SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.___ )
Filed by the Registrant [ X ]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
U.S. GLOBAL ACCOLADE FUNDS
-----------------------------
BONNEL GROWTH FUND
MEGATRENDS FUND
REGENT EASTERN EUROPEAN FUND
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registra tion statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
================================================================================
NOTICE OF MEETING
PROXY STATEMENT
June 26, 2000
Dear Shareholder:
Enclosed is a proxy statement describing important proposals for you to
consider. You are eligible to vote on these proposals because you were a
shareholder of record of one or more of the funds listed below on June 19, 2000.
* Bonnel Growth Fund
* MegaTrends Fund
* Regent Eastern European Fund
I'm sure that you, like most people, lead a busy life and are tempted to put
this proxy aside. Please don't. When shareholders do not vote, the funds incur
additional expenses to pay for follow-up mailings and telephone calls. Please
take a few minutes to review this proxy statement and sign, date, and return the
proxy card in the enclosed postage paid envelope. Or you can vote on the
Internet or by telephone - instruction card enclosed.
During the past ten years, the mutual fund industry and the regulatory
environment have changed significantly. Many of the changes we are proposing are
designed to modernize our governing documents and investment restrictions to
reflect these industry and regulatory changes. We believe that these changes
will also permit the funds to operate more efficiently and to adapt to future
industry and regulatory developments without incurring the cost of another
shareholder meeting. These changes are not expected to affect materially the
management of the funds.
THE BOARD OF TRUSTEES HAS UNANIMOUSLY APPROVED THESE PROPOSALS AND RECOMMENDS A
VOTE "FOR" EACH ONE.
If you have any questions regarding the issues to be voted on or need assistance
completing your proxy card, please contact our proxy solicitor, D. F. King &
Co., Inc. (1-800-207-2872, between 9:00 a.m. and 9:00 p.m. Eastern daylight
time, Monday through Friday). If you have account-specific questions, please
call one of our shareholder services representatives (1-800-873-8637 between
7:30 a.m. and 7:00 p.m. Central daylight time, Monday through Friday).
I appreciate your taking the time to consider these important proposals. Thank
you for investing with U.S. Global Accolade Funds.
Sincerely,
Frank E. Holmes
President of the Trust
<PAGE>
PROXY STATEMENT [GRAPHIC: U.S. GLOBAL INVESTORS, INC. LOGO]
JUNE 26, 2000
IMPORTANT VOTING INFORMATION INSIDE!
TABLE OF CONTENTS
PROXY STATEMENT SUMMARY..................................... Page 2
NOTICE OF SPECIAL JOINT MEETING OF U.S. GLOBAL ACCOLADE
FUNDS..................................................... Page 5
PROXY STATEMENT FOR SPECIAL JOINT MEETING OF U.S. GLOBAL
ACCOLADE FUNDS............................................ Page 6
PROPOSAL ONE - ALL FUNDS - TO ELECT THE BOARD OF
TRUSTEES................................................ Page 9
PROPOSAL TWO - ALL FUNDS - TO RATIFY THE SELECTION OF THE
INDEPENDENT AUDITORS.................................... Page 14
PROPOSAL THREE - ALL FUNDS - TO AUTHORIZE THE TRUSTEES TO
ADOPT AN AMENDED AND RESTATED MASTER TRUST AGREEMENT.... Page 15
PROPOSAL FOUR - TO RECLASSIFY OR AMEND CERTAIN FUNDAMENTAL
INVESTMENT RESTRICTIONS................................. Page 17
PROPOSAL 4A - All Funds - To Amend the Senior Securities
Restriction........................................... Page 18
PROPOSAL 4B - All Funds - To Eliminate the
Diversification Restriction........................... Page 19
PROPOSAL 4C - All Funds - To Amend and Reclassify the
Margin Purchases and Short Sales of Securities
Restrictions.......................................... Page 20
PROPOSAL 4D - All Funds - To Amend the Borrowing
Restriction........................................... Page 22
PROPOSAL 4E - All Funds - To Amend the Real Estate
Restriction........................................... Page 24
PROPOSAL 4F - All Funds - To Amend the Industry
Concentration Restriction............................. Page 25
PROPOSAL 4G - All Funds - To Amend the Underwriting
Restriction........................................... Page 26
PROPOSAL 4H - All Funds - To Amend the Lending
Restriction........................................... Page 27
PROPOSAL 4I - All Funds - To Eliminate the Restriction
on Investing in Other Investment Companies............ Page 28
PROPOSAL 4J - Bonnel Growth Fund and MegaTrends
Fund - To Reclassify the Restriction on Investing in
Illiquid Securities................................... Page 29
PROPOSAL 4K - Bonnel Growth Fund and Regent Eastern
European Fund - To Amend the Commodities
Restriction........................................... Page 30
PROPOSAL 4L - MegaTrends Fund - To Eliminate the
Restriction on Investing in Oil, Gas or Other Mineral
Leases................................................ Page 31
PROPOSAL 4M - MegaTrends Fund - To Eliminate the
Restriction on Investing in Warrants.................. Page 32
PROPOSAL 4N - MegaTrends Fund - To Eliminate the Single
Issuers Restriction................................... Page 33
EXHIBIT I - FORM OF AMENDED AND RESTATED MASTER TRUST
AGREEMENT............................................... Page 35
<PAGE>
PROXY STATEMENT SUMMARY
The following questions and answers provide a brief summary of the proposals to
be considered at the special meeting of shareholders. The information below is
qualified in its entirety by more detailed information contained elsewhere in
this proxy statement. Please read all of the enclosed proxy materials before
voting.
I'M A SMALL INVESTOR. WHY SHOULD I BOTHER TO VOTE?
Your vote makes a difference. If many shareholders just like you fail to vote,
the funds may not receive enough votes to hold the meeting. If this happens,
the trustees will solicit votes again - a costly proposition for the funds.
WHEN WILL THE SPECIAL MEETING BE HELD? WHO IS ELIGIBLE TO VOTE?
The meeting will be held August 16, 2000, at 2:00 p.m. Central daylight time,
at 7900 Callaghan Road, San Antonio, Texas. This will be a business meeting
only. There will be no presentations about the funds. The record date for the
meeting is the close of business June 19, 2000. Only shareholders who own
shares on the record date are entitled to vote at the meeting.
WHAT AM I BEING ASKED TO VOTE ON?
All shareholders are being asked to vote on four items:
1. Election of the board of trustees
2. Ratification of the selection of independent auditors
3. Reclassification or amendment of certain investment restrictions
4. Approval of an Amended and Restated Master Trust Agreement
HOW DO THE TRUSTEES RECOMMEND THAT I VOTE ON THESE PROPOSALS?
The trustees unanimously recommend that you vote "FOR" all proposals.
WILL ANY OF THE PROPOSED CHANGES SUBSTANTIALLY AFFECT THE WAY THE FUNDS ARE
MANAGED?
No.
WHY ARE THE TRUSTEES PROPOSING TO CHANGE CERTAIN INVESTMENT
RESTRICTIONS?
The proposed changes will modernize and standardize the fundamental investment
restrictions for all funds within the U.S. Global Family of
2
<PAGE>
Funds. The trustees believe that, over time, these changes will permit the
funds to operate more efficiently and to adapt to changing regulatory and
industry conditions. For the foreseeable future, the changes are not expected
to affect materially the way in which the funds are managed.
WHEN WILL THE PROPOSED CHANGES TO INVESTMENT RESTRICTIONS TAKE EFFECT, IF
APPROVED?
September 1, 2000.
WHO IS ASKING FOR MY VOTE?
Your board of trustees is asking you to sign and return the enclosed proxy
card so your votes can be cast at the meeting. In the event the meeting is
adjourned, these proxies also would be voted at the reconvened meeting.
HOW DO I VOTE MY SHARES?
You do not have to attend the meeting. We've made it easy for you. You can
vote through the Internet, by mail, by phone, or in person.
* To vote through the Internet, follow the enclosed instructions (you will
need the control number that appears on your proxy card).
* To vote by telephone, dial the toll-free number indicated on the enclosed
sheet and follow the instructions that you hear on the phone, or our proxy
solicitor, D.F. King & Co., Inc. can help you (dial 1-800-207-2872).
We encourage you to vote by Internet or telephone, using the control number
that appears on your proxy card. These voting methods will save the funds a
good deal of money because the fund will not have to pay for return-mail
postage.
* To vote by mail, sign and send us the enclosed proxy card in the envelope
provided. Note: If you vote by Internet or telephone, please do not return
your proxy card.
* Or you can vote in person at the meeting on August 16, 2000.
I PLAN TO VOTE ON THE INTERNET OR TELEPHONE. HOW DOES INTERNET OR TELEPHONE
VOTING WORK?
Just follow the instructions on the enclosed card.
3
<PAGE>
I PLAN TO VOTE BY MAIL. HOW SHOULD I SIGN MY PROXY CARD?
If you are an individual account owner, please sign exactly as your name
appears on the proxy card. Either owner of a joint account may sign the proxy
card, but the signer's name must exactly match one that appears on the card.
You should sign proxy cards for other types of accounts in a way that
indicates your authority (for instance, "John Doe, Custodian").
IF I SEND MY PROXY IN NOW, CAN I CHANGE MY VOTE LATER?
A proxy can be revoked at any time by:
* Revoting through the Internet or by telephone,
* Sending us another proxy card,
* Writing to us, or
* Attending the meeting and voting in person. Even if you plan to attend the
meeting and vote in person, we ask that you return the enclosed proxy card.
Doing so will help us ensure that an adequate number of shares are present
at the meeting.
4
<PAGE>
NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS OF
U.S. GLOBAL ACCOLADE FUNDS
---------------------
BONNEL GROWTH FUND
MEGATRENDS FUND
REGENT EASTERN EUROPEAN FUND
To the Shareholders of the Funds:
A Special Joint Meeting of Shareholders of the Bonnel Growth Fund, the
MegaTrends Fund, and the Regent Eastern European Fund (the funds) will be held
at 7900 Callaghan, San Antonio, Texas 78229, on August 16, 2000, at 2:00 p.m.,
Central daylight time. The purpose of the meeting is to consider and act on the
following proposals and to transact other business as may properly come before
the meeting or any adjournments of the meeting.
1. To elect a board of trustees.
2. To ratify selection of the independent auditors.
3. To authorize the trustees to adopt an Amended and Restated
Master Trust Agreement.
4. To reclassify or amend certain investment restrictions.
The board of trustees has fixed the close of business on June 19, 2000, as the
record date for the determination of the shareholders of each fund entitled to
notice of, and to vote at, the meeting.
Your vote is important - please vote promptly.
We urge any shareholder who does not expect to attend the meeting to indicate
voting instructions on the enclosed proxy card, date and sign it, and return it
in the envelope provided, which needs no postage if mailed in the United States
or to vote by Internet or telephone. To avoid unnecessary expense, we ask your
cooperation in mailing your proxy card promptly, no matter how large or small
your holdings may be.
By Order of the Board of Trustees,
Susan B. McGee
Secretary of the Trust
Dated: June 26, 2000
5
<PAGE>
PROXY STATEMENT FOR SPECIAL JOINT MEETING
OF SHAREHOLDERS OF U.S. GLOBAL ACCOLADE FUNDS
---------------------
BONNEL GROWTH FUND
MEGATRENDS FUND
REGENT EASTERN EUROPEAN FUND
This proxy statement is furnished to shareholders of all the series of U.S.
Global Accolade Funds, a Massachusetts business trust (Trust). This proxy
statement is furnished in connection with the solicitation of proxies by and on
behalf of the board of trustees of the Trust to be used at a special meeting of
shareholders to be held at 7900 Callaghan Road, San Antonio, Texas 78229, on
August 16, 2000, at 2:00 p.m., or at any adjournments of the meeting.
The purpose of the meeting is set forth in the accompanying Notice. This proxy
statement and the accompanying proxy are expected to be mailed to shareholders
on or about June 26, 2000. Shareholders of record at the close of business on
June 19, 2000, will be entitled to notice of and to vote at the meeting or any
adjournment thereof.
All shares represented at the meeting by properly executed proxies will be voted
according to the instructions thereon, if any. If no instructions are given, the
proxy will be voted for approval of the proposals. The board of trustees does
not know of any action to be considered at the meeting other than the proposals,
which are discussed below.
The proxy may be revoked at any time before it is exercised by the subsequent
execution and submission of a revised proxy, by written notice of revocation to
the Secretary of the Trust, or by voting in person at the meeting.
The cost of the solicitation of proxies by the board of trustees of the Trust
for this meeting of shareholders will be borne by the Trust and will include any
reimbursement paid to fiduciaries, brokerage firms, nominees, and custodians for
their expenses in forwarding solicitation material regarding the meeting to
beneficial owners. D.F. King & Co., Inc. will provide the Trust with
solicitation services that will include soliciting shareholder votes by mail or
telephone and planning the voting process, tabulation and reporting. The
estimated cost of these solicitation services is approximately $160,000. In
addition to the solicitation of proxies by mail, officers and employees of the
Trust and U.S. Global Investors, Inc. (Adviser), without additional
compensation, may solicit proxies in person or by telephone or other means of
communication.
6
<PAGE>
Shares of each fund of the Trust issued and outstanding as of June 19, 2000, are
shown in the table below. Each full share outstanding is entitled to one full
vote and each fractional share outstanding is entitled to a proportionate share
of one vote.
<TABLE>
<CAPTION>
NO. OF NO. OF
FUND SHARES FUND SHARES
---------------------- ------------- -------------------------- -----------
<S> <C> <S> <C>
Bonnel Growth Fund 7,683,443.822 Regent Eastern European
MegaTrends Fund 1,510,775.482 Fund 502,192.622
</TABLE>
REQUIRED VOTE
A plurality of all votes cast at the meeting is sufficient to approve Proposal
One (to elect the board of trustees). Approval of Proposal Two (to ratify the
selection of the independent auditors) requires a majority of all votes cast at
the meeting, provided a quorum is present. Approval of Proposal Three (to adopt
an Amended and Restated Master Trust Agreement) requires a majority of all
shares of the Trust outstanding as of the record date. Approval of each of
Proposals 4A-4N (changes to certain investment restrictions) requires, with
respect to each fund voting thereon, a "majority of the outstanding voting
securities" of that fund. Under the Investment Company Act of 1940 (1940 Act),
the vote of a "majority of the outstanding voting securities" means the
affirmative vote of the lesser of (a) 67% or more of the voting securities
present at the meeting or represented by proxy if the holders of more than 50%
of the outstanding voting securities are present or represented by proxy or (b)
more than 50% of the outstanding voting securities.
On Proposal One (to elect the board of trustees), Proposal Two (to ratify the
selection of the independent auditors), and Proposal Three (to authorize the
adoption of an Amended and Restated Master Trust Agreement), all shares of the
Trust will vote together, and not by fund. On Proposals Four 4A - 4N (to
reclassify or amend certain fundamental investment restrictions), each fund will
vote separately.
A quorum to conduct business consists of a majority of the shares entitled to
vote at a shareholder meeting. A lesser number is sufficient for adjournments.
In tallying shareholder votes, abstentions and "broker non-votes" [i.e. shares
held by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or persons entitled to vote; and (ii) the broker or
nominee does not have discretionary voting power on a particular matter] will be
counted for purposes of determining whether a quorum is present for convening
the meeting. On Proposal One (to elect
7
<PAGE>
the board of trustees), abstentions and broker non-votes will have no effect;
the four nominees receiving the largest number of votes will be elected. On
Proposal Two (to ratify the selection of the independent auditors) abstentions
and broker non-votes will not be counted as "votes cast" and will have no effect
on the result of the vote. On Proposal Three (to authorize the adoption of an
Amended and Restated Master Trust Agreement), abstentions and broker non-votes
will be considered to be entitled to vote at the meeting, and, as a result, will
have the effect of being counted as voted against the proposal. On Proposal Four
(to reclassify or amend certain fundamental investment restrictions),
abstentions and broker non- votes will be considered to be both present at the
meeting and issued and outstanding and, as a result, will have the effect of
being counted as voted against the proposal.
If a quorum is not present at the meeting, or if a quorum is present at the
meeting but sufficient votes to approve one or more of the proposed items are
not received, or if other matters arise that require shareholder attention, the
persons named as proxy agents may propose one or more adjournments of the
meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares present at the
meeting or represented by proxy. When voting on a proposed adjournment, the
persons named as proxy agents will vote FOR the proposed adjournment all shares
that they are entitled to vote with respect to each item, unless directed to
vote AGAINST the item, in which case such shares will be voted AGAINST the
proposed adjournment with respect to that item. A shareholder vote may be taken
on one or more of the items in this Proxy Statement before such adjournment if
sufficient votes have been received and it is otherwise appropriate.
The following chart illustrates the proposals for which various fund
shareholders may vote.
<TABLE>
<CAPTION>
SHAREHOLDERS OF THESE FUNDS -- -- VOTE FOR THESE PROPOSALS
--------------------------------- ------------------------------------------------------------------------------------------------
1 2 3 4A 4B 4C 4D 4E 4F 4G 4H 4I 4J 4K 4L 4M 4N
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bonnel Growth Fund X X X X X X X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
MegaTrends Fund X X X X X X X X X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Regent Eastern
European Fund X X X X X X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
PROPOSAL ONE
(ALL FUNDS)
TO ELECT THE BOARD OF TRUSTEES
Four candidates, who are currently trustees, have been nominated for election as
trustees of the Trust. It is intended that the proxies will be voted to ratify
each of the trustees' current terms and to elect as trustees the nominees
described below for the new terms described below.
Pursuant to the Master Trust Agreement, trustees are elected (or appointed) for
six-year terms. Each of the nominees has previously been elected by
shareholders, except Mr. Belz, who was appointed to the board on November 1,
1998, to serve a six-year term ending November 1, 2004. Mr. Holmes was initially
elected by shareholders on April 15, 1993, to serve for an indefinite term. On
September 21, 1994, Mr. Holmes was elected by shareholders to serve a three-year
term ending September 21, 1997; and on February 28, 1997, Mr. Holmes' term was
extended by the trustees until September 21, 2000. Mr. Mandigo was initially
elected by shareholders on April 16, 1993, for an indefinite term and on
September 21, 1994, was elected by shareholders to serve a six-year term ending
September 21, 2000. Dr. Hughs was elected by shareholders on September 21, 1994,
to serve for a six-year term ending September 21, 2000.
Mr. Frank E. Holmes, Mr. Clark R. Mandigo and Dr. Richard E. Hughs will be
elected to serve a six-year term ending September 21, 2006. If approved by
shareholders, Mr. Michael Belz has indicated he will resign his existing term on
September 21, 2000, and be elected to serve a six-year term ending September 21,
2006.
All the nominees listed below have consented to serve as trustees, if elected.
If any nominees shall be unable or shall fail to act as a trustee by virtue of
an unexpected occurrence, the proxies may be voted for such other person(s) as
shall be determined by the persons acting under the proxies in their discretion.
9
<PAGE>
Set forth below is information concerning the trustees:
TRUSTEE (AGE)
BUSINESS ADDRESS TRUSTEE
POSITION WITH TRUST PRINCIPAL OCCUPATION SINCE
------------------------- ------------------------------------------ -------
J. Michael Belz (47) (1) President and Chief Executive Officer of 1998
1635 NE Loop 410 Catholic Life Insurance from 1984 to
San Antonio, Texas 78209 present. Director of Benefit Planners,
Inc. from 1996 to present.
Trustee
--------------------------------------------------------------------------------
Frank E. Holmes (45) (*) Chairman of the Board of Directors and 1993
7900 Callaghan Road Chief Executive Officer of the Adviser.
San Antonio, Texas 78229 Since October 1989 Mr. Holmes has served
and continues to serve in various
Trustee positions with the Adviser, its
President subsidiaries and the investment companies
Chief Executive Officer it sponsors. Director of FrancOr Resource
Chief Investment Officer Corp. from November 1994 to November 1996.
Director of Adventure Capital Limited from
January 1996 to July 1997 and Director of
Vedron Gold, Inc. from August 1996 to
March 1997. Director of 71316 Ontario,
Inc. since April 1987 and of F. E. Holmes
Organization, Inc. since July 1978.
Director of Marleau, Lemire Inc. from
January 1995 to January 1996. Director of
United Services Canada, Inc. since
February 1995 and Chief Executive Officer
from February to August 1995.
--------------------------------------------------------------------------------
Richard E. Hughs Professor at the School of Business of the 1994
(64) (1), (2) State University of New York at Albany
11 Dennin Drive from 1990 to present; Dean, School of
Menands, NY 12204 Business 1990-1994; Director of the
Institute for the Advancement of Health
Trustee Care Management, 1994-present. Corporate
Vice President, Sierra Pacific Resources,
Reno, NV, 1985-1990. Dean and Professor,
College of Business Administration,
University of Nevada, Reno, 1977-1985.
Associate Dean, Stern School of Business,
New York University, New York City,
1970-1977.
--------------------------------------------------------------------------------
10
<PAGE>
TRUSTEE (AGE)
BUSINESS ADDRESS TRUSTEE
POSITION WITH TRUST PRINCIPAL OCCUPATION SINCE
------------------------- ------------------------------------------ -------
Clark R. Mandigo (57) (1) Business consultant since 1991. From 1985 1993
15050 Jones Maltsberger to 1991, President, Chief Executive
San Antonio, Texas 78247 Officer, and Director of Intelogic Trace,
Inc., a nationwide company which sold,
Trustee leased and maintained computers and
telecommunications systems and equipment.
Prior to 1985, President of BHP Petroleum
(Americas), Ltd., an oil and gas
exploration and development company.
Director of Lone Star Steakhouse & Saloon,
Inc. and Horizon Organic Holdings, Inc.
Formerly a Director of Datapoint
Corporation, Palmer Wireless, Inc. and
Physician Corporation of America. Trustee
of U.S. Global Accolade Funds since 1993.
Trustee for Pauze/Swanson United Services
Funds from November 1993 to February 1996.
--------------------------------------------------------------------------------
(*) A trustee who is an interested person
(1) The trustee is an "independent trustee," i.e. a trustee who is not an
"interested person" of the Trust, as that term is defined in the 1940 Act.
(2) From May 29, 1996, through September 25, 1998, Dr. Hughs owned 10,000
shares of the Adviser.
The following table sets forth information describing the compensation of each
trustee for his services for the fiscal year ended October 31, 1999.
<TABLE>
<CAPTION>
COMPENSATION TABLE
---------------------------------------------------------------------------------------
TRUSTEES
------------------------------------------------
J. MICHAEL FRANK E. RICHARD E. CLARK R.
NAME OF FUND BELZ HOLMES HUGHS MANDIGO (1)
------------------------------------ ---------- -------- ---------- -----------
<S> <C> <C> <C> <C>
All funds of U.S. Global Accolade
Funds $19,433 $0 $23,100 $18,100
Total Compensation from all funds
managed by U.S. Global Investors,
Inc. $19,433 $0 $23,100 $45,325
<FN>
-----------------
(1) Mr. Mandigo was also compensated for serving on the board of trustees for
U.S. Global Investors Funds.
</FN>
</TABLE>
The board has an Audit Committee whose members are Messrs. Mandigo
and Belz and Dr. Hughs. The Audit Committee is responsible for:
* meeting with the Trust's auditors to review audit procedures and results for
each fund;
11
<PAGE>
* considering any matters arising from an audit of a fund to be brought to the
attention of the board as a whole with respect to the Trust's fund
accounting or its internal accounting controls; and
* considering such matters as may from time to time be set forth in a charter
adopted by the board and such committee.
Although the Trust does not have a nominating committee, the selection and
nomination of the trustees who are not interested persons of the Trust are
committed to the discretion of such trustees.
The board met four times during the fiscal year ended October 31, 1999. The
Audit Committee met two times during the fiscal year ended October 31, 1999. All
of the trustees attended all of the meetings of the board and the Audit
Committee (if a member thereof) during the fiscal year ended October 31, 1999.
In June 1999, in part to compensate Mr. Holmes for becoming the Adviser's chief
investment officer and upon cancellation of Mr. Holmes' warrants and option to
acquire 986,122 shares of class C common stock of the Adviser, the board of the
Adviser (not the Trust) approved the issuance of 1,000,000 shares of class C
common stock of the Adviser (67% of the outstanding shares) to Mr. Holmes to be
vested over a ten-year period beginning with fiscal year 1999, with an annual
compensation value of $50,000.
TRUST OFFICERS. Information about the executive officers of the Trust (except
for Mr. Holmes, which is set forth above) is shown in the table below.
NAME (AGE)
BUSINESS ADDRESS OFFICER
POSITION WITH TRUST PRINCIPAL OCCUPATION SINCE
------------------------- ------------------------------------------ -------
Susan B. McGee (41) President and General Counsel of the 1996
7900 Callaghan Road Adviser. Since September 1992, Ms. McGee
San Antonio, Texas 78229 has served and continues to serve in
various positions with the Adviser, its
Executive Vice President, subsidiaries, and the investment companies
Secretary, General it sponsors.
Counsel
--------------------------------------------------------------------------------
12
<PAGE>
NAME (AGE)
BUSINESS ADDRESS OFFICER
POSITION WITH TRUST PRINCIPAL OCCUPATION SINCE
------------------------- ------------------------------------------ -------
David J. Clark (39) Chief Financial Officer, Chief Operating 1998
7900 Callaghan Road Officer of the Adviser. Chief Financial
San Antonio, Texas 78229 Officer of U.S. Global Brokerage, Inc.,
the principal underwriter. Since May 1997,
Treasurer Mr. Clark has served and continues to
serve in various positions with the
Adviser and the investment companies it
sponsors. Foreign Service Officer with
U.S. Agency for International Development
in the U.S. Embassy, Bonn, West Germany,
from May 1992 to May 1997. Audit
Supervisor for University of Texas Health
Science Center from April 1991 to April
1992. Auditor-in-Charge for Texaco, Inc.
from August 1987 to June 1990.
--------------------------------------------------------------------------------
Elias Suarez (38) Vice President of the Adviser. Since March 1997
7900 Callaghan Road of 1992, Mr. Suarez served and continues
San Antonio, Texas 78229 to serve in various positions with the
Adviser and United Shareholder Services,
Vice President Inc.
--------------------------------------------------------------------------------
The following chart shows the number of shares of each fund owned beneficially
by each trustee as of June 19, 2000, as well as the number of shares owned
beneficially by the trustees and officers as a group. In each case, the amounts
shown are less than 1% of the outstanding shares.
<TABLE>
<CAPTION>
BONNEL GROWTH MEGATRENDS REGENT EASTERN
FUND FUND EUROPE FUND
------------- ---------- --------------
<S> <C> <C> <C>
J. Michael Belz 2,983.449 92.564 86.597
Frank E. Holmes -- -- --
Richard E. Hughs 2,293.552 1,548.476 1,684.840
Clark R. Mandigo 3,423.674 92.564 86.597
All Officers and Trustees 12,367.481 1,733.604 2,308.481
</TABLE>
13
<PAGE>
The Trust is aware of the entities shown in the chart below that owned of
record, or beneficially, more than 5% of the outstanding shares of the Trust on
June 19, 2000.
<TABLE>
<CAPTION>
REGENT EASTERN
BONNEL GROWTH FUND MEGATRENDS FUND EUROPEAN FUND
-------------------------- ------------------- -----------------------
SHARES/ TYPE OF SHARES/ TYPE OF SHARES/ TYPE OF
NAME/ADDRESS OF OWNER % OWNED OWNERSHIP % OWNED OWNERSHIP % OWNED OWNERSHIP
--------------------------------- ------------- ---------- ------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Charles Schwab & Co., Inc. 1,088,228.169 Beneficial n/a n/a 63,169.177/ Beneficial
101 Montgomery Street 14.15% 12.63%
San Francisco, CA 94104
National Financial Services Corp. 456,153.891 Beneficial n/a n/a n/a n/a
Church Street Station
P.O. Box 3908
New York, NY 10008-3908
Security Trust & Financial Co. 450,263.298 Beneficial n/a n/a n/a n/a
7900 Callaghan Road
San Antonio TX 78229
John A. Swanson n/a n/a n/a n/a 43,177.218/ Of Record
113 Waters Edge Lane 8.63%
Moneta, VA 24121
</TABLE>
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL ONE.
PROPOSAL TWO
(ALL FUNDS)
TO RATIFY THE SELECTION OF THE
INDEPENDENT AUDITORS
The Investment Company Act of 1940 requires every registered investment company
to be audited at least once a year by independent auditors selected by the board
of trustees, including a majority of the trustees who are not "interested
persons" (as defined in the Investment Company Act). The Investment Company Act
also requires that the selection be submitted for ratification by the
shareholders at their next meeting following the selection.
Ernst & Young has been the Trust's independent auditors since February 1999 when
Ernst & Young replaced PricewaterhouseCoopers (PWC) as independent auditors of
the Trust. At the meeting, shareholders of all the funds within the U.S. Global
Accolade Trust will be asked to ratify the selection of Ernst & Young as the
funds' independent auditors. The board of trustees chose Ernst & Young upon the
recommendation of the Audit Committee of the board following a selection process
during which the Audit Committee reviewed proposals and conducted interviews
with representatives from several large, national accounting firms with
significant investment company experience. The decision to change auditors did
not involve a disagreement between PWC and the Trust nor was there any
14
<PAGE>
disagreement since the Trust's commencement of operations and the decision was
not related to PWC's reports on the financial condition of the Trust. The board
selected Ernst & Young in February 1999 based on its expertise as an auditor of
investment companies, the quality of its audit services, its commitment of
experienced audit personnel to the funds, its tax and international experience
in the mutual fund area and its use and commitment of technology in performing
its audit functions. Representatives of Ernst & Young are not expected to be
present at the meeting, but have been given the opportunity to make a statement
if they so desire and will be available by telephone should any matter arise
during the meeting.
Ernst & Young has no direct or material indirect financial interest in the Trust
other than receipt of fees for services to the Trust.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL TWO.
PROPOSAL THREE
(ALL FUNDS)
TO AUTHORIZE THE TRUSTEES TO ADOPT AN
AMENDED AND RESTATED MASTER TRUST AGREEMENT
The board of trustees has approved and recommends that the shareholders of the
Trust authorize them to adopt an Amended and Restated Master Trust Agreement for
the Trust and the funds of the Trust. The Amended and Restated Master Trust
Agreement is substantially the same as the existing Master Trust Agreement
except that it (i) provides the trustees with the ability to terminate the Trust
or its Sub-Trusts or classes without shareholder approval, (ii) changes the
quorum requirements for shareholder meetings, (iii) reflects name changes of the
trustees and funds, and (iv) makes certain other changes to correct and clarify
typographical errors. The Amended and Restated Master Trust Agreement, with all
proposed changes, is included as Exhibit I to this proxy statement.
TERMINATION OF THE TRUST OR ITS SUB-TRUSTS OR CLASSES. The current Master Trust
Agreement requires shareholder approval in order to terminate the Trust or any
of its Sub-Trusts. The Amended and Restated Master Trust Agreement generally
permits the trustees, subject to applicable federal and state law, to terminate
all or a portion of the Trust or any of its Sub-Trusts or classes without
shareholder approval.
Under certain circumstances, it may not be in the shareholders' interest to
require a shareholder meeting to permit the trustees to terminate a fund or
class. The Amended and Restated Master Trust Agreement broadens the trustees'
authority to terminate a fund to include any fund in the Trust in
15
<PAGE>
any circumstance. For example, a fund may have insufficient assets to invest
effectively or excessively high expense levels due to operational needs. Under
such circumstances, absent viable alternatives, the trustees may determine that
terminating the fund is in the shareholders' interest and the only appropriate
course of action. The process of obtaining shareholder approval of the fund's
termination may, however, make it more difficult to complete the fund's
liquidation and termination and, in general, will increase the costs associated
with the termination. In such a case, it is in the shareholders' interest to
permit fund termination without incurring the costs and delays of a shareholder
meeting. Any exercise of the trustees' increased authority under the Amended and
Restated Master Trust Agreement is also subject to any applicable requirements
of the 1940 Act and Massachusetts law.
QUORUM AND REQUIRED VOTE. The current Master Trust Agreement states that a
quorum for the transaction of business at a shareholders' meeting is a majority
of the shares entitled to vote. The Amended and Restated Master Trust Agreement
reduces this requirement by permitting 30 percent of the shares entitled to vote
to constitute a quorum. By lowering the quorum requirement, it will be easier to
achieve a quorum and will be less costly to solicit votes. In addition, lowering
the quorum is consistent with industry practice as a business trust.
The proposal to lower the quorum will only affect matters that may be approved
with no more than a quorum of shares being present at a meeting, such as the
election of trustees and the ratification of the selection of auditors.
Substantially all other matters require a higher vote under the terms of the
Amended and Restated Master Trust Agreement or the Investment Company Act of
1940. For such matters, the change in the quorum requirement will have no
effect.
Adoption of the Amended and Restated Master Trust Agreement will not change the
funds' trustees or officers or the investment policies described in the funds'
current prospectuses.
OTHER MATTERS. The Amended and Restated Master Trust Agreement includes other
nonmaterial changes. All changes are identified in Exhibit I.
BOARD CONCLUSION. The board of trustees has concluded that the proposed adoption
of the Amended and Restated Master Trust Agreement is in the best interests of
the Trust's shareholders.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL THREE.
16
<PAGE>
PROPOSAL FOUR
TO RECLASSIFY OR AMEND CERTAIN
FUNDAMENTAL INVESTMENT RESTRICTIONS
The board of trustees has proposed that shareholders approve the
reclassification or amendment of certain fundamental investment restrictions of
each of the U.S. Global Accolade Funds. The proposed changes to the investment
restrictions of each fund are based on recommendations prepared by the funds'
adviser, U.S. Global Investors, Inc., and each fund's sub-adviser (Sub-Adviser),
which were reviewed and approved by the board at a meeting held on May 25, 2000.
The board is recommending that shareholders approve the proposals.
Under the Investment Company Act of 1940, as amended, all investment policies of
a mutual fund must be classified as either "fundamental" or "nonfundamental." A
fundamental policy may not be changed without the approval of the fund's
shareholders; a nonfundamental policy may be changed by the board without
shareholder approval. Under the 1940 Act only certain policies are required to
be classified as fundamental.
In the past, U.S. Global Accolade Funds has adopted certain fundamental
investment restrictions for each fund to reflect regulatory, business or
industry conditions, which in many cases are no longer in effect. The board has
recently reviewed each fund's fundamental investment restrictions and determined
that it would be in the best interests of each fund to eliminate or reclassify
as nonfundamental certain investment restrictions that are not required to be
fundamental under applicable law, and to clarify and to modernize certain
restrictions required to be fundamental. The board also analyzed the various
fundamental and nonfundamental investment restrictions of all of the mutual
funds advised by the Adviser, and where practical and appropriate to a fund's
investment objective, proposed to standardize investment restrictions. The
proposed investment restrictions set forth below are expected to become standard
for each of the funds in the U.S. Global Accolade Trust.
The board believes that the ability of the Adviser to manage the funds'
portfolios in a changing regulatory or investment environment will be enhanced
by approval of these proposals. In addition, the board believes that approval of
these proposals will reduce the need for future shareholder meetings, thereby
reducing the funds' ongoing costs of operation. Furthermore, it is anticipated
that increased standardization will help to promote operational efficiencies and
facilitate monitoring of compliance with fundamental and nonfundamental
investment restrictions.
17
<PAGE>
At the meeting, shareholders of each fund will vote on each proposal separately.
Each change to a fund's fundamental investment restriction will become effective
as soon as practicable following approval by shareholders but in no event prior
to September 1, 2000.
Although the proposed changes to each fund's investment restrictions generally
give broader authority to make certain investments or engage in certain
practices than do the current investment restriction of the funds, the Adviser
and Sub-Adviser do not currently intend to change in any material way the
principal investment strategies or operations of any fund.
PROPOSAL 4A
(ALL FUNDS)
TO AMEND THE INVESTMENT RESTRICTION
CONCERNING THE ISSUANCE OF SENIOR SECURITIES
The Bonnel Growth Fund and the Regent Eastern European Fund currently have a
fundamental investment restriction regarding senior securities that states:
"The fund may not issue senior securities."
The MegaTrends Fund currently has a fundamental investment restriction regarding
senior securities that states:
"The fund may not issue senior securities as defined in the Investment
Company Act of 1940, as amended, or mortgage, pledge, hypothecate or in
any way transfer as security for indebtedness any securities owed or held
by the fund except as may be necessary in connection with borrowings
described in (8) above, and then not exceeding 10% of the fund's total
assets, taken at the lesser of cost or market value."
It is proposed that shareholders approve replacing the funds' current investment
restriction with the following fundamental investment restriction governing the
issuance of senior securities:
"A fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940, as amended, and as interpreted or modified
by regulatory authority having jurisdiction from time to time."
The proposed fundamental investment restriction clarifies that the funds may
issue senior securities to the full extent permitted under the 1940 Act.
Although the definition of a "senior security" involves complex statutory and
regulatory concepts, a senior security is generally thought of as an obligation
of a fund that has a claim to the fund's assets or earnings that takes
precedence over the claims of the fund's shareholders. The 1940 Act
18
<PAGE>
generally prohibits mutual funds from issuing any such security; however, mutual
funds are permitted to engage in certain types of transactions that might be
considered "senior securities" as long as certain conditions are met. For
example, a transaction that obligates a fund to pay money at a future date
(e.g., the purchase of securities to be settled on a date that is farther away
than the normal settlement period) may be considered a "senior security." A
mutual fund is permitted to enter into this type of transaction if it maintains
a segregated account containing liquid securities in an amount equal to its
obligation to pay cash for the securities at a future date. Funds would utilize
transactions that may be considered "senior securities" only in accordance with
applicable regulatory requirements under the 1940 Act.
Adoption of the proposed fundamental investment restriction is not expected to
materially affect the operation of the funds. However, adoption of the proposal
will facilitate the Adviser's compliance efforts and will allow the funds to
respond to developments in the mutual fund industry and the law that may make
the use of permissible senior securities advantageous.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4A.
PROPOSAL 4B
(ALL FUNDS)
TO ELIMINATE THE INVESTMENT RESTRICTION
CONCERNING DIVERSIFICATION OF INVESTMENTS
The Bonnel Growth Fund and the Regent Eastern European Fund currently have a
fundamental investment restriction regarding diversification of investments that
states:
"With respect to 75% of its total assets the fund will not: (a) invest
more than 5% of the value of its total assets in securities of any one
issuer, except such limitation shall not apply to obligations issued or
guaranteed by the United States Government, its agencies or
instrumentalities, or (b) acquire more than 10% of the voting securities
of any one issuer."
The MegaTrends Fund currently has a fundamental investment restriction regarding
diversification of investments that states:
"The fund may not invest in securities of any one issuer if immediately
after and as a result of such investment more than 5% of the total assets
of the fund, at market value, would be invested in the securities
19
<PAGE>
of such issuer. This restriction does not apply to investments in
securities of the United States Government, its agencies or
instrumentalities."
The funds have elected to be "diversified open-end management investment
companies" under the 1940 Act, which requires the limitations contained in the
current fundamental investment restriction to apply to 75% of the total assets
of the funds. The current policy of the MegaTrends Fund is more restrictive,
applying the limitations on ownership to 100% of its portfolio. The primary
purpose of the proposed change with respect to MegaTrends Fund applying the
restrictive standard is to allow the fund to invest in accordance with the
limits contained in the 1940 Act for diversified companies.
This would allow the MegaTrends Fund the flexibility to purchase larger amounts
of issuers' securities when the Adviser or Sub-Adviser deems an opportunity
attractive. The new policy would allow the investment policies of the funds to
conform with the definition of "diversified" as it appears in the 1940 Act.
Please note that the funds cannot change their election to be a diversified
company without a further shareholder vote.
With respect to the Bonnel Growth Fund and the Regent Eastern European Fund
currently applying the 1940 Act standard, the elimination of the fundamental
policy will allow the funds to respond more quickly to changes of that standard,
as well as to other legal, regulatory, and market developments without delay or
expense of a shareholder vote. The adoption of this change is not expected
materially to affect the operations of the funds.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4B.
PROPOSAL 4C
(ALL FUNDS)
TO AMEND AND RECLASSIFY THE INVESTMENT
RESTRICTIONS CONCERNING MARGIN PURCHASES
AND SHORT SALES OF SECURITIES
The Bonnel Growth Fund currently has fundamental investment restrictions
regarding margin purchases and short sales that state:
"The fund may not purchase any security on margin, except that it may
obtain such short-term credits as are necessary for clearance of
securities transactions."
"The fund may not make short sales."
20
<PAGE>
The Regent Eastern European Fund currently has a fundamental investment
restrictions regarding margin purchases and short sales that states:
"The fund may not purchase any security on margin, except that it may
obtain such short-term credits as are necessary for clearance of
securities transactions."
"The fund may not sell short more than 5% of its total assets."
The MegaTrends Fund currently has a fundamental investment restriction regarding
margin purchases and short sales that states:
"The fund may not purchase securities on margin, make short sales of
securities or maintain a short position, except that the fund may obtain
such short-term credit as may be necessary for the clearance of purchases
and sales of portfolio securities. This restriction does not apply to
short sales `against the box' (i.e., when the fund owns or is long on the
securities sold short)."
If the proposal is approved, the current fundamental investment restriction will
be replaced with a nonfundamental investment restriction that could be changed
without a shareholder vote. The proposed nonfundamental limitation is as
follows:
"A fund may not purchase securities on margin or make short sales, except
(i) short sales against the box, (ii) the fund may obtain such short-term
credits as are necessary for the clearance of transactions, and (iii)
provided that margin payments in connection with futures contracts and
options on futures contracts shall not constitute purchasing securities on
margin or selling securities short."
Margin purchases involve the purchase of securities with money borrowed from a
broker. "Margin" is the cash or eligible securities that the borrower places
with a broker as collateral against the loan. The current fundamental investment
restriction prohibits a fund from purchasing securities on margin, except to
obtain such short-term credits as may be necessary for the clearance of
transactions. Mutual funds are generally prohibited from entering into most
types of margin purchases. However, policies of the SEC allow mutual funds to
make initial and variation margin payments in connection with the purchase and
sale of futures contracts and options on futures contracts. The proposed
nonfundamental investment restriction would parallel the SEC's policies.
In a short sale, an investor sells a borrowed security and has a corresponding
obligation to the lender to return the identical security. In an investment
technique known as a short sale "against the box," an investor sells short while
owning the same securities in the same amount, or having the
21
<PAGE>
right to obtain equivalent securities. The investor could have the right to
obtain equivalent securities, for example, through its ownership of warrants,
options, or convertible bonds.
The Adviser and Sub-Adviser recognize that short sales may not be appropriate
for all of the funds. If the proposal is approved, the Adviser, Sub-Adviser and
the board will determine the appropriateness of short sales on a fund-by-fund
basis. Appropriate disclosure of this practice will also be included in such
fund's prospectus and/or statement of additional information.
Although reclassification of the funds' fundamental investment restriction on
margin purchases and short sales to nonfundamental is unlikely to materially
affect any fund's investment techniques at this time, in the event of a change
in federal regulatory requirements, the funds will be able to alter their
investment practices without the delay and expense of a shareholder vote.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4C.
PROPOSAL 4D
(ALL FUNDS)
TO AMEND THE INVESTMENT RESTRICTION
CONCERNING BORROWING
The Bonnel Growth Fund and the Regent Eastern European Fund currently have a
fundamental investment restriction regarding borrowing that states:
"The fund may not borrow money, except that the fund may borrow not in
excess of 5% of its total assets from banks as a temporary measure for
extraordinary purposes, may borrow up to 33 1/3% of the amount of its
total assets (reduced by the amount of all liabilities and indebtedness
other than such borrowing) when deemed desirable or appropriate to effect
redemptions, provided, however, that the fund will not purchase additional
securities while borrowings exceed 5% of the total assets of the fund."
The MegaTrends Fund's current fundamental investment restriction regarding
borrowing states the following:
"The fund may not borrow money, except for (i) temporary bank borrowings
not in excess of 5% of the value of the fund's total assets for emergency
or extraordinary purposes, or (ii) short- term credits not
22
<PAGE>
in excess of 5% of the value of the fund's total assets as may be
necessary for the clearance of securities transactions."
It is proposed that shareholders approve replacing the funds' current
fundamental investment restriction with the following:
"A fund may not borrow money, except as permitted under the 1940 Act, as
amended, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time."
If approved, the funds would adopt the following nonfundamental investment
restriction:
"A fund may not borrow money, except that a fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of a fund's total assets (including the
amount borrowed) less liabilities (other than borrowings)."
The primary purpose of the proposed change to the fundamental investment
restriction concerning borrowing is to permit all the funds to borrow in a
manner to the full extent permitted by the applicable law for temporary or
emergency purposes. The 1940 Act requires borrowings to have 300% asset
coverage, which means, in effect, that a fund would be permitted to borrow up to
an amount equal to 50% of its total assets under the proposed borrowing policy.
Additionally, under the proposed policy, each fund would not be limited to
borrowing for temporary or emergency purposes, could borrow for leverage, and
could purchase securities for investment while borrowings are outstanding.
However, the boards have no current intention of authorizing any of these
practices. If a board authorized a fund to borrow for leverage, such borrowings
would increase the fund's volatility and the risk of loss in a declining market.
The proposed amendment is consistent with current limitations imposed under the
1940 Act.
The proposed nonfundamental investment restriction is also consistent with
current policies that would not permit a fund to borrow for the purpose of
leveraging its portfolio. With this proposal, the operational policy that the
funds cannot purchase any security while borrowings represent more than 5% of
their total assets outstanding will become a nonfundamental investment
restriction. The board believes that these changes will provide the Adviser or
Sub-Adviser with greater flexibility in managing the liquidity needs of a fund
by allowing the fund to use borrowings to satisfy redemptions or settle
securities transactions.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4D.
23
<PAGE>
PROPOSAL 4E
(ALL FUNDS)
TO AMEND THE INVESTMENT RESTRICTION
CONCERNING INVESTMENTS IN REAL ESTATE
The Bonnel Growth Fund and the Regent Eastern European Fund currently have a
fundamental investment restriction regarding real estate that states:
"The fund may not invest in real estate."
The MegaTrends Fund currently has a fundamental investment restriction regarding
real estate that states:
"The fund may not purchase or sell commodities in real estate. However,
the fund may invest in publicly traded securities secured by real estate
or issued by companies that invest in real estate or real estate
interests."
Shareholders are being asked to approve the amendment of the above investment
restriction. As proposed, the funds' current fundamental investment restriction
will be replaced by the following fundamental investment restriction that will
govern future purchases and sales of real estate:
"The fund may not purchase or sell real estate, which term does not
include securities of companies which deal in real estate and/or mortgages
or investments secured by real estate, or interests therein, except that
the fund reserves freedom of action to hold and to sell real estate
acquired as a result of the fund's ownership of securities."
The primary purpose of the proposed amendment is to clarify the types of
securities in which the fund is not authorized to purchase. If the proposal is
approved, the new fundamental real estate restriction may not be changed without
a shareholder vote.
The proposed limitation would make it explicit that each of the funds may
acquire a security or other instrument whose payments of interest and principal
may be secured by a mortgage or other right to foreclose on real estate, in the
event of default. Any investments in these securities are, of course, subject to
the fund's investment objective and policies and to other limitations regarding
diversification and concentration. The proposed limitation also specifically
permits the fund to sell real estate acquired as a result of ownership of
securities or other instruments. However, in light of the types of securities in
which the funds regularly invest, the Adviser and Sub-Adviser consider this to
be a remote possibility.
24
<PAGE>
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4E.
PROPOSAL 4F
(ALL FUNDS)
TO AMEND THE INVESTMENT RESTRICTION
CONCERNING CONCENTRATION OF INVESTMENTS
IN A PARTICULAR INDUSTRY
The Bonnel Growth Fund currently has a fundamental investment restriction
regarding concentration of investments in a particular industry that states:
"The fund may not invest more than 25% of its total assets in securities
of companies principally engaged in any one industry. For the purposes of
determining industry concentration, the fund relies on the Standard
Industrial Classification as compiled by Standard & Poor's Compustat
Services, Inc. as in effect from time to time."
The Regent Eastern European Fund currently has a fundamental investment
restriction regarding concentration of investments in a particular industry that
states:
"The fund may not invest more than 25% of its total assets in securities
of companies principally engaged in any one industry. For the purposes of
determining industry concentration, the fund relies on the Standard
Industrial Classification as compiled by Bloomberg as in effect from time
to time."
The MegaTrends Fund currently has a fundamental investment restriction regarding
concentration of investments in a particular industry that states:
"The fund may not invest more than 25% of its total assets in securities
of issuers in any particular industry. This restriction does not apply to
investments in securities of the United States Government, its agencies or
instrumentalities."
Shareholders are being asked to approve the amendment of the above investment
restriction. As proposed, the funds' current fundamental investment restriction
will be replaced by the following fundamental investment restriction that will
govern concentration of investments:
"The fund may not concentrate its investments in a particular industry
(other than securities issued or guaranteed by the U.S. Government or any
of its agencies or instrumentalities), as that term is used in the 1940
Act, as amended, and as interpreted or modified by regulatory authority
having jurisdiction, from time to time."
25
<PAGE>
The primary purpose of the proposed amendment is to adopt a concentration
limitation that is expected to become the standard for all funds managed by the
Adviser. While the 1940 Act does not define what constitutes "concentration" in
an industry, the staff of the Commission takes the position that investment of
more than 25% of a fund's assets in an industry constitutes concentration. If a
fund concentrates in an industry, it must at all times have more than 25% of its
assets invested in that industry, and if its policy is not to concentrate, as is
the case with each of the funds, it may not invest more than 25% of its assets
in the applicable industry, unless, in either case, the fund discloses the
specific conditions under which it will change from concentrating to not
concentrating or vice versa. If the proposal is approved, the new fundamental
investment restriction may not be changed without a shareholder vote.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4F.
PROPOSAL 4G
(ALL FUNDS)
TO AMEND THE INVESTMENT RESTRICTION
CONCERNING UNDERWRITING
The Bonnel Growth Fund and the Regent Eastern European Fund's current
fundamental investment restriction concerning underwriting states the following:
"The fund may not underwrite the securities of other issuers."
The MegaTrends Fund's current fundamental investment restriction concerning
underwriting states the following:
"The fund may not underwrite securities of other issuers except to the
extent the fund may be deemed an underwriter under the Securities Act of
1933, as amended, in selling portfolio securities."
It is proposed that shareholders approve replacing the current limitation with
the following fundamental investment restriction concerning underwriting:
"The fund may not engage in the business of underwriting securities,
except to the extent that the fund may be deemed to be an underwriter in
connection with the disposition of portfolio securities."
The primary purpose of the proposed amendment is to clarify that the funds are
not prohibited from selling restricted securities if, as a result of the sale,
the funds would be considered underwriters under federal securities law. While
the proposed change will have no current impact on the
26
<PAGE>
funds, adoption of the proposal will standardize the investment restriction for
all funds of U.S. Global Accolade Funds.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4G.
PROPOSAL 4H
(ALL FUNDS)
TO AMEND THE INVESTMENT RESTRICTION
CONCERNING THE LENDING OF ASSETS
The Bonnel Growth Fund and the Regent Eastern European Fund's current
fundamental investment restriction concerning lending assets states the
following:
"The fund may not lend its assets, except that the fund may purchase money
market debt obligations and repurchase agreements secured by money market
obligation, and except for the purchase or acquisition of bonds,
debentures or other debt securities of a type customarily purchased by
institutional investors and except that the fund may lend portfolio
securities with an aggregate market value of not more than one-third of
the fund's total net assets. (Accounts receivable shares purchased by
telephone will not be deemed loans.)"
The MegaTrends Fund's current fundamental investment restriction states the
following:
"The fund may not lend money, except in repurchase agreements or by
purchasing publicly distributed or privately placed debt obligations in
which the fund may invest consistent with its investment objectives and
policies. The fund may make loans of its portfolio securities in an
aggregate amount not exceeding 25% of its total assets, provided that such
loans are collateralized by cash or cash equivalents or U.S. Government
obligations in an amount equal to the market value of the securities
loaned, marked to market on a daily basis."
It is proposed that shareholders of each fund replace the fund's current
fundamental investment restriction with the following:
"The fund may not make loans except as permitted under the 1940 Act, as
amended, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time."
While the proposed amendments to the funds' investment restrictions concerning
loans will not materially affect the operations of the funds, they would
standardize these investment restrictions for all funds and permit the funds to
lend securities in a manner to the full extent permitted by the
27
<PAGE>
applicable law. The proposed change would also permit each fund, subject to the
receipt of any necessary, regulatory approval and board authorization, to enter
into lending arrangements under which the funds advised by U.S. Global
Investors, Inc. could for temporary purposes lend money directly to and borrow
money directly from each other through a credit facility. Each fund believes
that the flexibility provided by this policy change could possibly reduce the
fund's borrowing costs and enhance its ability to earn higher rates of interests
on short-term lendings in the event that the board determines that such
arrangements are warranted in light of the fund's particular circumstances.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4H.
PROPOSAL 4I
(ALL FUNDS)
TO ELIMINATE THE INVESTMENT RESTRICTION
CONCERNING INVESTMENT IN
OTHER INVESTMENT COMPANIES
The Bonnel Growth Fund's current fundamental investment restriction concerning
investment in other investment companies states the following:
"The fund may not invest more than 10% of its total net assets in open-end
investment companies. To the extent that the fund will invest in open-end
investment companies, the fund's Adviser and Sub-Adviser will waive a
proportional amount of their management fee."
The MegaTrends Fund's current fundamental investment restriction concerning
investment in other investment companies states the following:
"The fund may not purchase securities of other investment companies,
except in connection with a merger, consolidation, acquisition or
reorganization."
The Regent Eastern European Fund's current fundamental investment restriction
concerning investment in other investment companies states the following:
"The fund may not invest more than 10% of its total net assets in
investment companies. To the extent that the fund shall invest in open-end
investment companies, the fund's Adviser and Sub-Adviser shall waive a
proportional amount of their management fee."
It is proposed that shareholders of the funds approve the elimination of the
above fundamental investment restriction. The 1940 Act allows a mutual fund to
invest up to 10% of its assets in securities of other investment
28
<PAGE>
companies. The board believes that the proposed change will benefit the funds by
allowing the Adviser greater investment flexibility. This restriction will
remain applicable to the funds whether or not they are recited as a fundamental
investment restriction. As a result, elimination of the above fundamental
limitation is not expected to have any material impact on the funds' investment
practices, except to the extent that regulatory requirements may change in the
future. To the extent the funds invest in other investment companies, the
elimination of this restriction will benefit the funds' Adviser and Sub-Adviser
by the amount of their fees that they would otherwise have to waive.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4I.
PROPOSAL 4J
(BONNEL GROWTH FUND AND MEGATRENDS FUND)
TO RECLASSIFY THE INVESTMENT RESTRICTION
CONCERNING INVESTMENTS IN ILLIQUID SECURITIES
The Bonnel Growth Fund currently has a fundamental investment restriction
concerning illiquid securities that states:
"A fund may not invest more than 15% of its total net assets in illiquid
securities, including securities that are subject to legal or contractual
restrictions on resale."
The MegaTrends Fund currently has a fundamental investment restriction
concerning illiquid securities that states:
"The fund may not invest more than 10% of its total assets in securities
that are illiquid."
It is proposed that shareholders approve the elimination of this fundamental
investment restriction. If approved, the fund would adopt the following
nonfundamental investment restriction:
"The fund may not invest more than 15% of its net assets in securities
that are illiquid."
Under the rules established by the Securities and Exchange Commission (SEC),
mutual funds are required to price their shares daily and to offer daily
redemptions with payment to follow within seven days of the redemption request.
In order to ensure that funds can satisfy these requirements, the SEC requires
mutual funds to limit their holdings in illiquid securities to 15% of their net
assets. This is because illiquid securities may be difficult to value daily and
difficult to sell promptly at an acceptable price.
29
<PAGE>
The percentage limitation restricting the amount a mutual fund may invest in
illiquid securities has been changed by the SEC over time. For example, prior to
1993, the percentage limit on a fund's investment in illiquid securities was
10%.
In order to be able to respond to regulatory and market developments without the
delay and expense of a shareholder vote, we are asking that shareholders
eliminate this fundamental investment restriction and replace it with a similar
nonfundamental investment restriction. While nonfundamental investment
restrictions can be changed without shareholder approval, such changes still
require the approval of the board.
If this proposal is approved by shareholders, the specific types of securities
that may be deemed illiquid will be determined by the Adviser and Sub-Adviser,
utilizing the current guidelines.
The proposed change will materially impact the operation of the fund. However,
adoption of a standardized nonfundamental investment restriction concerning
underwriting will facilitate the Adviser and Sub-Adviser's investment compliance
efforts and will enable the funds to respond more promptly if circumstances
suggest such a change in the future.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4J.
PROPOSAL 4K
(BONNEL GROWTH FUND AND
REGENT EASTERN EUROPEAN FUND)
TO AMEND THE INVESTMENT RESTRICTION
CONCERNING PURCHASE OR SALE OF COMMODITIES
OR COMMODITY FUTURES CONTRACTS
The Bonnel Growth Fund's current fundamental investment restriction concerning
purchases or sales of commodities states the following:
"The fund may not engage in the purchase or sale of commodities or
commodity futures, except that the fund may invest in futures contracts
and options thereon on equity securities indexes in conformance with rules
and regulations issued by the Securities and Exchange Commission."
30
<PAGE>
The Regent Eastern European Fund's current fundamental investment restriction
concerning purchases or sales of commodities states the following:
"The fund may not engage in the purchase or sale of commodities or
commodity futures, except that the fund may invest in futures contracts,
forward contracts, options, and other derivative investments in
conformance with policies disclosed in the fund's then current Prospectus
and/or Statement of Additional Information."
It is proposed that the above fundamental investment restriction be replaced
with the following fundamental investment restriction:
"The fund may not purchase physical commodities or contracts relating to
physical commodities."
The primary purpose of the proposed amendment is to clarify the types of
commodities the funds may not purchase. The funds' current policies prohibit the
purchase or sale of commodities or commodity contracts. These policies contain
exceptions for financial futures contracts and options on such contracts. Under
the proposed policy, each fund would be prohibited from purchasing only physical
commodities or contracts relating to physical commodities. While the proposed
change will have no current impact on the funds, the adoption of the proposal
will standardize and clarify the investment restriction concerning commodities
for the funds.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4K.
PROPOSAL 4L
(MEGATRENDS FUND)
TO ELIMINATE THE INVESTMENT RESTRICTION
CONCERNING INVESTMENTS IN OIL,
GAS OR OTHER MINERAL LEASES
The fund currently has a fundamental investment restriction concerning
investments in oil, gas or other mineral leases that states:
"The fund may not invest in oil, gas or other mineral leases."
It is proposed that shareholders approve the elimination of the above
fundamental investment restriction.
This investment restriction was originally adopted in response to state "Blue
Sky" requirements. These requirements are no longer applicable to the funds and
the 1940 Act does not contain a similar restriction. The
31
<PAGE>
Adviser, Sub-Adviser and the board do not believe that a blanket prohibition
against these types of investments is in the best interests of the fund.
The proposed elimination of the investment restriction will not materially
affect the operations of the fund. This would allow the fund greater investment
flexibility and would allow the fund to respond more quickly to market
developments without the delay or expense of a shareholder vote.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4L.
PROPOSAL 4M
(MEGATRENDS FUND)
TO ELIMINATE THE INVESTMENT RESTRICTION
CONCERNING INVESTMENTS IN WARRANTS
The fund currently has the following fundamental investment restriction
regarding investing in warrants:
"The fund may not invest more than 5% of its net assets in warrants and
will not invest more than 2% of its net assets in warrants which are not
listed on the New York, Nasdaq, or American Stock exchanges. This
restriction does not apply to investment in warrants acquired in units or
attached to securities."
It is proposed that shareholders approve the elimination of the above
fundamental investment restriction. This investment restriction was originally
adopted in response to state "Blue Sky" requirements. These requirements are no
longer applicable to the funds and the 1940 Act does not contain a similar
restriction. The Adviser, Sub-Adviser and the board do not believe that a
blanket prohibition against these types of investments is in the best interests
of the fund.
The proposed elimination of the investment restriction will not materially
affect the operations of the fund. This would allow the fund greater investment
flexibility and would allow the fund to respond more quickly to market
developments without the delay or expense of a shareholder vote.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4M.
32
<PAGE>
PROPOSAL 4N
(MEGATRENDS FUND)
TO ELIMINATE THE INVESTMENT RESTRICTION
CONCERNING INVESTMENT RESTRICTIONS IN ANY ONE ISSUER
The MegaTrends Fund's current fundamental investment restriction states the
following:
"The fund may not purchase more than 10% of the outstanding voting
securities, or any class of securities, of any one issuer. This
restriction does not apply to investments in securities of the United
States Government, its agencies or instrumentalities."
The fund has elected to be a "diversified open-end management investment
company" under the 1940 Act, which requires the limitations contained in the
current fundamental investment restriction to apply to 75% of the total assets
of the fund. The current policy of the MegaTrends Fund is more restrictive,
applying the limitations on ownership to 100% of its portfolio. The primary
purpose of the proposed change with respect to the MegaTrends Fund applying the
restrictive standard is to allow the fund to invest in accordance with the
limits contained in the 1940 Act for diversified companies.
This would allow the MegaTrends Fund the flexibility to purchase larger amounts
of issuers' securities when the Adviser or Sub-Adviser deems an opportunity
attractive. The new policy would allow the investment policies of the funds to
conform with the definition of "diversified" as it appears in the 1940 Act.
Please note that the fund cannot change its election to be a diversified company
without a further shareholder vote.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4N.
OTHER MATTERS
No business other than the matters set forth in this proxy statement is expected
to come before the Meeting, but should any other matters requiring a vote of
shareholders arise, including a question of adjourning the Meeting, the persons
named in the accompanying proxy will vote thereon according to their best
judgment in the interests of the funds.
33
<PAGE>
THE FUNDS' ANNUAL AND SEMI-ANNUAL REPORT IS AVAILABLE AT NO CHARGE. YOU MAY
REQUEST ONE --
* BY PHONE 1-800-US-FUNDS
* BY MAIL Shareholder Services
U.S. Global Investors Funds
P.O. Box 781234
San Antonio, TX 78278-1234
ACTIVITIES AND MANAGEMENT OF U.S. GLOBAL INVESTORS, INC.
ADVISER. U.S. Global Investors, Inc. is a Texas corporation with its principal
executive offices located at 7900 Callaghan Road, San Antonio, Texas 78229. U.S.
Global Investors, Inc. is the Investment Adviser to the funds.
SUB-ADVISERS. Bonnel, Inc., P.O. Box 649, Reno, Nevada 89504, serves as
Sub-Adviser for the Bonnel Growth Fund.
Money Growth Institute, Inc., 500 5th Avenue, Suite 3120, New York, New York
10110, serves as the Sub-Adviser for the MegaTrends Fund.
Regent Fund Management Limited, Regent House, 1618 Ridge Way Street, Douglas,
Isle of Man IMIIEN, serves as Sub-Adviser for the Regent Eastern European Fund.
PRINCIPAL UNDERWRITER. U.S. Global Brokerage, Inc. (U.S. Global Brokerage), a
wholly owned subsidiary of U.S. Global Investors, Inc., is a Texas corporation
with its principal executive offices at 7900 Callaghan Road, San Antonio, Texas,
78229. U.S. Global Brokerage is the principal underwriter and distributor of the
U.S. Global Accolade Funds.
SUBMISSION OF SHAREHOLDER PROPOSALS
Since the funds do not hold annual shareholders meetings, the anticipated date
of the next special shareholders meeting (if any) cannot be provided.
The foregoing notice and proxy statement are sent by order of the board of
trustees.
Susan B. McGee
Secretary of the Trust
Dated: June 26, 2000
34
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT I
FORM OF AMENDED AND RESTATED MASTER TRUST AGREEMENT
Deletions are shown with the following attributes: [DELETION]. Deleted text is
shown as full text.
Insertions are shown with the following attributes: \INSERTION\
\U.S. GLOBAL\ ACCOLADE FUNDS
[FIRST] \SECOND\ AMENDED AND RESTATED
MASTER TRUST AGREEMENT
[MAY 22, 1996] \_____, 2000\
<PAGE>
\U.S. GLOBAL\ ACCOLADE FUNDS
[FIRST] \SECOND\ AMENDED AND RESTATED
MASTER TRUST AGREEMENT
PAGE
DECLARATIONS................................................1
ARTICLE I[.] NAME AND DEFINITIONS
Section 1.1 Name and Principal Office...................................1
Section 1.2 Definitions.................................................1
(a) "By-Laws"...............................................1
(b) "1940 Act"..............................................1
(c) "Commission"............................................1
(d) "Series"................................................1
(e) "Shareholder"...........................................1
(f) "Shares"................................................1
(g) "Trust".................................................1
(h) "Agreement".............................................1
(i) "Trustees"..............................................2
(j) "Class".................................................2
ARTICLE II[.] PURPOSE OF TRUST
ARTICLE III[.] THE TRUSTEES
Section 3.1 Appointment, Election, Removal, etc.........................2
(a) Trustees................................................2
(b) Number..................................................2
(c) Election ...............................................2
(d) Term....................................................2
(e) Vacancies...............................................2
(f) Resignation.............................................2
(g) Removal.................................................2
(h) Effect of Death, Resignation, etc.......................3
(i) No Accounting...........................................3
Section 3.2 Powers of Trustees..........................................3
(a) Investments.............................................3
(b) Disposition of Assets...................................3
(c) Ownership Powers........................................3
(d) Subscription............................................4
(e) Form of Holding.........................................4
(f) Reorganization, etc.....................................4
(g) Voting Trusts, etc......................................4
(h) Compromise..............................................4
(i) Associations, etc.......................................4
(j) Borrowing and Security..................................4
(k) Guarantees, etc.........................................4
(l) Insurance...............................................4
(m) Vote Required, Place and Type of Meeting ...............4
(n) Distribution Plans......................................4
<PAGE>
Section 3.3 Certain Contracts...........................................4
Section 3.4 Trust Expenses .............................................5
Section 3.5 Ownership of Assets of the Trust............................5
ARTICLE IV SHARES/SUB-TRUSTS
Section 4.1 Description of Shares.......................................5
Section 4.2 Establishment and Designation of Sub-Trust and Classes.....6
Section 4.3 Rights and Preferences of Sub-Trusts........................6
(a) Assets Belonging to Sub-Trusts..........................6
(b) Liabilities Belonging to Sub-Trusts.....................6
(c) Determination of Treatment as Income and/or Capital.....6
(d) Dividends...............................................6
(e) Liquidation.............................................7
(f) Voting..................................................7
(g) Redemption by Shareholder...............................7
(h) Redemption by Trust.....................................7
(i) Net Asset Value.........................................7
(j) Transfer................................................8
(k) Equality................................................8
(l) Fractions...............................................8
(m)Conversion Rights .......................................8
(n) Class Differences.......................................8
Section 4.4 Ownership of Shares.........................................8
Section 4.5 Investments in the Trust....................................8
Section 4.6 No Preemptive Rights........................................8
Section 4.7 Status of Shares and Limitation of Personal Liability.......8
ARTICLE V SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 Voting Powers...............................................9
Section 5.2 Meetings and Notice.........................................9
Section 5.3 Record Dates...............................................10
Section 5.4 Quorum and Required Vote...................................10
Section 5.5 Action by Written Consent..................................10
Section 5.6 Inspection of Records......................................10
Section 5.7 Additional Provisions......................................10
Section 5.8 Shareholder Communications.................................10
<PAGE>
ARTICLE VI LIMITATION OF LIABILITY -- INDEMNIFICATION
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable,
Notice ....................................................10
Section 6.2 Notice for Contracts.......................................11
Section 6.3 Trustee's Good Faith Action; Expert Advice; No Bond .......11
Section 6.4 Indemnification of Shareholders............................11
Section 6.5 Indemnification of Trustees, Officers, etc.................11
Section 6.6 Compromise Payment.........................................12
Section 6.7 Indemnification Not Exclusive, etc.........................12
Section 6.8 Liability of Third Persons Dealing with Trustees...........12
ARTICLE VII MISCELLANEOUS
Section 7.1 Duration and Termination of Trust..........................12
Section 7.2 Reorganization.............................................12
Section 7.3 Amendments ................................................13
Section 7.4 Filing of Copies; References; Headings.....................13
Section 7.5 Applicable Law.............................................13
Section 7.6 Resident Agent.............................................14
<PAGE>
\U.S. GLOBAL\ ACCOLADE FUNDS
[FIRST] \SECOND\ AMENDED AND RESTATED
MASTER TRUST AGREEMENT
This AGREEMENT AND DECLARATION OF TRUST (the "Agreement") made at San
Antonio, Texas, the 15th day of April, 1993, by the Trustees named under this
Agreement, and by the holders of shares of beneficial interest to be issued as
provided under this Agreement\,\ is hereby amended and restated in its entirety
this [22ND] \____\ day of [MAY] \___\, [1996] \2000\ in the City of San Antonio
in the State of Texas, as follows:
DECLARATIONS
WHEREAS\,\ this Trust has been created to conduct the business of an
investment company; [AND]
WHEREAS\,\ this Trust is authorized to issue, in accordance with the
provisions of this Agreement, its shares of beneficial interest in separate
series, with each separate series to be a Sub-Trust \AS\ described in this
Agreement; \AND\
WHEREAS\,\ the Trustees have agreed to manage the property received by them
as trustees of a Massachusetts business trust in accordance with the provisions
in this Agreement.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may acquire (from time to time) as
Trustees under this Agreement IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust or \IN \Sub-Trusts created
under this Agreement as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 NAME AND PRINCIPAL OFFICE. This Trust shall be known as \U.S.
GLOBAL\ Accolade Funds and the Trustees will conduct the business of the Trust
under that name or any other name or names as they may from time to time
determine. The principal place of business of the Trust shall be 7900 Callaghan
Road, San Antonio, Texas 78229 or at such other location as the Trustees may
from time to time determine.
Section 1.2 DEFINITIONS. Unless otherwise specifically stated, the following
terms shall mean:
(a) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time.
(b) The "1940 Act" refers to the Investment Company Act of 1940 and
regulations thereunder, all as amended from time to time;
(c) The term "Commission" shall have the meaning given it in the 1940 Act;
(d) "Series" refers to Series of Shares established and designated under or
in accordance with the provisions of Article IV, each of which Series shall be a
Sub-Trust of the Trust;
(e) "Shareholder" means a record owner of Shares;
(f) "Shares" refers to the transferable units of interest into which the
beneficial interest in the Trust and each Sub-Trust of the Trust (as the context
may require) shall be divided from time to time;
(g) The "Trust" refers to the \U.S. GLOBAL\ Accolade Funds business trust
established by this Agreement, as amended from time to time, inclusive of each
and every Sub-Trust established hereunder;
<PAGE>
(h) "Agreement" shall mean this Agreement and Declaration of Trust as
amended or restated from time to time; [AND]
(i) "Trustees" refers to the Trustees of the Trust named herein or elected
in accordance with Article III; and
(j) "Class" refers to any class of Shares of any Series or Sub-Trust
established and designated under or in accordance with the provisions of Article
IV.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to conduct the business of an investment
company, offering Shareholders of the Trust one or more investment programs; and
to engage in any business allowable under applicable law which the Trustees may
deem convenient or proper in furtherance of the Trust's business.
ARTICLE III
THE TRUSTEES
Section 3.1 APPOINTMENT, ELECTION, REMOVAL, ETC\.\[.]
(a) TRUSTEES. The Trustees hereof are Richard E. Hughs, 11 Dennin Drive,
Menands, New York 12204; Clark R. Mandigo, [317 Geneseo] \15050 JONES
MALTSBERGER\, San Antonio, Texas [78209] \78247\; \J. MICHAEL BELZ, 3122
GOLDSBORO, SAN ANTONIO, TEXAS 78230;\ and[,] Frank E. Holmes, 7900 Callaghan
Rd., San Antonio, Texas 78229.
(b) NUMBER. The Trustee(s) serving as such, whether named above or hereafter
appointed or elected, have the discretion to increase or decrease the number of
Trustees. No decrease in the number of Trustees may remove any Trustee from
office prior to the expiration of his term; however, a decrease in the number of
Trustees may coincide with the removal of a Trustee pursuant to subsection (g)
of this Section 3.1.
(c) ELECTION. The Shareholders shall elect the Trustees of the Trust.
Subject to Section 16(a) of the 1940 Act, the Trustees may elect their own
successors and may, pursuant to Section 3.1(e), appoint Trustees to fill
vacancies.
(d) TERM. Whether named above, appointed or elected pursuant to the terms of
this Agreement, a Trustee shall serve as trustee of the Trust and each Sub-Trust
hereunder for a period of six years or until termination of the Trust or the
Trustees' death, resignation or removal, whichever occurs first.[NOTWITHSTANDING
THE FOREGOING, THE TRUSTEES' TERMS SHALL BE STAGGERED SO THAT THE TERMS OF AT
LEAST 25% OF THE BOARD OF TRUSTEES WILL EXPIRE EVERY THREE YEARS.] This
provision shall not be construed to preclude re-election of a Trustee whose
terms is expiring.
(e) VACANCIES. Any vacancy resulting from death, resignation, removal or any
other means, including without limitation an increase in the number of trustees
by the other trustees, or any anticipated vacancy may (but need not unless
required by the 1940 Act) be filled by a majority of the remaining Trustees.
Subject to the provisions of Section 16(a) of the 1940 Act, the remaining
Trustees, in their sole discretion, may appoint in writing a Trustee to fill a
vacancy, and this appointment shall become effective upon the written acceptance
of such named person and his agreement to be bound by the provisions of this
Agreement. In the event of an appointment to fill an anticipated vacancy, the
appointment shall become effective at or after the date the anticipated vacancy
occurs. No further act is necessary for the Trust estate to vest in the new
Trustee once the appointment is effective.
<PAGE>
(f) RESIGNATION. A Trustee may resign as a trustee by delivering to the
Trustees or any Trust officer a signed written document to that effect. The
effective date of such resignation will be the later of \THE \date stated in the
document or[,] the date of delivery of the document to the Trust at its
principal offices.
(g) REMOVAL. Any Trustee may be removed with or without cause at any time
either: (i) by a written document stating the effective date of the removal and
signed by at least two-thirds of the number of Trustees prior to such removal;
or (ii) by at least a two-thirds vote of the outstanding shares, with such vote
cast in person or by proxy at a meeting called for such purpose; or (iii) by a
written declaration signed by Shareholders owning at least two-thirds of the
outstanding shares and filed with the Trust's custodian.
(h) EFFECT OF DEATH, RESIGNATION, ETC. The death, resignation, retirement,
removal, or incapacity of one or more of the Trustees shall not terminate the
Trust or any Sub-Trust or revoke or terminate any existing agency or contract
created or entered into pursuant to the terms of this Agreement.
(i) NO ACCOUNTING. No persons or estate of such person who has ceased acting
as Trustee shall be required to make an accounting to the Trustees or
Shareholders unless required by the 1940 Act or justified by circumstances
calling for removal for cause.
Section 3.2 POWERS. The Trustees may, in accordance with this Trust
Agreement, carry on the business of the Trust and shall have all the powers
necessary to conduct such business to carry out the purpose of the Trust. The
Trustees' powers include, but are not limited to:
adopting By-Laws consistent with the Trust Agreement which specify
procedures for conducting the daily business affairs of the Trust, including
the power to amend and repeal the By-Laws to the extent that the By-Laws do
not reserve that right to the Shareholders;
establish Sub-Trusts, each such Sub-Trust to operate as a separate and
distinct investment medium and with separately defined investment objectives
and policies;
establish, from time to time in accordance with the provisions of Section
4.1 hereof, classes of Shares of any Series or Sub-Trust or divide the
Shares of any Series or Sub-Trust into classes;
elect and remove officers [AND] \,\ appoint and terminate agents and
consultants\, \and hire and terminate employees, any one or more of the
foregoing of whom may be a Trustee, and [MAY] provide for the compensation
of all of the foregoing;
appoint from their own number, and terminate, any one or more committees
consisting of two or more Trustees, including without implied limitation an
executive committee, which may, when the Trustees are not in session and
subject to the 1940 Act, exercise some or all of the power and authority of
the Trustees as the Trustees may determine;
employ one or more Advisers, Administrators, Depositories and Custodians\,\
and [MAY] authorize any Depository or Custodian to employ subcustodians or
agents and to deposit all or any part of such assets in a system or systems
for the central handling of securities and debt instruments, retain
transfer, dividend, accounting or Shareholder servicing agents or any of the
foregoing, provide for the distribution of Shares by the Trust through one
or more distributors, principal underwriters or otherwise; and
in general, [THEY MAY ]delegate to any officer of the Trust, to any
committee of the Trustees and to any employee, adviser, administrator,
distributor, depository, custodian, transfer and dividend disbursing agent,
or any other agent or consultant of the Trust such authority, powers,
functions and duties as they consider desirable or appropriate for the
conduct of the business and affairs of the Trust, including authority to act
in the name of the Trust and of the Trustees, to sign documents and to act
as attorney-in- fact for the Trustees.
Without limiting the foregoing, the Trustees, on behalf of the Trust, shall,
in accordance with the 1940 Act or other applicable law, have the authority:
<PAGE>
(a) INVESTMENTS. To invest cash and other property, and to hold cash or
other property uninvested without regard to the custom of investments by
trustees;
(b) DISPOSITION OF ASSETS. To sell, exchange, lend, pledge, mortgage, write
options on and lease any or all of the assets of the Trust;
(c) OWNERSHIP POWERS. To vote, or give assent \TO\, or exercise any rights
of ownership, with respect to stock or other securities, debt instruments or
property; and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper;
(d) SUBSCRIPTION. To exercise powers and rights of subscription which arise
out of ownership of securities or debt instruments;
(e) FORM OF HOLDING. To hold any assets of the Trust in the name of the
Trust, Trustees, Sub-Trust, nominee or otherwise;
(f) REORGANIZATION, ETC\.\[.] To consent to or participate in any plan for
the reorganization or consolidation of any corporation or issuer for which a
security or debt instrument is or was held in the Trust;
(g) VOTING TRUSTS, ETC\.\[.] To join with other holders of any securities or
debt instruments in acting through a committee, depository, voting trustee or
otherwise, and in that connection to deposit any security or debt instrument
with, or transfer any security or debt instrument to the other holders or a
representative thereof and to delegate to them such power and authority with
regard to any security or debt instrument (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to pay such portion of the
expenses and compensation of such representative as the Trustees shall deem
proper;
(h) COMPROMISE. To compromise or arbitrate claims (or any matter in
controversy) in favor of or against the Trust or any Sub-Trust;
(i) ASSOCIATIONS, ETC\.\[.] To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) BORROWING AND SECURITY. To borrow funds and to mortgage the assets of
the Trust to secure the obligations arising out of such borrowing;
(k) GUARANTEES, ETC\.\[.] To make contracts of guaranty, endorse or
guarantee the payment of any obligations of any person[;] \,\ and to mortgage
and pledge any Trust property to secure any of or all such --- obligations;
(l) INSURANCE. To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
Trust's business including, without limitation, liability insurance for the
benefit of the Shareholders, Trustees, officers, employees, agents, consultants,
investment advisors, managers, administrators, distributors, principal
underwriters or independent contractors (or any person connected
therewith);[AND]
(m) VOTE REQUIRED, PLACE AND TYPE OF MEETING. Except as otherwise provided
by the 1940 Act or other applicable law, this Agreement or the By-Laws, any
action to be taken by the Trustees on behalf of the Trust or any Sub-Trust may
be taken by a majority of the Trustees present at a meeting of Trustees (a
quorum, consisting of at least a majority of the Trustees then in office, being
present), within or without Massachusetts, including any meeting held by means
of a conference telephone or other communications equipment by means of which
all persons participating in the meeting can hear each other at the same time
and participation by such means shall constitute presence in person at a
meeting, or by written consents of a majority of the Trustees then in office (or
such larger or different number as may be required by the 1940 Act or other
applicable law); and
(n) DISTRIBUTION PLANS. To adopt on behalf of the Trust or any Sub-Trust
with respect to any class thereof a plan of distribution and related agreements
thereto pursuant to the terms of Rule 12b-1 and/or other
<PAGE>
provisions of the 1940 Act and to make payments from the assets of the Trust or
the relevant Sub-Trust or Sub- Trusts pursuant to said Rule 12b-1 Plan.
Section 3.3 CERTAIN CONTRACTS. The Trustees may from time to time enter into
contracts with any type of organization or individual ("Contracting Party") to
provide services for the Trust. Any delegation of powers by the Trustees shall
not limit the generality of their powers and authority.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
Contracting Party, or of or for any parent or affiliate of any
contracting party or that the contracting party or any parent or
affiliate thereof is a Shareholder or has an interest in the Trust or
any Sub-Trust, or that
(ii) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other corporations,
trusts, associations, partnerships, limited partnerships or other
organizations, or have other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust or any
Sub-Trust and/or the Trustees or disqualify any Shareholder, Trustee or officer
of the Trust from voting upon or executing the same or create any liability or
accountability to the Trust, any Sub-Trust or its Shareholders, provided that in
the case of any relationship or interest referred to in the preceding clause (i)
on the part of any Trustee or officer of the Trust either (x) the material facts
as to such relationship or interest have been disclosed to or are known by the
Trustees not having any such relationship or interest and the contract involved
is approved in good faith by a majority of such Trustees not having any such
relationship or interest (even though such unrelated or disinterested Trustees
are less than a quorum of all of the Trustees), (y) the material facts as to
such relationship or interest and as to the contract have been disclosed to or
are known by the Shareholders entitled to vote thereon and the contract involved
is specifically approved in good faith by vote of the shareholders, or (z) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by the Shareholders.
Section 3.4 TRUST EXPENSES. The Trustees are authorized to incur on behalf
of the Trust expenses which they deem necessary and proper to carry out the
business of the Trust. As an element of expenses, the Trustees are authorized to
determine, establish, and receive reasonable compensation for their services as
Trustees. The Trustees are authorized to pay all expenses from either principal
or income and may allocate expenses among the Sub-Trusts and/or one or more
classes of Shares thereof as the Trustees, in their discretion, deem necessary
and appropriate.
Section 3.5 OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the Trust
assets shall at all times be considered as vested in the Trustees.
ARTICLE IV
[]SHARES/SUB-TRUSTS
Section 4.1 DESCRIPTION OF SHARES. The beneficial interest in the Trust
shall consist of one class of no-par Shares; however, the Trustees have
authority to divide the class of Shares into Series of Shares \,\ each of which
Series of Shares shall be a separate and distinct Sub-Trust of the Trust, as
they deem necessary or desirable. Each Sub-Trust of Shares established will be
deemed to be a separate Trust under Massachusetts General Laws Chapter 182. The
Trustees shall have exclusive powers without Shareholder approval to establish
any Sub-Trust and to determine the relative rights and preferences between the
Shares of the separate Sub-Trusts as to right of redemption and the price, terms
and manner of redemption, special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund provisions,
conversion rights, and conditions under which the several Sub-Trusts shall have
separate voting rights or no voting rights.
<PAGE>
In addition, the Trustees shall have exclusive power, without the
requirement of Shareholder approval, to issue classes of Shares of any Sub-Trust
or divide the Shares of any Sub-Trust into classes, each class having such
difference dividend, liquidation, voting and other rights as the Trustees may
determine, and may establish and designate the specific classes of Shares of
each Sub-Trust. The fact that a Sub-Trust shall have initially been established
and designated without any specific establishment or designation or classes
(i.e., that all Shares of such Sub-Trust are initially of a single class), or
that a Sub-Trust shall have more than one established and designated class,
shall not limit the authority of the Trustees to establish and designate
separate classes, or one or more further classes, of said Sub-Trust without
approval of the holders of the initial class thereof, or previously established
and designated class or classes thereof, provided that the establishment and
designation of such further separate classes would not adversely affect the
rights of the holders of the initial or previously established and designated
class or classes.
The number of authorized Shares and the number of Shares of each Sub-Trust
or class thereof that may be issued is unlimited, and the Trustees may issue
Shares of any Sub-Trust or class thereof for such consideration and on such
terms as they may determine (or for no consideration if pursuant to a Share
dividend or split-up), all without action or approval of the Shareholders. All
Shares when so issued on the terms determined by the Trustees shall be fully
paid and non-assessable (but may be subject to mandatory contribution back to
the Trust as provided in [SUBSECTION] \SUBSECTION\ (h) of Section 4.[4] \3\).
The Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any Sub-Trust or class thereof into one or
more Sub- Trusts or classes thereof that may be established and designated from
time to time. The Trustees may hold as treasury Shares, reissue for such
consideration and on such terms as they may determine, or cancel, at their
discretion from time to time, any Shares of any Sub-Trust or class thereof
reacquired by the Trust.
The Trustees may, at any time, abolish a Sub-Trust if no Shares of that
Sub-Trust are outstanding.
The Trustees may from time to time close the transfer books or establish
record dates and times for the purposes of determining the holders of Shares
entitled to be treated as such, to the extent provided or referred to in Section
5.3.
The establishment and designation of any Sub-Trust or of any class of Shares
of any Sub-Trust in addition to those established and designated in Section 4.2
shall be effective upon the vote of a majority of the [THEN ]Trustees setting
forth such establishment and designation and the relative rights and preferences
of the Shares of such Sub-Trust or class, or as otherwise provided in such
instrument. At any time that there are no Shares outstanding of any particular
Sub-Trust or class previously established and designated \,\ the Trustees may by
vote of a majority of their number (or by an instrument executed by an officer
of the Trust pursuant to the vote of a majority of the Trustees) abolish that
Sub-Trust or class and the establishment and designation thereof. Each vote
referred to in this paragraph shall be implemented by preparation and filing of
an amendment to this Agreement.
Any Trustee, officer or other agent of the Trust, and any organization in
which any such person is interested may acquire, own, hold and dispose of Shares
of any Sub-Trust (including any classes thereof) of the Trust to the same extent
as if such person were not a Trustee, officer or other agent of the Trust; and
the Trust may issue and sell or cause to be issued and sold and may purchase
Shares of any Sub-Trust (including any classes thereof from any such person
or any such organization subject only to the general limitations, restrictions
or other provisions applicable to the sale or purchase of Shares of such
Sub-Trust (including any classes thereof) generally.
Section 4.2 ESTABLISHMENT AND DESIGNATION OF SUB-TRUSTS. Without limiting
the Trustees' authority to establish further Sub-Trusts pursuant to Section 4.1,
the Trustees hereby establish the following [SUB-TRUSTS] \SUB- TRUSTS\: [SIF
GOVERNMENT MONEY MARKET FUND; SIF GOVERNMENT SHORT-TERM FUND;] Bonnel Growth
Fund; \MEGA TRENDS FUND;\ [LEEB VALUE FUND]; and \REGENT EASTERN EUROPEAN FUND.\
Section 4.3 RIGHTS AND PREFERENCES OF SUB-TRUSTS. Unless otherwise specified
by the Trustees, the Sub- Trusts established above and all future Sub-Trusts or
any classes thereof have the following rights and preferences:
(a) ASSETS BELONGING TO SUB-TRUSTS. All consideration received by the Trust
for the issue or sale of Shares of a particular Sub-Trust or []any classes
thereof, all assets in which the consideration is invested, and proceeds from
the sale, exchange or liquidation thereof, all income earnings, profits and
proceeds from those assets and any items allocated to the Sub-Trust or class
thereof by the Trustees shall be held in trust by the Trustees for the benefit
of the Shareholders of that Sub-Trust or class thereof \,\ shall irrevocably
belong to that Sub-Trust (and be allocable to any classes thereof) \,\ and shall
be recorded on the books of account of the Trust as assets belonging to that
Sub-Trust. The Trustees may, in a manner they deem fair and equitable, allocate
among the Sub-Trusts any items which are not readily identifiable to any one
particular Sub-Trust (and allocable to any classes thereof). Each allocation
shall be binding upon the Shareholders of the Trust.
(b) LIABILITIES BELONGING TO SUB-TRUSTS. The liabilities belonging to a
Sub-Trust shall include all liabilities associated with the assets of that
particular Sub-Trust, all expenses and charges attributable to that Sub- Trust
and any general liabilities which are not readily identifiable and which the
Trustees may allocate in a manner they deem fair and equitable to that
Sub-Trust. In addition, the liabilities in respect of a particular class of
Shares of a particular Sub-Trust and all expenses, costs, charges and reserves
belonging to that class of Shares, and any general liabilities, expenses, costs,
charges or reserves of that particular Sub-Trust which are not readily
identifiable as belonging to any particular class of Shares of that Sub-Trust
shall be allocated and charged by the Trustees to and among any one or more of
the classes of Shares of that Sub-Trust established and designated from time to
time in such manner and on such basis as the Trustees in their sole discretion
deem fair and equitable. Each allocation shall be binding upon the Shareholders
of the Trust. Only the assets of a particular Sub-Trust (including any classes
thereof) may be used to satisfy a creditor of that Sub-Trust.
(c) DETERMINATION OF TREATMENT AS INCOME AND/OR CAPITAL. Except as otherwise
provided by the 1940 Act, the Trustees shall have full discretion to determine
which items shall be treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.
(d) DIVIDENDS. Dividends and distributions on Shares of a particular
Sub-Trust or any class thereof may be paid with such frequency as the Trustees
may determine, which may be daily or otherwise pursuant to a standing resolution
or resolutions adopted only once or with such frequency as the Trustees may
determine, to the holders of Shares of that Sub-Trust or class, from such of the
income and capital gains, accrued or realized, from the assets belonging to that
Sub-Trust, or in the case of a class, belonging to that [SUB-TRUST] \SUB-TRUST\
and allocable to that class, as the Trustees may determine, after providing for
actual and accrued liabilities belonging to that Sub-Trust or class. All
dividends and distributions on Shares of a particular Sub-Trust or class thereof
shall be distributed pro rata to the holders of Shares of that Sub-Trust or
class in proportion to the number of Shares of that Sub-Trust held by such
holders at the date and time of record established for the payment of such
dividends or distributions, except that in connection with any dividend or
distribution program or procedure the Trustees may determine that no dividend or
distribution shall be payable on Shares as to which the Shareholder's purchase
order and/or payment have not been received by the time or times established by
the Trustees under such program or procedure. Such dividends and distributions
may be made in cash or Shares of that Sub-Trust or class or a combination
thereof as determined by the Trustees or pursuant to any program that the
Trustees may have in effect at the time for the election by each Shareholder of
the mode of the making of such dividend or distribution to that Shareholder. Any
such dividend or distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with [THE SUBSECTION] \SUBSECTION\ (i) of
Section 4.3.
The Trustees shall have full discretion, to the extent not inconsistent with
the 1940 Act, to determine which items shall be treated as income and which
items as capital; and each such determination and allocation shall be conclusive
and binding upon the Shareholders.
(e) LIQUIDATION. [A] \IN THE EVENT OF THE LIQUIDATION OR DISSOLUTION OF THE
TRUST, ANY SUB-TRUST OR CLASS THEREOF THE SHAREHOLDERS OF EACH\ Sub-Trust or any
class [THERE MAY BE LIQUIDATED AFTER SUCH LIQUIDATION HAS BEEN AUTHORIZED BY A
MAJORITY VOTE OF THE TRUSTEES THEN IN OFFICE AND APPROVED BY A MAJORITY OF THE
OUTSTANDING VOTING SHARES OF THAT SUB-TRUST] \THEREOF THAT HAS BEEN ESTABLISHED
AND DESIGNATED SHALL BE ENTITLED TO RECEIVE, WHEN AND AS DECLARED BY THE
TRUSTEES, THE EXCESS OF THE ASSETS BELONGING TO THAT SUB-TRUST,\ or in the case
of a class, belonging to that Sub-Trust and allocable to that class, over the
liabilities belonging to that Sub-Trust or CLASS [,AS DEFINED IN THE 1940 ACT.
THE]. \UPON THE LIQUIDATION OR DISSOLUTION OF THE TRUST OR ANY SUB-TRUST OR
CLASS PURSUANT TO THIS SECTION 4.3(E) THE TRUSTEES SHALL MAKE PROVISIONS FOR THE
PAYMENT OF ALL OUTSTANDING
<PAGE>
OBLIGATIONS, TAXES AND OTHER LIABILITIES, ACCRUED OR CONTINGENT, OF THE TRUST OR
THAT SUB-TRUST OR CLASS. THE ASSETS SO DISTRIBUTABLE TO THE \Shareholders of
[THAT] \ANY\ particular Sub-Trust or class thereof shall [RECEIVE THE EXCESS OF
ASSETS IN THE] \BE DISTRIBUTED AMONG SUCH SHAREHOLDERS IN PROPORTION TO THE
RELATIVE NET ASSET VALUE, AS DEFINED IN SECTION 4.3(I), OF SUCH SHARES. THE
LIQUIDATION OR DISSOLUTION OF ANY PARTICULAR\ Sub-Trust or class thereof [OVER
THE LIABILITIES IN THE SUB-TRUST ON A PRO RATA BASIS.] \MAY BE AUTHORIZED BY
VOTE OF A MAJORITY OF THE TRUSTEES THEN IN OFFICE WITHOUT THE APPROVAL OF THE
SHAREHOLDERS OF THE TRUST OR THAT SUB-TRUST OR CLASS THEREOF.\
(f) VOTING. On each matter submitted to a vote of the Shareholders, each
holder of a Share of each Sub- Trust or any class thereof shall be entitled to
one vote for each whole Share and for a proportionate fractional vote for each
fractional Share outstanding in his name on the books of the Trust\,\and all
shares of each Sub-Trust or class thereof shall vote as a separate class, except
as to voting for Trustees and as otherwise required by the 1940 Act. As to any
matter which does not affect the interest of a particular Sub-Trust or class
thereof, only the holders of Shares of one or more of the affected Sub-Trusts or
classes thereof shall be entitled to vote.
(g) REDEMPTION BY SHAREHOLDER. Each Shareholder shall have the right to
tender all or part of his shares of the Sub-Trust or any class thereof for
redemption at such times as the By-Laws permit, but at least once weekly, with
the redemption price equal to the net asset value per Share as defined in this
[SECTION] \SECTION\. The Trust shall make payment in cash unless in the
Trustee's judgment conditions exist which make payment in cash undesirable, in
which case the Trust may make payment wholly or partly in assets belonging to
the Sub-Trust or class thereof. The Trust may postpone payment of the redemption
price and suspend the Shareholder's right of redemption in appropriate
circumstances, to the extent permissible under the 1940 Act.
(h) REDEMPTION BY TRUST. The Trustees shall have the right to redeem the
Shares of the Trust and Sub- Trusts or classes thereof at the same redemption
price as if the Shareholder were redeeming the Shares. A redemption by the
Trustees shall occur if: (1) the Trustees determine in their sole discretion
that failure to redeem the Shares would result in material adverse consequences
to the Shareholders of any of the Sub-Trusts; or (2) [THE FAILURE OF] a
Shareholder \FAILS\ to maintain a minimum amount as set forth in the current
prospectus of the Trust (Sub-Trust). If the Trustees exercise their right of
redemption, the Shareholder shall have no further right except to receive
payment of the redemption price.
(i) NET ASSET VALUE. The net asset value per Share of any Sub-Trust shall be
(a) in the case of a Sub- Trust whose Shares are not divided into classes, the
quotient obtained by dividing the value of the net assets of that Sub-Trust
(being the value of the assets belonging to that Sub-Trust less the liabilities
belonging to that Sub-Trust) by the total number of Shares of that Sub-Trust
outstanding, and (b) in the case of a class of Shares of a Sub-Trust whose
Shares are divided into classes, the quotient obtained by dividing the value of
the assets of that Sub-Trust allocable to such class (less the liabilities
belonging to such class) by the total number of Shares of such class
outstanding. The net asset value shall be computed in accordance with the 1940
Act and regulations thereunder. In calculating the net asset value, methods and
procedures established by the Trustees shall be used.
The Trustees may determine to maintain the net asset value per Share of any
Sub-Trust at a designated constant dollar amount and in connection therewith may
adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that Sub-Trust as dividends payable in
additional Shares of that Sub-Trust at the designated constant dollar amount and
for the handling of any losses attributable to that Sub- Trust. Such procedures
may provide that in the event of any loss each Shareholder shall be deemed to
have contributed to the capital of the Trust attributable to that Sub-Trust his
pro rata portion of the total number of Shares required to be canceled in order
to permit the net asset value per Share of that Sub-Trust to be maintained,
after reflecting such loss, at the designated constant dollar amount. Each
Shareholder of the Trust shall be deemed to have agreed, by his investment in
any Sub-Trust with respect to which the Trustees shall have adopted any such
procedure, to make the contribution referred to in the preceding sentence in the
event of any such loss.
(j) TRANSFER. All Shares of each particular Sub-Trust or class thereof shall
be transferable, but transfers of Shares of a particular Sub-Trust or class
thereof will be recorded on the Share transfer records of the Trust applicable
to that Sub-Trust or class only at such times as Shareholders shall have the
right to require the Trust to redeem Shares of that Sub-Trust or class and at
such other times as may be permitted by the Trustees.
(k) EQUALITY. Except as provided herein or in the instrument designating and
establishing any class of Shares or any Sub-Trust, all Shares of each particular
Sub-Trust or class thereof shall represent an equal proportionate interest in
the assets belonging to that Sub-Trust, or in the case of a class, belonging to
that Sub-Trust and allocable to that class (subject to the liabilities belonging
to that Sub-Trust or class), and each Share of any particular Sub-Trust or class
shall be equal to each other Share of that Sub-Trust or class; but the
provisions of this sentence shall not restrict any distinctions permissible
under [SUBSECTION] \SUBSECTION\ (d) of this Section 4.3 that may exist with
respect to dividends and distributions on Shares of the same Sub-Trust or class.
The Trustees may from time to time divide or combine the Shares of any
particular Sub-Trust or class into a greater or lesser number of Shares of that
Sub-Trust or class without thereby changing the proportionate beneficial
interest in the assets of that Sub-Trust or class or in any way affecting the
rights of Shares of any other Sub-Trust or class.
(l) FRACTIONS. A fractional Share of a Sub-Trust or class proportionately
carries all the rights and obligations of a whole Share of the Sub-Trust or
class.
(m) CONVERSION RIGHTS. The Trustees shall have authority to establish
procedures pursuant to which a Shareholder of one Sub-Trust or class thereof may
exchange shares of that Sub-Trust for shares of another Sub- Trust or class
thereof.
(n) CLASS DIFFERENCES. The relative rights and preferences of the classes of
any Sub-Trust may differ in such other respects as the Trustees may determine to
be appropriate in their sole discretion, provided that such differences are set
forth in the resolutions adopted by the Trustees or the instrument establishing
and designating such classes and executed by a majority of the Trustees (or by
an instrument executed by an officer of the Trust pursuant to a vote of a
majority of the Trustees).
Section 4.4 OWNERSHIP OF SHARES. The ownership of Shares shall be recorded
on the books of the Trust or of a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Sub- Trust and each
class thereof. No certificates certifying the ownership of Shares need be issued
except as the Trustees determine. The Trustees may establish such rules as they
consider appropriate for the issuance of Share certificates, use of facsimile
signatures, transfer of Shares and similar matters. The record books of the
Trust shall be conclusive as to who are the Shareholders and as to the number of
Shares of each Sub-Trust and class thereof held from time to time by each such
Shareholder.
Section 4.5 INVESTMENTS IN THE TRUST. The Trustees shall have authority to
establish procedures and policies with respect to acceptance or rejection of
investments in the Trust and Sub-Trusts and to authorize other persons to accept
and reject orders for the purchase of Shares in accordance therewith.
Section 4.6 NO PREEMPTIVE RIGHTS. The Shares of the Trust or Sub-Trusts have
no preemptive rights.
Section 4.7 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder, by virtue of having become a Shareholder, shall
be held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the Trust or any Sub-Trust thereof nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Shares shall
not entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, nor shall the ownership of Shares constitute the Shareholders \AS
\partners. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust shall have any power to bind personally any Shareholder, nor,
except as specifically provided herein, to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
<PAGE>
Section 5.1 VOTING POWERS. The Shareholders shall only vote in the following
instances:
(i) election or removal of Trustees as provided herein;
(ii) approval of a contract for which the 1940 Act requires Shareholder
approval;
(iii) [TERMINATION OR] reorganization of the Trust or any Sub-Trust if
required by Section 7.2;
(iv) amendment of the Trust Agreement if required by Section 7.3;
(v) determination of whether a derivative or class action suit should be
brought or pursued on behalf of the Trust or Sub-Trust or class
thereof as would the stockholders of a Massachusetts business
corporation, provided that the Shareholders of one Sub-Trust or
class thereof may not vote on an action on behalf of another
Sub-Trust or class thereof or one of its Shareholders; and
(vi) such additional matters relating to the Trust as may be required by
the 1940 Act, this Agreement, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any state, or
as the Trustees may consider necessary or desirable.
There shall be no cumulative voting in Trustee elections.
Shares may be voted by proxy or in person. Shares held in the name of two or
more persons may be voted by proxy executed by one of the named persons unless
the Trust is notified to the contrary by written instructions, prior to the
execution of the proxy. A proxy purporting to be executed by or on behalf of a
Shareholder shall be presumed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall be on the challenger.
Until Shares are issued\,\the Trustees may take any action required by law,
this Agreement or the By- Laws to be taken by Shareholders.
Proxies may be given orally or in writing or pursuant to any computerized or
mechanical data gathering process specifically approved by the Trustees.
Section 5.2 MEETINGS AND NOTICE. No annual or regular meeting of
Shareholders is required; however, the Trustees may call meetings to take action
on matters which require Shareholder vote and for other matters which the
Trustees determine Shareholder vote is necessary or desirable.
The Trustees shall give Shareholders written notice of any Shareholder
meeting by mailing such notice, postage prepaid, at least seven days before the
meeting date to each Shareholder at the Shareholder's address as it appears on
the records of the Trust. The notice shall state the purpose of the meeting.
Upon written request of Shareholders holding 10% or more of the then
outstanding Shares, the Trustees shall call a meeting to vote upon the removal
of a Trustee. If the Trustees do not call a Shareholder meeting within 30 days
after receipt of the written request, Shareholders holding 10% or more \OF\ the
[THEN OUTSTANDING] \THEN-OUTSTANDING \ Shares may call a meeting for that
purpose \,\ giving notice and following the procedures governing Trustee-called
meetings[,] set forth in this Agreement.
No notice is required for adjourned sessions which are held within a
reasonable time after the original meeting.
Section 5.3 RECORD DATES. For the purpose of determining Shareholders
entitled to vote or act at a meeting, to participate in a dividend or
distribution, or for the purpose of any other action, the Trustees may close the
transfer books for a period not exceeding 30 days (except at or in connection
with the termination of the Trust) as the Trustees may determine. Alternatively,
without closing the transfer books, the Trustees may fix a date and time not
more than 60 days prior to the date of any meeting of Shareholders or other
action as the date and time of record for the determination of Shareholders
entitled to vote at such meeting or to be treated as Shareholders of record for
purposes of such other action, and any Shareholder who was a Shareholder at the
date and time so fixed shall be entitled to vote at such meeting or any
adjournment thereof or to be treated as a Shareholder of record for purposes of
such other action, even though he has since that date and time disposed of his
Shares; and[,] no person becoming a Shareholder after that date and time shall
be so entitled to vote at such meeting or any adjournment thereof or to be
treated as a Shareholder of record for purposes of such other action.
Section 5.4 QUORUM AND REQUIRED VOTE. A quorum to conduct business shall
consist of a majority of the Shares entitled to vote at a Shareholder's meeting.
A lesser number is sufficient for adjournments.
Unless otherwise required by applicable law or this Agreement\,\ a majority
of the voted Shares at a meeting at which a quorum is present shall be
sufficient to transact business, and Trustees shall be elected by a plurality.
Section 5.5 ACTION BY WRITTEN CONSENT. Unless otherwise required by
applicable law, Shareholders may take action without a meeting if a majority of
the Shareholders entitled to vote on the action (or such greater percentage as
may be required by applicable law for such action) consent in writing to such
action and their consents are filed with the records of the Shareholder
meetings. Written [CONSENTS] \CONSENTS\ shall be treated as votes taken at a
Shareholder meeting.
Section 5.6 INSPECTION OF RECORDS. Shareholders may inspect the Trust's
records to the same extent permitted by Massachusetts Business Corporation Law
to the stockholders of a Massachusetts business corporation.
Section 5.7 ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
Section 5.8 SHAREHOLDER COMMUNICATIONS. Whenever ten or more Shareholders of
record have been [SUCH ]for a least six months preceding the date of
application, and who hold in the aggregate either Shares having a net asset
value of at least $25,000 or at least 1% of the outstanding Shares, whichever is
less, shall apply to the Trustees in writing, stating that they wish to
communicate with other Shareholders with a view to obtaining signatures to a
request for a Shareholder meeting and accompanied by a form of communication and
request which they wish to transmit, the Trustees shall within five business
days after receipt of such application either ([1] \A\) afford to such
applicants access to a list of the names and addresses of all Shareholders as
recorded on the books of the Trust or Sub-Trust, as applicable; or ([2] \B\)
inform such applicants as to the approximate number of Shareholders of record,
and the approximate cost of mailing to them the proposed communication and form
of request.
If the Trustees elect to follow the course specified in [PARAGRAPH] [2]
\B\above (OF THIS SECTION 5.8), the Trustees, upon the written request of such
applicants, accompanied by a tender of the material to be mailed and of the
reasonable expenses of mailing, shall, with reasonable promptness, mail such
material to all Shareholders of record at their addresses as recorded on the
books, unless within five business days after such tender the Trustees shall
mail to such applicants and file with the Commission, together with a copy of
the material to be mailed, a written statement signed by at least a majority of
the Trustees to the effect that in their opinion either such material contains
untrue statements of fact or omits to state facts necessary to make the
statements contained therein not misleading, or would be in such violation of
applicable law, and specifying the basis of such opinion. The Trustees shall
thereafter comply with the requirements of the 1940 Act.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE[,] \;\
NOTICE. All persons extending credit to, contracting with or having any claim
against the Trust shall look only to the assets of the Sub-Trust with which such
person dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other Sub-Trust
shall be personally liable therefor. Every note, bond, contract, instrument,
certificate or undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have been executed
or done only by or for the Trust (or the Sub-Trust) or the Trustees and not
personally. Nothing in this Agreement shall protect any Trustee or officer
against any liability to the Trust or the Shareholders to which such Trustee or
officer would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee or of such officer.
Section 6.2 NOTICE FOR CONTRACTS. Every contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officers or officer shall
give notice (a) that this Agreement is on file with the Secretary of the
Commonwealth of Massachusetts, (b) that the document was executed or made on
behalf of the Trust or by them as Trustees or as officers and not by them
individually, and (c) that the obligations of such instrument are not binding
upon any of them or the Shareholders individually, but are binding only upon the
assets and property of the Trust, or the particular Sub-Trust in question, as
the case may be. Omission of such notice shall not operate to bind any Trustee,
officer or Shareholder individually.
Section 6.3 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND. The
exercise by the Trustees of their powers and discretion hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his own wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law. Subject
to the foregoing, (a) the Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, consultant,
adviser, administrator, distributor or principal underwriter, custodian or
transfer, dividend disbursing, Shareholder servicing or accounting agent of the
Trust, nor shall any Trustee be responsible for the act or omission of any other
Trustee; (b) the Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Agreement and their duties as
Trustees, and shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice; and (c) in discharging
their duties, the Trustees, when acting in good faith, shall be entitled to rely
upon the books of account of the Trust and upon written reports made to the
Trustees by any officer appointed by them, any independent public accountant,
and (with respect to the subject matter of the contract involved) any officer,
partner or responsible employee of a contracting party appointed by the Trustees
pursuant to Section 3.3. The Trustees, as such, shall not be required to give
any bond or other security for the performance of their duties.
Section 6.4 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder (or
former Shareholder) of any Sub-Trust of the Trust shall be charged or held to be
personally liable for any obligation or liability of the Trust solely by reason
of being or having been a Shareholder and not because of such Shareholder's acts
or omissions or for some other reason, said Sub-Trust (upon proper and timely
request by the Shareholder) shall assume the defense against such charge and
satisfy any judgment thereon, and the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of said Sub-Trust estate to be held harmless
from and indemnified against all loss and expense arising from such liability.
Section 6.5 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC\.\[.] The Trust shall
indemnify (from the assets of the Sub-Trust or class thereof or Sub-Trusts or
classes thereof in question) each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise [hereinafter referred to as a ["COVERED PERSON"] \"COVERED
PERSON"\]) against all liabilities, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, director or trustee, except with respect
to any matter as to which it has been determined in one of the manners described
below, that such Covered Person (i) did not act in good faith in the reasonable
belief that such Covered Person's action was in or not opposed to the best
interests of the Trust or (ii) had acted with wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such Covered Person's office (either and both of the conduct described in (i)
and (ii) being referred to hereafter as "Disabling Conduct"). A determination
that the Covered Person is [NOT] entitled to indemnification [DUE TO] \,DESPITE
ALLEGATIONS OF\ Disabling Conduct, may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
person to be indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding against a Covered
Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as defined in section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. Expenses, including accountants' and counsel
fees so incurred by any such Covered Person (but excluding amounts paid in
satisfaction of [JUDGEMENTS] \JUDGMENTS\, in compromise or as fines or
penalties), may be paid from time to time in advance of the final disposition of
any such action, suit or proceeding, provided that the Covered Person shall have
undertaken to repay the amounts so paid to the Sub-Trust in question if it is
ultimately determined that indemnification of such expenses is not authorized
under this Article VI and (i) the Covered Person shall have provided security
for such undertaking, (ii) the Trust shall be insured against losses arising by
reason of any lawful advances, or (iii) a majority of a quorum of the
disinterested Trustees who are not a party to the proceeding, or an independent
legal counsel in a written opinion, shall have determined, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that there is
reason to believe the Covered Party ultimately will be found \TO BE\ entitled to
indemnification.
Section 6.6 COMPROMISE PAYMENT. Any compromise settlement shall be
indemnified only if approved: (a) by a majority of the disinterested Trustees
not a party to the proceeding; or (b) by a written opinion of an independent
legal counsel. If payment has been made pursuant to (a) or (b) and the recipient
is subsequently found to have engaged in bad faith, wilful misfeasance, gross
negligence or reckless disregard of duty, the Trust may recover such payment.
Section 6.7 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of indemnification
provided by this Article VI shall not be exclusive of or affect any other rights
to which any [COVERED PERSON] \COVERED PERSON \ may be entitled. The
indemnification shall inure to the benefit of such person's heirs, executors and
administrators. Nothing contained in this [ARTICLE] \ARTICLE \ shall affect any
rights to indemnification to which personnel of the Trust, other than Trustees
and officers, and other persons may be entitled by contract or otherwise under
law, nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
Section 6.8 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII
MISCELLANEOUS
Section 7.1 DURATION AND TERMINATION OF TRUST. [THIS] \UNLESS TERMINATED AS
PROVIDED HEREIN, THE \Trust shall continue [FOR AN UNLIMITED PERIOD. THE TRUST]
\WITHOUT LIMITATION OF TIME AND, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, NO CHANGE, ALTERATION OR MODIFICATION WITH RESPECT TO ANY SUB-TRUST
OR CLASS THEREOF SHALL OPERATE TO TERMINATE THE TRUST. THE TRUST, ANY SUB-TRUST
OR CLASS THEREOF \may be terminated at any time by a majority [VOTE] of the
Trustees then in office [AND APPROVED BY A MAJORITY VOTE OF THE OUTSTANDING
VOTING SHARES AS DEFINED IN 1940 ACT, SHARES OF EACH SUB-TRUST OR EACH CLASS
THEREOF VOTING SEPARATELY BY] \, PROVIDED THAT (1) THE DISTRIBUTION OF ANY
REMAINING PROCEEDS OR ASSETS OF THE TRUST, ANY \Sub-Trust or class thereof.
NO MODIFICATION OF ANY] \, AS THE CASE MAY BE, PURSUANT TO SECTION 4.3(E),
HAS BEEN COMPLETED OR (2) NO SHARES OF THE TRUST, SUCH \ Sub-Trust or class
[SHALL TERMINATE THE TRUST.
IN THE EVENT OF TERMINATION, THE TRUSTEES SHALL PAY ALL DUE AND ANTICIPATED
EXPENSES, AND THEN LIQUIDATE THE ASSETS IN A MANNER THE TRUSTEES DEEM
APPROPRIATE AND DISTRIBUTE THE PROCEEDS ACCORDING TO THE PROVISIONS OF THIS
AGREEMENT.] \THEREOF, AS THE CASE MAY BE, ARE THEN OUTSTANDING.\
Section 7.2 REORGANIZATION. The Trustees may sell, convey, merge and
transfer the assets of the Trust, or the assets belonging to any one or more
Sub-Trusts, to another trust, partnership, association or corporation organized
under the laws of any state of the United States, or to the Trust to be held as
assets belonging to another Sub-Trust of the Trust, in exchange for cash, shares
or other securities (including, in the case of a transfer to another Sub-Trust
of the Trust, Shares of such other Sub-Trust) with such transfer either (1)
being made subject to, or with the assumption by the transferee of, the
liabilities belonging to each Sub-Trust the assets of which are so transferred,
or (2) not being made subject to, or not with the assumption of, such
liabilities; provided, however, that no assets belonging to any particular
Sub-Trust shall be so transferred unless the terms of such transfer shall have
first been approved at a meeting called for the purpose by the [AFFIRMATION]
\AFFIRMATIVE \ vote of the holders of a majority of the outstanding voting
Shares, as defined in the 1940 Act, of that Sub-Trust. Following such transfer,
the Trustees shall distribute such cash, shares or other securities (giving due
effect to the assets and liabilities belonging to and any other differences
among the various Sub-Trusts and classes\,\ the assets belonging to which have
been so transferred) among the Shareholders of the Sub-Trust\,\ the assets
belonging to which have been so transferred; and if all of the assets of the
Trust have been so transferred, the Trust shall be terminated.
The Trust, or any one or more Sub-Trusts, may, either as the successor,
survivor, or non-survivor, (1) consolidate with one or more other trusts,
partnerships, associations or corporations organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States, to form a
new consolidated trust, partnership, association or corporation under the laws
of which any one of the constituent entities is organized, or (2) merge into one
or more other trusts, partnerships, associations or corporations organized under
the laws of the Commonwealth of Massachusetts or any other state of the United
States, or have one or more such trusts, partnerships, associations or
corporations merged into it, any such consolidation or merger to be upon such
terms and conditions as are specified in an agreement and plan of reorganization
entered into by the Trust, or one or more Sub-Trusts\,\ as the case may be, in
connection therewith. The terms "merge" or "merger" as used herein shall also
include the purchase or acquisition of any assets of any other trust,
partnership, association or corporation which is an investment company organized
under the laws of the Commonwealth of Massachusetts or any other state of the
United States. Any such consolidation or merger shall require the affirmative
vote of the holders of a majority of the outstanding voting Shares, as defined
in the 1940 Act, of each Sub-Trust affected thereby.
Section 7.3 AMENDMENTS. All rights granted to the Shareholders under this
Agreement are granted subject to the reservation of the right to amend this
Agreement as herein provided, except that no amendment shall repeal the
limitations on personal liability of any Shareholder or Trustee or repeal the
prohibition of assessment upon the Shareholders without the express consent of
each Shareholder or Trustee involved. Subject to the foregoing, the provisions
of this Agreement (whether or not related to the rights of Shareholders) may be
amended at any time, so long as such amendment does not adversely affect the
rights of any Shareholder with respect to which such amendment is or purports to
be applicable and so long as such amendment is not in contravention of
applicable law, including the 1940 Act, by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust pursuant to the
vote of a majority of such Trustees). Any amendment to this Agreement that
adversely affects the rights of Shareholders may be adopted at any time by an
instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to a vote of a majority of such Trustees) when
authorized to do so by the vote in accordance with [SUBSECTION] \SUBSECTION\
([E] \F\) of Section 4.[2] \3\ of Shareholders holding a majority of the Shares
entitled to vote. Subject to the foregoing, any such amendment shall be
effective as provided in the instrument containing the terms of such amendment
or, if there is no provision therein with respect to effectiveness, upon the
execution of such instrument and of a certificate (which may be a part of such
instrument) executed by a trustee or officer of the Trust to the effect that
such amendment has been duly adopted.
Section 7.4 FILING OF COPIES; REFERENCES; HEADINGS. This Agreement and all
amendments shall be maintained in Trust offices for Shareholder inspection.
A copy of this Agreement and all amendments shall be filed with the
appropriate governmental offices as required, including the Secretary of the
Commonwealth of Massachusetts and the Boston City Clerk. Failure to make any
such filing shall not impair the effectiveness of this instrument or any such
amendment.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such amendments have been made, as to the
identities of the Trustees and officers, and as to any matters in connection
with the Trust hereunder; and, with the same effect as if it were the original,
may rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this instrument as a whole
as the same may be amended or affected by any such amendments. [____ ]
As used in this Agreement\,\ the masculine gender shall include the feminine
and neuter genders. Headings are used for reference only and shall not affect
the meaning or construction of this Agreement. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or
[CONTROL] \AS CONTROLLING\ or [AFFECT] \AFFECTING\ the meaning, construction or
effect of this instrument. This instrument may be executed in any number of
counterparts\,\ each of which shall be deemed an original.
Any reference to this document shall include all amendments.
Section 7.5 APPLICABLE LAW. This Agreement is made in [THE] \THE\
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth,
including the Massachusetts Business Corporation Law as the same may be amended
from time to time, to which reference is made with the intention that matters
not specifically covered herein or as to which an ambiguity may exist shall be
resolved as if the Trust were a business corporation organized in Massachusetts,
but the reference to said Business Corporation Law is not intended to give the
Trust, the Trustees, the Shareholders or any other person any right, power,
authority or responsibility available only to or in connection with an entity
organized in corporate form. The Trust shall be of the type referred to in
Section 1 of Chapter 182 of the Massachusetts General Laws and of the type
commonly called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
Section 7.6 RESIDENT AGENT. Mr. Edward S. Brewer, Jr., 101 Federal Street,
22nd Floor, Boston, Massachusetts for the purposes of complying with the laws of
[THE] \THE \ Commonwealth of Massachusetts is hereby appointed as resident agent
for the Trust within the Commonwealth of Massachusetts; and hereby is designated
as its attorney in the Commonwealth of Massachusetts upon whom may be served any
notice, process or pleading in any action or proceeding against the Trust[.] and
the undersigned does hereby consent that any such action or proceeding against
the Trust may be commenced in any court of competent jurisdiction and proper
venue within the State so designated by services of process upon said resident
agent with the same effect as if the Trust had been served lawfully with
process. It is requested that a copy of any notice, process or pleadings served
be mailed to \U.S. GLOBAL \ Accolade Funds at 7900 Callaghan Road, San Antonio,
Texas 78229.
IN WITNESS WHEREOF, the undersigned have hereunto set their hand and seals
for themselves and their assigns, as of the date and year first above written.
---------------------------------------------
Richard E. Hughs
---------------------------------------------
Clark R. Mandigo
---------------------------------------------
Frank E. Holmes
---------------------------------------------
J. Michael Belz
STATE OF TEXAS )
)ss
COUNTY OF BEXAR )
Then personally appeared the above-named acknowledged the foregoing
instrument to be their free act and deed, before me, this [22ND ] \___ \day of
[MAY 1996] \____, 2000\.
---------------------------------------------
Notary Public
S E A L My commission expires:
<PAGE>
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FORM OF PROXY
VOTE BY TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE: 1-888-221-0697 OR VISIT WWW.USFUNDS.COM
SEE THE ENCLOSED INSERT FOR FURTHER INSTRUCTIONS ON VOTING BY PHONE OR INTERNET
Control Number: 000 000 000 000 00 Please fold and detach card at
perforation before mailing
Fund name prints here
U.S. GLOBAL ACCOLADE FUNDS
This proxy is solicited on behalf of the Board of Trustees
The undersigned, revoking previous proxies, hereby appoint(s) Susan B. McGee
and David J. Clark, attorneys, with full power of substitution, to vote all
shares of the fund(s) indicated above that the undersigned is entitled to vote
at the Special Joint Meeting of the Shareholders of the fund(s) to be held on
August 16, 2000, and at any adjournments thereof. This proxy shall be voted on
the proposals described in the Proxy Statement. Receipt of the Notice of Special
Joint Meeting of Shareholders and accompanying Proxy Statement is hereby
acknowledged. If a choice is specified, this proxy will be voted as indicated.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSALS. As to any
other matter, said attorneys shall vote in accordance with their best judgment.
This proxy may be revoked at any time prior to the exercise of the powers
conferred by the proxy.
NOTE: Please sign exactly as your name
appears on this proxy card. When signing
as attorney, executor, administrator,
trustee or guardian, give full title. If
a corporation, sign in the full
corporate name by president or other
authorized officer. If a partnership,
sign in partnership name by authorized
person.
Date , 2000
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SIGNATURE(S) IF HELD JOINTLY
<PAGE>
Please vote by filling in the appropriate boxes below.
Please fold and detach card at perforation before mailing.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR ALL OF THE PROPOSALS.
If you wish to vote FOR ALL of the [ ] FOR ALL
proposals as recommended by the board
of trustees and do not want to check
all of the "For" boxes below, you may
check the box at the right instead.
Proposals
ALL FUNDS VOTE ON 1-3.
1. TO ELECT THE NOMINEES SPECIFIED BELOW
AS TRUSTEES
(01) J. Michael Belz [ ] FOR all nominees listed (except
(02) Frank E. Holmes as marked to the contrary at
(03) Richard D. Hughs the left)
(04) Clark R. Mandigo
To withhold authority to vote for any [ ] WITHHOLD authority to vote for
individual nominee(s), write the all nominees
name(s) of the nominee(s) on this
line: --------------------------------
2. TO RATIFY THE SELECTION OF [ ] FOR [ ] AGAINST [ ] ABSTAIN
INDEPENDENT AUDITORS
3. TO AUTHORIZE THE TRUSTEES TO ADOPT AN [ ] FOR [ ] AGAINST [ ] ABSTAIN
AMENDED AND RESTATED MASTER TRUST
AGREEMENT
4. TO RECLASSIFY OR AMEND CERTAIN
INVESTMENT RESTRICTIONS
ALL FUNDS VOTE ON 4A - 4I
4A. Issuance of senior securities [ ] FOR [ ] AGAINST [ ] ABSTAIN
4B. Diversification of investments [ ] FOR [ ] AGAINST [ ] ABSTAIN
4C. Margin purchases of securities [ ] FOR [ ] AGAINST [ ] ABSTAIN
4D. Borrowing [ ] FOR [ ] AGAINST [ ] ABSTAIN
4E. Investments in real estate [ ] FOR [ ] AGAINST [ ] ABSTAIN
4F. Concentration of investments in a [ ] FOR [ ] AGAINST [ ] ABSTAIN
particular industry
4G. Underwriting [ ] FOR [ ] AGAINST [ ] ABSTAIN
4H. Lending of assets [ ] FOR [ ] AGAINST [ ] ABSTAIN
4I. Investments in other investment [ ] FOR [ ] AGAINST [ ] ABSTAIN
companies
4J. BONNEL GROWTH FUND and MEGATRENDS [ ] FOR [ ] AGAINST [ ] ABSTAIN
FUND ONLY: Investments in illiquid
assets
4K. BONNEL GROWTH FUND FUND and REGENT [ ] FOR [ ] AGAINST [ ] ABSTAIN
EASTERN EUROPEAN FUND ONLY: Purchase
or sale of commodities or comodity
futures contracts
4L. MEGATRENDS FUND ONLY: Investments in [ ] FOR [ ] AGAINST [ ] ABSTAIN
oil, gas, or other mineral leases
4M. MEGATRENDS FUND ONLY: Investments in [ ] FOR [ ] AGAINST [ ] ABSTAIN
warrants
4N. MEGATRENDS FUND ONLY: Investment [ ] FOR [ ] AGAINST [ ] ABSTAIN
restrictions in any one issuer
