<PAGE>
PAGE 1
000 B000000 12/31/95
000 C000000 0000927972
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 A
001 A000000 THE DLB FUND GROUP
001 B000000 811-08690
001 C000000 6172253800
002 A000000 ONE MEMORIAL DRIVE
002 B000000 CAMBRIDGE
002 C000000 MA
002 D010000 02142
003 000000 Y
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 4
007 C010100 1
007 C020100 THE DLB FIXED INCOME FUND
007 C030100 N
007 C010200 2
007 C020200 THE DLB GLOBAL SMALL CAPITALIZATION FUND
007 C030200 N
007 C010300 3
007 C020300 THE DLB VALUE FUND
007 C030300 N
007 C010400 4
007 C020400 THE DLB MID CAPITALIZATION FUND
007 C030400 N
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
007 C011100 11
007 C011200 12
007 C011300 13
007 C011400 14
007 C011500 15
007 C011600 16
007 C011700 17
007 C011800 18
007 C011900 19
007 C012000 20
012 A00AA01 INVESTORS BANK & TRUST COMPANY
<PAGE>
PAGE 2
012 B00AA01 85-720
012 C01AA01 BOSTON
012 C02AA01 MA
012 C03AA01 02205
013 A00AA01 DELOITTE & TOUCHE LLP
013 B01AA01 BOSTON
013 B02AA01 MA
013 B03AA01 02110
014 A00AA01 BABSON SECURITIES CORPORATION
014 B00AA01 8-47589
015 A00AA01 INVESTORS BANK & TRUST COMPANY
015 B00AA01 C
015 C01AA01 BOSTON
015 C02AA01 MA
015 C03AA01 02205
015 E01AA01 X
015 A00AA02 CITIBANK, N.A.
015 B00AA02 S
015 C01AA02 X
015 D01AA02 ARGENTINA
015 E04AA02 X
015 A00AA03 NATIONAL NOMINEES LIMITED
015 B00AA03 S
015 C01AA03 X
015 D01AA03 AUSTRALIA
015 E04AA03 X
015 A00AA04 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA04 S
015 C01AA04 X
015 D01AA04 AUSTRIA
015 E04AA04 X
015 A00AA05 CREDITANSTALT BANKVEREIN
015 B00AA05 S
015 C01AA05 X
015 D01AA05 AUSTRIA
015 E04AA05 X
015 A00AA06 STANDARD CHARTERED BANK, DHAKA
015 B00AA06 S
015 C01AA06 X
015 D01AA06 BANGLADESH
015 E04AA06 X
015 A00AA07 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA07 S
015 C01AA07 X
015 D01AA07 BELGIUM
015 E04AA07 X
015 A00AA08 GENERALE BANQUE
015 B00AA08 S
015 C01AA08 X
015 D01AA08 BELGIUM
015 E04AA08 X
<PAGE>
PAGE 3
015 A00AA09 BARCLAYS BANK BOTSWANA LTD., GABORONE
015 B00AA09 S
015 C01AA09 X
015 D01AA09 BOTSWANA
015 E04AA09 X
015 A00AA10 BANCO DE BOSTON, SAO PAULO
015 B00AA10 S
015 C01AA10 SAO PAULO
015 D01AA10 BRAZIL
015 E04AA10 X
015 A00AA11 ROYAL TRUST CORPORATION OF CANADA, TORONTO
015 B00AA11 S
015 C01AA11 TORONTO
015 D01AA11 CANADA
015 E04AA11 X
015 A00AA12 STANDARD CHARTERED BANK
015 B00AA12 S
015 C01AA12 SHANGHAI
015 D01AA12 CHINA
015 E04AA12 X
015 A00AA13 STANDARD CHARTERED BANK
015 B00AA13 S
015 C01AA13 SHENZHEN
015 D01AA13 CHINA
015 E04AA13 X
015 A00AA14 CITITRUST COLOMBIA S.A. SOCIEDAD FIDUCIARIA
015 B00AA14 S
015 C01AA14 X
015 D01AA14 COLOMBIA
015 E04AA14 X
015 A00AA15 CHASE MANHATTAN N.A.
015 B00AA15 S
015 C01AA15 X
015 D01AA15 CZECH REPUBLIC
015 E04AA15 X
015 A00AA16 CESKOSLOVENSKA OBCHODNI BANKA, PRAGUE
015 B00AA16 S
015 C01AA16 PRAGUE
015 D01AA16 CZECH REPUBLIC
015 E04AA16 X
015 A00AA17 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA17 S
015 C01AA17 X
015 D01AA17 DENMARK
015 E04AA17 X
015 A00AA18 DEN DANSKE BANK, COPENHAGEN
015 B00AA18 S
015 C01AA18 COPENHAGEN
015 D01AA18 DENMARK
015 E04AA18 X
015 A00AA19 CHASE MANHATTAN, N.A.
<PAGE>
PAGE 4
015 B00AA19 S
015 C01AA19 X
015 D01AA19 EGYPT
015 E04AA19 X
015 A00AA20 NATIONAL BANK OF EGYPT, CAIRO
015 B00AA20 S
015 C01AA20 CAIRO
015 D01AA20 EGYPT
015 E04AA20 X
015 A00AA21 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA21 S
015 C01AA21 X
015 D01AA21 FINLAND
015 E04AA21 X
015 A00AA22 KANSALLIS-OSAKE-PANKI, HELSINKI
015 B00AA22 S
015 C01AA22 HELSINKI
015 D01AA22 FINLAND
015 E04AA22 X
015 A00AA23 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA23 S
015 C01AA23 X
015 D01AA23 FRANCE
015 E04AA23 X
015 A00AA24 MORGAN GUARANTY PARIS
015 B00AA24 S
015 C01AA24 PARIS
015 D01AA24 FRANCE
015 E04AA24 X
015 A00AA25 SOCIETE GENERALE
015 B00AA25 S
015 C01AA25 X
015 D01AA25 FRANCE
015 E04AA25 X
015 A00AA26 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA26 S
015 C01AA26 X
015 D01AA26 GERMANY
015 E04AA26 X
015 A00AA27 DEUTSCHE BANK A.G.
015 B00AA27 S
015 C01AA27 X
015 D01AA27 GERMANY
015 E04AA27 X
015 A00AA28 BARCLAYS BANK OF GHANA LTD., ACCRA
015 B00AA28 S
015 C01AA28 ACCRA
015 D01AA28 GHANA
015 E04AA28 X
015 A00AA29 CITIBANK, N.A. (GREECE) ATHENS BRANCH
015 B00AA29 S
<PAGE>
PAGE 5
015 C01AA29 ATHENS
015 D01AA29 GREECE
015 E04AA29 X
015 A00AA30 STANDARD CHARTERED BANK, HONG KONG
015 B00AA30 S
015 C01AA30 X
015 D01AA30 HONG KONG
015 E04AA30 X
015 A00AA31 CITIBANK BUDAPEST RT.
015 B00AA31 S
015 C01AA31 BUDAPEST
015 D01AA31 HUNGARY
015 E04AA31 X
015 A00AA32 STATE BANK OF INDIA
015 B00AA32 S
015 C01AA32 X
015 D01AA32 INDIA
015 E04AA32 X
015 A00AA33 STANDARD CHARTERED BANK
015 B00AA33 S
015 C01AA33 X
015 D01AA33 INDONESIA
015 E04AA33 X
015 A00AA34 BANK OF IRELAND SECURITIES SERVICES, DUBLIN
015 B00AA34 S
015 C01AA34 DUBLIN
015 D01AA34 IRELAND
015 E04AA34 X
015 A00AA35 CHASE MANHATTAN BANK, N.A.
015 B00AA35 S
015 C01AA35 X
015 D01AA35 ISRAEL
015 E04AA35 X
015 A00AA36 BANK LEUMI LE-ISRAEL, TEL AVIV
015 B00AA36 S
015 C01AA36 TEL AVIV
015 D01AA36 ISRAEL
015 E04AA36 X
015 A00AA37 CITIBANK, N.A. (ITALY)
015 B00AA37 S
015 C01AA37 X
015 D01AA37 ITALY
015 E04AA37 X
015 A00AA38 STANDARD CHARTERED BANK
015 B00AA38 S
015 C01AA38 X
015 D01AA38 JAPAN
015 E04AA38 X
015 A00AA39 CITIBANK, N.A. (JORDAN)
015 B00AA39 S
015 C01AA39 X
<PAGE>
PAGE 6
015 D01AA39 JORDAN
015 E04AA39 X
015 A00AA40 STANDARD CHARTERED BANK
015 B00AA40 S
015 C01AA40 X
015 D01AA40 KOREA
015 E04AA40 X
015 A00AA41 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA41 S
015 C01AA41 X
015 D01AA41 LUXEMBOURG
015 E04AA41 X
015 A00AA42 STANDARD CHARTERED BANK OF MALAYSIA BERHAD
015 B00AA42 S
015 C01AA42 X
015 D01AA42 MALAYSIA
015 E04AA42 X
015 A00AA43 CHASE MANHATTAN, N.A.
015 B00AA43 S
015 C01AA43 X
015 D01AA43 MAURITIUS
015 E04AA43 X
015 A00AA44 HONGKONG SHANGHAI BANKING CORP.
015 B00AA44 S
015 C01AA44 X
015 D01AA44 MAURITIUS
015 E04AA44 X
015 A00AA45 BANCOMER, S.A.
015 B00AA45 S
015 C01AA45 X
015 D01AA45 MEXICO
015 E04AA45 X
015 A00AA46 CHASE MANHATTAN, N.A.
015 B00AA46 S
015 C01AA46 X
015 D01AA46 MOROCCO
015 E04AA46 X
015 A00AA47 BANQUE COMMERCIAL DU MAROC
015 B00AA47 S
015 C01AA47 X
015 D01AA47 MOROCCO
015 E04AA47 X
015 A00AA48 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA48 S
015 C01AA48 X
015 D01AA48 NETHERLANDS
015 E04AA48 X
015 A00AA49 ABN AMRO BANK
015 B00AA49 S
015 C01AA49 X
015 D01AA49 NETHERLANDS
<PAGE>
PAGE 7
015 E04AA49 X
015 A00AA50 NATIONAL NOMINEES LIMITED
015 B00AA50 S
015 C01AA50 X
015 D01AA50 NEW ZEALAND
015 E04AA50 X
015 A00AA51 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA51 S
015 C01AA51 X
015 D01AA51 NORWAY
015 E04AA51 X
015 A00AA52 CHRISTIANA BANK
015 B00AA52 S
015 C01AA52 X
015 D01AA52 NORWAY
015 E04AA52 X
015 A00AA53 STANDARD CHARTERED BANK, KARACHI
015 B00AA53 S
015 C01AA53 KARACHI
015 D01AA53 PAKISTAN
015 E04AA53 X
015 A00AA54 CITIBANK, N.A. (LIMA)
015 B00AA54 S
015 C01AA54 LIMA
015 D01AA54 PERU
015 E04AA54 X
015 A00AA55 STANDARD CHARTERED BANK, MANILA
015 B00AA55 S
015 C01AA55 MANILA
015 D01AA55 PHILIPPINES
015 E04AA55 X
015 A00AA56 CITIBANK POLAND S.A.
015 B00AA56 S
015 C01AA56 X
015 D01AA56 POLAND
015 E04AA56 X
015 A00AA57 CITIBANK PORTUGAL S.A.
015 B00AA57 S
015 C01AA57 X
015 D01AA57 PORTUGAL
015 E04AA57 X
015 A00AA58 STANDARD CHARTERED BANK, SINGAPORE
015 B00AA58 S
015 C01AA58 X
015 D01AA58 SINGAPORE
015 E04AA58 X
015 A00AA59 STANDARD BANK OF SOUTH AFRICA
015 B00AA59 S
015 C01AA59 X
015 D01AA59 SOUTH AFRICA
015 E04AA59 X
<PAGE>
PAGE 8
015 A00AA60 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA60 S
015 C01AA60 X
015 D01AA60 SPAIN
015 E04AA60 X
015 A00AA61 BANCO SANTANDER
015 B00AA61 S
015 C01AA61 X
015 D01AA61 SPAIN
015 E04AA61 X
015 A00AA62 STANDARD CHARTERED BANK, COLOMBO
015 B00AA62 S
015 C01AA62 COLOMBO
015 D01AA62 SRI LANKA
015 E04AA62 X
015 A00AA63 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA63 S
015 C01AA63 X
015 D01AA63 SWEDEN
015 E04AA63 X
015 A00AA64 SKANDINAVISKA ENSKILDA BANKEN
015 B00AA64 S
015 C01AA64 X
015 D01AA64 SWEDEN
015 E04AA64 X
015 A00AA65 CITIBANK, N.A. ZURICH
015 B00AA65 S
015 C01AA65 ZURICH
015 D01AA65 SWITZERLAND
015 E04AA65 X
015 A00AA66 EUROCLEAR CLEARANCE SYSTEM S.C.
015 B00AA66 S
015 C01AA66 X
015 D01AA66 SWITZERLAND
015 E04AA66 X
015 A00AA67 CREDIT SUISSE
015 B00AA67 S
015 C01AA67 X
015 D01AA67 SWITZERLAND
015 E04AA67 X
015 A00AA68 STANDARD CHARTERED BANK, TAIPEI
015 B00AA68 S
015 C01AA68 TAIPEI
015 D01AA68 TAIWAN
015 E04AA68 X
015 A00AA69 STANDARD CHARTERED BANK, BANGKOK
015 B00AA69 S
015 C01AA69 BANGKOK
015 D01AA69 THAILAND
015 E04AA69 X
015 A00AA70 CHASE MANHATTAN N.A., ISTANBUL
<PAGE>
PAGE 9
015 B00AA70 S
015 C01AA70 ISTANBUL
015 D01AA70 TURKEY
015 E04AA70 X
015 A00AA71 BARCLAYS BANK PLC
015 B00AA71 S
015 C01AA71 X
015 D01AA71 UNITED KINGDOM
015 E04AA71 X
015 A00AA72 FIRST CHICAGO CLEARING CENTRE
015 B00AA72 S
015 C01AA72 X
015 D01AA72 UNITED KINGDOM
015 E04AA72 X
015 A00AA73 CITIBANK, N.A. (CARACAS)
015 B00AA73 S
015 C01AA73 CARACAS
015 D01AA73 VENEZUELA
015 E04AA73 X
015 A00AA74 BARCLAYS BANK OF ZAMBIA LTD., LUSAKA
015 B00AA74 S
015 C01AA74 LUSAKA
015 D01AA74 ZAMBIA
015 E04AA74 X
015 A00AA75 BARCLAYS BANK OF ZIMBABWE LTD., HARARE
015 B00AA75 S
015 C01AA75 HARARE
015 D01AA75 ZIMBABWE
015 E04AA75 X
018 00AA00 Y
019 A00AA00 N
019 B00AA00 0
020 A000001 JEFFRIES
020 C000001 211
020 A000002 INSTINET
020 C000002 194
020 A000003 CANTOR FITZGERALD
020 C000003 169
020 A000004 MERRIL LYNCH
020 C000004 160
020 A000005 POSIT/ITG
020 C000005 152
020 A000006 CAPITAL INSTITUTIONAL SERVICES
020 C000006 139
020 A000007 SMITH BARNEY
020 C000007 132
020 A000008 DAIN BOSWORTH
020 C000008 98
020 A000009 WILLIAM O'NEIL
020 C000009 75
020 A000010 RAYMOND JAMES
<PAGE>
PAGE 10
020 C000010 74
021 000000 1404
022 A000001 LEHMAN BROTHERS
022 C000001 2783
022 D000001 104
022 A000002 FIRST BOSTON
022 C000002 1722
022 D000002 513
022 A000003 MERRILL LYNCH
022 C000003 1036
022 D000003 447
022 A000004 SALOMON BROTHERS
022 C000004 1175
022 D000004 225
022 A000005 GOLDMAN SACHS
022 C000005 423
022 D000005 771
022 A000006 DONALDSON LUFKIN & JENRETTE
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022 D000006 152
022 A000007 SMITH BARNEY
022 C000007 343
022 D000007 0
022 A000008 PRUDENTIAL SECURITIES
022 C000008 318
022 D000008 0
022 A000009 AG EDWARDS
022 C000009 252
022 D000009 0
022 A000010 BEAR STEARNS
022 C000010 200
022 D000010 0
023 C000000 8928
023 D000000 2337
024 00AA00 N
026 A000000 N
026 B000000 Y
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
029 00AA00 N
030 A00AA00 0
030 B00AA00 0.00
030 C00AA00 0.00
031 A00AA00 0
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<PAGE>
PAGE 11
032 00AA00 0
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034 00AA00 N
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036 B00AA00 0
037 00AA00 N
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039 00AA00 N
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042 D00AA00 0
042 E00AA00 0
042 F00AA00 0
042 G00AA00 0
042 H00AA00 0
043 00AA00 0
044 00AA00 0
049 00AA00 N
050 00AA00 N
051 00AA00 N
052 00AA00 N
053 A00AA00 Y
053 B00AA00 Y
053 C00AA00 N
054 A00AA00 Y
054 B00AA00 Y
054 C00AA00 N
054 D00AA00 N
054 E00AA00 N
054 F00AA00 N
054 G00AA00 Y
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 N
054 L00AA00 N
054 M00AA00 N
054 N00AA00 Y
054 O00AA00 N
055 A00AA00 N
055 B00AA00 N
056 00AA00 Y
057 00AA00 N
058 A00AA00 N
059 00AA00 Y
060 A00AA00 N
060 B00AA00 N
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<PAGE>
PAGE 12
077 A000000 Y
077 B000000 Y
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
080 A00AA00 LLOYDS OF LONDON
080 C00AA00 600
081 A00AA00 Y
081 B00AA00 11
082 A00AA00 N
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083 A00AA00 N
083 B00AA00 0
084 A00AA00 N
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085 A00AA00 Y
085 B00AA00 N
086 A010000 0
086 A020000 0
086 B010000 0
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086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
008 A000101 DAVID L. BABSON & CO., INC.
008 B000101 A
008 C000101 801-241
008 D010101 CAMBRIDGE
008 D020101 MA
008 D030101 02142
028 A010100 0
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<PAGE>
PAGE 13
028 D040100 0
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045 000100 Y
046 000100 N
047 000100 Y
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048 I020100 0.000
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<PAGE>
PAGE 14
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066 A000100 N
067 000100 N
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070 D020100 N
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070 E020100 N
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070 F020100 N
070 G010100 N
070 G020100 N
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<PAGE>
PAGE 15
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<PAGE>
PAGE 16
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<PAGE>
PAGE 17
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<PAGE>
PAGE 18
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067 000200 N
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069 000200 N
070 A010200 Y
070 A020200 Y
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070 C020200 N
070 D010200 Y
070 D020200 N
070 E010200 N
070 E020200 N
070 F010200 N
070 F020200 N
070 G010200 N
070 G020200 N
070 H010200 N
070 H020200 N
070 I010200 N
070 I020200 N
070 J010200 Y
070 J020200 Y
070 K010200 Y
070 K020200 N
070 L010200 Y
070 L020200 Y
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070 M020200 Y
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<PAGE>
PAGE 19
070 P020200 Y
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<PAGE>
PAGE 20
074 F000200 10260
074 G000200 0
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008 A000301 DAVID L BABSON & CO., INC.
008 B000301 A
008 C000301 801-241
008 D010301 CAMBRIDGE
008 D020301 MA
008 D030301 02142
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<PAGE>
PAGE 21
028 E020300 0
028 E030300 0
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028 G010300 10000
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045 000300 Y
046 000300 N
047 000300 Y
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048 I010300 0
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062 A000300 N
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062 D000300 0.0
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062 F000300 0.0
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<PAGE>
PAGE 22
062 N000300 0.0
062 O000300 0.0
062 P000300 0.0
062 Q000300 0.0
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066 A000300 Y
066 B000300 N
066 C000300 Y
066 D000300 N
066 E000300 N
066 F000300 N
066 G000300 N
067 000300 N
068 A000300 N
068 B000300 N
069 000300 N
070 A010300 Y
070 A020300 Y
070 B010300 Y
070 B020300 N
070 C010300 N
070 C020300 N
070 D010300 Y
070 D020300 N
070 E010300 N
070 E020300 N
070 F010300 N
070 F020300 N
070 G010300 N
070 G020300 N
070 H010300 N
070 H020300 N
070 I010300 N
070 I020300 N
070 J010300 Y
070 J020300 N
070 K010300 Y
070 K020300 N
070 L010300 Y
070 L020300 Y
070 M010300 Y
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070 N020300 N
070 O010300 Y
070 O020300 N
070 P010300 Y
070 P020300 N
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<PAGE>
PAGE 23
070 Q020300 N
070 R010300 Y
070 R020300 N
071 A000300 10539
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073 A010300 0.0900
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<PAGE>
PAGE 24
074 H000300 0
074 I000300 0
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074 Y000300 10000
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076 000300 0.00
008 A000401 DAVID L. BABSON & CO., INC.
008 B000401 A
008 C000401 801-241
008 D010401 CAMBRIDGE
008 D020401 MA
008 D030401 02142
028 A010400 0
028 A020400 0
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028 B010400 10000
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<PAGE>
PAGE 25
028 E040400 0
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045 000400 Y
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062 A000400 N
062 B000400 0.0
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<PAGE>
PAGE 26
062 P000400 0.0
062 Q000400 0.0
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063 A000400 0
063 B000400 0.0
066 A000400 Y
066 B000400 N
066 C000400 Y
066 D000400 N
066 E000400 N
066 F000400 N
066 G000400 N
067 000400 N
068 A000400 N
068 B000400 N
069 000400 N
070 A010400 Y
070 A020400 Y
070 B010400 Y
070 B020400 N
070 C010400 N
070 C020400 N
070 D010400 Y
070 D020400 N
070 E010400 N
070 E020400 N
070 F010400 N
070 F020400 N
070 G010400 N
070 G020400 N
070 H010400 N
070 H020400 N
070 I010400 N
070 I020400 N
070 J010400 Y
070 J020400 N
070 K010400 Y
070 K020400 N
070 L010400 Y
070 L020400 Y
070 M010400 Y
070 M020400 N
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<PAGE>
PAGE 27
070 R020400 N
071 A000400 10399
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<PAGE>
PAGE 28
074 J000400 0
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SIGNATURE RONALD E. GWOZDZ
TITLE PRESIDENT
<PAGE>
This report is signed on behalf of the registrant in the City of
Cambridge, The Commonwealth of Massachusetts on February 29, 1996.
THE DLB FUND GROUP
By: /s/ Ronald E. Gwozdz Witness: /s/ Edson B. Olds IV
-------------------- ---------------
Ronald E. Gwozdz Name: Edson B. Olds IV
President Title: Treasurer and Clerk
<PAGE>
Deloitte &
Touche LLP
- ------------ -------------------------------------------------------------
125 Summer Street Telephone: (617) 261-8000
Boston, Massachusetts 02110-1617 Facsimile: (617) 261-8111
To the Trustees of the DLB Fund Group and Shareholders of
DLB Fixed Income Fund, DLB Value Fund, DLB Global Small
Capitalization Fund and DLB Mid Capitalization Fund ("Funds"):
In planning and performing our audits of the financial statements of the Funds
(the portfolios constituting the DLB Fund Group) for the period ended December
31, 1995 (on which we have issued our reports each dated February 1, 1996), we
considered their internal control structure, including procedures for
safeguarding securities, in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and to comply with
the requirements of Form N-SAR, not to provide assurance on the internal control
structure.
The management of the DLB Fund Group is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
December 31, 1995.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
February 1, 1996
- ----------------
Deloitte Touche
Tohmatsu
International
- ----------------
<PAGE>
Exhibit Index
1. Bylaws of The DLB Fund Group (the "Trust"), as amended on October 4, 1995
2. Management Contract between the Trust and David L. Babson & Co., Inc.
(the "Manager") on behalf of the DLB Fixed Income Fund
3. Management Contract between the Trust and the Manager on behalf of the
DLB Global Small Capitalization Fund
4. Sub-Advisory Agreement between the Manager and Babson-Stewart Ivory
International (the "Sub-Advisor") on behalf of the DLB Global Small
Capitalization Fund
5. Management Contract between the Trust and the Manager on behalf of the
DLB Value Fund
6. Management Contract between the Trust and the Manager on behalf of the
DLB Mid Capitalization Fund
7. Financial Data Schedules for the: (a) DLB Fixed Income Fund (b) DLB
Global Small Capitalization Fund (c) DLB Value Fund (d) DLB Mid
Capitalization Fund
-2-
BYLAWS
OF
THE DLB FUND GROUP
(as revised through October 4, 1995)
ARTICLE 1
Agreement and Declaration of Trust and
Principal Office
1.1. Agreement and Declaration of Trust. These Bylaws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of The DLB Fund Group, the Massachusetts business trust
established by the Declaration of Trust (the "Trust").
1.2. Principal Office of the Trust. The initial principal office of the
Trust shall be located in Cambridge, Massachusetts. The Trust may have such
other offices within or without Massachusetts as the Trustee may determine or as
they may authorize.
ARTICLE 2
Meetings of Trustees
2.1. Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees.
2.2. Special Meetings. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the Chairman of the Trustees, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Clerk or
an Assistant Clerk or by the officer or the Trustees calling the meeting.
2.3. Notice. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram, telex
or telecopy or other electronic facsimile transmission method at least
twenty-four hours before the meeting addressed to the Trustee at his or her
usual or last known business or residence address or to give notice to him or
her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before the meeting, is filed with the records of
the meeting, or to any Trustee who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him or
-1-
<PAGE>
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
2.4. Quorum. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5. Action by Vote. When a quorum is present at any meeting, a
majority of Trustees present may take any action, except when a larger vote is
expressly required by law, by the Declaration of Trust or by these Bylaws.
2.6. Action by Writing. Except as required by law, any action required
or permitted to be taken at any meeting of the Trustees may be taken without a
meeting if a majority of the Trustees (or such larger proportion thereof as
shall be required by any express provision of the Declaration of Trust or these
Bylaws) consent to the action in writing and such written consents are filed
with the records of the meetings of Trustees. Such consent shall be treated for
all purposes as a vote taken at a meeting of Trustees.
2.7. Presence through Communications Equipment. Except as required by
law, the Trustees may participate in a meeting of Trustees by means of a
conference telephone or similar 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.
ARTICLE 3
Officers
3.1. Enumeration; Qualification. The officers of the Trust shall be a
President, a Treasurer, a Clerk, and such other officers, including a Chairman
of the Trustees and a Controller, if any, as the Trustees from time to time may
in their discretion elect. The Trust may also have such agents as the Trustees
from time to time may in their discretion appoint. The Chairman of the Trustees,
if one is elected, shall be a Trustee and may but need not be a Shareholder; and
any other officer may but need not be a Trustee or a Shareholder. Any two or
more offices may be held by the same person.
3.2. Election. The President, the Treasurer, and the Clerk shall be
elected annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at such or any other time. Vacancies in any office may
be filled at any time.
3.3. Tenure. The Chairman of the Trustees, if one is elected, the
President, the Treasurer and the Clerk shall hold office until their respective
successors are chosen and
-2-
<PAGE>
qualified, or in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent shall
retain authority at the pleasure of the Trustees.
3.4. Powers. Subject to the provisions of these Bylaws, each officer
shall have, in addition to the duties and powers herein and in the Declaration
of Trust set forth, such duties and powers as are commonly incident to the
office occupied by him or her as if the Trust were organized as a Massachusetts
business corporation and such other duties and powers as the Trustees may from
time to time designate.
3.5. Chairman; President. Unless the Trustees otherwise provide, the
Chairman of the Trustees or, if there is none or in the absence of the Chairman,
the President shall preside at all meetings of the Shareholders and of the
Trustees. The President shall be the chief executive officer.
3.6. Treasurer and Controller. The Treasurer shall be the chief
financial officer and, if no Controller is elected, chief accounting officer of
the Trust, and shall, subject to the provisions of the Declaration of Trust and
to any arrangement made by the Trustees with a custodian, investment adviser or
manager, or transfer, shareholder servicing or similar agent, be in charge of
the valuable papers and, if no Controller is elected, the books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.
The Controller, if any, shall be the chief accounting officer of the
Trust and shall be in charge of its books of account and accounting records. The
Controller shall be responsible for preparation of financial statements of the
Trust and shall have such other duties and powers as may be designated from time
to time by the Trustees or the President.
3.7. Clerk. The Clerk shall record all proceedings of the Shareholders
and the Trustees in books to be kept therefor, which books or a copy thereof
shall be kept at the principal office of the Trust. In the absence of the Clerk
from any meeting of the Shareholders or Trustees, an assistant clerk or, if
there be none or if he or she is absent, a temporary clerk chosen at such
meeting shall record the proceedings thereof in the aforesaid books.
3.8. Resignations. Any officer may resign at any time by written
instrument signed by him or her and delivered to the Chairman, the President or
the Clerk or to a meeting of the Trustees. Such resignation shall be effective
upon receipt unless specified to be effective at some other time. Except to the
extent expressly provided in a written agreement with the Trust, no officer
resigning and no officer removed shall have any right to any compensation for
any period following his or her resignation or removal, or any right to damages
on account of such removal.
-3-
<PAGE>
ARTICLE 4
Committees
4.1. Quorum; Voting. A majority of the members of any Committee of the
Trustees shall constitute a quorum for the transaction of business, and any
action of such a Committee may be taken at a meeting by a vote of a majority of
the members present (a quorum being present) or evidenced by one or more
writings signed by such a majority. Members of a Committee may participate in a
meeting of such Committee 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.
ARTICLE 5
Reports
5.1. General. The Trustees and officers shall render reports at the
time and in the manner required by the Declaration of Trust or any applicable
law. Officers and Committees shall render such additional reports as they may
deem desirable or as may from time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
6.1. General. Except as from time to time otherwise provided by the
Trustees, the initial fiscal year of the Trust shall end on such date as is
determined in advance or in arrears by the Treasurer, and subsequent fiscal
years shall end on such date in subsequent years.
ARTICLE 7
Seal
7.1. General. The Trust shall have no seal.
ARTICLE 8
Execution of Papers
8.1. General. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President or by the Treasurer.
-4-
<PAGE>
ARTICLE 9
Share Certificates
9.1. Share Certificates. No certificates certifying the ownership of
Shares shall be issued except as the Trustees may otherwise authorize. In the
event that the Trustees authorize the issuance of Share certificates, subject to
the provisions of Section 9.3, each Shareholder shall be entitled to a
certificate stating the number of Shares and the series or class owned by him or
her, in such form as shall be prescribed from time to time by the Trustees. Such
certificates shall be signed by the President or any Vice-President and by the
Treasurer or any Assistant Treasurer. Such signatures may be facsimiles if the
certificate is signed by a transfer agent, or by a registrar, other than a
Trustee, officer or employee of the Trust. In case any officer who has signed or
whose facsimile signature has been placed on such certificate shall cease to be
such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he or she were such officer at the time of its issue.
In lieu of issuing certificates for Shares, the Trustees or the
transfer agent may either issue receipts therefor or may keep accounts upon the
books of the Trust for the record holders of such Shares, who shall in either
case be deemed, for all purposes hereunder, to be the holders of certificates
for such Shares as if they had accepted such certificates and shall be held to
have expressly assented and agreed to the terms hereof.
9.2. Loss of Certificates. In case of the alleged loss or destruction
or the mutilation of a Share certificate, a duplicate certificate may be issued
in place thereof, upon such terms as the Trustees may prescribe.
9.3. Discontinuance of Issuance of Certificates. The Trustees may at
any time discontinue the issuance of Share certificates and may, by written
notice to each Shareholder, require the surrender of Share certificates to the
Trust for cancellation. Such surrender and cancellation shall not affect the
ownership of Shares in the Trust.
ARTICLE 10
Provisions Relating to the Conduct of the Trust's Business
10.1. Determination of Net Asset Value Per Share. Net asset value per
Share of each series or class of Shares of the Trust shall mean: (i) the value
of all the assets of such series or class of Shares; (ii) less total liabilities
of such series or class of Shares; (iii) divided by the number of Shares of such
series or class of Shares outstanding, in each case at the time of each
determination. The net asset value per Share of each series or class of Shares
shall be determined at such times as determined by the Trustees.
-5-
<PAGE>
In valuing the portfolio investments of any series or class of Shares
for determination of net asset value per Share of such series, securities for
which market quotations are readily available shall be valued at prices which,
in the opinion of the Trustees or the person designated by the Trustees to make
the determination, most nearly represent the market value of such securities,
and other securities and asset shall be valued at their fair value as determined
by or pursuant to the direction of the Trustees, which in the case of short-term
debt obligations, commercial paper and repurchase agreements may, but need not,
be on the basis of quoted yields for securities of comparable maturity, quality
and type, or on the basis of amortized cost. Expenses and liabilities of the
Trust shall be accrued each day. Liabilities may include such reserves for
taxes, estimated accrued expenses and contingencies as the Trustees or their
designates may in their sole discretion deem fair and reasonable under the
circumstances. No accruals shall be made in respect of taxes on unrealized
appreciation of securities owned unless the Trustees shall otherwise determine.
Dividends payable by the Trust shall be deducted as at the time of but
immediately prior to the determination of net asset value per Share on the
record date thereof.
10.2. Derivative Claims. No Shareholder shall have the right to bring
or maintain any court action, proceeding or claim on behalf of this Trust or any
series without first making demand on the Trustees requesting the Trustees to
bring or maintain such action, proceeding or claim. Such demand shall be excused
only when the plaintiff makes a specific showing that irreparable injury to the
Trust or series would otherwise result. Such demand shall be mailed to the Clerk
of the Trust at the Trust's principal office and shall set forth in reasonable
detail the nature of the proposed court action, proceeding or claim and the
essential facts relied upon by the Shareholder to support the allegations made
in the demand. The Trustees shall consider such demand within 45 days of its
receipt by the Trust. In their sole discretion, the Trustees may submit the
matter to a vote of Shareholders of the Trust or series, as appropriate. Any
decision by the Trustees to bring, maintain or settle (or not to bring, maintain
or settle) such court action, proceeding or claim, or to submit the matter to a
vote of Shareholders shall be made by the Trustees in their business judgment
and shall be binding upon the Shareholders. Any decision by the Trustees to
bring or maintain a court action, proceeding or suit on behalf of the Trust or a
series shall be subject to the right of the Shareholders under Article V,
Section 1 of the Declaration of Trust to vote on whether or not such court
action, proceeding or suit should or should not be brought or maintained.
10.3. Securities and Cash of the Trust to be held by Custodian Subject
to Certain Terms and Conditions.
(a) All securities and cash owned by this Trust shall be held by
or deposited with one or more banks or trust companies having
(according to its last published report) not less than
$5,000,000 aggregate capital, surplus and undivided profits
(any such bank or trust company being hereby designated as
"Custodian"), provided such a Custodian can be found ready and
willing to act; subject to such rules, regulations and orders,
if any, as the Securities and Exchange
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Commission may adopt, this Trust may, or may permit any
Custodian to, deposit all or any part of the securities owned
by this Trust in a system for the central handling of
securities pursuant to which all securities of any particular
class or series of any issue deposited within the system may
be transferred or pledged by bookkeeping entry, without
physical delivery. The Custodian may appoint, subject to the
approval of the Trustees, one or more subcustodians.
(b) The Trust shall enter into a written contract with each
Custodian regarding the powers, duties and compensation of
such Custodian with respect to the cash and securities of the
Trust held by such Custodian. Such contract and all amendments
thereto shall be approved by the Trustees.
(c) The Trust shall upon the resignation or inability to serve of
any Custodian or upon change of any Custodian:
(i) in case of such resignation or inability to serve,
use its best efforts to obtain a successor Custodian;
(ii) require that the cash and securities owned by the
Trust be delivered directly to the successor
Custodian; and
(iii) in the event that no successor Custodian can be
found, submit to the Shareholders, before permitting
delivery of the cash and securities owned by the
Trust to a successor Custodian, the question whether
the Trust shall be liquidated or shall function
without a Custodian.
ARTICLE 11
Shareholders' Voting Powers and Meetings
11.1. Voting Powers. The Shareholders shall have power to vote only (i)
for the election of Trustees as provided in Article IV, Section 1 of the
Declaration of Trust, provided, however, that no meeting of Shareholders is
required to be called for the purpose of electing Trustees unless and until such
time as less than a majority of the Trustees have been elected by the
Shareholders, (ii) with respect to any Manager or Sub-Adviser as provided in
Article IV, Section 6 of the Declaration of Trust to the extent required by the
1940 Act, (iii) with respect to any plan of distribution adopted by the Trustees
with respect to one or more series or classes pursuant to Rule 12b-1 under the
1940 Act, (iv) with respect to any termination of this Trust to the extent and
as provided in Article IX, Section 4 of the Declaration of Trust, (v) with
respect to any amendment of the Declaration of Trust to the extent and as
provided in Article IX, Section 7 of the Declaration of Trust, (vi) to the same
extent as the stockholders of a Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the
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<PAGE>
Trust or the Shareholders, (vii) the removal, with or without cause, of a
Trustee and (viii) with respect to such additional matters relating to the Trust
as may be required by law, the Declaration of Trust, these Bylaws 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. Annual meetings
of Shareholders are not required by these Bylaws. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote. The
Shareholders of any particular series or class shall not be entitled to vote on
any matters as to which such series or class is not affected. Except with
respect to matters as to which the Trustees have determined that only the
interests of one or more particular series or classes are affected or as
required by law, all of the Shares of each series or class shall, on matters as
to which such series or class is entitled to vote, vote with other series or
classes so entitled as a single class. Notwithstanding the foregoing, with
respect to matters which would otherwise be voted on by two or more series or
classes as a single class, the Trustees may, in their sole discretion, submit
such matters to the Shareholders of any or all such series or classes,
separately. There will be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. The placing of a Shareholder's name on a proxy
pursuant to telephonic or electronically transmitted instructions obtained
pursuant to procedures reasonably designed to verify that such instructions have
been authorized by such Shareholder shall constitute execution of such proxy by
or on behalf of such Shareholder. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take action required by law, the
Declaration of Trust or these Bylaws to be taken by Shareholders.
11.2. Voting Power and Meetings. Meetings of the Shareholders of the
Trust or of one or more series or classes of Shares may be called by the
Trustees for the purpose of electing Trustees as provided in Article IV, Section
1 of the Declaration of Trust and for such other purposes as may be prescribed
by law, by the Declaration of Trust or by these Bylaws. Any meeting of the
Shareholders of the Trust or of one or more series or classes of Shares shall be
called by the Trustees upon request of Shareholders holding at least ten percent
(10%) of the Shares entitled to vote on such matter. Meetings of the
Shareholders of the Trust or of one or more series or classes of Shares may also
be called by the Trustees from time to time for the purpose of taking action
upon any other matter deemed by the Trustees to be necessary or desirable. A
meeting of Shareholders may be held at any place designated by the Trustees.
Written notice of any meeting of Shareholders shall be given or caused to be
given by the Trustees by mailing such notice at least seven days before such
meeting, postage prepaid, stating the time and place of the meeting, to each
Shareholder at the Shareholder's address as it appears on the record of the
Trust. Whenever notice of a meeting is required to be given to a Shareholder
under the Declaration of Trust or these Bylaws, a written waiver thereof,
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<PAGE>
executed before or after the meeting by such Shareholder or his attorney
thereunto authorized and filed with the records of the meeting, shall be deemed
equivalent to such notice.
11.3. Quorum and Required Vote. Ten percent (10%) of Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of the Declaration of Trust
or these Bylaws permits or requires that holders of any series or class of
Shares shall vote as a series or class, as the case may be, then ten percent
(10%) of the aggregate number of Shares of that series or that class entitled to
vote shall be necessary to constitute a quorum for the transaction of business
by that series or class. Any lesser number shall be sufficient for adjournments.
Any adjourned session or sessions may be held, within a reasonable time after
the date set for the original meeting, without the necessity of further notice.
Except when a larger vote is required by any provision of law or the Declaration
of Trust or these Bylaws, a majority of the Shares voted shall decide any
questions and a plurality shall elect a Trustee, provided that where any
provision of law or of the Declaration of Trust or these Bylaws permits or
requires that the holders of any series or class shall vote as a series or
class, as the case may be, then a majority of the Shares of that series or that
class voted on the matter (or a plurality with respect to the election of a
Trustee) shall decide that matter insofar as that series or class is concerned.
11.4. Action by Written Consent. Any action taken by Shareholders may
be taken without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger proportion thereof as shall be required by any express
provision of law or the Declaration of Trust or these Bylaws) consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.
11.5. Record Dates. For the purpose of determining the Shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a time, which shall be not more than 60
days before the date of any meeting of Shareholders or the date for the payment
of any dividend or of any other distribution, as the record date for determining
the Shareholders having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or distribution,
and in such case only Shareholders of record on such record date shall have such
right notwithstanding any transfer of Shares on the books of the Trust after the
record date; or without fixing such record date the Trustees may for any of such
purposes close the register or transfer books for all or any part of such
period.
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ARTICLE 12
Amendments to the Bylaws
12.1. General. These Bylaws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
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MANAGEMENT CONTRACT
Management Contract executed as of July 19, 1995 between THE DLB FUND
GROUP, a Massachusetts business trust (the "Trust"), on behalf of its DLB Fixed
Income Fund (the "Fund"), and DAVID L. BABSON & CO., INC., a Massachusetts
corporation (the "Manager").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO THE TRUST.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of its portfolio securities and (ii) furnish office space and
equipment, provide bookkeeping and clerical services (excluding determination of
net asset value, shareholder accounting services and fund accounting services)
and pay all salaries, fees and expenses of officers and Trustees of the Trust
who are affiliated with the Manager. In the performance of its duties, the
Manager will comply with the provisions of the Agreement and Declaration of
Trust and By-laws of the Trust and the Fund's stated investment objective,
policies and restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the
Manager will seek the best price and execution available, except to the extent
it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Manager shall
consider all factors it deems relevant, including, without limitation, the
overall net economic result to the Fund (involving price paid or received and
any commissions and other costs paid), the efficiency with which the transaction
is effected, the ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Subject to such policies as the Trustees may determine, the Manager
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its having caused the
Fund to pay a broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either
<PAGE>
that particular transaction or the Manager's overall responsibilities with
respect to the Fund and to other clients of the Manager as to which the Manager
exercises investment discretion.
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940, the Manager, at its
expense, may select and contract with investment consultants or sub-advisers
(the "Consultants" or "Sub-Advisers," as applicable) for the Fund. The Manager
will compensate any Consultant or Sub-Adviser of the Fund for its services to
the Fund. The Manager may terminate the services of the Consultant or
Sub-Adviser at any time in its sole discretion and shall at such time assume the
responsibilities of such Consultant or Sub-Adviser unless and until a successor
Consultant or Sub-Adviser is selected.
(d) The Manager shall not be obligated under this Contract to pay any
expenses of or for the Trust or of or for the Fund not expressly assumed by the
Manager pursuant to this Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Manager, and in any person
controlling, controlled by or under common control with the Manager, and that
the Manager and any person controlling, controlled by or under common control
with the Manager may have an interest in the Trust. It is also understood that
the Manager and persons controlling, controlled by or under common control with
the Manager have and may have advisory, management service, distribution or
other contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.40% of the Fund's average daily net asset value. Such average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month while this
Contract is in effect. Such fee shall be payable for each month within five (5)
business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Fund
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses of the Fund exceed any expense
limitation which the Manager may, by written notice to the Trust, voluntarily
declare to be
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<PAGE>
effective with respect to the Fund, subject to such terms and conditions as the
Manager may prescribe in such notice, the compensation due the Manager shall be
reduced, and, if necessary, the Manager shall bear the Fund's expenses to the
extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Trustees of the Trust who are not interested persons of the Trust or of the
Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4)
until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the rules and regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
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<PAGE>
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" of the Fund means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund present (in person or by proxy) and entitled to vote at
such meeting, if the holders of more than 50% of the outstanding shares of the
Fund entitled to vote at such meeting are present in person or by proxy, or (b)
of the holders of more than 50% of the outstanding shares of the Fund entitled
to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; and the phrase
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the rules and regulations
thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. INITIALS "DLB."
The Manager owns the initials "DLB" and such initials may be used by
the Trust only with the consent of the Manager. The Manager consents to the use
by the Trust of the name "The DLB Fund Group" or any other name embodying the
initials "DLB", in such forms as the Manager shall in writing approve, but only
on condition and so long as (i) this Contract shall remain in full force and
(ii) the Trust shall fully perform, fulfill and comply with all provisions of
this Contract expressed herein to be performed, fulfilled or complied with by
it. No such name shall be used by the Trust at any time or in any place or for
any purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said initials as part
of a business or name is not exclusive of the right of the Manager itself to
use, or to authorize others to use, the same; the Trust acknowledges and agrees
that as between the Manager and the Trust, the Manager has the exclusive right
so to use, or authorize others to use, said initials and the Trust agrees to
take such action as may reasonably be requested by the Manager to give full
effect to the provisions of this section (including, without limitation,
consenting to such use of said initials). Without
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<PAGE>
limiting the generality of the foregoing, the Trust agrees that, upon any
termination of this Contract by either party or upon the violation of any of its
provisions by the Trust, the Trust will, at the request of the Manager made
within six months after the Manager has knowledge of such termination or
violation, use its best efforts to change the name of the Trust so as to
eliminate all reference, if any, to the initials "DLB" and will not thereafter
transact any business in a name containing the initials "DLB" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the initials "DLB" or any other
reference to the Manager. Such covenants on the part of the Trust shall be
binding upon it, its trustees, officers, stockholders, creditors and all other
persons claiming under or through it.
9. EXERCISE OF VOTING RIGHTS.
Except as instructed otherwise by the Trustees of the Trust, the
Manager shall at its discretion exercise or procure the exercise of any voting
right attaching to investments of the Fund.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
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<PAGE>
IN WITNESS WHEREOF, THE DLB FUND GROUP and DAVID L. BABSON & CO., INC.
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
THE DLB FUND GROUP
By_______________________________
Title:
DAVID L. BABSON & CO., INC.
By_______________________________
Title:
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MANAGEMENT CONTRACT
Management Contract executed as of July 19, 1995 between THE DLB FUND
GROUP, a Massachusetts business trust (the "Trust") on behalf of its DLB Global
Small Capitalization Fund (the "Fund"), and DAVID L. BABSON & CO., INC., a
Massachusetts corporation (the "Manager").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO THE TRUST.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of its portfolio securities and (ii) furnish office space and
equipment, provide bookkeeping and clerical services (excluding determination of
net asset value, shareholder accounting services and fund accounting services)
and pay all salaries, fees and expenses of officers and Trustees of the Trust
who are affiliated with the Manager. In the performance of its duties, the
Manager will comply with the provisions of the Agreement and Declaration of
Trust and By-laws of the Trust and the Fund's stated investment objective,
policies and restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the
Manager will seek the best price and execution available, except to the extent
it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Manager shall
consider all factors it deems relevant, including, without limitation, the
overall net economic result to the Fund (involving price paid or received and
any commissions and other costs paid), the efficiency with which the transaction
is effected, the ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Subject to such policies as the Trustees may determine, the Manager
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its having caused the
Fund to pay a broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either
-1-
<PAGE>
that particular transaction or the Manager's overall responsibilities with
respect to the Fund and to other clients of the Manager as to which the Manager
exercises investment discretion.
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940, the Manager, at its
expense, may select and contract with investment consultants or sub-advisers
(the "Consultants" or "Sub-Advisers," as applicable) for the Fund. So long as
Babson-Stewart Ivory International ("Babson-Stewart") serves as Sub-Adviser to
the Fund pursuant to a Sub-Advisory Agreement in substantially the form attached
hereto as Exhibit A (the "Sub-Advisory Agreement"), the obligation of the
Manager under this Contract with respect to the Fund shall be, subject in any
event to the control of the Trustees of the Trust, to determine and review with
Babson-Stewart investment policies of the Fund, and Babson-Stewart shall have
the obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable investment objectives,
policies and restrictions and placing all orders for the purchase and sale of
portfolio securities for the Fund. The Manager will compensate any Consultant or
Sub- Adviser of the Fund for its services to the Fund. The Manager may terminate
the services of the Consultant or Sub-Adviser at any time in its sole discretion
and shall at such time assume the responsibilities of such Consultant or
Sub-Adviser unless and until a successor Consultant or Sub-Adviser is selected.
(d) The Manager shall not be obligated under this Contract to pay any
expenses of or for the Trust or of or for the Fund not expressly assumed by the
Manager pursuant to this Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Manager, and in any person
controlling, controlled by or under common control with the Manager, and that
the Manager and any person controlling, controlled by or under common control
with the Manager may have an interest in the Trust. It is also understood that
the Manager and persons controlling, controlled by or under common control with
the Manager have and may have advisory, management service, distribution or
other contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 1.00% of the Fund's average daily net asset value. Such average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month while
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<PAGE>
this Contract is in effect. Such fee shall be payable for each month within five
(5) business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Fund
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses of the Fund exceed any expense
limitation which the Manager may, by written notice to the Trust, voluntarily
declare to be effective with respect to the Fund, subject to such terms and
conditions as the Manager may prescribe in such notice, the compensation due the
Manager shall be reduced, and, if necessary, the Manager shall bear the Fund's
expenses to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Trustees of the Trust who are not interested persons of the Trust or of the
Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4)
until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second
-3-
<PAGE>
anniversary of its execution, or upon the expiration of one year from
the effective date of the last such continuance, whichever is later;
provided, however, that if the continuance of this Contract is
submitted to the shareholders of the Fund for their approval and such
shareholders fail to approve such continuance of this Contract as
provided herein, the Manager may continue to serve hereunder in a
manner consistent with the Investment Company Act of 1940 and the rules
and regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" of the Fund means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund present (in person or by proxy) and entitled to vote at
such meeting, if the holders of more than 50% of the outstanding shares of the
Fund entitled to vote at such meeting are present in person or by proxy, or (b)
of the holders of more than 50% of the outstanding shares of the Fund entitled
to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; and the phrase
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the rules and regulations
thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. INITIALS "DLB."
The Manager owns the initials "DLB" and such initials may be used by
the Trust only with the consent of the Manager. The Manager consents to the use
by the Trust of the name "The DLB Fund Group" or any other name embodying the
initials "DLB", in such forms as the Manager shall in writing approve, but only
on condition and so long as (i) this Contract
-4-
<PAGE>
shall remain in full force and (ii) the Trust shall fully perform, fulfill and
comply with all provisions of this Contract expressed herein to be performed,
fulfilled or complied with by it. No such name shall be used by the Trust at any
time or in any place or for any purposes or under any conditions except as in
this section provided. The foregoing authorization by the Manager to the Trust
to use said initials as part of a business or name is not exclusive of the right
of the Manager itself to use, or to authorize others to use, the same; the Trust
acknowledges and agrees that as between the Manager and the Trust, the Manager
has the exclusive right so to use, or authorize others to use, said initials and
the Trust agrees to take such action as may reasonably be requested by the
Manager to give full effect to the provisions of this section (including,
without limitation, consenting to such use of said initials). Without limiting
the generality of the foregoing, the Trust agrees that, upon any termination of
this Contract by either party or upon the violation of any of its provisions by
the Trust, the Trust will, at the request of the Manager made within six months
after the Manager has knowledge of such termination or violation, use its best
efforts to change the name of the Trust so as to eliminate all reference, if
any, to the initials "DLB" and will not thereafter transact any business in a
name containing the initials "DLB" in any form or combination whatsoever, or
designate itself as the same entity as or successor to an entity of such name,
or otherwise use the initials "DLB" or any other reference to the Manager. Such
covenants on the part of the Trust shall be binding upon it, its trustees,
officers, stockholders, creditors and all other persons claiming under or
through it.
9. EXERCISE OF VOTING RIGHTS.
Except as instructed otherwise by the Trustees of the Trust, the
Manager shall at its discretion exercise or procure the exercise of any voting
right attaching to investments of the Fund.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
-5-
<PAGE>
IN WITNESS WHEREOF, THE DLB FUND GROUP and DAVID L. BABSON & CO., INC.
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
THE DLB FUND GROUP
By_______________________________
Title:
DAVID L. BABSON & CO., INC.
By_______________________________
Title:
-6-
THE DLB GLOBAL SMALL CAPITALIZATION FUND
SUB-ADVISORY AGREEMENT
Sub-Advisory Agreement executed as of July 19, 1995 between DAVID L.
BABSON & CO., INC. (the "Manager") and BABSON-STEWART IVORY INTERNATIONAL (the
"Sub-Adviser").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE SUB-ADVISER TO THE MANAGER.
(a) Subject always to the control of the Trustees of The DLB Fund Group
(the "Trust"), a Massachusetts business trust, and to such policies as the
Trustees or the Manager, as the case may be, may determine, the Sub-Adviser
will, at its expense, (i) furnish continuously an investment program for the DLB
Global Small Capitalization Fund (the "Fund") and will make investment decisions
on behalf of the Fund and place all orders for the purchase and sale of its
portfolio securities and (ii) furnish office space and equipment and provide
bookkeeping and clerical services (excluding determination of net asset value,
shareholder accounting services and fund accounting services). In the
performance of its duties, the Sub-Adviser will comply with the provisions of
the Agreement and Declaration of Trust and By-laws of the Trust and the Fund's
stated investment objective, policies and restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the
Sub-Adviser will seek the best price and execution available, except to the
extent it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Sub-Adviser shall
consider all factors it deems relevant, including, without limitation, the
overall net economic result to the Fund (involving price paid or received and
any commissions and other costs paid), the efficiency with which the transaction
is effected, the ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Subject to such policies as the Trustees or the Manager, as the case
may be, may determine, the Sub-Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused the Fund to pay a broker or dealer that
provides brokerage and research services to the Sub- Adviser an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Sub-Adviser determines in good faith that such amount
of commission was
<PAGE>
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with respect to the
Fund and to other clients of the Sub-Adviser as to which the Sub-Adviser
exercises investment discretion.
(c) The Sub-Adviser shall not be obligated under this Agreement to pay
any expenses of or for the Trust or of or for the Fund not expressly assumed by
the Sub-Adviser pursuant to this Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any person
controlling, controlled by or under common control with the Sub-Adviser, and
that the Sub-Adviser and any person controlling, controlled by or under common
control with the Sub-Adviser may have an interest in the Trust. It is also
understood that the Sub-Adviser and persons controlling, controlled by or under
common control with the Sub-Adviser have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses; provided, however, that without the
prior consent of the Manager, neither the Sub- Adviser nor any of its affiliates
shall undertake to act as investment adviser or subadviser for any U.S.
registered investment company that has substantially similar investment policies
to the Fund.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER.
The Manager will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered, for the facilities furnished and for the
expenses borne by the Sub-Adviser pursuant to Section 1, a fee, computed and
paid monthly at the annual rate of 0.50% of the Fund's average daily net asset
value. Such average daily net asset value of the Fund shall be determined by
taking an average of all of the determinations of such net asset value during
such month while this Agreement is in effect. Such fee shall be payable for each
month within five (5) business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Trust
are qualified for offer and sale, the compensation due the Sub-Adviser for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses of the Fund exceed any expense
limitation which the Sub-Adviser may, by written notice to the Manager,
voluntarily declare to be effective with respect to the Fund, subject to such
terms and conditions as the Sub-Adviser may prescribe in such notice, the
compensation due the Sub-Adviser shall be reduced, and, if
-2-
<PAGE>
necessary, the Sub-Adviser shall bear the Fund's expenses to the extent required
by such expense limitation.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS
AGREEMENT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the Management
Contract between the Manager and the Trust relating to the Fund shall have
terminated for any reason; and this Agreement shall not be amended unless such
amendment is approved at a meeting by the affirmative vote of a majority of the
outstanding shares of the Fund, and by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the Trustees
of the Trust who are not interested persons of the Trust or of the Manager or of
the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this
Agreement by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust, the Manager or of the Sub- Adviser, by
vote cast in person at a meeting called for the purpose of voting on
such approval, do not specifically approve at least annually the
continuance of this Agreement, then this Agreement shall automatically
terminate at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the effective date
of the last such continuance, whichever is later; provided, however,
that if the continuance of this Agreement is submitted to the
shareholders of the Fund for their approval and such shareholders fail
to approve such continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner consistent with
the Investment Company Act of 1940 (the "1940 Act") and the rules and
regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
-3-
<PAGE>
Termination of this Agreement pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall fail to be
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended from time to time, and under the laws of any jurisdiction in which
the Sub-Adviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement or any other agreement
concerning the provision of investment advisory services to the Trust, (b) the
Sub-Adviser shall be disqualified from serving as investment adviser to the Fund
pursuant to Section 9 of the 1940 Act, or otherwise, (c) the Sub-Adviser shall
have been served or otherwise have notice of any action, suit, proceeding or
inquiry or investigation, at law or in equity, before or by any court, public
board or body, involving the affairs of the Trust, (d) there is a change in
control of the Sub-Adviser or any parent of the Sub-Adviser within the meaning
of the 1940 Act or (e) there is a material adverse change in the business or
financial position of the Sub- Adviser.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" of the Fund means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund present (in person or by proxy) and entitled to vote at
such meeting, if the holders of more than 50% of the outstanding shares of the
Fund entitled to vote at such meeting are present in person or by proxy, or (b)
of the holders of more than 50% of the outstanding shares of the Fund entitled
to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "affiliated person",
"control," "interested person" and "assignment" shall have their respective
meanings defined in the 1940 Act and the rules and regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; and the phrase "specifically approve at
least annually" shall be construed in a manner consistent with the 1940 Act and
the rules and regulations thereunder.
7. NONLIABILITY OF THE SUB-ADVISER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser shall not be subject to any liability to the Trust,
or to any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
-4-
<PAGE>
8. EXERCISE OF VOTING RIGHTS.
Except as instructed otherwise by the Trustees of the Trust or the
Manager, the Sub- Adviser shall at its discretion exercise or procure the
exercise of any voting right attaching to investments of the Fund.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and the obligations of
this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
-5-
<PAGE>
IN WITNESS WHEREOF, David L. Babson & Co. and Babson-Stewart Ivory
International have each caused this instrument to be signed in duplicate on its
behalf by its duly authorized representative, all as of the day and year first
above written.
DAVID L. BABSON & CO., INC.
By_______________________________
Title:
BABSON-STEWART IVORY INTERNATIONAL
By_______________________________
Title:
Accepted and agreed to as of the day and year first above written:
THE DLB FUND GROUP,
on behalf of its
DLB Global Small Capitalization Fund
By________________________
Title:
-6-
MANAGEMENT CONTRACT
Management Contract executed as of July 19, 1995 between THE DLB FUND
GROUP, a Massachusetts business trust (the "Trust") on behalf of its DLB Value
Fund (the "Fund"), and DAVID L. BABSON & CO., INC., a Massachusetts corporation
(the "Manager").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO THE TRUST.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of its portfolio securities and (ii) furnish office space and
equipment, provide bookkeeping and clerical services (excluding determination of
net asset value, shareholder accounting services and fund accounting services)
and pay all salaries, fees and expenses of officers and Trustees of the Trust
who are affiliated with the Manager. In the performance of its duties, the
Manager will comply with the provisions of the Agreement and Declaration of
Trust and By-laws of the Trust and the Fund's stated investment objective,
policies and restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the
Manager will seek the best price and execution available, except to the extent
it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Manager shall
consider all factors it deems relevant, including, without limitation, the
overall net economic result to the Fund (involving price paid or received and
any commissions and other costs paid), the efficiency with which the transaction
is effected, the ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Subject to such policies as the Trustees may determine, the Manager
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its having caused the
Fund to pay a broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either
<PAGE>
that particular transaction or the Manager's overall responsibilities with
respect to the Fund and to other clients of the Manager as to which the Manager
exercises investment discretion.
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940, the Manager, at its
expense, may select and contract with investment consultants or sub-advisers
(the "Consultants" or "Sub-Advisers," as applicable) for the Fund. The Manager
will compensate any Consultant or Sub-Adviser of the Fund for its services to
the Fund. The Manager may terminate the services of the Consultant or
Sub-Adviser at any time in its sole discretion and shall at such time assume the
responsibilities of such Consultant or Sub-Adviser unless and until a successor
Consultant or Sub-Adviser is selected.
(d) The Manager shall not be obligated under this Contract to pay any
expenses of or for the Trust or of or for the Fund not expressly assumed by the
Manager pursuant to this Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Manager, and in any person
controlling, controlled by or under common control with the Manager, and that
the Manager and any person controlling, controlled by or under common control
with the Manager may have an interest in the Trust. It is also understood that
the Manager and persons controlling, controlled by or under common control with
the Manager have and may have advisory, management service, distribution or
other contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.55% of the Fund's average daily net asset value. Such average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month while this
Contract is in effect. Such fee shall be payable for each month within five (5)
business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Fund
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses of the Fund exceed any expense
limitation which the Manager may, by written notice to the Trust, voluntarily
declare to be
-2-
<PAGE>
effective with respect to the Fund, subject to such terms and conditions as the
Manager may prescribe in such notice, the compensation due the Manager shall be
reduced, and, if necessary, the Manager shall bear the Fund's expenses to the
extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Trustees of the Trust who are not interested persons of the Trust or of the
Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4)
until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the rules and regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
-3-
<PAGE>
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" of the Fund means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund present (in person or by proxy) and entitled to vote at
such meeting, if the holders of more than 50% of the outstanding shares of the
Fund entitled to vote at such meeting are present in person or by proxy, or (b)
of the holders of more than 50% of the outstanding shares of the Fund entitled
to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; and the phrase
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the rules and regulations
thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. INITIALS "DLB."
The Manager owns the initials "DLB" and such initials may be used by
the Trust only with the consent of the Manager. The Manager consents to the use
by the Trust of the name "The DLB Fund Group" or any other name embodying the
initials "DLB", in such forms as the Manager shall in writing approve, but only
on condition and so long as (i) this Contract shall remain in full force and
(ii) the Trust shall fully perform, fulfill and comply with all provisions of
this Contract expressed herein to be performed, fulfilled or complied with by
it. No such name shall be used by the Trust at any time or in any place or for
any purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said initials as part
of a business or name is not exclusive of the right of the Manager itself to
use, or to authorize others to use, the same; the Trust acknowledges and agrees
that as between the Manager and the Trust, the Manager has the exclusive right
so to use, or authorize others to use, said initials and the Trust agrees to
take such action as may reasonably be requested by the Manager to give full
effect to the provisions of this section (including, without limitation,
consenting to such use of said initials). Without
-4-
<PAGE>
limiting the generality of the foregoing, the Trust agrees that, upon any
termination of this Contract by either party or upon the violation of any of its
provisions by the Trust, the Trust will, at the request of the Manager made
within six months after the Manager has knowledge of such termination or
violation, use its best efforts to change the name of the Trust so as to
eliminate all reference, if any, to the initials "DLB" and will not thereafter
transact any business in a name containing the initials "DLB" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the initials "DLB" or any other
reference to the Manager. Such covenants on the part of the Trust shall be
binding upon it, its trustees, officers, stockholders, creditors and all other
persons claiming under or through it.
9. EXERCISE OF VOTING RIGHTS.
Except as instructed otherwise by the Trustees of the Trust, the
Manager shall at its discretion exercise or procure the exercise of any voting
right attaching to investments of the Fund.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
-5-
<PAGE>
IN WITNESS WHEREOF, THE DLB FUND GROUP and DAVID L. BABSON & CO., INC.
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
THE DLB FUND GROUP
By_______________________________
Title:
DAVID L. BABSON & CO., INC.
By_______________________________
Title:
-6-
MANAGEMENT CONTRACT
Management Contract executed as of July 19, 1995 between THE DLB FUND
GROUP, a Massachusetts business trust (the "Trust") on behalf of its DLB Mid
Capitalization Fund (the "Fund"), and DAVID L. BABSON & CO., INC., a
Massachusetts corporation (the "Manager").
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO THE TRUST.
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, at its expense,
(i) furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of its portfolio securities and (ii) furnish office space and
equipment, provide bookkeeping and clerical services (excluding determination of
net asset value, shareholder accounting services and fund accounting services)
and pay all salaries, fees and expenses of officers and Trustees of the Trust
who are affiliated with the Manager. In the performance of its duties, the
Manager will comply with the provisions of the Agreement and Declaration of
Trust and By-laws of the Trust and the Fund's stated investment objective,
policies and restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the
Manager will seek the best price and execution available, except to the extent
it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
the Fund the most favorable price and execution available, the Manager shall
consider all factors it deems relevant, including, without limitation, the
overall net economic result to the Fund (involving price paid or received and
any commissions and other costs paid), the efficiency with which the transaction
is effected, the ability to effect the transaction at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Subject to such policies as the Trustees may determine, the Manager
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Contract or otherwise solely by reason of its having caused the
Fund to pay a broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Manager determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either
<PAGE>
that particular transaction or the Manager's overall responsibilities with
respect to the Fund and to other clients of the Manager as to which the Manager
exercises investment discretion.
(c) Subject to the provisions of the Agreement and Declaration of Trust
of the Trust and the Investment Company Act of 1940, the Manager, at its
expense, may select and contract with investment consultants or sub-advisers
(the "Consultants" or "Sub-Advisers," as applicable) for the Fund. The Manager
will compensate any Consultant or Sub-Adviser of the Fund for its services to
the Fund. The Manager may terminate the services of the Consultant or
Sub-Adviser at any time in its sole discretion and shall at such time assume the
responsibilities of such Consultant or Sub-Adviser unless and until a successor
Consultant or Sub-Adviser is selected.
(d) The Manager shall not be obligated under this Contract to pay any
expenses of or for the Trust or of or for the Fund not expressly assumed by the
Manager pursuant to this Section 1 other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Manager, and in any person
controlling, controlled by or under common control with the Manager, and that
the Manager and any person controlling, controlled by or under common control
with the Manager may have an interest in the Trust. It is also understood that
the Manager and persons controlling, controlled by or under common control with
the Manager have and may have advisory, management service, distribution or
other contracts with other organizations and persons, and may have other
interests and businesses.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed and paid monthly at the
annual rate of 0.60% of the Fund's average daily net asset value. Such average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month while this
Contract is in effect. Such fee shall be payable for each month within five (5)
business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by any
statute or regulatory authority of any jurisdiction in which shares of the Fund
are qualified for offer and sale, the compensation due the Manager for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses of the Fund exceed any expense
limitation which the Manager may, by written notice to the Trust, voluntarily
declare to be
-2-
<PAGE>
effective with respect to the Fund, subject to such terms and conditions as the
Manager may prescribe in such notice, the compensation due the Manager shall be
reduced, and, if necessary, the Manager shall bear the Fund's expenses to the
extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS
CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Trustees of the Trust who are not interested persons of the Trust or of the
Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4)
until terminated as follows:
(a) Either party hereto may at any time terminate this
Contract by not more than sixty days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager, by vote cast in
person at a meeting called for the purpose of voting on such approval,
do not specifically approve at least annually the continuance of this
Contract, then this Contract shall automatically terminate at the close
of business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Contract as provided herein, the Manager may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the rules and regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
-3-
<PAGE>
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" of the Fund means the affirmative vote, at a duly
called and held meeting of shareholders, (a) of the holders of 67% or more of
the shares of the Fund present (in person or by proxy) and entitled to vote at
such meeting, if the holders of more than 50% of the outstanding shares of the
Fund entitled to vote at such meeting are present in person or by proxy, or (b)
of the holders of more than 50% of the outstanding shares of the Fund entitled
to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; and the phrase
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the rules and regulations
thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust, or to
any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.
8. INITIALS "DLB."
The Manager owns the initials "DLB" and such initials may be used by
the Trust only with the consent of the Manager. The Manager consents to the use
by the Trust of the name "The DLB Fund Group" or any other name embodying the
initials "DLB", in such forms as the Manager shall in writing approve, but only
on condition and so long as (i) this Contract shall remain in full force and
(ii) the Trust shall fully perform, fulfill and comply with all provisions of
this Contract expressed herein to be performed, fulfilled or complied with by
it. No such name shall be used by the Trust at any time or in any place or for
any purposes or under any conditions except as in this section provided. The
foregoing authorization by the Manager to the Trust to use said initials as part
of a business or name is not exclusive of the right of the Manager itself to
use, or to authorize others to use, the same; the Trust acknowledges and agrees
that as between the Manager and the Trust, the Manager has the exclusive right
so to use, or authorize others to use, said initials and the Trust agrees to
take such action as may reasonably be requested by the Manager to give full
effect to the provisions of this section (including, without limitation,
consenting to such use of said initials). Without
-4-
<PAGE>
limiting the generality of the foregoing, the Trust agrees that, upon any
termination of this Contract by either party or upon the violation of any of its
provisions by the Trust, the Trust will, at the request of the Manager made
within six months after the Manager has knowledge of such termination or
violation, use its best efforts to change the name of the Trust so as to
eliminate all reference, if any, to the initials "DLB" and will not thereafter
transact any business in a name containing the initials "DLB" in any form or
combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the initials "DLB" or any other
reference to the Manager. Such covenants on the part of the Trust shall be
binding upon it, its trustees, officers, stockholders, creditors and all other
persons claiming under or through it.
9. EXERCISE OF VOTING RIGHTS.
Except as instructed otherwise by the Trustees of the Trust, the
Manager shall at its discretion exercise or procure the exercise of any voting
right attaching to investments of the Fund.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
-5-
<PAGE>
IN WITNESS WHEREOF, THE DLB FUND GROUP and DAVID L. BABSON & CO., INC.
have each caused this instrument to be signed in duplicate on its behalf by its
duly authorized representative, all as of the day and year first above written.
THE DLB FUND GROUP
By_______________________________
Title:
DAVID L. BABSON & CO., INC.
By_______________________________
Title:
-6-
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF DLB FIXED
INCOME FUND AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER>001
<NAME> DLB FIXED INCOME FUND
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 5,112,299
<INVESTMENTS-AT-VALUE> 5,245,291
<RECEIVABLES> 80,409
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,325,706
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (567)
<TOTAL-LIABILITIES> (567)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> (5,192,147)
<SHARES-COMMON-STOCK> 518,789
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (132,992)
<NET-ASSETS> (5,325,139)
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> (152,090)
<OTHER-INCOME> 0
<EXPENSES-NET> 13,179
<NET-INVESTMENT-INCOME> 138,911
<REALIZED-GAINS-CURRENT> (53,226)
<APPREC-INCREASE-CURRENT> (132,992)
<NET-CHANGE-FROM-OPS> 325,129
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 139,227
<DISTRIBUTIONS-OF-GAINS> 53,159
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 500,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 18,788
<NET-CHANGE-IN-ASSETS> (5,325,129)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8,911
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 81,886
<AVERAGE-NET-ASSETS> 5,082,266
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> 0.28
<PER-SHARE-GAIN-APPREC> 0.37
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.39)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.26
<EXPENSE-RATIO> 0.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF DLB
GLOBAL SMALL CAPITALIZATION FUND AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER>002
<NAME> DLB GLOBAL SMALL CAPITALIZATION FUND
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 10,142,533
<INVESTMENTS-AT-VALUE> 10,514,281
<RECEIVABLES> 135,775
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10,650,056
<PAYABLE-FOR-SECURITIES> (104,880)
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (35,898)
<TOTAL-LIABILITIES> (140,778)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> (10,172,224)
<SHARES-COMMON-STOCK> 1,017,012
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (66,244)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 35,271
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (371,931)
<NET-ASSETS> (10,508,884)
<DIVIDEND-INCOME> (119,082)
<INTEREST-INCOME> (23,708)
<OTHER-INCOME> 10,439
<EXPENSES-NET> 66,107
<NET-INVESTMENT-INCOME> 66,244
<REALIZED-GAINS-CURRENT> 28,897
<APPREC-INCREASE-CURRENT> (371,931)
<NET-CHANGE-FROM-OPS> 409,278
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 72,224
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,010,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 7,012
<NET-CHANGE-IN-ASSETS> (10,409,278)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 45,284
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 142,658
<AVERAGE-NET-ASSETS> 9,956,998
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> 0.07
<PER-SHARE-GAIN-APPREC> 0.34
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.07)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.33
<EXPENSE-RATIO> 1.47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF DLB VALUE
FUND AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER>003
<NAME> DLB VALUE FUND
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 10,286,866
<INVESTMENTS-AT-VALUE> 10,865,639
<RECEIVABLES> 16,864
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10,882,509
<PAYABLE-FOR-SECURITIES> (45,744)
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (19,187)
<TOTAL-LIABILITIES> (64,931)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> (10,238,563)
<SHARES-COMMON-STOCK> 1,022,591
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (242)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (578,773)
<NET-ASSETS> (10,817,578)
<DIVIDEND-INCOME> (111,574)
<INTEREST-INCOME> (16,211)
<OTHER-INCOME> 0
<EXPENSES-NET> 36,683
<NET-INVESTMENT-INCOME> 91,102
<REALIZED-GAINS-CURRENT> (147,693)
<APPREC-INCREASE-CURRENT> (578,773)
<NET-CHANGE-FROM-OPS> 817,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 90,860
<DISTRIBUTIONS-OF-GAINS> 147,693
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,000,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 22,590
<NET-CHANGE-IN-ASSETS> (10,817,568)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 24,862
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 109,763
<AVERAGE-NET-ASSETS> 10,312,183
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> 0.09
<PER-SHARE-GAIN-APPREC> 0.73
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.24)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.58
<EXPENSE-RATIO> 0.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF DLB MID
CAPITALIZATION FUND AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER>004
<NAME> DLB MID CAPITALIZATION FUND
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 10,240,402
<INVESTMENTS-AT-VALUE> 10,992,195
<RECEIVABLES> 22,882
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11,015,083
<PAYABLE-FOR-SECURITIES> (62,493)
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (23,716)
<TOTAL-LIABILITIES> (86,209)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> (10,176,967)
<SHARES-COMMON-STOCK> 1,016,544
<SHARES-COMMON-PRIOR> 1
<ACCUMULATED-NII-CURRENT> (232)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (751,675)
<NET-ASSETS> (10,928,874)
<DIVIDEND-INCOME> (96,748)
<INTEREST-INCOME> (27,489)
<OTHER-INCOME> 0
<EXPENSES-NET> 40,356
<NET-INVESTMENT-INCOME> 83,881
<REALIZED-GAINS-CURRENT> (93,308)
<APPREC-INCREASE-CURRENT> (751,675)
<NET-CHANGE-FROM-OPS> 928,864
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 83,531
<DISTRIBUTIONS-OF-GAINS> 93,308
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,000,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 16,543
<NET-CHANGE-IN-ASSETS> (10,928,864)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 26,445
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 116,479
<AVERAGE-NET-ASSETS> 10,054,454
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 0.84
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.17)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.75
<EXPENSE-RATIO> 0.92
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
