prescribed by the Act, and
only if the terms and the renewal of this Agreement have
been approved by a vote of a majority of the Directors of
the Fund including a majority of the Directors who are not
parties to the Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of
voting on such approval. No amendment to this Agreement
shall be effective unless the terms thereof have been
approved by the vote of a majority of outstanding shares of
the Fund as prescribed by the Act and by vote of a majority
of the Directors of the Fund who are not parties to the
Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval. It shall be the duty of the Directors of the Fund
to request and evaluate, and the duty of the Manager to
furnish, such information as may reasonably be necessary to
evaluate the terms of this Agreement and any amendment
thereto. This Agreement may be terminated at any time,
without the payment of any penalty, by the Directors of the
Fund, or by the vote of a majority of the outstanding voting
shares of the Fund as prescribed by the Act on not more than
sixty days written notice to the Manager, and it may be
terminated by the Manager upon not less than sixty days
written notice to the Fund. It shall terminate automatically
in the event of its assignment by either party unless the
parties hereby, by agreement, obtain an exemption from the
Securities and Exchange Commission from the provisions of
the Act pertaining to the subject matter of this paragraph.
Any notice, request or instruction provided for herein,or
for the giving of which, the occasion may arise hereunder,
shall be deemed duly given, if in writing and mailed by
registered mail, postage prepaid, addressed to the regular
executive office of the Fund or the Manager as the case may
be. As used in this Agreement, the terms "assignment", "a
majority of the outstanding voting shares", and "interested
persons" shall have the same meaning as similar terms
contained in the Act.
6. It is specifically provided in this Agreement that
the Manager is to secure the services of DAVID L. BABSON &
CO. INC. of Cambridge, Massachusetts (at the sole expense of
the Manager), as its Investment Counsel to furnish advice
and recommendations with respect to the purchase and sale of
securities and the making of portfolio commitments; to place
at the disposal of the Manager such statistical information
as may reasonably be required and in general to superintend
the investments of the Fund, subject to the control and
approval of the Board of Directors of the Manager and the
Board of Directors of the Fund.
7. As a condition of this agreement, the Manager will
provide in its Investment Counsel agreement with DAVID L.
BABSON & CO. INC. for the exclusive right of the Fund to use
the name "Babson" as part of its name, so long as JONES &
BABSON, INC., or any successor in interest, continues as its
manager and DAVID L. BABSON & CO. INC., or any successor in
interest, continues as an Investment Counsel to the manager.
The term "exclusive right of the Fund" appearing in the
preceding sentence means that no other investment company,
whether or not registered under the Investment Company Act
of 1940, as amended, will be entitled to use the precise
name "Babson" so long as the Fund has the right to use it as
a part of its name. However, nothing herein shall prohibit
the right of JONES & BABSON, INC., Mr. Babson, or DAVID L.
BABSON & CO. INC. from granting to another investment
company managed by JONES & BABSON, INC. with DAVID L. BABSON
& CO. INC. as its Investment Counsel, and which has
investment objectives and policies different from those of
the Fund, to use in its name either the name "Babson" or "D.
L. Babson" or "Babson (D. L.)" or "Jones & Babson" or any
combination of these names. Should the Fund terminate
either JONES & BABSON, INC. or its successor as Manager for
the Fund, or DAVID L. BABSON & CO. INC., or its successor,
as its Investment Counsel, either JONES & BABSON, INC. or
DAVID L. BABSON & CO. INC., or their respective successors
in interest, may elect to notify the Fund in writing that
permission to use the name "David L. Babson" (or any part
thereof) has been withdrawn, whereupon the Fund, its
officers, directors and shareholders, expressly agree to
take all necessary corporate action and to proceed
expeditiously to change the name of the Fund and not use any
other name or take any other action which would indicate the
Fund's continued association with DAVID L. BABSON & CO.
INC., Mr. Babson, or JONES & BABSON, INC. If the use of the
name "David L. Babson" (or any part thereof) is so withdrawn
as aforesaid, the Fund, its officers, directors and
shareholders, understand and agree that there shall be no
limitation with respect to the future use of the name "David
L. Babson" (or any part thereof) by DAVID L. BABSON & CO.
INC., or its successor in interest, or with the permission
of DAVID L. BABSON & CO. INC., or its successor, by JONES &
BABSON, INC. or its successor.
8. The agreement between JONES & BABSON, INC. and
DAVID L. BABSON & CO. INC. also shall provide that, although
it is not anticipated, there may occur some unforeseen
reason which would prohibit DAVID L. BABSON & CO. INC., as a
matter of reasonable business necessity, continuing as an
Investment Counsel to JONES & BABSON, INC. Should such
circumstances occur, D. L. BABSON MONEY MARKET FUND, INC.,
or its successor may elect to terminate its services, even
though the Fund would want to continue to use the name
"Babson" and continue JONES & BABSON, INC., or its
successor, as manager. Upon receipt of such a written
notice, the Fund, its officers, directors and shareholders,
agree to take all necessary corporate action and proceed
expeditiously to change the name of the Fund not later than
one year after the effective date of the termination notice,
and not use any other name or take any other action which
would indicate the Fund's continued association with DAVID
L. BABSON & CO. INC., Mr. Babson or JONES & BABSON, INC. In
consideration for this right, DAVID L. BABSON & CO. INC. and
JONES & BABSON, INC. agree that should the name "Babson" be
withdrawn, they will not permit another investment company,
whether or not registered under the Investment Company Act
of 1940, to use the name "Babson" as part of its name for a
period of five years subsequent to the effective date of the
written withdrawal request, unless this prohibition is
waived or modified by a majority vote of the Fund's
shareholders entitled to vote at the next annual meeting of
the Fund's shareholders following receipt of the request,
and if any such action is also approved by the majority of
shares entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC. For this right to
withdraw the name "Babson" from the use of the Fund, DAVID
L. BABSON & CO. INC. will agree in its contract with JONES &
BABSON, INC. that it will not compete with JONES & BABSON,
INC. for the management of the Fund during said five-year
period, unless this no-compete provision is waived by a
majority of the shares entitled to vote at a duly
constituted meeting of the shareholders of JONES & BABSON,
INC.
9. It is further agreed that the provisions of
Paragraphs 7 and 8 shall inure to the benefit of DAVID L.
BABSON & CO. INC. and may be imposed by it or any successor
in interest as if it or such successor in interest were
parties to this Agreement.
10. The Manager shall not be liable for any error in
judgment or mistake at law for any loss suffered by the Fund
in connection with any matters to which this Agreement
relates, except that nothing herein contained shall be
construed to protect the Investment Manager against any
liability by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reckless
disregard of its obligations or duties under this Agreement.
11. This Agreement may not be amended, transferred,
assigned, sold or in any manner hypothecated or pledged nor
may any new Agreement become effective without affirmative
vote or written consent of the holders of a majority of the
shares of the Fund.
D. L. BABSON MONEY MARKET FUND, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
JONES & BABSON, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
<PAGE>
EX99.23(d)(2)(B)
INVESTMENT COUNSEL AGREEMENT
Between
JONES & BABSON, INC.
and
DAVID L. BABSON & CO. INC.
THIS AGREEMENT made this 30th day of June, 1995 by and
between JONES & BABSON, INC. (hereinafter referred to as the
"Manager"), and DAVID L. BABSON & CO. INC. (hereinafter referred
to as the "Investment Counsel"), and which Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall
constitute but one instrument.
WITNESSETH:
WHEREAS, the Directors of the Manager want to enter into a
contract with the Investment Counsel to render the Manager the
following services:
To furnish research, analysis, advice and recommendations
with respect to the purchase and sale of securities and the
making of investment commitments; to place at the disposal of the
Manager such statistical information and reports as may
reasonably be required, and in general to superintend the
investments of the D. L. BABSON MONEY MARKET, INC. (Fund),
subject to the control of the Directors of the Fund and JONES &
BABSON, INC.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties agree as follows:
1. During the term of this Agreement, or any extension or
extensions thereof, the Investment Counsel will, to the best of
its ability, furnish the foregoing services.
2. As compensation, JONES & BABSON, INC. will pay
Investment Counsel for its services the following annual fee
computed daily as determined by the Fund's price make-up sheet
and which shall be payable monthly or at such other intervals as
agreed by the parties.
a.Twenty one-hundredths of one percent (20/100 of 1%) of
the average daily total net assets of the Fund.
3. This Agreement shall become effective concurrently with
the investment Management Agreement between JONES & BABSON, INC.
and the D. L. BABSON MONEY MARKET, INC. pursuant to the approval
of the shareholders of the Fund according to the provisions of
the Investment Company Act of 1940 (Act).
4. This Agreement shall continue for a period ending
October 31, 1996. It may be renewed thereafter for successive
periods not exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by the
Board of Directors of the Fund or by a vote of the majority of
the outstanding voting securities of the Fund as prescribed by
the Act and provided further that such continuance is approved at
least annually thereafter by a vote of a majority of the
Directors who are not parties to such Agreement or interested
persons of such party, cast in person at a meeting called for the
purpose of voting on such approval. The Investment Counsel shall
provide the Manager such information as may be reasonably
necessary to assist the Directors of the Fund to evaluate the
terms of the Management Agreement. This Agreement automatically
will terminate with the Management Agreement without the payment
of any penalty, upon sixty days written notice by the Fund to the
Manager that the Board of Directors or the shareholders by vote
of a majority of the outstanding voting securities of the Fund,
as provided by the Act, has terminated the Management Agreement.
This Agreement shall automatically terminate in the event of
its assignment or assignment of the Management Agreement unless
such assignment is approved by the Directors and the shareholders
of the Fund as herein before provided or unless an exemption is
obtained from the Securities and Exchange Commission from the
provisions of the Act pertaining to the subject matter of this
paragraph.
5. It is expressly understood and agreed that the services
to be rendered by the Investment Counsel to the Manager under the
provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Counsel shall be free to render
similar or different services to others so long as its ability to
render the services provided for in this Agreement shall not be
impaired thereby, and provided further that the services to be
rendered by the Investment Counsel to the Manager under this
Agreement and the compensation provided for in Paragraph 2 hereof
shall be limited solely to services with reference to the Fund.
6. The Manager agrees that it will furnish currently to
Investment Counsel all information reasonably necessary to permit
Investment Counsel to give the advice called for under this
Agreement and such information with reference to the Fund that is
reasonably necessary to permit Investment Counsel to carry out
its responsibilities under this Agreement, and the parties agree
that they will from time to time consult and make appropriate
arrangements as to specific information that is required under
this paragraph and the frequency and manner with which it shall
be supplied.
7. The Investment Counsel shall not be liable for any
error of judgment or mistake at law or for any loss suffered by
the Manager or the Fund in connection with any matters to which
this Agreement relates except that nothing herein contained shall
be construed to protect the Investment Counsel against any
liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reckless
disregard of its obligations or duties under this agreement.
8. In compliance with the provisions of the Management
Agreement between the Fund and JONES & BABSON, INC., Investment
Counsel agrees with Manager that subject to the terms and
conditions of this Paragraph 8, the Fund may use the name of
"David L. Babson" (or any part thereof) as part of its name so
long as JONES & BABSON, INC., or any successor in interest,
continues as Manager and DAVID L. BABSON & CO. INC., or any
successor in interest, continues as Investment Counsel. Should
the Fund terminate either JONES & BABSON, INC., or its successor
as Manager, or DAVID L. BABSON & CO. INC., or its successor as
Investment Counsel, either JONES & BABSON, INC., or DAVID L.
BABSON & CO. INC., or their respective successors in interest,
may elect to notify the Fund in writing that permission to use
the name "David L. Babson" (or any part thereof) has been
withdrawn. It is understood that the Fund has, in its Management
Agreement with JONES & BABSON, INC., expressly agreed that it,
its officers, directors and shareholders will take all necessary
corporate action and proceed expeditiously to change the name of
the Fund and not use any other name or take any action which
would indicate the Fund's continued association with DAVID L.
BABSON & CO. INC. If the use of the name "David L. Babson" (or
any part thereof) is so withdrawn as aforesaid, it is understood
and agreed that there shall be no limitation with respect to the
future use of the name "David L. Babson" (or any part thereof) by
DAVID L. BABSON & CO. INC., or its successor in interest, or by
JONES & BABSON, INC. or its successor in interest.
9. Although it is not anticipated, there may occur some
unforeseen reason which would prohibit DAVID L. BABSON & CO.
INC., as a matter of reasonable business necessity, continuing as
Investment Counsel. Should such circumstances occur, DAVID L.
BABSON & CO. INC., or its successor may elect to terminate its
services, even though the Fund would want to continue to use the
name "David L. Babson" (or any part thereof) and continue JONES &
BABSON, INC., or its successor, as manager with DAVID L. BABSON &
CO. INC., or its successor, as Investment Counsel. Upon receipt
of such a written notice, the Fund, its officers, directors and
shareholders, have agreed in the Management Agreement between the
Fund and JONES & BABSON, INC., for the benefit of DAVID L. BABSON
& CO. INC., to take all necessary corporate action and proceed
expeditiously to change the name of the Fund (but if necessary,
take up to one year from the effective date of the termination of
the Management Agreement) and not use any other name or take any
other action which would indicate the Fund's continued
association with DAVID L. BABSON & CO. INC. In consideration for
this right, DAVID L. BABSON & CO. INC. agrees that should it so
request the withdrawal of the name "David L. Babson" (or any part
thereof) it will not permit another investment company, whether
or not registered under the Investment Company Act of 1940, to
use the name "David L. Babson" (or any part thereof) as part of
its name for a period of five years subsequent to the effective
date of the written withdrawal request, unless this prohibition
is waived or modified by a majority vote of the Fund's
shareholders entitled to vote at a duly constituted meeting of
the Fund's shareholders following receipt of the request, and if
any such action is also approved by the majority of shares
entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC. For this right to withdraw
the name "David L. Babson" (or any part thereof) from the use of
the Fund, DAVID L. BABSON & CO. INC. agrees that it will not
compete with JONES & BABSON, INC. for the management of the Fund
during said five-year period, unless this no-compete provision is
waived by a majority of the shares entitled to vote at a duly
constituted meeting of the shareholders of JONES & BABSON,
INC.
Each party hereby executes this Agreement as of the 30th day
of June, 1995, pursuant to the authority granted by its Board of
Directors.
DAVID L. BABSON & CO. INC.
By /s/ Peter C. Thompson
ATTEST:
/s/ Paula C. Howell
JONES & BABSON, INC.
By /s/ Larry D. Armel
ATTEST:
/s/ Martin A. Cramer
EX99.23(d)(3)(A)
MANAGEMENT AGREEMENT
Between
JONES & BABSON, INC.
and
D. L. BABSON TAX-FREE INCOME FUND, INC.
THIS AGREEMENT, made and entered into this 30th day of
June, 1995, by and between D. L. BABSON TAX-FREE INCOME
FUND, INC., (a Maryland corporation, hereinafter referred to
as the "Fund") and JONES & BABSON, INC., a corporation
organized under the laws of the State of Missouri
(hereinafter referred to as the "Manager"), and which
Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of
which together shall constitute but one instrument.
WHEREAS the Fund was founded and incorporated by the
Manager for the purpose of engaging in the business of
investing and reinvesting its property and assets and to
operate as an open-end, diversified , management investment
company, as defined in the Investment Company Act of 1940 as
amended (Act), under which it is registered with the
Securities and Exchange Commission, and
WHEREAS the Manager was formed for and is engaged in
the business of supplying investment advice and management
service to the Fund, as an independent contractor and,
WHEREAS the Manager desires to enter into a contractual
arrangement whereby the Manager provides investment advice
and management service to the Fund for a fee.
NOW THEREFORE, in consideration of the mutual promises
herein contained, and other good and valuable consideration,
receipt of which is hereby acknowledged, it is mutually
agreed and contracted by and between the parties hereto
that:
1. The Fund hereby employs the Manager, for the period
set forth in Paragraph 5 hereof, and on the terms set forth
herein, to render investment advice and management service
to the Fund, subject to the supervision and direction of the
Board of Directors of the Fund. The Manager hereby accepts
such employment and agrees, during such period, to render
the services and assume the obligations herein set forth,
for the compensation herein provided. The Management shall,
for all purposes herein, be deemed to be an independent
contractor, and shall, except as provided in the
Underwriting Agreement between the Manager and the Fund or
unless otherwise expressly provided and authorized, have no
authority to act for or represent the Fund in any way, or in
any other way be deemed an agent of the Fund.
The Manager shall furnish the Fund investment
management and administrative services. Investment
management shall include analysis, research and portfolio
recommendations consistent with the Fund's objectives and
policies. Administrative services shall include the services
and compensation of such members of the manager's
organization as shall be duly elected officers and/or
Directors of the Fund and such other personnel as shall be
necessary to carry out its normal operations; fees of the
independent Directors, the custodian, the independent public
accountant, investment counsel and legal counsel (but not
legal and audit fees and other costs in contemplation of or
arising out of litigation or administrative actions to which
the Fund, its officers or Directors are a party or incurred
in anticipation of becoming a party); rent; the cost of a
transfer and dividend disbursing agent or similar in-house
services; bookkeeping; accounting; and all other clerical
and administrative functions as may be reasonable and
necessary to maintain the Fund's records and for it to
operate as an open-end management investment company.
Exclusive of the management fee, the Fund shall bear the
cost of any interest, taxes, dues, fees and other charges of
governments and their agencies including the cost of
qualifying the Fund's shares for sale in any jurisdiction,
brokerage commissions, or any other expenses incurred by it
which are not assumed herein by the Manager.
All property, equipment and information used by the
Manager in the management and administration of the Fund
shall belong to the manager. Should the management and
administrative relationship between the Fund and the manager
terminate, the Fund shall be entitled to, and the manager
shall provide the Fund, a copy of all information and
records in the Manager's file necessary for the Fund to
continue its functions, which shall include computer systems
and programs in use as of the date of such termination; but
nothing herein shall prohibit thereafter the use of such
information, systems or programs by the manager, so long as
such does not unfairly interfere with the continued
operation of the Fund.
2. As compensation for the services to be rendered to
the Fund by the Manager under the provisions of this
agreement, the Fund agrees to pay semimonthly to the Manager
an annual fee based on the average total net assets of the
Fund computed daily in accordance with its Certificate of
Incorporation and By-Laws as follows:
a. With respect to Portfolio MM (Money Market): fifty one-
hundredths of one percent (50/100 of 1%) of the average
total net assets of the Fund thereof.
b. With respect to Portfolio S (Shorter Term) and
Portfolio L (Longer Term): ninety-five one-hundredths of one
percent (95/100 of 1%) of the average total net assets of
the Fund thereof.
c.Should the Fund's normal operating expenses except
for taxes, fees and other charges of governments and
their agencies including the cost of qualifying the
Fund's shares for sale in any jurisdiction,
interest, brokerage commissions and costs arising
out of litigation or administrative actions, all as
described in Paragraph 1, exceed the limits set out
in sub-paragraphs a and b of this Paragraph 2, the
Investment Manager shall reimburse the Fund in the
amount of the excess.
3. It is understood and agreed that the services to be
rendered by the Manager to the Fund under the provisions of
the Agreement are not to be deemed exclusive, and the
Manager shall be free to render similar or different
services to others so long as its ability to render the
services provided for in this Agreement shall not be
impaired thereby.
4. It is understood and agreed that the Directors,
officers, agents, employees, and shareholders of the Fund
may be interested in the Manager as owners, employees,
agents or otherwise, and that owners, employees and agents
of the Manager may be interested in the Fund as shareholders
or otherwise. It is understood and agreed that shareholders,
officers, Directors, and other personnel of the Manager are
and may continue to be officers and Directors of the Fund,
but that they receive no remuneration from the Fund solely
for acting in those capacities.
5. This Agreement shall be executed and become
effective pursuant to its approval by the Fund's Board of
Directors and by the vote of a majority of the outstanding
shares of the Fund as prescribed by the Act. It shall remain
in force through the 31st day of October, 1996, and
thereafter may be renewed for successive periods not
exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by
the Board of Directors or by vote of a majority of the
outstanding shares of the Fund as prescribed by the Act, and
only if the terms and the renewal of this Agreement have
been approved by a vote of a majority of the Directors of
the Fund including a majority of the Directors who are not
parties to the Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of
voting on such approval. No amendment to this Agreement
shall be effective unless the terms thereof have been
approved by the vote of a majority of outstanding shares of
the Fund as prescribed by the Act and by vote of a majority
of the Directors of the Fund who are not parties to the
Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval. It shall be the duty of the Directors of the Fund
to request and evaluate, and the duty of the Manager to
furnish, such information as may reasonably be necessary to
evaluate the terms of this Agreement and any amendment
thereto. This Agreement may be terminated at any time,
without the payment of any penalty, by the Directors of the
Fund, or by the vote of a majority of the outstanding voting
shares of the Fund as prescribed by the Act on not more than
sixty days written notice to the Manager, and it may be
terminated by the Manager upon not less than sixty days
written notice to the Fund. It shall terminate automatically
in the event of its assignment by either party unless the
parties hereby, by agreement, obtain an exemption from the
Securities and Exchange Commission from the provisions of
the Act pertaining to the subject matter of this paragraph.
Any notice, request or instruction provided for herein, or
for the giving of which, the occasion may arise hereunder,
shall be deemed duly given, if in writing and mailed by
registered mail, postage prepaid, addressed to the regular
executive office of the Fund or the Manager as the case may
be. As used in this Agreement, the terms "assignment", "a
majority of the outstanding voting shares", and "interested
persons" shall have the same meaning as similar terms
contained in the Act.
6. It is specifically provided in this Agreement that
the Manager is to secure the services of DAVID L. BABSON &
CO. INC. of Cambridge, Massachusetts (at the sole expense of
the Manager), as its Investment Counsel to furnish advice
and recommendations with respect to the purchase and sale of
securities and the making of portfolio commitments; to place
at the disposal of the Manager such statistical information
as may reasonably be required and in general to superintend
the investments of the Fund, subject to the control and
approval of the Board of Directors of the Manager and the
Board of Directors of the Fund.
7. As a condition of this agreement, the Manager will
provide in its Investment Counsel agreement with DAVID L.
BABSON & CO. INC. for the exclusive right of the Fund to use
the name "Babson" as part of its name, so long as JONES &
BABSON, INC., or any successor in interest, continues as its
manager and DAVID L. BABSON & CO. INC., or any successor in
interest, continues as an Investment Counsel to the manager.
The term "exclusive right of the Fund" appearing in the
preceding sentence means that no other investment company,
whether or not registered under the Investment Company Act
of 1940, as amended, will be entitled to use the precise
name "Babson" so long as the Fund has the right to use it as
a part of its name. However, nothing herein shall prohibit
the right of JONES & BABSON, INC., Mr. Babson, or DAVID L.
BABSON & CO. INC. from granting to another investment
company managed by JONES & BABSON, INC. with DAVID L. BABSON
& CO. INC. as its Investment Counsel, and which has
investment objectives and policies different from those of
the Fund, to use in its name either the name "Babson" or "D.
L. Babson" or "Babson (D. L.)" or "Jones & Babson" or any
combination of these names. Should the Fund terminate
either JONES & BABSON, INC. or its successor as Manager for
the Fund, or DAVID L. BABSON & CO. INC., or its successor,
as its Investment Counsel, either JONES & BABSON, INC. or
DAVID L. BABSON & CO. INC., or their respective successors
in interest, may elect to notify the Fund in writing that
permission to use the name "David L. Babson" (or any part
thereof) has been withdrawn, whereupon the Fund, its
officers, directors and shareholders, expressly agree to
take all necessary corporate action and to proceed
expeditiously to change the name of the Fund and not use any
other name or take any other action which would indicate the
Fund's continued association with DAVID L. BABSON & CO.
INC., Mr. Babson, or JONES & BABSON, INC. If the use of the
name "David L. Babson" (or any part thereof) is so withdrawn
as aforesaid, the Fund, its officers, directors and
shareholders, understand and agree that there shall be no
limitation with respect to the future use of the name "David
L. Babson" (or any part thereof) by DAVID L. BABSON & CO.
INC., or its successor in interest, or with the permission
of DAVID L. BABSON & CO. INC., or its successor, by JONES &
BABSON, INC. or its successor.
8. The agreement between JONES & BABSON, INC. and
DAVID L. BABSON & CO. INC. also shall provide that, although
it is not anticipated, there may occur some unforeseen
reason which would prohibit DAVID L. BABSON & CO. INC., as a
matter of reasonable business necessity, continuing as an
Investment Counsel to JONES & BABSON, INC. Should such
circumstances occur, D. L. BABSON TAX-FREE INCOME FUND,
INC., or its successor may elect to terminate its services,
even though the Fund would want to continue to use the name
"Babson" and continue JONES & BABSON, INC., or its
successor, as manager. Upon receipt of such a written
notice, the Fund, its officers, directors and shareholders,
agree to take all necessary corporate action and proceed
expeditiously to change the name of the Fund not later than
one year after the effective date of the termination notice,
and not use any other name or take any other action which
would indicate the Fund's continued association with DAVID
L. BABSON & CO. INC., Mr. Babson or JONES & BABSON, INC. In
consideration for this right, DAVID L. BABSON & CO. INC. and
JONES & BABSON, INC. agree that should the name "Babson" be
withdrawn, they will not permit another investment company,
whether or not registered under the Investment Company Act
of 1940, to use the name "Babson" as part of its name for a
period of five years subsequent to the effective date of the
written withdrawal request, unless this prohibition is
waived or modified by a majority vote of the Fund's
shareholders entitled to vote at the next annual meeting of
the Fund's shareholders following receipt of the request,
and if any such action is also approved by the majority of
shares entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC. For this right to
withdraw the name "Babson" from the use of the Fund, DAVID
L. BABSON & CO. INC. will agree in its contract with JONES &
BABSON, INC. that it will not compete with JONES & BABSON,
INC. for the management of the Fund during said five-year
period, unless this no-compete provision is waived by a
majority of the shares entitled to vote at a duly
constituted meeting of the shareholders of JONES & BABSON,
INC.
9. It is further agreed that the provisions of
Paragraphs 7 and 8 shall inure to the benefit of DAVID L.
BABSON & CO. INC. and may be imposed by it or any successor
in interest as if it or such successor in interest were
parties to this Agreement.
10. The Manager shall not be liable for any error in
judgment or mistake at law for any loss suffered by the Fund
in connection with any matters to which this Agreement
relates, except that nothing herein contained shall be
construed to protect the Investment Manager against any
liability by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reckless
disregard of its obligations or duties under this Agreement.
11. This Agreement may not be amended, transferred,
assigned, sold or in any manner hypothecated or pledged nor
may any new Agreement become effective without affirmative
vote or written consent of the holders of a majority of the
shares of the Fund.
D. L. BABSON TAX-FREE INCOME FUND, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
JONES & BABSON, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
<PAGE>
EX99.23(d)(3)(B)
INVESTMENT COUNSEL AGREEMENT
Between
JONES & BABSON, INC.
and
DAVID L. BABSON & CO. INC.
THIS AGREEMENT made this 30th day of June, 1995 by and
between JONES & BABSON, INC. (hereinafter referred to as the
"Manager"), and DAVID L. BABSON & CO. INC. (hereinafter referred
to as the "Investment Counsel"), and which Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall
constitute but one instrument.
WITNESSETH:
WHEREAS, the Directors of the Manager want to enter into a
contract with the Investment Counsel to render the Manager the
following services:
To furnish research, analysis, advice and recommendations
with respect to the purchase and sale of securities and the
making of investment commitments; to place at the disposal of the
Manager such statistical information and reports as may
reasonably be required, and in general to superintend the
investments of the D. L. BABSON TAX-FREE INCOME FUND, INC.
(Fund), subject to the control of the Directors of the Fund and
JONES & BABSON, INC.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties agree as follows:
1. During the term of this Agreement, or any extension or
extensions thereof, the Investment Counsel will, to the best of
its ability, furnish the foregoing services.
2. As compensation, JONES & BABSON, INC. will pay
Investment Counsel for its services the following annual fee
computed daily as determined by the Fund's price make-up sheet
and which shall be payable monthly or at such other intervals as
agreed by the parties.
a.With respect to Portfolio MM (Money Market): ten one-
hundredths of one percent (10/100 of 1%) of the average
daily total net assets of the Fund.
b.With respect to Portfolio S (Shorter Term) and Portfolio
L (Longer Term): twenty-five one-hundredths of one
percent (25/100 of 1%) of the average daily total net
assets of the Fund.
3. This Agreement shall become effective concurrently with
the investment Management Agreement between JONES & BABSON, INC.
and the D. L. BABSON TAX-FREE INCOME FUND, INC. pursuant to the
approval of the shareholders of the Fund according to the
provisions of the Investment Company Act of 1940 (Act).
4. This Agreement shall continue for a period ending
October 31, 1996. It may be renewed thereafter for successive
periods not exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by the
Board of Directors of the Fund or by a vote of the majority of
the outstanding voting securities of the Fund as prescribed by
the Act and provided further that such continuance is approved at
least annually thereafter by a vote of a majority of the
Directors who are not parties to such Agreement or interested
persons of such party, cast in person at a meeting called for the
purpose of voting on such approval. The Investment Counsel shall
provide the Manager such information as may be reasonably
necessary to assist the Directors of the Fund to evaluate the
terms of the Management Agreement. This Agreement automatically
will terminate with the Management Agreement without the payment
of any penalty, upon sixty days written notice by the Fund to the
Manager that the Board of Directors or the shareholders by vote
of a majority of the outstanding voting securities of the Fund,
as provided by the Act, has terminated the Management Agreement.
This Agreement shall automatically terminate in the event of
its assignment or assignment of the Management Agreement unless
such assignment is approved by the Directors and the shareholders
of the Fund as herein before provided or unless an exemption is
obtained from the Securities and Exchange Commission from the
provisions of the Act pertaining to the subject matter of this
paragraph.
5. It is expressly understood and agreed that the services
to be rendered by the Investment Counsel to the Manager under the
provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Counsel shall be free to render
similar or different services to others so long as its ability to
render the services provided for in this Agreement shall not be
impaired thereby, and provided further that the services to be
rendered by the Investment Counsel to the Manager under this
Agreement and the compensation provided for in Paragraph 2 hereof
shall be limited solely to services with reference to the Fund.
6. The Manager agrees that it will furnish currently to
Investment Counsel all information reasonably necessary to permit
Investment Counsel to give the advice called for under this
Agreement and such information with reference to the Fund that is
reasonably necessary to permit Investment Counsel to carry out
its responsibilities under this Agreement, and the parties agree
that they will from time to time consult and make appropriate
arrangements as to specific information that is required under
this paragraph and the frequency and manner with which it shall
be supplied.
7. The Investment Counsel shall not be liable for any
error of judgment or mistake at law or for any loss suffered by
the Manager or the Fund in connection with any matters to which
this Agreement relates except that nothing herein contained shall
be construed to protect the Investment Counsel against any
liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reckless
disregard of its obligations or duties under this agreement.
8. In compliance with the provisions of the Management
Agreement between the Fund and JONES & BABSON, INC., Investment
Counsel agrees with Manager that subject to the terms and
conditions of this Paragraph 8, the Fund may use the name of
"David L. Babson" (or any part thereof) as part of its name so
long as JONES & BABSON, INC., or any successor in interest,
continues as Manager and DAVID L. BABSON & CO. INC., or any
successor in interest, continues as Investment Counsel. Should
the Fund terminate either JONES & BABSON, INC., or its successor
as Manager, or DAVID L. BABSON & CO. INC., or its successor as
Investment Counsel, either JONES & BABSON, INC., or DAVID L.
BABSON & CO. INC., or their respective successors in interest,
may elect to notify the Fund in writing that permission to use
the name "David L. Babson" (or any part thereof) has been
withdrawn. It is understood that the Fund has, in its Management
Agreement with JONES & BABSON, INC., expressly agreed that it,
its officers, directors and shareholders will take all necessary
corporate action and proceed expeditiously to change the name of
the Fund and not use any other name or take any action which
would indicate the Fund's continued association with DAVID L.
BABSON & CO. INC. If the use of the name "David L. Babson" (or
any part thereof) is so withdrawn as aforesaid, it is understood
and agreed that there shall be no limitation with respect to the
future use of the name "David L. Babson" (or any part thereof) by
DAVID L. BABSON & CO. INC., or its successor in interest, or by
JONES & BABSON, INC. or its successor in interest.
9. Although it is not anticipated, there may occur some
unforeseen reason which would prohibit DAVID L. BABSON & CO.
INC., as a matter of reasonable business necessity, continuing as
Investment Counsel. Should such circumstances occur, DAVID L.
BABSON & CO. INC., or its successor may elect to terminate its
services, even though the Fund would want to continue to use the
name "David L. Babson" (or any part thereof) and continue JONES &
BABSON, INC., or its successor, as manager with DAVID L. BABSON &
CO. INC., or its successor, as Investment Counsel. Upon receipt
of such a written notice, the Fund, its officers, directors and
shareholders, have agreed in the Management Agreement between the
Fund and JONES & BABSON, INC., for the benefit of DAVID L. BABSON
& CO. INC., to take all necessary corporate action and proceed
expeditiously to change the name of the Fund (but if necessary,
take up to one year from the effective date of the termination of
the Management Agreement) and not use any other name or take any
other action which would indicate the Fund's continued
association with DAVID L. BABSON & CO. INC. In consideration for
this right, DAVID L. BABSON & CO. INC. agrees that should it so
request the withdrawal of the name "David L. Babson" (or any part
thereof) it will not permit another investment company, whether
or not registered under the Investment Company Act of 1940, to
use the name "David L. Babson" (or any part thereof) as part of
its name for a period of five years subsequent to the effective
date of the written withdrawal request, unless this prohibition
is waived or modified by a majority vote of the Fund's
shareholders entitled to vote at a duly constituted meeting of
the Fund's shareholders following receipt of the request, and if
any such action is also approved by the majority of shares
entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC. For this right to withdraw
the name "David L. Babson" (or any part thereof) from the use of
the Fund, DAVID L. BABSON & CO. INC. agrees that it will not
compete with JONES & BABSON, INC. for the management of the Fund
during said five-year period, unless this no-compete provision is
waived by a majority of the shares entitled to vote at a duly
constituted meeting of the shareholders of JONES & BABSON,
INC.
Each party hereby executes this Agreement as of the 30th day
of June, 1995, pursuant to the authority granted by its Board of
Directors.
DAVID L. BABSON & CO. INC.
By /s/ Peter C. Thompson
ATTEST:
/s/ Paula C. Howell
JONES & BABSON, INC.
By /s/ Larry D. Armel
ATTEST:
/s/ Martin A. Cramer
EX99.23(d)(4)(A)
MANAGEMENT AGREEMENT
Between
JONES & BABSON, INC.
and
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
THIS AGREEMENT, made and entered into this 30th day of
June, 1995, by and between BABSON-STEWART IVORY
INTERNATIONAL FUND, INC., (a Maryland corporation,
hereinafter referred to as the "Fund") and JONES & BABSON,
INC., a corporation organized under the laws of the State of
Missouri (hereinafter referred to as the "Manager"), and
which Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one
instrument.
WHEREAS the Fund was founded and incorporated by the
Manager for the purpose of engaging in the business of
investing and reinvesting its property and assets and to
operate as an open-end, diversified , management investment
company, as defined in the Investment Company Act of 1940 as
amended (Act), under which it is registered with the
Securities and Exchange Commission, and
WHEREAS the Manager was formed for and is engaged in
the business of supplying investment advice and management
service to the Fund, as an independent contractor and,
WHEREAS the Manager desires to enter into a contractual
arrangement whereby the Manager provides investment advice
and management service to the Fund for a fee.
NOW THEREFORE, in consideration of the mutual promises
herein contained, and other good and valuable consideration,
receipt of which is hereby acknowledged, it is mutually
agreed and contracted by and between the parties hereto
that:
1. The Fund hereby employs the Manager, for the period
set forth in Paragraph 5 hereof, and on the terms set forth
herein, to render investment advice and management service
to the Fund, subject to the supervision and direction of the
Board of Directors of the Fund. The Manager hereby accepts
such employment and agrees, during such period, to render
the services and assume the obligations herein set forth,
for the compensation herein provided. The Management shall,
for all purposes herein, be deemed to be an independent
contractor, and shall, except as provided in the
Underwriting Agreement between the Manager and the Fund or
unless otherwise expressly provided and authorized, have no
authority to act for or represent the Fund in any way, or in
any other way be deemed an agent of the Fund.
The Manager shall furnish the Fund investment
management and administrative services. Investment
management shall include analysis, research and portfolio
recommendations consistent with the Fund's objectives and
policies. Administrative services shall include the services
and compensation of such members of the manager's
organization as shall be duly elected officers and/or
Directors of the Fund and such other personnel as shall be
necessary to carry out its normal operations; fees of the
independent Directors, the custodian, the independent public
accountant, investment counsel and legal counsel (but not
legal and audit fees and other costs in contemplation of or
arising out of litigation or administrative actions to which
the Fund, its officers or Directors are a party or incurred
in anticipation of becoming a party); rent; the cost of a
transfer and dividend disbursing agent or similar in-house
services; bookkeeping; accounting; and all other clerical
and administrative functions as may be reasonable and
necessary to maintain the Fund's records and for it to
operate as an open-end management investment company.
Exclusive of the management fee, the Fund shall bear the
cost of any interest, taxes, dues, fees and other charges of
governments and their agencies including the cost of
qualifying the Fund's shares for sale in any jurisdiction,
brokerage commissions, or any other expenses incurred by it
which are not assumed herein by the Manager.
All property, equipment and information used by the
Manager in the management and administration of the Fund
shall belong to the manager. Should the management and
administrative relationship between the Fund and the manager
terminate, the Fund shall be entitled to, and the manager
shall provide the Fund, a copy of all information and
records in the Manager's file necessary for the Fund to
continue its functions, which shall include computer systems
and programs in use as of the date of such termination; but
nothing herein shall prohibit thereafter the use of such
information, systems or programs by the manager, so long as
such does not unfairly interfere with the continued
operation of the Fund.
2. As compensation for the services to be rendered to
the Fund by the Manager under the provisions of this
agreement, the Fund agrees to pay semimonthly to the Manager
an annual fee based on the average total net assets of the
Fund computed daily in accordance with its Certificate of
Incorporation and By-Laws as follows:
a. Ninety-five one-hundredths of one percent
(95/100 of 1%) of the average total net assets of
the Fund.
b. Should the Fund's normal operating
expenses except for taxes, fees and other charges
of governments and their agencies including the
cost of qualifying the Fund's shares for sale in
any jurisdiction, interest, brokerage commissions
and costs arising out of litigation or
administrative actions, all as described in
Paragraph 1, exceed the limits set out in sub-
paragraphs a and b of this Paragraph 2, the
Investment Manager shall reimburse the Fund in the
amount of the excess.
3. It is understood and agreed that the services to be
rendered by the Manager to the Fund under the provisions of
the Agreement are not to be deemed exclusive, and the
Manager shall be free to render similar or different
services to others so long as its ability to render the
services provided for in this Agreement shall not be
impaired thereby.
4. It is understood and agreed that the Directors,
officers, agents, employees, and shareholders of the Fund
may be interested in the Manager as owners, employees,
agents or otherwise, and that owners, employees and agents
of the Manager may be interested in the Fund as shareholders
or otherwise. It is understood and agreed that shareholders,
officers, Directors, and other personnel of the Manager are
and may continue to be officers and Directors of the Fund,
but that they receive no remuneration from the Fund solely
for acting in those capacities.
5. This Agreement shall be executed and become
effective pursuant to its approval by the Fund's Board of
Directors and by the vote of a majority of the outstanding
shares of the Fund as prescribed by the Act. It shall remain
in force through the 31st day of October, 1996, and
thereafter may be renewed for successive periods not
exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by
the Board of Directors or by vote of a majority of the
outstanding shares of the Fund as prescribed by the Act, and
only if the terms and the renewal of this Agreement have
been approved by a vote of a majority of the Directors of
the Fund including a majority of the Directors who are not
parties to the Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of
voting on such approval. No amendment to this Agreement
shall be effective unless the terms thereof have been
approved by the vote of a majority of outstanding shares of
the Fund as prescribed by the Act and by vote of a majority
of the Directors of the Fund who are not parties to the
Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval. It shall be the duty of the Directors of the Fund
to request and evaluate, and the duty of the Manager to
furnish, such information as may reasonably be necessary to
evaluate the terms of this Agreement and any amendment
thereto. This Agreement may be terminated at any time,
without the payment of any penalty, by the Directors of the
Fund, or by the vote of a majority of the outstanding voting
shares of the Fund as prescribed by the Act on not more than
sixty days written notice to the Manager, and it may be
terminated by the Manager upon not less than sixty days
written notice to the Fund. It shall terminate automatically
in the event of its assignment by either party unless the
parties hereby, by agreement, obtain an exemption from the
Securities and Exchange Commission from the provisions of
the Act pertaining to the subject matter of this paragraph.
Any notice, request or instruction provided for herein, or
for the giving of which, the occasion may arise hereunder,
shall be deemed duly given, if in writing and mailed by
registered mail, postage prepaid, addressed to the regular
executive office of the Fund or the Manager as the case may
be. As used in this Agreement, the terms "assignment", "a
majority of the outstanding voting shares", and "interested
persons" shall have the same meaning as similar terms
contained in the Act.
6. It is specifically provided in this Agreement that
the Manager is to secure the services of DAVID L. BABSON &
CO. INC. of Cambridge, Massachusetts (at the sole expense of
the Manager), as its Investment Counsel to furnish advice
and recommendations with respect to the purchase and sale of
securities and the making of portfolio commitments; to place
at the disposal of the Manager such statistical information
as may reasonably be required and in general to superintend
the investments of the Fund, subject to the control and
approval of the Board of Directors of the Manager and the
Board of Directors of the Fund.
7. As a condition of this agreement, the Manager will
provide in its Investment Counsel agreement with DAVID L.
BABSON & CO. INC. for the exclusive right of the Fund to use
the name "Babson" as part of its name, so long as JONES &
BABSON, INC., or any successor in interest, continues as its
manager and DAVID L. BABSON & CO. INC., or any successor in
interest, continues as an Investment Counsel to the manager.
The term "exclusive right of the Fund" appearing in the
preceding sentence means that no other investment company,
whether or not registered under the Investment Company Act
of 1940, as amended, will be entitled to use the precise
name "Babson" so long as the Fund has the right to use it as
a part of its name. However, nothing herein shall prohibit
the right of JONES & BABSON, INC., Mr. Babson, or DAVID L.
BABSON & CO. INC. from granting to another investment
company managed by JONES & BABSON, INC. with DAVID L. BABSON
& CO. INC. as its Investment Counsel, and which has
investment objectives and policies different from those of
the Fund, to use in its name either the name "Babson" or "D.
L. Babson" or "Babson (D. L.)" or "Jones & Babson" or any
combination of these names. Should the Fund terminate
either JONES & BABSON, INC. or its successor as Manager for
the Fund, or DAVID L. BABSON & CO. INC., or its successor,
as its Investment Counsel, either JONES & BABSON, INC. or
DAVID L. BABSON & CO. INC., or their respective successors
in interest, may elect to notify the Fund in writing that
permission to use the name "David L. Babson" (or any part
thereof) has been withdrawn, whereupon the Fund, its
officers, directors and shareholders, expressly agree to
take all necessary corporate action and to proceed
expeditiously to change the name of the Fund and not use any
other name or take any other action which would indicate the
Fund's continued association with DAVID L. BABSON & CO.
INC., Mr. Babson, or JONES & BABSON, INC. If the use of the
name "David L. Babson" (or any part thereof) is so withdrawn
as aforesaid, the Fund, its officers, directors and
shareholders, understand and agree that there shall be no
limitation with respect to the future use of the name "David
L. Babson" (or any part thereof) by DAVID L. BABSON & CO.
INC., or its successor in interest, or with the permission
of DAVID L. BABSON & CO. INC., or its successor, by JONES &
BABSON, INC. or its successor.
8. The agreement between JONES & BABSON, INC. and
DAVID L. BABSON & CO. INC. also shall provide that, although
it is not anticipated, there may occur some unforeseen
reason which would prohibit DAVID L. BABSON & CO. INC., as a
matter of reasonable business necessity, continuing as an
Investment Counsel to JONES & BABSON, INC. Should such
circumstances occur, BABSON-STEWART IVORY INTERNATIONAL
FUND, INC., or its successor may elect to terminate its
services, even though the Fund would want to continue to use
the name "Babson" and continue JONES & BABSON, INC., or its
successor, as manager. Upon receipt of such a written
notice, the Fund, its officers, directors and shareholders,
agree to take all necessary corporate action and proceed
expeditiously to change the name of the Fund not later than
one year after the effective date of the termination notice,
and not use any other name or take any other action which
would indicate the Fund's continued association with DAVID
L. BABSON & CO. INC., Mr. Babson or JONES & BABSON, INC. In
consideration for this right, DAVID L. BABSON & CO. INC. and
JONES & BABSON, INC. agree that should the name "Babson" be
withdrawn, they will not permit another investment company,
whether or not registered under the Investment Company Act
of 1940, to use the name "Babson" as part of its name for a
period of five years subsequent to the effective date of the
written withdrawal request, unless this prohibition is
waived or modified by a majority vote of the Fund's
shareholders entitled to vote at the next annual meeting of
the Fund's shareholders following receipt of the request,
and if any such action is also approved by the majority of
shares entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC. For this right to
withdraw the name "Babson" from the use of the Fund, DAVID
L. BABSON & CO. INC. will agree in its contract with JONES &
BABSON, INC. that it will not compete with JONES & BABSON,
INC. for the management of the Fund during said five-year
period, unless this no-compete provision is waived by a
majority of the shares entitled to vote at a duly
constituted meeting of the shareholders of JONES & BABSON,
INC.
9. It is further agreed that the provisions of
Paragraphs 7 and 8 shall inure to the benefit of DAVID L.
BABSON & CO. INC. and may be imposed by it or any successor
in interest as if it or such successor in interest were
parties to this Agreement.
10. The Manager shall not be liable for any error in
judgment or mistake at law for any loss suffered by the Fund
in connection with any matters to which this Agreement
relates, except that nothing herein contained shall be
construed to protect the Investment Manager against any
liability by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reckless
disregard of its obligations or duties under this Agreement.
11. This Agreement may not be amended, transferred,
assigned, sold or in any manner hypothecated or pledged nor
may any new Agreement become effective without affirmative
vote or written consent of the holders of a majority of the
shares of the Fund.
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
JONES & BABSON, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
<PAGE>
EX99.23(d)(4)(B)
INVESTMENT COUNSEL AGREEMENT
Between
JONES & BABSON, INC.
and
BABSON-STEWART IVORY INTERNATIONAL
THIS AGREEMENT by and between JONES & BABSON, INC., a
Missouri corporation with its principal office at Three Crown
Center, 2440 Pershing Road, Kansas City, Missouri 64108
(hereinafter referred to as the "Manager"), and BABSON-STEWART
IVORY INTERNATIONAL, a Massachusetts partnership with its
principal office at One Memorial Drive, Cambridge, Massachusetts
02142 (hereinafter referred to as the "Investment Counsel"), is
made pursuant to the approval and direction of the parties'
respective Board of Directors and may be executed in any number
of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute but one instrument.
WITNESSETH:
WHEREAS, the Manager has entered into a Management Agreement
with the BABSON-STEWART IVORY INTERNATIONAL FUND, INC. (Fund) of
concurrent date to provide management services, including
investment advisory services, the Manager desires the assistance
of the Investment Counsel which can supply the following
services:
Research, analysis, advice and recommendations with respect
to the purchase and sale of securities and the making of
investment commitments; statistical information and reports as
may reasonably be required, and general assistance in the
supervision of the investments of the Fund, subject to the
control of the Directors of the Fund and the Directors of JONES &
BABSON, INC.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties agree as follows:
1. During the term of this Agreement, or any extension or
extensions thereof, the Investment Counsel will, to the best of
its ability, furnish the foregoing services.
2. As compensation, the Manager will pay Investment
Counsel for its services the following annual fee computed daily
as determined by the Fund's price make-up sheet and which shall
be payable monthly or at such other intervals as agreed by the
parties:
a.Four hundred seventy-five one-thousandths of one percent
(475/1000 of 1%) of the average daily total net assets of
the Fund.
3. This Agreement shall become effective and run
concurrently with the Management Agreement of the same date
between the Manager and the Fund, an executed copy of which shall
be supplied the Investment Counsel.
4. The last day of the initial period of this Agreement
shall coincide with the last day of the Management Agreement
which shall be the 31st day of October, 1996. Thereafter this
Agreement may be renewed in conjunction with the Management
Agreement for successive periods not exceeding one year only so
long as such renewal and continuance is specifically approved at
least annually by the Board of Directors of the Fund or by a vote
of the majority of the outstanding voting securities of the Fund
as prescribed by the Investment Company Act of 1940 (Act) and
provided further that such continuance is approved at least
annually thereafter by a vote of a majority of the Directors who
are not parties to such Agreement or interested persons (as
defined by the Act) of such party, cast in person at a meeting
called for the purpose of voting on such approval. The Investment
Counsel shall provide the Manager such information as may be
reasonably necessary to assist the Directors of the Fund to
evaluate the terms of the Management Agreement. This Agreement
automatically will terminate with the Management Agreement
without the payment of any penalty, upon sixty days written
notice by the Fund to the Manager that the Board of Directors or
the shareholders by vote of a majority of the outstanding voting
securities of the Fund, as provided by the Act, has terminated
the Management Agreement. This Agreement shall automatically
terminate in the event of its assignment or assignment of the
Management Agreement unless such assignment is approved by the
Directors and the shareholders of the Fund as herein before
provided or unless an exemption is obtained from the Securities
and Exchange Commission from the provisions of the Act pertaining
to the subject matter of this paragraph. The Manager shall
promptly notify the Investment Counsel of any notice of
termination or of any circumstances which are likely to result in
a termination of the Management Agreement.
5. It is understood and agreed that the services to be
rendered by the Investment Counsel to the Manager under the
provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Counsel shall be free to render
similar or different services to others so long as its ability to
render the services provided for in this Agreement shall not be
impaired thereby, and provided further that the services to be
rendered by the Investment Counsel to the Manager under this
Agreement and the compensation provided for in Paragraph 2 hereof
shall be limited solely to services with reference to the Fund.
6. The Manager agrees that it will furnish currently to
Investment Counsel all information reasonably necessary to permit
Investment Counsel to give the advice called for under this
Agreement and such information with reference to the Fund that is
reasonably necessary to permit Investment Counsel to carry out
its responsibilities under this Agreement, and the parties agree
that they will from time to time consult and make appropriate
arrangements as to specific information that is required under
this paragraph and the frequency and manner with which it shall
be supplied.
7. The Investment Counsel shall not be liable for any
error of judgment or mistake at law or for any loss suffered by
Manager of the Fund in connection with any matters to which this
Agreement relates except that nothing herein contained shall be
construed to protect the Investment Counsel against any liability
by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties or by reckless disregard of its
obligations or duties under this agreement.
8. In compliance with the provisions of the Management
Agreement between the Fund and JONES & BABSON, INC., Investment
Counsel agrees with Manager that subject to the terms and
conditions of this Paragraph 8, the Fund may use the name of
"David L. Babson" (or any part thereof) as part of its name so
long as JONES & BABSON, INC., or any successor in interest,
continues as Manager and BABSON-STEWART IVORY INTERNATIONAL, or
any successor in interest, continues as Investment Counsel.
Should the Fund terminate either JONES & BABSON, INC., or its
successor as Manager, or BABSON-STEWART IVORY INTERNATIONAL, or
its successor as Investment Counsel, either JONES & BABSON, INC.,
or BABSON-STEWART IVORY INTERNATIONAL, or their respective
successors in interest, may elect to notify the Fund in writing
that permission to use the name "David L. Babson" (or any part
thereof) has been withdrawn. It is understood that the Fund has,
in its Management Agreement with JONES & BABSON, INC., expressly
agreed that it, its officers, directors and shareholders will
take all necessary corporate action and proceed expeditiously to
change the name of the Fund and not use any other name or take
any action which would indicate the Fund's continued association
with BABSON-STEWART IVORY INTERNATIONAL. If the use of the name
"David L. Babson" (or any part thereof) is so withdrawn as
aforesaid, it is understood and agreed that there shall be no
limitation with respect to the future use of the name "David L.
Babson" (or any part thereof) by BABSON-STEWART IVORY
INTERNATIONAL, or its successor in interest, or by JONES &
BABSON, INC. or its successor in interest.
9. Although it is not anticipated, there may occur some
unforeseen reason which would prohibit BABSON-STEWART IVORY
INTERNATIONAL, as a matter of reasonable business necessity,
continuing as Investment Counsel. Should such circumstances
occur, BABSON-STEWART IVORY INTERNATIONAL, or its successor may
elect to terminate its services, even though the Fund would want
to continue to use the name "David L. Babson" (or any part
thereof) and continue JONES & BABSON, INC., or its successor, as
manager with BABSON-STEWART IVORY INTERNATIONAL, or its
successor, as Investment Counsel. Upon receipt of such a written
notice, the Fund, its officers, directors and shareholders, have
agreed in the Management Agreement between the Fund and JONES &
BABSON, INC., for the benefit of BABSON-STEWART IVORY
INTERNATIONAL, to take all necessary corporate action and proceed
expeditiously to change the name of the Fund (but if necessary,
take up to one year from the effective date of the termination of
the Management Agreement) and not use any other name or take any
other action which would indicate the Fund's continued
association with BABSON-STEWART IVORY INTERNATIONAL In
consideration for this right, BABSON-STEWART IVORY INTERNATIONAL
agrees that should it so request the withdrawal of the name
"David L. Babson" (or any part thereof) it will not permit
another investment company, whether or not registered under the
Investment Company Act of 1940, to use the name "David L. Babson"
(or any part thereof) as part of its name for a period of five
years subsequent to the effective date of the written withdrawal
request, unless this prohibition is waived or modified by a
majority vote of the Fund's shareholders entitled to vote at a
duly constituted meeting of the Fund's shareholders following
receipt of the request, and if any such action is also approved
by the majority of shares entitled to vote at a duly constituted
meeting of the shareholders of JONES & BABSON, INC. For this
right to withdraw the name "David L. Babson" (or any part
thereof) from the use of the Fund, BABSON-STEWART IVORY
INTERNATIONAL agrees that it will not compete with JONES &
BABSON, INC. for the management of the Fund during said five-year
period, unless this no-compete provision is waived by a majority
of the
shares entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC.
Each party hereby executes this Agreement as of the 30th day
of June, 1995, pursuant to the authority granted by its Board of
Directors.
BABSON-STEWART IVORY INTERNATIONAL
By /s/ Peter C. Thompson
ATTEST:
Paula H. Howell
JONES & BABSON, INC.
By /s/ Larry D. Armel
ATTEST:
Martin A. Cramer
EX99.23(d)(5)(A)
MANAGEMENT AGREEMENT
Between
JONES & BABSON, INC.
and
SHADOW STOCK FUND, INC.
THIS AGREEMENT, made and entered into this 30th day of
June, 1995, by and between SHADOW STOCK FUND, INC., (a
Maryland corporation, hereinafter referred to as the "Fund")
and JONES & BABSON, INC., a corporation organized under the
laws of the State of Missouri (hereinafter referred to as
the "Manager"), and which Agreement may be executed in any
number of counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute but
one instrument.
WHEREAS the Fund was founded and incorporated by the
Manager for the purpose of engaging in the business of
investing and reinvesting its property and assets and to
operate as an open-end, diversified , management investment
company, as defined in the Investment Company Act of 1940 as
amended (Act), under which it is registered with the
Securities and Exchange Commission, and
WHEREAS the Manager was formed for and is engaged in
the business of supplying investment advice and management
service to the Fund, as an independent contractor and,
WHEREAS the Manager desires to enter into a contractual
arrangement whereby the Manager provides investment advice
and management service to the Fund for a fee.
NOW THEREFORE, in consideration of the mutual promises
herein contained, and other good and valuable consideration,
receipt of which is hereby acknowledged, it is mutually
agreed and contracted by and between the parties hereto
that:
1. The Fund hereby employs the Manager, for the period
set forth in Paragraph 5 hereof, and on the terms set forth
herein, to render investment advice and management service
to the Fund, subject to the supervision and direction of the
Board of Directors of the Fund. The Manager hereby accepts
such employment and agrees, during such period, to render
the services and assume the obligations herein set forth,
for the compensation herein provided. The Management shall,
for all purposes herein, be deemed to be an independent
contractor, and shall, except as provided in the
Underwriting Agreement between the Manager and the Fund or
unless otherwise expressly provided and authorized, have no
authority to act for or represent the Fund in any way, or in
any other way be deemed an agent of the Fund.
The Manager shall furnish the Fund investment
management and administrative services. Investment
management shall include analysis, research and portfolio
recommendations consistent with the Fund's objectives and
policies. Administrative services shall include the services
and compensation of such members of the manager's
organization as shall be duly elected officers and/or
Directors of the Fund and such other personnel as shall be
necessary to carry out its normal operations; fees of the
independent Directors, the custodian, the independent public
accountant, investment counsel and legal counsel (but not
legal and audit fees and other costs in contemplation of or
arising out of litigation or administrative actions to which
the Fund, its officers or Directors are a party or incurred
in anticipation of becoming a party); rent; the cost of a
transfer and dividend disbursing agent or similar in-house
services; bookkeeping; accounting; and all other clerical
and administrative functions as may be reasonable and
necessary to maintain the Fund's records and for it to
operate as an open-end management investment company.
Exclusive of the management fee, the Fund shall bear the
cost of any interest, taxes, dues, fees and other charges of
governments and their agencies including the cost of
qualifying the Fund's shares for sale in any jurisdiction,
brokerage commissions, or any other expenses incurred by it
which are not assumed herein by the Manager.
All property, equipment and information used by the
Manager in the management and administration of the Fund
shall belong to the manager. Should the management and
administrative relationship between the Fund and the manager
terminate, the Fund shall be entitled to, and the manager
shall provide the Fund, a copy of all information and
records in the Manager's file necessary for the Fund to
continue its functions, which shall include computer systems
and programs in use as of the date of such termination; but
nothing herein shall prohibit thereafter the use of such
information, systems or programs by the manager, so long as
such does not unfairly interfere with the continued
operation of the Fund.
2. As compensation for the services to be rendered to
the Fund by the Manager under the provisions of this
agreement, the Fund agrees to pay semimonthly to the Manager
an annual fee based on the average total net assets of the
Fund computed daily in accordance with its Certificate of
Incorporation and By-Laws as follows:
a. One percent (1%) of the average total net
assets of the Fund.
b. Should the Fund's normal operating
expenses except for taxes, fees and other charges
of governments and their agencies including the
cost of qualifying the Fund's shares for sale in
any jurisdiction, interest, brokerage commissions
and costs arising out of litigation or
administrative actions, all as described in
Paragraph 1, exceed the limits set out in sub-
paragraphs a and b of this Paragraph 2, the
Investment Manager shall reimburse the Fund in the
amount of the excess.
3. It is understood and agreed that the services to be
rendered by the Manager to the Fund under the provisions of
the Agreement are not to be deemed exclusive, and the
Manager shall be free to render similar or different
services to others so long as its ability to render the
services provided for in this Agreement shall not be
impaired thereby.
4. It is understood and agreed that the Directors,
officers, agents, employees, and shareholders of the Fund
may be interested in the Manager as owners, employees,
agents or otherwise, and that owners, employees and agents
of the Manager may be interested in the Fund as shareholders
or otherwise. It is understood and agreed that shareholders,
officers, Directors, and other personnel of the Manager are
and may continue to be officers and Directors of the Fund,
but that they receive no remuneration from the Fund solely
for acting in those capacities.
5. This Agreement shall be executed and become
effective pursuant to its approval by the Fund's Board of
Directors and by the vote of a majority of the outstanding
shares of the Fund as prescribed by the Act. It shall remain
in force through the 31st day of October, 1996, and
thereafter may be renewed for successive periods not
exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by
the Board of Directors or by vote of a majority of the
outstanding shares of the Fund as prescribed by the Act, and
only if the terms and the renewal of this Agreement have
been approved by a vote of a majority of the Directors of
the Fund including a majority of the Directors who are not
parties to the Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of
voting on such approval. No amendment to this Agreement
shall be effective unless the terms thereof have been
approved by the vote of a majority of outstanding shares of
the Fund as prescribed by the Act and by vote of a majority
of the Directors of the Fund who are not parties to the
Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval. It shall be the duty of the Directors of the Fund
to request and evaluate, and the duty of the Manager to
furnish, such information as may reasonably be necessary to
evaluate the terms of this Agreement and any amendment
thereto. This Agreement may be terminated at any time,
without the payment of any penalty, by the Directors of the
Fund, or by the vote of a majority of the outstanding voting
shares of the Fund as prescribed by the Act on not more than
sixty days written notice to the Manager, and it may be
terminated by the Manager upon not less than sixty days
written notice to the Fund. It shall terminate automatically
in the event of its assignment by either party unless the
parties hereby, by agreement, obtain an exemption from the
Securities and Exchange Commission from the provisions of
the Act pertaining to the subject matter of this paragraph.
Any notice, request or instruction provided for herein, or
for the giving of which, the occasion may arise hereunder,
shall be deemed duly given, if in writing and mailed by
registered mail, postage prepaid, addressed to the regular
executive office of the Fund or the Manager as the case may
be. As used in this Agreement, the terms "assignment", "a
majority of the outstanding voting shares", and "interested
persons" shall have the same meaning as similar terms
contained in the Act.
6. It is specifically provided in this Agreement that
the Manager is to secure the services of DAVID L. BABSON &
CO. INC. of Cambridge, Massachusetts (at the sole expense of
the Manager), as its Investment Counsel to furnish advice
and recommendations with respect to the purchase and sale of
securities and the making of portfolio commitments; to place
at the disposal of the Manager such statistical information
as may reasonably be required and in general to superintend
the investments of the Fund, subject to the control and
approval of the Board of Directors of the Manager and the
Board of Directors of the Fund.
7. As a condition of this agreement, the Manager will
provide in its Investment Counsel agreement with DAVID L.
BABSON & CO. INC. for the exclusive right of the Fund to use
the name "Babson" as part of its name, so long as JONES &
BABSON, INC., or any successor in interest, continues as its
manager and DAVID L. BABSON & CO. INC., or any successor in
interest, continues as an Investment Counsel to the manager.
The term "exclusive right of the Fund" appearing in the
preceding sentence means that no other investment company,
whether or not registered under the Investment Company Act
of 1940, as amended, will be entitled to use the precise
name "Babson" so long as the Fund has the right to use it as
a part of its name. However, nothing herein shall prohibit
the right of JONES & BABSON, INC., Mr. Babson, or DAVID L.
BABSON & CO. INC. from granting to another investment
company managed by JONES & BABSON, INC. with DAVID L. BABSON
& CO. INC. as its Investment Counsel, and which has
investment objectives and policies different from those of
the Fund, to use in its name either the name "Babson" or "D.
L. Babson" or "Babson (D. L.)" or "Jones & Babson" or any
combination of these names. Should the Fund terminate
either JONES & BABSON, INC. or its successor as Manager for
the Fund, or DAVID L. BABSON & CO. INC., or its successor,
as its Investment Counsel, either JONES & BABSON, INC. or
DAVID L. BABSON & CO. INC., or their respective successors
in interest, may elect to notify the Fund in writing that
permission to use the name "David L. Babson" (or any part
thereof) has been withdrawn, whereupon the Fund, its
officers, directors and shareholders, expressly agree to
take all necessary corporate action and to proceed
expeditiously to change the name of the Fund and not use any
other name or take any other action which would indicate the
Fund's continued association with DAVID L. BABSON & CO.
INC., Mr. Babson, or JONES & BABSON, INC. If the use of the
name "David L. Babson" (or any part thereof) is so withdrawn
as aforesaid, the Fund, its officers, directors and
shareholders, understand and agree that there shall be no
limitation with respect to the future use of the name "David
L. Babson" (or any part thereof) by DAVID L. BABSON & CO.
INC., or its successor in interest, or with the permission
of DAVID L. BABSON & CO. INC., or its successor, by JONES &
BABSON, INC. or its successor.
8. The agreement between JONES & BABSON, INC. and
DAVID L. BABSON & CO. INC. also shall provide that, although
it is not anticipated, there may occur some unforeseen
reason which would prohibit DAVID L. BABSON & CO. INC., as a
matter of reasonable business necessity, continuing as an
Investment Counsel to JONES & BABSON, INC. Should such
circumstances occur, SHADOW STOCK FUND, INC., or its
successor may elect to terminate its services, even though
the Fund would want to continue to use the name "Babson" and
continue JONES & BABSON, INC., or its successor, as manager.
Upon receipt of such a written notice, the Fund, its
officers, directors and shareholders, agree to take all
necessary corporate action and proceed expeditiously to
change the name of the Fund not later than one year after
the effective date of the termination notice, and not use
any other name or take any other action which would indicate
the Fund's continued association with DAVID L. BABSON & CO.
INC., Mr. Babson or JONES & BABSON, INC. In consideration
for this right, DAVID L. BABSON & CO. INC. and JONES &
BABSON, INC. agree that should the name "Babson" be
withdrawn, they will not permit another investment company,
whether or not registered under the Investment Company Act
of 1940, to use the name "Babson" as part of its name for a
period of five years subsequent to the effective date of the
written withdrawal request, unless this prohibition is
waived or modified by a majority vote of the Fund's
shareholders entitled to vote at the next annual meeting of
the Fund's shareholders following receipt of the request,
and if any such action is also approved by the majority of
shares entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC. For this right to
withdraw the name "Babson" from the use of the Fund, DAVID
L. BABSON & CO. INC. will agree in its contract with JONES &
BABSON, INC. that it will not compete with JONES & BABSON,
INC. for the management of the Fund during said five-year
period, unless this no-compete provision is waived by a
majority of the shares entitled to vote at a duly
constituted meeting of the shareholders of JONES & BABSON,
INC.
9. It is further agreed that the provisions of
Paragraphs 7 and 8 shall inure to the benefit of DAVID L.
BABSON & CO. INC. and may be imposed by it or any successor
in interest as if it or such successor in interest were
parties to this Agreement.
10. The Manager shall not be liable for any error in
judgment or mistake at law for any loss suffered by the Fund
in connection with any matters to which this Agreement
relates, except that nothing herein contained shall be
construed to protect the Investment Manager against any
liability by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reckless
disregard of its obligations or duties under this Agreement.
11. This Agreement may not be amended, transferred,
assigned, sold or in any manner hypothecated or pledged nor
may any new Agreement become effective without affirmative
vote or written consent of the holders of a majority of the
shares of the Fund.
SHADOW STOCK FUND, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
JONES & BABSON, INC.
By /s/ Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/ Martin A. Cramer
Martin A. Cramer
Vice President and Secretary
<PAGE>
EX99.23(d)(5)(B)
INVESTMENT COUNSEL AGREEMENT
Between
JONES & BABSON, INC.
and
DAVID L. BABSON & CO. INC.
THIS AGREEMENT made this 30th day of June, 1995 by and
between JONES & BABSON, INC. (hereinafter referred to as the
"Manager"), and DAVID L. BABSON & CO. INC. (hereinafter referred
to as the "Investment Counsel"), and which Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall
constitute but one instrument.
WITNESSETH:
WHEREAS, the Directors of the Manager want to enter into a
contract with the Investment Counsel to render the Manager the
following services:
To furnish research, analysis, advice and recommendations
with respect to the purchase and sale of securities and the
making of investment commitments; to place at the disposal of the
Manager such statistical information and reports as may
reasonably be required, and in general to superintend the
investments of the SHADOW STOCK FUND, INC. (Fund), subject to the
control of the Directors of the Fund and JONES & BABSON, INC.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties agree as follows:
1. During the term of this Agreement, or any extension or
extensions thereof, the Investment Counsel will, to the best of
its ability, furnish the foregoing services.
2. As compensation, JONES & BABSON, INC. will pay
Investment Counsel for its services the following annual fee
computed daily as determined by the Fund's price make-up sheet
and which shall be payable monthly or at such other intervals as
agreed by the parties.
a.Twenty-five one-hundredths of one percent (25/100 of 1%)
of the average daily total net assets of the Fund.
3. This Agreement shall become effective concurrently with
the investment Management Agreement between JONES & BABSON, INC.
and the SHADOW STOCK FUND, INC. pursuant to the approval of the
shareholders of the Fund according to the provisions of the
Investment Company Act of 1940 (Act).
4. This Agreement shall continue for a period ending
October 31, 1996. It may be renewed thereafter for successive
periods not exceeding one year only so long as such renewal and
continuance is specifically approved at least annually by the
Board of Directors of the Fund or by a vote of the majority of
the outstanding voting securities of the Fund as prescribed by
the Act and provided further that such continuance is approved at
least annually thereafter by a vote of a majority of the
Directors who are not parties to such Agreement or interested
persons of such party, cast in person at a meeting called for the
purpose of voting on such approval. The Investment Counsel shall
provide the Manager such information as may be reasonably
necessary to assist the Directors of the Fund to evaluate the
terms of the Management Agreement. This Agreement automatically
will terminate with the Management Agreement without the payment
of any penalty, upon sixty days written notice by the Fund to the
Manager that the Board of Directors or the shareholders by vote
of a majority of the outstanding voting securities of the Fund,
as provided by the Act, has terminated the Management Agreement.
This Agreement shall automatically terminate in the event of
its assignment or assignment of the Management Agreement unless
such assignment is approved by the Directors and the shareholders
of the Fund as herein before provided or unless an exemption is
obtained from the Securities and Exchange Commission from the
provisions of the Act pertaining to the subject matter of this
paragraph.
5. It is expressly understood and agreed that the services
to be rendered by the Investment Counsel to the Manager under the
provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Counsel shall be free to render
similar or different services to others so long as its ability to
render the services provided for in this Agreement shall not be
impaired thereby, and provided further that the services to be
rendered by the Investment Counsel to the Manager under this
Agreement and the compensation provided for in Paragraph 2 hereof
shall be limited solely to services with reference to the Fund.
6. The Manager agrees that it will furnish currently to
Investment Counsel all information reasonably necessary to permit
Investment Counsel to give the advice called for under this
Agreement and such information with reference to the Fund that is
reasonably necessary to permit Investment Counsel to carry out
its responsibilities under this Agreement, and the parties agree
that they will from time to time consult and make appropriate
arrangements as to specific information that is required under
this paragraph and the frequency and manner with which it shall
be supplied.
7. The Investment Counsel shall not be liable for any
error of judgment or mistake at law or for any loss suffered by
the Manager or the Fund in connection with any matters to which
this Agreement relates except that nothing herein contained shall
be construed to protect the Investment Counsel against any
liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reckless
disregard of its obligations or duties under this agreement.
8. In compliance with the provisions of the Management
Agreement between the Fund and JONES & BABSON, INC., Investment
Counsel agrees with Manager that subject to the terms and
conditions of this Paragraph 8, the Fund may use the name of
David L. Babson (or any part thereof) as part of its name so long
as JONES & BABSON, INC., or any successor in interest, continues
as Manager and DAVID L. BABSON & CO. INC., or any successor in
interest, continues as Investment Counsel. Should the Fund
terminate either JONES & BABSON, INC., or its successor as
Manager, or DAVID L. BABSON & CO. INC., or its successor as
Investment Counsel, either JONES & BABSON, INC., or DAVID L.
BABSON & CO. INC., or their respective successors in interest,
may elect to notify the Fund in writing that permission to use
the name "David L. Babson" (or any part thereof) has been
withdrawn. It is understood that the Fund has, in its Management
Agreement with JONES & BABSON, INC., expressly agreed that it,
its officers, directors and shareholders will take all necessary
corporate action and proceed expeditiously to change the name of
the Fund and not use any other name or take any action which
would indicate the Fund's continued association with DAVID L.
BABSON & CO. INC. If the use of the name "David L. Babson" (or
any part thereof) is so withdrawn as aforesaid, it is understood
and agreed that there shall be no limitation with respect to the
future use of the name "David L. Babson" (or any part thereof) by
DAVID L. BABSON & CO. INC., or its successor in interest, or by
JONES & BABSON, INC. or its successor in interest.
9. Although it is not anticipated, there may occur some
unforeseen reason which would prohibit DAVID L. BABSON & CO.
INC., as a matter of reasonable business necessity, continuing as
Investment Counsel. Should such circumstances occur, DAVID L.
BABSON & CO. INC., or its successor may elect to terminate its
services, even though the Fund would want to continue to use the
name "David L. Babson" (or any part thereof) and continue JONES &
BABSON, INC., or its successor, as manager with DAVID L. BABSON &
CO. INC., or its successor, as Investment Counsel. Upon receipt
of such a written notice, the Fund, its officers, directors and
shareholders, have agreed in the Management Agreement between the
Fund and JONES & BABSON, INC., for the benefit of DAVID L. BABSON
& CO. INC., to take all necessary corporate action and proceed
expeditiously to change the name of the Fund (but if necessary,
take up to one year from the effective date of the termination of
the Management Agreement) and not use any other name or take any
other action which would indicate the Fund's continued
association with DAVID L. BABSON & CO. INC. In consideration for
this right, DAVID L. BABSON & CO. INC. agrees that should it so
request the withdrawal of the name "David L. Babson" (or any part
thereof) it will not permit another investment company, whether
or not registered under the Investment Company Act of 1940, to
use the name "David L. Babson" (or any part thereof) as part of
its name for a period of five years subsequent to the effective
date of the written withdrawal request, unless this prohibition
is waived or modified by a majority vote of the Fund's
shareholders entitled to vote at a duly constituted meeting of
the Fund's shareholders following receipt of the request, and if
any such action is also approved by the majority of shares
entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC. For this right to withdraw
the name "David L. Babson" (or any part thereof) from the use of
the Fund, DAVID L. BABSON & CO. INC. agrees that it will not
compete with JONES & BABSON, INC. for the management of the Fund
during said five-year period, unless this no-compete provision is
waived by a majority of the shares entitled to vote at a duly
constituted meeting of the shareholders of JONES & BABSON,
INC.
Each party hereby executes this Agreement as of the 30th day
of June, 1995, pursuant to the authority granted by its Board of
Directors.
DAVID L. BABSON & CO. INC.
By /s/ Peter C. Thompson
ATTEST:
/s/ Paula C. Howell
JONES & BABSON, INC.
By /s/ Larry D. Armel
ATTEST:
/s/ Martin A. Cramer
<PAGE>
EX99.23(d)(5)(C)
INVESTMENT COUNSEL AGREEMENT
Between
JONES & BABSON, INC.
and
ANALYTIC SYSTEMS, INC.
THIS AGREEMENT by and between JONES & BABSON, INC., a
Missouri corporation with its principal office at Three Crown
Center, 2440 Pershing Road, Kansas City, Missouri 64108
(hereinafter referred to as the "Manager"), and ANALYTIC SYSTEMS,
INC., an Illinois corporation with its principal office at 625
North Michigan Avenue, Chicago, Illinois 60611 (hereinafter
referred to as the "Investment Counsel"), is made pursuant to the
approval and direction of the parties' respective Board of
Directors and may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which
together shall constitute but one instrument.
WITNESSETH:
WHEREAS, the Manager has entered into a Management Agreement
with the SHADOW STOCK FUND, INC. (Fund) of concurrent date to
provide management services, including investment advisory
services, and the Manager desires the assistance of the
Investment Counsel which can supply the following services:
Research, analysis, advice and recommendations with respect
to the purchase and sale of securities and the making of
investment commitments; statistical information and reports as
may reasonably be required, and general assistance in the
supervision of the investments of the Fund, subject to the
control of the Directors of the Fund and the Directors of JONES
& BABSON, INC.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties agree as follows:
1. During the term of this Agreement, or any extension or
extensions thereof, the Investment Counsel will, to the best of
its ability, furnish the foregoing services.
2. As compensation, the Manager will pay Investment
Counsel for its services the following annual fee computed daily
as determined by the Fund's price make-up sheet and which shall
be payable monthly or at such other intervals as agreed by the
parties:
a.Twenty one-hundredths of one percent (20/100 of 1%)
of the average daily total net assets of the Fund.
3. This Agreement shall become effective and run
concurrently with the Management Agreement of the same date
between the Manager and the Fund, an executed copy of which shall
be supplied the Investment Counsel.
4. The last day of the initial period of this Agreement
shall coincide with the last day of the Management Agreement
which shall be the 31st day of October, 1996. Thereafter this
Agreement may be renewed in conjunction with the Management
Agreement for successive periods not exceeding one year only so
long as such renewal and continuance is specifically approved at
least annually by the Board of Directors of the Fund or by a vote
of the majority of the outstanding voting securities of the Fund
as prescribed by the Investment Company Act of 1940 (Act) and
provided further that such continuance is approved at least
annually thereafter by a vote of a majority of the directors who
are not parties to such Agreement or interested persons (as
defined by the Act) of such party, cast in person at a meeting
called for the purpose of voting on such approval. The Investment
Counsel shall provide the Manager such information as may be
reasonably necessary to assist the directors of the Fund to
evaluate the terms of the Management Agreement. This Agreement
automatically will terminate with the Management Agreement
without the payment of any penalty, upon sixty days written
notice by the Fund to the Manager that the Board of Directors or
the shareholders by vote of a majority of the outstanding voting
securities of the Fund, as provided by the Act, has terminated
the Management Agreement. This Agreement shall automatically
terminate in the event of its assignment or assignment of the
Management Agreement unless such assignment is approved by the
Directors and the shareholders of the Fund as herein before
provided or unless an exemption is obtained from the Securities
and Exchange Commission from the provisions of the Act pertaining
to the subject matter of this paragraph. The Manager shall
promptly notify the Investment Counsel of any notice of
termination or of any circumstances which are likely to result in
a termination of the Management Agreement.
5. It is understood and agreed that the services to be
rendered by the Investment Counsel to the Manager under the
provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Counsel shall be free to render
similar or different services to others so long as its ability to
render the services provided for in this Agreement shall not be
impaired thereby, and provided further that the services to be
rendered by the Investment Counsel to the Manager under this
Agreement and the compensation provided for in Paragraph 2 hereof
shall be limited solely to services with reference to the Fund.
6. The Manager agrees that it will furnish currently to
Investment Counsel all information reasonably necessary to permit
Investment Counsel to give the advice called for under this
Agreement and such information with reference to the Fund that is
reasonably necessary to permit Investment Counsel to carry out
its responsibilities under this Agreement, and the parties agree
that they will from time to time consult and make appropriate
arrangements as to specific information that is required under
this paragraph and the frequency and manner with which it shall
be supplied.
7. The Investment Counsel shall not be liable for any
error of judgment or mistake of law or for any loss suffered by
Manager of the Fund in connection with any matters to which this
Agreement relates except that nothing herein contained shall be
construed to protect the Investment Counsel against any liability
by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties or by reckless disregard of its
obligations or duties under this Agreement.
8. In compliance with the provisions of the Management
Agreement between SHADOW STOCK FUND, INC. and JONES & BABSON,
INC., Investment Counsel agrees with Manager that subject to the
terms and conditions of this paragraph 8, the Fund may use the
name "Shadow Stock" as part of its name, so long as JONES &
BABSON, INC., or any successor in interest, continues as its
manager and ANALYTIC SYSTEMS, INC., or any successor in interest,
continues as an investment counsel to the manager. Should the
Fund terminate either JONES & BABSON, INC. or its successor as
manager for the Fund, or ANALYTIC SYSTEMS, INC., or its
successor, as an investment counsel, either JONES & BABSON, INC.
or ANALYTIC SYSTEMS, INC., or their respective successors in
interest, may elect to notify the Fund in writing that permission
to use the name "Shadow Stock" has been withdrawn. It is
understood that the Fund has, in its Management Agreement with
JONES & BABSON, INC., expressly agreed that it, its officers,
directors and shareholders, will take all necessary corporate
action and proceed expeditiously to change the name of the Fund
and not use any other name or take any other action which would
indicate the Fund's continued association with ANALYTIC SYSTEMS,
INC., JONES & BABSON, INC., or DAVID L. BABSON & CO. INC. If the
use of the name "Shadow Stock" is so withdrawn as aforesaid, the
Fund, its officers, directors and shareholders, understand and
agree that there shall be no limitation with respect to the
future use of the name "Shadow Stock" by ANALYTIC SYSTEMS, INC.,
or its successor in interest, or with the permission of ANALYTIC
SYSTEMS, INC., by JONES & BABSON, INC. or DAVID L. BABSON & CO.
INC. or their respective successors.
9. Although it is not anticipated, there may occur some
unforeseen reason which would prohibit ANALYTIC SYSTEMS, INC., as
a matter of reasonable business necessity, continuing as an
Investment Counsel to JONES & BABSON, INC. Should such
circumstances occur, ANALYTIC SYSTEMS, INC., or its successor may
elect to terminate its services, even though the Fund would want
to continue the use the name "Shadow Stock" and continue JONES &
BABSON, INC., or its successor, as manager. Upon receipt of such
a written notice, the Fund, its officers, directors and
shareholders, have agreed in the Management Agreement between the
Fund and JONES & BABSON, INC., to take all necessary corporate
action and proceed expeditiously to change the name of the Fund
(but, if necessary, to take up to one year from the effective
date of the termination of this Investment Counsel Agreement) and
not use any other name or take any other action which would
indicate the Fund's continued association with ANALYTIC SYSTEMS,
INC. In consideration for this right, ANALYTIC SYSTEMS, INC.
agrees that should the name "Shadow Stock" be withdrawn, it will
not permit another investment company, whether or not registered
under the Investment Company Act of 1940, as amended, to use the
name "Shadow Stock" as part of its name for a period of five
years subsequent to the effective date of the written withdrawal
request, unless this prohibition is waived or modified by a
majority vote of the Fund's shareholders entitled to vote at the
next annual meeting of the Fund's shareholders following receipt
of the request, and if any such action is also approved by the
majority of shares entitled to vote at a duly constituted meeting
of the shareholders of JONES & BABSON, INC. For this right to
withdraw the name "Shadow Stock" from the use of the Fund,
ANALYTIC SYSTEMS, INC. agrees with JONES & BABSON, INC. that it
will not compete with JONES & BABSON, INC. for the management of
the Fund during said five-year period, unless this no-compete
provision is waived by a majority of the shares
entitled to vote at a duly constituted meeting of the
shareholders of JONES & BABSON, INC.
Each party hereby executes this Agreement as of the 30th day
of June, 1995, pursuant to the authority granted by its Board of
Directors.
ANALYTIC SYSTEMS, INC.
By /s/ James B. Cloonan
ATTEST:
/s/ Martin A. Cramer
JONES & BABSON, INC.
By /s/ Larry D. Armel
ATTEST:
/s/ Martin A. Cramer
EX99.23(e)(1)
UNDERWRITING AGREEMENT
Between
DAVID L. BABSON GROWTH FUND, INC.
and
JONES & BABSON, INC.
THIS AGREEMENT, made and entered into this 30th day of September, 1993, by
and between DAVID L. BABSON GROWTH FUND, INC., (a Maryland corporation,
hereinafter referred to as the "Fund") and JONES & BABSON, Inc. (a Missouri
corporation, hereinafter referred to as "Principal Underwriter")
1. Subject to the provisions of its Certificate of Incorporation and By-
Laws, copies of which have been delivered to and are acknowledged by the
Principal Underwriter, the Board of Directors of the Fund hereby appoint the
firm of Jones & Babson, Inc. as the Principal Underwriter and sole
distributor of the shares of the Fund, except for shares which the Fund may
elect pursuant to authority of its Board of Directors to issue direct to
registered owners, which shall include by definition but not by limitation
stock issued by virtue of reinvestment of dividends, or as the result of a
splitting of shares, or as the result of the Fund merging or consolidating
with another organization, or in return for acquisition of assets, or as the
result of shares issued in connection with a contractual plan for which the
Fund is the underlying investment, or for the purpose of complying with the
registration laws of a particular state or jurisdiction.
2. In consideration of its appointment under this Agreement as Principal
Underwriter, Jones & Babson, Inc. agrees to pay all costs of all management,
supervisory and administrative services required in the normal operation of
the Fund. This includes investment management and supervision; fees of the
custodian, independent public accountants and legal counsel; remuneration of
directors, officers and other personnel; rent; shareholder services,
including the maintenance of the shareholder accounting system and transfer
agency; and such other items as are incidental to corpor~te adm~nistration.
Not considered normal operating expenses and therefore payable by the Fund,
are taxes, interest, fees and other charges of governments and their agencies
including the cost of qualifying the Fund's shares for sale in any
jurisdiction, brokerage costs, dues and all extraordinary costs and expenses
including but not limited to legal and accounting fees incurred in
anticipation of or arising out of litigation or administrative proceedings to
which the Fund, its directors or officers may be subject or a party thereto.
3. The Fund agrees to prepare and file registration statements with the
Securities and Exchange Commission and the Securities Departments of the
various states and other jurisdictions in
1 OF 3 PAGES
which the shares may be offered, and do such other things and to take such
other actions as may be mutually agreed upon by and between the parties as
shall be reasonably necessary in order to effect the registration and the
sale of the Fund's shares.
4. The Principal Underwriter agrees to place its full facilities at the
disposal of the Fund and to assist and cooperate fully with respect to the
registration and qualification of the Fund's shares, as well as perform all
functions required in connection with any offering including, but not limited
to, the creation and preparation of literature, advertising, and any other
promotional material for the purpose of selling the Fund's shares.
5. Jones & Babson, Inc. will act as agent of the Fund and not as principal
in the solicitation and sale of the shares of the Fund unless expressly
agreed to in writing by the Principal Underwriter and the Fund.
6. Normally, the Fund shall not exercise any direction or control over the
time and place of solicitation, the persons to be solicited, or the manner of
solicitation; but the Principal Underwriter agrees that solicitations shall
be in a form acceptable to the Fund and shall be subject to such terms and
conditions as may be prescribed from time to time by the Fund, the
Registration Statement, the Prospectus, the Certificate of Incorporation, and
By-Laws of the Fund, and shall not violate any provision of the laws of the
United States or of any other jurisdiction to which solicitations are
subject, or violate any rule or regulation promulgated by any lawfully
constituted authority to which the Fund or Principal Underwriter may be
subject.
7. The Fund agrees to issue new shares direct to the registered owner
pursuant to this Agreement and according to instructions from the Principal
Underwriter, subject to the net asset value of such shares next effective
after acceptance of the order by the Fund and as more fully set out in
paragraph 8.
8. The Fund hereby authorizes the Principal Underwriter to sell its shares
in accordance with the following schedule of prices:
The applicable price will be the net asset value per share next
effective after receipt and acceptance by the Fund of a proper offer to
purchase, determined in accordance with the Certificate of
Incorporation, By-Laws, Registration Statement and Prospectus of the
Fund.
9. The Fund agrees that, as long as this Agreement is in effect, it will
not authorize anyone else to offer or solicit applications for shares of the
Fund and will not accept any such application if submitted by or through
anyone other than the Principal Underwriter, unless the Principal Underwriter
shall first have agreed in writing to such authorization.
2 OF 3 PAGES
10. This Agreement (i) may be terminated without the payment of any
penalty, either by vote of the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Fund, on sixty (60) days
written notice to the Principal Underwriter; (ii) may be terminated without
penalty by the Principal Underwriter on sixty (60) days written notice to the
Fund; and (iii) shall immediately terminate in the event of its assignment.
11. The Principal Underwriter agrees that it will not take either a short
or long position with respect to shares of the Fund; that it will not place
orders for more shares than are required to fill the requests received by it
as agent of the Fund; and that it will expeditiously transmit all such orders
to the Fund.
12. Nothing contained in this Agreement shall be deemed to protect the
Principal Underwriter against any liability to the Fund or to its securities
holders to which the Principal Underwriter would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties hereunder, or by reason of its reckless disregard
of its obligations and duties hereunder.
13. This Agreement shall become effective on the date first above written,
and continue in effect through the 31st day of October, 1994 and thereafter
shall continue automatically for successive annual periods ending with each
31st day of October, provided that such continuance is specifically approved
at least annually by the Board of Directors or by vote of a majority of the
outstanding voting securities of the Fund and provided further that this
Agreement or any renewal thereof shall be approved by the vote of a majority
of the Directors who are not parties to the Agreement or interested persons
of any such party, cast in person, at a meeting called for the purpose of
voting on such approval.
DAVID L. BABSON GROWTH FUND, INC.
By /s/Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
Secretary
JONES & BABSON, INC.
By /s/Larry D. Armel
Larry D. Armel
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
3 OF 3 PAGES
<PAGE>
EX99.23(e)(2)
UNDERWRITING AGREEMENT
Between
D. L. BABSON MONEY MARKET FUND, INC.
and
JONES & BABSON, INC.
THIS AGREEMENT, made and entered into this 30th day of September, 1993, by
and between D. L. BABSON MONEY MARKET FUND, INC., (a Maryland corporation,
hereinafter referred to as the "Fund") and JONES & BABSON, Inc. (a Missouri
corporation, hereinafter referred to as "Principal Underwriter")
1. Subject to the provisions of its Certificate of Incorporation and By-
Laws, copies of which have been delivered to and are acknowledged by the
Principal Underwriter, the Board of Directors of the Fund hereby appoint the
firm of Jones & Babson, Inc. as the Principal Underwriter and sole
distributor of the shares of the Fund, except for shares which the Fund may
elect pursuant to authority of its Board of Directors to issue direct to
registered owners, which shall include by definition but not by limitation
stock issued by virtue of reinvestment of dividends, or as the result of a
splitting of shares, or as the result of the Fund merging or consolidating
with another organization, or in return for acquisition of assets, or as the
result of shares issued in connection with a contractual plan for which the
Fund is the underlying investment, or for the purpose of complying with the
registration laws of a particular state or jurisdiction.
2. In consideration of its appointment under this Agreement as Principal
Underwriter, Jones & Babson, Inc. agrees to pay all costs of all management,
supervisory and administrative services required in the normal operation of
the Fund. This includes investment management and supervision; fees of the
custodian, independent public accountants and legal counsel; remuneration of
directors, officers and other personnel; rent; shareholder services,
including the maintenance of the shareholder accounting system and transfer
agency; and such other items as are incidental to corpor~te adm~nistration.
Not considered normal operating expenses and therefore payable by the Fund,
are taxes, interest, fees and other charges of governments and their agencies
including the cost of qualifying the Fund's shares for sale in any
jurisdiction, brokerage costs, dues and all extraordinary costs and expenses
including but not limited to legal and accounting fees incurred in
anticipation of or arising out of litigation or administrative proceedings to
which the Fund, its directors or officers may be subject or a party thereto.
3. The Fund agrees to prepare and file registration statements with the
Securities and Exchange Commission and the Securities Departments of the
various states and other jurisdictions in
1 OF 3 PAGES
which the shares may be offered, and do such other things and to take such
other actions as may be mutually agreed upon by and between the parties as
shall be reasonably necessary in order to effect the registration and the
sale of the Fund's shares.
4. The Principal Underwriter agrees to place its full facilities at the
disposal of the Fund and to assist and cooperate fully with respect to the
registration and qualification of the Fund's shares, as well as perform all
functions required in connection with any offering including, but not limited
to, the creation and preparation of literature, advertising, and any other
promotional material for the purpose of selling the Fund's shares.
5. Jones & Babson, Inc. will act as agent of the Fund and not as principal
in the solicitation and sale of the shares of the Fund unless expressly
agreed to in writing by the Principal Underwriter and the Fund.
6. Normally, the Fund shall not exercise any direction or control over the
time and place of solicitation, the persons to be solicited, or the manner of
solicitation; but the Principal Underwriter agrees that solicitations shall
be in a form acceptable to the Fund and shall be subject to such terms and
conditions as may be prescribed from time to time by the Fund, the
Registration Statement, the Prospectus, the Certificate of Incorporation, and
By-Laws of the Fund, and shall not violate any provision of the laws of the
United States or of any other jurisdiction to which solicitations are
subject, or violate any rule or regulation promulgated by any lawfully
constituted authority to which the Fund or Principal Underwriter may be
subject.
7. The Fund agrees to issue new shares direct to the registered owner
pursuant to this Agreement and according to instructions from the Principal
Underwriter, subject to the net asset value of such shares next effective
after acceptance of the order by the Fund and as more fully set out in
paragraph 8.
8. The Fund hereby authorizes the Principal Underwriter to sell its shares
in accordance with the following schedule of prices:
The applicable price will be the net asset value per share next
effective after receipt and acceptance by the Fund of a proper offer to
purchase, determined in accordance with the Certificate of
Incorporation, By-Laws, Registration Statement and Prospectus of the
Fund.
9. The Fund agrees that, as long as this Agreement is in effect, it will
not authorize anyone else to offer or solicit applications for shares of the
Fund and will not accept any such application if submitted by or through
anyone other than the Principal Underwriter, unless the Principal Underwriter
shall first have agreed in writing to such authorization.
2 OF 3 PAGES
10. This Agreement (i) may be terminated without the payment of any
penalty, either by vote of the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Fund, on sixty (60) days
written notice to the Principal Underwriter; (ii) may be terminated without
penalty by the Principal Underwriter on sixty (60) days written notice to the
Fund; and (iii) shall immediately terminate in the event of its assignment.
11. The Principal Underwriter agrees that it will not take either a short
or long position with respect to shares of the Fund; that it will not place
orders for more shares than are required to fill the requests received by it
as agent of the Fund; and that it will expeditiously transmit all such orders
to the Fund.
12. Nothing contained in this Agreement shall be deemed to protect the
Principal Underwriter against any liability to the Fund or to its securities
holders to which the Principal Underwriter would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties hereunder, or by reason of its reckless disregard
of its obligations and duties hereunder.
13. This Agreement shall become effective on the date first above written,
and continue in effect through the 31st day of October, 1994 and thereafter
shall continue automatically for successive annual periods ending with each
31st day of October, provided that such continuance is specifically approved
at least annually by the Board of Directors or by vote of a majority of the
outstanding voting securities of the Fund and provided further that this
Agreement or any renewal thereof shall be approved by the vote of a majority
of the Directors who are not parties to the Agreement or interested persons
of any such party, cast in person, at a meeting called for the purpose of
voting on such approval.
D. L. BABSON MONEY MARKET FUND, INC.
By /s/Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
Secretary
JONES & BABSON, INC.
By /s/Larry D. Armel
Larry D. Armel
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
3 OF 3 PAGES
<PAGE>
EX99.23(e)(3)
UNDERWRITING AGREEMENT
Between
D. L. BABSON TAX-FREE INCOME FUND, INC.
and
JONES & BABSON, INC.
THIS AGREEMENT, made and entered into this 30th day of September, 1993, by
and between D. L. BABSON TAX-FREE INCOME FUND, INC., (a Maryland corporation,
hereinafter referred to as the "Fund") and JONES & BABSON, Inc. (a Missouri
corporation, hereinafter referred to as "Principal Underwriter")
1. Subject to the provisions of its Certificate of Incorporation and By-
Laws, copies of which have been delivered to and are acknowledged by the
Principal Underwriter, the Board of Directors of the Fund hereby appoint the
firm of Jones & Babson, Inc. as the Principal Underwriter and sole
distributor of the shares of the Fund, except for shares which the Fund may
elect pursuant to authority of its Board of Directors to issue direct to
registered owners, which shall include by definition but not by limitation
stock issued by virtue of reinvestment of dividends, or as the result of a
splitting of shares, or as the result of the Fund merging or consolidating
with another organization, or in return for acquisition of assets, or as the
result of shares issued in connection with a contractual plan for which the
Fund is the underlying investment, or for the purpose of complying with the
registration laws of a particular state or jurisdiction.
2. In consideration of its appointment under this Agreement as Principal
Underwriter, Jones & Babson, Inc. agrees to pay all costs of all management,
supervisory and administrative services required in the normal operation of
the Fund. This includes investment management and supervision; fees of the
custodian, independent public accountants and legal counsel; remuneration of
directors, officers and other personnel; rent; shareholder services,
including the maintenance of the shareholder accounting system and transfer
agency; and such other items as are incidental to corpor~te adm~nistration.
Not considered normal operating expenses and therefore payable by the Fund,
are taxes, interest, fees and other charges of governments and their agencies
including the cost of qualifying the Fund's shares for sale in any
jurisdiction, brokerage costs, dues and all extraordinary costs and expenses
including but not limited to legal and accounting fees incurred in
anticipation of or arising out of litigation or administrative proceedings to
which the Fund, its directors or officers may be subject or a party thereto.
3. The Fund agrees to prepare and file registration statements with the
Securities and Exchange Commission and the Securities Departments of the
various states and other jurisdictions in
1 OF 3 PAGES
which the shares may be offered, and do such other things and to take such
other actions as may be mutually agreed upon by and between the parties as
shall be reasonably necessary in order to effect the registration and the
sale of the Fund's shares.
4. The Principal Underwriter agrees to place its full facilities at the
disposal of the Fund and to assist and cooperate fully with respect to the
registration and qualification of the Fund's shares, as well as perform all
functions required in connection with any offering including, but not limited
to, the creation and preparation of literature, advertising, and any other
promotional material for the purpose of selling the Fund's shares.
5. Jones & Babson, Inc. will act as agent of the Fund and not as principal
in the solicitation and sale of the shares of the Fund unless expressly
agreed to in writing by the Principal Underwriter and the Fund.
6. Normally, the Fund shall not exercise any direction or control over the
time and place of solicitation, the persons to be solicited, or the manner of
solicitation; but the Principal Underwriter agrees that solicitations shall
be in a form acceptable to the Fund and shall be subject to such terms and
conditions as may be prescribed from time to time by the Fund, the
Registration Statement, the Prospectus, the Certificate of Incorporation, and
By-Laws of the Fund, and shall not violate any provision of the laws of the
United States or of any other jurisdiction to which solicitations are
subject, or violate any rule or regulation promulgated by any lawfully
constituted authority to which the Fund or Principal Underwriter may be
subject.
7. The Fund agrees to issue new shares direct to the registered owner
pursuant to this Agreement and according to instructions from the Principal
Underwriter, subject to the net asset value of such shares next effective
after acceptance of the order by the Fund and as more fully set out in
paragraph 8.
8. The Fund hereby authorizes the Principal Underwriter to sell its shares
in accordance with the following schedule of prices:
The applicable price will be the net asset value per share next
effective after receipt and acceptance by the Fund of a proper offer to
purchase, determined in accordance with the Certificate of
Incorporation, By-Laws, Registration Statement and Prospectus of the
Fund.
9. The Fund agrees that, as long as this Agreement is in effect, it will
not authorize anyone else to offer or solicit applications for shares of the
Fund and will not accept any such application if submitted by or through
anyone other than the Principal Underwriter, unless the Principal Underwriter
shall first have agreed in writing to such authorization.
2 OF 3 PAGES
10. This Agreement (i) may be terminated without the payment of any
penalty, either by vote of the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Fund, on sixty (60) days
written notice to the Principal Underwriter; (ii) may be terminated without
penalty by the Principal Underwriter on sixty (60) days written notice to the
Fund; and (iii) shall immediately terminate in the event of its assignment.
11. The Principal Underwriter agrees that it will not take either a short
or long position with respect to shares of the Fund; that it will not place
orders for more shares than are required to fill the requests received by it
as agent of the Fund; and that it will expeditiously transmit all such orders
to the Fund.
12. Nothing contained in this Agreement shall be deemed to protect the
Principal Underwriter against any liability to the Fund or to its securities
holders to which the Principal Underwriter would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties hereunder, or by reason of its reckless disregard
of its obligations and duties hereunder.
13. This Agreement shall become effective on the date first above written,
and continue in effect through the 31st day of October, 1994 and thereafter
shall continue automatically for successive annual periods ending with each
31st day of October, provided that such continuance is specifically approved
at least annually by the Board of Directors or by vote of a majority of the
outstanding voting securities of the Fund and provided further that this
Agreement or any renewal thereof shall be approved by the vote of a majority
of the Directors who are not parties to the Agreement or interested persons
of any such party, cast in person, at a meeting called for the purpose of
voting on such approval.
D. L. BABSON TAX-FREE INCOME FUND, INC.
By /s/Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
Secretary
JONES & BABSON, INC.
By /s/Larry D. Armel
Larry D. Armel
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
3 OF 3 PAGES
<PAGE>
EX99.23(e)(4)
UNDERWRITING AGREEMENT
Between
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
and
JONES & BABSON, INC.
THIS AGREEMENT, made and entered into this 30th day of September, 1993, by
and between BABSON-STEWART IVORY INTERNATIONAL FUND, INC., (a Maryland
corporation, hereinafter referred to as the "Fund") and JONES & BABSON, Inc.
(a Missouri corporation, hereinafter referred to as "Principal Underwriter")
1. Subject to the provisions of its Certificate of Incorporation and By-
Laws, copies of which have been delivered to and are acknowledged by the
Principal Underwriter, the Board of Directors of the Fund hereby appoint the
firm of Jones & Babson, Inc. as the Principal Underwriter and sole
distributor of the shares of the Fund, except for shares which the Fund may
elect pursuant to authority of its Board of Directors to issue direct to
registered owners, which shall include by definition but not by limitation
stock issued by virtue of reinvestment of dividends, or as the result of a
splitting of shares, or as the result of the Fund merging or consolidating
with another organization, or in return for acquisition of assets, or as the
result of shares issued in connection with a contractual plan for which the
Fund is the underlying investment, or for the purpose of complying with the
registration laws of a particular state or jurisdiction.
2. In consideration of its appointment under this Agreement as Principal
Underwriter, Jones & Babson, Inc. agrees to pay all costs of all management,
supervisory and administrative services required in the normal operation of
the Fund. This includes investment management and supervision; fees of the
custodian, independent public accountants and legal counsel; remuneration of
directors, officers and other personnel; rent; shareholder services,
including the maintenance of the shareholder accounting system and transfer
agency; and such other items as are incidental to corpor~te adm~nistration.
Not considered normal operating expenses and therefore payable by the Fund,
are taxes, interest, fees and other charges of governments and their agencies
including the cost of qualifying the Fund's shares for sale in any
jurisdiction, brokerage costs, dues and all extraordinary costs and expenses
including but not limited to legal and accounting fees incurred in
anticipation of or arising out of litigation or administrative proceedings to
which the Fund, its directors or officers may be subject or a party thereto.
3. The Fund agrees to prepare and file registration statements with the
Securities and Exchange Commission and the Securities Departments of the
various states and other jurisdictions in
1 OF 3 PAGES
which the shares may be offered, and do such other things and to take such
other actions as may be mutually agreed upon by and between the parties as
shall be reasonably necessary in order to effect the registration and the
sale of the Fund's shares.
4. The Principal Underwriter agrees to place its full facilities at the
disposal of the Fund and to assist and cooperate fully with respect to the
registration and qualification of the Fund's shares, as well as perform all
functions required in connection with any offering including, but not limited
to, the creation and preparation of literature, advertising, and any other
promotional material for the purpose of selling the Fund's shares.
5. Jones & Babson, Inc. will act as agent of the Fund and not as principal
in the solicitation and sale of the shares of the Fund unless expressly
agreed to in writing by the Principal Underwriter and the Fund.
6. Normally, the Fund shall not exercise any direction or control over the
time and place of solicitation, the persons to be solicited, or the manner of
solicitation; but the Principal Underwriter agrees that solicitations shall
be in a form acceptable to the Fund and shall be subject to such terms and
conditions as may be prescribed from time to time by the Fund, the
Registration Statement, the Prospectus, the Certificate of Incorporation, and
By-Laws of the Fund, and shall not violate any provision of the laws of the
United States or of any other jurisdiction to which solicitations are
subject, or violate any rule or regulation promulgated by any lawfully
constituted authority to which the Fund or Principal Underwriter may be
subject.
7. The Fund agrees to issue new shares direct to the registered owner
pursuant to this Agreement and according to instructions from the Principal
Underwriter, subject to the net asset value of such shares next effective
after acceptance of the order by the Fund and as more fully set out in
paragraph 8.
8. The Fund hereby authorizes the Principal Underwriter to sell its shares
in accordance with the following schedule of prices:
The applicable price will be the net asset value per share next
effective after receipt and acceptance by the Fund of a proper offer to
purchase, determined in accordance with the Certificate of
Incorporation, By-Laws, Registration Statement and Prospectus of the
Fund.
9. The Fund agrees that, as long as this Agreement is in effect, it will
not authorize anyone else to offer or solicit applications for shares of the
Fund and will not accept any such application if submitted by or through
anyone other than the Principal Underwriter, unless the Principal Underwriter
shall first have agreed in writing to such authorization.
2 OF 3 PAGES
10. This Agreement (i) may be terminated without the payment of any
penalty, either by vote of the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Fund, on sixty (60) days
written notice to the Principal Underwriter; (ii) may be terminated without
penalty by the Principal Underwriter on sixty (60) days written notice to the
Fund; and (iii) shall immediately terminate in the event of its assignment.
11. The Principal Underwriter agrees that it will not take either a short
or long position with respect to shares of the Fund; that it will not place
orders for more shares than are required to fill the requests received by it
as agent of the Fund; and that it will expeditiously transmit all such orders
to the Fund.
12. Nothing contained in this Agreement shall be deemed to protect the
Principal Underwriter against any liability to the Fund or to its securities
holders to which the Principal Underwriter would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties hereunder, or by reason of its reckless disregard
of its obligations and duties hereunder.
13. This Agreement shall become effective on the date first above written,
and continue in effect through the 31st day of October, 1994 and thereafter
shall continue automatically for successive annual periods ending with each
31st day of October, provided that such continuance is specifically approved
at least annually by the Board of Directors or by vote of a majority of the
outstanding voting securities of the Fund and provided further that this
Agreement or any renewal thereof shall be approved by the vote of a majority
of the Directors who are not parties to the Agreement or interested persons
of any such party, cast in person, at a meeting called for the purpose of
voting on such approval.
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
By /s/Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
Secretary
JONES & BABSON, INC.
By /s/Larry D. Armel
Larry D. Armel
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
3 OF 3 PAGES
<PAGE>
EX99.23(e)(5)
UNDERWRITING AGREEMENT
Between
SHADOW STOCK FUND, INC.
and
JONES & BABSON, INC.
THIS AGREEMENT, made and entered into this 30th day of September, 1993, by
and between SHADOW STOCK FUND, INC., (a Maryland corporation,
hereinafter referred to as the "Fund") and JONES & BABSON, Inc. (a Missouri
corporation, hereinafter referred to as "Principal Underwriter")
1. Subject to the provisions of its Certificate of Incorporation and By-
Laws, copies of which have been delivered to and are acknowledged by the
Principal Underwriter, the Board of Directors of the Fund hereby appoint the
firm of Jones & Babson, Inc. as the Principal Underwriter and sole
distributor of the shares of the Fund, except for shares which the Fund may
elect pursuant to authority of its Board of Directors to issue direct to
registered owners, which shall include by definition but not by limitation
stock issued by virtue of reinvestment of dividends, or as the result of a
splitting of shares, or as the result of the Fund merging or consolidating
with another organization, or in return for acquisition of assets, or as the
result of shares issued in connection with a contractual plan for which the
Fund is the underlying investment, or for the purpose of complying with the
registration laws of a particular state or jurisdiction.
2. In consideration of its appointment under this Agreement as Principal
Underwriter, Jones & Babson, Inc. agrees to pay all costs of all management,
supervisory and administrative services required in the normal operation of
the Fund. This includes investment management and supervision; fees of the
custodian, independent public accountants and legal counsel; remuneration of
directors, officers and other personnel; rent; shareholder services,
including the maintenance of the shareholder accounting system and transfer
agency; and such other items as are incidental to corpor~te adm~nistration.
Not considered normal operating expenses and therefore payable by the Fund,
are taxes, interest, fees and other charges of governments and their agencies
including the cost of qualifying the Fund's shares for sale in any
jurisdiction, brokerage costs, dues and all extraordinary costs and expenses
including but not limited to legal and accounting fees incurred in
anticipation of or arising out of litigation or administrative proceedings to
which the Fund, its directors or officers may be subject or a party thereto.
3. The Fund agrees to prepare and file registration statements with the
Securities and Exchange Commission and the Securities Departments of the
various states and other jurisdictions in
1 OF 3 PAGES
which the shares may be offered, and do such other things and to take such
other actions as may be mutually agreed upon by and between the parties as
shall be reasonably necessary in order to effect the registration and the
sale of the Fund's shares.
4. The Principal Underwriter agrees to place its full facilities at the
disposal of the Fund and to assist and cooperate fully with respect to the
registration and qualification of the Fund's shares, as well as perform all
functions required in connection with any offering including, but not limited
to, the creation and preparation of literature, advertising, and any other
promotional material for the purpose of selling the Fund's shares.
5. Jones & Babson, Inc. will act as agent of the Fund and not as principal
in the solicitation and sale of the shares of the Fund unless expressly
agreed to in writing by the Principal Underwriter and the Fund.
6. Normally, the Fund shall not exercise any direction or control over the
time and place of solicitation, the persons to be solicited, or the manner of
solicitation; but the Principal Underwriter agrees that solicitations shall
be in a form acceptable to the Fund and shall be subject to such terms and
conditions as may be prescribed from time to time by the Fund, the
Registration Statement, the Prospectus, the Certificate of Incorporation, and
By-Laws of the Fund, and shall not violate any provision of the laws of the
United States or of any other jurisdiction to which solicitations are
subject, or violate any rule or regulation promulgated by any lawfully
constituted authority to which the Fund or Principal Underwriter may be
subject.
7. The Fund agrees to issue new shares direct to the registered owner
pursuant to this Agreement and according to instructions from the Principal
Underwriter, subject to the net asset value of such shares next effective
after acceptance of the order by the Fund and as more fully set out in
paragraph 8.
8. The Fund hereby authorizes the Principal Underwriter to sell its shares
in accordance with the following schedule of prices:
The applicable price will be the net asset value per share next
effective after receipt and acceptance by the Fund of a proper offer to
purchase, determined in accordance with the Certificate of
Incorporation, By-Laws, Registration Statement and Prospectus of the
Fund.
9. The Fund agrees that, as long as this Agreement is in effect, it will
not authorize anyone else to offer or solicit applications for shares of the
Fund and will not accept any such application if submitted by or through
anyone other than the Principal Underwriter, unless the Principal Underwriter
shall first have agreed in writing to such authorization.
2 OF 3 PAGES
10. This Agreement (i) may be terminated without the payment of any
penalty, either by vote of the Board of Directors of the Fund or by vote of a
majority of the outstanding voting securities of the Fund, on sixty (60) days
written notice to the Principal Underwriter; (ii) may be terminated without
penalty by the Principal Underwriter on sixty (60) days written notice to the
Fund; and (iii) shall immediately terminate in the event of its assignment.
11. The Principal Underwriter agrees that it will not take either a short
or long position with respect to shares of the Fund; that it will not place
orders for more shares than are required to fill the requests received by it
as agent of the Fund; and that it will expeditiously transmit all such orders
to the Fund.
12. Nothing contained in this Agreement shall be deemed to protect the
Principal Underwriter against any liability to the Fund or to its securities
holders to which the Principal Underwriter would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties hereunder, or by reason of its reckless disregard
of its obligations and duties hereunder.
13. This Agreement shall become effective on the date first above written,
and continue in effect through the 31st day of October, 1994 and thereafter
shall continue automatically for successive annual periods ending with each
31st day of October, provided that such continuance is specifically approved
at least annually by the Board of Directors or by vote of a majority of the
outstanding voting securities of the Fund and provided further that this
Agreement or any renewal thereof shall be approved by the vote of a majority
of the Directors who are not parties to the Agreement or interested persons
of any such party, cast in person, at a meeting called for the purpose of
voting on such approval.
SHADOW STOCK FUND, INC.
By /s/Larry D. Armel
Larry D. Armel
President
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
Secretary
JONES & BABSON, INC.
By /s/Larry D. Armel
Larry D. Armel
ATTEST:
/s/Martin A. Cramer
Martin A. Cramer
3 OF 3 PAGES
EX99.23(G)
CUSTODY AGREEMENT
Dated May 5, 1997
Between
UMB BANK, N.A.
and
JONES & BABSON FUNDS
TABLE OF CONTENTS
SECTION PAGE
1. Appointment of Custodian 1
2. Definitions 1
(a) Securities 1
(b) Assets 2
(c) Instructions and Special Instructions 2
3. Delivery of Corporate Documents 2
4. Powers and Duties of Custodian and Domestic Subcustodian 3
(a) Safekeeping 4
(b) Manner of Holding Securities 4
(c) Free Delivery of Assets 5
(d) Exchange of Securities 6
(e) Purchases of Assets 6
(f) Sales of Assets 7
(g) Options 7
(h) Futures Contracts 8
(i) Segregated Accounts 9
(j) Depository Receipts 9
(k) Corporate Actions, Put Bonds, Called Bonds, Etc. 9
(l) Interest Bearing Deposits 10
(m) Foreign Exchange Transactions 10
(n) Pledges or Loans of Securities 11
(o) Stock Dividends, Rights, Etc. 12
(p) Routine Dealings 12
(q) Collections 12
(r) Bank Accounts 13
(s) Dividends, Distributions and Redemptions 13
(t) Proceeds from Shares Sold 13
(u) Proxies and Notices; Compliance with the Shareholders
Communication Act of 1985 13
(v) Books and Records 14
(w) Opinion of Fund's Independent Certified Public Accountants 14
(x) Reports by Independent Certified Public Accountants 14
(y) Bills and Others Disbursements 14
5. Subcustodians 15
(a) Domestic Subcustodians 15
(b) Foreign Subcustodians 15
(c) Interim Subcustodians 16
(d) Special Subcustodians 16
(e) Termination of a Subcustodian 17
(f) Certification Regarding Foreign Subcustodians 17
6. Standard of Care 17
(a) General Standard of Care 17
(b) Actions Prohibited by Applicable Law, Events Beyond
Custodian's Control, Armed 17
Conflict, Sovereign Risk, etc.
(c) Liability for Past Records 18
(d) Advice of Counsel 18
(e) Advice of the Fund and Others 18
(f) Instructions Appearing to be Genuine 18
(g) Exceptions from Liability 19
7. Liability of the Custodian for Actions of Others 19
(a) Domestic Subcustodians 19
(b) Liability for Acts and Omissions of Foreign Subcustodians 19
(c) Securities Systems, Interim Subcustodians, Special
Subcustodians, Securities 20
Depositories and Clearing Agencies
(d) Defaults or Insolvencies of Brokers, Banks, Etc. 20
(e) Reimbursement of Expenses 20
8. Indemnification 20
(a) Indemnification by Fund 20
(b) Indemnification by Custodian 21
9. Advances 21
10. Liens 21
11. Compensation 22
12. Powers of Attorney 22
13. Termination and Assignment 22
14. Additional Funds 23
15. Notices 23
16. Miscellaneous 23
CUSTODY AGREEMENT
This agreement made as of this 5th day of May, 1997, between UMB Bank,
n.a., a national banking association with its principal place of business
located at Kansas City, Missouri (hereinafter "Custodian"), and each of the
Funds which have executed the signature page hereof together with such
additional Funds which shall be made parties to this Agreement by the
execution of a separate signature page hereto (individually, a "Fund" and
collectively, the "Funds").
WITNESSETH:
WHEREAS, each Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended; and
WHEREAS, each Fund desires to appoint Custodian as its custodian for the
custody of Assets (as hereinafter defined) owned by such Fund which Assets are
to be held in such accounts as such Fund may establish from time to time; and
WHEREAS, Custodian is willing to accept such appointment on the terms
and conditions hereof.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant
and agree as follows:
1. APPOINTMENT OF CUSTODIAN.
Each Fund hereby constitutes and appoints the Custodian as custodian of
Assets belonging to each such Fund which have been or may be from time to time
deposited with the Custodian. Custodian accepts such appointment as a
custodian and agrees to perform the duties and responsibilities of Custodian
as set forth herein on the conditions set forth herein.
2. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings so indicated:
(a) "Security" or "Securities" shall mean stocks, bonds, bills, rights,
script, warrants, interim certificates and all negotiable or nonnegotiable
paper commonly known as Securities and other instruments or obligations.
(b) "Assets" shall mean Securities, monies and other property held by
the Custodian for the benefit of a Fund.
(c)(1) "Instructions", as used herein, shall mean: (i) a tested telex,
a written (including, without limitation, facsimile transmission) request,
direction, instruction or certification signed or initialed by or on behalf of
a Fund by an Authorized Person; (ii) a telephonic or other oral communication
from a person the Custodian reasonably believes to be an Authorized Person; or
(iii) a communication effected directly between an electro-mechanical or
electronic device or system (including, without limitation, computers) on
behalf of a Fund. Instructions in the form of oral communications shall be
confirmed by the appropriate Fund by tested telex or in writing in the manner
set forth in clause (i) above, but the lack of such confirmation shall in no
way affect any action taken by the Custodian in reliance upon such oral
Instructions prior to the Custodian's receipt of such confirmation. Each Fund
authorizes the Custodian to record any and all telephonic or other oral
Instructions communicated to the Custodian.
(c)(2) "Special Instructions", as used herein, shall mean Instructions
countersigned or confirmed in writing by the Treasurer or any Assistant
Treasurer of a Fund or any other person designated by the Treasurer of such
Fund in writing, which countersignature or confirmation shall be included on
the same instrument containing the Instructions or on a separate instrument
relating thereto.
(c)(3) Instructions and Special Instructions shall be delivered to the
Custodian at the address and/or telephone, facsimile transmission or telex
number agreed upon from time to time by the Custodian and each Fund.
(c)(4) Where appropriate, Instructions and Special Instructions shall
be continuing instructions.
3. DELIVERY OF CORPORATE DOCUMENTS.
Each of the parties to this Agreement represents that its execution does
not violate any of the provisions of its respective charter, articles of
incorporation, articles of association or bylaws and all required corporate
action to authorize the execution and delivery of this Agreement has been
taken.
Each Fund has furnished the Custodian with copies, properly certified or
authenticated, with all amendments or supplements thereto, of the following
documents:
(a) Certificate of Incorporation (or equivalent document) of the Fund
as in effect on the date hereof;
(b) By-Laws of the Fund as in effect on the date hereof;
(c) Resolutions of the Board of Directors of the Fund appointing the
Custodian and approving the form of this Agreement; and
(d) The Fund's current prospectus and statements of additional
information.
Each Fund shall promptly furnish the Custodian with copies of any
updates, amendments or supplements to the foregoing documents.
In addition, each Fund has delivered or will promptly deliver to the
Custodian, copies of the Resolution(s) of its Board of Directors or Trustees
and all amendments or supplements thereto, properly certified or
authenticated, designating certain officers or employees of each such Fund who
will have continuing authority to certify to the Custodian: (a) the names,
titles, signatures and scope of authority of all persons authorized to give
Instructions or any other notice, request, direction, instruction, certificate
or instrument on behalf of each Fund, and (b) the names, titles and signatures
of those persons authorized to countersign or confirm Special Instructions on
behalf of each Fund (in both cases collectively, the "Authorized Persons" and
individually, an "Authorized Person"). Such Resolutions and certificates may
be accepted and relied upon by the Custodian as conclusive evidence of the
facts set forth therein and shall be considered to be in full force and effect
until delivery to the Custodian of a similar Resolution or certificate to the
contrary. Upon delivery of a certificate which deletes or does not include
the name(s) of a person previously authorized to give Instructions or to
countersign or confirm Special Instructions, such persons shall no longer be
considered an Authorized Person authorized to give Instructions or to
countersign or confirm Special Instructions. Unless the certificate
specifically requires that the approval of anyone else will first have been
obtained, the Custodian will be under no obligation to inquire into the right
of the person giving such Instructions or Special Instructions to do so.
Notwithstanding any of the foregoing, no Instructions or Special Instructions
received by the Custodian from a Fund will be deemed to authorize or permit
any director, trustee, officer, employee, or agent of such Fund to withdraw
any of the Assets of such Fund upon the mere receipt of such authorization,
Special Instructions or Instructions from such director, trustee, officer,
employee or agent.
4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN.
Except for Assets held by any Subcustodian appointed pursuant to
Sections 5(b), (c), or (d) of this Agreement, the Custodian shall have and
perform the powers and duties hereinafter set forth in this Section 4. For
purposes of this Section 4 all references to powers and duties of the
"Custodian" shall also refer to any Domestic Subcustodian appointed pursuant
to Section 5(a).
(a) Safekeeping.
The Custodian will keep safely the Assets of each Fund which are
delivered to it from time to time. The Custodian shall not be responsible for
any property of a Fund held or received by such Fund and not delivered to the
Custodian.
(b) Manner of Holding Securities.
(1) The Custodian shall at all times hold Securities of each
Fund
either: (i) by physical possession of the share certificates or
other
instruments representing such Securities in registered or bearer form; or (ii)
in book-entry form by a Securities System (as hereinafter defined) in
accordance with the provisions of sub-paragraph (3) below.
(2) The Custodian may hold registrable portfolio Securities
which
have been delivered to it in physical form, by registering the same in the
name of the appropriate Fund or its nominee, or in the name of the Custodian
or its nominee, for whose actions such Fund and Custodian, respectively, shall
be fully responsible. Upon the receipt of Instructions, the Custodian shall
hold such Securities in street certificate form, so called, with or without
any indication of fiduciary capacity. However, unless it receives
Instructions to the contrary, the Custodian will register all such portfolio
Securities in the name of the Custodian's authorized nominee. All such
Securities shall be held in an account of the Custodian containing only assets
of the appropriate Fund or only assets held by the Custodian as a fiduciary,
provided that the records of the Custodian shall indicate at all times the
Fund or other customer for which such Securities are held in such accounts and
the respective interests therein.
(3) The Custodian may deposit and/or maintain domestic
Securities
owned by a Fund in, and each Fund hereby approves use of: (a) The Depository
Trust Company; (b) The Participants Trust Company; and (c) any book-entry
system as provided in (i) Subpart O of Treasury Circular No. 300, 31 CFR
306.115, (ii) Subpart B of Treasury Circular Public Debt Series No. 27-76, 31
CFR 350.2, or (iii) the book-entry regulations of federal agencies
substantially in the form of 31 CFR 306.115. Upon the receipt of Special
Instructions, the Custodian may deposit and/or maintain domestic Securities
owned by a Fund in any other domestic clearing agency registered with the
Securities and Exchange Commission ("SEC") under Section 17A of the Securities
Exchange Act of 1934 (or as may otherwise be authorized by the SEC to serve in
the capacity of depository or clearing agent for the Securities or other
assets of investment companies) which acts as a Securities depository. Each
of the foregoing shall be referred to in this Agreement as a "Securities
System", and all such Securities Systems shall be listed on the attached
Appendix A. Use of a Securities System shall be in accordance with applicable
Federal Reserve Board and SEC rules and regulations, if any, and subject to
the following provisions:
(i) The Custodian may deposit the Securities directly
or through
one or more agents or Subcustodians which are also qualified to act as
custodians for investment companies.
(ii) The Custodian shall deposit and/or maintain the
Securities
in a Securities System, provided that such Securities are represented in an
account ("Account") of the Custodian in the Securities System that includes
only assets held by the Custodian as a fiduciary, custodian or otherwise for
customers.
(iii) The books and records of the Custodian shall at
all times
identify those Securities belonging to any one or more Funds which are
maintained in a Securities System.
(iv) The Custodian shall pay for Securities purchased
for the
account of a Fund only upon (a) receipt of advice from the Securities System
that such Securities have been transferred to the Account of the Custodian in
accordance with the rules of the Securities System, and (b) the making of an
entry on the records of the Custodian to reflect such payment and transfer for
the account of such Fund. The Custodian shall transfer Securities sold for
the account of a Fund only upon (a) receipt of advice from the Securities
System that payment for such Securities has been transferred to the Account of
the Custodian in accordance with the rules of the Securities System, and (b)
the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of such Fund. Copies of all advices from
the Securities System relating to transfers of Securities for the account of a
Fund shall be maintained for such Fund by the Custodian. The Custodian shall
deliver to a Fund on the next succeeding business day daily transaction
reports which shall include each day's transactions in the Securities System
for the account of such Fund. Such transaction reports shall be delivered to
such Fund or any agent designated by such Fund pursuant to Instructions, by
computer or in such other manner as such Fund and Custodian may agree.
(v) The Custodian shall, if requested by a Fund
pursuant to
Instructions, provide such Fund with reports obtained by the Custodian or any
Subcustodian with respect to a Securities System's accounting system, internal
accounting control and procedures for safeguarding Securities deposited in the
Securities System.
(vi) Upon receipt of Special Instructions, the
Custodian shall
terminate the use of any Securities System on behalf of a Fund as promptly as
practicable and shall take all actions reasonably practicable to safeguard the
Securities of such Fund maintained with such Securities System.
(c) Free Delivery of Assets.
Notwithstanding any other provision of this Agreement and except as
provided in Section 3 hereof, the Custodian, upon receipt of Special
Instructions, will undertake to make free delivery of Assets, provided such
Assets are on hand and available, in connection with a Fund's transactions and
to transfer such Assets to such broker, dealer, Subcustodian, bank, agent,
Securities System or otherwise as specified in such Special Instructions.
(d) Exchange of Securities.
Upon receipt of Instructions, the Custodian will exchange portfolio
Securities held by it for a Fund for other Securities or cash paid in
connection with any reorganization, recapitalization, merger, consolidation,
or conversion of convertible Securities, and will deposit any such Securities
in accordance with the terms of any reorganization or protective plan.
Without Instructions, the Custodian is authorized to exchange Securities
held by it in temporary form for Securities in definitive form, to surrender
Securities for transfer into a name or nominee name as permitted in Section
4(b)(2), to effect an exchange of shares in a stock split or when the par
value of the stock is changed, to sell any fractional shares, and, upon
receiving payment therefor, to surrender bonds or other Securities held by it
at maturity or call.
(e) Purchases of Assets.
(1) Securities Purchases. In accordance with Instructions, the
Custodian shall, with respect to a purchase of Securities, pay for such
Securities out of monies held for a Fund's account for which the purchase was
made, but only insofar as monies are available therein for such purpose, and
receive the portfolio Securities so purchased. Unless the Custodian has
received Special Instructions to the contrary, such payment will be made only
upon receipt of Securities by the Custodian, a clearing corporation of a
national Securities exchange of which the Custodian is a member, or a
Securities System in accordance with the provisions of Section 4(b)(3) hereof.
Notwithstanding the foregoing, upon receipt of Instructions: (i) in
connection with a repurchase agreement, the Custodian may release funds to a
Securities System prior to the receipt of advice from the Securities System
that the Securities underlying such repurchase agreement have been transferred
by book-entry into the Account maintained with such Securities System by the
Custodian, provided that the Custodian's instructions to the Securities System
require that the Securities System may make payment of such funds to the other
party to the repurchase agreement only upon transfer by book-entry of the
Securities underlying the repurchase agreement into such Account; (ii) in the
case of Interest Bearing Deposits, currency deposits, and other deposits,
foreign exchange transactions, futures contracts or options, pursuant to
Sections 4(g), 4(h), 4(l), and 4(m) hereof, the Custodian may make payment
therefor before receipt of an advice of transaction; and (iii) in the case of
Securities as to which payment for the Security and receipt of the instrument
evidencing the Security are under generally accepted trade practice or the
terms of the instrument representing the Security expected to take place in
different locations or through separate parties, such as commercial paper
which is indexed to foreign currency exchange rates, derivatives and similar
Securities, the Custodian may make payment for such Securities prior to
delivery thereof in accordance with such generally accepted trade practice or
the terms of the instrument representing such Security.
(2) Other Assets Purchased. Upon receipt of Instructions and
except as
otherwise provided herein, the Custodian shall pay for and receive other
Assets for the account of a Fund as provided in Instructions.
(f) Sales of Assets.
(1) Securities Sold. In accordance with Instructions, the
Custodian
will, with respect to a sale, deliver or cause to be delivered the Securities
thus designated as sold to the broker or other person specified in the
Instructions relating to such sale. Unless the Custodian has received Special
Instructions to the contrary, such delivery shall be made only upon receipt of
payment therefor in the form of: (a) cash, certified check, bank cashier's
check, bank credit, or bank wire transfer; (b) credit to the account of the
Custodian with a clearing corporation of a national Securities exchange of
which the Custodian is a member; or (c) credit to the Account of the Custodian
with a Securities System, in accordance with the provisions of Section 4(b)(3)
hereof. Notwithstanding the foregoing, Securities held in physical form may
be delivered and paid for in accordance with "street delivery custom" to a
broker or its clearing agent, against delivery to the Custodian of a receipt
for such Securities, provided that the Custodian shall have taken reasonable
steps to ensure prompt collection of the payment for, or return of, such
Securities by the broker or its clearing agent, and provided further that the
Custodian shall not be responsible for the selection of or the failure or
inability to perform of such broker or its clearing agent or for any related
loss arising from delivery or custody of such Securities prior to receiving
payment therefor.
(2) Other Assets Sold. Upon receipt of Instructions and except
as
otherwise provided herein, the Custodian shall receive payment for and deliver
other Assets for the account of a Fund as provided in Instructions.
(g) Options.
(1) Upon receipt of Instructions relating to the purchase of an
option
or sale of a covered call option, the Custodian shall: (a) receive and retain
confirmations or other documents, if any, evidencing the purchase or writing
of the option by a Fund; (b) if the transaction involves the sale of a covered
call option, deposit and maintain in a segregated account the Securities
(either physically or by book-entry in a Securities System) subject to the
covered call option written on behalf of such Fund; and (c) pay, release
and/or transfer such Securities, cash or other Assets in accordance with any
notices or other communications evidencing the expiration, termination or
exercise of such options which are furnished to the Custodian by the Options
Clearing Corporation (the "OCC"), the securities or options exchanges on which
such options were traded, or such other organization as may be responsible for
handling such option transactions.
(2) Upon receipt of Instructions relating to the sale of a
naked option
(including stock index and commodity options), the Custodian, the appropriate
Fund and the broker-dealer shall enter into an agreement to comply with the
rules of the OCC or of any registered national securities exchange or similar
organizations(s). Pursuant to that agreement and such Fund's Instructions,
the Custodian shall: (a) receive and retain confirmations or other documents,
if any, evidencing the writing of the option; (b) deposit and maintain in a
segregated account, Securities (either physically or by book-entry in a
Securities System), cash and/or other Assets; and (c) pay, release and/or
transfer such Securities, cash or other Assets in accordance with any such
agreement and with any notices or other communications evidencing the
expiration, termination or exercise of such option which are furnished to the
Custodian by the OCC, the securities or options exchanges on which such
options were traded, or such other organization as may be responsible for
handling such option transactions. The appropriate Fund and the broker-dealer
shall be responsible for determining the quality and quantity of assets held
in any segregated account established in compliance with applicable margin
maintenance requirements and the performance of other terms of any option
contract.
(h) Futures Contracts.
Upon receipt of Instructions, the Custodian shall enter into a futures
margin procedural agreement among the appropriate Fund, the Custodian and the
designated futures commission merchant (a "Procedural Agreement"). Under the
Procedural Agreement the Custodian shall: (a) receive and retain
confirmations, if any, evidencing the purchase or sale of a futures contract
or an option on a futures contract by such Fund; (b) deposit and maintain in a
segregated account cash, Securities and/or other Assets designated as initial,
maintenance or variation "margin" deposits intended to secure such Fund's
performance of its obligations under any futures contracts purchased or sold,
or any options on futures contracts written by such Fund, in accordance with
the provisions of any Procedural Agreement designed to comply with the
provisions of the Commodity Futures Trading Commission and/or any commodity
exchange or contract market (such as the Chicago Board of Trade), or any
similar organization(s), regarding such margin deposits; and (c) release
Assets from and/or transfer Assets into such margin accounts only in
accordance with any such Procedural Agreements. The appropriate Fund and such
futures commission merchant shall be responsible for determining the type and
amount of Assets held in the segregated account or paid to the broker-dealer
in compliance with applicable margin maintenance requirements and the
performance of any futures contract or option on a futures contract in
accordance with its terms.
(i) Segregated Accounts.
Upon receipt of Instructions, the Custodian shall establish and maintain
on its books a segregated account or accounts for and on behalf of a Fund,
into which account or accounts may be transferred Assets of such Fund,
including Securities maintained by the Custodian in a Securities System
pursuant to Paragraph (b)(3) of this Section 4, said account or accounts to be
maintained (i) for the purposes set forth in Sections 4(g), 4(h) and 4(n) and
(ii) for the purpose of compliance by such Fund with the procedures required
by the SEC Investment Company Act Release Number 10666 or any subsequent
release or releases relating to the maintenance of segregated accounts by
registered investment companies, or (iii) for such other purposes as may be
set forth, from time to time, in Special Instructions. The Custodian shall
not be responsible for the determination of the type or amount of Assets to be
held in any segregated account referred to in this paragraph, or for
compliance by the Fund with required procedures noted in (ii) above.
(j) Depository Receipts.
Upon receipt of Instructions, the Custodian shall surrender or cause to
be
surrendered Securities to the depository used for such Securities by an issuer
of American Depository Receipts or International Depository Receipts
(hereinafter referred to, collectively, as "ADRs"), against a written receipt
therefor adequately describing such Securities and written evidence
satisfactory to the organization surrendering the same that the depository has
acknowledged receipt of instructions to issue ADRs with respect to such
Securities in the name of the Custodian or a nominee of the Custodian, for
delivery in accordance with such instructions.
Upon receipt of Instructions, the Custodian shall surrender or cause to
be
surrendered ADRs to the issuer thereof, against a written receipt therefor
adequately describing the ADRs surrendered and written evidence satisfactory
to the organization surrendering the same that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver the
Securities underlying such ADRs in accordance with such instructions.
(k) Corporate Actions, Put Bonds, Called Bonds, Etc.
Upon receipt of Instructions, the Custodian shall: (a) deliver warrants,
puts, calls, rights or similar Securities to the issuer or trustee thereof (or
to the agent of such issuer or trustee) for the purpose of exercise or sale,
provided that the new Securities, cash or other Assets, if any, acquired as a
result of such actions are to be delivered to the Custodian; and (b) deposit
Securities upon invitations for tenders thereof, provided that the
consideration for such Securities is to be paid or delivered to the Custodian,
or the tendered Securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary in Instructions, to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall notify the appropriate Fund of such action in
writing by facsimile transmission or in such other manner as such Fund and
Custodian may agree in writing.
The Fund agrees that if it gives an Instruction for the performance of
an
act on the last permissible date of a period established by any optional offer
or on the last permissible date for the performance of such act, the Fund
shall hold the Bank harmless from any adverse consequences in connection with
acting upon or failing to act upon such Instructions.
(l) Interest Bearing Deposits.
Upon receipt of Instructions directing the Custodian to purchase
interest
bearing fixed term and call deposits (hereinafter referred to, collectively,
as "Interest Bearing Deposits") for the account of a Fund, the Custodian shall
purchase such Interest Bearing Deposits in the name of such Fund with such
banks or trust companies, including the Custodian, any Subcustodian or any
subsidiary or affiliate of the Custodian (hereinafter referred to as "Banking
Institutions"), and in such amounts as such Fund may direct pursuant to
Instructions. Such Interest Bearing Deposits may be denominated in U.S.
dollars or other currencies, as such Fund may determine and direct pursuant to
Instructions. The responsibilities of the Custodian to a Fund for Interest
Bearing Deposits issued by the Custodian shall be that of a U.S. bank for a
similar deposit. With respect to Interest Bearing Deposits other than those
issued by the Custodian, (a) the Custodian shall be responsible for the
collection of income and the transmission of cash to and from such accounts;
and (b) the Custodian shall have no duty with respect to the selection of the
Banking Institution or for the failure of such Banking Institution to pay upon
demand.
(m) Foreign Exchange Transactions.
(l) Each Fund hereby appoints the Custodian as its agent in the
execution of all currency exchange transactions. The Custodian agrees to
provide exchange rate and U.S. Dollar information, in writing, to the Funds.
Such information shall be supplied by the Custodian at least by the business
day prior to the value date of the foreign exchange transaction, provided that
the Custodian receives the request for such information at least two business
days prior to the value date of the transaction.
(2) Upon receipt of Instructions, the Custodian shall settle
foreign
exchange contracts or options to purchase and sell foreign currencies for spot
and future delivery on behalf of and for the account of a Fund with such
currency brokers or Banking Institutions as such Fund may determine and direct
pursuant to Instructions. If, in its Instructions, a Fund does not direct the
Custodian to utilize a particular currency broker or Banking Institution, the
Custodian is authorized to select such currency broker or Banking Institution
as it deems appropriate to execute the Fund's foreign currency transaction.
(3) Each Fund accepts full responsibility for its use of third
party
foreign exchange brokers and for execution of said foreign exchange contracts
and understands that the Fund shall be responsible for any and all costs and
interest charges which may be incurred as a result of the failure or delay of
its third party broker to deliver foreign exchange. The Custodian shall have
no responsibility or liability with respect to the selection of the currency
brokers or Banking Institutions with which a Fund deals or the performance of
such brokers or Banking Institutions.
(4) Notwithstanding anything to the contrary contained herein,
upon
receipt of Instructions the Custodian may, in connection with a foreign
exchange contract, make free outgoing payments of cash in the form of U.S.
Dollars or foreign currency prior to receipt of confirmation of such foreign
exchange contract or confirmation that the countervalue currency completing
such contract has been delivered or received.
(5) The Custodian shall not be obligated to enter into foreign
exchange
transactions as principal. However, if the Custodian has made available to a
Fund its services as a principal in foreign exchange transactions
and subject to any separate agreement between the parties relating to such
transactions, the Custodian shall enter into foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future delivery
on behalf of and for the account of the Fund, with the Custodian as principal.
(n) Pledges or Loans of Securities.
(1) Upon receipt of Instructions from a Fund, the Custodian
will
release or cause to be released Securities held in custody to the pledgees
designated in such Instructions by way of pledge or hypothecation to secure
loans incurred by such Fund with various lenders including but not limited to
UMB Bank, n.a.; provided, however, that the Securities shall be released only
upon payment to the Custodian of the monies borrowed, except that in cases
where additional collateral is required to secure existing borrowings, further
Securities may be released or delivered, or caused to be released or delivered
for that purpose upon receipt of Instructions. Upon receipt of Instructions,
the Custodian will pay, but only from funds available for such purpose, any
such loan upon re-delivery to it of the Securities pledged or hypothecated
therefor and upon surrender of the note or notes evidencing such loan. In
lieu of delivering collateral to a pledgee, the Custodian, on the receipt of
Instructions, shall transfer the pledged Securities to a segregated account
for the benefit of the pledgee.
(2) Upon receipt of Special Instructions, and execution of a
separate
Securities Lending Agreement, the Custodian will release Securities held in
custody to the borrower designated in such Instructions and may, except as
otherwise provided below, deliver such Securities prior to the receipt of
collateral, if any, for such borrowing, provided that, in case of loans of
Securities held by a Securities System that are secured by cash collateral,
the Custodian's instructions to the Securities System shall require that the
Securities System deliver the Securities of the appropriate Fund to the
borrower thereof only upon receipt of the collateral for such borrowing. The
Custodian shall have no responsibility or liability for any loss arising from
the delivery of Securities prior to the receipt of collateral. Upon receipt
of Instructions and the loaned Securities, the Custodian will release the
collateral to the borrower.
(o) Stock Dividends, Rights, Etc.
The Custodian shall receive and collect all stock dividends, rights, and
other items of like nature and, upon receipt of Instructions, take action with
respect to the same as directed in such Instructions.
(p) Routine Dealings.
The Custodian will, in general, attend to all routine and mechanical
matters in accordance with industry standards in connection with the sale,
exchange, substitution, purchase, transfer, or other dealings with Securities
or other property of each Fund except as may be otherwise provided in this
Agreement or directed from time to time by Instructions from any particular
Fund. The Custodian may also make payments to itself or others from the
Assets for disbursements and out-of-pocket expenses incidental to handling
Securities or other similar items relating to its duties under this Agreement,
provided that all such payments shall be accounted for to the appropriate
Fund.
(q) Collections.
The Custodian shall (a) collect amounts due and payable to each Fund
with
respect to portfolio Securities and other Assets; (b) promptly credit to the
account of each Fund all income and other payments relating to portfolio
Securities and other Assets held by the Custodian hereunder upon Custodian's
receipt of such income or payments or as otherwise agreed in writing by the
Custodian and any particular Fund; (c) promptly endorse and deliver any
instruments required to effect such collection; and (d) promptly execute
ownership and other certificates and affidavits for all federal, state, local
and foreign tax purposes in connection with receipt of income or other
payments with respect to portfolio Securities and other Assets, or in
connection with the transfer of such Securities or other Assets; provided,
however, that with respect to portfolio Securities registered in so-called
street name, or physical Securities with variable interest rates, the
Custodian shall use its best efforts to collect amounts due and payable to any
such Fund. The Custodian shall notify a Fund in writing by facsimile
transmission or in such other manner as such Fund and Custodian may agree in
writing if any amount payable with respect to portfolio Securities or other
Assets is not received by the Custodian when due. The Custodian shall not be
responsible for the collection of amounts due and payable with respect to
portfolio Securities or other Assets that are in default.
(r) Bank Accounts.
Upon Instructions, the Custodian shall open and operate a bank account
or
accounts on the books of the Custodian; provided that such bank account(s)
shall be in the name of the Custodian or a nominee thereof, for the account of
one or more Funds, and shall be subject only to draft or order of the
Custodian. The responsibilities of the Custodian to any one or more such
Funds for deposits accepted on the Custodian's books shall be that of a U.S.
bank for a similar deposit.
(s) Dividends, Distributions and Redemptions.
To enable each Fund to pay dividends or other distributions to
shareholders of each such Fund and to make payment to shareholders who have
requested repurchase or redemption of their shares of each such Fund
(collectively, the "Shares"), the Custodian shall release cash or Securities
insofar as available. In the case of cash, the Custodian shall, upon the
receipt of Instructions, transfer such funds by check or wire transfer to any
account at any bank or trust company designated by each such Fund in such
Instructions. In the case of Securities, the Custodian shall, upon the
receipt of Special Instructions, make such transfer to any entity or account
designated by each such Fund in such Special Instructions.
(t) Proceeds from Shares Sold.
The Custodian shall receive funds representing cash payments received
for
shares issued or sold from time to time by each Fund, and shall credit such
funds to the account of the appropriate Fund. The Custodian shall notify the
appropriate Fund of Custodian's receipt of cash in payment for shares issued
by such Fund by facsimile transmission or in such other manner as such Fund
and the Custodian shall agree. Upon receipt of Instructions, the Custodian
shall: (a) deliver all federal funds received by the Custodian in payment for
shares as may be set forth in such Instructions and at a time agreed upon
between the Custodian and such Fund; and (b) make federal funds available to a
Fund as of specified times agreed upon from time to time by such Fund and the
Custodian, in the amount of checks received in payment for shares which are
deposited to the accounts of such Fund.
(u) Proxies and Notices; Compliance with the Shareholders Communication
Act of 1985.
The Custodian shall deliver or cause to be delivered to the appropriate
Fund all forms of proxies, all notices of meetings, and any other notices or
announcements affecting or relating to Securities owned by such Fund that are
received by the Custodian, any Subcustodian, or any nominee of either of them,
and, upon receipt of Instructions, the Custodian shall execute and deliver, or
cause such Subcustodian or nominee to execute and deliver, such proxies or
other authorizations as may be required. Except as directed pursuant to
Instructions, neither the Custodian nor any Subcustodian or nominee shall vote
upon any such Securities, or execute any proxy to vote thereon, or give any
consent or take any other action with respect thereto.
The Custodian will not release the identity of any Fund to an issuer
which
requests such information pursuant to the Shareholder Communications Act of
1985 for the specific purpose of direct communications between such issuer and
any such Fund unless a particular Fund directs the Custodian otherwise in
writing.
(v) Books and Records.
The Custodian shall maintain such records relating to its activities
under
this Agreement as are required to be maintained by Rule 31a-1 under the
Investment Company Act of 1940 ("the 1940 Act") and to preserve them for the
periods prescribed in Rule 31a-2 under the 1940 Act. These records shall be
open for inspection by duly authorized officers, employees or agents
(including independent public accountants) of the appropriate Fund during
normal business hours of the Custodian.
The Custodian shall provide accountings relating to its activities under
this Agreement as shall be agreed upon by each Fund and the Custodian.
(w) Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as each Fund may request
to
obtain from year to year favorable opinions from each such Fund's independent
certified public accountants with respect to the Custodian's activities
hereunder and in connection with the preparation of each such Fund's periodic
reports to the SEC and with respect to any other requirements of the SEC.
(x) Reports by Independent Certified Public Accountants.
At the request of a Fund, the Custodian shall deliver to such Fund a
written report prepared by the Custodian's independent certified public
accountants with respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's accounting system,
internal accounting control and procedures for safeguarding cash, Securities
and other Assets, including cash, Securities and other Assets deposited and/or
maintained in a Securities System or with a Subcustodian. Such report shall
be of sufficient scope and in sufficient detail as may reasonably be required
by such Fund and as may reasonably be obtained by the Custodian.
(y) Bills and Other Disbursements.
Upon receipt of Instructions, the Custodian shall pay, or cause to be
paid, all bills, statements, or other obligations of a Fund.
5. SUBCUSTODIANS.
From time to time, in accordance with the relevant provisions of this
Agreement, the Custodian may appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Special Subcustodians, or Interim Subcustodians (as
each are hereinafter defined) to act on behalf of any one or more Funds. A
Domestic Subcustodian, in accordance with the provisions of this Agreement,
may also appoint a Foreign Subcustodian, Special Subcustodian, or Interim
Subcustodian to act on behalf of any one or more Funds. For purposes of this
Agreement, all Domestic Subcustodians, Foreign Subcustodians, Special
Subcustodians and Interim Subcustodians shall be referred to collectively as
"Subcustodians".
(a) Domestic Subcustodians.
The Custodian may, at any time and from time to time, appoint any bank
as
defined in Section 2(a)(5) of the 1940 Act or any trust company or other
entity, any of which meet the requirements of a custodian under Section 17(f)
of the 1940 Act and the rules and regulations thereunder, to act for the
Custodian on behalf of any one or more Funds as a subcustodian for purposes of
holding Assets of such Fund(s) and performing other functions of the Custodian
within the United States (a "Domestic Subcustodian"). Each Fund shall approve
in writing the appointment of the proposed Domestic Subcustodian; and the
Custodian's appointment of any such Domestic Subcustodian shall not be
effective without such prior written approval of the Fund(s). Each such duly
approved Domestic Subcustodian shall be listed on Appendix A attached hereto,
as it may be amended, from time to time.
(b) Foreign Subcustodians.
The Custodian may at any time appoint, or cause a Domestic Subcustodian
to
appoint, any bank, trust company or other entity meeting the requirements of
an "eligible foreign custodian" under Section 17(f) of the 1940 Act and the
rules and regulations thereunder to act for the Custodian on behalf of any one
or more Funds as a subcustodian or sub-subcustodian (if appointed by a
Domestic Subcustodian) for purposes of holding Assets of the Fund(s) and
performing other functions of the Custodian in countries other than the United
States of America (hereinafter referred to as a "Foreign Subcustodian" in the
context of either a subcustodian or a sub-subcustodian); provided that the
Custodian shall have obtained written confirmation from each Fund of the
approval of the Board of Directors or other governing body of each such Fund
(which approval may be withheld in the sole discretion of such Board of
Directors or other governing body or entity) with respect to (i) the identity
of any proposed Foreign Subcustodian (including branch designation), (ii) the
country or countries in which, and the securities depositories or clearing
agencies (hereinafter "Securities Depositories and Clearing Agencies"), if
any, through which, the Custodian or any proposed Foreign Subcustodian is
authorized to hold Securities and other Assets of each such Fund, and (iii)
the form and terms of the subcustodian agreement to be entered into with such
proposed Foreign Subcustodian. Each such duly approved Foreign Subcustodian
and the countries where and the Securities Depositories and Clearing Agencies
through which they may hold Securities and other Assets of the Fund(s) shall
be listed on Appendix A attached hereto, as it may be amended, from time to
time. Each Fund shall be responsible for informing the Custodian sufficiently
in advance of a proposed investment which is to be held in a country in which
no Foreign Subcustodian is authorized to act, in order that there shall be
sufficient time for the Custodian, or any Domestic Subcustodian, to effect the
appropriate arrangements with a proposed Foreign Subcustodian, including
obtaining approval as provided in this Section 5(b). In connection with the
appointment of any Foreign Subcustodian, the Custodian shall, or shall cause
the Domestic Subcustodian to, enter into a subcustodian agreement with the
Foreign Subcustodian in form and substance approved by each such Fund. The
Custodian shall not consent to the amendment of, and shall cause any Domestic
Subcustodian not to consent to the amendment of, any agreement entered into
with a Foreign Subcustodian, which materially affects any Fund's rights under
such agreement, except upon prior written approval of such Fund pursuant to
Special Instructions.
(c) Interim Subcustodians.
Notwithstanding the foregoing, in the event that a Fund shall invest in
an
Asset to be held in a country in which no Foreign Subcustodian is authorized
to act, the Custodian shall notify such Fund in writing by facsimile
transmission or in such other manner as such Fund and the Custodian shall
agree in writing of the unavailability of an approved Foreign Subcustodian in
such country; and upon the receipt of Special Instructions from such Fund, the
Custodian shall, or shall cause its Domestic Subcustodian to, appoint or
approve an entity (referred to herein as an "Interim Subcustodian") designated
in such Special Instructions to hold such Security or other Asset.
(d) Special Subcustodians.
Upon receipt of Special Instructions, the Custodian shall, on behalf of
a
Fund, appoint one or more banks, trust companies or other entities designated
in such Special Instructions to act for the Custodian on behalf of such Fund
as a subcustodian for purposes of: (i) effecting third-party repurchase
transactions with banks, brokers, dealers or other entities through the use of
a common custodian or subcustodian; (ii) providing depository and clearing
agency services with respect to certain variable rate demand note Securities,
(iii) providing depository and clearing agency services with respect to dollar
denominated Securities, and (iv) effecting any other transactions designated
by such Fund in such Special Instructions. Each such designated subcustodian
(hereinafter referred to as a "Special Subcustodian") shall be listed on
Appendix A attached hereto, as it may be amended from time to time. In
connection with the appointment of any Special Subcustodian, the Custodian
shall enter into a subcustodian agreement with the Special Subcustodian in
form and substance approved by the appropriate Fund in Special Instructions.
The Custodian shall not amend any subcustodian agreement entered into with a
Special Subcustodian, or waive any rights under such agreement, except upon
prior approval pursuant to Special Instructions.
(e) Termination of a Subcustodian.
The Custodian may, at any time in its discretion upon notification to
the
appropriate Fund(s), terminate any Subcustodian of such Fund(s) in accordance
with the termination provisions under the applicable subcustodian agreement,
and upon the receipt of Special Instructions, the Custodian will terminate any
Subcustodian in accordance with the termination provisions under the
applicable subcustodian agreement.
(f) Certification Regarding Foreign Subcustodians.
Upon request of a Fund, the Custodian shall deliver to such Fund a
certificate stating: (i) the identity of each Foreign Subcustodian then
acting on behalf of the Custodian; (ii) the countries in which and the
Securities
Depositories and Clearing Agencies through which each such Foreign
Subcustodian is then holding cash, Securities and other Assets of such Fund;
and (iii) such other information as may be requested by such Fund, and as the
Custodian shall be reasonably able to obtain, to evidence compliance with
rules and regulations under the 1940 Act.
6. STANDARD OF CARE.
(a) General Standard of Care.
The Custodian shall be liable to a Fund for all losses, damages and
reasonable costs and expenses suffered or incurred by such Fund resulting from
the negligence or willful misfeasance of the Custodian; provided, however, in
no event shall the Custodian be liable for special, indirect or consequential
damages arising under or in connection with this Agreement.
(b) Actions Prohibited by Applicable Law, Events Beyond Custodian's
Control, Sovereign Risk, Etc.
In no event shall the Custodian or any Domestic Subcustodian incur
liability hereunder (i) if the Custodian or any Subcustodian or Securities
System, or any subcustodian, Securities System, Securities Depository or
Clearing Agency utilized by the Custodian or any such Subcustodian, or any
nominee of the Custodian or any Subcustodian (individually, a "Person") is
prevented, forbidden or delayed from performing, or omits to perform, any act
or thing which this Agreement provides shall be performed or omitted to be
performed, by reason of: (a) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or
of any foreign country, or political subdivision thereof or of any court of
competent jurisdiction (and neither the Custodian nor any other Person shall
be obligated to take any action contrary thereto); or (b) any event beyond the
control of the Custodian or other Person such as armed conflict, riots,
strikes, lockouts, labor disputes, equipment or transmission failures, natural
disasters, or failure of the mails, transportation, communications or power
supply; or (ii) for any loss, damage, cost or expense resulting from
"Sovereign Risk." A "Sovereign Risk" shall mean nationalization,
expropriation, currency devaluation, revaluation or fluctuation, confiscation,
seizure, cancellation, destruction or similar action by any governmental
authority, de facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency restrictions,
exchange controls, taxes, levies or other charges affecting a Fund's Assets;
or acts of armed conflict, terrorism, insurrection or revolution; or any other
act or event beyond the Custodian's or such other Person's control.
(c) Liability for Past Records.
Neither the Custodian nor any Domestic Subcustodian shall have any
liability in respect of any loss, damage or expense suffered by a Fund,
insofar as such loss, damage or expense arises from the performance of the
Custodian or any Domestic Subcustodian in reliance upon records that were
maintained for such Fund by entities other than the Custodian or any Domestic
Subcustodian prior to the Custodian's employment hereunder.
(d) Advice of Counsel.
The Custodian and all Domestic Subcustodians shall be entitled to
receive
and act upon advice of counsel of its own choosing on all matters. The
Custodian and all Domestic Subcustodians shall be without liability for any
actions taken or omitted in good faith pursuant to the advice of counsel.
(e) Advice of the Fund and Others.
The Custodian and any Domestic Subcustodian may rely upon the advice of
any Fund and upon statements of such Fund's accountants and other persons
believed by it in good faith to be expert in matters upon which they are
consulted, and neither the Custodian nor any Domestic Subcustodian shall be
liable for any actions taken or omitted, in good faith, pursuant to such
advice or statements.
(f) Instructions Appearing to be Genuine.
The Custodian and all Domestic Subcustodians shall be fully protected
and
indemnified in acting as a custodian hereunder upon any Resolutions of the
Board of Directors or Trustees, Instructions, Special Instructions, advice,
notice, request, consent, certificate, instrument or paper appearing to it to
be genuine and to have been properly executed and shall, unless otherwise
specifically provided herein, be entitled to receive as conclusive proof of
any fact or matter required to be ascertained from any Fund hereunder a
certificate signed by any officer of such Fund authorized to countersign or
confirm Special Instructions.
(g) Exceptions from Liability.
Without limiting the generality of any other provisions hereof, neither
the Custodian nor any Domestic Subcustodian shall be under any duty or
obligation to inquire into, nor be liable for:
(i) the validity of the issue of any Securities purchased by
or for
any Fund, the legality of the purchase thereof or evidence of ownership
required to be received by any such Fund, or the propriety of the decision to
purchase or amount paid therefor;
(ii) the legality of the sale of any Securities by or for
any Fund,
or the propriety of the amount for which the same were sold; or
(iii) any other expenditures, encumbrances of Securities,
borrowings
or similar actions with respect to any Fund's Assets;
and may, until notified to the contrary, presume that all Instructions or
Special Instructions received by it are not in conflict with or in any way
contrary to any provisions of any such Fund's Declaration of Trust,
Partnership Agreement, Articles of Incorporation or By-Laws or votes or
proceedings of the shareholders, trustees, partners or directors of any such
Fund, or any such Fund's currently effective Registration Statement on file
with the SEC.
7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS.
(a) Domestic Subcustodians
The Custodian shall be liable for the acts or omissions of any Domestic
Subcustodian to the same extent as if such actions or omissions were performed
by the Custodian itself.
(b) Liability for Acts and Omissions of Foreign Subcustodians.
The Custodian shall be liable to a Fund for any loss or damage to such
Fund caused by or resulting from the acts or omissions of any Foreign
Subcustodian to the extent that, under the terms set forth in the subcustodian
agreement between the Custodian or a Domestic Subcustodian and such Foreign
Subcustodian, the Foreign Subcustodian has failed to perform in accordance
with the standard of conduct imposed under such subcustodian agreement and the
Custodian or Domestic Subcustodian recovers from the Foreign Subcustodian
under the applicable subcustodian agreement.
(c) Securities Systems, Interim Subcustodians, Special Subcustodians,
Securities Depositories and Clearing Agencies.
The Custodian shall not be liable to any Fund for any loss, damage or
expense suffered or incurred by such Fund resulting from or occasioned by the
actions or omissions of a Securities System, Interim Subcustodian, Special
Subcustodian, or Securities Depository and Clearing Agency unless such loss,
damage or expense is caused by, or results from, the negligence or willful
misfeasance of the Custodian.
(d) Defaults or Insolvencies of Brokers, Banks, Etc.
The Custodian shall not be liable for any loss, damage or expense
suffered
or incurred by any Fund resulting from or occasioned by the actions,
omissions, neglects, defaults or insolvency of any broker, bank, trust company
or any other person with whom the Custodian may deal (other than any of such
entities acting as a Subcustodian, Securities System or Securities Depository
and Clearing Agency, for whose actions the liability of the Custodian is set
out elsewhere in this Agreement) unless such loss, damage or expense is caused
by, or results from, the negligence or willful misfeasance of the Custodian.
(e) Reimbursement of Expenses.
Each Fund agrees to reimburse the Custodian for all out-of-pocket
expenses
incurred by the Custodian in connection with this Agreement, but excluding
salaries and usual overhead expenses.
8. INDEMNIFICATION.
(a) Indemnification by Fund.
Subject to the limitations set forth in this Agreement, each Fund agrees
to indemnify and hold harmless the Custodian and its nominees from all losses,
damages and expenses (including attorneys' fees) suffered or incurred by the
Custodian or its nominee caused by or arising from actions taken by the
Custodian, its employees or agents in the performance of its duties and
obligations under this Agreement, including, but not limited to, any
indemnification obligations undertaken by the Custodian under any relevant
subcustodian agreement; provided, however, that such indemnity shall not apply
to the extent the Custodian is liable under Sections 6 or 7 hereof.
If any Fund requires the Custodian to take any action with respect to
Securities, which action involves the payment of money or which may, in the
opinion of the Custodian, result in the Custodian or its nominee assigned to
such Fund being liable for the payment of money or incurring liability of some
other form, such Fund, as a prerequisite to requiring the Custodian to take
such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
(b) Indemnification by Custodian.
Subject to the limitations set forth in this Agreement and in addition
to
the obligations provided in Sections 6 and 7, the Custodian agrees to
indemnify and hold harmless each Fund from all losses, damages and expenses
suffered or incurred by each such Fund caused by the negligence or willful
misfeasance of the Custodian.
9. ADVANCES.
In the event that, pursuant to Instructions, the Custodian or any
Subcustodian, Securities System, or Securities Depository or Clearing Agency
acting either directly or indirectly under agreement with the Custodian (each
of which for purposes of this Section 9 shall be referred to as "Custodian"),
makes any payment or transfer of funds on behalf of any Fund as to which there
would be, at the close of business on the date of such payment or transfer,
insufficient funds held by the Custodian on behalf of any such Fund, the
Custodian may, in its discretion without further Instructions, provide an
advance ("Advance") to any such Fund in an amount sufficient to allow the
completion of the transaction by reason of which such payment or transfer of
funds is to be made. In addition, in the event the Custodian is directed by
Instructions to make any payment or transfer of funds on behalf of any Fund as
to which it is subsequently determined that such Fund has overdrawn its cash
account with the Custodian as of the close of business on the date of such
payment or transfer, said overdraft shall constitute an Advance. Any Advance
shall be payable by the Fund on behalf of which the Advance was made on demand
by Custodian, unless otherwise agreed by such Fund and the Custodian, and
shall accrue interest from the date of the Advance to the date of payment by
such Fund to the Custodian at a rate agreed upon in writing from time to time
by the Custodian and such Fund. It is understood that any transaction in
respect of which the Custodian shall have made an Advance, including but not
limited to a foreign exchange contract or transaction in respect of which the
Custodian is not acting as a principal, is for the account of and at the risk
of the Fund on behalf of which the Advance was made, and not, by reason of
such Advance, deemed to be a transaction undertaken by the Custodian for its
own account and risk. The Custodian and each of the Funds which are parties
to this Agreement acknowledge that the purpose of Advances is to finance
temporarily the purchase or sale of Securities for prompt delivery in
accordance with the settlement terms of such transactions or to meet emergency
expenses not reasonably foreseeable by a Fund. The Custodian shall promptly
notify the appropriate Fund of any Advance. Such notification shall be sent
by facsimile transmission or in such other manner as such Fund and the
Custodian may agree.
10. LIENS.
The Bank shall have a lien on the Property in the Custody Account to
secure payment of fees and expenses for the services rendered under this
Agreement. If the Bank advances cash or securities to the Fund for any
purpose or in the event that the Bank or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of its duties hereunder, except such as may
arise from its or its nominee's negligent action, negligent failure to act or
willful misconduct, any Property at any time held for the Custody Account
shall be security therefor and the Fund hereby grants a security interest
therein to the Bank. The Fund shall promptly reimburse the Bank for any such
advance of cash or securities or any such taxes, charges, expenses,
assessments, claims or liabilities upon request for payment, but should the
Fund fail to so reimburse the Bank, the Bank shall be entitled to dispose of
such Property to the extent necessary to obtain reimbursement. The Bank shall
be entitled to debit any account of the Fund with the Bank including, without
limitation, the Custody Account, in connection with any such advance and any
interest on such advance as the Bank deems reasonable.
11. COMPENSATION.
Each Fund will pay to the Custodian such compensation as is agreed to in
writing by the Custodian and each such Fund from time to time. Such
compensation, together with all amounts for which the Custodian is to be
reimbursed in accordance with Section 7(e), shall be billed to each such Fund
and paid in cash to the Custodian.
12. POWERS OF ATTORNEY.
Upon request, each Fund shall deliver to the Custodian such proxies,
powers of attorney or other instruments as may be reasonable and necessary or
desirable in connection with the performance by the Custodian or any
Subcustodian of their respective obligations under this Agreement or any
applicable subcustodian agreement.
13. TERMINATION AND ASSIGNMENT.
Any Fund or the Custodian may terminate this Agreement by notice in
writing, delivered or mailed, postage prepaid (certified mail, return receipt
requested) to the other not less than 90 days prior to the date upon which
such termination shall take effect. Upon termination of this Agreement, the
appropriate Fund shall pay to the Custodian such fees as may be due the
Custodian hereunder as well as its reimbursable disbursements, costs and
expenses paid or incurred. Upon termination of this Agreement, the Custodian
shall deliver, at the terminating party's expense, all Assets held by it
hereunder to the appropriate Fund or as otherwise designated by such Fund by
Special Instructions. Upon such delivery, the Custodian shall have no further
obligations or liabilities under this Agreement except as to the final
resolution of matters relating to activity occurring prior to the effective
date of termination.
This Agreement may not be assigned by the Custodian or any Fund without
the respective consent of the other, duly authorized by a resolution by its
Board of Directors or Trustees.
14. ADDITIONAL FUNDS.
An additional Fund or Funds may become a party to this Agreement after
the
date hereof by an instrument in writing to such effect signed by such Fund or
Funds and the Custodian. If this Agreement is terminated as to one or more of
the Funds (but less than all of the Funds) or if an additional Fund or Funds
shall become a party to this Agreement, there shall be delivered to each party
an Appendix #1 or an amended Appendix #1, signed by each of the additional
Funds (if any) and each of the remaining Funds as well as the Custodian,
deleting or adding such Fund or Funds, as the case may be. The termination of
this Agreement as to less than all of the Funds shall not affect the
obligations of the Custodian and the remaining Funds hereunder as set forth on
the signature page hereto and in Appendix #1 as revised from time to time.
15. NOTICES.
As to each Fund, notices, requests, instructions and other writings
delivered to Jones & Babson, Inc, 700 Karnes Blvd., Kansas City, Missouri
64108, postage prepaid, or to such other address as any particular Fund may
have designated to the Custodian in writing, shall be deemed to have been
properly delivered or given to a Fund.
Notices, requests, instructions and other writings delivered to the
Securities Administration Department of the Custodian at its office at 928
Grand Avenue, Kansas City, Missouri, or mailed postage prepaid, to the
Custodian's Securities Administration Department, Post Office Box 226, Kansas
City, Missouri 64141, or to such other addresses as the Custodian may have
designated to each Fund in writing, shall be deemed to have been properly
delivered or given to the Custodian hereunder; provided, however, that
procedures for the delivery of Instructions and Special Instructions shall be
governed by Section 2(c) hereof.
16. MISCELLANEOUS.
(a) This Agreement is executed and delivered in the State of Missouri
and
shall be governed by the laws of such state.
(b) All of the terms and provisions of this Agreement shall be binding
upon, and inure to the benefit of, and be enforceable by the respective
successors and assigns of the parties hereto.
(c) No provisions of this Agreement may be amended, modified or waived,
in any manner except in writing, properly executed by both parties hereto;
provided, however, Appendix A may be amended from time to time as Domestic
Subcustodians, Foreign Subcustodians, Special Subcustodians, and Securities
Depositories and Clearing Agencies are approved or terminated according to the
terms of this Agreement.
(d) 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.
(e) This Agreement shall be effective as of the date of execution
hereof.
(f) This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(g) The following terms are defined terms within the meaning of this
Agreement, and the definitions thereof are found in the following sections of
the Agreement:
Term Section
Account 4(b)(3)(ii)
ADR'S 4(j)
Advance 9
Assets 2(b)
Authorized Person 3
Banking Institution 4(1)
Domestic Subcustodian 5(a)
Foreign Subcustodian 5(b)
Instruction 2(c)(1)
Interim Subcustodian 5(c)
Interest Bearing Deposit 4(1)
Term Section
Liability 10
OCC 4(g)(2)
Person 6(b)
Procedural Agreement 4(h)
SEC 4(b)(3)
Securities 2(a)
Securities Depositories and
Clearing Agencies 5(b)
Securities System 4(b)(3)
Shares 4(s)
Sovereign Risk 6(b)
Special Instruction 2(c)(2)
Special Subcustodian 5(c)
Subcustodian 5
1940 Act 4(v)
(h) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid by any court of
competent jurisdiction, the remaining portion or portions shall be considered
severable and shall not be affected, and the rights and obligations of the
parties shall be construed and enforced as if this Agreement did not contain
the particular part, term or provision held to be illegal or invalid.
(i) This Agreement constitutes the entire understanding and agreement
of the parties hereto with respect to the subject matter hereof, and
accordingly supersedes, as of the effective date of this Agreement, any
custodian agreement heretofore in effect between the Fund and the Custodian.
IN WITNESS WHEREOF, the parties hereto have caused this Custody
Agreement to be executed by their respective duly authorized officers.
JONES & BABSON FUNDS
By: P. Bradley Adams
Name: P. Bradley Adams
Title: Treasurer
Date: May 5, 1997
UMB BANK, N.A.
By: Ralph R. Santoro
Name: Ralph R. Santoro
Title: Vice President
Date: April 22, 1997
APPENDIX A
CUSTODY AGREEMENT
DOMESTIC SUBCUSTODIANS:
United Missouri Trust Company of New York
Morgan Stanley Trust Company (Foreign Securities Only)
SECURITIES SYSTEMS:
Federal Book Entry
Depository Trust Company
Participant's Trust Company
SPECIAL SUBCUSTODIANS:
SECURITIES DEPOSITORIES
COUNTRIES FOREIGN SUBCUSTODIANS CLEARING AGENCIES
Euroclear
JONES & BABSON FUNDS
By: P. Bradley Adams
Name: P. Bradley Adams
Title: Treasurer
Date: May 5, 1997
UMB BANK, N.A.
By: Ralph R. Santoro
Name: Ralph R. Santoro
Title: Vice President
Date: April 22, 1997
APPENDIX #1
UMB Bank, n.a.
AND
UNITED MISSOURI TRUST COMPANY OF NEW YORK
DOMESTIC CUSTODY FEE AGREEMENT
FOR THE
JONES AND BABSON FAMILY OF FUNDS
JONES AND BABSON FUNDS
Babson Tax-Free Income M
Babson Tax-Free Income S
Babson Tax-Free Income L
Babson Money Market- Prime
Babson Money Market- Federal
Babson Enterprise
Babson Value
Shadow Stock
Babson Bond Trust S
Babson Enterprise II
Buffalo Balanced
Babson Bond Trust L
Buffalo Equity
Buffalo Global
Buffalo High Yield
Babson Growth Fund
Buffalo Small Cap Fund, Inc.
AFBA Five Star Fund Balanced Portfolio
AFBA Five Star Fund Equity Portfolio
AFBA Five Star Fund High Yield Portfolio
AFBA Five Star Fund USA Global Portfolio
Investors Mark Value Fund
Investors Mark Balanced Fund
Investors Mark Large Cap Growth
Investors Mark Small Cap Equity
Investors Mark Growth and Income
Jones & Babson UMB Bank, n.a.
By: /s/P. Bradley Adams By:
/s/Ralph R. Santoro
Name: P/ Bradley Adams Name: Ralph R. Santoro
Title: Treasurer Title: Senior Vie President
Date: 1/29/98 Date: 01/20/98
EX99.23(h)(1)
TRANSFER AGENCY AGREEMENT
This Agreement made as of the 31st day of October 31, 1994 between
David L. Babson Growth Fund, Inc., a Maryland corporation (the "Fund"),
and Jones & Babson, Inc., a Missouri corporation (the "Transfer
Agent").
WITNESSETH
That in consideration of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases
shall have the following meanings:
1. "Approved Institution" shall mean an entity so named in a
Certificate, as hereinafter defined. From time to time, the Fund may
amend a previously delivered Certificate by delivering to the Transfer
Agent a Certificate naming an additional entity or deleting any entity
named in a previously delivered Certificate.
2. The "Board of Directors" shall mean the Board of Directors
of the Fund.
3. "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be
given to the Transfer Agent by the Fund which is signed by any Officer,
as hereinafter defined, and actually received by the Transfer Agent.
4. "Custodian" shall mean the financial institution appointed
as custodian under the terms and conditions of the Custody Agreement
between the financial institution and the Fund, or its successor(s).
5. "Fund Business Day" shall be determined as set out in the
Fund's prospectuses as shall be effective from time to time.
6. "Officer" shall be deemed to be the Fund's President, any
Vice President, Secretary, Treasurer, Controller, any Assistant
Controller, any Assistant Treasurer and any Assistant Secretary, and any
other person duly authorized by the Board of Directors of the Fund to
execute any Certificate, instruction, notice or other instrument on
behalf of the Fund, and any person reasonably believed by the Transfer
Agent to be such a person.
7. "Out-of-Pocket Expenses" means amounts reasonably
necessary and actually incurred by Transfer Agent in the provision of
Transfer Agent services or pursuant to this Agreement for the following
purposes: postage (and first class mail insurance in connection with
mailing Share certificates), envelopes, check forms, continuous forms,
forms for reports and statements, stationery and other similar items,
telephone and telegraph charges incurred in answering inquiries from
dealers or shareholders, microfilm used to record transactions in
shareholder accounts and computer tapes used for permanent storage of
records and cost of insertion of materials in mailing envelopes by
outside firms. Any charges associated with special or exception
processing shall also be considered Out-of-Pocket Expenses.
8. "Prospectus" shall mean the most recent Fund prospectus
actually received by the Transfer Agent from the Fund with respect to
which the Fund has indicated a registration statement under the
Securities Act of 1933, as amended, has become effective, including the
Statement of Additional Information, incorporated by reference therein.
9. "Shares" shall mean all or any part of each class or
series of the shares of beneficial interest of the Fund or portfolio
listed in the Certificate as to which the Transfer Agent acts as
transfer agent hereunder, as may be amended from time to time, which are
authorized and/or issued by the Fund.
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. Effective as of the date of this Agreement, the Fund hereby
constitutes and appoints the Transfer Agent as transfer agent of all the
Shares of the Fund and as dividend disbursing agent during the period of
this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer
agent and dividend disbursing agent and agrees to perform duties thereof
as hereinafter set forth.
3. In connection with such appointment, the Fund upon the
request of the Transfer Agent, shall deliver the following documents to
the Transfer Agent:
(i) A copy of the Articles of Incorporation of the Fund
and all
amendments thereto certified by the Secretary of the Fund;
(ii) A copy of the By-laws of the Fund certified by the
Secretary of the
Fund;
(iii) A copy of a resolution of the Board of Directors of
the Fund
certified by the Secretary of the Fund appointing the Transfer
Agent and
authorizing the execution of this Transfer Agency Agreement;
(iv) A Certificate signed by the Secretary of the Fund
specifying: the number of authorized Shares, the number of such
authorized Shares issued, the number of such authorized Shares
issued and currently outstanding, the names and specimen
signatures of the Officers of the Fund and the name and address of
the legal counsel for the Fund;
(v) Specimen Share certificate for each or series class of
Shares in the form approved by the Board of Directors of the Fund
(and in a format compatible with the Transfer Agent's system),
together with a Certificate signed by the Secretary of the Fund as
to such approval;
(vi) Copies of the Fund's registration statement, as
amended to date, and the most recently filed Post-Effective
Amendment thereto, filed by the Fund with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
and under the Investment Company Act of 1940, as amended, together
with any applications filed in connection therewith; and
(vii) Opinion of counsel for the Fund with respect to the
validity of the authorized and outstanding Shares, whether such
Shares are fully paid and nonassessable and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that they have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. If requested by the Transfer Agent, the Fund shall deliver
to the Transfer Agent the following documents on or before the effective
date of any increase or decrease in the total number of Shares
authorized to be issued:
(a) A certified copy of the amendment to the Articles of
Incorporation giving effect to such increase or decrease;
(b) In the case of an increase, an opinion of counsel for
the Fund with respect to the validity of the Shares of the Fund
and the status of such Shares under the Securities Act of 1933, as
amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been registered and
that the registration statement has become effective or, if
exempt, the specific grounds therefor); and
(c) In the case of an increase, if the appointment of the
Transfer Agent was theretofore expressly limited, a certified copy
of a resolution of the Board of Directors of the Fund increasing
the authority of the Transfer Agent.
2. Prior to the issuance of any additional Shares pursuant to
stock dividends or stock splits, etc., and prior to any reduction in the
number of Shares outstanding, if requested by the Transfer Agent, the
Fund shall deliver the following documents to the Transfer Agent:
(a) A certified copy of the resolution(s) adopted by the
Board of Directors and/or the shareholders of the Fund authorizing
such issuance of additional Shares or such reduction, as the case
may be; and
(b) An opinion of counsel for the Fund with respect to
the validity of the Shares and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable
federal law or regulation (i.e., if subject to registration, that
they have been registered and that the registration statement has
become effective, or, if exempt, the specific grounds therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or
other capital adjustment requiring a change in the form of Share
certificates, the Transfer Agent will issue Share certificates in the
new form in exchange for, or upon transfer of, outstanding Share
certificates in the old form, upon receiving:
a) A Certificate authorizing the issuance of the Share
certificates in the new form;
(b) A certified copy of any amendment to the Articles of
Incorporation with respect to the change;
(c) Specimen Share certificates for each class of Shares
in the new form approved by the Board of Directors of the Fund,
with a Certificate signed by the Secretary of the Fund as to such
approval; and
(d) An opinion of counsel for the Fund with respect to the
validity of the Shares in the new form and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
2. The Fund at its expense shall furnish the Transfer Agent
with a sufficient supply of blank Share certificates in the new form and
from time to time will replenish such supply upon the request of the
Transfer Agent. Such blank Share certificates shall be compatible with
the Transfer Agent's system and shall be properly signed by facsimile or
otherwise by Officers of the Fund authorized by law or by the By-laws to
sign Share certificates and, if required, shall bear the corporate seal
or facsimile thereof. The Fund agrees to indemnify and exonerate, save
and hold the Transfer Agent harmless from and against any and all claims
or demands that may be asserted against the Transfer Agent with respect
to the genuineness of any Share certificate supplied to the Transfer
Agent pursuant to this Article.
ARTICLE V
ISSUANCE, REDEMPTION AND TRANSFER OF SHARES
1. (a) The Transfer Agent acknowledges that it has received a
copy of the Fund's Prospectus, which Prospectus describes how
sales and redemption of Shares of the Fund shall be made, and the
Transfer Agent agrees to accept purchase orders and redemption
requests with respect to Shares on each Fund Business Day in
accordance with such Prospectus. The Fund agrees to provide the
Transfer Agent with sufficient advance notice to enable the
Transfer Agent to effect any changes in the procedures set forth
in the Prospectus regarding such purchase and redemption
procedure; provided, however, that in no event will such advance
notice be less than thirty (30) days.
(b) The Transfer Agent shall also accept with respect to
each Fund Business Day, at such times as are agreed upon from time
to time by the Transfer Agent and the Fund, a computer tape or
electronic data transmission consistent in all respects with the
Transfer Agent's record format, as amended from time to time,
which is believed by the Transfer Agent to be furnished by or on
behalf of any Approved Institution. The Transfer Agent shall not
be liable for any losses or damages to the Fund or its
shareholders in the event that a computer tape or electronic data
transmission from an Approved Institution is unable to be
processed for any reason beyond the control of the Transfer Agent,
or if any of the information on such tape or transmission is found
to be incorrect.
2. On each Fund Business Day, the Transfer Agent shall, as of
the time at which the Fund computes the net asset value of the Fund,
issue to and redeem from the accounts specified in a purchase order,
redemption request or computer tape or electronic data transmission,
which in accordance with the Prospectus is effective on such Fund
Business Day, the appropriate number of full and fractional Shares based
on the net asset value per Share of such Fund specified in an advice
received on such Fund Business Day from the Fund. Notwithstanding the
foregoing, if a redemption specified in a computer tape or electronic
data transmission is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account, the
Transfer Agent shall not effect such redemption in whole or in part and
shall within twenty-four (24) hours orally advise the Approved
Institution which supplied such tape of the discrepancy.
3. In connection with a reinvestment of a dividend or
distribution of Shares of the Fund, the Transfer Agent shall as of each
Fund Business Day, as specified in a Certificate or resolution described
in paragraph 1 of succeeding Article VI, issue Shares of the Fund based
on the net asset value per Share of such Fund specified in an advice
received from the Fund on such Fund Business Day.
4. On each Fund Business Day, the Transfer Agent shall supply
the Fund with a statement specifying with respect to the immediately
preceding Fund Business Day: the total number of Shares of the Fund
(including fractional Shares) issued and outstanding at the opening of
business on such day; the total number of Shares of the Fund sold on
such day, pursuant to the preceding paragraph 2 of this Article; the
total number of Shares of the Fund redeemed from shareholders by the
Transfer Agent on such day; the total number of Shares of the Fund, if
any, sold on such day pursuant to the preceding paragraph 3 of this
Article, and the total number of Shares of the Fund issued and
outstanding.
5. In connection with each purchase and each redemption of
Shares, the Transfer Agent shall send such statements as are prescribed
by the Federal Securities laws applicable to transfer agents or as
described in the Prospectus. If the Prospectus indicates that
certificates for Shares are available and if specifically requested in
writing by any shareholder, or if otherwise required hereunder, the
Transfer Agent will countersign (if necessary), issue and mail to such
shareholder at the address set forth in the records of the Transfer
Agent a Share certificate for any full Share requested.
6. As of each Fund Business Day, the Transfer Agent shall
furnish the Fund with an advice setting forth the number and dollar
amount of Shares to be redeemed on such Fund Business Day in accordance
with paragraph 2 of this Article.
7. Upon receipt of a proper redemption request and moneys paid
to it by the Custodian in connection with a redemption of Shares, the
Transfer Agent shall cancel the redeemed Shares and after making
appropriate deduction for any withholding of taxes required of it by
applicable law: (a) in the case of a redemption of Shares pursuant to a
redemption described in the preceding paragraph l(a) of this Article,
make payment in accordance with the Fund's redemption and payment
procedures described in the Prospectus; and (b) in the case of a
redemption of Shares pursuant to a computer tape or electronic data
transmission described in the preceding paragraph l(b) of this Article,
make payment by directing a federal funds wire order to the account
previously designated by the Approved Institution specified in said
computer tape or electronic data transmission.
8. The Transfer Agent shall not be required to issue any Shares
after it has received from an Officer of the Fund or from an appropriate
federal or state authority written notification that the sale of Shares
has been suspended or discontinued, and the Transfer Agent shall be
entitled to rely upon such written notification.
9. Upon the issuance of any Shares in accordance with this
Agreement, the Transfer Agent shall not be responsible for the payment
of any original issue or other taxes required to be paid by the Fund in
connection with such issuance of any Shares.
10. The Transfer Agent shall accept a computer tape or
electronic data transmission consistent with the Transfer Agent's record
format, as amended from time to time, which is reasonably believed by
the Transfer Agent to be furnished by or on behalf of any Approved
Institution and is represented to be instructions with respect to the
transfer of Shares from one account of such Approved Institution to
another such account, and shall effect the transfers specified in said
computer tape or electronic data transmission. The Transfer Agent shall
not be liable for any losses to the Fund or its shareholders in the
event that a computer tape or electronic data transmission from an
Approved Institution is unable to be processed for any reason beyond the
control of the Transfer Agent, or if any of the information on such tape
or transmission is found to be incorrect.
11. (a) Except as otherwise provided in subparagraph (b) of
this paragraph and in paragraph 13 of this Article, Shares will be
transferred or redeemed upon presentation to the Transfer Agent of
Share certificates or instructions properly endorsed for transfer
or redemption, accompanied by such documents as the Transfer Agent
deems necessary to evidence the authority of the person making
such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes. In the case of small estates
where no administration is contemplated, the Transfer Agent may,
when furnished with an appropriate surety bond, and without
further approval of the Fund, transfer or redeem Shares registered
in the name of a decedent where the current market value of the
Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent
reserves the right to refuse to transfer or redeem Shares until it
is satisfied that the endorsement on the stock certificate or
instructions is valid and genuine, and for that purpose it will
require, unless otherwise instructed by an authorized Officer of
the Fund, a guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-15. The
Transfer Agent also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers or redemptions
which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to
any claims adverse to such transfer or redemption. The Transfer
Agent may, in effecting transfers and redemptions of Shares, rely
upon those provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as
the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer
Agent for any act done or omitted by it in good faith in reliance
upon such laws. In no event will the Fund indemnify the Transfer
Agent for any act done by it as a result of willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties.
The Transfer Agent shall be entitled to accept, and shall be fully
protected by the Fund in accepting, any request from any entity to
carry out any transaction in Shares received by the Transfer Agent
through any of the various programs offered through the National
Securities Clearing Corporation ("NSCC") (including, but not
limited to, Networking and FundServ). Any such entity shall
constitute an Approved Institution as defined herein.
(b) Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, the Transfer Agent
shall be fully protected by the Fund in not requiring any
instruments, documents, assurances, endorsements or guarantees,
including, without limitation, any signature guarantees, in
connection with a redemption or transfer of Shares whenever the
Transfer Agent reasonably believes that requiring the same would
be inconsistent with the transfer and redemption procedures as
described in the Prospectus.
12. Notwithstanding any provision contained in this Agreement to
the contrary, the Transfer Agent shall not be required or expected to
require, as a condition to any transfer of any Shares pursuant to
paragraph 11 of this Article or any redemption of any Shares pursuant to
a computer tape or electronic data transmission described in this
Agreement, any documents, including, without limitation, any documents
of the kind described in subparagraph (a) of paragraph 11 of this
Article, to evidence the authority of the person requesting the transfer
or redemption and/or the payment of any stock transfer taxes, and shall
be fully protected in acting in accordance with the applicable
provisions of this Article.
13. (a) As used in this Agreement, the terms "computer tape
or electronic data transmission" and "computer tape believed by
the Transfer Agent to be furnished by an Approved Institution",
shall include any tapes generated by the Transfer Agent to reflect
information believed by the Transfer Agent to have been input by
an Approved Institution, via a remote terminal or other similar
link, into a data processing, storage or collection system, or
similar system (the "System"), located on the Transfer Agent's
premises. For purposes of paragraph 1 of this Article, such a
computer tape or electronic data transmission shall be deemed to
have been furnished at such times as are agreed upon from time to
time by the Transfer Agent and Fund only if the information
reflected thereon was input to the System at such times as are
agreed upon from time to time by the Transfer Agent and the Fund.
(b) Nothing contained in this Agreement shall constitute
any agreement or representation by the Transfer Agent to permit,
or to agree to permit, any Approved Institution to input
information into a System.
(c) The Transfer Agent reserves the right to approve, in
advance, any Approved Institution; such approval not to be
unreasonably withheld. The Transfer Agent also reserves the right
to terminate any and all automated data communications, at its
discretion, upon a reasonable attempt to notify the Fund when in
the opinion of the Transfer Agent continuation of such
communications would jeopardize the accuracy and/or integrity of
the Fund's records on the System.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a
resolution of its Board of Directors, certified by the
Secretary or any Assistant Secretary, either: (i) setting forth
the date of the declaration of a dividend or distribution, the date of
accrual or payment, as the case may be, thereof, the record date as of
which shareholders entitled to payment, or accrual, as the case may be,
shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and
unpaid dividends are to be paid and the total amount, if any, payable to
the Transfer Agent on such payment date; or (ii) authorizing the
declaration of dividends and distributions on a daily or other periodic
basis and authorizing the Transfer Agent to rely on a Certificate
setting forth the information described in subsection (i) of this
paragraph.
2. Upon the mail date specified in such Certificate or
resolution, as the case may be, the Fund shall, in the case of a cash
dividend or distribution, cause the Custodian to deposit in an account
in the name of the Transfer Agent on behalf of the Fund an amount of
cash, if any, sufficient for the Transfer Agent to make the payment, as
of the mail date, specified in such Certificate or resolution, as the
case may be, to the shareholders who were of record on the record date.
The Transfer Agent will, upon receipt of any such cash, make payment of
such cash dividends or distributions to the shareholders of record as of
the record date by: (i) mailing a check, payable to the registered
shareholder, to the address of record or dividend mailing address; or
(ii) wiring such amounts to the accounts previously designated by an
Approved Institution, as the case may be. The Transfer Agent shall not
be liable for any improper payments made in good faith and without
negligence, in accordance with a Certificate or resolution described in
the preceding paragraph. If the Transfer Agent shall not receive from
the Custodian sufficient cash to make payments of any cash dividend or
distribution to all shareholders of the Fund as of the record date, the
Transfer Agent shall, upon notifying the Fund, withhold payment to all
shareholders of record as of the record date until sufficient cash is
provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or
capital gain distributions due to the shareholders. It is expressly
agreed and understood that the Transfer Agent is not liable for any loss
as a result of processing a distribution based on information provided
in the Certificate that is incorrect. The Fund agrees to pay the
Transfer Agent for any and all costs, both direct and Out-of-Pocket
Expenses, incurred in such corrective work as necessary to remedy such
error.
4. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividend and
capital gain distributions with the proper federal, state and local
authorities as are required by law to be filed by the Fund, but shall in
no way be responsible for the collection or withholding of taxes due on
such dividends or distributions due to shareholders, except and only to
the extent required by applicable law. Anything in this Agreement to the
contrary notwithstanding, the Fund shall be solely responsible for the
accurate, complete and timely filing with the proper federal, state and
local authorities of all tax information with respect to any Fund
account maintained under Matrix Level 3 through any of the various
programs offered through the NSCC (including, but not limited to,
Networking and FundServ).
ARTICLE VII
CONCERNING THE FUND
1. The Fund represents to the Transfer Agent that:
(a) It is a corporation duly organized and existing under
the laws of the State of Maryland.
(b) It is empowered under applicable laws and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is an investment company registered under the
Investment Company Act of 1940, as amended.
(e) A registration statement under the Securities Act of
1933, as amended, with respect to the Shares is effective. The
Fund shall notify the Transfer Agent if such registration
statement or any state securities registrations have been
terminated or a stop order has been entered with respect to the
Shares.
2. Each copy of the Articles of Incorporation of the Fund and
copies of all amendments thereto shall be certified by the Secretary of
State (or other appropriate official) of the state of organization, and
if such Articles of Incorporation and/or amendments are required by law
also to be filed with a county or other officer or official body, a
certificate of such filing shall be filed with a certified copy
submitted to the Transfer Agent. Each copy of the By-laws and copies of
all amendments thereto, and copies of resolutions of the Board of
Directors of the Fund shall be certified by the Secretary of the Fund
under seal.
3. The Fund shall promptly deliver to the Transfer Agent
written notice of any change in the Officers authorized to sign Share
certificates, notifications or requests, together with a specimen
signature of each new Officer. In the event any Officer who shall have
signed manually or whose facsimile signature shall have been affixed to
blank Share certificates shall die, resign or be removed prior to
issuance of such Share certificates, the Transfer Agent may issue such
Share certificates of the Fund notwithstanding such death, resignation
or removal, and the Fund shall promptly deliver to the Transfer Agent
such approval, adoption or ratification as may be required by law.
4. It shall be the sole responsibility of the Fund to deliver
to the Transfer Agent the Fund's currently effective Prospectus and, for
purposes of this Agreement, the Transfer Agent shall not be deemed to
have notice of any information contained in such Prospectus until a
reasonable time after it is actually received by the Transfer Agent.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents and warrants to the Fund that:
(a) It is a corporation duly organized and existing under
the laws of the State of Missouri.
(b) It is empowered under applicable law and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is duly registered as a transfer agent under
Section 17A of the Securities Exchange Act of 1934, as amended.
2. The Transfer Agent shall not be liable and shall be
indemnified in acting upon any computer tape or electronic data
transmission, writing or document reasonably believed by it to be
genuine and to have been signed or made by an Officer of the Fund or
person designated by the Fund and shall not be held to have any notice
of any change of authority of any person until receipt of written notice
thereof from the Fund or such person. It shall also be protected in
processing Share certificates which bear the proper countersignature of
the Transfer Agent and which it reasonably believes to bear the proper
manual or facsimile signature of the Officers of the Fund.
3. The Transfer Agent upon notice to the Fund may establish
such additional procedures, rules and regulations governing the transfer
or registration of Share certificates as it may deem advisable and
consistent with such rules and regulations generally adopted by mutual
fund transfer agents.
4. The Transfer Agent shall keep such records as it may deem
advisable and is agreeable to the Fund, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular Rules 31a-2 and 31a-3 under the Investment Company Act of
1940, as amended. The Transfer Agent acknowledges that such records are
the property of the Fund. The Transfer Agent may deliver to the Fund
from time to time at its discretion, for safekeeping or disposition by
the Fund in accordance with law, such records, papers, documents
accumulated in the execution of its duties as such Transfer Agent, as
the Transfer Agent may deem expedient, other than those which the
Transfer Agent is itself required to maintain pursuant to applicable
laws and regulations. The Fund shall assume all responsibility for any
failure thereafter to produce any record, paper, cancelled Share
certificate or other document so returned, if and when required. Such
records maintained by the Transfer Agent pursuant to this paragraph 4,
which have not been previously delivered to the Fund pursuant to the
foregoing provisions of this paragraph 4, shall be considered to be the
property of the Fund, shall be made available upon request for
inspection by the Officers, employees and auditors of the Fund, and
records shall be delivered to the Fund upon request and in any event
upon the date of termination of this Agreement, as specified in Article
IX of this Agreement, in the form and manner kept by the Transfer Agent
on such date of termination or such earlier date as may be requested by
the Fund.
5. The Transfer Agent shall not be liable for any loss or
damage, including counsel fees, resulting from its actions or omissions
to act or otherwise, except for any loss or damage arising out of its
bad faith, willful misfeasance, gross negligence or reckless disregard
of its duties under this Agreement.
6. (a) The Fund shall indemnify and exonerate, save and hold
harmless the Transfer Agent from and against any and all claims
(whether with or without basis in fact or law), demands, expenses
(including reasonable attorneys' fees) and liabilities of any and
every nature which the Transfer Agent may sustain or incur or
which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be
taken by any prior transfer agent of the Fund or as a result of
any action taken or omitted to be taken by the Transfer Agent in
good faith and without gross negligence or willful misfeasance or
in reliance upon: (i) any provision of this Agreement; (ii)
the Prospectus; (iii) any instruction or order including, without
limitation, any computer tape or electronic data transmission
reasonably believed by the Transfer Agent to have been received
from an Approved Institution; (iv) any instrument, order or Share
certificate reasonably believed by it to be genuine and to be
signed, countersigned or executed by any duly authorized Officer
of the Fund; (v) any Certificate or other instructions of an
Officer; (vi) any opinion of legal counsel for the Fund or the
Transfer Agent; or (vii) any request by any entity to carry out
any transaction in Shares received by the Transfer Agent through
any of the various programs offered through the NSCC (including,
but not limited to, Networking and FundServ). The Fund shall
indemnify and exonerate, save and hold the Transfer Agent harmless
from and against any and all claims (whether with or without basis
in fact or law), demands, expenses (including reasonable
attorneys' fees) and liabilities of any and every nature which the
Transfer Agent may sustain or incur or which may be asserted
against the Transfer Agent by any person by reason of or as a
result of any action taken or omitted to be taken by the Transfer
Agent in good faith in connection with its appointment or in
reliance upon any law, act, regulation or any interpretation of
the same even though such law, act or regulation may thereafter
have been altered, changed, amended or repealed.
(b) The Transfer Agent shall not settle any claim, demand,
expense or liability to which it may seek indemnity pursuant to
paragraph 6(a) above (each, an "Indemnifiable Claim") without
the express written consent of an Officer of the Fund. The
Transfer Agent shall notify the Fund within fifteen (15) days of
receipt of notification of an Indemnifiable Claim, provided that
the failure by the Transfer Agent to furnish such notification
shall not impair its right to seek indemnification from the Fund
unless the Fund is unable to adequately defend the Indemnifiable
Claim as a result of such failure, and further provided, that if
as a result of the Transfer Agent's failure to provide the Fund
with timely notice of the institution of litigation a judgment by
default is entered, prior to seeking indemnification from the Fund
the Transfer Agent, at its own cost and expense, shall open such
judgment. The Fund shall have the right to defend any
Indemnifiable Claim at its own expense, provided that such defense
shall be conducted by counsel selected by the Fund and reasonably
acceptable to the Transfer Agent. The Transfer Agent may join in
such defense at its own expense, but to the extent that it shall
so desire the Fund shall direct such defense. The Fund shall not
settle any Indemnifiable Claim without the express written consent
of the Transfer Agent if the Transfer Agent determines that such
settlement would have an adverse effect on the Transfer Agent
beyond the scope of this Agreement. In such event, the Fund and
the Transfer Agent shall each be responsible for their own defense
at their own cost and expense, and such claim shall not be deemed
an Indemnifiable Claim hereunder. If the Fund shall fail or refuse
to defend an Indemnifiable Claim, the Transfer Agent may provide
its own defense at the cost and expense of the Fund. Anything in
this Agreement to the contrary notwithstanding, the Fund shall not
indemnify the Transfer Agent against any liability or expense
arising out of the Transfer Agent's willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties and
obligations under this Agreement. The Transfer Agent shall
indemnify and hold the Fund harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or
failure or omission to act by the Transfer Agent as a result of
the Transfer Agent's lack of good faith, gross negligence or
willful misfeasance.
7. The Transfer Agent shall not be liable to the Fund with
respect to any redemption draft on which the signature of the drawer is
forged and which the Fund's Custodian has advised the Transfer Agent to
honor the redemption (but nothing herein is meant to impose any duties
upon the Fund's Custodian); nor shall the Transfer Agent be liable for
any material alteration or absence or forgery of any endorsement, it
being understood that the Transfer Agent's sole responsibility with
respect to inspecting redemption drafts is to use reasonable care to
verify the drawer's signature against signatures on file.
8. There shall be excluded from the consideration of whether
the Transfer Agent has breached this Agreement in any way, any period of
time, and only such period of time during which the Transfer Agent's
performance is materially affected, by reason of circumstances beyond
its control (collectively, "Causes"), including, without limitation,
mechanical breakdowns of equipment (including any alternative power
supply and operating systems software), flood or catastrophe, acts of
God, failures of transportation, communication or power supply, strikes,
lockouts, work stoppages or other similar circumstances.
9. At any time the Transfer Agent may apply to an Officer of
the Fund for written instructions with respect to any matter arising in
connection with the Transfer Agent's duties and obligations under this
Agreement, and the Transfer Agent shall not be liable for any action
taken or permitted by it in good faith in accordance with such written
instructions. Such application by the Transfer Agent for written
instructions from an Officer of the Fund may set forth in writing any
action proposed to be taken or omitted by the Transfer Agent with
respect to its duties or obligations under this Agreement and the date
on and/or after which such action shall be taken. The Transfer Agent
shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified
therein unless, prior to taking or omitting any such action, the
Transfer Agent has received written instructions in response to such
application specifying the action to be taken or omitted. The Transfer
Agent may consult counsel of the Fund, or upon notice to the Fund, its
own counsel, at the expense of the Fund and shall be fully protected
with respect to anything done or omitted by it in good faith in
accordance with the advice or opinion of counsel to the Fund or its own
counsel.
10. The Transfer Agent may issue new Share certificates in place
of certificates represented to have been lost, stolen or destroyed upon
receiving written instructions from the shareholder accompanied by proof
of an indemnity or surety bond issued by a recognized insurance
institution specified by the Fund or the Transfer Agent.
If the Transfer Agent receives written notification from the shareholder
or broker dealer that the certificate issued was never received, and
such notification is made within thirty (30) days of the date of
issuance, the Transfer Agent may reissue the certificate without
requiring a surety bond. The Transfer Agent may also reissue
certificates which are represented as lost, stolen or destroyed without
requiring a surety bond provided that the notification is in writing and
accompanied by an indemnification signed on behalf of a member firm of
the New York Stock Exchange and signed by an officer of said firm with
the signature guaranteed. Notwithstanding the foregoing, the Transfer
Agent will reissue a certificate upon written authorization from an
Officer of the Fund.
11. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to
notify the Fund promptly and to secure instructions from an Officer as
to such inspection. The Transfer Agent reserves the right, however, to
exhibit the shareholder records to any person whenever it receives an
opinion from its counsel that there is a reasonable likelihood that the
Transfer Agent will be held liable for the failure to exhibit the
shareholder records to such person; provided, however, that in
connection with any such disclosure the Transfer Agent shall promptly
notify the Fund that such disclosure has been made or is to be made.
12. At the request of an Officer of the Fund, the Transfer Agent
will address and mail such appropriate notices to shareholders as the
Fund may direct.
13. Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the
authority of the Approved Institution or of the Fund, as the case
may be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or of a
redemption of any Shares, the propriety of the amount to be paid
therefor, or the authority of the Approved Institution or of the
Fund, as the case may be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend by the
Fund, or the legality of the issue of any Shares in payment of any
stock dividend; or
(d) The legality of any recapitalization or readjustment
of Shares.
14. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically
set forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against the Transfer Agent.
15. Purchase and Prices of Services:
(a) The Fund will compensate the Transfer Agent for, and
Transfer Agent will provide, beginning on the execution date of
this Agreement and continuing until the termination of this
Agreement as provided hereinafter, the services set forth in
Schedule I.
(b) The current unit prices for the services are set forth
in Schedule II (the "Schedule II Fees"). Effective as of January
1, 1997, once in each calendar year, the Transfer Agent may elect
to raise the Schedule II Fees upon ninety (90) days prior notice
to the Fund, all subject to the mutual agreement of the parties
hereto. Notwithstanding the annual right to raise the Schedule II
Fees, the Transfer Agent may increase prices due to changes in
legal or regulatory requirements subject to the approval of the
Fund, which approval shall not be unreasonably withheld.
16. Billing and Payment:
(a) The Transfer Agent shall bill the Fund monthly in
arrears for accounts maintained and Out-of-Pocket Expenses. The
Transfer Agent may from time to time request that the Fund advance
estimated expenditures of an unusual nature subject to
reconciliation of actual expenses as soon as practicable
thereafter.
(b) The Fund shall pay the Transfer Agent in immediately
available funds at UMB Bank, n.a. in Kansas City, Missouri within
thirty (30) days of the date of the bill. Any amounts due under
this Agreement which are not paid within said thirty (30) day
period shall bear interest at the rate of one and one-half percent
(l 1/2%) per month from such date until paid in full.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than sixty (60) days after the
date of receipt of such notice. In the event such notice is given by the
Fund, it shall be accompanied by a copy of a resolution of the Board of
Directors of the Fund, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement and designating the
successor transfer agent or transfer agents. In the event such notice is
given by the Transfer Agent, the Fund shall on or before the termination
date, deliver to the Transfer Agent a copy of a resolution of its Board
of Directors, certified by the Secretary or any Assistant Secretary,
designating a successor transfer agent or transfer agents. In the
absence of such designation by the Fund, the Fund shall upon the date
specified in the notice of termination of this Agreement and delivery of
the records maintained hereunder, be deemed to be its own transfer agent
and the Transfer Agent shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement.
In the event this Agreement is terminated as provided herein, the
Transfer Agent, upon the written request of the Fund, shall deliver the
records of the Fund on electromagnetic media to the Fund or its
successor transfer agent. The Fund shall be responsible to the Transfer
Agent for the reasonable costs and expenses associated with the
preparation and delivery of such media.
ARTICLE X
MISCELLANEOUS
1 The Fund agrees that prior to effecting any change in the
Prospectus which would increase or alter the duties and obligations of
the Transfer Agent hereunder, it shall advise the Transfer Agent of such
proposed change at least thirty (30) days prior to the intended date of
the same, and shall proceed with such change only if it shall have
received the written consent of the Transfer Agent thereto, which shall
not be unreasonably withheld.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund shall be sufficiently
given if addressed to the Fund and mailed or delivered to it at:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Fund may from time to time designate in
writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Transfer Agent shall be
sufficiently given if addressed to the Transfer Agent and mailed or
delivered to:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Transfer Agent may from time to time
designate in writing.
4. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the
formality of this Agreement.
5. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns.
6. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
7. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
8. The provisions of this Agreement are intended to benefit
only the Transfer Agent and the Fund, and no rights shall be granted to
any other person by virtue of this Agreement.
9. (a) The Transfer Agent shall endeavor to assist in
resolving shareholder inquiries and errors relating to the period
during which prior transfer agents acted as such for the Fund. Any
such inquiries or errors which cannot be expediently resolved by
the Transfer Agent will be referred to the Fund.
(b) The Transfer Agent shall only be responsible for the
safekeeping and maintenance of transfer agency records, cancelled
Share certificates and correspondence of the Fund created or
produced prior to the time of conversion which are under its
control and acknowledged in a writing to the Fund to be in its
possession. Any expenses or liabilities incurred by the Transfer
Agent as a result of shareholder inquiries, regulatory compliance
or audits related to such records and not caused as a result of
Transfer Agent's bad faith, willful misfeasance or gross
negligence shall be the responsibility of the Fund as provided in
Article VIII herein.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective corporate officer, thereunto duly
authorized and their respective corporate seals to be hereunto affixed,
as of the day and year first above written.
DAVID L. BABSON GROWTH FUND, INC.
By /s/Larry D. Armel
Name: Larry D. Armel
Title: President
[SEAL]
JONES & BABSON, INC.
By /s/Michael A. Brummel
Name: Michael A. Brummel
Title: Assistant Secretary
[SEAL]
<PAGE>
SCHEDULE I
DESCRIPTION OF SERVICES
In consideration of the fees to be paid in such manner and at such
times as Fund and Transfer Agent may agree, Transfer Agent will provide the
services set forth below:
Examine and Process New Accounts, Subsequent Payments, Liquidations,
Exchanges, Telephone Transactions, Check Redemptions, Automatic Withdrawals,
Certificate Issuance, Wire Order Trades, Dividends, Dividend Statements,
Dealer Statements.
This Agreement does not apply to services with respect to qualified
plans. Such services, including, but not limited to fiduciary accounting
services and the preparation and mailing of Forms 5498 and 1099R, are
available subject to separate agreement for an additional charge.
DAILY ACTIVITY
Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
Name and Address, including Zip Code
Balance of Uncertificated Shares
Balance of Certificated Shares
Certificate number, number of shares, issuance date of each certificate
outstanding and cancellation date for each certificate date for each
certificate no longer outstanding, if issued
Balance of dollars available for redemption
Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash)
Type of account code
Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available
Original establishment date for accounts opened by exchange W-9
withholding status and periodic reporting
State of residence code
Social Security or taxpayer identification number, and indication of
certification
Historical transactions on the account for the most recent 18 months,
or other period as mutually agreed to from time-to-time
Indication as to whether phone transactions can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant, etc.
An alternate or "secondary" account number issued by a dealer (or bank,
etc.) to a customer for use, inquiry and transaction input by "remote
accessors"
FUNCTIONS
Answer investor and dealer telephone and/or written inquiries, except
those concerning Fund policy, or requests for investment advice which
will be referred to the Fund, or those which the Fund chooses to answer
Deposit Fund share certificates into accounts upon receipt of
instructions from the investor or other authorized person, if issued
Examine and process transfers of shares insuring that all transfer
requirements and legal documents have been supplied
Process and confirm address changes
Process standard account record changes as required, i.e. Dividend
Codes, etc.
Microfilm source documents for transactions, such as account
applications and correspondence
Perform backup withholding for those accounts which federal government
regulations indicate is necessary
Solicit missing taxpayer identification numbers
Provide remote access inquiry to Fund records via Fund supplied
hardware (Fund responsible for connection line and monthly fee)
REPORTS PROVIDED
Daily Journals Reflecting all shares and
dollar activity for the
previous day
Blue Sky Report Supply information monthly
for Fund's Preparation of
Blue Sky Reporting
N-SAR Report Supply monthly correspondence,
redemption and liquidation
information for use in fund's
N-SAR Report
Additionally, monthly average daily balance reports will be provided at
the Fund's request to the Fund at no charge.
Prepare and mail copies of summary statements to dealers and investment
advisers
Generate and mail confirmation statements for financial transactions
DIVIDEND ACTIVITY
Reinvest or pay in cash including reinvesting in other funds within the
fund group serviced by the Transfer Agent as described in each Fund
Prospectus
Distribute capital gains simultaneously with income dividends
DEALER SERVICES
Prepare and mail confirmation statements to dealers and
Prepare and mail copies of statements to dealers, same frequency as
investor statements
ANNUAL MEETINGS
Assist Fund in obtaining a qualified service to: address and mail
proxies and related material, tabulate returned proxies and supply
daily reports when sufficient proxies have been received
Prepare certified list of stockholders, hard copy or microform
PERIODIC ACTIVITIES
Mail transaction confirmation statements daily to investors
Address and mail four (4) periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent)
Mail periodic statement to investors
Compute, prepare and furnish all necessary reports to Governmental
authorities: Forms 1099DIV, 1099B, 1042 and 1042S
Enclose various marketing material as designated by the Fund in statement
mailings, i.e. monthly and quarterly statements (material must be adaptable
to mechanical equipment as reasonably specified by the Transfer Agent)
SCHEDULE II
TRANSFER AGENT FEE SCHEDULE
(None for this Fund)
<PAGE>
EX99.23(h)(2)
TRANSFER AGENCY AGREEMENT
This Agreement made as of the 31st day of October 31, 1994 between
D. L. Babson Money Market Fund, Inc., a Maryland corporation (the "Fund"),
and Jones & Babson, Inc., a Missouri corporation (the "Transfer
Agent").
WITNESSETH
That in consideration of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases
shall have the following meanings:
1. "Approved Institution" shall mean an entity so named in a
Certificate, as hereinafter defined. From time to time, the Fund may
amend a previously delivered Certificate by delivering to the Transfer
Agent a Certificate naming an additional entity or deleting any entity
named in a previously delivered Certificate.
2. The "Board of Directors" shall mean the Board of Directors
of the Fund.
3. "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be
given to the Transfer Agent by the Fund which is signed by any Officer,
as hereinafter defined, and actually received by the Transfer Agent.
4. "Custodian" shall mean the financial institution appointed
as custodian under the terms and conditions of the Custody Agreement
between the financial institution and the Fund, or its successor(s).
5. "Fund Business Day" shall be determined as set out in the
Fund's prospectuses as shall be effective from time to time.
6. "Officer" shall be deemed to be the Fund's President, any
Vice President, Secretary, Treasurer, Controller, any Assistant
Controller, any Assistant Treasurer and any Assistant Secretary, and any
other person duly authorized by the Board of Directors of the Fund to
execute any Certificate, instruction, notice or other instrument on
behalf of the Fund, and any person reasonably believed by the Transfer
Agent to be such a person.
7. "Out-of-Pocket Expenses" means amounts reasonably
necessary and actually incurred by Transfer Agent in the provision of
Transfer Agent services or pursuant to this Agreement for the following
purposes: postage (and first class mail insurance in connection with
mailing Share certificates), envelopes, check forms, continuous forms,
forms for reports and statements, stationery and other similar items,
telephone and telegraph charges incurred in answering inquiries from
dealers or shareholders, microfilm used to record transactions in
shareholder accounts and computer tapes used for permanent storage of
records and cost of insertion of materials in mailing envelopes by
outside firms. Any charges associated with special or exception
processing shall also be considered Out-of-Pocket Expenses.
8. "Prospectus" shall mean the most recent Fund prospectus
actually received by the Transfer Agent from the Fund with respect to
which the Fund has indicated a registration statement under the
Securities Act of 1933, as amended, has become effective, including the
Statement of Additional Information, incorporated by reference therein.
9. "Shares" shall mean all or any part of each class or
series of the shares of beneficial interest of the Fund or portfolio
listed in the Certificate as to which the Transfer Agent acts as
transfer agent hereunder, as may be amended from time to time, which are
authorized and/or issued by the Fund.
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. Effective as of the date of this Agreement, the Fund hereby
constitutes and appoints the Transfer Agent as transfer agent of all the
Shares of the Fund and as dividend disbursing agent during the period of
this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer
agent and dividend disbursing agent and agrees to perform duties thereof
as hereinafter set forth.
3. In connection with such appointment, the Fund upon the
request of the Transfer Agent, shall deliver the following documents to
the Transfer Agent:
(i) A copy of the Articles of Incorporation of the Fund
and all
amendments thereto certified by the Secretary of the Fund;
(ii) A copy of the By-laws of the Fund certified by the
Secretary of the
Fund;
(iii) A copy of a resolution of the Board of Directors of
the Fund
certified by the Secretary of the Fund appointing the Transfer
Agent and
authorizing the execution of this Transfer Agency Agreement;
(iv) A Certificate signed by the Secretary of the Fund
specifying: the number of authorized Shares, the number of such
authorized Shares issued, the number of such authorized Shares
issued and currently outstanding, the names and specimen
signatures of the Officers of the Fund and the name and address of
the legal counsel for the Fund;
(v) Specimen Share certificate for each or series class of
Shares in the form approved by the Board of Directors of the Fund
(and in a format compatible with the Transfer Agent's system),
together with a Certificate signed by the Secretary of the Fund as
to such approval;
(vi) Copies of the Fund's registration statement, as
amended to date, and the most recently filed Post-Effective
Amendment thereto, filed by the Fund with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
and under the Investment Company Act of 1940, as amended, together
with any applications filed in connection therewith; and
(vii) Opinion of counsel for the Fund with respect to the
validity of the authorized and outstanding Shares, whether such
Shares are fully paid and nonassessable and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that they have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. If requested by the Transfer Agent, the Fund shall deliver
to the Transfer Agent the following documents on or before the effective
date of any increase or decrease in the total number of Shares
authorized to be issued:
(a) A certified copy of the amendment to the Articles of
Incorporation giving effect to such increase or decrease;
(b) In the case of an increase, an opinion of counsel for
the Fund with respect to the validity of the Shares of the Fund
and the status of such Shares under the Securities Act of 1933, as
amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been registered and
that the registration statement has become effective or, if
exempt, the specific grounds therefor); and
(c) In the case of an increase, if the appointment of the
Transfer Agent was theretofore expressly limited, a certified copy
of a resolution of the Board of Directors of the Fund increasing
the authority of the Transfer Agent.
2. Prior to the issuance of any additional Shares pursuant to
stock dividends or stock splits, etc., and prior to any reduction in the
number of Shares outstanding, if requested by the Transfer Agent, the
Fund shall deliver the following documents to the Transfer Agent:
(a) A certified copy of the resolution(s) adopted by the
Board of Directors and/or the shareholders of the Fund authorizing
such issuance of additional Shares or such reduction, as the case
may be; and
(b) An opinion of counsel for the Fund with respect to
the validity of the Shares and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable
federal law or regulation (i.e., if subject to registration, that
they have been registered and that the registration statement has
become effective, or, if exempt, the specific grounds therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or
other capital adjustment requiring a change in the form of Share
certificates, the Transfer Agent will issue Share certificates in the
new form in exchange for, or upon transfer of, outstanding Share
certificates in the old form, upon receiving:
a) A Certificate authorizing the issuance of the Share
certificates in the new form;
(b) A certified copy of any amendment to the Articles of
Incorporation with respect to the change;
(c) Specimen Share certificates for each class of Shares
in the new form approved by the Board of Directors of the Fund,
with a Certificate signed by the Secretary of the Fund as to such
approval; and
(d) An opinion of counsel for the Fund with respect to the
validity of the Shares in the new form and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
2. The Fund at its expense shall furnish the Transfer Agent
with a sufficient supply of blank Share certificates in the new form and
from time to time will replenish such supply upon the request of the
Transfer Agent. Such blank Share certificates shall be compatible with
the Transfer Agent's system and shall be properly signed by facsimile or
otherwise by Officers of the Fund authorized by law or by the By-laws to
sign Share certificates and, if required, shall bear the corporate seal
or facsimile thereof. The Fund agrees to indemnify and exonerate, save
and hold the Transfer Agent harmless from and against any and all claims
or demands that may be asserted against the Transfer Agent with respect
to the genuineness of any Share certificate supplied to the Transfer
Agent pursuant to this Article.
ARTICLE V
ISSUANCE, REDEMPTION AND TRANSFER OF SHARES
1. (a) The Transfer Agent acknowledges that it has received a
copy of the Fund's Prospectus, which Prospectus describes how
sales and redemption of Shares of the Fund shall be made, and the
Transfer Agent agrees to accept purchase orders and redemption
requests with respect to Shares on each Fund Business Day in
accordance with such Prospectus. The Fund agrees to provide the
Transfer Agent with sufficient advance notice to enable the
Transfer Agent to effect any changes in the procedures set forth
in the Prospectus regarding such purchase and redemption
procedure; provided, however, that in no event will such advance
notice be less than thirty (30) days.
(b) The Transfer Agent shall also accept with respect to
each Fund Business Day, at such times as are agreed upon from time
to time by the Transfer Agent and the Fund, a computer tape or
electronic data transmission consistent in all respects with the
Transfer Agent's record format, as amended from time to time,
which is believed by the Transfer Agent to be furnished by or on
behalf of any Approved Institution. The Transfer Agent shall not
be liable for any losses or damages to the Fund or its
shareholders in the event that a computer tape or electronic data
transmission from an Approved Institution is unable to be
processed for any reason beyond the control of the Transfer Agent,
or if any of the information on such tape or transmission is found
to be incorrect.
2. On each Fund Business Day, the Transfer Agent shall, as of
the time at which the Fund computes the net asset value of the Fund,
issue to and redeem from the accounts specified in a purchase order,
redemption request or computer tape or electronic data transmission,
which in accordance with the Prospectus is effective on such Fund
Business Day, the appropriate number of full and fractional Shares based
on the net asset value per Share of such Fund specified in an advice
received on such Fund Business Day from the Fund. Notwithstanding the
foregoing, if a redemption specified in a computer tape or electronic
data transmission is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account, the
Transfer Agent shall not effect such redemption in whole or in part and
shall within twenty-four (24) hours orally advise the Approved
Institution which supplied such tape of the discrepancy.
3. In connection with a reinvestment of a dividend or
distribution of Shares of the Fund, the Transfer Agent shall as of each
Fund Business Day, as specified in a Certificate or resolution described
in paragraph 1 of succeeding Article VI, issue Shares of the Fund based
on the net asset value per Share of such Fund specified in an advice
received from the Fund on such Fund Business Day.
4. On each Fund Business Day, the Transfer Agent shall supply
the Fund with a statement specifying with respect to the immediately
preceding Fund Business Day: the total number of Shares of the Fund
(including fractional Shares) issued and outstanding at the opening of
business on such day; the total number of Shares of the Fund sold on
such day, pursuant to the preceding paragraph 2 of this Article; the
total number of Shares of the Fund redeemed from shareholders by the
Transfer Agent on such day; the total number of Shares of the Fund, if
any, sold on such day pursuant to the preceding paragraph 3 of this
Article, and the total number of Shares of the Fund issued and
outstanding.
5. In connection with each purchase and each redemption of
Shares, the Transfer Agent shall send such statements as are prescribed
by the Federal Securities laws applicable to transfer agents or as
described in the Prospectus. If the Prospectus indicates that
certificates for Shares are available and if specifically requested in
writing by any shareholder, or if otherwise required hereunder, the
Transfer Agent will countersign (if necessary), issue and mail to such
shareholder at the address set forth in the records of the Transfer
Agent a Share certificate for any full Share requested.
6. As of each Fund Business Day, the Transfer Agent shall
furnish the Fund with an advice setting forth the number and dollar
amount of Shares to be redeemed on such Fund Business Day in accordance
with paragraph 2 of this Article.
7. Upon receipt of a proper redemption request and moneys paid
to it by the Custodian in connection with a redemption of Shares, the
Transfer Agent shall cancel the redeemed Shares and after making
appropriate deduction for any withholding of taxes required of it by
applicable law: (a) in the case of a redemption of Shares pursuant to a
redemption described in the preceding paragraph l(a) of this Article,
make payment in accordance with the Fund's redemption and payment
procedures described in the Prospectus; and (b) in the case of a
redemption of Shares pursuant to a computer tape or electronic data
transmission described in the preceding paragraph l(b) of this Article,
make payment by directing a federal funds wire order to the account
previously designated by the Approved Institution specified in said
computer tape or electronic data transmission.
8. The Transfer Agent shall not be required to issue any Shares
after it has received from an Officer of the Fund or from an appropriate
federal or state authority written notification that the sale of Shares
has been suspended or discontinued, and the Transfer Agent shall be
entitled to rely upon such written notification.
9. Upon the issuance of any Shares in accordance with this
Agreement, the Transfer Agent shall not be responsible for the payment
of any original issue or other taxes required to be paid by the Fund in
connection with such issuance of any Shares.
10. The Transfer Agent shall accept a computer tape or
electronic data transmission consistent with the Transfer Agent's record
format, as amended from time to time, which is reasonably believed by
the Transfer Agent to be furnished by or on behalf of any Approved
Institution and is represented to be instructions with respect to the
transfer of Shares from one account of such Approved Institution to
another such account, and shall effect the transfers specified in said
computer tape or electronic data transmission. The Transfer Agent shall
not be liable for any losses to the Fund or its shareholders in the
event that a computer tape or electronic data transmission from an
Approved Institution is unable to be processed for any reason beyond the
control of the Transfer Agent, or if any of the information on such tape
or transmission is found to be incorrect.
11. (a) Except as otherwise provided in subparagraph (b) of
this paragraph and in paragraph 13 of this Article, Shares will be
transferred or redeemed upon presentation to the Transfer Agent of
Share certificates or instructions properly endorsed for transfer
or redemption, accompanied by such documents as the Transfer Agent
deems necessary to evidence the authority of the person making
such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes. In the case of small estates
where no administration is contemplated, the Transfer Agent may,
when furnished with an appropriate surety bond, and without
further approval of the Fund, transfer or redeem Shares registered
in the name of a decedent where the current market value of the
Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent
reserves the right to refuse to transfer or redeem Shares until it
is satisfied that the endorsement on the stock certificate or
instructions is valid and genuine, and for that purpose it will
require, unless otherwise instructed by an authorized Officer of
the Fund, a guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-15. The
Transfer Agent also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers or redemptions
which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to
any claims adverse to such transfer or redemption. The Transfer
Agent may, in effecting transfers and redemptions of Shares, rely
upon those provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as
the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer
Agent for any act done or omitted by it in good faith in reliance
upon such laws. In no event will the Fund indemnify the Transfer
Agent for any act done by it as a result of willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties.
The Transfer Agent shall be entitled to accept, and shall be fully
protected by the Fund in accepting, any request from any entity to
carry out any transaction in Shares received by the Transfer Agent
through any of the various programs offered through the National
Securities Clearing Corporation ("NSCC") (including, but not
limited to, Networking and FundServ). Any such entity shall
constitute an Approved Institution as defined herein.
(b) Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, the Transfer Agent
shall be fully protected by the Fund in not requiring any
instruments, documents, assurances, endorsements or guarantees,
including, without limitation, any signature guarantees, in
connection with a redemption or transfer of Shares whenever the
Transfer Agent reasonably believes that requiring the same would
be inconsistent with the transfer and redemption procedures as
described in the Prospectus.
12. Notwithstanding any provision contained in this Agreement to
the contrary, the Transfer Agent shall not be required or expected to
require, as a condition to any transfer of any Shares pursuant to
paragraph 11 of this Article or any redemption of any Shares pursuant to
a computer tape or electronic data transmission described in this
Agreement, any documents, including, without limitation, any documents
of the kind described in subparagraph (a) of paragraph 11 of this
Article, to evidence the authority of the person requesting the transfer
or redemption and/or the payment of any stock transfer taxes, and shall
be fully protected in acting in accordance with the applicable
provisions of this Article.
13. (a) As used in this Agreement, the terms "computer tape
or electronic data transmission" and "computer tape believed by
the Transfer Agent to be furnished by an Approved Institution",
shall include any tapes generated by the Transfer Agent to reflect
information believed by the Transfer Agent to have been input by
an Approved Institution, via a remote terminal or other similar
link, into a data processing, storage or collection system, or
similar system (the "System"), located on the Transfer Agent's
premises. For purposes of paragraph 1 of this Article, such a
computer tape or electronic data transmission shall be deemed to
have been furnished at such times as are agreed upon from time to
time by the Transfer Agent and Fund only if the information
reflected thereon was input to the System at such times as are
agreed upon from time to time by the Transfer Agent and the Fund.
(b) Nothing contained in this Agreement shall constitute
any agreement or representation by the Transfer Agent to permit,
or to agree to permit, any Approved Institution to input
information into a System.
(c) The Transfer Agent reserves the right to approve, in
advance, any Approved Institution; such approval not to be
unreasonably withheld. The Transfer Agent also reserves the right
to terminate any and all automated data communications, at its
discretion, upon a reasonable attempt to notify the Fund when in
the opinion of the Transfer Agent continuation of such
communications would jeopardize the accuracy and/or integrity of
the Fund's records on the System.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a
resolution of its Board of Directors, certified by the
Secretary or any Assistant Secretary, either: (i) setting forth
the date of the declaration of a dividend or distribution, the date of
accrual or payment, as the case may be, thereof, the record date as of
which shareholders entitled to payment, or accrual, as the case may be,
shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and
unpaid dividends are to be paid and the total amount, if any, payable to
the Transfer Agent on such payment date; or (ii) authorizing the
declaration of dividends and distributions on a daily or other periodic
basis and authorizing the Transfer Agent to rely on a Certificate
setting forth the information described in subsection (i) of this
paragraph.
2. Upon the mail date specified in such Certificate or
resolution, as the case may be, the Fund shall, in the case of a cash
dividend or distribution, cause the Custodian to deposit in an account
in the name of the Transfer Agent on behalf of the Fund an amount of
cash, if any, sufficient for the Transfer Agent to make the payment, as
of the mail date, specified in such Certificate or resolution, as the
case may be, to the shareholders who were of record on the record date.
The Transfer Agent will, upon receipt of any such cash, make payment of
such cash dividends or distributions to the shareholders of record as of
the record date by: (i) mailing a check, payable to the registered
shareholder, to the address of record or dividend mailing address; or
(ii) wiring such amounts to the accounts previously designated by an
Approved Institution, as the case may be. The Transfer Agent shall not
be liable for any improper payments made in good faith and without
negligence, in accordance with a Certificate or resolution described in
the preceding paragraph. If the Transfer Agent shall not receive from
the Custodian sufficient cash to make payments of any cash dividend or
distribution to all shareholders of the Fund as of the record date, the
Transfer Agent shall, upon notifying the Fund, withhold payment to all
shareholders of record as of the record date until sufficient cash is
provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or
capital gain distributions due to the shareholders. It is expressly
agreed and understood that the Transfer Agent is not liable for any loss
as a result of processing a distribution based on information provided
in the Certificate that is incorrect. The Fund agrees to pay the
Transfer Agent for any and all costs, both direct and Out-of-Pocket
Expenses, incurred in such corrective work as necessary to remedy such
error.
4. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividend and
capital gain distributions with the proper federal, state and local
authorities as are required by law to be filed by the Fund, but shall in
no way be responsible for the collection or withholding of taxes due on
such dividends or distributions due to shareholders, except and only to
the extent required by applicable law. Anything in this Agreement to the
contrary notwithstanding, the Fund shall be solely responsible for the
accurate, complete and timely filing with the proper federal, state and
local authorities of all tax information with respect to any Fund
account maintained under Matrix Level 3 through any of the various
programs offered through the NSCC (including, but not limited to,
Networking and FundServ).
ARTICLE VII
CONCERNING THE FUND
1. The Fund represents to the Transfer Agent that:
(a) It is a corporation duly organized and existing under
the laws of the State of Maryland.
(b) It is empowered under applicable laws and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is an investment company registered under the
Investment Company Act of 1940, as amended.
(e) A registration statement under the Securities Act of
1933, as amended, with respect to the Shares is effective. The
Fund shall notify the Transfer Agent if such registration
statement or any state securities registrations have been
terminated or a stop order has been entered with respect to the
Shares.
2. Each copy of the Articles of Incorporation of the Fund and
copies of all amendments thereto shall be certified by the Secretary of
State (or other appropriate official) of the state of organization, and
if such Articles of Incorporation and/or amendments are required by law
also to be filed with a county or other officer or official body, a
certificate of such filing shall be filed with a certified copy
submitted to the Transfer Agent. Each copy of the By-laws and copies of
all amendments thereto, and copies of resolutions of the Board of
Directors of the Fund shall be certified by the Secretary of the Fund
under seal.
3. The Fund shall promptly deliver to the Transfer Agent
written notice of any change in the Officers authorized to sign Share
certificates, notifications or requests, together with a specimen
signature of each new Officer. In the event any Officer who shall have
signed manually or whose facsimile signature shall have been affixed to
blank Share certificates shall die, resign or be removed prior to
issuance of such Share certificates, the Transfer Agent may issue such
Share certificates of the Fund notwithstanding such death, resignation
or removal, and the Fund shall promptly deliver to the Transfer Agent
such approval, adoption or ratification as may be required by law.
4. It shall be the sole responsibility of the Fund to deliver
to the Transfer Agent the Fund's currently effective Prospectus and, for
purposes of this Agreement, the Transfer Agent shall not be deemed to
have notice of any information contained in such Prospectus until a
reasonable time after it is actually received by the Transfer Agent.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents and warrants to the Fund that:
(a) It is a corporation duly organized and existing under
the laws of the State of Missouri.
(b) It is empowered under applicable law and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is duly registered as a transfer agent under
Section 17A of the Securities Exchange Act of 1934, as amended.
2. The Transfer Agent shall not be liable and shall be
indemnified in acting upon any computer tape or electronic data
transmission, writing or document reasonably believed by it to be
genuine and to have been signed or made by an Officer of the Fund or
person designated by the Fund and shall not be held to have any notice
of any change of authority of any person until receipt of written notice
thereof from the Fund or such person. It shall also be protected in
processing Share certificates which bear the proper countersignature of
the Transfer Agent and which it reasonably believes to bear the proper
manual or facsimile signature of the Officers of the Fund.
3. The Transfer Agent upon notice to the Fund may establish
such additional procedures, rules and regulations governing the transfer
or registration of Share certificates as it may deem advisable and
consistent with such rules and regulations generally adopted by mutual
fund transfer agents.
4. The Transfer Agent shall keep such records as it may deem
advisable and is agreeable to the Fund, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular Rules 31a-2 and 31a-3 under the Investment Company Act of
1940, as amended. The Transfer Agent acknowledges that such records are
the property of the Fund. The Transfer Agent may deliver to the Fund
from time to time at its discretion, for safekeeping or disposition by
the Fund in accordance with law, such records, papers, documents
accumulated in the execution of its duties as such Transfer Agent, as
the Transfer Agent may deem expedient, other than those which the
Transfer Agent is itself required to maintain pursuant to applicable
laws and regulations. The Fund shall assume all responsibility for any
failure thereafter to produce any record, paper, cancelled Share
certificate or other document so returned, if and when required. Such
records maintained by the Transfer Agent pursuant to this paragraph 4,
which have not been previously delivered to the Fund pursuant to the
foregoing provisions of this paragraph 4, shall be considered to be the
property of the Fund, shall be made available upon request for
inspection by the Officers, employees and auditors of the Fund, and
records shall be delivered to the Fund upon request and in any event
upon the date of termination of this Agreement, as specified in Article
IX of this Agreement, in the form and manner kept by the Transfer Agent
on such date of termination or such earlier date as may be requested by
the Fund.
5. The Transfer Agent shall not be liable for any loss or
damage, including counsel fees, resulting from its actions or omissions
to act or otherwise, except for any loss or damage arising out of its
bad faith, willful misfeasance, gross negligence or reckless disregard
of its duties under this Agreement.
6. (a) The Fund shall indemnify and exonerate, save and hold
harmless the Transfer Agent from and against any and all claims
(whether with or without basis in fact or law), demands, expenses
(including reasonable attorneys' fees) and liabilities of any and
every nature which the Transfer Agent may sustain or incur or
which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be
taken by any prior transfer agent of the Fund or as a result of
any action taken or omitted to be taken by the Transfer Agent in
good faith and without gross negligence or willful misfeasance or
in reliance upon: (i) any provision of this Agreement; (ii)
the Prospectus; (iii) any instruction or order including, without
limitation, any computer tape or electronic data transmission
reasonably believed by the Transfer Agent to have been received
from an Approved Institution; (iv) any instrument, order or Share
certificate reasonably believed by it to be genuine and to be
signed, countersigned or executed by any duly authorized Officer
of the Fund; (v) any Certificate or other instructions of an
Officer; (vi) any opinion of legal counsel for the Fund or the
Transfer Agent; or (vii) any request by any entity to carry out
any transaction in Shares received by the Transfer Agent through
any of the various programs offered through the NSCC (including,
but not limited to, Networking and FundServ). The Fund shall
indemnify and exonerate, save and hold the Transfer Agent harmless
from and against any and all claims (whether with or without basis
in fact or law), demands, expenses (including reasonable
attorneys' fees) and liabilities of any and every nature which the
Transfer Agent may sustain or incur or which may be asserted
against the Transfer Agent by any person by reason of or as a
result of any action taken or omitted to be taken by the Transfer
Agent in good faith in connection with its appointment or in
reliance upon any law, act, regulation or any interpretation of
the same even though such law, act or regulation may thereafter
have been altered, changed, amended or repealed.
(b) The Transfer Agent shall not settle any claim, demand,
expense or liability to which it may seek indemnity pursuant to
paragraph 6(a) above (each, an "Indemnifiable Claim") without
the express written consent of an Officer of the Fund. The
Transfer Agent shall notify the Fund within fifteen (15) days of
receipt of notification of an Indemnifiable Claim, provided that
the failure by the Transfer Agent to furnish such notification
shall not impair its right to seek indemnification from the Fund
unless the Fund is unable to adequately defend the Indemnifiable
Claim as a result of such failure, and further provided, that if
as a result of the Transfer Agent's failure to provide the Fund
with timely notice of the institution of litigation a judgment by
default is entered, prior to seeking indemnification from the Fund
the Transfer Agent, at its own cost and expense, shall open such
judgment. The Fund shall have the right to defend any
Indemnifiable Claim at its own expense, provided that such defense
shall be conducted by counsel selected by the Fund and reasonably
acceptable to the Transfer Agent. The Transfer Agent may join in
such defense at its own expense, but to the extent that it shall
so desire the Fund shall direct such defense. The Fund shall not
settle any Indemnifiable Claim without the express written consent
of the Transfer Agent if the Transfer Agent determines that such
settlement would have an adverse effect on the Transfer Agent
beyond the scope of this Agreement. In such event, the Fund and
the Transfer Agent shall each be responsible for their own defense
at their own cost and expense, and such claim shall not be deemed
an Indemnifiable Claim hereunder. If the Fund shall fail or refuse
to defend an Indemnifiable Claim, the Transfer Agent may provide
its own defense at the cost and expense of the Fund. Anything in
this Agreement to the contrary notwithstanding, the Fund shall not
indemnify the Transfer Agent against any liability or expense
arising out of the Transfer Agent's willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties and
obligations under this Agreement. The Transfer Agent shall
indemnify and hold the Fund harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or
failure or omission to act by the Transfer Agent as a result of
the Transfer Agent's lack of good faith, gross negligence or
willful misfeasance.
7. The Transfer Agent shall not be liable to the Fund with
respect to any redemption draft on which the signature of the drawer is
forged and which the Fund's Custodian has advised the Transfer Agent to
honor the redemption (but nothing herein is meant to impose any duties
upon the Fund's Custodian); nor shall the Transfer Agent be liable for
any material alteration or absence or forgery of any endorsement, it
being understood that the Transfer Agent's sole responsibility with
respect to inspecting redemption drafts is to use reasonable care to
verify the drawer's signature against signatures on file.
8. There shall be excluded from the consideration of whether
the Transfer Agent has breached this Agreement in any way, any period of
time, and only such period of time during which the Transfer Agent's
performance is materially affected, by reason of circumstances beyond
its control (collectively, "Causes"), including, without limitation,
mechanical breakdowns of equipment (including any alternative power
supply and operating systems software), flood or catastrophe, acts of
God, failures of transportation, communication or power supply, strikes,
lockouts, work stoppages or other similar circumstances.
9. At any time the Transfer Agent may apply to an Officer of
the Fund for written instructions with respect to any matter arising in
connection with the Transfer Agent's duties and obligations under this
Agreement, and the Transfer Agent shall not be liable for any action
taken or permitted by it in good faith in accordance with such written
instructions. Such application by the Transfer Agent for written
instructions from an Officer of the Fund may set forth in writing any
action proposed to be taken or omitted by the Transfer Agent with
respect to its duties or obligations under this Agreement and the date
on and/or after which such action shall be taken. The Transfer Agent
shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified
therein unless, prior to taking or omitting any such action, the
Transfer Agent has received written instructions in response to such
application specifying the action to be taken or omitted. The Transfer
Agent may consult counsel of the Fund, or upon notice to the Fund, its
own counsel, at the expense of the Fund and shall be fully protected
with respect to anything done or omitted by it in good faith in
accordance with the advice or opinion of counsel to the Fund or its own
counsel.
10. The Transfer Agent may issue new Share certificates in place
of certificates represented to have been lost, stolen or destroyed upon
receiving written instructions from the shareholder accompanied by proof
of an indemnity or surety bond issued by a recognized insurance
institution specified by the Fund or the Transfer Agent.
If the Transfer Agent receives written notification from the shareholder
or broker dealer that the certificate issued was never received, and
such notification is made within thirty (30) days of the date of
issuance, the Transfer Agent may reissue the certificate without
requiring a surety bond. The Transfer Agent may also reissue
certificates which are represented as lost, stolen or destroyed without
requiring a surety bond provided that the notification is in writing and
accompanied by an indemnification signed on behalf of a member firm of
the New York Stock Exchange and signed by an officer of said firm with
the signature guaranteed. Notwithstanding the foregoing, the Transfer
Agent will reissue a certificate upon written authorization from an
Officer of the Fund.
11. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to
notify the Fund promptly and to secure instructions from an Officer as
to such inspection. The Transfer Agent reserves the right, however, to
exhibit the shareholder records to any person whenever it receives an
opinion from its counsel that there is a reasonable likelihood that the
Transfer Agent will be held liable for the failure to exhibit the
shareholder records to such person; provided, however, that in
connection with any such disclosure the Transfer Agent shall promptly
notify the Fund that such disclosure has been made or is to be made.
12. At the request of an Officer of the Fund, the Transfer Agent
will address and mail such appropriate notices to shareholders as the
Fund may direct.
13. Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the
authority of the Approved Institution or of the Fund, as the case
may be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or of a
redemption of any Shares, the propriety of the amount to be paid
therefor, or the authority of the Approved Institution or of the
Fund, as the case may be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend by the
Fund, or the legality of the issue of any Shares in payment of any
stock dividend; or
(d) The legality of any recapitalization or readjustment
of Shares.
14. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically
set forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against the Transfer Agent.
15. Purchase and Prices of Services:
(a) The Fund will compensate the Transfer Agent for, and
Transfer Agent will provide, beginning on the execution date of
this Agreement and continuing until the termination of this
Agreement as provided hereinafter, the services set forth in
Schedule I.
(b) The current unit prices for the services are set forth
in Schedule II (the "Schedule II Fees"). Effective as of January
1, 1997, once in each calendar year, the Transfer Agent may elect
to raise the Schedule II Fees upon ninety (90) days prior notice
to the Fund, all subject to the mutual agreement of the parties
hereto. Notwithstanding the annual right to raise the Schedule II
Fees, the Transfer Agent may increase prices due to changes in
legal or regulatory requirements subject to the approval of the
Fund, which approval shall not be unreasonably withheld.
16. Billing and Payment:
(a) The Transfer Agent shall bill the Fund monthly in
arrears for accounts maintained and Out-of-Pocket Expenses. The
Transfer Agent may from time to time request that the Fund advance
estimated expenditures of an unusual nature subject to
reconciliation of actual expenses as soon as practicable
thereafter.
(b) The Fund shall pay the Transfer Agent in immediately
available funds at UMB Bank, n.a. in Kansas City, Missouri within
thirty (30) days of the date of the bill. Any amounts due under
this Agreement which are not paid within said thirty (30) day
period shall bear interest at the rate of one and one-half percent
(l 1/2%) per month from such date until paid in full.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than sixty (60) days after the
date of receipt of such notice. In the event such notice is given by the
Fund, it shall be accompanied by a copy of a resolution of the Board of
Directors of the Fund, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement and designating the
successor transfer agent or transfer agents. In the event such notice is
given by the Transfer Agent, the Fund shall on or before the termination
date, deliver to the Transfer Agent a copy of a resolution of its Board
of Directors, certified by the Secretary or any Assistant Secretary,
designating a successor transfer agent or transfer agents. In the
absence of such designation by the Fund, the Fund shall upon the date
specified in the notice of termination of this Agreement and delivery of
the records maintained hereunder, be deemed to be its own transfer agent
and the Transfer Agent shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement.
In the event this Agreement is terminated as provided herein, the
Transfer Agent, upon the written request of the Fund, shall deliver the
records of the Fund on electromagnetic media to the Fund or its
successor transfer agent. The Fund shall be responsible to the Transfer
Agent for the reasonable costs and expenses associated with the
preparation and delivery of such media.
ARTICLE X
MISCELLANEOUS
1 The Fund agrees that prior to effecting any change in the
Prospectus which would increase or alter the duties and obligations of
the Transfer Agent hereunder, it shall advise the Transfer Agent of such
proposed change at least thirty (30) days prior to the intended date of
the same, and shall proceed with such change only if it shall have
received the written consent of the Transfer Agent thereto, which shall
not be unreasonably withheld.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund shall be sufficiently
given if addressed to the Fund and mailed or delivered to it at:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Fund may from time to time designate in
writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Transfer Agent shall be
sufficiently given if addressed to the Transfer Agent and mailed or
delivered to:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Transfer Agent may from time to time
designate in writing.
4. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the
formality of this Agreement.
5. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns.
6. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
7. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
8. The provisions of this Agreement are intended to benefit
only the Transfer Agent and the Fund, and no rights shall be granted to
any other person by virtue of this Agreement.
9. (a) The Transfer Agent shall endeavor to assist in
resolving shareholder inquiries and errors relating to the period
during which prior transfer agents acted as such for the Fund. Any
such inquiries or errors which cannot be expediently resolved by
the Transfer Agent will be referred to the Fund.
(b) The Transfer Agent shall only be responsible for the
safekeeping and maintenance of transfer agency records, cancelled
Share certificates and correspondence of the Fund created or
produced prior to the time of conversion which are under its
control and acknowledged in a writing to the Fund to be in its
possession. Any expenses or liabilities incurred by the Transfer
Agent as a result of shareholder inquiries, regulatory compliance
or audits related to such records and not caused as a result of
Transfer Agent's bad faith, willful misfeasance or gross
negligence shall be the responsibility of the Fund as provided in
Article VIII herein.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective corporate officer, thereunto duly
authorized and their respective corporate seals to be hereunto affixed,
as of the day and year first above written.
D. L. BABSON MONEY MARKET FUND, INC.
By /s/Larry D. Armel
Name: Larry D. Armel
Title: President
[SEAL]
JONES & BABSON, INC.
By /s/Michael A. Brummel
Name: Michael A. Brummel
Title: Assistant Secretary
[SEAL]
<PAGE>
SCHEDULE I
DESCRIPTION OF SERVICES
In consideration of the fees to be paid in such manner and at such
times as Fund and Transfer Agent may agree, Transfer Agent will provide the
services set forth below:
Examine and Process New Accounts, Subsequent Payments, Liquidations,
Exchanges, Telephone Transactions, Check Redemptions, Automatic Withdrawals,
Certificate Issuance, Wire Order Trades, Dividends, Dividend Statements,
Dealer Statements.
This Agreement does not apply to services with respect to qualified
plans. Such services, including, but not limited to fiduciary accounting
services and the preparation and mailing of Forms 5498 and 1099R, are
available subject to separate agreement for an additional charge.
DAILY ACTIVITY
Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
Name and Address, including Zip Code
Balance of Uncertificated Shares
Balance of Certificated Shares
Certificate number, number of shares, issuance date of each certificate
outstanding and cancellation date for each certificate date for each
certificate no longer outstanding, if issued
Balance of dollars available for redemption
Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash)
Type of account code
Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available
Original establishment date for accounts opened by exchange W-9
withholding status and periodic reporting
State of residence code
Social Security or taxpayer identification number, and indication of
certification
Historical transactions on the account for the most recent 18 months,
or other period as mutually agreed to from time-to-time
Indication as to whether phone transactions can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant, etc.
An alternate or "secondary" account number issued by a dealer (or bank,
etc.) to a customer for use, inquiry and transaction input by "remote
accessors"
FUNCTIONS
Answer investor and dealer telephone and/or written inquiries, except
those concerning Fund policy, or requests for investment advice which
will be referred to the Fund, or those which the Fund chooses to answer
Deposit Fund share certificates into accounts upon receipt of
instructions from the investor or other authorized person, if issued
Examine and process transfers of shares insuring that all transfer
requirements and legal documents have been supplied
Process and confirm address changes
Process standard account record changes as required, i.e. Dividend
Codes, etc.
Microfilm source documents for transactions, such as account
applications and correspondence
Perform backup withholding for those accounts which federal government
regulations indicate is necessary
Solicit missing taxpayer identification numbers
Provide remote access inquiry to Fund records via Fund supplied
hardware (Fund responsible for connection line and monthly fee)
REPORTS PROVIDED
Daily Journals Reflecting all shares and
dollar activity for the
previous day
Blue Sky Report Supply information monthly
for Fund's Preparation of
Blue Sky Reporting
N-SAR Report Supply monthly correspondence,
redemption and liquidation
information for use in fund's
N-SAR Report
Additionally, monthly average daily balance reports will be provided at
the Fund's request to the Fund at no charge.
Prepare and mail copies of summary statements to dealers and investment
advisers
Generate and mail confirmation statements for financial transactions
DIVIDEND ACTIVITY
Reinvest or pay in cash including reinvesting in other funds within the
fund group serviced by the Transfer Agent as described in each Fund
Prospectus
Distribute capital gains simultaneously with income dividends
DEALER SERVICES
Prepare and mail confirmation statements to dealers and
Prepare and mail copies of statements to dealers, same frequency as
investor statements
ANNUAL MEETINGS
Assist Fund in obtaining a qualified service to: address and mail
proxies and related material, tabulate returned proxies and supply
daily reports when sufficient proxies have been received
Prepare certified list of stockholders, hard copy or microform
PERIODIC ACTIVITIES
Mail transaction confirmation statements daily to investors
Address and mail four (4) periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent)
Mail periodic statement to investors
Compute, prepare and furnish all necessary reports to Governmental
authorities: Forms 1099DIV, 1099B, 1042 and 1042S
Enclose various marketing material as designated by the Fund in statement
mailings, i.e. monthly and quarterly statements (material must be adaptable
to mechanical equipment as reasonably specified by the Transfer Agent)
SCHEDULE II
TRANSFER AGENT FEE SCHEDULE
(None for this Fund)
<PAGE>
EX99.23(h)(3)
TRANSFER AGENCY AGREEMENT
This Agreement made as of the 31st day of October 31, 1994 between
D. L. Babson Tax-Free Income Fund, Inc., a Maryland corporation (the "Fund"),
and Jones & Babson, Inc., a Missouri corporation (the "Transfer
Agent").
WITNESSETH
That in consideration of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases
shall have the following meanings:
1. "Approved Institution" shall mean an entity so named in a
Certificate, as hereinafter defined. From time to time, the Fund may
amend a previously delivered Certificate by delivering to the Transfer
Agent a Certificate naming an additional entity or deleting any entity
named in a previously delivered Certificate.
2. The "Board of Directors" shall mean the Board of Directors
of the Fund.
3. "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be
given to the Transfer Agent by the Fund which is signed by any Officer,
as hereinafter defined, and actually received by the Transfer Agent.
4. "Custodian" shall mean the financial institution appointed
as custodian under the terms and conditions of the Custody Agreement
between the financial institution and the Fund, or its successor(s).
5. "Fund Business Day" shall be determined as set out in the
Fund's prospectuses as shall be effective from time to time.
6. "Officer" shall be deemed to be the Fund's President, any
Vice President, Secretary, Treasurer, Controller, any Assistant
Controller, any Assistant Treasurer and any Assistant Secretary, and any
other person duly authorized by the Board of Directors of the Fund to
execute any Certificate, instruction, notice or other instrument on
behalf of the Fund, and any person reasonably believed by the Transfer
Agent to be such a person.
7. "Out-of-Pocket Expenses" means amounts reasonably
necessary and actually incurred by Transfer Agent in the provision of
Transfer Agent services or pursuant to this Agreement for the following
purposes: postage (and first class mail insurance in connection with
mailing Share certificates), envelopes, check forms, continuous forms,
forms for reports and statements, stationery and other similar items,
telephone and telegraph charges incurred in answering inquiries from
dealers or shareholders, microfilm used to record transactions in
shareholder accounts and computer tapes used for permanent storage of
records and cost of insertion of materials in mailing envelopes by
outside firms. Any charges associated with special or exception
processing shall also be considered Out-of-Pocket Expenses.
8. "Prospectus" shall mean the most recent Fund prospectus
actually received by the Transfer Agent from the Fund with respect to
which the Fund has indicated a registration statement under the
Securities Act of 1933, as amended, has become effective, including the
Statement of Additional Information, incorporated by reference therein.
9. "Shares" shall mean all or any part of each class or
series of the shares of beneficial interest of the Fund or portfolio
listed in the Certificate as to which the Transfer Agent acts as
transfer agent hereunder, as may be amended from time to time, which are
authorized and/or issued by the Fund.
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. Effective as of the date of this Agreement, the Fund hereby
constitutes and appoints the Transfer Agent as transfer agent of all the
Shares of the Fund and as dividend disbursing agent during the period of
this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer
agent and dividend disbursing agent and agrees to perform duties thereof
as hereinafter set forth.
3. In connection with such appointment, the Fund upon the
request of the Transfer Agent, shall deliver the following documents to
the Transfer Agent:
(i) A copy of the Articles of Incorporation of the Fund
and all
amendments thereto certified by the Secretary of the Fund;
(ii) A copy of the By-laws of the Fund certified by the
Secretary of the
Fund;
(iii) A copy of a resolution of the Board of Directors of
the Fund
certified by the Secretary of the Fund appointing the Transfer
Agent and
authorizing the execution of this Transfer Agency Agreement;
(iv) A Certificate signed by the Secretary of the Fund
specifying: the number of authorized Shares, the number of such
authorized Shares issued, the number of such authorized Shares
issued and currently outstanding, the names and specimen
signatures of the Officers of the Fund and the name and address of
the legal counsel for the Fund;
(v) Specimen Share certificate for each or series class of
Shares in the form approved by the Board of Directors of the Fund
(and in a format compatible with the Transfer Agent's system),
together with a Certificate signed by the Secretary of the Fund as
to such approval;
(vi) Copies of the Fund's registration statement, as
amended to date, and the most recently filed Post-Effective
Amendment thereto, filed by the Fund with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
and under the Investment Company Act of 1940, as amended, together
with any applications filed in connection therewith; and
(vii) Opinion of counsel for the Fund with respect to the
validity of the authorized and outstanding Shares, whether such
Shares are fully paid and nonassessable and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that they have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. If requested by the Transfer Agent, the Fund shall deliver
to the Transfer Agent the following documents on or before the effective
date of any increase or decrease in the total number of Shares
authorized to be issued:
(a) A certified copy of the amendment to the Articles of
Incorporation giving effect to such increase or decrease;
(b) In the case of an increase, an opinion of counsel for
the Fund with respect to the validity of the Shares of the Fund
and the status of such Shares under the Securities Act of 1933, as
amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been registered and
that the registration statement has become effective or, if
exempt, the specific grounds therefor); and
(c) In the case of an increase, if the appointment of the
Transfer Agent was theretofore expressly limited, a certified copy
of a resolution of the Board of Directors of the Fund increasing
the authority of the Transfer Agent.
2. Prior to the issuance of any additional Shares pursuant to
stock dividends or stock splits, etc., and prior to any reduction in the
number of Shares outstanding, if requested by the Transfer Agent, the
Fund shall deliver the following documents to the Transfer Agent:
(a) A certified copy of the resolution(s) adopted by the
Board of Directors and/or the shareholders of the Fund authorizing
such issuance of additional Shares or such reduction, as the case
may be; and
(b) An opinion of counsel for the Fund with respect to
the validity of the Shares and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable
federal law or regulation (i.e., if subject to registration, that
they have been registered and that the registration statement has
become effective, or, if exempt, the specific grounds therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or
other capital adjustment requiring a change in the form of Share
certificates, the Transfer Agent will issue Share certificates in the
new form in exchange for, or upon transfer of, outstanding Share
certificates in the old form, upon receiving:
a) A Certificate authorizing the issuance of the Share
certificates in the new form;
(b) A certified copy of any amendment to the Articles of
Incorporation with respect to the change;
(c) Specimen Share certificates for each class of Shares
in the new form approved by the Board of Directors of the Fund,
with a Certificate signed by the Secretary of the Fund as to such
approval; and
(d) An opinion of counsel for the Fund with respect to the
validity of the Shares in the new form and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
2. The Fund at its expense shall furnish the Transfer Agent
with a sufficient supply of blank Share certificates in the new form and
from time to time will replenish such supply upon the request of the
Transfer Agent. Such blank Share certificates shall be compatible with
the Transfer Agent's system and shall be properly signed by facsimile or
otherwise by Officers of the Fund authorized by law or by the By-laws to
sign Share certificates and, if required, shall bear the corporate seal
or facsimile thereof. The Fund agrees to indemnify and exonerate, save
and hold the Transfer Agent harmless from and against any and all claims
or demands that may be asserted against the Transfer Agent with respect
to the genuineness of any Share certificate supplied to the Transfer
Agent pursuant to this Article.
ARTICLE V
ISSUANCE, REDEMPTION AND TRANSFER OF SHARES
1. (a) The Transfer Agent acknowledges that it has received a
copy of the Fund's Prospectus, which Prospectus describes how
sales and redemption of Shares of the Fund shall be made, and the
Transfer Agent agrees to accept purchase orders and redemption
requests with respect to Shares on each Fund Business Day in
accordance with such Prospectus. The Fund agrees to provide the
Transfer Agent with sufficient advance notice to enable the
Transfer Agent to effect any changes in the procedures set forth
in the Prospectus regarding such purchase and redemption
procedure; provided, however, that in no event will such advance
notice be less than thirty (30) days.
(b) The Transfer Agent shall also accept with respect to
each Fund Business Day, at such times as are agreed upon from time
to time by the Transfer Agent and the Fund, a computer tape or
electronic data transmission consistent in all respects with the
Transfer Agent's record format, as amended from time to time,
which is believed by the Transfer Agent to be furnished by or on
behalf of any Approved Institution. The Transfer Agent shall not
be liable for any losses or damages to the Fund or its
shareholders in the event that a computer tape or electronic data
transmission from an Approved Institution is unable to be
processed for any reason beyond the control of the Transfer Agent,
or if any of the information on such tape or transmission is found
to be incorrect.
2. On each Fund Business Day, the Transfer Agent shall, as of
the time at which the Fund computes the net asset value of the Fund,
issue to and redeem from the accounts specified in a purchase order,
redemption request or computer tape or electronic data transmission,
which in accordance with the Prospectus is effective on such Fund
Business Day, the appropriate number of full and fractional Shares based
on the net asset value per Share of such Fund specified in an advice
received on such Fund Business Day from the Fund. Notwithstanding the
foregoing, if a redemption specified in a computer tape or electronic
data transmission is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account, the
Transfer Agent shall not effect such redemption in whole or in part and
shall within twenty-four (24) hours orally advise the Approved
Institution which supplied such tape of the discrepancy.
3. In connection with a reinvestment of a dividend or
distribution of Shares of the Fund, the Transfer Agent shall as of each
Fund Business Day, as specified in a Certificate or resolution described
in paragraph 1 of succeeding Article VI, issue Shares of the Fund based
on the net asset value per Share of such Fund specified in an advice
received from the Fund on such Fund Business Day.
4. On each Fund Business Day, the Transfer Agent shall supply
the Fund with a statement specifying with respect to the immediately
preceding Fund Business Day: the total number of Shares of the Fund
(including fractional Shares) issued and outstanding at the opening of
business on such day; the total number of Shares of the Fund sold on
such day, pursuant to the preceding paragraph 2 of this Article; the
total number of Shares of the Fund redeemed from shareholders by the
Transfer Agent on such day; the total number of Shares of the Fund, if
any, sold on such day pursuant to the preceding paragraph 3 of this
Article, and the total number of Shares of the Fund issued and
outstanding.
5. In connection with each purchase and each redemption of
Shares, the Transfer Agent shall send such statements as are prescribed
by the Federal Securities laws applicable to transfer agents or as
described in the Prospectus. If the Prospectus indicates that
certificates for Shares are available and if specifically requested in
writing by any shareholder, or if otherwise required hereunder, the
Transfer Agent will countersign (if necessary), issue and mail to such
shareholder at the address set forth in the records of the Transfer
Agent a Share certificate for any full Share requested.
6. As of each Fund Business Day, the Transfer Agent shall
furnish the Fund with an advice setting forth the number and dollar
amount of Shares to be redeemed on such Fund Business Day in accordance
with paragraph 2 of this Article.
7. Upon receipt of a proper redemption request and moneys paid
to it by the Custodian in connection with a redemption of Shares, the
Transfer Agent shall cancel the redeemed Shares and after making
appropriate deduction for any withholding of taxes required of it by
applicable law: (a) in the case of a redemption of Shares pursuant to a
redemption described in the preceding paragraph l(a) of this Article,
make payment in accordance with the Fund's redemption and payment
procedures described in the Prospectus; and (b) in the case of a
redemption of Shares pursuant to a computer tape or electronic data
transmission described in the preceding paragraph l(b) of this Article,
make payment by directing a federal funds wire order to the account
previously designated by the Approved Institution specified in said
computer tape or electronic data transmission.
8. The Transfer Agent shall not be required to issue any Shares
after it has received from an Officer of the Fund or from an appropriate
federal or state authority written notification that the sale of Shares
has been suspended or discontinued, and the Transfer Agent shall be
entitled to rely upon such written notification.
9. Upon the issuance of any Shares in accordance with this
Agreement, the Transfer Agent shall not be responsible for the payment
of any original issue or other taxes required to be paid by the Fund in
connection with such issuance of any Shares.
10. The Transfer Agent shall accept a computer tape or
electronic data transmission consistent with the Transfer Agent's record
format, as amended from time to time, which is reasonably believed by
the Transfer Agent to be furnished by or on behalf of any Approved
Institution and is represented to be instructions with respect to the
transfer of Shares from one account of such Approved Institution to
another such account, and shall effect the transfers specified in said
computer tape or electronic data transmission. The Transfer Agent shall
not be liable for any losses to the Fund or its shareholders in the
event that a computer tape or electronic data transmission from an
Approved Institution is unable to be processed for any reason beyond the
control of the Transfer Agent, or if any of the information on such tape
or transmission is found to be incorrect.
11. (a) Except as otherwise provided in subparagraph (b) of
this paragraph and in paragraph 13 of this Article, Shares will be
transferred or redeemed upon presentation to the Transfer Agent of
Share certificates or instructions properly endorsed for transfer
or redemption, accompanied by such documents as the Transfer Agent
deems necessary to evidence the authority of the person making
such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes. In the case of small estates
where no administration is contemplated, the Transfer Agent may,
when furnished with an appropriate surety bond, and without
further approval of the Fund, transfer or redeem Shares registered
in the name of a decedent where the current market value of the
Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent
reserves the right to refuse to transfer or redeem Shares until it
is satisfied that the endorsement on the stock certificate or
instructions is valid and genuine, and for that purpose it will
require, unless otherwise instructed by an authorized Officer of
the Fund, a guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-15. The
Transfer Agent also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers or redemptions
which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to
any claims adverse to such transfer or redemption. The Transfer
Agent may, in effecting transfers and redemptions of Shares, rely
upon those provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as
the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer
Agent for any act done or omitted by it in good faith in reliance
upon such laws. In no event will the Fund indemnify the Transfer
Agent for any act done by it as a result of willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties.
The Transfer Agent shall be entitled to accept, and shall be fully
protected by the Fund in accepting, any request from any entity to
carry out any transaction in Shares received by the Transfer Agent
through any of the various programs offered through the National
Securities Clearing Corporation ("NSCC") (including, but not
limited to, Networking and FundServ). Any such entity shall
constitute an Approved Institution as defined herein.
(b) Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, the Transfer Agent
shall be fully protected by the Fund in not requiring any
instruments, documents, assurances, endorsements or guarantees,
including, without limitation, any signature guarantees, in
connection with a redemption or transfer of Shares whenever the
Transfer Agent reasonably believes that requiring the same would
be inconsistent with the transfer and redemption procedures as
described in the Prospectus.
12. Notwithstanding any provision contained in this Agreement to
the contrary, the Transfer Agent shall not be required or expected to
require, as a condition to any transfer of any Shares pursuant to
paragraph 11 of this Article or any redemption of any Shares pursuant to
a computer tape or electronic data transmission described in this
Agreement, any documents, including, without limitation, any documents
of the kind described in subparagraph (a) of paragraph 11 of this
Article, to evidence the authority of the person requesting the transfer
or redemption and/or the payment of any stock transfer taxes, and shall
be fully protected in acting in accordance with the applicable
provisions of this Article.
13. (a) As used in this Agreement, the terms "computer tape
or electronic data transmission" and "computer tape believed by
the Transfer Agent to be furnished by an Approved Institution",
shall include any tapes generated by the Transfer Agent to reflect
information believed by the Transfer Agent to have been input by
an Approved Institution, via a remote terminal or other similar
link, into a data processing, storage or collection system, or
similar system (the "System"), located on the Transfer Agent's
premises. For purposes of paragraph 1 of this Article, such a
computer tape or electronic data transmission shall be deemed to
have been furnished at such times as are agreed upon from time to
time by the Transfer Agent and Fund only if the information
reflected thereon was input to the System at such times as are
agreed upon from time to time by the Transfer Agent and the Fund.
(b) Nothing contained in this Agreement shall constitute
any agreement or representation by the Transfer Agent to permit,
or to agree to permit, any Approved Institution to input
information into a System.
(c) The Transfer Agent reserves the right to approve, in
advance, any Approved Institution; such approval not to be
unreasonably withheld. The Transfer Agent also reserves the right
to terminate any and all automated data communications, at its
discretion, upon a reasonable attempt to notify the Fund when in
the opinion of the Transfer Agent continuation of such
communications would jeopardize the accuracy and/or integrity of
the Fund's records on the System.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a
resolution of its Board of Directors, certified by the
Secretary or any Assistant Secretary, either: (i) setting forth
the date of the declaration of a dividend or distribution, the date of
accrual or payment, as the case may be, thereof, the record date as of
which shareholders entitled to payment, or accrual, as the case may be,
shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and
unpaid dividends are to be paid and the total amount, if any, payable to
the Transfer Agent on such payment date; or (ii) authorizing the
declaration of dividends and distributions on a daily or other periodic
basis and authorizing the Transfer Agent to rely on a Certificate
setting forth the information described in subsection (i) of this
paragraph.
2. Upon the mail date specified in such Certificate or
resolution, as the case may be, the Fund shall, in the case of a cash
dividend or distribution, cause the Custodian to deposit in an account
in the name of the Transfer Agent on behalf of the Fund an amount of
cash, if any, sufficient for the Transfer Agent to make the payment, as
of the mail date, specified in such Certificate or resolution, as the
case may be, to the shareholders who were of record on the record date.
The Transfer Agent will, upon receipt of any such cash, make payment of
such cash dividends or distributions to the shareholders of record as of
the record date by: (i) mailing a check, payable to the registered
shareholder, to the address of record or dividend mailing address; or
(ii) wiring such amounts to the accounts previously designated by an
Approved Institution, as the case may be. The Transfer Agent shall not
be liable for any improper payments made in good faith and without
negligence, in accordance with a Certificate or resolution described in
the preceding paragraph. If the Transfer Agent shall not receive from
the Custodian sufficient cash to make payments of any cash dividend or
distribution to all shareholders of the Fund as of the record date, the
Transfer Agent shall, upon notifying the Fund, withhold payment to all
shareholders of record as of the record date until sufficient cash is
provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or
capital gain distributions due to the shareholders. It is expressly
agreed and understood that the Transfer Agent is not liable for any loss
as a result of processing a distribution based on information provided
in the Certificate that is incorrect. The Fund agrees to pay the
Transfer Agent for any and all costs, both direct and Out-of-Pocket
Expenses, incurred in such corrective work as necessary to remedy such
error.
4. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividend and
capital gain distributions with the proper federal, state and local
authorities as are required by law to be filed by the Fund, but shall in
no way be responsible for the collection or withholding of taxes due on
such dividends or distributions due to shareholders, except and only to
the extent required by applicable law. Anything in this Agreement to the
contrary notwithstanding, the Fund shall be solely responsible for the
accurate, complete and timely filing with the proper federal, state and
local authorities of all tax information with respect to any Fund
account maintained under Matrix Level 3 through any of the various
programs offered through the NSCC (including, but not limited to,
Networking and FundServ).
ARTICLE VII
CONCERNING THE FUND
1. The Fund represents to the Transfer Agent that:
(a) It is a corporation duly organized and existing under
the laws of the State of Maryland.
(b) It is empowered under applicable laws and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is an investment company registered under the
Investment Company Act of 1940, as amended.
(e) A registration statement under the Securities Act of
1933, as amended, with respect to the Shares is effective. The
Fund shall notify the Transfer Agent if such registration
statement or any state securities registrations have been
terminated or a stop order has been entered with respect to the
Shares.
2. Each copy of the Articles of Incorporation of the Fund and
copies of all amendments thereto shall be certified by the Secretary of
State (or other appropriate official) of the state of organization, and
if such Articles of Incorporation and/or amendments are required by law
also to be filed with a county or other officer or official body, a
certificate of such filing shall be filed with a certified copy
submitted to the Transfer Agent. Each copy of the By-laws and copies of
all amendments thereto, and copies of resolutions of the Board of
Directors of the Fund shall be certified by the Secretary of the Fund
under seal.
3. The Fund shall promptly deliver to the Transfer Agent
written notice of any change in the Officers authorized to sign Share
certificates, notifications or requests, together with a specimen
signature of each new Officer. In the event any Officer who shall have
signed manually or whose facsimile signature shall have been affixed to
blank Share certificates shall die, resign or be removed prior to
issuance of such Share certificates, the Transfer Agent may issue such
Share certificates of the Fund notwithstanding such death, resignation
or removal, and the Fund shall promptly deliver to the Transfer Agent
such approval, adoption or ratification as may be required by law.
4. It shall be the sole responsibility of the Fund to deliver
to the Transfer Agent the Fund's currently effective Prospectus and, for
purposes of this Agreement, the Transfer Agent shall not be deemed to
have notice of any information contained in such Prospectus until a
reasonable time after it is actually received by the Transfer Agent.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents and warrants to the Fund that:
(a) It is a corporation duly organized and existing under
the laws of the State of Missouri.
(b) It is empowered under applicable law and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is duly registered as a transfer agent under
Section 17A of the Securities Exchange Act of 1934, as amended.
2. The Transfer Agent shall not be liable and shall be
indemnified in acting upon any computer tape or electronic data
transmission, writing or document reasonably believed by it to be
genuine and to have been signed or made by an Officer of the Fund or
person designated by the Fund and shall not be held to have any notice
of any change of authority of any person until receipt of written notice
thereof from the Fund or such person. It shall also be protected in
processing Share certificates which bear the proper countersignature of
the Transfer Agent and which it reasonably believes to bear the proper
manual or facsimile signature of the Officers of the Fund.
3. The Transfer Agent upon notice to the Fund may establish
such additional procedures, rules and regulations governing the transfer
or registration of Share certificates as it may deem advisable and
consistent with such rules and regulations generally adopted by mutual
fund transfer agents.
4. The Transfer Agent shall keep such records as it may deem
advisable and is agreeable to the Fund, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular Rules 31a-2 and 31a-3 under the Investment Company Act of
1940, as amended. The Transfer Agent acknowledges that such records are
the property of the Fund. The Transfer Agent may deliver to the Fund
from time to time at its discretion, for safekeeping or disposition by
the Fund in accordance with law, such records, papers, documents
accumulated in the execution of its duties as such Transfer Agent, as
the Transfer Agent may deem expedient, other than those which the
Transfer Agent is itself required to maintain pursuant to applicable
laws and regulations. The Fund shall assume all responsibility for any
failure thereafter to produce any record, paper, cancelled Share
certificate or other document so returned, if and when required. Such
records maintained by the Transfer Agent pursuant to this paragraph 4,
which have not been previously delivered to the Fund pursuant to the
foregoing provisions of this paragraph 4, shall be considered to be the
property of the Fund, shall be made available upon request for
inspection by the Officers, employees and auditors of the Fund, and
records shall be delivered to the Fund upon request and in any event
upon the date of termination of this Agreement, as specified in Article
IX of this Agreement, in the form and manner kept by the Transfer Agent
on such date of termination or such earlier date as may be requested by
the Fund.
5. The Transfer Agent shall not be liable for any loss or
damage, including counsel fees, resulting from its actions or omissions
to act or otherwise, except for any loss or damage arising out of its
bad faith, willful misfeasance, gross negligence or reckless disregard
of its duties under this Agreement.
6. (a) The Fund shall indemnify and exonerate, save and hold
harmless the Transfer Agent from and against any and all claims
(whether with or without basis in fact or law), demands, expenses
(including reasonable attorneys' fees) and liabilities of any and
every nature which the Transfer Agent may sustain or incur or
which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be
taken by any prior transfer agent of the Fund or as a result of
any action taken or omitted to be taken by the Transfer Agent in
good faith and without gross negligence or willful misfeasance or
in reliance upon: (i) any provision of this Agreement; (ii)
the Prospectus; (iii) any instruction or order including, without
limitation, any computer tape or electronic data transmission
reasonably believed by the Transfer Agent to have been received
from an Approved Institution; (iv) any instrument, order or Share
certificate reasonably believed by it to be genuine and to be
signed, countersigned or executed by any duly authorized Officer
of the Fund; (v) any Certificate or other instructions of an
Officer; (vi) any opinion of legal counsel for the Fund or the
Transfer Agent; or (vii) any request by any entity to carry out
any transaction in Shares received by the Transfer Agent through
any of the various programs offered through the NSCC (including,
but not limited to, Networking and FundServ). The Fund shall
indemnify and exonerate, save and hold the Transfer Agent harmless
from and against any and all claims (whether with or without basis
in fact or law), demands, expenses (including reasonable
attorneys' fees) and liabilities of any and every nature which the
Transfer Agent may sustain or incur or which may be asserted
against the Transfer Agent by any person by reason of or as a
result of any action taken or omitted to be taken by the Transfer
Agent in good faith in connection with its appointment or in
reliance upon any law, act, regulation or any interpretation of
the same even though such law, act or regulation may thereafter
have been altered, changed, amended or repealed.
(b) The Transfer Agent shall not settle any claim, demand,
expense or liability to which it may seek indemnity pursuant to
paragraph 6(a) above (each, an "Indemnifiable Claim") without
the express written consent of an Officer of the Fund. The
Transfer Agent shall notify the Fund within fifteen (15) days of
receipt of notification of an Indemnifiable Claim, provided that
the failure by the Transfer Agent to furnish such notification
shall not impair its right to seek indemnification from the Fund
unless the Fund is unable to adequately defend the Indemnifiable
Claim as a result of such failure, and further provided, that if
as a result of the Transfer Agent's failure to provide the Fund
with timely notice of the institution of litigation a judgment by
default is entered, prior to seeking indemnification from the Fund
the Transfer Agent, at its own cost and expense, shall open such
judgment. The Fund shall have the right to defend any
Indemnifiable Claim at its own expense, provided that such defense
shall be conducted by counsel selected by the Fund and reasonably
acceptable to the Transfer Agent. The Transfer Agent may join in
such defense at its own expense, but to the extent that it shall
so desire the Fund shall direct such defense. The Fund shall not
settle any Indemnifiable Claim without the express written consent
of the Transfer Agent if the Transfer Agent determines that such
settlement would have an adverse effect on the Transfer Agent
beyond the scope of this Agreement. In such event, the Fund and
the Transfer Agent shall each be responsible for their own defense
at their own cost and expense, and such claim shall not be deemed
an Indemnifiable Claim hereunder. If the Fund shall fail or refuse
to defend an Indemnifiable Claim, the Transfer Agent may provide
its own defense at the cost and expense of the Fund. Anything in
this Agreement to the contrary notwithstanding, the Fund shall not
indemnify the Transfer Agent against any liability or expense
arising out of the Transfer Agent's willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties and
obligations under this Agreement. The Transfer Agent shall
indemnify and hold the Fund harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or
failure or omission to act by the Transfer Agent as a result of
the Transfer Agent's lack of good faith, gross negligence or
willful misfeasance.
7. The Transfer Agent shall not be liable to the Fund with
respect to any redemption draft on which the signature of the drawer is
forged and which the Fund's Custodian has advised the Transfer Agent to
honor the redemption (but nothing herein is meant to impose any duties
upon the Fund's Custodian); nor shall the Transfer Agent be liable for
any material alteration or absence or forgery of any endorsement, it
being understood that the Transfer Agent's sole responsibility with
respect to inspecting redemption drafts is to use reasonable care to
verify the drawer's signature against signatures on file.
8. There shall be excluded from the consideration of whether
the Transfer Agent has breached this Agreement in any way, any period of
time, and only such period of time during which the Transfer Agent's
performance is materially affected, by reason of circumstances beyond
its control (collectively, "Causes"), including, without limitation,
mechanical breakdowns of equipment (including any alternative power
supply and operating systems software), flood or catastrophe, acts of
God, failures of transportation, communication or power supply, strikes,
lockouts, work stoppages or other similar circumstances.
9. At any time the Transfer Agent may apply to an Officer of
the Fund for written instructions with respect to any matter arising in
connection with the Transfer Agent's duties and obligations under this
Agreement, and the Transfer Agent shall not be liable for any action
taken or permitted by it in good faith in accordance with such written
instructions. Such application by the Transfer Agent for written
instructions from an Officer of the Fund may set forth in writing any
action proposed to be taken or omitted by the Transfer Agent with
respect to its duties or obligations under this Agreement and the date
on and/or after which such action shall be taken. The Transfer Agent
shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified
therein unless, prior to taking or omitting any such action, the
Transfer Agent has received written instructions in response to such
application specifying the action to be taken or omitted. The Transfer
Agent may consult counsel of the Fund, or upon notice to the Fund, its
own counsel, at the expense of the Fund and shall be fully protected
with respect to anything done or omitted by it in good faith in
accordance with the advice or opinion of counsel to the Fund or its own
counsel.
10. The Transfer Agent may issue new Share certificates in place
of certificates represented to have been lost, stolen or destroyed upon
receiving written instructions from the shareholder accompanied by proof
of an indemnity or surety bond issued by a recognized insurance
institution specified by the Fund or the Transfer Agent.
If the Transfer Agent receives written notification from the shareholder
or broker dealer that the certificate issued was never received, and
such notification is made within thirty (30) days of the date of
issuance, the Transfer Agent may reissue the certificate without
requiring a surety bond. The Transfer Agent may also reissue
certificates which are represented as lost, stolen or destroyed without
requiring a surety bond provided that the notification is in writing and
accompanied by an indemnification signed on behalf of a member firm of
the New York Stock Exchange and signed by an officer of said firm with
the signature guaranteed. Notwithstanding the foregoing, the Transfer
Agent will reissue a certificate upon written authorization from an
Officer of the Fund.
11. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to
notify the Fund promptly and to secure instructions from an Officer as
to such inspection. The Transfer Agent reserves the right, however, to
exhibit the shareholder records to any person whenever it receives an
opinion from its counsel that there is a reasonable likelihood that the
Transfer Agent will be held liable for the failure to exhibit the
shareholder records to such person; provided, however, that in
connection with any such disclosure the Transfer Agent shall promptly
notify the Fund that such disclosure has been made or is to be made.
12. At the request of an Officer of the Fund, the Transfer Agent
will address and mail such appropriate notices to shareholders as the
Fund may direct.
13. Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the
authority of the Approved Institution or of the Fund, as the case
may be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or of a
redemption of any Shares, the propriety of the amount to be paid
therefor, or the authority of the Approved Institution or of the
Fund, as the case may be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend by the
Fund, or the legality of the issue of any Shares in payment of any
stock dividend; or
(d) The legality of any recapitalization or readjustment
of Shares.
14. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically
set forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against the Transfer Agent.
15. Purchase and Prices of Services:
(a) The Fund will compensate the Transfer Agent for, and
Transfer Agent will provide, beginning on the execution date of
this Agreement and continuing until the termination of this
Agreement as provided hereinafter, the services set forth in
Schedule I.
(b) The current unit prices for the services are set forth
in Schedule II (the "Schedule II Fees"). Effective as of January
1, 1997, once in each calendar year, the Transfer Agent may elect
to raise the Schedule II Fees upon ninety (90) days prior notice
to the Fund, all subject to the mutual agreement of the parties
hereto. Notwithstanding the annual right to raise the Schedule II
Fees, the Transfer Agent may increase prices due to changes in
legal or regulatory requirements subject to the approval of the
Fund, which approval shall not be unreasonably withheld.
16. Billing and Payment:
(a) The Transfer Agent shall bill the Fund monthly in
arrears for accounts maintained and Out-of-Pocket Expenses. The
Transfer Agent may from time to time request that the Fund advance
estimated expenditures of an unusual nature subject to
reconciliation of actual expenses as soon as practicable
thereafter.
(b) The Fund shall pay the Transfer Agent in immediately
available funds at UMB Bank, n.a. in Kansas City, Missouri within
thirty (30) days of the date of the bill. Any amounts due under
this Agreement which are not paid within said thirty (30) day
period shall bear interest at the rate of one and one-half percent
(l 1/2%) per month from such date until paid in full.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than sixty (60) days after the
date of receipt of such notice. In the event such notice is given by the
Fund, it shall be accompanied by a copy of a resolution of the Board of
Directors of the Fund, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement and designating the
successor transfer agent or transfer agents. In the event such notice is
given by the Transfer Agent, the Fund shall on or before the termination
date, deliver to the Transfer Agent a copy of a resolution of its Board
of Directors, certified by the Secretary or any Assistant Secretary,
designating a successor transfer agent or transfer agents. In the
absence of such designation by the Fund, the Fund shall upon the date
specified in the notice of termination of this Agreement and delivery of
the records maintained hereunder, be deemed to be its own transfer agent
and the Transfer Agent shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement.
In the event this Agreement is terminated as provided herein, the
Transfer Agent, upon the written request of the Fund, shall deliver the
records of the Fund on electromagnetic media to the Fund or its
successor transfer agent. The Fund shall be responsible to the Transfer
Agent for the reasonable costs and expenses associated with the
preparation and delivery of such media.
ARTICLE X
MISCELLANEOUS
1 The Fund agrees that prior to effecting any change in the
Prospectus which would increase or alter the duties and obligations of
the Transfer Agent hereunder, it shall advise the Transfer Agent of such
proposed change at least thirty (30) days prior to the intended date of
the same, and shall proceed with such change only if it shall have
received the written consent of the Transfer Agent thereto, which shall
not be unreasonably withheld.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund shall be sufficiently
given if addressed to the Fund and mailed or delivered to it at:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Fund may from time to time designate in
writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Transfer Agent shall be
sufficiently given if addressed to the Transfer Agent and mailed or
delivered to:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Transfer Agent may from time to time
designate in writing.
4. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the
formality of this Agreement.
5. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns.
6. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
7. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
8. The provisions of this Agreement are intended to benefit
only the Transfer Agent and the Fund, and no rights shall be granted to
any other person by virtue of this Agreement.
9. (a) The Transfer Agent shall endeavor to assist in
resolving shareholder inquiries and errors relating to the period
during which prior transfer agents acted as such for the Fund. Any
such inquiries or errors which cannot be expediently resolved by
the Transfer Agent will be referred to the Fund.
(b) The Transfer Agent shall only be responsible for the
safekeeping and maintenance of transfer agency records, cancelled
Share certificates and correspondence of the Fund created or
produced prior to the time of conversion which are under its
control and acknowledged in a writing to the Fund to be in its
possession. Any expenses or liabilities incurred by the Transfer
Agent as a result of shareholder inquiries, regulatory compliance
or audits related to such records and not caused as a result of
Transfer Agent's bad faith, willful misfeasance or gross
negligence shall be the responsibility of the Fund as provided in
Article VIII herein.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective corporate officer, thereunto duly
authorized and their respective corporate seals to be hereunto affixed,
as of the day and year first above written.
D. L. BABSON TAX-FREE INCOME FUND, INC.
By /s/Larry D. Armel
Name: Larry D. Armel
Title: President
[SEAL]
JONES & BABSON, INC.
By /s/Michael A. Brummel
Name: Michael A. Brummel
Title: Assistant Secretary
[SEAL]
<PAGE>
SCHEDULE I
DESCRIPTION OF SERVICES
In consideration of the fees to be paid in such manner and at such
times as Fund and Transfer Agent may agree, Transfer Agent will provide the
services set forth below:
Examine and Process New Accounts, Subsequent Payments, Liquidations,
Exchanges, Telephone Transactions, Check Redemptions, Automatic Withdrawals,
Certificate Issuance, Wire Order Trades, Dividends, Dividend Statements,
Dealer Statements.
This Agreement does not apply to services with respect to qualified
plans. Such services, including, but not limited to fiduciary accounting
services and the preparation and mailing of Forms 5498 and 1099R, are
available subject to separate agreement for an additional charge.
DAILY ACTIVITY
Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
Name and Address, including Zip Code
Balance of Uncertificated Shares
Balance of Certificated Shares
Certificate number, number of shares, issuance date of each certificate
outstanding and cancellation date for each certificate date for each
certificate no longer outstanding, if issued
Balance of dollars available for redemption
Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash)
Type of account code
Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available
Original establishment date for accounts opened by exchange W-9
withholding status and periodic reporting
State of residence code
Social Security or taxpayer identification number, and indication of
certification
Historical transactions on the account for the most recent 18 months,
or other period as mutually agreed to from time-to-time
Indication as to whether phone transactions can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant, etc.
An alternate or "secondary" account number issued by a dealer (or bank,
etc.) to a customer for use, inquiry and transaction input by "remote
accessors"
FUNCTIONS
Answer investor and dealer telephone and/or written inquiries, except
those concerning Fund policy, or requests for investment advice which
will be referred to the Fund, or those which the Fund chooses to answer
Deposit Fund share certificates into accounts upon receipt of
instructions from the investor or other authorized person, if issued
Examine and process transfers of shares insuring that all transfer
requirements and legal documents have been supplied
Process and confirm address changes
Process standard account record changes as required, i.e. Dividend
Codes, etc.
Microfilm source documents for transactions, such as account
applications and correspondence
Perform backup withholding for those accounts which federal government
regulations indicate is necessary
Solicit missing taxpayer identification numbers
Provide remote access inquiry to Fund records via Fund supplied
hardware (Fund responsible for connection line and monthly fee)
REPORTS PROVIDED
Daily Journals Reflecting all shares and
dollar activity for the
previous day
Blue Sky Report Supply information monthly
for Fund's Preparation of
Blue Sky Reporting
N-SAR Report Supply monthly correspondence,
redemption and liquidation
information for use in fund's
N-SAR Report
Additionally, monthly average daily balance reports will be provided at
the Fund's request to the Fund at no charge.
Prepare and mail copies of summary statements to dealers and investment
advisers
Generate and mail confirmation statements for financial transactions
DIVIDEND ACTIVITY
Reinvest or pay in cash including reinvesting in other funds within the
fund group serviced by the Transfer Agent as described in each Fund
Prospectus
Distribute capital gains simultaneously with income dividends
DEALER SERVICES
Prepare and mail confirmation statements to dealers and
Prepare and mail copies of statements to dealers, same frequency as
investor statements
ANNUAL MEETINGS
Assist Fund in obtaining a qualified service to: address and mail
proxies and related material, tabulate returned proxies and supply
daily reports when sufficient proxies have been received
Prepare certified list of stockholders, hard copy or microform
PERIODIC ACTIVITIES
Mail transaction confirmation statements daily to investors
Address and mail four (4) periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent)
Mail periodic statement to investors
Compute, prepare and furnish all necessary reports to Governmental
authorities: Forms 1099DIV, 1099B, 1042 and 1042S
Enclose various marketing material as designated by the Fund in statement
mailings, i.e. monthly and quarterly statements (material must be adaptable
to mechanical equipment as reasonably specified by the Transfer Agent)
SCHEDULE II
TRANSFER AGENT FEE SCHEDULE
(None for this Fund)
<PAGE>
EX99.23(h)(4)
TRANSFER AGENCY AGREEMENT
This Agreement made as of the 31st day of October 31, 1994 between
Babson-Stewart Ivory International Fund, Inc., a Maryland corporation (the
"Fund"), and Jones & Babson, Inc., a Missouri corporation (the "Transfer
Agent").
WITNESSETH
That in consideration of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases
shall have the following meanings:
1. "Approved Institution" shall mean an entity so named in a
Certificate, as hereinafter defined. From time to time, the Fund may
amend a previously delivered Certificate by delivering to the Transfer
Agent a Certificate naming an additional entity or deleting any entity
named in a previously delivered Certificate.
2. The "Board of Directors" shall mean the Board of Directors
of the Fund.
3. "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be
given to the Transfer Agent by the Fund which is signed by any Officer,
as hereinafter defined, and actually received by the Transfer Agent.
4. "Custodian" shall mean the financial institution appointed
as custodian under the terms and conditions of the Custody Agreement
between the financial institution and the Fund, or its successor(s).
5. "Fund Business Day" shall be determined as set out in the
Fund's prospectuses as shall be effective from time to time.
6. "Officer" shall be deemed to be the Fund's President, any
Vice President, Secretary, Treasurer, Controller, any Assistant
Controller, any Assistant Treasurer and any Assistant Secretary, and any
other person duly authorized by the Board of Directors of the Fund to
execute any Certificate, instruction, notice or other instrument on
behalf of the Fund, and any person reasonably believed by the Transfer
Agent to be such a person.
7. "Out-of-Pocket Expenses" means amounts reasonably
necessary and actually incurred by Transfer Agent in the provision of
Transfer Agent services or pursuant to this Agreement for the following
purposes: postage (and first class mail insurance in connection with
mailing Share certificates), envelopes, check forms, continuous forms,
forms for reports and statements, stationery and other similar items,
telephone and telegraph charges incurred in answering inquiries from
dealers or shareholders, microfilm used to record transactions in
shareholder accounts and computer tapes used for permanent storage of
records and cost of insertion of materials in mailing envelopes by
outside firms. Any charges associated with special or exception
processing shall also be considered Out-of-Pocket Expenses.
8. "Prospectus" shall mean the most recent Fund prospectus
actually received by the Transfer Agent from the Fund with respect to
which the Fund has indicated a registration statement under the
Securities Act of 1933, as amended, has become effective, including the
Statement of Additional Information, incorporated by reference therein.
9. "Shares" shall mean all or any part of each class or
series of the shares of beneficial interest of the Fund or portfolio
listed in the Certificate as to which the Transfer Agent acts as
transfer agent hereunder, as may be amended from time to time, which are
authorized and/or issued by the Fund.
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. Effective as of the date of this Agreement, the Fund hereby
constitutes and appoints the Transfer Agent as transfer agent of all the
Shares of the Fund and as dividend disbursing agent during the period of
this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer
agent and dividend disbursing agent and agrees to perform duties thereof
as hereinafter set forth.
3. In connection with such appointment, the Fund upon the
request of the Transfer Agent, shall deliver the following documents to
the Transfer Agent:
(i) A copy of the Articles of Incorporation of the Fund
and all
amendments thereto certified by the Secretary of the Fund;
(ii) A copy of the By-laws of the Fund certified by the
Secretary of the
Fund;
(iii) A copy of a resolution of the Board of Directors of
the Fund
certified by the Secretary of the Fund appointing the Transfer
Agent and
authorizing the execution of this Transfer Agency Agreement;
(iv) A Certificate signed by the Secretary of the Fund
specifying: the number of authorized Shares, the number of such
authorized Shares issued, the number of such authorized Shares
issued and currently outstanding, the names and specimen
signatures of the Officers of the Fund and the name and address of
the legal counsel for the Fund;
(v) Specimen Share certificate for each or series class of
Shares in the form approved by the Board of Directors of the Fund
(and in a format compatible with the Transfer Agent's system),
together with a Certificate signed by the Secretary of the Fund as
to such approval;
(vi) Copies of the Fund's registration statement, as
amended to date, and the most recently filed Post-Effective
Amendment thereto, filed by the Fund with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
and under the Investment Company Act of 1940, as amended, together
with any applications filed in connection therewith; and
(vii) Opinion of counsel for the Fund with respect to the
validity of the authorized and outstanding Shares, whether such
Shares are fully paid and nonassessable and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that they have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. If requested by the Transfer Agent, the Fund shall deliver
to the Transfer Agent the following documents on or before the effective
date of any increase or decrease in the total number of Shares
authorized to be issued:
(a) A certified copy of the amendment to the Articles of
Incorporation giving effect to such increase or decrease;
(b) In the case of an increase, an opinion of counsel for
the Fund with respect to the validity of the Shares of the Fund
and the status of such Shares under the Securities Act of 1933, as
amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been registered and
that the registration statement has become effective or, if
exempt, the specific grounds therefor); and
(c) In the case of an increase, if the appointment of the
Transfer Agent was theretofore expressly limited, a certified copy
of a resolution of the Board of Directors of the Fund increasing
the authority of the Transfer Agent.
2. Prior to the issuance of any additional Shares pursuant to
stock dividends or stock splits, etc., and prior to any reduction in the
number of Shares outstanding, if requested by the Transfer Agent, the
Fund shall deliver the following documents to the Transfer Agent:
(a) A certified copy of the resolution(s) adopted by the
Board of Directors and/or the shareholders of the Fund authorizing
such issuance of additional Shares or such reduction, as the case
may be; and
(b) An opinion of counsel for the Fund with respect to
the validity of the Shares and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable
federal law or regulation (i.e., if subject to registration, that
they have been registered and that the registration statement has
become effective, or, if exempt, the specific grounds therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or
other capital adjustment requiring a change in the form of Share
certificates, the Transfer Agent will issue Share certificates in the
new form in exchange for, or upon transfer of, outstanding Share
certificates in the old form, upon receiving:
a) A Certificate authorizing the issuance of the Share
certificates in the new form;
(b) A certified copy of any amendment to the Articles of
Incorporation with respect to the change;
(c) Specimen Share certificates for each class of Shares
in the new form approved by the Board of Directors of the Fund,
with a Certificate signed by the Secretary of the Fund as to such
approval; and
(d) An opinion of counsel for the Fund with respect to the
validity of the Shares in the new form and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
2. The Fund at its expense shall furnish the Transfer Agent
with a sufficient supply of blank Share certificates in the new form and
from time to time will replenish such supply upon the request of the
Transfer Agent. Such blank Share certificates shall be compatible with
the Transfer Agent's system and shall be properly signed by facsimile or
otherwise by Officers of the Fund authorized by law or by the By-laws to
sign Share certificates and, if required, shall bear the corporate seal
or facsimile thereof. The Fund agrees to indemnify and exonerate, save
and hold the Transfer Agent harmless from and against any and all claims
or demands that may be asserted against the Transfer Agent with respect
to the genuineness of any Share certificate supplied to the Transfer
Agent pursuant to this Article.
ARTICLE V
ISSUANCE, REDEMPTION AND TRANSFER OF SHARES
1. (a) The Transfer Agent acknowledges that it has received a
copy of the Fund's Prospectus, which Prospectus describes how
sales and redemption of Shares of the Fund shall be made, and the
Transfer Agent agrees to accept purchase orders and redemption
requests with respect to Shares on each Fund Business Day in
accordance with such Prospectus. The Fund agrees to provide the
Transfer Agent with sufficient advance notice to enable the
Transfer Agent to effect any changes in the procedures set forth
in the Prospectus regarding such purchase and redemption
procedure; provided, however, that in no event will such advance
notice be less than thirty (30) days.
(b) The Transfer Agent shall also accept with respect to
each Fund Business Day, at such times as are agreed upon from time
to time by the Transfer Agent and the Fund, a computer tape or
electronic data transmission consistent in all respects with the
Transfer Agent's record format, as amended from time to time,
which is believed by the Transfer Agent to be furnished by or on
behalf of any Approved Institution. The Transfer Agent shall not
be liable for any losses or damages to the Fund or its
shareholders in the event that a computer tape or electronic data
transmission from an Approved Institution is unable to be
processed for any reason beyond the control of the Transfer Agent,
or if any of the information on such tape or transmission is found
to be incorrect.
2. On each Fund Business Day, the Transfer Agent shall, as of
the time at which the Fund computes the net asset value of the Fund,
issue to and redeem from the accounts specified in a purchase order,
redemption request or computer tape or electronic data transmission,
which in accordance with the Prospectus is effective on such Fund
Business Day, the appropriate number of full and fractional Shares based
on the net asset value per Share of such Fund specified in an advice
received on such Fund Business Day from the Fund. Notwithstanding the
foregoing, if a redemption specified in a computer tape or electronic
data transmission is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account, the
Transfer Agent shall not effect such redemption in whole or in part and
shall within twenty-four (24) hours orally advise the Approved
Institution which supplied such tape of the discrepancy.
3. In connection with a reinvestment of a dividend or
distribution of Shares of the Fund, the Transfer Agent shall as of each
Fund Business Day, as specified in a Certificate or resolution described
in paragraph 1 of succeeding Article VI, issue Shares of the Fund based
on the net asset value per Share of such Fund specified in an advice
received from the Fund on such Fund Business Day.
4. On each Fund Business Day, the Transfer Agent shall supply
the Fund with a statement specifying with respect to the immediately
preceding Fund Business Day: the total number of Shares of the Fund
(including fractional Shares) issued and outstanding at the opening of
business on such day; the total number of Shares of the Fund sold on
such day, pursuant to the preceding paragraph 2 of this Article; the
total number of Shares of the Fund redeemed from shareholders by the
Transfer Agent on such day; the total number of Shares of the Fund, if
any, sold on such day pursuant to the preceding paragraph 3 of this
Article, and the total number of Shares of the Fund issued and
outstanding.
5. In connection with each purchase and each redemption of
Shares, the Transfer Agent shall send such statements as are prescribed
by the Federal Securities laws applicable to transfer agents or as
described in the Prospectus. If the Prospectus indicates that
certificates for Shares are available and if specifically requested in
writing by any shareholder, or if otherwise required hereunder, the
Transfer Agent will countersign (if necessary), issue and mail to such
shareholder at the address set forth in the records of the Transfer
Agent a Share certificate for any full Share requested.
6. As of each Fund Business Day, the Transfer Agent shall
furnish the Fund with an advice setting forth the number and dollar
amount of Shares to be redeemed on such Fund Business Day in accordance
with paragraph 2 of this Article.
7. Upon receipt of a proper redemption request and moneys paid
to it by the Custodian in connection with a redemption of Shares, the
Transfer Agent shall cancel the redeemed Shares and after making
appropriate deduction for any withholding of taxes required of it by
applicable law: (a) in the case of a redemption of Shares pursuant to a
redemption described in the preceding paragraph l(a) of this Article,
make payment in accordance with the Fund's redemption and payment
procedures described in the Prospectus; and (b) in the case of a
redemption of Shares pursuant to a computer tape or electronic data
transmission described in the preceding paragraph l(b) of this Article,
make payment by directing a federal funds wire order to the account
previously designated by the Approved Institution specified in said
computer tape or electronic data transmission.
8. The Transfer Agent shall not be required to issue any Shares
after it has received from an Officer of the Fund or from an appropriate
federal or state authority written notification that the sale of Shares
has been suspended or discontinued, and the Transfer Agent shall be
entitled to rely upon such written notification.
9. Upon the issuance of any Shares in accordance with this
Agreement, the Transfer Agent shall not be responsible for the payment
of any original issue or other taxes required to be paid by the Fund in
connection with such issuance of any Shares.
10. The Transfer Agent shall accept a computer tape or
electronic data transmission consistent with the Transfer Agent's record
format, as amended from time to time, which is reasonably believed by
the Transfer Agent to be furnished by or on behalf of any Approved
Institution and is represented to be instructions with respect to the
transfer of Shares from one account of such Approved Institution to
another such account, and shall effect the transfers specified in said
computer tape or electronic data transmission. The Transfer Agent shall
not be liable for any losses to the Fund or its shareholders in the
event that a computer tape or electronic data transmission from an
Approved Institution is unable to be processed for any reason beyond the
control of the Transfer Agent, or if any of the information on such tape
or transmission is found to be incorrect.
11. (a) Except as otherwise provided in subparagraph (b) of
this paragraph and in paragraph 13 of this Article, Shares will be
transferred or redeemed upon presentation to the Transfer Agent of
Share certificates or instructions properly endorsed for transfer
or redemption, accompanied by such documents as the Transfer Agent
deems necessary to evidence the authority of the person making
such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes. In the case of small estates
where no administration is contemplated, the Transfer Agent may,
when furnished with an appropriate surety bond, and without
further approval of the Fund, transfer or redeem Shares registered
in the name of a decedent where the current market value of the
Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent
reserves the right to refuse to transfer or redeem Shares until it
is satisfied that the endorsement on the stock certificate or
instructions is valid and genuine, and for that purpose it will
require, unless otherwise instructed by an authorized Officer of
the Fund, a guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-15. The
Transfer Agent also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers or redemptions
which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to
any claims adverse to such transfer or redemption. The Transfer
Agent may, in effecting transfers and redemptions of Shares, rely
upon those provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as
the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer
Agent for any act done or omitted by it in good faith in reliance
upon such laws. In no event will the Fund indemnify the Transfer
Agent for any act done by it as a result of willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties.
The Transfer Agent shall be entitled to accept, and shall be fully
protected by the Fund in accepting, any request from any entity to
carry out any transaction in Shares received by the Transfer Agent
through any of the various programs offered through the National
Securities Clearing Corporation ("NSCC") (including, but not
limited to, Networking and FundServ). Any such entity shall
constitute an Approved Institution as defined herein.
(b) Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, the Transfer Agent
shall be fully protected by the Fund in not requiring any
instruments, documents, assurances, endorsements or guarantees,
including, without limitation, any signature guarantees, in
connection with a redemption or transfer of Shares whenever the
Transfer Agent reasonably believes that requiring the same would
be inconsistent with the transfer and redemption procedures as
described in the Prospectus.
12. Notwithstanding any provision contained in this Agreement to
the contrary, the Transfer Agent shall not be required or expected to
require, as a condition to any transfer of any Shares pursuant to
paragraph 11 of this Article or any redemption of any Shares pursuant to
a computer tape or electronic data transmission described in this
Agreement, any documents, including, without limitation, any documents
of the kind described in subparagraph (a) of paragraph 11 of this
Article, to evidence the authority of the person requesting the transfer
or redemption and/or the payment of any stock transfer taxes, and shall
be fully protected in acting in accordance with the applicable
provisions of this Article.
13. (a) As used in this Agreement, the terms "computer tape
or electronic data transmission" and "computer tape believed by
the Transfer Agent to be furnished by an Approved Institution",
shall include any tapes generated by the Transfer Agent to reflect
information believed by the Transfer Agent to have been input by
an Approved Institution, via a remote terminal or other similar
link, into a data processing, storage or collection system, or
similar system (the "System"), located on the Transfer Agent's
premises. For purposes of paragraph 1 of this Article, such a
computer tape or electronic data transmission shall be deemed to
have been furnished at such times as are agreed upon from time to
time by the Transfer Agent and Fund only if the information
reflected thereon was input to the System at such times as are
agreed upon from time to time by the Transfer Agent and the Fund.
(b) Nothing contained in this Agreement shall constitute
any agreement or representation by the Transfer Agent to permit,
or to agree to permit, any Approved Institution to input
information into a System.
(c) The Transfer Agent reserves the right to approve, in
advance, any Approved Institution; such approval not to be
unreasonably withheld. The Transfer Agent also reserves the right
to terminate any and all automated data communications, at its
discretion, upon a reasonable attempt to notify the Fund when in
the opinion of the Transfer Agent continuation of such
communications would jeopardize the accuracy and/or integrity of
the Fund's records on the System.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a
resolution of its Board of Directors, certified by the
Secretary or any Assistant Secretary, either: (i) setting forth
the date of the declaration of a dividend or distribution, the date of
accrual or payment, as the case may be, thereof, the record date as of
which shareholders entitled to payment, or accrual, as the case may be,
shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and
unpaid dividends are to be paid and the total amount, if any, payable to
the Transfer Agent on such payment date; or (ii) authorizing the
declaration of dividends and distributions on a daily or other periodic
basis and authorizing the Transfer Agent to rely on a Certificate
setting forth the information described in subsection (i) of this
paragraph.
2. Upon the mail date specified in such Certificate or
resolution, as the case may be, the Fund shall, in the case of a cash
dividend or distribution, cause the Custodian to deposit in an account
in the name of the Transfer Agent on behalf of the Fund an amount of
cash, if any, sufficient for the Transfer Agent to make the payment, as
of the mail date, specified in such Certificate or resolution, as the
case may be, to the shareholders who were of record on the record date.
The Transfer Agent will, upon receipt of any such cash, make payment of
such cash dividends or distributions to the shareholders of record as of
the record date by: (i) mailing a check, payable to the registered
shareholder, to the address of record or dividend mailing address; or
(ii) wiring such amounts to the accounts previously designated by an
Approved Institution, as the case may be. The Transfer Agent shall not
be liable for any improper payments made in good faith and without
negligence, in accordance with a Certificate or resolution described in
the preceding paragraph. If the Transfer Agent shall not receive from
the Custodian sufficient cash to make payments of any cash dividend or
distribution to all shareholders of the Fund as of the record date, the
Transfer Agent shall, upon notifying the Fund, withhold payment to all
shareholders of record as of the record date until sufficient cash is
provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or
capital gain distributions due to the shareholders. It is expressly
agreed and understood that the Transfer Agent is not liable for any loss
as a result of processing a distribution based on information provided
in the Certificate that is incorrect. The Fund agrees to pay the
Transfer Agent for any and all costs, both direct and Out-of-Pocket
Expenses, incurred in such corrective work as necessary to remedy such
error.
4. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividend and
capital gain distributions with the proper federal, state and local
authorities as are required by law to be filed by the Fund, but shall in
no way be responsible for the collection or withholding of taxes due on
such dividends or distributions due to shareholders, except and only to
the extent required by applicable law. Anything in this Agreement to the
contrary notwithstanding, the Fund shall be solely responsible for the
accurate, complete and timely filing with the proper federal, state and
local authorities of all tax information with respect to any Fund
account maintained under Matrix Level 3 through any of the various
programs offered through the NSCC (including, but not limited to,
Networking and FundServ).
ARTICLE VII
CONCERNING THE FUND
1. The Fund represents to the Transfer Agent that:
(a) It is a corporation duly organized and existing under
the laws of the State of Maryland.
(b) It is empowered under applicable laws and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is an investment company registered under the
Investment Company Act of 1940, as amended.
(e) A registration statement under the Securities Act of
1933, as amended, with respect to the Shares is effective. The
Fund shall notify the Transfer Agent if such registration
statement or any state securities registrations have been
terminated or a stop order has been entered with respect to the
Shares.
2. Each copy of the Articles of Incorporation of the Fund and
copies of all amendments thereto shall be certified by the Secretary of
State (or other appropriate official) of the state of organization, and
if such Articles of Incorporation and/or amendments are required by law
also to be filed with a county or other officer or official body, a
certificate of such filing shall be filed with a certified copy
submitted to the Transfer Agent. Each copy of the By-laws and copies of
all amendments thereto, and copies of resolutions of the Board of
Directors of the Fund shall be certified by the Secretary of the Fund
under seal.
3. The Fund shall promptly deliver to the Transfer Agent
written notice of any change in the Officers authorized to sign Share
certificates, notifications or requests, together with a specimen
signature of each new Officer. In the event any Officer who shall have
signed manually or whose facsimile signature shall have been affixed to
blank Share certificates shall die, resign or be removed prior to
issuance of such Share certificates, the Transfer Agent may issue such
Share certificates of the Fund notwithstanding such death, resignation
or removal, and the Fund shall promptly deliver to the Transfer Agent
such approval, adoption or ratification as may be required by law.
4. It shall be the sole responsibility of the Fund to deliver
to the Transfer Agent the Fund's currently effective Prospectus and, for
purposes of this Agreement, the Transfer Agent shall not be deemed to
have notice of any information contained in such Prospectus until a
reasonable time after it is actually received by the Transfer Agent.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents and warrants to the Fund that:
(a) It is a corporation duly organized and existing under
the laws of the State of Missouri.
(b) It is empowered under applicable law and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is duly registered as a transfer agent under
Section 17A of the Securities Exchange Act of 1934, as amended.
2. The Transfer Agent shall not be liable and shall be
indemnified in acting upon any computer tape or electronic data
transmission, writing or document reasonably believed by it to be
genuine and to have been signed or made by an Officer of the Fund or
person designated by the Fund and shall not be held to have any notice
of any change of authority of any person until receipt of written notice
thereof from the Fund or such person. It shall also be protected in
processing Share certificates which bear the proper countersignature of
the Transfer Agent and which it reasonably believes to bear the proper
manual or facsimile signature of the Officers of the Fund.
3. The Transfer Agent upon notice to the Fund may establish
such additional procedures, rules and regulations governing the transfer
or registration of Share certificates as it may deem advisable and
consistent with such rules and regulations generally adopted by mutual
fund transfer agents.
4. The Transfer Agent shall keep such records as it may deem
advisable and is agreeable to the Fund, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular Rules 31a-2 and 31a-3 under the Investment Company Act of
1940, as amended. The Transfer Agent acknowledges that such records are
the property of the Fund. The Transfer Agent may deliver to the Fund
from time to time at its discretion, for safekeeping or disposition by
the Fund in accordance with law, such records, papers, documents
accumulated in the execution of its duties as such Transfer Agent, as
the Transfer Agent may deem expedient, other than those which the
Transfer Agent is itself required to maintain pursuant to applicable
laws and regulations. The Fund shall assume all responsibility for any
failure thereafter to produce any record, paper, cancelled Share
certificate or other document so returned, if and when required. Such
records maintained by the Transfer Agent pursuant to this paragraph 4,
which have not been previously delivered to the Fund pursuant to the
foregoing provisions of this paragraph 4, shall be considered to be the
property of the Fund, shall be made available upon request for
inspection by the Officers, employees and auditors of the Fund, and
records shall be delivered to the Fund upon request and in any event
upon the date of termination of this Agreement, as specified in Article
IX of this Agreement, in the form and manner kept by the Transfer Agent
on such date of termination or such earlier date as may be requested by
the Fund.
5. The Transfer Agent shall not be liable for any loss or
damage, including counsel fees, resulting from its actions or omissions
to act or otherwise, except for any loss or damage arising out of its
bad faith, willful misfeasance, gross negligence or reckless disregard
of its duties under this Agreement.
6. (a) The Fund shall indemnify and exonerate, save and hold
harmless the Transfer Agent from and against any and all claims
(whether with or without basis in fact or law), demands, expenses
(including reasonable attorneys' fees) and liabilities of any and
every nature which the Transfer Agent may sustain or incur or
which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be
taken by any prior transfer agent of the Fund or as a result of
any action taken or omitted to be taken by the Transfer Agent in
good faith and without gross negligence or willful misfeasance or
in reliance upon: (i) any provision of this Agreement; (ii)
the Prospectus; (iii) any instruction or order including, without
limitation, any computer tape or electronic data transmission
reasonably believed by the Transfer Agent to have been received
from an Approved Institution; (iv) any instrument, order or Share
certificate reasonably believed by it to be genuine and to be
signed, countersigned or executed by any duly authorized Officer
of the Fund; (v) any Certificate or other instructions of an
Officer; (vi) any opinion of legal counsel for the Fund or the
Transfer Agent; or (vii) any request by any entity to carry out
any transaction in Shares received by the Transfer Agent through
any of the various programs offered through the NSCC (including,
but not limited to, Networking and FundServ). The Fund shall
indemnify and exonerate, save and hold the Transfer Agent harmless
from and against any and all claims (whether with or without basis
in fact or law), demands, expenses (including reasonable
attorneys' fees) and liabilities of any and every nature which the
Transfer Agent may sustain or incur or which may be asserted
against the Transfer Agent by any person by reason of or as a
result of any action taken or omitted to be taken by the Transfer
Agent in good faith in connection with its appointment or in
reliance upon any law, act, regulation or any interpretation of
the same even though such law, act or regulation may thereafter
have been altered, changed, amended or repealed.
(b) The Transfer Agent shall not settle any claim, demand,
expense or liability to which it may seek indemnity pursuant to
paragraph 6(a) above (each, an "Indemnifiable Claim") without
the express written consent of an Officer of the Fund. The
Transfer Agent shall notify the Fund within fifteen (15) days of
receipt of notification of an Indemnifiable Claim, provided that
the failure by the Transfer Agent to furnish such notification
shall not impair its right to seek indemnification from the Fund
unless the Fund is unable to adequately defend the Indemnifiable
Claim as a result of such failure, and further provided, that if
as a result of the Transfer Agent's failure to provide the Fund
with timely notice of the institution of litigation a judgment by
default is entered, prior to seeking indemnification from the Fund
the Transfer Agent, at its own cost and expense, shall open such
judgment. The Fund shall have the right to defend any
Indemnifiable Claim at its own expense, provided that such defense
shall be conducted by counsel selected by the Fund and reasonably
acceptable to the Transfer Agent. The Transfer Agent may join in
such defense at its own expense, but to the extent that it shall
so desire the Fund shall direct such defense. The Fund shall not
settle any Indemnifiable Claim without the express written consent
of the Transfer Agent if the Transfer Agent determines that such
settlement would have an adverse effect on the Transfer Agent
beyond the scope of this Agreement. In such event, the Fund and
the Transfer Agent shall each be responsible for their own defense
at their own cost and expense, and such claim shall not be deemed
an Indemnifiable Claim hereunder. If the Fund shall fail or refuse
to defend an Indemnifiable Claim, the Transfer Agent may provide
its own defense at the cost and expense of the Fund. Anything in
this Agreement to the contrary notwithstanding, the Fund shall not
indemnify the Transfer Agent against any liability or expense
arising out of the Transfer Agent's willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties and
obligations under this Agreement. The Transfer Agent shall
indemnify and hold the Fund harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or
failure or omission to act by the Transfer Agent as a result of
the Transfer Agent's lack of good faith, gross negligence or
willful misfeasance.
7. The Transfer Agent shall not be liable to the Fund with
respect to any redemption draft on which the signature of the drawer is
forged and which the Fund's Custodian has advised the Transfer Agent to
honor the redemption (but nothing herein is meant to impose any duties
upon the Fund's Custodian); nor shall the Transfer Agent be liable for
any material alteration or absence or forgery of any endorsement, it
being understood that the Transfer Agent's sole responsibility with
respect to inspecting redemption drafts is to use reasonable care to
verify the drawer's signature against signatures on file.
8. There shall be excluded from the consideration of whether
the Transfer Agent has breached this Agreement in any way, any period of
time, and only such period of time during which the Transfer Agent's
performance is materially affected, by reason of circumstances beyond
its control (collectively, "Causes"), including, without limitation,
mechanical breakdowns of equipment (including any alternative power
supply and operating systems software), flood or catastrophe, acts of
God, failures of transportation, communication or power supply, strikes,
lockouts, work stoppages or other similar circumstances.
9. At any time the Transfer Agent may apply to an Officer of
the Fund for written instructions with respect to any matter arising in
connection with the Transfer Agent's duties and obligations under this
Agreement, and the Transfer Agent shall not be liable for any action
taken or permitted by it in good faith in accordance with such written
instructions. Such application by the Transfer Agent for written
instructions from an Officer of the Fund may set forth in writing any
action proposed to be taken or omitted by the Transfer Agent with
respect to its duties or obligations under this Agreement and the date
on and/or after which such action shall be taken. The Transfer Agent
shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified
therein unless, prior to taking or omitting any such action, the
Transfer Agent has received written instructions in response to such
application specifying the action to be taken or omitted. The Transfer
Agent may consult counsel of the Fund, or upon notice to the Fund, its
own counsel, at the expense of the Fund and shall be fully protected
with respect to anything done or omitted by it in good faith in
accordance with the advice or opinion of counsel to the Fund or its own
counsel.
10. The Transfer Agent may issue new Share certificates in place
of certificates represented to have been lost, stolen or destroyed upon
receiving written instructions from the shareholder accompanied by proof
of an indemnity or surety bond issued by a recognized insurance
institution specified by the Fund or the Transfer Agent.
If the Transfer Agent receives written notification from the shareholder
or broker dealer that the certificate issued was never received, and
such notification is made within thirty (30) days of the date of
issuance, the Transfer Agent may reissue the certificate without
requiring a surety bond. The Transfer Agent may also reissue
certificates which are represented as lost, stolen or destroyed without
requiring a surety bond provided that the notification is in writing and
accompanied by an indemnification signed on behalf of a member firm of
the New York Stock Exchange and signed by an officer of said firm with
the signature guaranteed. Notwithstanding the foregoing, the Transfer
Agent will reissue a certificate upon written authorization from an
Officer of the Fund.
11. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to
notify the Fund promptly and to secure instructions from an Officer as
to such inspection. The Transfer Agent reserves the right, however, to
exhibit the shareholder records to any person whenever it receives an
opinion from its counsel that there is a reasonable likelihood that the
Transfer Agent will be held liable for the failure to exhibit the
shareholder records to such person; provided, however, that in
connection with any such disclosure the Transfer Agent shall promptly
notify the Fund that such disclosure has been made or is to be made.
12. At the request of an Officer of the Fund, the Transfer Agent
will address and mail such appropriate notices to shareholders as the
Fund may direct.
13. Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the
authority of the Approved Institution or of the Fund, as the case
may be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or of a
redemption of any Shares, the propriety of the amount to be paid
therefor, or the authority of the Approved Institution or of the
Fund, as the case may be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend by the
Fund, or the legality of the issue of any Shares in payment of any
stock dividend; or
(d) The legality of any recapitalization or readjustment
of Shares.
14. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically
set forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against the Transfer Agent.
15. Purchase and Prices of Services:
(a) The Fund will compensate the Transfer Agent for, and
Transfer Agent will provide, beginning on the execution date of
this Agreement and continuing until the termination of this
Agreement as provided hereinafter, the services set forth in
Schedule I.
(b) The current unit prices for the services are set forth
in Schedule II (the "Schedule II Fees"). Effective as of January
1, 1997, once in each calendar year, the Transfer Agent may elect
to raise the Schedule II Fees upon ninety (90) days prior notice
to the Fund, all subject to the mutual agreement of the parties
hereto. Notwithstanding the annual right to raise the Schedule II
Fees, the Transfer Agent may increase prices due to changes in
legal or regulatory requirements subject to the approval of the
Fund, which approval shall not be unreasonably withheld.
16. Billing and Payment:
(a) The Transfer Agent shall bill the Fund monthly in
arrears for accounts maintained and Out-of-Pocket Expenses. The
Transfer Agent may from time to time request that the Fund advance
estimated expenditures of an unusual nature subject to
reconciliation of actual expenses as soon as practicable
thereafter.
(b) The Fund shall pay the Transfer Agent in immediately
available funds at UMB Bank, n.a. in Kansas City, Missouri within
thirty (30) days of the date of the bill. Any amounts due under
this Agreement which are not paid within said thirty (30) day
period shall bear interest at the rate of one and one-half percent
(l 1/2%) per month from such date until paid in full.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than sixty (60) days after the
date of receipt of such notice. In the event such notice is given by the
Fund, it shall be accompanied by a copy of a resolution of the Board of
Directors of the Fund, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement and designating the
successor transfer agent or transfer agents. In the event such notice is
given by the Transfer Agent, the Fund shall on or before the termination
date, deliver to the Transfer Agent a copy of a resolution of its Board
of Directors, certified by the Secretary or any Assistant Secretary,
designating a successor transfer agent or transfer agents. In the
absence of such designation by the Fund, the Fund shall upon the date
specified in the notice of termination of this Agreement and delivery of
the records maintained hereunder, be deemed to be its own transfer agent
and the Transfer Agent shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement.
In the event this Agreement is terminated as provided herein, the
Transfer Agent, upon the written request of the Fund, shall deliver the
records of the Fund on electromagnetic media to the Fund or its
successor transfer agent. The Fund shall be responsible to the Transfer
Agent for the reasonable costs and expenses associated with the
preparation and delivery of such media.
ARTICLE X
MISCELLANEOUS
1 The Fund agrees that prior to effecting any change in the
Prospectus which would increase or alter the duties and obligations of
the Transfer Agent hereunder, it shall advise the Transfer Agent of such
proposed change at least thirty (30) days prior to the intended date of
the same, and shall proceed with such change only if it shall have
received the written consent of the Transfer Agent thereto, which shall
not be unreasonably withheld.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund shall be sufficiently
given if addressed to the Fund and mailed or delivered to it at:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Fund may from time to time designate in
writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Transfer Agent shall be
sufficiently given if addressed to the Transfer Agent and mailed or
delivered to:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Transfer Agent may from time to time
designate in writing.
4. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the
formality of this Agreement.
5. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns.
6. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
7. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
8. The provisions of this Agreement are intended to benefit
only the Transfer Agent and the Fund, and no rights shall be granted to
any other person by virtue of this Agreement.
9. (a) The Transfer Agent shall endeavor to assist in
resolving shareholder inquiries and errors relating to the period
during which prior transfer agents acted as such for the Fund. Any
such inquiries or errors which cannot be expediently resolved by
the Transfer Agent will be referred to the Fund.
(b) The Transfer Agent shall only be responsible for the
safekeeping and maintenance of transfer agency records, cancelled
Share certificates and correspondence of the Fund created or
produced prior to the time of conversion which are under its
control and acknowledged in a writing to the Fund to be in its
possession. Any expenses or liabilities incurred by the Transfer
Agent as a result of shareholder inquiries, regulatory compliance
or audits related to such records and not caused as a result of
Transfer Agent's bad faith, willful misfeasance or gross
negligence shall be the responsibility of the Fund as provided in
Article VIII herein.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective corporate officer, thereunto duly
authorized and their respective corporate seals to be hereunto affixed,
as of the day and year first above written.
BABSON-STEWART IVORY INTERNATIONAL FUND, INC.
By /s/Larry D. Armel
Name: Larry D. Armel
Title: President
[SEAL]
JONES & BABSON, INC.
By /s/Michael A. Brummel
Name: Michael A. Brummel
Title: Assistant Secretary
[SEAL]
<PAGE>
SCHEDULE I
DESCRIPTION OF SERVICES
In consideration of the fees to be paid in such manner and at such
times as Fund and Transfer Agent may agree, Transfer Agent will provide the
services set forth below:
Examine and Process New Accounts, Subsequent Payments, Liquidations,
Exchanges, Telephone Transactions, Check Redemptions, Automatic Withdrawals,
Certificate Issuance, Wire Order Trades, Dividends, Dividend Statements,
Dealer Statements.
This Agreement does not apply to services with respect to qualified
plans. Such services, including, but not limited to fiduciary accounting
services and the preparation and mailing of Forms 5498 and 1099R, are
available subject to separate agreement for an additional charge.
DAILY ACTIVITY
Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
Name and Address, including Zip Code
Balance of Uncertificated Shares
Balance of Certificated Shares
Certificate number, number of shares, issuance date of each certificate
outstanding and cancellation date for each certificate date for each
certificate no longer outstanding, if issued
Balance of dollars available for redemption
Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash)
Type of account code
Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available
Original establishment date for accounts opened by exchange W-9
withholding status and periodic reporting
State of residence code
Social Security or taxpayer identification number, and indication of
certification
Historical transactions on the account for the most recent 18 months,
or other period as mutually agreed to from time-to-time
Indication as to whether phone transactions can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant, etc.
An alternate or "secondary" account number issued by a dealer (or bank,
etc.) to a customer for use, inquiry and transaction input by "remote
accessors"
FUNCTIONS
Answer investor and dealer telephone and/or written inquiries, except
those concerning Fund policy, or requests for investment advice which
will be referred to the Fund, or those which the Fund chooses to answer
Deposit Fund share certificates into accounts upon receipt of
instructions from the investor or other authorized person, if issued
Examine and process transfers of shares insuring that all transfer
requirements and legal documents have been supplied
Process and confirm address changes
Process standard account record changes as required, i.e. Dividend
Codes, etc.
Microfilm source documents for transactions, such as account
applications and correspondence
Perform backup withholding for those accounts which federal government
regulations indicate is necessary
Solicit missing taxpayer identification numbers
Provide remote access inquiry to Fund records via Fund supplied
hardware (Fund responsible for connection line and monthly fee)
REPORTS PROVIDED
Daily Journals Reflecting all shares and
dollar activity for the
previous day
Blue Sky Report Supply information monthly
for Fund's Preparation of
Blue Sky Reporting
N-SAR Report Supply monthly correspondence,
redemption and liquidation
information for use in fund's
N-SAR Report
Additionally, monthly average daily balance reports will be provided at
the Fund's request to the Fund at no charge.
Prepare and mail copies of summary statements to dealers and investment
advisers
Generate and mail confirmation statements for financial transactions
DIVIDEND ACTIVITY
Reinvest or pay in cash including reinvesting in other funds within the
fund group serviced by the Transfer Agent as described in each Fund
Prospectus
Distribute capital gains simultaneously with income dividends
DEALER SERVICES
Prepare and mail confirmation statements to dealers and
Prepare and mail copies of statements to dealers, same frequency as
investor statements
ANNUAL MEETINGS
Assist Fund in obtaining a qualified service to: address and mail
proxies and related material, tabulate returned proxies and supply
daily reports when sufficient proxies have been received
Prepare certified list of stockholders, hard copy or microform
PERIODIC ACTIVITIES
Mail transaction confirmation statements daily to investors
Address and mail four (4) periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent)
Mail periodic statement to investors
Compute, prepare and furnish all necessary reports to Governmental
authorities: Forms 1099DIV, 1099B, 1042 and 1042S
Enclose various marketing material as designated by the Fund in statement
mailings, i.e. monthly and quarterly statements (material must be adaptable
to mechanical equipment as reasonably specified by the Transfer Agent)
SCHEDULE II
TRANSFER AGENT FEE SCHEDULE
(None for this Fund)
<PAGE>
EX99.23(h)(5)
TRANSFER AGENCY AGREEMENT
This Agreement made as of the 31st day of October 31, 1994 between
Shadow Stock Fund, Inc., a Maryland corporation (the "Fund"), and Jones &
Babson, Inc., a Missouri corporation (the "Transfer Agent").
WITNESSETH
That in consideration of the mutual promises hereinafter set
forth, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases
shall have the following meanings:
1. "Approved Institution" shall mean an entity so named in a
Certificate, as hereinafter defined. From time to time, the Fund may
amend a previously delivered Certificate by delivering to the Transfer
Agent a Certificate naming an additional entity or deleting any entity
named in a previously delivered Certificate.
2. The "Board of Directors" shall mean the Board of Directors
of the Fund.
3. "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be
given to the Transfer Agent by the Fund which is signed by any Officer,
as hereinafter defined, and actually received by the Transfer Agent.
4. "Custodian" shall mean the financial institution appointed
as custodian under the terms and conditions of the Custody Agreement
between the financial institution and the Fund, or its successor(s).
5. "Fund Business Day" shall be determined as set out in the
Fund's prospectuses as shall be effective from time to time.
6. "Officer" shall be deemed to be the Fund's President, any
Vice President, Secretary, Treasurer, Controller, any Assistant
Controller, any Assistant Treasurer and any Assistant Secretary, and any
other person duly authorized by the Board of Directors of the Fund to
execute any Certificate, instruction, notice or other instrument on
behalf of the Fund, and any person reasonably believed by the Transfer
Agent to be such a person.
7. "Out-of-Pocket Expenses" means amounts reasonably
necessary and actually incurred by Transfer Agent in the provision of
Transfer Agent services or pursuant to this Agreement for the following
purposes: postage (and first class mail insurance in connection with
mailing Share certificates), envelopes, check forms, continuous forms,
forms for reports and statements, stationery and other similar items,
telephone and telegraph charges incurred in answering inquiries from
dealers or shareholders, microfilm used to record transactions in
shareholder accounts and computer tapes used for permanent storage of
records and cost of insertion of materials in mailing envelopes by
outside firms. Any charges associated with special or exception
processing shall also be considered Out-of-Pocket Expenses.
8. "Prospectus" shall mean the most recent Fund prospectus
actually received by the Transfer Agent from the Fund with respect to
which the Fund has indicated a registration statement under the
Securities Act of 1933, as amended, has become effective, including the
Statement of Additional Information, incorporated by reference therein.
9. "Shares" shall mean all or any part of each class or
series of the shares of beneficial interest of the Fund or portfolio
listed in the Certificate as to which the Transfer Agent acts as
transfer agent hereunder, as may be amended from time to time, which are
authorized and/or issued by the Fund.
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. Effective as of the date of this Agreement, the Fund hereby
constitutes and appoints the Transfer Agent as transfer agent of all the
Shares of the Fund and as dividend disbursing agent during the period of
this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer
agent and dividend disbursing agent and agrees to perform duties thereof
as hereinafter set forth.
3. In connection with such appointment, the Fund upon the
request of the Transfer Agent, shall deliver the following documents to
the Transfer Agent:
(i) A copy of the Articles of Incorporation of the Fund
and all
amendments thereto certified by the Secretary of the Fund;
(ii) A copy of the By-laws of the Fund certified by the
Secretary of the
Fund;
(iii) A copy of a resolution of the Board of Directors of
the Fund
certified by the Secretary of the Fund appointing the Transfer
Agent and
authorizing the execution of this Transfer Agency Agreement;
(iv) A Certificate signed by the Secretary of the Fund
specifying: the number of authorized Shares, the number of such
authorized Shares issued, the number of such authorized Shares
issued and currently outstanding, the names and specimen
signatures of the Officers of the Fund and the name and address of
the legal counsel for the Fund;
(v) Specimen Share certificate for each or series class of
Shares in the form approved by the Board of Directors of the Fund
(and in a format compatible with the Transfer Agent's system),
together with a Certificate signed by the Secretary of the Fund as
to such approval;
(vi) Copies of the Fund's registration statement, as
amended to date, and the most recently filed Post-Effective
Amendment thereto, filed by the Fund with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
and under the Investment Company Act of 1940, as amended, together
with any applications filed in connection therewith; and
(vii) Opinion of counsel for the Fund with respect to the
validity of the authorized and outstanding Shares, whether such
Shares are fully paid and nonassessable and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that they have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. If requested by the Transfer Agent, the Fund shall deliver
to the Transfer Agent the following documents on or before the effective
date of any increase or decrease in the total number of Shares
authorized to be issued:
(a) A certified copy of the amendment to the Articles of
Incorporation giving effect to such increase or decrease;
(b) In the case of an increase, an opinion of counsel for
the Fund with respect to the validity of the Shares of the Fund
and the status of such Shares under the Securities Act of 1933, as
amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been registered and
that the registration statement has become effective or, if
exempt, the specific grounds therefor); and
(c) In the case of an increase, if the appointment of the
Transfer Agent was theretofore expressly limited, a certified copy
of a resolution of the Board of Directors of the Fund increasing
the authority of the Transfer Agent.
2. Prior to the issuance of any additional Shares pursuant to
stock dividends or stock splits, etc., and prior to any reduction in the
number of Shares outstanding, if requested by the Transfer Agent, the
Fund shall deliver the following documents to the Transfer Agent:
(a) A certified copy of the resolution(s) adopted by the
Board of Directors and/or the shareholders of the Fund authorizing
such issuance of additional Shares or such reduction, as the case
may be; and
(b) An opinion of counsel for the Fund with respect to
the validity of the Shares and the status of such Shares under the
Securities Act of 1933, as amended, and any other applicable
federal law or regulation (i.e., if subject to registration, that
they have been registered and that the registration statement has
become effective, or, if exempt, the specific grounds therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or
other capital adjustment requiring a change in the form of Share
certificates, the Transfer Agent will issue Share certificates in the
new form in exchange for, or upon transfer of, outstanding Share
certificates in the old form, upon receiving:
a) A Certificate authorizing the issuance of the Share
certificates in the new form;
(b) A certified copy of any amendment to the Articles of
Incorporation with respect to the change;
(c) Specimen Share certificates for each class of Shares
in the new form approved by the Board of Directors of the Fund,
with a Certificate signed by the Secretary of the Fund as to such
approval; and
(d) An opinion of counsel for the Fund with respect to the
validity of the Shares in the new form and the status of such
Shares under the Securities Act of 1933, as amended, and any other
applicable federal law or regulation (i.e., if subject to
registration, that the Shares have been registered and that the
registration statement has become effective or, if exempt, the
specific grounds therefor).
2. The Fund at its expense shall furnish the Transfer Agent
with a sufficient supply of blank Share certificates in the new form and
from time to time will replenish such supply upon the request of the
Transfer Agent. Such blank Share certificates shall be compatible with
the Transfer Agent's system and shall be properly signed by facsimile or
otherwise by Officers of the Fund authorized by law or by the By-laws to
sign Share certificates and, if required, shall bear the corporate seal
or facsimile thereof. The Fund agrees to indemnify and exonerate, save
and hold the Transfer Agent harmless from and against any and all claims
or demands that may be asserted against the Transfer Agent with respect
to the genuineness of any Share certificate supplied to the Transfer
Agent pursuant to this Article.
ARTICLE V
ISSUANCE, REDEMPTION AND TRANSFER OF SHARES
1. (a) The Transfer Agent acknowledges that it has received a
copy of the Fund's Prospectus, which Prospectus describes how
sales and redemption of Shares of the Fund shall be made, and the
Transfer Agent agrees to accept purchase orders and redemption
requests with respect to Shares on each Fund Business Day in
accordance with such Prospectus. The Fund agrees to provide the
Transfer Agent with sufficient advance notice to enable the
Transfer Agent to effect any changes in the procedures set forth
in the Prospectus regarding such purchase and redemption
procedure; provided, however, that in no event will such advance
notice be less than thirty (30) days.
(b) The Transfer Agent shall also accept with respect to
each Fund Business Day, at such times as are agreed upon from time
to time by the Transfer Agent and the Fund, a computer tape or
electronic data transmission consistent in all respects with the
Transfer Agent's record format, as amended from time to time,
which is believed by the Transfer Agent to be furnished by or on
behalf of any Approved Institution. The Transfer Agent shall not
be liable for any losses or damages to the Fund or its
shareholders in the event that a computer tape or electronic data
transmission from an Approved Institution is unable to be
processed for any reason beyond the control of the Transfer Agent,
or if any of the information on such tape or transmission is found
to be incorrect.
2. On each Fund Business Day, the Transfer Agent shall, as of
the time at which the Fund computes the net asset value of the Fund,
issue to and redeem from the accounts specified in a purchase order,
redemption request or computer tape or electronic data transmission,
which in accordance with the Prospectus is effective on such Fund
Business Day, the appropriate number of full and fractional Shares based
on the net asset value per Share of such Fund specified in an advice
received on such Fund Business Day from the Fund. Notwithstanding the
foregoing, if a redemption specified in a computer tape or electronic
data transmission is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account, the
Transfer Agent shall not effect such redemption in whole or in part and
shall within twenty-four (24) hours orally advise the Approved
Institution which supplied such tape of the discrepancy.
3. In connection with a reinvestment of a dividend or
distribution of Shares of the Fund, the Transfer Agent shall as of each
Fund Business Day, as specified in a Certificate or resolution described
in paragraph 1 of succeeding Article VI, issue Shares of the Fund based
on the net asset value per Share of such Fund specified in an advice
received from the Fund on such Fund Business Day.
4. On each Fund Business Day, the Transfer Agent shall supply
the Fund with a statement specifying with respect to the immediately
preceding Fund Business Day: the total number of Shares of the Fund
(including fractional Shares) issued and outstanding at the opening of
business on such day; the total number of Shares of the Fund sold on
such day, pursuant to the preceding paragraph 2 of this Article; the
total number of Shares of the Fund redeemed from shareholders by the
Transfer Agent on such day; the total number of Shares of the Fund, if
any, sold on such day pursuant to the preceding paragraph 3 of this
Article, and the total number of Shares of the Fund issued and
outstanding.
5. In connection with each purchase and each redemption of
Shares, the Transfer Agent shall send such statements as are prescribed
by the Federal Securities laws applicable to transfer agents or as
described in the Prospectus. If the Prospectus indicates that
certificates for Shares are available and if specifically requested in
writing by any shareholder, or if otherwise required hereunder, the
Transfer Agent will countersign (if necessary), issue and mail to such
shareholder at the address set forth in the records of the Transfer
Agent a Share certificate for any full Share requested.
6. As of each Fund Business Day, the Transfer Agent shall
furnish the Fund with an advice setting forth the number and dollar
amount of Shares to be redeemed on such Fund Business Day in accordance
with paragraph 2 of this Article.
7. Upon receipt of a proper redemption request and moneys paid
to it by the Custodian in connection with a redemption of Shares, the
Transfer Agent shall cancel the redeemed Shares and after making
appropriate deduction for any withholding of taxes required of it by
applicable law: (a) in the case of a redemption of Shares pursuant to a
redemption described in the preceding paragraph l(a) of this Article,
make payment in accordance with the Fund's redemption and payment
procedures described in the Prospectus; and (b) in the case of a
redemption of Shares pursuant to a computer tape or electronic data
transmission described in the preceding paragraph l(b) of this Article,
make payment by directing a federal funds wire order to the account
previously designated by the Approved Institution specified in said
computer tape or electronic data transmission.
8. The Transfer Agent shall not be required to issue any Shares
after it has received from an Officer of the Fund or from an appropriate
federal or state authority written notification that the sale of Shares
has been suspended or discontinued, and the Transfer Agent shall be
entitled to rely upon such written notification.
9. Upon the issuance of any Shares in accordance with this
Agreement, the Transfer Agent shall not be responsible for the payment
of any original issue or other taxes required to be paid by the Fund in
connection with such issuance of any Shares.
10. The Transfer Agent shall accept a computer tape or
electronic data transmission consistent with the Transfer Agent's record
format, as amended from time to time, which is reasonably believed by
the Transfer Agent to be furnished by or on behalf of any Approved
Institution and is represented to be instructions with respect to the
transfer of Shares from one account of such Approved Institution to
another such account, and shall effect the transfers specified in said
computer tape or electronic data transmission. The Transfer Agent shall
not be liable for any losses to the Fund or its shareholders in the
event that a computer tape or electronic data transmission from an
Approved Institution is unable to be processed for any reason beyond the
control of the Transfer Agent, or if any of the information on such tape
or transmission is found to be incorrect.
11. (a) Except as otherwise provided in subparagraph (b) of
this paragraph and in paragraph 13 of this Article, Shares will be
transferred or redeemed upon presentation to the Transfer Agent of
Share certificates or instructions properly endorsed for transfer
or redemption, accompanied by such documents as the Transfer Agent
deems necessary to evidence the authority of the person making
such transfer or redemption, and bearing satisfactory evidence of
the payment of stock transfer taxes. In the case of small estates
where no administration is contemplated, the Transfer Agent may,
when furnished with an appropriate surety bond, and without
further approval of the Fund, transfer or redeem Shares registered
in the name of a decedent where the current market value of the
Shares being transferred does not exceed such amount as may from
time to time be prescribed by various states. The Transfer Agent
reserves the right to refuse to transfer or redeem Shares until it
is satisfied that the endorsement on the stock certificate or
instructions is valid and genuine, and for that purpose it will
require, unless otherwise instructed by an authorized Officer of
the Fund, a guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule 17Ad-15. The
Transfer Agent also reserves the right to refuse to transfer or
redeem Shares until it is satisfied that the requested transfer or
redemption is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers or redemptions
which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to
any claims adverse to such transfer or redemption. The Transfer
Agent may, in effecting transfers and redemptions of Shares, rely
upon those provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as
the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer
Agent for any act done or omitted by it in good faith in reliance
upon such laws. In no event will the Fund indemnify the Transfer
Agent for any act done by it as a result of willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties.
The Transfer Agent shall be entitled to accept, and shall be fully
protected by the Fund in accepting, any request from any entity to
carry out any transaction in Shares received by the Transfer Agent
through any of the various programs offered through the National
Securities Clearing Corporation ("NSCC") (including, but not
limited to, Networking and FundServ). Any such entity shall
constitute an Approved Institution as defined herein.
(b) Notwithstanding the foregoing or any other provision
contained in this Agreement to the contrary, the Transfer Agent
shall be fully protected by the Fund in not requiring any
instruments, documents, assurances, endorsements or guarantees,
including, without limitation, any signature guarantees, in
connection with a redemption or transfer of Shares whenever the
Transfer Agent reasonably believes that requiring the same would
be inconsistent with the transfer and redemption procedures as
described in the Prospectus.
12. Notwithstanding any provision contained in this Agreement to
the contrary, the Transfer Agent shall not be required or expected to
require, as a condition to any transfer of any Shares pursuant to
paragraph 11 of this Article or any redemption of any Shares pursuant to
a computer tape or electronic data transmission described in this
Agreement, any documents, including, without limitation, any documents
of the kind described in subparagraph (a) of paragraph 11 of this
Article, to evidence the authority of the person requesting the transfer
or redemption and/or the payment of any stock transfer taxes, and shall
be fully protected in acting in accordance with the applicable
provisions of this Article.
13. (a) As used in this Agreement, the terms "computer tape
or electronic data transmission" and "computer tape believed by
the Transfer Agent to be furnished by an Approved Institution",
shall include any tapes generated by the Transfer Agent to reflect
information believed by the Transfer Agent to have been input by
an Approved Institution, via a remote terminal or other similar
link, into a data processing, storage or collection system, or
similar system (the "System"), located on the Transfer Agent's
premises. For purposes of paragraph 1 of this Article, such a
computer tape or electronic data transmission shall be deemed to
have been furnished at such times as are agreed upon from time to
time by the Transfer Agent and Fund only if the information
reflected thereon was input to the System at such times as are
agreed upon from time to time by the Transfer Agent and the Fund.
(b) Nothing contained in this Agreement shall constitute
any agreement or representation by the Transfer Agent to permit,
or to agree to permit, any Approved Institution to input
information into a System.
(c) The Transfer Agent reserves the right to approve, in
advance, any Approved Institution; such approval not to be
unreasonably withheld. The Transfer Agent also reserves the right
to terminate any and all automated data communications, at its
discretion, upon a reasonable attempt to notify the Fund when in
the opinion of the Transfer Agent continuation of such
communications would jeopardize the accuracy and/or integrity of
the Fund's records on the System.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a
resolution of its Board of Directors, certified by the
Secretary or any Assistant Secretary, either: (i) setting forth
the date of the declaration of a dividend or distribution, the date of
accrual or payment, as the case may be, thereof, the record date as of
which shareholders entitled to payment, or accrual, as the case may be,
shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and
unpaid dividends are to be paid and the total amount, if any, payable to
the Transfer Agent on such payment date; or (ii) authorizing the
declaration of dividends and distributions on a daily or other periodic
basis and authorizing the Transfer Agent to rely on a Certificate
setting forth the information described in subsection (i) of this
paragraph.
2. Upon the mail date specified in such Certificate or
resolution, as the case may be, the Fund shall, in the case of a cash
dividend or distribution, cause the Custodian to deposit in an account
in the name of the Transfer Agent on behalf of the Fund an amount of
cash, if any, sufficient for the Transfer Agent to make the payment, as
of the mail date, specified in such Certificate or resolution, as the
case may be, to the shareholders who were of record on the record date.
The Transfer Agent will, upon receipt of any such cash, make payment of
such cash dividends or distributions to the shareholders of record as of
the record date by: (i) mailing a check, payable to the registered
shareholder, to the address of record or dividend mailing address; or
(ii) wiring such amounts to the accounts previously designated by an
Approved Institution, as the case may be. The Transfer Agent shall not
be liable for any improper payments made in good faith and without
negligence, in accordance with a Certificate or resolution described in
the preceding paragraph. If the Transfer Agent shall not receive from
the Custodian sufficient cash to make payments of any cash dividend or
distribution to all shareholders of the Fund as of the record date, the
Transfer Agent shall, upon notifying the Fund, withhold payment to all
shareholders of record as of the record date until sufficient cash is
provided to the Transfer Agent.
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or
capital gain distributions due to the shareholders. It is expressly
agreed and understood that the Transfer Agent is not liable for any loss
as a result of processing a distribution based on information provided
in the Certificate that is incorrect. The Fund agrees to pay the
Transfer Agent for any and all costs, both direct and Out-of-Pocket
Expenses, incurred in such corrective work as necessary to remedy such
error.
4. It is understood that the Transfer Agent shall file such
appropriate information returns concerning the payment of dividend and
capital gain distributions with the proper federal, state and local
authorities as are required by law to be filed by the Fund, but shall in
no way be responsible for the collection or withholding of taxes due on
such dividends or distributions due to shareholders, except and only to
the extent required by applicable law. Anything in this Agreement to the
contrary notwithstanding, the Fund shall be solely responsible for the
accurate, complete and timely filing with the proper federal, state and
local authorities of all tax information with respect to any Fund
account maintained under Matrix Level 3 through any of the various
programs offered through the NSCC (including, but not limited to,
Networking and FundServ).
ARTICLE VII
CONCERNING THE FUND
1. The Fund represents to the Transfer Agent that:
(a) It is a corporation duly organized and existing under
the laws of the State of Maryland.
(b) It is empowered under applicable laws and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is an investment company registered under the
Investment Company Act of 1940, as amended.
(e) A registration statement under the Securities Act of
1933, as amended, with respect to the Shares is effective. The
Fund shall notify the Transfer Agent if such registration
statement or any state securities registrations have been
terminated or a stop order has been entered with respect to the
Shares.
2. Each copy of the Articles of Incorporation of the Fund and
copies of all amendments thereto shall be certified by the Secretary of
State (or other appropriate official) of the state of organization, and
if such Articles of Incorporation and/or amendments are required by law
also to be filed with a county or other officer or official body, a
certificate of such filing shall be filed with a certified copy
submitted to the Transfer Agent. Each copy of the By-laws and copies of
all amendments thereto, and copies of resolutions of the Board of
Directors of the Fund shall be certified by the Secretary of the Fund
under seal.
3. The Fund shall promptly deliver to the Transfer Agent
written notice of any change in the Officers authorized to sign Share
certificates, notifications or requests, together with a specimen
signature of each new Officer. In the event any Officer who shall have
signed manually or whose facsimile signature shall have been affixed to
blank Share certificates shall die, resign or be removed prior to
issuance of such Share certificates, the Transfer Agent may issue such
Share certificates of the Fund notwithstanding such death, resignation
or removal, and the Fund shall promptly deliver to the Transfer Agent
such approval, adoption or ratification as may be required by law.
4. It shall be the sole responsibility of the Fund to deliver
to the Transfer Agent the Fund's currently effective Prospectus and, for
purposes of this Agreement, the Transfer Agent shall not be deemed to
have notice of any information contained in such Prospectus until a
reasonable time after it is actually received by the Transfer Agent.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents and warrants to the Fund that:
(a) It is a corporation duly organized and existing under
the laws of the State of Missouri.
(b) It is empowered under applicable law and by its
Articles of Incorporation and By-laws to enter into and perform
this Agreement.
(c) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
(d) It is duly registered as a transfer agent under
Section 17A of the Securities Exchange Act of 1934, as amended.
2. The Transfer Agent shall not be liable and shall be
indemnified in acting upon any computer tape or electronic data
transmission, writing or document reasonably believed by it to be
genuine and to have been signed or made by an Officer of the Fund or
person designated by the Fund and shall not be held to have any notice
of any change of authority of any person until receipt of written notice
thereof from the Fund or such person. It shall also be protected in
processing Share certificates which bear the proper countersignature of
the Transfer Agent and which it reasonably believes to bear the proper
manual or facsimile signature of the Officers of the Fund.
3. The Transfer Agent upon notice to the Fund may establish
such additional procedures, rules and regulations governing the transfer
or registration of Share certificates as it may deem advisable and
consistent with such rules and regulations generally adopted by mutual
fund transfer agents.
4. The Transfer Agent shall keep such records as it may deem
advisable and is agreeable to the Fund, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular Rules 31a-2 and 31a-3 under the Investment Company Act of
1940, as amended. The Transfer Agent acknowledges that such records are
the property of the Fund. The Transfer Agent may deliver to the Fund
from time to time at its discretion, for safekeeping or disposition by
the Fund in accordance with law, such records, papers, documents
accumulated in the execution of its duties as such Transfer Agent, as
the Transfer Agent may deem expedient, other than those which the
Transfer Agent is itself required to maintain pursuant to applicable
laws and regulations. The Fund shall assume all responsibility for any
failure thereafter to produce any record, paper, cancelled Share
certificate or other document so returned, if and when required. Such
records maintained by the Transfer Agent pursuant to this paragraph 4,
which have not been previously delivered to the Fund pursuant to the
foregoing provisions of this paragraph 4, shall be considered to be the
property of the Fund, shall be made available upon request for
inspection by the Officers, employees and auditors of the Fund, and
records shall be delivered to the Fund upon request and in any event
upon the date of termination of this Agreement, as specified in Article
IX of this Agreement, in the form and manner kept by the Transfer Agent
on such date of termination or such earlier date as may be requested by
the Fund.
5. The Transfer Agent shall not be liable for any loss or
damage, including counsel fees, resulting from its actions or omissions
to act or otherwise, except for any loss or damage arising out of its
bad faith, willful misfeasance, gross negligence or reckless disregard
of its duties under this Agreement.
6. (a) The Fund shall indemnify and exonerate, save and hold
harmless the Transfer Agent from and against any and all claims
(whether with or without basis in fact or law), demands, expenses
(including reasonable attorneys' fees) and liabilities of any and
every nature which the Transfer Agent may sustain or incur or
which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be
taken by any prior transfer agent of the Fund or as a result of
any action taken or omitted to be taken by the Transfer Agent in
good faith and without gross negligence or willful misfeasance or
in reliance upon: (i) any provision of this Agreement; (ii)
the Prospectus; (iii) any instruction or order including, without
limitation, any computer tape or electronic data transmission
reasonably believed by the Transfer Agent to have been received
from an Approved Institution; (iv) any instrument, order or Share
certificate reasonably believed by it to be genuine and to be
signed, countersigned or executed by any duly authorized Officer
of the Fund; (v) any Certificate or other instructions of an
Officer; (vi) any opinion of legal counsel for the Fund or the
Transfer Agent; or (vii) any request by any entity to carry out
any transaction in Shares received by the Transfer Agent through
any of the various programs offered through the NSCC (including,
but not limited to, Networking and FundServ). The Fund shall
indemnify and exonerate, save and hold the Transfer Agent harmless
from and against any and all claims (whether with or without basis
in fact or law), demands, expenses (including reasonable
attorneys' fees) and liabilities of any and every nature which the
Transfer Agent may sustain or incur or which may be asserted
against the Transfer Agent by any person by reason of or as a
result of any action taken or omitted to be taken by the Transfer
Agent in good faith in connection with its appointment or in
reliance upon any law, act, regulation or any interpretation of
the same even though such law, act or regulation may thereafter
have been altered, changed, amended or repealed.
(b) The Transfer Agent shall not settle any claim, demand,
expense or liability to which it may seek indemnity pursuant to
paragraph 6(a) above (each, an "Indemnifiable Claim") without
the express written consent of an Officer of the Fund. The
Transfer Agent shall notify the Fund within fifteen (15) days of
receipt of notification of an Indemnifiable Claim, provided that
the failure by the Transfer Agent to furnish such notification
shall not impair its right to seek indemnification from the Fund
unless the Fund is unable to adequately defend the Indemnifiable
Claim as a result of such failure, and further provided, that if
as a result of the Transfer Agent's failure to provide the Fund
with timely notice of the institution of litigation a judgment by
default is entered, prior to seeking indemnification from the Fund
the Transfer Agent, at its own cost and expense, shall open such
judgment. The Fund shall have the right to defend any
Indemnifiable Claim at its own expense, provided that such defense
shall be conducted by counsel selected by the Fund and reasonably
acceptable to the Transfer Agent. The Transfer Agent may join in
such defense at its own expense, but to the extent that it shall
so desire the Fund shall direct such defense. The Fund shall not
settle any Indemnifiable Claim without the express written consent
of the Transfer Agent if the Transfer Agent determines that such
settlement would have an adverse effect on the Transfer Agent
beyond the scope of this Agreement. In such event, the Fund and
the Transfer Agent shall each be responsible for their own defense
at their own cost and expense, and such claim shall not be deemed
an Indemnifiable Claim hereunder. If the Fund shall fail or refuse
to defend an Indemnifiable Claim, the Transfer Agent may provide
its own defense at the cost and expense of the Fund. Anything in
this Agreement to the contrary notwithstanding, the Fund shall not
indemnify the Transfer Agent against any liability or expense
arising out of the Transfer Agent's willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties and
obligations under this Agreement. The Transfer Agent shall
indemnify and hold the Fund harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to any action or
failure or omission to act by the Transfer Agent as a result of
the Transfer Agent's lack of good faith, gross negligence or
willful misfeasance.
7. The Transfer Agent shall not be liable to the Fund with
respect to any redemption draft on which the signature of the drawer is
forged and which the Fund's Custodian has advised the Transfer Agent to
honor the redemption (but nothing herein is meant to impose any duties
upon the Fund's Custodian); nor shall the Transfer Agent be liable for
any material alteration or absence or forgery of any endorsement, it
being understood that the Transfer Agent's sole responsibility with
respect to inspecting redemption drafts is to use reasonable care to
verify the drawer's signature against signatures on file.
8. There shall be excluded from the consideration of whether
the Transfer Agent has breached this Agreement in any way, any period of
time, and only such period of time during which the Transfer Agent's
performance is materially affected, by reason of circumstances beyond
its control (collectively, "Causes"), including, without limitation,
mechanical breakdowns of equipment (including any alternative power
supply and operating systems software), flood or catastrophe, acts of
God, failures of transportation, communication or power supply, strikes,
lockouts, work stoppages or other similar circumstances.
9. At any time the Transfer Agent may apply to an Officer of
the Fund for written instructions with respect to any matter arising in
connection with the Transfer Agent's duties and obligations under this
Agreement, and the Transfer Agent shall not be liable for any action
taken or permitted by it in good faith in accordance with such written
instructions. Such application by the Transfer Agent for written
instructions from an Officer of the Fund may set forth in writing any
action proposed to be taken or omitted by the Transfer Agent with
respect to its duties or obligations under this Agreement and the date
on and/or after which such action shall be taken. The Transfer Agent
shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified
therein unless, prior to taking or omitting any such action, the
Transfer Agent has received written instructions in response to such
application specifying the action to be taken or omitted. The Transfer
Agent may consult counsel of the Fund, or upon notice to the Fund, its
own counsel, at the expense of the Fund and shall be fully protected
with respect to anything done or omitted by it in good faith in
accordance with the advice or opinion of counsel to the Fund or its own
counsel.
10. The Transfer Agent may issue new Share certificates in place
of certificates represented to have been lost, stolen or destroyed upon
receiving written instructions from the shareholder accompanied by proof
of an indemnity or surety bond issued by a recognized insurance
institution specified by the Fund or the Transfer Agent.
If the Transfer Agent receives written notification from the shareholder
or broker dealer that the certificate issued was never received, and
such notification is made within thirty (30) days of the date of
issuance, the Transfer Agent may reissue the certificate without
requiring a surety bond. The Transfer Agent may also reissue
certificates which are represented as lost, stolen or destroyed without
requiring a surety bond provided that the notification is in writing and
accompanied by an indemnification signed on behalf of a member firm of
the New York Stock Exchange and signed by an officer of said firm with
the signature guaranteed. Notwithstanding the foregoing, the Transfer
Agent will reissue a certificate upon written authorization from an
Officer of the Fund.
11. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to
notify the Fund promptly and to secure instructions from an Officer as
to such inspection. The Transfer Agent reserves the right, however, to
exhibit the shareholder records to any person whenever it receives an
opinion from its counsel that there is a reasonable likelihood that the
Transfer Agent will be held liable for the failure to exhibit the
shareholder records to such person; provided, however, that in
connection with any such disclosure the Transfer Agent shall promptly
notify the Fund that such disclosure has been made or is to be made.
12. At the request of an Officer of the Fund, the Transfer Agent
will address and mail such appropriate notices to shareholders as the
Fund may direct.
13. Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for:
(a) The legality of the issue or sale of any Shares, the
sufficiency of the amount to be received therefor, or the
authority of the Approved Institution or of the Fund, as the case
may be, to request such sale or issuance;
(b) The legality of a transfer of Shares, or of a
redemption of any Shares, the propriety of the amount to be paid
therefor, or the authority of the Approved Institution or of the
Fund, as the case may be, to request such transfer or redemption;
(c) The legality of the declaration of any dividend by the
Fund, or the legality of the issue of any Shares in payment of any
stock dividend; or
(d) The legality of any recapitalization or readjustment
of Shares.
14. The Transfer Agent shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically
set forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against the Transfer Agent.
15. Purchase and Prices of Services:
(a) The Fund will compensate the Transfer Agent for, and
Transfer Agent will provide, beginning on the execution date of
this Agreement and continuing until the termination of this
Agreement as provided hereinafter, the services set forth in
Schedule I.
(b) The current unit prices for the services are set forth
in Schedule II (the "Schedule II Fees"). Effective as of January
1, 1997, once in each calendar year, the Transfer Agent may elect
to raise the Schedule II Fees upon ninety (90) days prior notice
to the Fund, all subject to the mutual agreement of the parties
hereto. Notwithstanding the annual right to raise the Schedule II
Fees, the Transfer Agent may increase prices due to changes in
legal or regulatory requirements subject to the approval of the
Fund, which approval shall not be unreasonably withheld.
16. Billing and Payment:
(a) The Transfer Agent shall bill the Fund monthly in
arrears for accounts maintained and Out-of-Pocket Expenses. The
Transfer Agent may from time to time request that the Fund advance
estimated expenditures of an unusual nature subject to
reconciliation of actual expenses as soon as practicable
thereafter.
(b) The Fund shall pay the Transfer Agent in immediately
available funds at UMB Bank, n.a. in Kansas City, Missouri within
thirty (30) days of the date of the bill. Any amounts due under
this Agreement which are not paid within said thirty (30) day
period shall bear interest at the rate of one and one-half percent
(l 1/2%) per month from such date until paid in full.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than sixty (60) days after the
date of receipt of such notice. In the event such notice is given by the
Fund, it shall be accompanied by a copy of a resolution of the Board of
Directors of the Fund, certified by the Secretary or any Assistant
Secretary, electing to terminate this Agreement and designating the
successor transfer agent or transfer agents. In the event such notice is
given by the Transfer Agent, the Fund shall on or before the termination
date, deliver to the Transfer Agent a copy of a resolution of its Board
of Directors, certified by the Secretary or any Assistant Secretary,
designating a successor transfer agent or transfer agents. In the
absence of such designation by the Fund, the Fund shall upon the date
specified in the notice of termination of this Agreement and delivery of
the records maintained hereunder, be deemed to be its own transfer agent
and the Transfer Agent shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement.
In the event this Agreement is terminated as provided herein, the
Transfer Agent, upon the written request of the Fund, shall deliver the
records of the Fund on electromagnetic media to the Fund or its
successor transfer agent. The Fund shall be responsible to the Transfer
Agent for the reasonable costs and expenses associated with the
preparation and delivery of such media.
ARTICLE X
MISCELLANEOUS
1 The Fund agrees that prior to effecting any change in the
Prospectus which would increase or alter the duties and obligations of
the Transfer Agent hereunder, it shall advise the Transfer Agent of such
proposed change at least thirty (30) days prior to the intended date of
the same, and shall proceed with such change only if it shall have
received the written consent of the Transfer Agent thereto, which shall
not be unreasonably withheld.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund shall be sufficiently
given if addressed to the Fund and mailed or delivered to it at:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Fund may from time to time designate in
writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Transfer Agent shall be
sufficiently given if addressed to the Transfer Agent and mailed or
delivered to:
2440 Pershing Road
Kansas City, MO 64108
or at such other place as the Transfer Agent may from time to time
designate in writing.
4. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the
formality of this Agreement.
5. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns.
6. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
7. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
8. The provisions of this Agreement are intended to benefit
only the Transfer Agent and the Fund, and no rights shall be granted to
any other person by virtue of this Agreement.
9. (a) The Transfer Agent shall endeavor to assist in
resolving shareholder inquiries and errors relating to the period
during which prior transfer agents acted as such for the Fund. Any
such inquiries or errors which cannot be expediently resolved by
the Transfer Agent will be referred to the Fund.
(b) The Transfer Agent shall only be responsible for the
safekeeping and maintenance of transfer agency records, cancelled
Share certificates and correspondence of the Fund created or
produced prior to the time of conversion which are under its
control and acknowledged in a writing to the Fund to be in its
possession. Any expenses or liabilities incurred by the Transfer
Agent as a result of shareholder inquiries, regulatory compliance
or audits related to such records and not caused as a result of
Transfer Agent's bad faith, willful misfeasance or gross
negligence shall be the responsibility of the Fund as provided in
Article VIII herein.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective corporate officer, thereunto duly
authorized and their respective corporate seals to be hereunto affixed,
as of the day and year first above written.
SHADOW STOCK FUND, INC.
By /s/Larry D. Armel
Name: Larry D. Armel
Title: President
[SEAL]
JONES & BABSON, INC.
By /s/Michael A. Brummel
Name: Michael A. Brummel
Title: Assistant Secretary
[SEAL]
<PAGE>
SCHEDULE I
DESCRIPTION OF SERVICES
In consideration of the fees to be paid in such manner and at such
times as Fund and Transfer Agent may agree, Transfer Agent will provide the
services set forth below:
Examine and Process New Accounts, Subsequent Payments, Liquidations,
Exchanges, Telephone Transactions, Check Redemptions, Automatic Withdrawals,
Certificate Issuance, Wire Order Trades, Dividends, Dividend Statements,
Dealer Statements.
This Agreement does not apply to services with respect to qualified
plans. Such services, including, but not limited to fiduciary accounting
services and the preparation and mailing of Forms 5498 and 1099R, are
available subject to separate agreement for an additional charge.
DAILY ACTIVITY
Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
Name and Address, including Zip Code
Balance of Uncertificated Shares
Balance of Certificated Shares
Certificate number, number of shares, issuance date of each certificate
outstanding and cancellation date for each certificate date for each
certificate no longer outstanding, if issued
Balance of dollars available for redemption
Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash)
Type of account code
Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available
Original establishment date for accounts opened by exchange W-9
withholding status and periodic reporting
State of residence code
Social Security or taxpayer identification number, and indication of
certification
Historical transactions on the account for the most recent 18 months,
or other period as mutually agreed to from time-to-time
Indication as to whether phone transactions can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant, etc.
An alternate or "secondary" account number issued by a dealer (or bank,
etc.) to a customer for use, inquiry and transaction input by "remote
accessors"
FUNCTIONS
Answer investor and dealer telephone and/or written inquiries, except
those concerning Fund policy, or requests for investment advice which
will be referred to the Fund, or those which the Fund chooses to answer
Deposit Fund share certificates into accounts upon receipt of
instructions from the investor or other authorized person, if issued
Examine and process transfers of shares insuring that all transfer
requirements and legal documents have been supplied
Process and confirm address changes
Process standard account record changes as required, i.e. Dividend
Codes, etc.
Microfilm source documents for transactions, such as account
applications and correspondence
Perform backup withholding for those accounts which federal government
regulations indicate is necessary
Solicit missing taxpayer identification numbers
Provide remote access inquiry to Fund records via Fund supplied
hardware (Fund responsible for connection line and monthly fee)
REPORTS PROVIDED
Daily Journals Reflecting all shares and
dollar activity for the
previous day
Blue Sky Report Supply information monthly
for Fund's Preparation of
Blue Sky Reporting
N-SAR Report Supply monthly correspondence,
redemption and liquidation
information for use in fund's
N-SAR Report
Additionally, monthly average daily balance reports will be provided at
the Fund's request to the Fund at no charge.
Prepare and mail copies of summary statements to dealers and investment
advisers
Generate and mail confirmation statements for financial transactions
DIVIDEND ACTIVITY
Reinvest or pay in cash including reinvesting in other funds within the
fund group serviced by the Transfer Agent as described in each Fund
Prospectus
Distribute capital gains simultaneously with income dividends
DEALER SERVICES
Prepare and mail confirmation statements to dealers and
Prepare and mail copies of statements to dealers, same frequency as
investor statements
ANNUAL MEETINGS
Assist Fund in obtaining a qualified service to: address and mail
proxies and related material, tabulate returned proxies and supply
daily reports when sufficient proxies have been received
Prepare certified list of stockholders, hard copy or microform
PERIODIC ACTIVITIES
Mail transaction confirmation statements daily to investors
Address and mail four (4) periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent)
Mail periodic statement to investors
Compute, prepare and furnish all necessary reports to Governmental
authorities: Forms 1099DIV, 1099B, 1042 and 1042S
Enclose various marketing material as designated by the Fund in statement
mailings, i.e. monthly and quarterly statements (material must be adaptable
to mechanical equipment as reasonably specified by the Transfer Agent)
SCHEDULE II
TRANSFER AGENT FEE SCHEDULE
(None for this Fund)
EX99.23(i)(1) [Growth Fund]
EX99.23(i)(2) [Money Market Fund]
EX99.23(i)(3) [Tax-Free Income Fund]
EX99.23(i)(4) [International Fund]
EX99.23(i)(5) [Shadow Stock Fund]
Law Office
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
(215) 564-8000
Direct Dial: (215) 564-8024
August 27, 1999
Babson Group of Funds
BMA Tower 700 Karnes Blvd.
Kansas City, MO 64108-3306
Re: Legal Opinion-Securities Act of 1933
Ladies and Gentlemen:
We have examined the Articles of Incorporation, as
amended and supplemented, if applicable (the "Articles") of DL
Babson Tax-Free Income Fund, Inc., DL Babson Money Market Fund,
Inc., David L. Babson Growth Fund, Inc., and Babson-Stewart Ivory
International Fund, Inc. (individually, each "Fund" and
collectively, the "Funds"), each a corporation organized under
Maryland law, the By-Laws of each Fund, and each Fund's proposed
form of Share Certificates (if any), all as amended to date, and
the various pertinent corporate proceedings we deem material. We
have also examined each Fund's Notification of Registration and
Registration Statements filed under the Investment Company Act of
1940, as amended (the "Investment Company Act") and the
Securities Act of 1933, as amended (the "Securities Act"), all as
amended to date, as well as other items we deem material to this
opinion.
Each Fund is authorized by its Articles to issue shares
of common stock and currently issues shares representing
interests in a single portfolio of investments, except that DL
Babson Tax-Free Income Fund, Inc. issues shares representing
interests in three portfolios of investments and DL Babson Money
Market Fund, Inc. issues shares representing interests in two
portfolios of investments. Each Fund has filed with the U.S.
Securities and Exchange Commission, a Registration Statement
under the Securities Act, which Registration Statement is deemed
to register an indefinite number of shares of such Fund pursuant
to the provisions of Section 24(f) of the Investment Company Act.
You have further advised us that each Fund has filed, and each
year hereafter will timely file, a Notice pursuant to Rule 24f-2
under the Investment Company Act perfecting the registration of
the shares sold by such Fund during each fiscal year during which
such registration of an indefinite number of shares remains in
effect.
You have also informed us that the shares of each Fund
have been, and will continue to be, sold in accordance with such
Fund's usual method of distributing its registered
Babson Group of Funds
August 27, 1999
Page 2
shares, under which prospectuses are made available for delivery
to offerees and purchasers of such shares in accordance with
Section 5(b) of the Securities Act.
Based upon the foregoing information and examination,
so long as each Fund remains a valid and subsisting entity under
the laws of its state of organization, and the registration of an
indefinite number of shares of each Fund remains effective, the
authorized shares of such Fund when issued for the consideration
set by such Fund's Board of Directors pursuant to its Articles,
and subject to compliance with Rule 24f-2, will be legally
outstanding, fully-paid, and non-assessable shares, and the
holders of such shares will have all the rights provided for with
respect to such holding by its Articles and the laws of the State
of Maryland.
We hereby consent to the use of this opinion, in lieu
of any other, as an exhibit to the Registration Statement of each
Fund, along with any amendments thereto, covering the
registration of the shares of each Fund under the Securities Act
and the applications, registration statements or notice filings,
and amendments thereto, filed in accordance with the securities
laws of the several states in which shares of each Fund are
offered, and we further consent to reference in the registration
statement of each Fund to the fact that this opinion concerning
the legality of the issue has been rendered by us.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
BY: /s/Mark H. Plafker
Mark H. Plafker
Doc. #163631 v.01
EX99.23(j)(1)(A)
Consent of Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additional Information and to the
incorporation by reference of our report dated August 6, 1999, in the
Registration Statement (Form N-1A) and related Prospectus of
David L. Babson Growth Fund, Inc. filed with the Securities and Exchange
Commission in this Post-Effective Amendment No. 77 under the
Securities Act of 1933 (Registration No. 2-15530) and Amendment
No. 78 under the Investment Company Act of 1940 (Registration No.
811-901).
/s/Ernst & Young LLP
Ernst & Young LLP
Kansas City, Missouri
August 25, 1999
<PAGE>
EX99.23(j)(1)(B)
Consent of Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additional Information and to the
incorporation by reference of our report dated August 6, 1999, in the
Registration Statement (Form N-1A) and related Prospectus of
D. L. Babson Money Market Fund, Inc. filed with the Securities and Exchange
Commission in this Post-Effective Amendment No. 26 under the
Securities Act of 1933 (Registration No. 2-65761) and Amendment
No. 28 under the Investment Company Act of 1940 (Registration No.
811-2963).
/s/Ernst & Young LLP
Ernst & Young LLP
Kansas City, Missouri
August 25, 1999
<PAGE>
EX99.23(j)(1)(C)
Consent of Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additional Information and to the
incorporation by reference of our report dated August 6, 1999, in the
Registration Statement (Form N-1A) and related Prospectus of
D. L. Babson Tax-Free Income Fund, Inc. filed with the Securities and
Exchange Commission in this Post-Effective Amendment No. 26 under the
Securities Act of 1933 (Registration No. 2-65489) and Amendment
No. 27 under the Investment Company Act of 1940 (Registration No.
811-2948).
/s/Ernst & Young LLP
Ernst & Young LLP
Kansas City, Missouri
August 25, 1999
<PAGE>
EX99.23(j)(1)(D)
Consent of Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additional Information and to the
incorporation by reference of our report dated August 6, 1999, in the
Registration Statement (Form N-1A) and related Prospectus of
Babson-Stewart Ivory International Fund, Inc. filed with the Securities
and Exchange Commission in this Post-Effective Amendment No. 16 under the
Securities Act of 1933 (Registration No. 33-17762) and Amendment
No. 17 under the Investment Company Act of 1940 (Registration No.
811-5386).
/s/Ernst & Young LLP
Ernst & Young LLP
Kansas City, Missouri
August 25, 1999
<PAGE>
EX99.23(j)(1)(E)
Consent of Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additional Information and to the
incorporation by reference of our report dated August 6, 1999, in the
Registration Statement (Form N-1A) and related Prospectus of
Shadow Stock Fund, Inc. filed with the Securities and Exchange
Commission in this Post-Effective Amendment No. 16 under the
Securities Act of 1933 (Registration No. 33-15074) and Amendment
No. 18 under the Investment Company Act of 1940 (Registration No.
811-5218).
/s/Ernst & Young LLP
Ernst & Young LLP
Kansas City, Missouri
August 25, 1999
<PAGE>
EX99.23(j)(1)(F)
Consent of Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additional Information and to the
incorporation by reference of our report dated August 6, 1999, in the
Registration Statement (Form N-1A) and related Prospectus of
Babson Enterprise Fund, Inc. filed with the Securities and Exchange
Commission in this Post-Effective Amendment No. 20 under the
Securities Act of 1933 (Registration No. 2-85791) and Amendment
No. 21 under the Investment Company Act of 1940 (Registration No.
811-3823).
/s/Ernst & Young LLP
Ernst & Young LLP
Kansas City, Missouri
August 25, 1999
<PAGE>
EX99.23(j)(1)(G)
Consent of Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additional Information and to the
incorporation by reference of our report dated August 6, 1999, in the
Registration Statement (Form N-1A) and related Prospectus of
Babson Enterprise Fund II, Inc. filed with the Securities and Exchange
Commission in this Post-Effective Amendment No. 11 under the
Securities Act of 1933 (Registration No. 33-39321) and Amendment
No. 12 under the Investment Company Act of 1940 (Registration No.
811-6252).
/s/Ernst & Young LLP
Ernst & Young LLP
Kansas City, Missouri
August 25, 1999
<PAGE>
EX99.23(j)(1)(H)
Consent of Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additional Information and to the
incorporation by reference of our report dated August 6, 1999, in the
Registration Statement (Form N-lA) and related Prospectus of
Babson Value Fund, Inc. filed with the Securities and
Exchange Commission in this Post-Effective Amendment No. 18 under
the Securities Act of 1933 (Registration No. 2-93363) and
Amendment No. 20 under the Investment Company Act of 1940
(Registration No. 811-4114).
/s/Ernst & Young LLP
Ernst & Young LLP
Kansas City, Missouri
August 25, 1999
<PAGE>
EX99.23(j)(1)(I)
Consent of Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Independent
Auditors" in the Statement of Additional Information and to the
incorporation by reference of our report dated August 6, 1999, in the
Registration Statement (Form N-1A) and related Prospectus of
D. L. Babson Bond Trust filed with the Securities and
Exchange Commission in this Post-Effective Amendment No. 100 under
the Securities Act of 1933 (Registration No. 2-10002) and
Amendment No. 100 under the Investment Company Act of 1940
(Registration No. 811-495).
/s/Ernst & Young LLP
Ernst & Young LLP
Kansas City, Missouri
August 25, 1999
EX99.23(j)(2)(A)
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of David L. Babson Growth
Fund, Inc., a Maryland Corporation which intends to do business
as an open-end diversified investment company (mutual fund), and
WHEREAS the David L. Babson Growth Fund, Inc. intends to register
its shares with the Securities and Exchange Commission under the
Securities Act of 1933 and the Investment Company Act of 1940 and
with the Securities Departments of the various states and the
District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the David L. Babson
Growth Fund, Inc. and in the maintenance of such registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/H. David Rybolt
H. David Rybolt
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of David L. Babson Growth
Fund, Inc., a Maryland Corporation which intends to do business
as an open-end diversified investment company (mutual fund), and
WHEREAS the David L. Babson Growth Fund, Inc. intends to register
its shares with the Securities and Exchange Commission under the
Securities Act of 1933 and the Investment Company Act of 1940 and
with the Securities Departments of the various states and the
District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the David L. Babson
Growth Fund, Inc. and in the maintenance of such registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/William H. Russell
William H. Russell
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of David L. Babson Growth
Fund, Inc., a Maryland Corporation which intends to do business
as an open-end diversified investment company (mutual fund), and
WHEREAS the David L. Babson Growth Fund, Inc. intends to register
its shares with the Securities and Exchange Commission under the
Securities Act of 1933 and the Investment Company Act of 1940 and
with the Securities Departments of the various states and the
District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the David L. Babson
Growth Fund, Inc. and in the maintenance of such registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/Francis C. Rood
Francis C. Rood
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
<PAGE>
EX99.23(j)(2)(B)
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of D. L. Babson Money
Market Fund, Inc., a Maryland Corporation which intends to do
business as an open-end diversified investment company (mutual
fund), and
WHEREAS the D. L. Babson Money Market Fund, Inc. intends to
register its shares with the Securities and Exchange Commission
under the Securities Act of 1933 and the Investment Company Act
of 1940 and with the Securities Departments of the various states
and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the D. L. Babson Money
Market Fund, Inc. and in the maintenance of such registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/ H. David Rybolt
H. David Rybolt
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of D. L. Babson Money
Market Fund, Inc., a Maryland Corporation which intends to do
business as an open-end diversified investment company (mutual
fund), and
WHEREAS the D. L. Babson Money Market Fund, Inc. intends to
register its shares with the Securities and Exchange Commission
under the Securities Act of 1933 and the Investment Company Act
of 1940 and with the Securities Departments of the various states
and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the D. L. Babson Money
Market Fund, Inc. and in the maintenance of such registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/ William H. Russell
William H. Russell
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of D. L. Babson Money
Market Fund, Inc., a Maryland Corporation which intends to do
business as an open-end diversified investment company (mutual
fund), and
WHEREAS the D. L. Babson Money Market Fund, Inc. intends to
register its shares with the Securities and Exchange Commission
under the Securities Act of 1933 and the Investment Company Act
of 1940 and with the Securities Departments of the various states
and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the D. L. Babson Money
Market Fund, Inc. and in the maintenance of such registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/ Francis C. Rood
Francis C. Rood
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
<PAGE>
EX99.23(j)(2)(C)
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of D. L. Babson Tax-Free
Income Fund, Inc., a Maryland Corporation which intends to do
business as an open-end diversified investment company (mutual
fund), and
WHEREAS the D. L. Babson Tax-Free Income Fund, Inc. intends to
register its shares with the Securities and Exchange Commission
under the Securities Act of 1933 and the Investment Company Act
of 1940 and with the Securities Departments of the various states
and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the D. L. Babson Tax-
Free Income Fund, Inc. and in the maintenance of such
registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/ H. David Rybolt
H. David Rybolt
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of D. L. Babson Tax-Free
Income Fund, Inc., a Maryland Corporation which intends to do
business as an open-end diversified investment company (mutual
fund), and
WHEREAS the D. L. Babson Tax-Free Income Fund, Inc. intends to
register its shares with the Securities and Exchange Commission
under the Securities Act of 1933 and the Investment Company Act
of 1940 and with the Securities Departments of the various states
and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the D. L. Babson Tax-
Free Income Fund, Inc. and in the maintenance of such
registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/ William H. Russell
William H. Russell
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of D. L. Babson Tax-Free
Income Fund, Inc., a Maryland Corporation which intends to do
business as an open-end diversified investment company (mutual
fund), and
WHEREAS the D. L. Babson Tax-Free Income Fund, Inc. intends to
register its shares with the Securities and Exchange Commission
under the Securities Act of 1933 and the Investment Company Act
of 1940 and with the Securities Departments of the various states
and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the D. L. Babson Tax-
Free Income Fund, Inc. and in the maintenance of such
registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/ Francis C. Rood
Francis C. Rood
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
<PAGE>
EX99.23(j)(2)(D)
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Babson-Stewart Ivory
International Fund, Inc., a Maryland Corporation which intends to
do business as an open-end diversified investment company (mutual
fund), and
WHEREAS the Babson-Stewart Ivory International Fund, Inc. intends
to register its shares with the Securities and Exchange
Commission under the Securities Act of 1933 and the Investment
Company Act of 1940 and with the Securities Departments of the
various states and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the Babson-Stewart
Ivory International Fund, Inc. and in the maintenance of such
registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 29th day
of July, 1999.
/s/ Richard J. Phelps
Richard J. Phelps
Sworn to before me this of 29th day of July, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Babson-Stewart Ivory
International Fund, Inc., a Maryland Corporation which intends to
do business as an open-end diversified investment company (mutual
fund), and
WHEREAS the Babson-Stewart Ivory International Fund, Inc. intends
to register its shares with the Securities and Exchange
Commission under the Securities Act of 1933 and the Investment
Company Act of 1940 and with the Securities Departments of the
various states and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the Babson-Stewart
Ivory International Fund, Inc. and in the maintenance of such
registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 29th day
of January, 1999.
/s/ William H. Russell
William H. Russell
Sworn to before me this of 29th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Babson-Stewart Ivory
International Fund, Inc., a Maryland Corporation which intends to
do business as an open-end diversified investment company (mutual
fund), and
WHEREAS the Babson-Stewart Ivory International Fund, Inc. intends
to register its shares with the Securities and Exchange
Commission under the Securities Act of 1933 and the Investment
Company Act of 1940 and with the Securities Departments of the
various states and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the Babson-Stewart
Ivory International Fund, Inc. and in the maintenance of such
registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 29th day
of January, 1999.
/s/ Francis C. Rood
Francis C. Rood
Sworn to before me this of 29th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Babson-Stewart Ivory
International Fund, Inc., a Maryland Corporation which intends to
do business as an open-end diversified investment company (mutual
fund), and
WHEREAS the Babson-Stewart Ivory International Fund, Inc. intends
to register its shares with the Securities and Exchange
Commission under the Securities Act of 1933 and the Investment
Company Act of 1940 and with the Securities Departments of the
various states and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the Babson-Stewart
Ivory International Fund, Inc. and in the maintenance of such
registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 29th day
of January, 1999.
/s/ James T. Jensen
James T. Jensen
Sworn to before me this of 29th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
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EX99.23(j)(2)(E)
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Shadow Stock Fund, Inc.,
a Maryland Corporation which intends to do business as an open-
end diversified investment company (mutual fund), and
WHEREAS the Shadow Stock Fund, Inc. intends to register its
shares with the Securities and Exchange Commission under the
Securities Act of 1933 and the Investment Company Act of 1940 and
with the Securities Departments of the various states and the
District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the Shadow Stock Fund,
Inc. and in the maintenance of such registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/ H. David Rybolt
H. David Rybolt
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Shadow Stock Fund, Inc.,
a Maryland Corporation which intends to do business as an open-
end diversified investment company (mutual fund), and
WHEREAS the Shadow Stock Fund, Inc. intends to register its
shares with the Securities and Exchange Commission under the
Securities Act of 1933 and the Investment Company Act of 1940 and
with the Securities Departments of the various states and the
District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the Shadow Stock Fund,
Inc. and in the maintenance of such registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/ William H. Russell
William H. Russell
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Shadow Stock Fund, Inc.,
a Maryland Corporation which intends to do business as an open-
end diversified investment company (mutual fund), and
WHEREAS the Shadow Stock Fund, Inc. intends to register its
shares with the Securities and Exchange Commission under the
Securities Act of 1933 and the Investment Company Act of 1940 and
with the Securities Departments of the various states and the
District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons
hereinafter set out as his attorney each with the power to act
severally in the name of the undersigned and to execute on his
behalf all forms and documents required by the Securities and
Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the
initial registration of the securities of the Shadow Stock Fund,
Inc. and in the maintenance of such registrations.
Larry D. Armel
P. Bradley Adams
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this of 28th day
of January, 1999.
/s/ Francis C. Rood
Francis C. Rood
Sworn to before me this of 28th day of January, 1999.
Chareen C. Smith, Notary Pub1ic
County of Jackson, State of Missouri
My commission expires May 1, 2001.
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