As filed with the Securities and Exchange Commission on February 27, 1998
Securities Act Registration No. 33-88756
Investment Company Act Registration No. 811-8958
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 4 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 4 X
(Check appropriate box or boxes.)
THE JEFFERSON FUND GROUP TRUST
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(Exact name of Registrant as Specified in Charter)
839 N. Jefferson Street
Milwaukee, Wisconsin 53202
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(Address of Principal Executive Offices) (Zip Code)
(800) 216-9786
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(Registrant's Telephone Number, including Area Code)
Copy to:
Lawrence Kujawski, President Scott E. Early
The Jefferson Fund Group Trust Foley & Lardner
839 N. Jefferson Street 330 North Wabash Avenue, Suite 3300
Milwaukee, Wisconsin 53202 Chicago, Illinois 60611
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(Name and Address of Agent for Service)
Registrant has registered an indefinite number or amount of shares of beneficial
interest, no par value, under the Securities Act of 1933 pursuant to Rule 24f-2
of the Investment Company Act of 1940.
It is proposed that this filing become effective (check appropriate box):
immediately upon filing pursuant to paragraph (b)
X on February 28, 1998, pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on (date) pursuant to paragraph (a) of Rule 485
THE JEFFERSON FUND GROUP TRUST
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the Prospectus and the
Statement of Additional Information of the responses to the Items of Parts A and
B of Form N-1A.)
Caption or Subheading in Prospectus
Item No. on Form N-1A or Statement of Additional Information
--------------------- --------------------------------------
Part A - INFORMATION REQUIRED IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Expense Information
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Introduction; Investment Objectives
and Policies
5. Management of the Fund Management of the Fund; Brokerage
Transactions; Capital Structure
5A. Management's Discussion of Fund *<F1>
Performance
6. Capital Stock and Other Securities Dividends, Distributions and Taxes;
Capital Structure; Shareholder
Reports
7. Purchase of Securities Being Offered Determination of Net Asset Value;
Purchase of Shares; Alternative
Purchase Agreements; Exchange
Privilege; Distributor and
Distribution and Servicing Plans;
Dividend Reinvestment; Retirement
Plans
8. Redemption or Repurchase How to Redeem; Exchange Privilege
9. Legal Proceedings *<F1>
PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
1. Cover Page Cover Page
2. Table of Contents Table of Contents
3. General Information and History *<F1>
4. Investment Objectives and Policies Investment Restrictions;
Investment Considerations
5. Management of the Registrant Trustees and Officers of the Fund
6. Control Persons and Principal Holders Included in Prospectus under
Of Securities "Capital Structure"
7. Investment Advisory and Other Service Investment Advisor, Administrator,
Custodian, Transfer Agent and
Accounting Services Agent;
Distributor and Distribution and
Servicing Plans; Independent
Accountants
8. Brokerage Allocation Allocation of Portfolio Brokerage
9. Capital Stock and Other Securities Included in Prospectus under
"Capital Structure"
10. Purchase, Redemption and Pricing of Included in Prospectus under
Securities Being "Determination of Net Asset
Value;" "Dividend Reinvestment;"
"Retirement Plans;" "Contingent
Deferred Sales Charge -- Class A
or B Shares;" "Distributor and
Distribution and Servicing Plans;"
"How to Redeem;" and "Exchange
Privilege"
11. Tax Status Taxes
12. Underwriters Distributor and Distribution and
Servicing Plans
13. Calculation of Performance Data Calculation of Total Return
14. Financial Statements Report of Independent Accountants;
Financial Statements
*<F1>Answer negative or inapplicable
P R O S P E C T U S FEBRUARY 28, 1998
THE JEFFERSON FUND GROUP TRUST
JEFFERSON GROWTH AND INCOME FUND
THE JEFFERSON FUND GROUP TRUST
(800) 216-9785
The Jefferson Fund Group Trust is an open-end, management investment company
currently consisting of one mutual fund -- JEFFERSON GROWTH AND INCOME FUND (the
"Fund"). The Fund's investment objectives are to produce long-term capital
appreciation and current income principally through investing in equity
securities.
- ---------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. Investors are advised to
read this Prospectus and retain it for future reference. This Prospectus does
not set forth all of the information included in the Registration Statement and
Exhibits thereto which the Fund has filed with the Securities and Exchange
Commission. A Statement of Additional Information, dated February 28, 1998,
which is a part of such Registration Statement is incorporated by reference
in this Prospectus. Copies of the Statement of Additional Information will be
provided promptly without charge to each person to whom a Prospectus is
delivered upon written or telephone request. Written requests should be made
by writing to: The Jefferson Fund Group Trust, c/o Firstar Trust Company,
Mutual Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701 (for
overnight and express mail, to: The Jefferson Fund Group Trust, c/o Firstar
Trust Company, Mutual Fund Services, 615 East Michigan Street, Milwaukee,
Wisconsin 53202), and telephone requests should be made by calling
(800) 216-9785.
The JEFFERSON FUND GROUP TRUST
JEFFERSON GROWTH AND INCOME FUND
TABLE OF CONTENTS
Page No.
-------
EXPENSE INFORMATION 2
FINANCIAL HIGHLIGHTS 3
INTRODUCTION 4
RISK FACTORS 4
INVESTMENT OBJECTIVES AND 4
MANAGEMENT OF THE FUND 9
DETERMINATION OF NET ASSET VALUE 10
PURCHASE OF SHARES 11
GENERAL 13
ALTERNATIVE PURCHASE ARRANGEMENTS 14
HOW TO REDEEM 18
EXCHANGE PRIVILEGE 22
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS 23
RETIREMENT PLANS 24
DIVIDEND REINVESTMENT 25
DIVIDENDS, DISTRIBUTIONS AND TAXES 25
BROKERAGE TRANSACTIONS 26
CAPITAL STRUCTURE 26
SHAREHOLDER REPORTS 27
PERFORMANCE INFORMATION 27
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS 29
PURCHASE APPLICATION
SUPPLEMENTAL APPLICATION
INDIVIDUAL RETIREMENT ACCOUTN (IRA) APPLICATION
INDIVIDUAL RETIREMENT ACCOUNT (IRA) TRANSFER F0RM
EDUCATION IRA APPLICATION
---------------------------------
EXPENSE INFORMATION
CLASS A CLASS B
SHAREHOLDER TRANSACTION EXPENSES SHARES SHARES
Maximum Sales Load Imposed on Purchases (as a percentage of
offering price at time of purchase) 5.5% None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price at time
of purchase) None None
Maximum Contingent Deferred Sales Charge (as a percentage
of net asset value at time of purchase) None 5.0%
Exchange Fee*<F2> None None
Redemption Fee**<F3> None None
ANNUAL FUND OPERATING EXPENSES
AFTER EXPENSE REIMBURSEMENTS CLASS A CLASS B
(as a percentage of average net assets) SHARES SHARES
Management Fees .60% .60%
12b-1 Fees***<F4> .25% 1.00%
Other Expenses (after expense reimbursements)****<F5> .30% .30%
Total Fund Operating Expenses
(after expense reimbursements)*****<F6> 1.15% 1.90%
*<F2>A fee of $5.00 is charged for each telephone exchange.
**<F3>A fee of $12.00 is charged for each wire redemption.
***<F4>12b-1 Fees which are less than or equal to .25% represent servicing fees,
and the remaining portion represent distribution fees. See "Distributor and
Distribution and Servicing Plans"
****<F5>Other expenses for the Fund are based on amounts for the fiscal year
ended October 31, 1997 and reflect expense reimbursements from Distributor.
Without such reimbursements, other expenses of Class A and Class B shares would
have been 2.11%.
*****<F6>Without expense reimbursements, the total fund operating expenses of
Class A and Class B shares would have been 2.96% and 3.71%, respectively.
Class A Shares Class B Shares
------------------------------ -------------------------------
Example: 1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
An investor would
pay the following
expenses on a
$1,000 investment,
assuming (1) 5%
annual return and
(2) redemption at
the end of each time
period: $66 $90 $115 $187 $69 $100 $133 $222
Class B Shares
-------------------------------------
1 Year 3 Years 5 Years 10 Years
An investor would pay the
following expenses on the same
investment, assuming
no redemption: $19 $60 $103 $222
THE PURPOSE OF THE PRECEDING TABLE IS TO ASSIST INVESTORS IN UNDERSTANDING THE
VARIOUS COSTS THAT AN INVESTOR IN THE FUND WILL BEAR, DIRECTLY OR INDIRECTLY.
THEY SHOULD NOT BE CONSIDERED TO BE A REPRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. THE ANNUAL FUND
OPERATING EXPENSES ARE BASED ON THE AMOUNTS SET FORTH ABOVE. THE EXAMPLE
ASSUMES A 5% ANNUAL RATE OF RETURN PURSUANT TO REQUIREMENTS OF THE SECURITIES
AND EXCHANGE COMMISSION. THIS HYPOTHETICAL RATE OF RETURN IS NOT INTENDED TO BE
REPRESENTATIVE OF PAST OR FUTURE PERFORMANCE OF THE FUND. DUE TO THE 12B-1
DISTRIBUTION FEE IMPOSED ON CLASS B SHARES, A CLASS B SHAREHOLDER OF THE FUND
MAY, DEPENDING ON THE LENGTH OF TIME THE SHARES ARE HELD, INCUR HIGHER SALES-
RELATED CHARGES THAN THE MAXIMUM PERMITTED BY THE RELEVANT RULES OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. ON FRONT-END SALES CHARGES.
FINANCIAL HIGHLIGHTS
The financial information for a Share outstanding of the Jefferson Growth
and Income Fund during the periods shown in the table below have been audited.
The table should be read in conjunction with the financial statements and
related notes which have been incorporated by reference into the Statement of
Additional Information and are contained in the Fund's Annual Report to
Shareholders. Copies of the Fund's Annual Report to Shareholders may be
obtained, without charge, upon request. The Fund's Annual Report to Shareholders
also contains further information about the performance of the Fund.
<TABLE>
<CAPTION>
SEPTEMBER 1, 1995 1<F5>
YEAR ENDED YEAR ENDED THROUGH
OCTOBER 31, 1997 OCTOBER 31, 1996 OCTOBER 31, 1995
------------------ ------------------ ------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
-------- -------- -------- -------- -------- --------
<S>
PER SHARE DATA: <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.91 $10.87 $10.04 $10.03 $10.00 $10.00
Income from investment operations:
Net investment income 0.29 0.20 0.27 0.21 0.04 0.03
Net realized and unrealized gains on securities 1.40 1.39 0.87 0.83 -- --
------- ------- ------- ------- ------- -------
Total from investment operations 1.69 1.59 1.14 1.04 0.04 0.03
Less distributions:
Dividends from net investment income (0.29) (0.21) (0.27) (0.20) -- --
Distributions from net realized gains (0.05) (0.05) -- -- -- --
------- ------- ------- ------- ------- -------
Total distributions (0.34) (0.26) (0.27) (0.20) -- --
------- ------- ------- ------- ------- -------
Net asset value, end of period $12.26 $12.20 $10.91 $10.87 $10.04 $10.03
======= ======= ======= ======= ======= =======
TOTAL RETURN 2<F6> 15.56% 14.68% 11.50% 10.49% 0.40%3 0.30%3
SUPPLEMENTAL DATA AND RATIOS: <F7> <F7>
Net assets, in thousands, end of period $6,815 $1,330 $4,688 $412 $1,279 $133
Ratio of net expenses to average net assets:
Before expense reimbursement 2.96% 3.71% 5.95% 6.70% 17.35%4 18.10%4
<F8> <F8>
After expense reimbursement 1.15% 1.90% 1.15% 1.90% 1.15%4 1.90%4
Ratio of net investment income <F8> <F8>
to average net assets:
Before expense reimbursement 1.01% 0.26% (1.77%) (2.52%) (14.95%)4 (15.70%)4
<F8> <F8>
After expense reimbursement 2.82% 2.07% 3.03% 2.28% 1.25%4 0.50%4
<F8> <F8>
Portfolio turnover rate 5<F9>, 6<F10> 98.37% 98.37% 131.98% 131.98% -- --
Average commission rate paid 6<F10>, 7<F11> $0.0765 $0.0765 $0.0884 $0.0884 -- --
1<F5>Commencement of operations.
2<F6>The total return calculation does not reflect the 5.5% front end sales
charge for Class A or the 5% CDSC on Class B.
3<F7>Not annualized.
4<F8>Annualized.
5<F9>During the period ended October 31, 1995, there were no sales of
securities.
6<F10>Portfolio turnover and average commission rate paid is calculated on the
basis of the Fund as a whole without distinguishing between classes of shares
issued.
7<F11>Average commission rate disclosure not required for the period ended
October 31, 1995.
</TABLE>
INTRODUCTION
The Jefferson Fund Group Trust, of which the Fund is a diversified
series, was organized as a business trust under the laws of Delaware on January
20, 1995. It is an open-end, management investment company registered under the
Investment Company Act of 1940. As an open-end investment company, it obtains
its assets by continuously selling shares of beneficial interest, having no par
value ("Shares"), to the public. Proceeds from such sales are invested by the
Fund in securities of other companies. The resources of many investors are thus
combined and each individual investor has an interest in every one of the
securities owned thereby providing diversification in a variety of industries.
The Fund's investment adviser furnishes professional management to select and
watch over its investments. The Fund is intended for long-term investors, not
for those who may wish to redeem their shares after a short period of time. The
Fund is a member of the Jefferson family of funds.
RISK FACTORS
As discussed more fully below under "Investment Objectives and
Policies," there can be no assurance that the Fund will achieve its investment
objectives. Share prices and bond prices of even the best managed, most
profitable corporations are subject to market risk. This may result in
fluctuations in the Fund's Share price. When an investor sells shares of the
Fund, the price may be higher or lower than the price at which the shares were
purchased. In addition, special risks may be presented by the particular types
of securities in which the Fund may invest. For example, investment in lower-
rated securities is speculative and involves risks not associated with
investment in higher rated securities, including overall greater risk of non-
payment of interest and principal and potentially greater sensitivity to general
economic conditions and changes in interest rates. In addition, the price of
non-convertible debt securities may vary inversely to interest rates, i.e.,
appreciate when interest rates decline and depreciate when interest rate rise.
The Fund's investment in non-convertible debt securities may cause the price of
the shares to fluctuate in the same manner.
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser, the Administrator and other service
providers do not properly process and calculate date-related information and
data from and after January 1, 2000. This is commonly known as the "Year 2000
Problem." The Adviser and the Administrator are taking steps that they
believe are reasonably designed to address the Year 2000 Problem with respect
to computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by the Fund's other major service providers.
More details on the risks involved are set forth in the Investment Objectives
and Policies section of this Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of the Fund are to produce long-term capital
appreciation and current income principally through investing in equity
securities. Uniplan, Inc., the Fund's investment adviser (the "Adviser"),
anticipates that most of the time more than 50% of the Fund's portfolio will be
invested in equity securities. For this purpose, the Adviser deems common
stocks, preferred stocks and securities (including debt securities) that are
convertible into common stocks to be equity securities. As described more fully
below, the Adviser anticipates that under normal market conditions the remaining
portion of the Fund's portfolio will be invested in non-convertible debt
securities, including short-term money market instruments and U.S. Government
and agency securities. Under unusual conditions, for temporary defensive
purposes, the Fund may invest 100% of its assets in nonconvertible debt
securities.
In selecting investments, the Adviser will consider various
financial characteristics of the issuer, including historical sales and net
income, debt/equity and price/earnings ratios and book value. The Adviser will
usually place an emphasis on issuers with favorable credit and earnings
characteristics. The Adviser may also review research reports of broker-dealers
and trade publications and, in appropriate situations, may meet with management.
Greater weight will be given to internal factors, such as product or service
development, than to external factors, such as interest rate changes, commodity
price fluctuations, general stock market trends and foreign currency exchange
values.
Investors should be aware that since the major portion of the Fund's portfolio
will normally be invested in equity securities, the Fund's net asset value may
be subject to greater fluctuation than a portfolio containing a substantial
amount of fixed-income securities. There can be no assurance that the
objectives of the Fund will be realized. Nor can there be any assurance that
the Fund's portfolio will not decline in value or that any income will be
earned.
When the Adviser believes that securities other than equity securities
offer opportunity for long-term capital appreciation and current income, the
Fund may invest its assets in non-convertible debt securities. Investments in
non-convertible debt securities offer an opportunity for growth of capital
during periods of declining interest rates, when the market value of such
securities in general increases. The Fund will limit its investments in non-
convertible debt securities to those which have been assigned one of the six
highest ratings of either Standard & Poor's Corporation ("S&P") or
Moody's Investors Service, Inc. ("Moody's") (or unrated but determined by the
Adviser to be of comparable quality). A Moody's rating of B (or an S&P rating of
B) is the sixth highest rating. This means that the non-convertible debt
security generally lacks the characteristics of a desirable investment.
Assurance of interest and principal payments over any long period of time may be
small. In the event a non-convertible debt security is downgraded below the
sixth highest rating after investment, the Fund may retain such security. A
description of the foregoing ratings is attached to this Prospectus as Appendix
A. A security is considered to be of "investment grade" quality if it is either
(1) rated in one of the top four rating categories by a nationally recognized
statistical rating organization ("NRSRO") (at least Baa by Moody's or BBB by
S&P) or (2) not rated by any NRSRO but determined by the Fund's Adviser to be of
comparable quality to obligations so rated. Securities rated in the fifth
highest rating category, sixth highest rating category or below are not
considered to be of investment grade and are referred to herein as "High Yield
Securities," and are commonly known as "junk bonds." These lesser rated debt
securities may involve special risks. Investments in securities rated below
investment grade that are eligible for purchase by the Fund are described as
"speculative" by both Moody's and S&P. Investment in lower rated corporate debt
securities (i.e. High Yield Securities) generally provides greater income and
increased opportunity for capital appreciation than investments in higher
quality securities, but they also typically entail greater price volatility and
principal and income risk. These High Yield Securities are regarded as
predominantly speculative with respect to the issuer's continuing ability to
meet principal and interest payments. The market for these securities is
relatively new, and many of the outstanding high yield securities have not
endured a major business recession. A long-term track record on default rates,
such as that for investment grade corporate bonds, does not exist for this
market. Analysis of the creditworthiness of issuers of debt securities that are
high yield may be more complex than for issuers of higher quality debt
securities. No more than 15% of the Fund's net assets will be invested in debt
securities rated below investment grade (or unrated but determined by the
Adviser to be of comparable quality).
As with other fixed-income securities, High Yield Securities are
subject to credit risk and market risk. Market risk relates to changes in a
security's value as a result of changes in interest rates. Credit risk relates
to the ability of the issuer to make payments of principal and interest. High
Yield Securities rated "BB" or "Ba" or lower by Moody's or S&P or of comparable
quality are considered to be speculative with respect to the issuer's capacity
to pay interest and repay principal.
High Yield Securities are generally subject to greater credit risk
than higher-rated securities because the issuers are more vulnerable to economic
downturns, higher interest rates or adverse issuer-specific developments. In
addition, the prices of High Yield Securities are generally subject to greater
market risk and therefore react more sharply to changes in interest rates. The
value and liquidity of High Yield Securities may be diminished by adverse
publicity and investor perceptions. Also, legislative proposals limiting the
tax benefits to the issuers or holders of taxable High Yield Securities or
requiring federally-insured savings and loan institutions to reduce their
holdings of taxable High Yield Securities have had and may continue to have
an adverse effect on the market value of these securities.
Because the market for certain High Yield Securities is relatively
new, that market may be particularly sensitive to an economic downturn or a
general increase in interest rates. Recent regulatory developments and declines
in the value of certain High Yield Securities have limited and may continue to
limit the ability of important participants in the High Yield Securities market
to maintain orderly markets in certain High Yield Securities.
Particular types of High Yield Securities may present special
concerns. Some High Yield Securities in which the Fund may invest may be
subject to redemption or call provisions that may limit increases in market
value that might otherwise result from lower interest rates while increasing the
risk that the Fund may be required to reinvest redemption or call proceeds
during a period of relatively low interest rates.
The Fund may purchase "illiquid securities," defined as securities
which may not be disposed of in the ordinary course of business within seven
days, and certain securities whose disposition is restricted by the securities
laws. The Fund may also purchase securities of unseasoned companies defined as
companies having a record of less than three years of continuous operation,
including the operation of any predecessor business of a company which came into
existence as a result of a merger, consolidation, reorganization or purchase of
substantially all of the assets of such predecessor business. The Fund may
purchase "illiquid securities" and securities of unseasoned companies so long
as no more than 10% of the Fund's net assets would be invested in such
securities after giving effect to the purchase. Within this 10% limitation,
the Fund will not invest more than 5% of its net assets in securities of issuers
that are restricted from being sold to the public without registration under the
Securities Act of 1933, including restricted securities subject to resale
pursuant to Rule 144A under the Securities Act of 1933. Illiquid securities at
present are considered to include repurchase agreements maturing in more than
seven days and certain over-the-counter options, to the extent described under
"Options Transactions - OTC Options" in the Statement of Additional Information.
Transactions in illiquid securities may involve relatively higher transaction
costs.
The Fund may invest in convertible securities. Convertible securities
are generally preferred stocks or fixed income securities that are convertible
into common stock at either a stated price or a stated rate. The price of the
convertible security will normally vary in some proportion to changes in the
price of the underlying common stock because of this conversion feature. A
convertible security may normally also provide a fixed income stream. For this
reason, the convertible security may not decline in price as rapidly as the
underlying common stock.
The Adviser will select convertible securities to be purchased by the
Fund based primarily upon its evaluation of the fundamental investment
characteristics and growth prospects of the issuer of the security. As a fixed-
income security, a convertible security tends to increase in market value when
interest rates decline and to decrease in value when interest rates rise. While
convertible securities generally offer lower interest or dividend yields than
non-convertible fixed-income securities of similar quality, their value tends to
increase as the market value of the underlying stock increases and to decrease
when the value of the underlying stock decreases.
For temporary defensive purposes, the Fund may invest all of its
assets in cash, high quality money market instruments and United States
Government or agency securities. These investments may be retained by the Fund
in amounts that assist the fund in engaging temporary defensive measures to
avoid the effects of declining securities prices.
The money market instruments in which the Fund may invest include
United States Treasury Bills and other short term U.S. Government Securities,
commercial paper rated A-3 or better by Standard & Poor's Corporation,
commercial paper master notes and repurchase agreements. Commercial paper
master notes are unsecured promissory notes issued by corporations to finance
short-term credit needs. They permit a series of short-term borrowings under a
single note. Borrowings under commercial paper master notes are payable in whole
or in part at any time, may be prepaid in whole or in part at any time, and bear
interest at rates which are fixed to known lending rates and automatically
adjusted when such known lending rates change. There is no secondary market
for commercial paper master notes. The Adviser will monitor the
creditworthiness of the issuer of the commercial paper master notes.
Repurchase agreements are agreements under which the seller of a
security agrees at the time of sale to repurchase the security at an agreed time
and price. The Fund will not enter into repurchase agreements with entities
other than banks or registered broker-dealers or invest over 25% of its net
assets in repurchase agreements, except that no such limit applies when the Fund
is investing for temporary defensive purposes. If a seller of a repurchase
agreement defaults and does not repurchase the security subject to the
agreement, the Fund will look to the collateral security underlying the seller's
repurchase agreement, including the securities subject to the repurchase
agreement, for satisfaction of the seller's obligation to the Fund. In such
event, the Fund might incur disposition costs in liquidating the collateral and
might suffer a loss if the value of the collateral declines. In addition, if
bankruptcy proceedings are instituted against a seller of a repurchase
agreement, realization upon the collateral may be delayed or limited.
The Fund may lend its portfolio securities to broker-dealers under
contracts calling for collateral in cash, U.S. Government securities or other
high quality debt securities equal to at least the market value of the
securities loaned. The Fund's performance will continue to reflect changes in
the value of the securities loaned and will also receive either interest,
through investment of cash collateral by the Fund in permissible investments, or
a fee, if the collateral is U.S. Government securities. Securities lending
involves the risk of loss of rights in the collateral or delay in recovery of
the collateral should the borrower fail financially. The Fund will normally pay
lending fees to the broker-dealer arranging the loan.
The Fund may from time to time make short sales "against the box."
While a short sale is made by selling a security the Fund does not own, a short
sale is "against the box" to the extent that the Fund contemporaneously owns or
has the right to obtain securities identical to those sold short at no added
cost. Short sales expose the Fund to the risk that it will be required to
purchase securities to cover its short position at a time when the securities
have appreciated in value, thus resulting in a loss to the Fund.
The Fund may purchase securities which it is eligible to purchase on a
when-issued basis, may purchase and sell such securities for delayed delivery
and may make contracts to purchase such securities for a fixed price at a future
date beyond normal settlement time ("forward commitments"). When-issued
transactions, delayed delivery purchases and forward commitments involve a risk
of loss if the value of the securities declines prior to the settlement date,
which risk is in addition to the risk of decline in the value of the Fund's
other assets. No income accrues to the purchaser of such securities prior to
delivery.
The Fund does not intend to place emphasis on short-term trading
profits. The Fund's annual portfolio turnover rate generally will not
exceed 75%. The annual portfolio turnover rate indicates changes in the
Fund's portfolio and is calculated by dividing the lesser of purchases or
sales of portfolio securities (excluding securities having maturities at
acquisition of one year or less) for the fiscal year, by the monthly average
of the value of the portfolio securities (excluding securities having
maturities at acquisition of one year or less) owned by the Fund during the
fiscal year. The annual portfolio turnover rate may vary widely
from year to year depending upon market conditions and prospects. High turnover
(100% or more) in any year may result in the payment by the Fund from capital of
above average amounts of brokerage commissions and could generate higher than
normal short-term capital gains.
The Fund will limit investments in American Depository Receipts of
foreign issuers to 25% of its assets. Such investments may involve risks which
are in addition to the usual risks inherent in investments in domestic issuers.
In many countries, there is less publicly available information about issuers
than is available in the reports and ratings published about companies in the
United States. Additionally, foreign companies are not subject to uniform
accounting, auditing and financial reporting standards. Dividends and interest
on foreign securities may be subject to foreign withholding taxes, which would
reduce the Fund's income without providing a tax credit for the Fund's
stockholders. Although the Fund intends to invest in American Depository
Receipts of foreign issuers domiciled in nations which the Fund's investment
adviser considers as having stable and friendly governments, there is the
possibility of expropriation, confiscatory taxation, currency blockage or
political or social instability which could affect investments relating to
issuers domiciled in those nations.
The Fund may invest in interest rate futures contracts and securities
index futures contracts and options thereon ("futures options") that are traded
on a United States or foreign exchange or board of trade for hedging purposes.
There are several risks associated with the use of futures and futures options
for hedging purposes. There can be no guarantee that there will be a
correlation between price movements in the hedging vehicle and in the portfolio
securities being hedged. An incorrect correlation could result in a loss on
both the hedged securities in the Fund and the hedging vehicle so that the
portfolio return might have been greater had hedging not been attempted. There
can be no assurance that a liquid market will exist at a time when the Fund
seeks to close out a futures contract or a futures option position. Most
futures exchanges and boards of trade limit the amount of fluctuation permitted
in futures contract prices during a single day; once the daily limit has been
reached on a particular contract, no trades may be made that day at a price
beyond that limit. In addition, certain of these instruments are relatively new
and without a significant trading history. As a result, there is no assurance
that an active secondary market will develop or continue to exist. Lack of a
liquid market for any reason may prevent the Fund from liquidating an
unfavorable position and the Fund would remain obligated to meet margin
requirements until the position is closed.
The Fund will only enter into futures contracts or futures options
which are standardized and traded on a U.S. or foreign exchange or board of
trade, or similar entity, or quoted on an automated quotation system. The Fund
will use financial futures contracts and related options only for "bona fide
hedging" purposes, as such term is defined in applicable regulations of the
CFTC, or, with respect to positions in financial futures and related options
that do not qualify as "bona fide hedging" positions, will enter such non-
hedging positions only to the extent that aggregate initial margin deposits plus
premiums paid by it for open futures option positions, less the amount by which
any such positions are "in-the-money," would not exceed 5% of the Fund's total
assets.
The Fund may purchase put options on securities to protect holdings in
an underlying or related security against a substantial decline in market value.
The Fund may purchase call options on securities to protect against substantial
increases in prices of securities the Fund intends to purchase pending its
ability to invest in such securities in an orderly manner. The Fund may sell
put or call options it has previously purchased, which could result in a net
gain or loss depending on whether the amount realized on the sale is more or
less than the premium and other transaction costs paid on the put or call
options which is sold. The Fund may write a call or put option only if the
option is "covered" by the Fund holding a position in the underlying securities
or by other means which permit immediate satisfaction of the Fund's obligation
as write of the option. Prior to exercise or expiration, an option may be
closed out by an offsetting purchase or sale of an option of the same series.
The purchase and writing of options involves certain risks. During
the option period, the covered call writer has, in return for the premium on the
option, given up the opportunity to profit from a price increase in the
underlying securities above the exercise price, but, as long as its obligation
as a writer continues, has retained the risk of loss should the price of the
underlying security decline. The writer of an option has no control over the
time when it may be required to fulfill its obligation as a writer of the
option. Once an option writer has received an exercise notice, it cannot effect
a closing purchase transaction in order to terminate its obligation under the
option and must deliver the underlying securities at the exercise price. If a
put or call option purchased by the Fund is not sold when it has remaining
value, and if the market price of the underlying security, in the case of a put,
remains equal to or greater than the exercise price or, in the case of a call,
remains less than or equal to the exercise price, the Fund will lose its entire
investment in the option. Also, where a put or call option on a particular
security is purchased to hedge against price movements in a related
security, the price of the put or call option may move more or less than the
price of the related security. There can be no assurance that a liquid market
will exist when the Fund seeks to close out an option position. Furthermore, if
trading restrictions or suspensions are imposed on the options market, the Fund
may be unable to close out a position.
Under certain circumstances the Fund may (a) invest in warrants, (b)
write covered call and put options or purchase put and call options, (c)
temporarily borrow money from banks for emergency or extraordinary borrowings,
(d) pledge its assets to secure borrowings, (e) purchase securities of other
investment companies, and (f) purchase and sell futures contracts and options
thereon. A more complete discussion of the circumstances in which the Fund may
engage in these activities is included in the Fund's Statement of Additional
Information. Except for the investment policies listed in subparagraph (b),
(c), (d) and (f) of this paragraph, the investment objectives and the other
policies described under this caption are not fundamental policies and may be
changed without shareholder approval. Such changes may result in the Fund
having investment objectives different from the objectives which the shareholder
considered appropriate at the time of investment in the Fund. Shareholders will
receive at least thirty days' prior written notice of any changes in the
investment objectives of the Fund.
MANAGEMENT OF THE FUND
As a Delaware business trust, the business and affairs of the Fund
are managed under the direction of its Trustees. Under an investment advisory
agreement (the "Agreement") with the Fund, Uniplan, Inc., 839 N. Jefferson
Street, Milwaukee, Wisconsin 53202 (the "Adviser"), furnishes continuous
investment advisory services and management to the Fund. In addition to the
Fund, the Adviser is the investment adviser to individual and institutional
clients with substantial investment portfolios. As of December 31, 1997, the
Adviser and its affiliates managed approximately $292 million in assets. The
Adviser was organized in 1985 and is currently controlled by Richard P.
Imperiale, who is a director and the President of the Adviser.
The Adviser supervises and manages the investment portfolio of the
Fund and, subject to such policies as the Trustees of the Fund may determine,
directs the purchase or sale of investment securities in the day-to-day
management of the Fund. Under the Agreement, the Adviser, at its own expense
and without reimbursement from the Fund, will furnish office space and all
necessary office facilities, equipment and executive personnel for making the
investment decisions necessary for managing the Fund and maintaining its
organization, and will pay the salaries and fees of all officers and Trustees of
the Fund (except the fees paid to disinterested directors or Trustees who are
affiliated with the Distributor). For the foregoing, the Adviser receives an
annual fee of .60% on the first $500,000,000 of the Fund's average net assets,
.50% of the next $500,000,000 of the Fund's average net assets and .40% of the
Fund's average net assets in excess of $1,000,000,000. Such fee will be paid
monthly. The Adviser may utilize a portion of the advisory fee to make
solicitation payments in accordance with the Investment Advisers Act of 1940.
Richard P. Imperiale, President of the Adviser since 1985, is
primarily responsible for the day-to-day management of the Fund's portfolio. He
has held this responsibility since the Fund commenced operations.
Mr. Imperiale also has served as the Chairman, Secretary and a Trustee of the
Fund since it was organized.
The Fund also has entered into an administration agreement (the
"Administration Agreement") with Firstar Trust Company (the "Administrator"),
615 East Michigan Street, Milwaukee, Wisconsin 53202. Under the Administration
Agreement, the Administrator maintains the books, accounts and other documents
required by the Act, responds to shareholder inquiries, prepares the Fund's
financial statements and tax returns, prepares certain reports and filings with
the Securities and Exchange Commission and with state Blue Sky authorities,
furnishes statistical and research data, clerical, accounting and bookkeeping
services and stationery and office supplies, keeps and maintains the Fund's
financial and accounting records and generally assists in all aspects of the
Fund's operations. The Administrator, at its own expense and without
reimbursement from the Fund, furnishes office space and all necessary office
facilities, equipment and executive personnel for performing the services
required to be performed by it under the Administration Agreement. For the
foregoing, the Administrator receives from the Fund a fee, paid monthly, based
on the Fund's average net assets, plus certain out-of-pocket expenses. The fee
varies when the Fund's average net assets exceed certain trigger points.
Notwithstanding the foregoing, the Administrator's minimum annual fee is
$20,000.
Firstar Trust Company also provides custodial, transfer agency and
accounting services for the Fund. Information regarding the fees payable by the
Fund to Firstar Trust Company for these services is provided in the Statement of
Additional Information.
The Fund will pay all of its expenses not assumed by the Adviser or
Rodman & Renshaw, Inc. ("Distributor"), including, but not limited to, the costs
of preparing and printing its registration statements required under the
Securities Act of 1933 and the Investment Company Act of 1940 and any amendments
thereto, the expenses of registering its shares with the
Securities and Exchange Commission and in the various states, the printing
and distribution cost of prospectuses mailed to existing shareholders,
the cost of trustee and officer liability insurance, reports to shareholders,
reports to government authorities and proxy statements, interest charges,
brokerage commissions, and expenses incurred in connection with portfolio
transactions. The Fund will also pay the fees of Trustees who are not officers
of the Fund, salaries of administrative and clerical personnel, association
membership dues, auditing and accounting services, fees and expenses of any
custodian or trustees having custody of Fund assets, expenses of calculating the
net asset value and repurchasing and redeeming shares, and charges and expenses
of dividend disbursing agents, registrars, and Share transfer
agents, including the cost of keeping all necessary shareholder records and
accounts and handling any problems relating thereto. In addition to any
reimbursement requirement required under the most restrictive applicable expense
limitation of state securities commissions, the Distributor has
agreed to reimburse the Fund for expenses in excess of 1.15% of its average net
assets for Class A Shares and 1.90% of its average net assets for Class B
Shares.
DETERMINATION OF NET ASSET VALUE
The per Share net asset value of the Fund is determined by dividing
the total value of its net assets (meaning its assets less its liabilities) by
the total number of its Shares outstanding at that time. The net asset value is
determined as of the close of regular trading (currently 4:00 p.m. Eastern time)
on the New York Stock Exchange on each day the New York Stock Exchange
is open for trading. This determination is applicable to all transactions
in Shares of the Fund prior to that time and after the previous time
as of which net asset value was determined. Accordingly, purchase orders
accepted or Shares tendered for redemption prior to the close of regular trading
on a day the New York Stock Exchange is open for trading will be valued as of
the close of trading, and purchase orders accepted or Shares tendered for
redemption after that time will be valued as of the close of the next trading
day. Orders received by the Distributor from dealers or brokers after the net
asset value is determined that day will be valued as of the close of the next
trading day even if the orders were received by the dealer or broker from its
customer prior to such determination. Purchase orders received on other than a
regular business day will be executed on the next succeeding regular business
day. The Distributor, in its sole discretion, may accept or reject any order
for purchase of Fund shares. The sale of shares will be suspended during any
period in which New York Stock Exchange is closed for other than weekends or
holidays, or if permitted by the rules of the SEC when trading on the New York
Stock Exchange is restricted or during an emergency which makes it impracticable
for the Fund to dispose of its securities or to determine fairly the value of
its net assets, or during any other period permitted by the SEC for the
protection of investors.
Securities traded on any national stock exchange or quoted on
the NASDAQ National Market System will be valued on the basis of the last
sale price on the date of valuation or, in the absence of any sale on that
date, the most recent bid price. Other portfolio securities will be valued at
the most recent bid price, if market quotations are readily available. Certain
of the Fund's holdings of debt securities are valued by a pricing service.
Securities for which there are no readily available market quotations and other
assets will be valued at their fair value as determined in good faith by the
Trustees or pursuant to procedures adopted by the Trustees. Odd lot
differentials and brokerage commissions will be excluded in calculating values.
PURCHASE OF SHARES
Shares of the Fund are continuously offered through the Fund's
principal underwriter, the Distributor, and through other firms which have
dealer agreements with the Distributor ("participating brokers") or which have
agreed to act as introducing brokers for the Distributor ("introducing
brokers").
There are two ways to purchase Shares: either (1) through your
broker or dealer which has a dealer agreement or (2) by mailing an Account
Application with payment, as described below under the heading "Direct
Investment," to the Transfer Agent (if no dealer is named in the application,
the Distributor may act as dealer).
The Fund offers and sells two classes of Shares (Class A and Class
B) which may be purchased at a price equal to their net asset value per share
next determined after receipt of an order, plus a sales charge which, at the
election of the purchaser, may be imposed either (i) at the time of the purchase
in the case of Class A Shares (the "initial sales charge alternative") or (ii)
on a contingent deferred basis in the case of Class B Shares (the "deferred
sales charge alternative"). Purchase payments for Class B Shares are fully
invested at the net asset value next determined after acceptance of the trade.
Purchase payments for Class A Shares, less the applicable sales charge, are
invested at the net asset value next determined after acceptance of the trade.
Except for purchases through the Auto Invest plan and tax-qualified
programs referred to below, the minimum initial investment in the Fund is $2,500
and the minimum additional investment is $100. As discussed below, the
minimum initial IRA investment is $250 and the minimum subsequent IRA investment
is $100. For information about dealer commissions, see "Initial Sales Charge
Alternative -- Class A Shares" and "Deferred Sales Charge Alternative -Class B
Shares." Persons selling Fund shares may receive different compensation for
selling Class A and Class B Shares. Normally Fund Shares purchased through
participating brokers are held in the investor's account with that broker. No
share certificates will be issued.
DIRECT INVESTMENT: Investors who wish to invest in the Fund
directly, rather than through a participating broker, may do so by completing
the Account Application included with this Prospectus. All shareholders who
open direct accounts with the Fund will receive from the Fund individual
confirmations of each purchase, redemption, dividend or reinvestment of Fund
Shares, including the total number of Fund Shares owned as of the confirmation
date except that purchases which result from the reinvestment of dividends
and/or distributions will be confirmed once each calendar quarter. See
"Distributions" below. Information regarding direct investment or any other
features or plans offered by the Fund may be obtained by calling 800-216-9785
or by calling your broker.
PURCHASE BY MAIL: Investors who wish to invest directly may send a
completed application form to:
The Jefferson Fund Group Trust
c/o Firstar Trust Company
Mutual Fund Services, 3rd Floor
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Do not mail letters or applications by overnight courier to the post
office address. Correspondence and applications mailed by overnight courier
should be sent to:
The Jefferson Fund Group Trust
c/o Firstar Trust Company
Mutual Fund Services, 3rd Floor
615 East Michigan Street
Milwaukee, Wisconsin 53202
All applications must be accompanied by payment in the form of a
check drawn on a U.S. bank payable to The Jefferson Fund Group Trust or by
direct wire transfer. No cash will be accepted. Firstar Trust Company will
charge a $20 fee against a shareholder's account for any payment check returned
to the custodian. The shareholder will also be responsible for any loss
suffered by the Fund as a result.
Purchases are accepted subject to collection of checks at full value
and conversion into federal funds. The purchase price is based on the net asset
value next determined after the purchase order and check are accepted, even
though the check may not yet have been converted into federal funds.
Funds should be wired to: Firstar Bank of Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA #0750-00022
Firstar Trust MFS A/C #112-952-137
Credit to: The Jefferson Fund Group Trust
[Your account number and title of account,
if known]
The establishment of a new account or any additional purchases for
an existing account by wire transfer should be preceded by a phone call to
Firstar Trust Company at (800) 216-9785 to provide information for the account.
A properly signed Share purchase application marked "follow-up" must be sent for
all new accounts opened by wire transfer. Applications are subject to acceptance
by the Fund, and are not binding until so accepted. The Fund reserves the right
to reject applications in whole or part.
SUBSEQUENT PURCHASES OF SHARES: Subsequent purchases can be made as
indicated above by mailing a check with a letter describing the investment or
with the additional investment portion of a confirmation statement. The minimum
subsequent purchase is $100. All payments should be made payable to The
Jefferson Fund Group Trust and should clearly indicate the shareholder's account
number. Checks should be mailed to, or funds wired to, the locations set forth
above under "Purchase by Mail."
AUTO INVEST: The Auto Invest plan provides for periodic investments
into the shareholder's account with the Fund by means of automatic transfers of
a designated amount from the shareholder's bank account. Investments may be
made monthly, on the business day of a shareholder's choosing, and may be in any
amount subject to a minimum of $100 per month. Further information regarding
the Auto Invest plan is available from the Distributor or participating brokers.
You may enroll by completing the appropriate section of the Application that
accompanies this Prospectus.
FUND LINK: (Does not apply to shares held in broker "street name"
accounts.) Fund Link ("Fund Link") connects your Fund account with a bank
account. Fund Link may be used for subsequent purchases and for redemption and
other transactions described under "How to Redeem." Purchase transactions are
effected by electronic funds transfers from the shareholder's account at a U.S.
bank or other financial institution that is an Automated Clearing House ("ACH")
member. Investors may use Fund Link to make subsequent purchases of shares in
amounts from $100 to $10,000. To initiate such purchases, call 800-216-9785.
The Fund may accept telephone instructions from any person identifying
himself as the owner of an account. The Fund may employ reasonable procedures
to confirm that instructions communicated by telephone are genuine, and may be
liable for any losses due to unauthorized or fraudulent instructions if it
fails to employ such procedures. The Fund will require a form of personal
identification prior to acting on a caller's telephone instructions, will
provide written confirmations of such transactions and will record telephone
instructions . Fund Link is normally established within 15 days of receipt of
an Application by the Transfer Agent. Shares will be purchased on the regular
business day the Transfer Agent receives the funds through the ACH system,
provided the funds are received before the close of regular trading on the
New York Stock Exchange. If the funds are received after the close of regular
trading, the Shares will be purchased on the next regular business day. Most
transfers are completed within three business days after you call to place the
order.
Fund Link privileges may be requested on the Account Application. To
establish Fund Link on an existing account, complete the Supplemental
Application with signatures guaranteed from all shareholders of record for the
account. See "Signature Guarantee" under "General" below. Such privileges
apply to each shareholder of record for the account unless and until the
Transfer Agent receives written instructions from a shareholder of record
canceling such privileges. Changes of bank account information must be made by
completing a new Supplemental Application signed by all owners of record of the
account, with all signatures guaranteed. The Transfer Agent and the Fund may
rely on any telephone instructions believed to be genuine and will not be
responsible for any damage, loss or expenses arising out of such instructions.
The Fund reserves the right to amend, suspend or discontinue Fund Link
privileges at any time without prior notice.
GENERAL
Changes in registration or account privileges may be made in writing
to Firstar Trust Company, the Fund's transfer agent (the "Transfer Agent").
Signature guarantees may be required. See "Signature Guarantee" below.
All correspondence must include the account number and must be sent
to:
The Jefferson Fund Group Trust
c/o Firstar Trust Company
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Overnight or express mail should be directed to:
The Jefferson Fund Group Trust
c/o Firstar Trust Company
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202
SIGNATURE GUARANTEE: When a signature guarantee is called for, the
shareholder should have "Signature Guaranteed" stamped under his signature and
guaranteed by any of the following entities: U.S. banks, foreign banks having a
U.S. correspondent bank, credit unions, savings associations, U.S. registered
dealers and brokers, municipal securities dealers and brokers, government
securities dealers and brokers, national securities exchanges, registered
securities associations and clearing agencies (each an "Eligible Guarantor
Institution"). The Distributor reserves the right to reject any signature
guarantee purchase to its written signature guarantee standards or procedures,
which may be revised in the future to permit it to reject signature guarantees
from Eligible Guarantor Institutions that do not, based on credit guidelines,
satisfy such written standards or procedures. The Fund may change the signature
guarantee requirements from time to time upon notice to shareholders, which may
be given by means of a new or supplemented Prospectus.
TDD SERVICE: Firstar Trust Company, the transfer agent, offers
Telecommunication Device for the Deaf (TDD) services for hearing impaired
shareholders. The dedicated number for this service is 1-800-684-3416.
ALTERNATIVE PURCHASE ARRANGEMENTS
The alternative purchase agreements offered by the Fund enable the
investor to choose the method of purchasing Fund shares that is most beneficial
given the amount of the intended purchase, the length of time the investor
expects to hold the Shares and other circumstances. Investors should consider
whether, during the anticipated life of an intended investment in the Fund, the
accumulated continuing distribution and servicing fees plus contingent deferred
sales charges on Class B Shares would exceed the initial sales charges plus
accumulated servicing fees on Class A Shares purchased at the same time, as
well as the possibility that the anticipated higher yield of Class A Shares due
to lower ongoing charges will offset the initial sales charge paid on such
Shares.
As an illustration, investors purchasing shares of sufficient value to
qualify for sales charges of 1% or less might prefer the initial sales charge
alternative (Class A) because similar reductions are not available on the
contingent deferred sales charge for purchases under the deferred sales charge
alternative (Class B). Moreover, all Shares acquired under the initial sales
charge alternative are subject to a servicing fee but are not subject to a
distribution fee and, accordingly, such shares are expected to pay
correspondingly higher dividends on a per Share basis. Investors whose purchase
will not qualify for reduced initial sales charges may nonetheless wish to
consider the initial sales charge alternative if they expect to hold their
shares for an extended period of time, because, depending on the number of years
the investor holds the investment, the accumulated continuing distribution and
servicing fees on Class B Shares would eventually exceed the initial sales
charge plus the continuing servicing fee on Class A Shares during the life of
such an investment. However, because initial sales charges are deducted at the
time of purchase, not all of the purchase payment for Class A Shares is invested
initially in Shares.
Some investors might determine that it would be more advantageous to
utilize the deferred sales charge alternative to have all purchase payments
invested initially, although remaining subject to continuing distribution and
servicing fees and being subject to contingent deferred sales charges.
For a description of the Distribution and Servicing Plans and
distribution and servicing fees payable thereunder with respect to Class A and
Class B Shares, see "Distributor and Distribution and Servicing Plans" below.
INITIAL SALES CHARGE ALTERNATIVE --
CLASS A SHARES
Class A Shares are sold at a public offering price equal to their net
asset value per share plus a sales charge, as set forth below.
Discount or
Commission
Sales Charge to Dealers
Sales Charge as % of the as % of
as % of Net Public Public
Amount Offering Offering
Amount of Purchase Invested Price Price
- ------------------ ------------ ---------- ----------
$0-$9,999 5.82% 5.50% 4.75%
$10,000-$24,999 4.71% 4.50% 3.75%
$25,000-$49,999 3.63% 3.50% 3.00%
$50,000-$99,999 2.56% 2.50% 2.00%
$100,000-$499,999 1.52% 1.50% 1.00%
$500,000-$999,999 1.01% 1.00% 0.75%
$1,000,000 + 0%1<F13> 0%1<F13> 0.25%1<F13>
1<F13>The Distributor will pay a 0.25% commission to dealers who sell amounts
of $1,000,000 or more of the Fund's Class A Shares, which commission may be paid
in installments over the course of the year following the purchase, and the
Distributor may pay additional commissions, not exceeding 0.25% per year, to
dealers, if the shares remain outstanding. The Distributor will not pay any
commission upon the sale of Class A Shares to any of the purchasers described
below under "Sales at Net Asset Value."
The Fund receives the entire net asset value of its Class A shares
sold to investors. The Distributor receives the sales charge shown above less
any applicable discount or commission "reallowed" to participating brokers in
the amounts indicated in the table above. The Distributor may, however, elect
to reallow the entire sales charge to participating brokers for all sales with
respect to which orders are placed with the Distributor for the Fund during a
particular period. A participating broker who receives a reallowance of 90% or
more of the sales charge may be deemed to be an "underwriter" under the
Securities Act of 1933. During such periods as may from time to time be
designated by the Distributor, the Distributor may pay selected participating
dealers an additional 0.25% of the public offering price to each participating
dealer which obtains purchase orders in amounts exceeding thresholds established
by Distributor.
Shares issued pursuant to the automatic reinvestment of income
dividends or capital gains distributions are issued at net asset value and are
not subject to any sales charges.
Under the circumstances described below, investors may be entitled to
pay reduced sales charges for Class A Shares.
COMBINED PURCHASE PRIVILEGE. Investors may qualify for a reduced
sales charge by combining purchases of the Class A Shares
of the Fund into a "single purchase," if the resulting purchase
totals at least $50,000. The term "single purchase" refers to: (i) a
single purchase by an individual, or concurrent purchases, which in the
aggregate are at least equal to the prescribed amounts, by an individual, his
spouse and their children under the age of 21 years purchasing Class A Shares of
the Fund for his, her or their own account; (ii) a single purchase by a trustee
or other fiduciary purchasing shares for a single trust, estate or fiduciary
account although more than one beneficiary is involved; or (iii) a single
purchase for the employee benefit plans of a single employer. For further
information, consult the Statement of Additional Information or call 1-800-216-
9785 or your broker.
CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION). A purchase of
additional Class A shares of the Fund may qualify for a Cumulative Quantity
Discount at the rate applicable to the discount bracket obtained by adding:
(i) the investor's current purchase;
(ii) the value (at the close of business on the day of the current
purchase) of all Class A Shares of the Fund held by the investor; and
(iii) the value of all shares described in paragraph (ii) owned by
another shareholder eligible to be combined with the investor's purchase into a
"single purchase" as defined above under "Combined Purchase Privilege."
For example, if you owned Class A Shares of the Fund worth $25,000 and
wished to purchase Class A Shares of the Fund worth an additional $30,000, the
sales charge for the $30,000 purchase would be at the 2.50% rate applicable to a
single $55,000 purchase of shares of the Fund, rather than the 5.50% rate.
An investor or participating broker must notify the Distributor
whenever a quantity discount or reduced sales charge is applicable to a purchase
and must provide the Distributor with sufficient information at the time of
purchase to verify that each purchase qualifies for the privilege or discount.
Upon such notification, the investor will receive the lowest applicable sales
charge. The quantity discounts described above may be modified or terminated at
any time.
LETTER OF INTENT. An investor may also obtain a reduced sales charge
by means of a written Letter of Intent, which expresses an intention to invest
not less than $50,000 within a period of 13 months in Class A Shares of the
Fund. Each purchase of shares under a Letter of Intent will be made at the
public offering price or prices applicable at the time of such purchase to a
single transaction of the dollar amount indicated in the Letter. At the
investor's option, a Letter of Intent may include purchases of Class A Shares of
the Fund made not more than 90 days prior to the date the Letter of Intent is
signed; however, the 13-month period during which the Letter is in effect will
begin on the date of the earliest purchase to be included and the sales charge
on any purchases prior to the Letter will not be adjusted.
Investors qualifying for the Combined Purchase Privilege described
above may purchase shares of the Fund under a single Letter of Intent. For
example, if at the time you sign a Letter of Intent to invest at least $100,000
in Class A Shares of the Fund, you and your spouse each purchase Class A Shares
of the Fund worth $30,000 (for a total of $60,000), it will only be necessary
to invest a total of $40,000 during the following 13 months in Class A Shares
of the Fund to qualify for the 1.50% sales charge on the total amount being
invested (the sales charge applicable to an investment of $100,000 in the Fund).
A Letter of Intent is not a binding obligation to purchase the full
amount indicated. The minimum initial investment under a Letter of Intent is 5%
of such amount. Shares purchased with the first 5% of such amount will be held
in escrow (while remaining registered in your name) to secure payment of the
higher sales charge applicable to the shares actually purchased in the event the
full intended amount is not purchased. If the full amount indicated is not
purchased, such escrowed shares will be involuntarily redeemed to pay the
additional sales charge applicable to the amount actually purchased, if
necessary. Dividends on escrowed shares, whether paid in cash or reinvested in
additional Fund shares, are not subject to escrow. When the full amount
indicated has been purchased, the escrow will be released.
If you wish to enter into a Letter of Intent in conjunction with your
initial investment in Class A Shares of the Fund, you should complete the
appropriate portion of the Account Application included with this Prospectus.
If you are a current Class A shareholder desiring to do so you can obtain a form
of Letter of Intent by calling 800-216-9785 or any broker participating in this
program.
SALES AT NET ASSET VALUE. The Fund may sell its Class A Shares at net
asset value without a sales charge: (1) to any Trustee or officer of the Fund;
(2) to any director or officer, or to any full-time employee or sales
representative (who has acted as such for at least 90 days), of the Adviser or
any subadviser hired by the Adviser, or of the Distributor; (3) to registered
representatives and employees of broker/dealers with whom the Distributor has
sales agreements; (4) to any qualified retirement plan for persons described
above; (5) to any officer, director or employee of a corporate affiliate of the
Adviser or the Distributor; (6) to any spouse, child, parent, grandparent,
brother or sister of any person named in (1), (2), (3) or (5) above; (7) to
employee benefit plans for employees of the Adviser, the Distributor and/or
their corporate affiliates; (8) to any employee or agent who retires from the
Adviser, the Distributor and/or a corporate affiliate of the Adviser or the
Distributor; (9) to any account held in the name of a qualified employee benefit
plan, endowment fund or foundation if, on the date of the investment, the plan,
fund or foundation has assets of $5,000,000 or more or at least 100
participants; (10) to any state, county, city, department, authority or similar
agency prohibited by law from paying a sales charge; or (11) any unallocated
accounts held by any third party administrators, registered investment advisers,
trust companies and bank trust departments which exercise discretionary
authority and hold the accounts in fiduciary, agency, custodial or similar
capacity, if in the aggregate such accounts equal or exceed $1,000,000; provided
that sales to persons listed in (1) through (11) above are made upon the written
assurance of the purchaser that the purchase is made for investment purposes and
that the shares so acquired will not be resold except to the Fund. As described
above, the Distributor will not pay any initial commission to dealers upon the
sale of Class A Shares to the purchasers described in this paragraph.
PARTICIPATING BROKERS. Investment dealers and other firms provide
varying arrangements for their clients to purchase and redeem Fund Shares. Some
may establish higher minimum investment requirements than set forth above.
Firms may arrange with their clients for other investment or administrative
services. Such firms may independently establish and charge additional amounts
to their clients for such services, which charges would reduce clients' return.
Firms also may hold Fund Shares in nominee or street name as agent for and on
behalf of their customers. In such instances, the Fund's transfer agent will
have no information with respect to or control over accounts of specific
shareholders. Such shareholders may obtain access to their accounts and
information about their accounts only from their broker. In addition, certain
privileges with respect to the purchase and redemption of Shares or the
reinvestment of dividends may not be available through such firms. Some firms
may participate in a program allowing them access to their clients' accounts for
servicing including, without limitation, transfers of registration and dividend
payee changes; and may perform functions such as generation of confirmation
statements and disbursement of cash dividends. This Prospectus should be read
in connection with such firms' material regarding their fees and services.
DEFERRED SALES CHARGE ALTERNATIVE --
CLASS B SHARES
Class B Shares are sold at their current net asset value without any
initial sales charge. A contingent deferred sales charge ("CDSC") is imposed on
Class B Shares if an investor redeems an amount which causes the current value
of the investor's account for the Fund to fall below the total dollar amount of
purchase payments subject to the CDSC, except that no CDSC is imposed if the
Shares redeemed have been acquired through the reinvestment of dividends or
capital gains distributions or if the amount redeemed is derived from increases
in the value of the account above the amount of purchase payments subject to the
CDSC. All of an investor's purchase payments are invested in shares of the
Fund.
Whether a CDSC is imposed and the amount of the CDSC will depend on
the number of years since the investor made a purchase payment from which a
purchase payment for which an amount is being redeemed and the date such
purchase payment was made. Purchases are subject to the CDSC according to the
following schedule:
Year Since Purchase Percentage Contingent
Payment Was Made Deferred Sales Charge
- ------------------- ---------------------
First 5
Second 4
Third 4
Fourth 3
Fifth 3
Sixth 2
Seventh 1
Eighth and Following 0
In determining whether a CDSC is payable, it is assumed that the
purchase payment from which the redemption is made is the earliest purchase
payment (from which a redemption or exchange has not already been effected).
The following example will illustrate the operation of the CDSC:
Assume that an individual opens an account and makes a purchase
payment of $10,000 for Class B Shares of the Fund and that six months later the
value of the investor's account for the Fund has grown through investment
performance and reinvestment of distributions to $11,000. The investor then may
redeem up to $1,000 from the Fund ($11,000 minus $10,000) without incurring a
CDSC. If the investor should redeem $3,000, a CDSC would be imposed on
$2,000 of the redemption (the amount by which the investor's account for the
Fund was reduced below the amount of the purchase payment). At the rate of 5%,
the CDSC would be $100.
In determining whether an amount is available for redemption without
incurring a CDSC, the purchase payments made for all Class B Shares in the
shareholder's account with the Fund are aggregated, and the current value of all
such Shares is aggregated. Any sales charges imposed on redemptions are paid to
the Distributor.
Except as described below, for sales of Class B Shares made and
services rendered to Class B shareholders, the Distributor intends to make
payments to participating brokers, at the time the shareholder purchases Class
B shares, of up to 1% (representing .75% distribution fees and .25% servicing
fees) of the purchase amount. For sales of Class B shares made to participants
making periodic purchases of not less than $100 through certain employers'
non-qualified savings plans which are clients of a broker or dealer with which
the Distributor has an agreement with respect to such plans, no payments are
made at the time of purchase.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE. The CDSC applicable to
Class B Shares is currently waived for (i) any partial or complete redemption
in connection with a distribution without penalty under Section 72(t) of the
Internal Revenue Code of 1986, as amended (the "Code") from a qualified
retirement plan, including a Keogh or IRA (a) upon attaining age 59 1/2,
(b) as part of a series of substantially equal periodic payments, or (c) in
the case of an employer retirement plan, upon separation from service and
attaining age 55; (ii) any partial or complete redemption in connection with a
qualifying loan from an employer retirement plan; (iii) any complete redemption
in connection with a distribution from a qualified employer retirement plan in
connection with termination of employment or termination of the employer's plan
and the transfer to another employer's plan or to an IRA; (iv) any partial or
complete redemption following death or disability (as defined in the Code) of a
shareholder (including one who owns the Shares as joint tenant with his or her
spouse) from an account in which the deceased or disabled is named, provided
the redemption is requested within one year of the death or initial
determination of disability; (v) any redemption resulting from a return of an
excess contribution to a qualified employer retirement plan or an IRA; (vi)
redemptions by trustees, officers and employees of The Jefferson Fund Group
Trust and by directors, officers and employees of the Distributor and the
Adviser; (vii) redemptions effected pursuant to the Fund's right to
involuntarily redeem a shareholder's account if the aggregate net asset value
of shares held in such shareholder's account is less than a minimum account size
specified in this Prospectus; (viii) involuntary redemptions caused by operation
of law; (ix) redemption of shares of the Fund that is combined with another
fund, investment company, or personal holding company by virtue of a merger,
acquisition or other similar reorganization transaction; (x) redemptions by a
shareholder who is a participant making periodic purchases of not less than $100
through non-qualified savings plans that are clients of a broker-dealer with
which the Distributor has an agreement with respect to such purchases; (xi)
redemptions effected by trustees or other fiduciaries who have purchased shares
for employer-sponsored plans, the administrator for which has an agreement with
the Distributor with respect to such purchases; or (xii) certain periodic
redemptions under a Systematic Withdrawal Plan from an account meeting certain
minimum balance requirements, in amounts meeting certain maximums established
from time to time by the Distributor. The Distributor may require documentation
prior to waiver of the charge, including distribution letters, certification by
plan administrators, applicable tax forms, death certificates, physicians
certificates, etc.
For more information about the CDSC, call 800-216-9785.
HOW TO REDEEM
Shares may be redeemed through a participating broker, by telephone,
by submitting a written redemption request directly to the Transfer Agent (for
non-broker accounts) or through Fund Link.
A CDSC may apply to a redemption of Class B Shares. See "Purchase
of Shares." Shares are redeemed at their net asset value next determined after
a proper redemption request has been received, less any applicable CDSC. There
is no charge by the Distributor (other than applicable CDSC) with respect to
redemption; however, a participating broker who processes a redemption for an
investor may charge customary commissions for its services. Dealers and other
financial services firms are obligated to transmit orders promptly. Requests
for redemption received by dealers or other firms prior to the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern time) on a
regular business day and received by the Transfer Agent prior to the close of
the Distributor's business day will be confirmed at the net asset value
effective as of the closing of the Exchange on that day, less any applicable
CDSC.
DIRECT REDEMPTION: A shareholder's original Account Application
permits the shareholder to redeem by written request and by telephone (unless
the shareholder specifically elects not to utilize telephone redemptions) and to
elect one or more of the additional redemption procedures described below. A
shareholder may change the instructions indicated on his original Account
Application, or may request additional redemption options, only by transmitting
a written direction to the Transfer Agent. Requests to institute or change any
of the additional redemption procedures will require a signature guarantee.
Redemption proceeds will normally be mailed to the redeeming
shareholder within seven days or, in the case of wire transfer redemptions, sent
to the designated bank account within one business day. Fund Link redemptions
may be received by the bank on the third business day. In cases where shares
have recently been purchased by personal check, redemption proceeds will be
mailed upon the clearance of the personal check which may take up to 15 days
or more. To avoid such delay, investors should purchase shares by certified or
bank check or by wire transfer.
WRITTEN REQUESTS. (Does not apply to shares held in broker "street
name" accounts.) To redeem Shares in writing a shareholder must send the
following items to: The Jefferson Fund Group Trust, c/o Firstar Trust Company,
P.O. Box 701, Milwaukee, Wisconsin 53201-0701: (1) a written request for
redemption signed by all registered owners exactly as the account is registered
on the Transfer Agent's records, including fiduciary titles, if any, and
specifying the account number and the dollar amount or number of Shares to be
redeemed; (2) for certain redemptions described below, a guarantee of all
signatures on the written request or, if required, as described under "Signature
Guarantee"; and (3) any additional documents which may be required by the
Transfer Agent for redemption by corporations, partnerships or other
organizations, executors, administrators, trustees, custodians or guardians,
or if the redemption is requested by anyone other than the shareholder(s) of
record. Redemption requests sent by overnight or express mail should be
directed to: The Jefferson Fund Group Trust, c/o Firstar Trust Company, Mutual
Fund Services, 3rd Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202.
Transfers of shares are subject to the same requirements. A signature guarantee
is not required for redemptions of $50,000 or less, requested by and payable to
all shareholders of record for the account, to be sent to the address of record
for that account. To avoid delay in redemption or transfer, shareholders having
any questions about these requirements should contact the Transfer Agent in
writing or by calling 1-800-216-9785 before submitting a request. If a
redemption request is inadvertently sent to the Fund, it will be promptly
forwarded to Firstar Trust Company, but the effective date of redemption will
be delayed until the request is received by Firstar Trust Company. Requests
for redemption by telegram and requests which are subject to any special
conditions or which specify an effective date other than as provided herein
cannot be honored. REDEMPTION OR TRANSFER REQUESTS WILL NOT BE HONORED UNTIL
ALL REQUIRED DOCUMENTS IN THE PROPER FORM HAVE BEEN RECEIVED BY THE TRANSFER
AGENT.
Shareholders who have an IRA must indicate on their redemption
requests whether or not to withhold federal income tax. Unless otherwise
indicated, these redemptions, as well as redemptions of other investment plans
not involving a direct rollover to an eligible plan, will be subject to federal
income tax withholding.
If the proceeds of the redemption (i) exceed $50,000, (ii) are to be
paid to a person other than the record owner, (iii) are to be sent to an address
other than the address of the account on the Transfer Agent's records, or (iv)
are to be paid to a corporation, partnership, trust or fiduciary, the
signature(s) on the redemption request must be guaranteed as described above,
except that the Distributor may waive the signature guarantee requirement for
redemptions up to $2,500 by a trustee of a qualified retirement plan, the
administrator for which has an agreement with the Distributor.
TELEPHONE REDEMPTIONS. (Does not apply to shares held in broker
"street name" accounts.) The Fund accepts telephone requests for redemption of
shares for amounts from $1,000 up to $50,000 within any 7 calendar day period,
except for investors who have specifically declined telephone redemption
privileges on the Account Application or elected in writing not to utilize
telephone redemptions. The proceeds of a telephone redemption will be sent to
the record shareholder at his record address. Changes in account information
must be made in a written authorization with a signature guarantee. See
"Signature Guarantee" under "General." Telephone redemptions will not be
accepted during the 30-day period following any change in an account's record
address.
By completing an Account Application, an investor agrees that the
Fund, the Distributor and the Transfer Agent shall not be liable for any loss
incurred by the investor by reason of the Fund accepting unauthorized telephone
redemption requests for his account if the Fund reasonably believes the
instructions to be genuine. Thus, shareholders risk possible losses in the
event of a telephone redemption not authorized by them. The Fund may accept
telephone redemption instructions from any person identifying himself as the
owner of an account or the owner's broker where the owner has not declined in
writing to utilize this service. The Fund will employ reasonable procedures
to confirm that instructions communicated by telephone are genuine, and may be
liable for any losses due to unauthorized or fraudulent instructions if it fails
to employ such procedures. The Fund will require a form of personal
identification prior to acting on a caller's telephone instructions, will
provide written confirmations of such transactions and will record telephone
instructions.
A shareholder making a telephone redemption should call the Transfer
Agent at 800-216-9785 and state (i) the name of the shareholder as it appears on
the Transfer Agent's records, (ii) his account number with the Fund, (iii) the
amount to be withdrawn and (iv) the name of the person requesting the
redemption. Usually the proceeds are sent to the investor on the next Fund
business day after the redemption is effected, provided the redemption request
is received prior to the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m. Eastern time) that day. If the redemption request is
received after the closing of the New York Stock Exchange, the redemption is
effected on the following Fund business day at that day's net asset value and
the proceeds are usually sent to the investor on the second following Fund
business day. The Fund reserves the right to terminate or modify the telephone
redemption service at any time. During times of severe disruptions in the
securities markets, the volume of calls may make it difficult to redeem by
telephone, in which case a shareholder may wish to send a written request for
redemption as described under "Written Requests" above. Telephone
communications may be recorded by the Distributor or the Transfer Agent.
FUND LINK REDEMPTIONS. (Does not apply to shares held in broker
"street name" accounts.) If a shareholder has established Fund Link, the
shareholder may redeem shares by telephone and have the redemption proceeds sent
to a designated account at a financial institution. Fund Link is normally
established within 15 days of receipt of the Application by the Transfer Agent.
To use Fund Link for redemptions, call the Transfer Agent at 800-216-9785.
Subject to the limitations set forth above under "Telephone Redemptions," the
Distributor, the Fund and the Transfer Agent may rely on instructions by any
registered owner believed to be genuine and will not be responsible for any loss
or expense arising out of such instructions. Requests received by the Transfer
Agent prior to the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m. Eastern time) on a business day will be processed at the net
asset value on that day and the proceeds (less any CDSC) will normally be sent
to the designated bank account on the following business day and received by the
bank on the second or third business day. If the redemption request is received
after the close of regular trading on the New York Stock Exchange, the
redemption is effected on the following business day. Shares purchased by check
may not be redeemed through Fund Link until such shares have been owned (i.e.,
paid for) for at least 15 days. Changes in bank account information must be
made by completing a new Supplemental Application, signed by all owners of
record of the account, with all signatures guaranteed. See "Signature
Guarantee" under "General." See "Fund Link" under "Purchase of Shares" for
information on establishing the Fund Link privilege. The Fund may terminate
the Fund Link program at any time without notice to shareholders.
EXPEDITED WIRE TRANSFER REDEMPTIONS.
(Does not apply to shares held in broker "street name" accounts.) If a
shareholder has given authorization for expedited wire redemption, shares can
be redeemed and the proceeds sent by federal wire transfer to a single
previously designated bank account. Requests received by the Fund prior to the
close of the New York Stock Exchange will result in shares being redeemed that
day at the next determined net asset value (less any CDSC) and normally the
proceeds being sent to the designated bank account the following business day.
The bank must be a member of the Federal Reserve wire system. Delivery of the
proceeds of a wire redemption request may be delayed by the Fund for up to 7
days if the Transfer Agent deems it appropriate under then current market
conditions. Once authorization is on file, the Fund will honor requests by any
person identifying himself as the owner of an account or the owner's broker by
telephone at 800-216-9785 or by written instructions. The Fund cannot be
responsible for the efficiency of the Federal Reserve wire system or the
shareholder's bank. The Transfer Agent currently charges a $12.00 fee for each
payment of redemption proceeds made by wire, which will be deducted from the
shareholder's account. The shareholder is responsible for any charges imposed
by the shareholder's bank. The minimum amount that may be wired is $1,000.
The Fund reserves the right to change this minimum or to terminate the wire
redemption privilege. Shares purchased by check may not be redeemed by wire
transfer until such shares have been owned (i.e. paid for) for at least 15 days.
To change the name of the single bank account designated to receive wire
redemption proceeds, it is necessary to send a written request with signatures
guaranteed to The Jefferson Fund Group Trust, c/o Firstar Trust Company, Mutual
Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201 or via express mail or
overnight courier to The Jefferson Fund Group Trust, c/o Firstar Trust Company,
Mutual Fund Services, 3rd Floor, 615 East Michigan Street, Milwaukee, Wisconsin
53202. See "Signature Guarantee" under "General."
SYSTEMATIC WITHDRAWAL PLAN. An investor who owns or buys shares of
the Fund having a net asset value of $10,000 or more may open a Systematic
Withdrawal Plan and have a designated sum of money (not less than $100) paid
monthly to the investor or another person. Such a plan may be established by
completing the appropriate section of the Supplemental Application. If a
Systematic Withdrawal Plan is set up after the account is established providing
for payment to a person other than the record shareholder or to an address other
than the address of record, a signature guarantee is required. See "Signature
Guarantee" under "General." Shares of either class of the Fund are deposited in
a plan account and all distributions are reinvested in additional shares of that
class of the Fund at net asset value. Shares in a plan account are then
redeemed at net asset value (less any applicable CDSC) to make each withdrawal
payment. The CDSC applicable to Class B shares is waived for certain redemptions
under a plan. See "Waiver of Contingent Deferred Sales Charges" under "Deferred
Sales Charge Alternative -- Class B Shares" above.
Redemptions for the purpose of withdrawals are ordinarily made on
the business day preceding the day of payment at that day's closing
net asset value and checks are mailed on the day after the day of
payment selected by the shareholder in the Supplemental Application.
Payment will be made to any person the investor designates; however,
if the shares are registered in the name of a trustee or other fiduciary,
payment will be made only to the fiduciary, except in the case of a profit-
sharing or pension plan where payment will be made to the designee. As
withdrawal payments may include a return of principal, they cannot be considered
a guaranteed annuity or actual yield of income to the investor. The redemption
of shares in connection with Systematic Withdrawal Plan may result in a gain or
loss for tax purposes. Continued withdrawals in excess of income will reduce and
possibly exhaust invested principal, especially in the event of a market
decline. The maintenance of a Systematic Withdrawal Plan concurrently with
purchases of additional shares of the Fund would be disadvantageous to the
investor because of the CDSC that may become payable on such withdrawals
in the case of Class B shares and because of the initial sales charge in the
case of Class A shares. For this reason, the minimum investment accepted for
the Fund while a Systematic Withdrawal Plan is in effect is $1,000, and an
investor may not maintain a plan for the accumulation of shares of the Fund
(other than through reinvestment of distributions) and a Systematic Withdrawal
Plan at the same time. The cost of administering the Systematic Withdrawal
Plans for the benefit of those shareholders participating in them is borne by
the Fund as an expense of all shareholders. The Fund or the Distributor may
terminate or change the terms of the Systematic Withdrawal Plan at any time.
Because the Systematic Withdrawal Plan may involve invasion of
capital, investors should consider carefully with their own financial advisers
whether the plan and the specified amounts to be withdrawn are appropriate in
their circumstances. The Fund and the Distributor make no recommendations or
representations in this regard.
EXCHANGE PRIVILEGE
A shareholder of the Fund may, without charge, exchange at net asset
value any or all of an investment in the Fund for shares of the Firstar Money
Market Fund (the "Money Market Fund"). This Exchange Privilege is a convenient
way for shareholders to buy shares in a money market fund in order to respond to
changes in their goals or market conditions. Before exchanging into the Money
Market Fund, read its prospectus. To obtain the Money Market Fund prospectus
and the necessary exchange authorization forms, call the Transfer Agent at 1-
800-216-9785. There is no charge for exchange transactions which are requested
by mail. The Transfer Agent may charge a $5.00 fee for each telephone exchange
which will be deducted from the investor's account from which the funds are
being withdrawn prior to effecting the exchange. Use of the Exchange Privilege
is subject to the minimum purchase and redemption amounts set forth in the
Prospectus for the Money Market Fund.
This Exchange Privilege also permits shareholders of the Fund to
make regular investments in an existing account with the Fund by redeeming
shares from their Money Market Fund account. There is no charge for this
service, but sales charges or CDSC may apply. These transactions must meet the
minimum purchase amounts described herein for automatic investments.
For purposes of the Exchange Privilege, exchanges into and out of
the Money Market Fund will be treated as the same Class of shares owned of the
Fund. For example, if an investor who owned Class A shares of the Fund moved an
investment from the Fund to the Money Market Fund and then decided at a later
date to move the investment back to the Fund, he or she would be deemed, once
again, to own Class A shares of the Fund and may do so without the imposition of
any additional sales charges, so long as the investment has been continuously
invested in shares of the Money Market Fund during the period between withdrawal
and re-investment. In addition, if an investor owned Class B shares of the Fund
and exchanged those shares into the Money Market Fund, the CDSC would not be
paid at the time of the exchange. Instead, the shares of the Money Market Fund
would be deemed "Class B shares" for the purpose of determining the applicable
holding period for payment of the CDSC, and for purposes of assessing the CDSC
payable upon the sale of the exchanged shares, the holding period of the shares
exchanged into the Money Market Fund will be added to the holding period of the
original Class B shares. For example, suppose an investor purchased 100 Class B
shares on January 1, 1998 and exchanged those shares into the Money Market Fund
on June 1, 1998. Suppose further that the shareholder exchanged those same
shares back into the Fund on February 1, 1999. For purposes of calculating the
CDSC holding period as of February 1, 1999, the shareholder can include both the
eight months in which he was a shareholder of the Money Market Fund as well as
the five months in which he was a shareholder of the Fund. Thus, if the
shareholder sold the 100 Class B shares on February 2, 1999, he would pay the
CDSC applicable to shareholders that have held their shares for more than one
year.
With respect to Class B shares subject to a CDSC, if less than all
of an investment is exchanged out of the Fund, shares subject to the lowest CDSC
will be the first to be exchanged. In this regard, any portion of the
investment attributable to capital appreciation and/or reinvested dividends or
capital gains distributions will be exchanged first, and thereafter any portions
exchanged will be from the earlier investment made in the Fund. Shareholders
should take into account the effect of any exchange on the applicability of any
CDSC that may be imposed upon any subsequent redemption.
All accounts opened as a result of using the exchange privilege must
be registered in the same name and taxpayer identification number as a
shareholder's existing account with the Fund. Remember that each exchange
represents the sale of shares of one fund and the purchase of shares of another.
Therefore, shareholders may realize a taxable gain or loss on the transaction.
Before making an exchange request, an investor should consult a tax or other
financial adviser to determine the tax consequences of a particular exchange.
The Distributor is entitled to receive a fee from the Money Market Fund for
certain support services at the annual rate of .02 of 1% of the average daily
net asset value of the shares for which it is the holder or dealer of record.
Because excessive trading can hurt the Fund's performance and shareholders, the
Fund reserves the right to temporarily or permanently limit the number of
exchanges or to otherwise prohibit or restrict shareholders from using the
exchange privilege at any time, without notice to shareholders. In particular,
a pattern of exchanges with a "market timing" strategy may be disruptive to the
Fund and may thus be restricted or refused. The Fund also believes that
excessive use of the exchange privilege is more than five exchanges per calendar
year. The restriction or termination of the exchange privilege does not affect
the rights of shareholders to redeem shares, as discussed herein under "How to
Redeem."
The Money Market Fund is managed by Firstar Investment Research and
Management Company, an affiliate of Firstar Trust Company. The Firstar Funds,
including the Money Market Fund, are unrelated to the Jefferson Fund Group
Trust.
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS
Rodman & Renshaw is the principal underwriter of the Fund shares and
in that capacity makes distribution and servicing payments to participating
brokers in connection with the sale of Class B Shares, servicing payments for
Class A Shares (in the case of Class A Shares, participating brokers are
compensated based on the amount of the front-end sales charge, except in cases
where Class A Shares are sold without a front-end sales charge) and, pursuant to
a Distribution Agreement with respect to the Fund's Class A and
Class B Shares, bears various other promotional and sales related expenses,
including the cost of printing and mailing prospectuses to persons other than
shareholders.
CLASS A SERVICING FEES: As compensation for services rendered and
expenses borne by the Distributor in connection with personal services rendered
to Class A shareholders of the Fund and the maintenance of Class A shareholder
accounts, the Fund pays the Distributor servicing fees of up to .25% annually
(calculated as a percentage of the Fund's average daily net assets attributable
to Class A Shares).
CLASS B DISTRIBUTION AND SERVICING FEES: As compensation for
services rendered and expenses borne by the Distributor in connection with the
distribution of Class B Shares of the Fund and in connection with personal
services rendered to Class B shareholders of the Fund and the maintenance of
Class B shareholder accounts, the Fund pays the Distributor annual distribution
and servicing fees of up to .75% and .25%, respectively, (calculated as a
percentage of the Fund's average daily net assets attributable to Class B
Shares).
The Class A servicing fees and Class B servicing and distribution
fees paid to the Distributor are made under Distribution and Servicing Plans
adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The distribution fee applicable to Class B Shares may be spent by
the Distributor on any activities or expenses primarily intended to result in
the sale of Class B Shares of the Fund, including compensation to, any expenses
(including overhead and telephone expenses) of, financial consultants or other
employees of the Distributor or of participating or introducing brokers who
engage in distribution of Class B Shares, printing of prospectuses and reports
for other than existing Class B shareholders, advertising and preparation,
printing and distribution of sales literature. The servicing fee, applicable to
both Class A and Class B Shares of the Fund, may be spent by the Distributor on
personal services rendered to shareholders of the Fund and the maintenance of
shareholder accounts, including compensation to, and expenses (including
telephone and overhead expenses) of, financial consultants or other employees
of the Distributor or of participating or introducing brokers who aid in the
processing of purchase or redemption requests or the processing of dividend
payments, who provide information periodically to shareholders showing their
positions in the Fund's shares, who forward communications from the Fund to
shareholders, who render ongoing advice concerning the suitability of particular
investment opportunities offered by the Fund in light of the shareholders'
needs, who respond to inquiries from shareholders relating to such services,
or who train personnel in the provision of such services. Distribution and
servicing fees may also be spent on interest relating to unreimbursed
distribution or servicing expenses from prior years.
The Distributor may from time to time pay additional cash bonuses or
other incentives to selected participating brokers in connection with the sale
or servicing of Class A and/or Class B Shares of the Fund. On some occasions,
such bonuses or incentives may be conditioned upon the sale of a specified
minimum dollar amount of the Shares of the Fund or a particular class of Shares,
during a specific period of time. The Distributor currently expects that such
additional bonuses or incentives will not exceed .25% of the amount of any sale.
RETIREMENT PLANS
The Fund offers the following retirement plans that may be funded
with purchases of Shares and may allow investors to shelter some of their income
from taxes:
INDIVIDUAL RETIREMENT ACCOUNT ("IRA"). Individuals who receive
compensation or earned income, even if they are active participants in a
qualified retirement plan (or certain similar retirement plans), may establish
their own tax-sheltered IRA. The Fund offers the Traditional IRA, the Roth IRA
and the Education IRA. There is currently no charge for establishing an
account, although there is an annual maintenance fee of $12.50. The minimum
initial IRA investment is $250 and the minimum subsequent IRA investment is
$100.
SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP/IRA"). The Fund also offers
a prototype SEP/IRA for employers, including self-employed individuals, who wish
to purchase Shares with tax-deductible contributions. Under this
plan, employer contributions are made directly to the IRA accounts of eligible
participants.
DEFINED CONTRIBUTION RETIREMENT PLAN (KEOGH OR CORPORATE PROFIT-
SHARING AND MONEY-PURCHASE PLANS).
A prototype defined contribution retirement plan is available for employers,
including self-employed individuals, who wish to purchase Shares with tax-
deductible contributions.
CASH OR DEFERRED 401(K) PLAN. A prototype cash or deferred 401(k)
plan is available for employers who wish to allow employees to elect to reduce
their compensation and have such amounts contributed to the plan.
A description of applicable service fees and certain limitations on
contributions and withdrawals, as well as application forms, are available from
the Fund upon request. The IRA documents contain a disclosure statement which
the Internal Revenue Service requires to be furnished to individuals who are
considering adopting an IRA. Because a retirement program involves commitments
covering future years, it is important that the investment objective of the Fund
be consistent with the participant's retirement objectives. Premature
withdrawals from a retirement plan will result in adverse tax consequences. The
amounts eligible for investment in retirement plans may change at any time due
to changes in the Internal Revenue Code or any regulation promulgated
thereunder.
DIVIDEND REINVESTMENT
Shareholders may elect to have all income dividends and capital
gains distributions reinvested or paid in cash, or to have dividends reinvested
and capital gains distributions paid in cash or capital gains distributions
reinvested and income dividends paid in cash. Shareholders having dividends
and/or capital gains distributions paid in cash may choose to have such amounts
automatically deposited to their checking or savings accounts. See the Share
purchase application form included at the back of this Prospectus for further
information. If a shareholder does not specify an election, all income
dividends and capital gains distributions will automatically be reinvested in
full and fractional Shares calculated to the nearest 1,000th of a Share. Shares
are purchased at the net asset value in effect on the business day after the
dividend record date and are credited to the shareholder's account on the
dividend payment date. Shareholders will be advised of the number of Shares
purchased and the price following each reinvestment. An election to reinvest or
receive dividends and distributions in cash will apply to all Shares registered
in the same name, including those previously purchased. See "DIVIDENDS,
DISTRIBUTIONS AND TAXES" for tax consequences.
A shareholder may change an election at any time by notifying the
Fund in writing. If such a notice is received between a dividend declaration
date and payment date, it will become effective on the day following the payment
date. The Fund may modify or terminate its dividend reinvestment program at any
time on thirty days' written notice to participants.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to qualify annually for and elect tax treatment
applicable to a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). Pursuant to the requirements of
the Code, the Fund intends to distribute substantially all of its net investment
income and net realized capital gains, if any, less any available capital loss
carry-over, to its shareholders annually so as to avoid paying income tax on its
net investment income and net realized capital gains or being subject to a
federal excise tax on undistributed net investment income and net realized
capital gains. For federal income tax purposes, distributions by the Fund,
whether invested in additional Shares or received in cash, will be taxable to
the Fund's shareholders except those shareholders that are not subject to tax on
their income.
Shareholders will be notified annually as to the federal tax status
of dividends and distributions. For federal income tax purposes, a
shareholder's original cost for his Shares continues as his basis and on
redemption his gain or loss is the difference between such basis and the
redemption price. Distributions and redemptions may also be taxed under
state and local tax laws which may differ from the Code.
Dividends paid in cash by the Fund with respect to its Class A and
Class B Shares are calculated in the same manner and at the same time and will
be in the same amount relative to the aggregate net asset value of the Shares in
each class, except that dividends on Class B Shares are expected to be lower
than dividends on Class A shares as a result of the distribution fee applicable
to Class B Shares. Currently, the Fund declares and pays dividends quarterly
and distributes capital gains annually.
The foregoing is only a brief summary of some of the important
federal income tax considerations generally affecting the Fund and its
shareholders, is not intended as a substitute for careful tax planning and is
based on tax laws and regulations which are in effect on the date of this
Prospectus. Such laws and regulations may be changed by legislative or
administrative action. Accordingly, investors in the Fund should consult their
tax advisers with specific reference to their own tax situation.
BROKERAGE TRANSACTIONS
The Agreement authorizes the Adviser to select the brokers or
dealers that will execute the purchases and sales of the Fund's portfolio
securities. In placing purchase and sale orders for the Fund, it is the policy
of the Adviser to seek the best execution of orders at the most favorable price
in light of the overall quality of brokerage and research services provided.
The Agreement permits the Adviser to pay a broker which provides
brokerage and research services to the Adviser a commission for effecting
securities transactions in excess of the amount another broker would have
charged for executing the transaction, provided the Adviser believes this to be
in the best interests of the Fund. In effecting purchases and sales of the
Fund's portfolio securities, the Adviser may replace orders with, and pay
brokerage commissions to, the Distributor or investment dealers, if any, with
which the Distributor executes sales agreements when it reasonably believes the
commissions and the transaction quality are comparable to that available from
other qualified brokers. In selecting among firms to handle a particular
transaction, the Adviser may take into account whether the firm has sold, or is
selling, shares of the Fund.
CAPITAL STRUCTURE
The Fund's authorized capital consists of an unlimited number of
Shares. Shareholders are entitled: (i) to one vote per full Share; (ii) to
such distributions as may be declared by the Fund's Trustees out of funds
legally available; and (iii) upon liquidation, to participate ratably in the
assets available for distribution. There are no conversion or sinking fund
provisions applicable to the Shares, and the holders have no preemptive rights
and may not cumulate their votes in the election of Trustees. Consequently, the
holders of more than 50% of the Shares voting for the election of Trustees can
elect all the Trustees, and in such event, the holders of the remaining Shares
voting for the election of Trustees will not be able to elect any persons as
Trustees. The Fund does not anticipate holding an annual meeting in any year in
which the election of Trustees is not required to be acted on by shareholders
under the Investment Company Act of 1940. The Fund's Trust Instrument contains
provisions for the removal of Trustees by the shareholders.
The Shares are redeemable and are transferable. All Shares issued
and sold by the Fund will be fully paid and nonassessable. Fractional Shares
entitle the holder to the same rights as whole Shares. Firstar Trust Company,
615 East Michigan Street, Milwaukee, Wisconsin 53202 acts as the Fund's transfer
agent and dividend disbursing agent.
The Fund will not issue certificates evidencing Shares purchased.
Each shareholder's account will be credited with the number of Shares purchased,
relieving shareholders of responsibility for safekeeping of certificates and the
need to deliver them upon redemption. Written confirmations are issued for all
purchases of Shares.
Pursuant to the Trust Instrument, the Trustees may establish and
designate one or more separate and distinct series of Shares, each of which
shall be authorized to issue an unlimited number of Shares. In addition, the
Trustees may, without obtaining any prior authorization or vote of shareholders,
redesignate or reclassify any issued Shares of any series. In the event that
more than one series is established, each Share outstanding, regardless of
series, would still entitle its holder to one (1) vote. As a general matter,
Shares would be voted in the aggregate and not by series, except where class
voting would be required by the Investment Company Act of 1940 (e.g., change in
investment policy or approval of an investment advisory agreement). All
consideration received from the sale of Shares of any series, together with all
income, earnings, profits and proceeds thereof, would belong to that series and
would be charged with the liabilities in respect of that series and of that
series' share of the general liabilities of the Fund in the proportion that the
total net assets of the series bear to the total net assets of all series. The
net asset value of a Share of any series would be based on the assets belonging
to that series less the liabilities charged to that series, and dividends could
be paid on Shares of any series only out of lawfully available assets belonging
to that series. In the event of liquidation or dissolution of the Fund, the
shareholders of each series would be entitled, out of the assets of the Fund
available for distribution, to the assets belonging to that series.
The Fund's Trust Instrument contains an express disclaimer of
shareholder liability for its acts or obligations and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Fund or its Trustees. The Trust Instrument provides for
indemnification and reimbursement of expenses out of the Fund's property for any
shareholder held personally liable for its obligations. The Trust Instrument
also provides that the Fund shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the Fund and satisfy
any judgment thereon.
The Trust Instrument further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law, but nothing in the
Trust Instrument protects a Trustee against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.
SHAREHOLDER REPORTS
Shareholders will be provided at least semi-annually with a report
showing the Fund's portfolio and other information and annually after the close
of the Fund's fiscal year, which ends October 31st, with an annual report
containing audited financial statements. Shareholders who have questions about
the Fund should write to: The Jefferson Fund Group Trust, c/o Firstar Trust
Company, Mutual Funds Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
Overnight and express mail should be sent to: The Jefferson Fund Group Trust,
c/o Firstar Trust Company, Mutual Fund Services, 3rd Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202. Questions about individual accounts may be
directed toll free to Firstar Trust Company at (800) 216-9785.
PERFORMANCE INFORMATION
The Fund may provide from time to time in advertisements, reports to
shareholders and other communications with shareholders its average annual
compounded rate of return as well as its total return and cumulative total
return. An average annual compounded rate of return refers to the rate of return
which, if applied to an initial investment at the beginning of a stated period
and compounded over the period, would result in the redeemable value of the
investment at the end of the stated period assuming reinvestment of all
dividends and distributions and reflecting the effect of all recurring fees.
Total return and cumulative total return similarly reflect net investment income
generated by, and the effect of any realized and unrealized appreciation or
depreciation of, the underlying investments of the Fund for the stated period,
assuming the reinvestment of all dividends and distributions and reflecting the
effect of all recurring fees. Total return figures are not annualized or
compounded and represent the aggregate percentage of dollar value change over
the period specified. Cumulative total return reflects the Fund's total return
since inception. An investor's principal in the Fund and the Fund's return are
not guaranteed and will fluctuate according to market conditions.
The Fund may compare its performance to other mutual funds with
similar investment objectives and to the industry as a whole, as reported by
Value Line, Weisberger's Encyclopedia of Institutional Funds, Lipper Analytical
Services, Inc., Morningstar, Inc., Money Manager Review, Money, Forbes, Business
Week and Barron's magazines, The Wall Street Journal and Investor's Business
Daily. (Value Line, Lipper Analytical Services, Inc., Morningstar, Inc. and
Money Manager Review are independent fund ranking services that rank mutual
funds based upon total return performance.) The Fund may also compare its
performance to the Dow Jones Industrial Average, NASDAQ Composite Index, NASDAQ
Industrials Index, Value Line Composite Index, the Standard & Poor's 500 Stock
Index and the Consumer Price Index. Such comparisons may be made in
advertisements, shareholder reports or other communications to shareholders.
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
---------------------------------
As set forth under the caption "INVESTMENT OBJECTIVES AND POLICIES,"
the Fund may invest a portion of its total assets in publicly distributed debt
securities assigned one of the six highest ratings of either Standard & Poor's
Corporation ("Standard & Poor's") or Moody's Investors Services, Inc.
("Moody's"). A brief description of the ratings symbols and their meanings
follows.
STANDARD & POOR'S DEBT RATINGS:
------------------------------
A Standard & Poor's corporate debt rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
This assessment may take into consideration obligors such as guarantors,
insurers or lessees.
The debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
The ratings are based on current information furnished by the issuer
or obtained by Standard & Poor's from other sources it considers reliable.
Standard & Poor's does not perform any audit in connection with any rating and
may, on occasion, rely on unaudited financial information. The ratings may be
changed, suspended or withdrawn as a result of changes in, or unavailability of,
such information, or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default - capacity and willingness of the
obligor as to the timely payment of interest and repayment of
principal in accordance with the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws
affecting creditors' rights;
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in the higher rated
categories.
BBB -- Debt rated BBB are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.
BB, B -- Debt rated BB and B are regarded, on balance, as
predominately speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. While such
debt will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.
MOODY'S BOND RATINGS:
--------------------
Aaa - Bonds which are rated Aaa are judged to be the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large, or by an
exceptionally stable, margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa - Bonds which are Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present, but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and thereby
not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Moody's bond rating symbols may contain numerical modifiers of a
generic rating classification. The modifier 1 indicates that the bond ranks at
the higher end of its category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
(JEFFERSON GROWTH & INCOME FUND LOGO)
PURCHASE APPLICATION
Send completed application to: The Jefferson Fund Group Trust, c/o Mutual Fund
Services
Mail address: P.O. Box 701, Milwaukee, WI 53201-0701
Overnight courier address: 615 East Michigan St., Milwaukee, WI 53202
1. INVESTOR NAME
[ ] Individual:
- ------------------------------------------------------------------------------
Name Birth date
- ------------------------- ------------------------ -----------------------
Social Security No. Citizen of [ ] U.S. [ ] Other
[ ] Joint owner:
- ------------------------------------------------------------------------------
Name Birth date
- ------------------------- ------------------------ -----------------------
Social Security No. Citizen of [ ] U.S. [ ] Other
[ ] Gift to minor:
- ------------------------------------------------------------------------------
Name of Custodian
- ------------------------------------------------------------------------------
Minor's Name Birth date
- ------------------------- ------------------------ -----------------------
Social Security No. Citizen of [ ] U.S. [ ] Other
[ ] Corporation, partnership, or other entity (A corporate resolution is
required).
- ------------------------------------------------------------------------------
Name of entity
- ------------------------------------------------------------------------------
Taxpayer Identification Number
2. MAILING ADDRESS.
- ------------------------------------------------------------------------------
Street, Apt. City/State/Zip
( )
- ------------------------------------------------------------------------------
Daytime phone
SEND DUPLICATE STATEMENT TO:
( )
- ------------------------------------------------------------------------------
Daytime phone
- ------------------------------------------------------------------------------
Street, Apt. City/State/Zip
3. INVESTMENT, PAYMENT FOR INITIAL PURCHASE AND DISTRIBUTION. The minimum
initial investment is $2,500 for shares of Jefferson Growth and Income Fund.
Minimum additions to the Fund are $100.
My initial investment is $------------------.
My investment is being sent
[ ] by check. (Payable to Jefferson Growth and Income Fund).
[ ] by wire. (The establishment of a new account by wire transfer should be
preceded by a telephone call to Firstar Trust Company at 1-800-216-9785 to
provide information for the setting up of the account. Please see the
prospectus for complete Federal wire instructions. A completed share purchase
application must also be sent to The Jefferson Fund Group Trust at the above
address immediately following the investment.)
I am selecting the following Class of Shares:
[ ] Class A Shares (Initial sales charge).
[ ] Class B Shares (Contingent deferred sales charge).
I am choosing the following Distribution Option (If no dividend option is
checked, dividends and capital gains will be reinvested):
[ ] Capital gains and dividends reinvested
[ ] Capital gains reinvested and dividends in cash*<F1>
[ ] Capital gains in cash*<F1> and dividends reinvested
[ ] Capital gains and dividends in cash*<F1>
*<F1>If you would like your cash payments automatically deposited to your
checking or savings account, please check this box [ ]. Also check "Fund Link
Redemption" box and provide appropriate bank information in item 5 (Telephone
Options) on the reverse side of this form.
4. LETTER OF INTENT. (This option available for Class A shares only). I agree
to the Letter of Intent conditions stated in the current prospectus. I intend
to invest within a 13-month period beginning on ------------------ (initial
purchase date) in shares of the Fund purchased with this application, an
aggregate amount which, together with the value of shares of the Fund owned by
me on the initial purchase date, will be at least equal to:
[ ] $50,000 [ ] $100,000 [ ] $500,000 [ ] $1,000,000 [ ] $3,000,000
(If no date is specified, the initial purchase date will be the date of this
purchase).
5.TELEPHONE OPTIONS. You will automatically have certain telephone exchange and
redemption privileges described below for yourself and your dealer
representative, unless you decline such privileges below.
[ ] Telephone Redemption. The proceeds will be mailed to the address of record
or deposited to your bank account. $1,000 minimum/$50,000 maximum telephone
redemption. (Complete bank account information below).
[ ] Fund Link Redemption*<F2>. Permits the liquidation of my shares with
proceeds electronically sent to your bank account. (Complete bank account
information below).
[ ] Fund Link Purchase*<F2>. Permits the purchase of shares using your bank
account to clear the transaction. (Complete bank account information below).
[ ] I do not wish to allow telephone transactions on my accounts.
- ------------------------------------------------------------------------------
Name of bank account
- ------------------------------------------------------------------------------
Bank name Account number
- ------------------------------------------------------------------------------
Bank address City/State/Zip
*<F2>For Fund Link options, your signed application must be received at least 15
business days prior to initial transaction. To assure proper
crediting/debiting of your bank account, please attach a voided check or deposit
slip.
6. AUTOMATIC INVESTMENT PLAN. Please start my Automatic Investment Plan as
described in the Prospectus beginning (month) ---------------- (year) ------- .
I hereby instruct Firstar Trust Company, Transfer Agent for The Jefferson Fund
Group Trust, to automatically transfer $------------- (minimum $100) directly
from my checking, NOW, or savings account named below on the -------- day of
each month or the first business day thereafter. I understand that I will be
assessed a $20 fee if the automatic purchase cannot be made due to insufficient
funds, stop payment, or for any other reason.
- ------------------------------------------------------------------------------
Name(s) on bank account
- ------------------------------------------------------------------------------
Bank name Account number
- ------------------------------------------------------------------------------
Bank address City/State/Zip
- ------------------------------------------------------------------------------
Signature of bank account owner Signature of joint owner
Your signed application must be received at least 15 business days prior to
initial transaction/ An unsigned voided check (for checking accounts) or a
savings account deposit slip is required with your application.
7. SIGNATURES AND CERTIFICATION. I am (we are) of legal age, have received and
read the Prospectus, and agree to the terms therein. I (we) certify that (1)
the Social Security or Taxpayer Identification Number provided above is correct
and (2) that the IRS has never notified me (us) that I am (we are) subject to
31% backup withholding.
- ------------------------------------------------------------------------------
Signature of individual Date
- ------------------------------------------------------------------------------
Signature of joint owner Date
- ------------------------------------------------------------------------------
Signature of authorized officers, partners, trustees or others Date
8.DEALER INFORMATION. (Please be sure to complete representative's first name
and middle initial).
- ------------------------------------------------------------------------------
Dealer name
DEALER HEAD OFFICE
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City/State/Zip
- ------------------------------------------------------------------------------
Telephone number
REPRESENTATIVE'S BRANCH OFFICE
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City/State/Zip
- ------------------------------------------------------------------------------
Telephone number Rep's A.E. number
(JEFFERSON GROWTH & INCOME FUND LOGO)
SUPPLEMENTAL APPLICATION
This supplemental application may be used to add special investment options
described in the Prospectus.
It must be accompanied by a completed purchase application if an account has not
been established.
Send completed application to: The Jefferson Fund Group Trust, c/o Mutual Fund
Services
Mail address: P.O. Box 701, Milwaukee, WI 53201-0701
Overnight courier address: 615 East Michigan St., Milwaukee, WI 53202
1. ACCOUNT REGISTRATION ADDRESS.
- ------------------------------------------------------------------------------
Investor name Social Security number
- ------------------------------------------------------------------------------
Account number (if existing account) Daytime phone number (Area code)
- ------------------------------------------------------------------------------
Address City/State/Zip
2. AUTOMATIC INVESTMENT PLAN. Please start my Automatic Investment Plan as
described in the Prospectus beginning
(month) ----------------- (year) ------ . I hereby instruct Firstar Trust
Company, Transfer Agent for The Jefferson Fund Group Trust, to automatically
transfer $------------- (minimum $100) directly from my checking, NOW, or
savings account named below on the ----------- day of each month or the first
business day thereafter. I understand that I will be assessed a $20 fee if the
automatic purchase cannot be made due to insufficient funds, stop payment, or
for any other reason.
- ------------------------------------------------------------------------------
Name(s) on bank account
- ------------------------------------------------------------------------------
Bank name Account number
- ------------------------------------------------------------------------------
Bank address City/State/Zip
- ------------------------------------------------------------------------------
Signature of bank account owner Signature of joint owner
Your signed application must be received at least 15 business days prior to
initial transaction. AN UNSIGNED VOIDED CHECK (FOR CHECKING ACCOUNTS) OR A
SAVINGS ACCOUNT DEPOSIT SLIP IS REQUIRED WITH YOUR APPLICATION.
3. SYSTEMATIC WITHDRAWALS. A balance of at least $10,000 is required for this
option.
I would like to withdraw from Jefferson Growth & Income Fund $-------------
($100 minimum) as follows:
[ ]I would like to have payments made to me on or about the -----th day of each
month, OR
[ ]I would like to have payments made to me on or about the -----th day of the
months that I have circled below:
Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
[ ]I would like to have my payments automatically deposited to my checking or
savings account. I have attached a voided check or deposit slip. (A check will
be mailed to the above Account registration address if this box is not checked)
4.TELEPHONE OPTIONS. You will automatically have certain telephone exchange and
redemption privileges described below for yourself and your dealer
representative, unless you decline such privileges below.
[ ]Telephone Redemption. The proceeds will be mailed to the address of record
or deposited to your bank account.
$1,000 minimum/$50,000 maximum telephone redemption. (Complete bank account
information below).
[ ]Fund Link Redemption*<F3>. Permits the liquidation of my shares with proceeds
electronically sent to your bank account.
(Complete bank account information below).
[ ]Fund Link Purchase*<F3>. Permits the purchase of shares using your bank
account to clear the transaction.
(Complete bank account information below).
[ ]I do not wish to allow telephone transactions on my accounts.
- ------------------------------------------------------------------------------
Name of bank account
- ------------------------------------------------------------------------------
Bank name Account number
- ------------------------------------------------------------------------------
Bank address City/State/Zip
*<F3>For Fund Link options, your signed application must be received at least 15
business days prior to initial transaction.
To assure proper crediting/debiting of your bank account, please attach a voided
check or deposit slip.
5. SIGNATURES. Please sign exactly as your name(s) appear(s) on your account.
- ------------------------------------------------------------------------------
Signature Date
- ------------------------------------------------------------------------------
Joint owner signature (if any) Title (if officer, trustee, custodian, etc)
- ------------------------------------------------------------------------------
Date
- ------------------------------------------------------------------------------
Signature(s) guaranteed by
(A guarantee is required to add telephone options to existing accounts. Your
signature should be guaranteed by your banker or broker-dealer. A notary
public is not acceptable.)
(JEFFERSON GROWTH & INCOME FUND LOGO)
INDIVIDUAL RETIREMENT ACCOUNT (IRA) APPLICATION
Send completed application to: The Jefferson Fund Group Trust, c/o Firstar Trust
Company
Mail address: P.O. Box 701, Milwaukee, WI 53201-0701
Overnight courier address: 615 East Michigan St., Milwaukee, WI 53202
- ------------------------------------------------------------------------------
1. INVESTOR INFORMATION.
- ------------------------------------------------------------------------------
Investor name Daytime phone
- ------------------------------------------------------------------------------
Address City/State/Zip
- ------------------------------------------------------------------------------
Social Security number Birth date
2. BENEFICIARY DESIGNATION (OPTIONAL). If no beneficiary is named, in the event
of your death your IRA will be payable to your estate.
- ------------------------------------------------------------------------------
Beneficiary name Relationship
- ------------------------------------------------------------------------------
Address City/State/Zip
- ------------------------------------------------------------------------------
Social Security number Birth date
3. TYPE OF IRA. (Please select only one of the following account types)
[ ] Individual Retirement Account ($250 minimum)
[ ] Rollover IRA
[ ] SEP IRA
[ ] SIMPLE IRA (Must be accompanied by IRSforms 5305 SA and 5304 SIMPLE)
[ ] Roth IRA
[ ] Conversion Roth IRA (only available to individuals with single or joint
Adjusted Gross Income of $100,000 or less).
Year of Conversion -------- (Year in which traditional IRA was converted to
a Roth IRA.)
4. INVESTMENT CHOICES. Total Investment $------------------
Fill in the amount or percentage of the total to be invested in each Fund
(Minimum investment is $250 per fund.)
Amount Percentage
[ ] Jefferson Growth & Income Fund Class A $----------------- ---------%
[ ] Jefferson Growth & Income Fund Class B $----------------- ---------%
[ ] Firstar Money Market Fund Class A $----------------- ---------%
[ ] Firstar Money Market Fund Class B $----------------- ---------%
5. TYPE OF CONTRIBUTION. (Please select one of the following types of
contributions)
[ ] Yearly Contribution for Tax Year -------- (If prior year, must be mailed on
or before April 15th).
[ ] Transfer (assets are a direct transfer from previous custodian). Please
attach transfer form.
[ ] Rollover assets (You had physical receipt of assets for less than 60 days)
from previous IRA.
[ ] Direct Rollover of Assets from your employer sponsored plan (you did not
have receipt of assets). Please indicate previous account type. (Direct
rollovers not allowed into a Roth IRA.)
- --- Corporate --- Pension Plan --- Profit Sharing Plan --- 401(k) ---
403(b) --- Other (please specify)-----------------------
[ ] Rollover Roth (Rollover of Traditional IRA to Conversion Roth IRA).
6.SIGNATURES. I adopt the Jefferson Growth and Income Fund Individual
Retirement Account and appoint Firstar Trust Company to perform custodial and
other administrative services specified in the IRA Custodial Agreement. I have
received and read the Prospectus for the Fund and have read and understood the
IRA Custodial Agreement and Disclosure Statement. I certify under penalties of
perjury that my Social Security number (above) is correct, and that I am of
legal age. If I am opening this IRA with a distribution from an employer-
sponsored retirement plan or another individual retirement account, I certify
that the distribution qualifies as a rollover contribution. I understand that
the fees relating to my IRA may be separately billed or collected by redeeming
sufficient shares from my Fund account balance. I agree to provide the Internal
Revenue Service with information as required. I further agree to follow all of
the terms and conditions of the IRA Custodial Agreement.
- ------------------------------------------------------------------------------
Signature Date
Appointment as custodian accepted:
- ------------------------------------------------------------------------------
Firstar Trust Company Date
7.DEALER INFORMATION. (Please be sure to complete representative's first name
and middle initial).
- ------------------------------------------------------------------------------
Dealer name
DEALER HEAD OFFICE
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City/State/Zip
- ------------------------------------------------------------------------------
Telephone number
REPRESENTATIVE'S BRANCH OFFICE
- ------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------
City/State/Zip
- ------------------------------------------------------------------------------
Telephone number Rep's A.E. number
(JEFFERSON GROWTH & INCOME FUND LOGO)
INDIVIDUAL RETIREMENT ACCOUNT (IRA) TRANSFER FORM
Use this form to transfer assets from an existing IRA to the Jefferson Growth
and Income Fund. Please call 800-216-9785 if you have any questions.
Send completed application along with your IRA application or existing Jefferson
Growth and Income Fund account number to: The Jefferson Fund Group Trust, c/o
Firstar Trust Company.
Mail address: P.O. Box 701, Milwaukee, WI 53201-0701
Overnight courier address: 615 East Michigan St., Milwaukee, WI 53202
- ------------------------------------------------------------------------------
1. INVESTOR INFORMATION.
- ------------------------------------------------------------------------------
Investor name Social Security number
- ------------------------------------------------------------------------------
Address City/State/Zip
- ------------------------------------------------------------------------------
Daytime phone Evening phone
2. PLEASE TRANSFER MY IRA FROM.
- ------------------------------------------------------------------------------
Name of current custodian (bank, mutual fund, etc.)
- ------------------------------------------------------------------------------
Address City/State/Zip
- ------------------------------------------------------------------------------
Acc't No. or Certificate of Deposit (CD) Maturity date (if applicable)
If Certificate of Deposit, please transfer [ ] immediately [ ] at maturity
3. PLEASE CHECK ONE: (If you are opening a new account, you will need to
accompany this form with a completed IRA Application).
[ ] Open a new*<F1> Jefferson Growth & Income Fund.
*<F1>If you are opening a new account, this form must be accompanied by a
completed IRA Application
[ ] IRA
[ ] Rollover IRA
[ ] SEP-IRA
[ ] SIMPLE
[ ] Roth IRA
[ ] **<F2>Conversion Roth IRA
Year Established --------- (Year in which traditional IRA was converted
to a Roth IRA.)
**<F2>Only available to individuals with single or joint Adjusted Gross Income
of $100,000 or less.
[ ] Invest in my existing Jefferson Growth & Income Fund.
Account #
[ ] IRA ------------------
[ ] Rollover IRA ------------------
[ ] SEP-IRA ------------------
[ ] SIMPLE ------------------
[ ] Roth IRA ------------------
[ ] **<F2>Conversion Roth IRA -----------------------------
Account # Investment
if applicable Amount or Percentage
[ ] Jefferson Growth
& Income Fund Class A ------------ $---------- ---------%
[ ] Jefferson Growth & Income
Fund Class B ------------ $---------- ---------%
[ ] Firstar Money Market
Fund Class A ------------ $---------- ---------%
[ ] Firstar Money Market
Fund Class B ------------ $---------- ---------%
- ------------------------------------------------------------------------------
4. CONVERSION OF TRADITIONAL IRA TO ROTH IRA.
[ ] Check here if you are distributing assets from a traditional IRA with the
intention of establishing a conversion Roth IRA.
5. SIGNATURES. (exactly as registered)
To current Custodian: Please consider this your authority to sell [ ] all of my
assets or [ ] $-------- of my assets in the account identified in section 2
above and prepare a check to The Jefferson Growth and Income Fund. It is my
intention to transfer these assets to the above-named fund, for which Firstar
Trust Company acts as Custodian. I understand a check will be sent regular mail
unless I inform you to send the proceeds via an alternative method. I certify
that I have received and read the prospectus for the fund into which I am
transferring my IRA. Thank you for your prompt handling.
- ------------------------------------------------------------------------------
Signature Date
- ------------------------------------------------------------------------------
Signature guarantee Date
- ------------------------------------------------------------------------------
Signature(s) guaranteed by
(A guarantee is required to add telephone options to existing accounts. Your
signature should be guaranteed by your banker or broker-dealer. A notary
public is not acceptable.)
6. ACCEPTANCE. (This portion is to be completed by Firstar Trust Company,
Trustee/Custodian for the Jefferson Growth and Income fund).
Please be advised that Firstar Trust Company has been appointed to serve as
successor custodian of this IRA. Please send the check or Federal Wire
representing the liquidation of the investments indicated above along with a
copy of this form to identify the check as a transfer of assets to: The
Jefferson Fund Group Trust, c/o Firstar Trust Company.
Mail address: P.O. Box 701, Milwaukee, WI 53201-0701
Overnight courier address: 615 East Michigan St., Milwaukee, WI 53202
- ------------------------------------------------------------------------------
Accepted by
(JEFFERSON GROWTH & INCOME FUND LOGO)
EDUCATION IRA APPLICATION
Mail To: Overnight Express Mail To:
Jefferson Growth & Income Fund Jefferson Growth & Income Fund
c/o Firstar Trust Company c/o Firstar Trust Company
Mutual Fund Services Mutual Fund Services
P.O. Box 701 615 E. Michigan St., 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202-5207
- ------------------------------------------------------------------------------
1. ACCOUNT HOLDER. (Beneficiary of Account)
- ------------------------------------- ----- --------------------------------
FIRST NAME M.I. LAST NAME
- -------------------------------------------- --------------------------------
ADDRESS CITY/STATE/ZIP
- --------------------------------------------
PHONE NUMBER
- -------------------------------------------- --------------------------------
SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr)
- ------------------------------------------------------------------------------
2. LEGALLY RESPONSIBLE PARTY. (If Account Holder is under age 18)
- ------------------------------------- ----- --------------------------------
FIRST NAME M.I. LAST NAME
- -------------------------------------------- ---------------------------------
ADDRESS (IF DIFFERENT FROM ACCOUNT HOLDER) CITY/STATE/ZIP
- ------------------------------------------- ----------------------------------
DAYTIME PHONE NUMBER RELATIONSHIP
[ ] Check this box if the responsible party wishes to continue to control the
account after the Account Holder attains age of majority in his/her state in
accordance with the terms described in the optional portion of Article VI of the
Educational Individual Retirement Custodial Account agreement.
- ------------------------------------------------------------------------------
3. TYPE OF EDUCATION IRA. (Check one)
[ ] Education Individual Retirement Account (Minimum contribution $250. Maximum
contribution $500 per account holder per year.)
For Tax Year 19----.
[ ] Rollover Account. If Rollover Account, please specify the type of Rollover.
[ ] Own Education IRA to Own Education IRA.
[ ] Qualifying Family Member's Education IRA to Account Holder's
Education IRA.
[ ] Transfer Account -- Check this box if assets are a direct transfer from
current Education IRA custodian (you will not have personal receipt of assets)
and complete an Education IRA Transfer Form.
- ------------------------------------------------------------------------------
4.YOUR INVESTMENT INSTRUCTIONS.
Fill in the amount to be invested in the Fund (Minimum investment per Fund
$250.)
($500 maximum investment per year.)
Amount
[ ]Jefferson Growth & Income Fund Class A $-----------------
[ ]Jefferson Growth & Income Fund Class B $-----------------
[ ]Firstar Money Market Fund Class A $-----------------
[ ]Firstar Money Market Fund Class B $-----------------
- ------------------------------------------------------------------------------
5.ACKNOWLEDGEMENT AND SIGNATURES.
I adopt the Jefferson Growth and Income Fund Education IRA and appoint Firstar
Trust Company to act as custodian and perform administrative services. I have
received and read the Prospectus for the Fund(s) in which my account will be
invested, and have read and understand the IRA Custodial Agreement and
Disclosure Statement. I certify under penalties of perjury that my Social
Security Number (above) is correct. I understand that the Custodian will charge
fees that are shown in the Disclosure Statement (or any update thereto) and they
may be separately billed or collected by redeeming sufficient shares from my
Fund(s) account balance. I will supply the Internal Revenue Service with
information as to any taxable year as required unless filed by the Custodian.
If the Account Holder is not of legal age, I certify that I am the Legally
Responsible Party for the Account Holder named above. I consent to all the terms
and conditions of this Education IRA on behalf of the Account Holder (including
the terms and conditions of the preceding paragraph), and I certify that I am
authorized to take any and all actions with respect to the Account Holder's
Education IRA, and that such actions shall be binding and nonvoidable.
I certify that if I am not a responsible individual with respect to the account
holder, that I have obtained a responsible individual's consent to the terms of
the aforegoing.
- ---------------------------------------------------------
DEPOSITOR/LEGALLY RESPONSIBLE INDIVIDUAL SIGNATURE
I have read, accept and incorporate the Custodial Agreement and Disclosure
Statement herein, by reference. I appoint Firstar Trust Company or its
successors, as Custodian of the account(s).
- -------------------------------------------------- --------------------------
FIRSTAR TRUST COMPANY AUTHORIZED SIGNATURE DATE
Appointment as custodian accepted:
FIRSTAR TRUST COMPANY
P R O S P E C T U S
THE JEFFERSON FUND GROUP TRUST
JEFFERSON GROWTH AND
INCOME FUND
A MUTUAL FUND
SEEKING LONG-TERM
CAPITAL APPRECIATION AND
CURRENT INCOME
BOARD OF TRUSTEES
Lawrence Kujawski
Milwaukee, Wisconsin
Richard Imperiale
Milwaukee, Wisconsin
F.L. Kirby
Chicago, Illinois
John Komives
Milwaukee, Wisconsin
J. Michael Borden
Delavan, Wisconsin
Dennis Lasser
Binghamton, New York
James Stanko
Rancho Santa Fe, California
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
FIRSTAR TRUST COMPANY
615 East Michigan Street
Milwaukee, Wisconsin 53202
INDEPENDENT ACCOUNTANTS
KPMG PEAT MARWICK L.L.P.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER
Suite 3300
330 North Wabash Avenue
Chicago, Illinois 60611
DISTRIBUTOR
RODMAN & RENSHAW, INC.
233 S. Wacker Drive
Chicago, Illinois 60606
INVESTMENT ADVISER
UNIPLAN, INC.
839 North Jefferson Street
Milwaukee, Wisconsin 53202
THE JEFFERSON FUND GROUP TRUST
(800) 216-9785
STATEMENT OF ADDITIONAL INFORMATION February 28, 1998
THE JEFFERSON FUND GROUP TRUST
JEFFERSON GROWTH AND INCOME FUND
This Statement of Additional Information is not a Prospectus and
should be read in conjunction with the Prospectus of The Jefferson Fund Group
Trust's Jefferson Growth and Income Fund dated February 28, 1998. Requests for
copies of the Prospectus should be made in writing to The Jefferson Fund Group
Trust, c/o Firstar Trust Company, Mutual Fund Services, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701, or by calling (800) 216-9785.
THE JEFFERSON FUND GROUP TRUST
JEFFERSON GROWTH AND INCOME FUND
Table of Contents
Page No.
--------
INVESTMENT RESTRICTIONS 1
INVESTMENT CONSIDERATIONS 5
CONTINGENT DEFERRED SALES CHARGE (CLASS B SHARES) AND INITIAL
SALES CHARGE (CLASS A SHARES) 23
EXCHANGE PRIVILEGE 23
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS 24
TRUSTEES AND OFFICERS OF THE FUND 27
INVESTMENT ADVISOR, ADMINISTRATOR, CUSTODIAN, TRANSFER
AGENT AND ACCOUNTING SERVICES AGENT 35
DETERMINATION OF NET ASSET VALUE 38
CALCULATION OF TOTAL RETURN 39
ALLOCATION OF PORTFOLIO BROKERAGE 43
TAXES 45
SHAREHOLDER MEETINGS 47
INDEPENDENT ACCOUNTANTS 48
FINANCIAL STATEMENTS 49
No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information and the Prospectus dated February 28, 1998, and, if given or made,
such information or representations may not be relied upon as having been
authorized by The Jefferson Fund Group Trust.
This Statement of Additional Information does not
constitute an offer to sell securities.
INVESTMENT RESTRICTIONS
As set forth in the prospectus dated February 28, 1998 of The
Jefferson Fund Group Trust relating to its mutual fund, the Jefferson Growth and
Income Fund (the "Fund") under the caption "INVESTMENT OBJECTIVES AND POLICIES",
the primary investment objectives of the Fund are to produce long-term capital
appreciation and current income principally through investing in equity
securities.
Fundamental Investment Restrictions
Consistent with its investment objectives, the Fund has adopted the
following investment restrictions which are matters of fundamental policy and
cannot be changed without approval of the holders of the lesser of: (i) 67% of
the Fund's shares present or represented at a shareholder's meeting at which the
holders of more than 50% of such shares are present or represented; or (ii) more
than 50% of the outstanding shares of the Fund.
1. The Fund will not purchase securities on margin or
participate in a joint-trading account.
2. The Fund will not borrow money or issue senior
securities, except for temporary bank borrowings for emergency or extraordinary
purposes (but not for the purpose of purchase of investments) and then only in
an amount not in excess of 5% of the value of its total assets and will not
pledge any of its assets except to secure borrowings. The Fund will not
purchase securities while it has any outstanding borrowings.
3. The Fund will not make short sales of securities or
maintain a short position for the account of the Fund unless at all times when a
short position is open the Fund owns an equal amount of such securities or owns
securities which, without payment of any further consideration, are convertible
into or exchangeable for securities of the same issue as, and
equal in amount to, the securities sold short.
4. The Fund will not make investments for
the purpose of exercising control or management of any company.
5. The Fund will limit its purchases of securities of any
issuer (other than the United States or an instrumentality of the United States)
in such a manner that it will satisfy at all times the requirements of Section
5(b)(1) of the Investment Company Act of 1940 (i.e., that at least 75% of the
value of its total assets is represented by cash and cash items (including
receivables), U.S. Government Securities, securities of other investment
companies, and other securities for the purpose of the foregoing limited in
respect of any one issuer to an amount not greater than 5% of the value of the
total assets of the Fund and to not more than 10% of the outstanding voting
securities of such issuer.)
6. Excluding U.S. Government securities (including
securities issued or guaranteed by agencies and instrumentalities thereof), the
Fund will not concentrate 25% or more of the value of its total assets,
determined at the time an investment is made, in securities issued by companies
engaged in the same industry.
7. The Fund will not acquire or retain any security issued
by a company if (a) an officer or director of such company is an officer or
trustee of the Fund or an officer, director or other affiliated person of its
investment advisor; or (b) officers or trustees of the Fund or officers or
directors of its investment adviser owning beneficially more than one-half of
one percent of its securities together own beneficially more than five percent
of its securities.
8. The fund will not write (sell) or purchase options except
that the Fund may (a) write covered call options or covered put options on
securities that it is eligible to purchase (and on stock indices) and enter into
closing purchase transactions with respect to such options, and (b) in
combination therewith, or separately, purchase put and call options on
securities it is eligible to purchase; provided that the premiums paid by the
Fund on all outstanding options it has purchased do not
exceed 5% of its total assets. The Fund may enter into closing sale
transactions with respect to options it has purchased.
9. The Fund will not act as an underwriter or distributor of
securities other than shares of the Fund.
10. The Fund will not purchase any interest in any oil, gas
or any other mineral exploration or development lease or program.
11. The Fund will not purchase or sell real estate, real
estate mortgage loans or real estate limited partnerships.
12. The Fund will not purchase or sell commodities or
commodities contracts, except that the Fund may purchase and sell financial
futures contracts and related options.
13. The fund will not make loans, except by purchase of debt
obligations or by entering into repurchase agreements or through the lending of
the Fund's portfolio securities with respect to not more than 25% of its total
assets.
Non-Fundamental Investment Restrictions
It is contrary to the Fund's present policy, which may be changed by
the trustees without shareholder approval, to:
1. Purchase securities of other investment companies except
(a) as part of a plan of merger, consolidation or reorganization approved by the
shareholders of the Fund or (b) securities of registered investment companies
where no commission or profit results, other than the usual and customary
broker's commission and where as a result of such purchase the Fund would hold
less than 3% of any class of securities, including voting securities, of any
registered investment company and less than 5% of the Fund's assets, taken at
current value, would be invested in securities of registered investment
companies. All assets of the Fund invested in securities of registered
investment companies will be included in the daily net assets of the Fund for
purposes of calculating the monthly advisory fees payable to the Advisor. In
such event, shareholders of the Fund will in effect pay two
advisory fees on the assets invested in investment companies.
2. Invest in warrants or rights excluding
options (other than warrants or rights acquired by the Fund as a part of a unit
or attached to securities at the time of purchase) if, as a result, such
investments (valued at the lower of cost or market) would exceed 5% of the value
of the Fund's net assets; provided that not more than 2% of the Fund's net
assets may be invested in warrants not listed on the New York or American Stock
Exchanges.
3. Invest in securities of an issuer, which, together with
any predecessors or controlling persons, has been in operation for less than
three consecutive years and in equity securities for which market quotations are
not readily available (excluding restricted securities) if, as a result, the
aggregate of such investments would exceed 5% of the value of the Fund's net
assets; provided, however, that this restriction shall not apply to any
obligation of the U.S. Government or its instrumentalities or agencies. (Debt
securities having equity features are not considered "equity securities" for
purposes of this restriction.)
4. Invest in (a) securities which at the time of such
investment are not readily marketable, (b) securities the disposition of which
is restricted under federal securities laws, (c) repurchase agreements maturing
in more than seven days, and (d) OTC options, if, as a result, more than 10% of
a Fund's net assets (taken at current value) would then be invested in
securities described in Section 3, 4(a), 4(b), 4(c), and 4(d) above. For the
purpose of this restriction securities subject to a 7-day put option or
convertible into readily saleable securities are not included with subsections
(a) or (b).
All percentage limitations on investments set forth herein and in the
Prospectus will apply at the time of the making of an investment and shall not
be considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of such investment. If violated, the Fund
will immediately liquidate such investment so that no excess or
deficiency remains.
The phrase "shareholder approval," as used herein, means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares of
the Fund or (2) 67% or more of the shares of the Fund present at a meeting if
more than 50% of the outstanding shares are represented at the meeting in person
or by proxy.
INVESTMENT CONSIDERATIONS
DEBT SECURITIES
---------------
As set forth in the Prospectus under the caption "Investment
Objectives and Policies," the Fund may invest in corporate debt securities of
domestic or foreign issuers that are assigned one of the six highest ratings of
either Standard & Poor's Corporation ("Standard & Poor's") or Moody's Investors
Service, Inc. ("Moody's"), or if unrated, are of comparable quality in the
opinion of the Fund's Advisor. A description of the ratings categories used is
set forth in "Description of Securities Ratings" located in the Fund's
Prospectus.
Securities rated Baa and BBB are the lowest which are considered
"investment grade" obligations. Moody's describes securities rated Baa as
"medium-grade" obligations; they are "neither highly protected nor poorly
secured . . . [i]nterest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any general length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well." S&P describes securities rated BBB as "regarded as
having an adequate capacity to pay interest and repay principal . . . whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely
to lead to a weakened capacity than in higher rated categories."
High yield securities may be more susceptible to real or perceived
adverse economic and competitive industry conditions than investment grade
securities. The prices of high yield securities have been found to be less
sensitive to interest rate changes than higher-rated investments, but more
sensitive to adverse economic downturns or individual corporate developments. A
projection of an economic downturn or of a period of rising interest rates, for
example, could cause a decline in high yield security prices because the advent
of a recession could lessen the ability of a highly leveraged company to make
principal and interest payments on its debt securities. If an issuer of high
yield securities defaults, in addition to risking payment of all or a portion of
interest and principal, the Fund may incur additional expenses to seek recovery.
In the case of high yield securities structured as zero-coupon or pay-in-kind
securities, their market prices are affected to a greater extent by interest
rate changes, and therefore tend to be more volatile than securities which pay
interest periodically and in cash.
The secondary market on which high yield securities are traded may be
less liquid than the market for higher grade securities. Less liquidity in the
secondary trading market could adversely affect the price at which the Fund
could sell a high yield security, and could adversely affect the daily net asset
value of the shares. Adverse publicity and investor perceptions, whether or not
based on fundamental analysis, may decrease the values and liquidity of high
yield securities especially in a thinly-traded market. When secondary markets
for high yield securities are less liquid than the market for higher grade
securities, it may be more difficult to value the securities because such
valuation may require more research, and elements of judgment may play a greater
role in the valuation because there is less reliable, objective data available.
The Advisor will seek to minimize the risks of investing in all
debt securities through diversification, in-depth credit
analysis and attention to current developments in interest rates and market
conditions.
Securities are purchased and sold principally in response to current
assessments of future changes in business conditions and the levels of interest
rates on debt securities of varying maturities, the availability of new
investment opportunities at higher relative yields, and current evaluations of
an issuer's continuing ability to meet its obligations in the future. The
average maturity or duration of the fixed-income securities in the Fund's
portfolio may be varied in response to anticipated changes in interest rates and
to other economic factors, although under normal circumstances the Fund's debt
securities will be primarily those with more than one year remaining to
maturity. Securities may be bought and sold in anticipation of a decline or a
rise in market interest rates. In addition, a security may be sold and another
of comparable quality and maturity (usually, but not always, of a different
issuer) purchased at approximately the same time to take advantage of what are
believed to be short-term differentials in values or yields.
DEPOSITORY RECEIPTS
-------------------
The Fund may invest in foreign securities in the form of American
Depositary Receipts (ADR's) convertible into securities of foreign issuers.
These securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADR's are receipts typically
issued by a United States bank or trust company evidencing ownership of the
underlying foreign securities. Generally, ADR's, in registered form, are
designed for use in the United States securities market.
WARRANTS
---------
The Fund may invest up to 5% of its net assets in warrants or rights
(valued at the lower of cost or market) which entitle the holder to buy equity
securities at a specific price for a specified period of time, provided that no
more than 2% of its net assets are invested in warrants not listed on the New
York or American Stock Exchanges. The Fund may invest in warrants or rights
acquired by the Fund as part of a unit or attached to securities at the time of
purchase without limitation.
PORTFOLIO TURNOVER
------------------
A change in securities held by the Fund is known as "portfolio
turnover" and almost always involves the payment by the Fund of brokerage
commissions or dealer markup and other transaction costs on the sale of
securities as well as on the reinvestment of the proceeds in other securities.
As a result of the investment policies of the Fund, under certain market
conditions its portfolio turnover may be higher than those of many other
investment companies. It is, however, impossible to predict portfolio turnover
in future years. For purposes of reporting portfolio turnover rates, all
securities the maturities of which at the time of purchase are one year or less
are excluded. High portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs, which will be borne directly
by the Fund.
FORWARD COMMITMENTS
-------------------
The Fund may make contracts to purchase securities for a fixed price
at a future date beyond customary settlement time ("forward commitments") if the
Fund either (i) holds, and maintains until the settlement date
in a segregated account, cash or high grade debt obligations in
an amount sufficient to meet the purchase price or (ii) enters
into an offsetting contract for the forward sale of securities of equal value
that it owns. Forward commitments may be considered securities in themselves.
They involve a risk of loss if the value of the security to be purchased
declines prior to the settlement date, which risk is in addition to the risk of
decline in value of the Fund's other assets. The Fund may dispose of a
commitment prior to settlement and may realize short-term profits or losses upon
such disposition.
REPURCHASE AGREEMENTS
---------------------
The Fund may enter into repurchase agreements with domestic commercial
banks or registered broker/dealers with respect to not more than 25% of its
total assets (taken at current value), except that no such limit applies when
the Fund is investing for temporary defensive purposes. A repurchase agreement
is a contract under which the Fund would acquire a security for a relatively
short period (usually not more than one week) subject to the obligation of the
seller to repurchase and the Fund to resell such security at a fixed time and
price (representing the Fund's cost plus interest). The value of the underlying
securities (or collateral) will be at least equal at all times to the total
amount of the repurchase obligation, including the interest factor. The Fund
bears a risk of loss in the event that the other party to a repurchase agreement
defaults on its obligations and the Fund is delayed or prevented from exercising
its rights to dispose of the collateral securities. The Advisor will monitor
the creditworthiness of the counterparties.
SECURITIES LOANS
The Fund may make secured loans of its portfolio
securities amounting to no more than 25% of its total assets.
The risks in lending portfolio securities, as with other
extensions of credit, consist of possible delay in recovery of the securities or
possible loss of rights in the collateral should the borrower fail financially.
However, such loans will be made only to broker-dealers that are believed by the
Advisor to be of relatively high credit standing. Securities loans are made to
broker-dealers pursuant to agreements requiring that loans be continuously
secured by collateral in cash, U.S. Government securities or other high quality
debt securities at least equal at all times to the market value of the
securities lent. The borrower pays to the lending Fund an amount equal to any
dividends or interest received on the securities lent. The Fund may invest the
cash collateral received in interest-bearing, short-term securities or receive a
fee from the borrower. Although voting rights or rights to consent with respect
to the loaned securities pass to the borrower, the Fund retains the right to
call the loans at any time on reasonable notice, and it will do so in order that
the securities may be voted by the Fund if the holders of such securities are
asked to vote upon or consent to matters materially affecting the investment.
The Fund may also call such loans in order to sell the securities involved.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
---------------------------------------------
The Fund may enter into agreements with banks or broker-dealers for
the purchase of securities at an agreed-upon price on a specified future date.
Such agreements might be entered into, for example, when the Fund anticipates a
decline in interest rates and is able to obtain a more advantageous yield by
committing currently to purchase securities to be issued later. When the Fund
purchases securities on a when-issued or delayed delivery basis, it is required
either: (I) to create a segregated account with the Fund's custodian and to
maintain in that account cash, U.S. Government securities or other high grade
debt obligations in an amount equal on a daily basis to the amount of the Fund's
when-issued or delayed delivery commitments; or (ii) to enter
into an offsetting forward sale of securities it owns equal in
value to those purchased. The Fund will only make commitments
to purchase securities on a when-issued or delayed-delivery basis with the
intention of actually acquiring the securities. However, the Fund may sell
these securities before the settlement date if it is deemed advisable as a
matter of investment strategy. When the time comes to pay for when-issued or
delayed-delivery securities, the Fund will meet its obligations from then
available cash flow or the sale of securities, or, although it would not
normally expect to do so, from the sale of the when-issued or delayed-delivery
securities themselves (which may have a value greater or less than the Funds'
payment obligation).
OPTIONS TRANSACTIONS
---------------------
The Fund will not write options that are not "covered." A written
call option is "covered" if the Fund owns the underlying security subject to the
call or has an absolute and immediate right to acquire that security without
additional cash consideration (or for additional cash consideration held in a
segregated account by its custodian) upon conversion or exchange of other
securities held in its portfolio. A call option is also covered if the Fund
holds on a share-for-share basis a call on the same security as the call written
where the exercise price of the call held is equal to or less than the exercise
price of the call written or greater than the exercise price of the call written
if the difference is maintained by the Fund in cash, Treasury bills or other
high grade short-term obligations in a segregated account with its custodian. A
written put option is "covered" if the Fund maintains cash, Treasury bills or
other high grade obligations with a value equal to the exercise price in a
segregated account with its custodian, or holds on a share-for-share basis a put
on the same security as the put written where the exercise price of the put held
is equal to or greater than the exercise price of the put written. The premium
paid by the purchaser of an option will reflect, among other
things, the relationship of the exercise price to the market
price and volatility of the underlying security, the remaining
term of the option, and supply and demand interest rates.
If the writer of an option wishes to terminate his obligations, he may
effect a "closing purchase transaction." This is accomplished by buying an
option of the same series as the option previously written. The effect of the
purchase is that the writer's position will be cancelled by the clearing
corporation. However, a writer may not effect a closing purchase transaction
after he has been notified of the exercise of an option. Likewise, an investor
who is the holder of an option may liquidate his position by effecting a
"closing sale transaction." This is accomplished by selling an option of the
same series as the option previously purchased. There is no guarantee that the
Fund will be able to effect a closing purchase or a closing sale transaction at
any particular time.
Effecting a closing transaction in the case of a written call option
will permit the Fund to write another call option on the underlying security
with either a different exercise price or expiration date or both, or in the
case of a written put option will permit the Fund to write another put option to
the extent that the exercise price thereof is secured by depositing cash or high
grade obligations. Also, effecting a closing transaction will permit the cash
or proceeds from the concurrent sale of any securities subject to the option to
be used for other Fund investments. If the Fund desires to sell a particular
security from its portfolio on which it has written a call option, it will
effect a closing transaction prior to or concurrent with the sale of the
security.
The Fund will realize a profit from a closing transaction if the price
of the transaction is less than the premium received from writing the option or
is more than the premium paid to purchase the option; the Fund will realize a
loss from a closing transaction if the price of the transaction
is more than the premium received from writing the option or is
less than the premium paid to purchase the option. Because
increases in the market price of a call option will generally reflect increases
in the market price of the underlying security, any loss resulting from the
repurchase of a call option is likely to be offset in whole or in part by
appreciation of the underlying security owned by the Fund.
The Fund may write options in connection with buy-and-write
transactions; that is, the Fund will purchase a security and then write a call
option against that security. The exercise price of the call the Fund
determines to write will depend upon the expected price movement of the
underlying security. The exercise price of a call option may be below ("in-the-
money"), equal to ("at-the-money") or above ("out-of-the-money") the current
value of the underlying security at the time the option is written. Buy-and-
write transactions using in-the-money call options may be used when it is
expected that the price of the underlying security will remain flat or decline
moderately during the option period. Buy-and-write transactions using at-the-
money call options may be used when it is expected that the price of the
underlying security will remain fixed or advance moderately during the option
period. Buy-and-write transactions using out-of-the-money call options may be
used when it is expected that the premiums received from writing the call option
plus the appreciation in the market price of the underlying security up to the
exercise price will be greater than the appreciation in the price of the
underlying security alone. If the call options are exercised in such
transactions, the Fund's maximum gain will be the premium received by it for
writing the option, adjusted upwards or downwards by the difference between the
Fund's purchase price of the security and the exercise price. If the options
are not exercised and the price of the underlying security declines, the amount
of such decline will be offset in part, or entirely, by the premium received.
The writing of covered put options is similar in terms of risk/return
characteristics to buy-and-write transactions. If the market
price of the underlying security rises or otherwise is above
the exercise price, the put option will expire worthless and
the Fund's gain will be limited to the premium received. If the market price of
the underlying security declines or otherwise is below the exercise price, the
Fund may elect to close the position or take delivery of the security at the
exercise price. In that event, the Fund's return will be the premium received
from the put option minus the cost of closing the position or, if it chooses to
take delivery of the security, the premium received from the put option minus
the amount by which the market price of the security is below the exercise
price. Out-of-the-money, at-the-money and in-the-money put options may be used
by the Fund in the same market environments that call options are used in
equivalent buy-and-write transactions.
The extent to which the Fund will be able to write and purchase call
and put options will also be restricted by the Fund's intention to qualify the
Fund as a regulated investment company under the federal income tax law. See
"Taxes."
OTC Options. The Fund will enter into over-the-counter ("OTC")
options transactions only with primary dealers in U.S. Government securities and
only pursuant to agreements that will assure that the Fund will at all times
have the right to repurchase the option written by it from the dealer at a
specified formula price. The Fund will treat the amount by which such formula
price exceeds the intrinsic value of the option (i.e., the amount, if any, by
which the market price of the underlying security exceeds the exercise price of
the option) as an illiquid investment.
It is the present policy of the Fund not to enter into any OTC option
transaction if, as a result, more than 15% of the Fund's net assets would be
invested in (i) OTC options purchased by the Fund and other illiquid
investments.
LIMITATIONS ON THE USE OF OPTIONS STRATEGIES
--------------------------------------------
The Fund's ability to engage in the options strategies described above
will depend on the availability of liquid markets in such instruments. Markets
in certain options are relatively new and still developing. It is impossible to
predict the amount of trading interest that may exist in various types of
options. Therefore no assurance can be given that the Fund will be able to
utilize these instruments effectively for the purposes set forth above.
Furthermore, the Fund's ability to engage in options transactions may be limited
by tax considerations.
RISK FACTORS IN OPTIONS TRANSACTIONS
------------------------------------
The option writer has no control over when the underlying securities
must be sold, in the case of a call option, or purchased, in the case of a put
option, since the writer may be assigned an exercise notice at any time prior to
the termination of the obligation. If an option expires unexercised, the writer
realizes a gain in the amount of the premium. Such a gain, of course, may, in
the case of a covered call option, be offset by a decline in the market value of
the underlying security during the option period. If a call option is
exercised, the writer realizes a gain or loss from the sale of the underlying
security. If a put option is exercised, the writer must fulfill the obligation
to purchase the underlying security at the exercise price, which will usually
exceed the then market value of the security.
An exchange-traded option may be closed out only on a national
securities exchange (an "Exchange") which generally provides a liquid secondary
market for an option of the same series. An over-the-counter option may be
closed out only with the other party to the option transaction. If a liquid
secondary market for an exchange-traded option does not exist,
it might not be possible to effect a closing transaction with
respect to a particular option with the result that the Fund
would have to exercise the option in order to realize any profit. If the Fund
is unable to effect a closing purchase transaction in a secondary market, it
will not be able to sell the underlying security until the option expires or it
delivers the underlying security upon exercise. Reasons for the absence of a
liquid secondary market on an Exchange include the following: (i) there may be
insufficient trading interest in certain options; (ii) restrictions may be
imposed by an Exchange on opening transactions or closing transactions or both;
(iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities;
(iv) unusual or unforseen circumstances may interrupt normal operations on an
Exchange; (v) the facilities of an Exchange or the Options Clearing Corporation
may not at all times be adequate to handle current trading volume; or (vi) one
or more Exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular class
or series of options), in which event the secondary market on the Exchange (or
in that class or series of options) would cease to exist, although outstanding
options on the Exchange that had been issued by the Options Clearing Corporation
as a result of trades on that Exchange would continue to be exercisable in
accordance with their terms.
The Exchanges have established limitations governing the maximum
number of options which may be written by an investor or group of investors
acting in concert. It is possible that the Fund and other clients of the
Advisor may be considered to be such a group. These position limits may
restrict the Funds' ability to purchase or sell options on a particular
security.
FUTURES TRANSACTIONS
--------------------
The Fund may sell futures contracts, purchase put
options on futures contracts and write call options on futures
contracts for the purpose of hedging its portfolio. Information concerning
futures contracts and options on futures contracts is set forth below.
FUTURES CONTRACTS. A futures contract sale creates an obligation by
the seller to deliver the type of commodity or financial instrument called for
in the contract in a specified delivery month for a stated price. A futures
contract purchase creates an obligation by the purchaser to take delivery of the
underlying commodity or financial instrument in a specified delivery month at a
stated price. The specific instruments delivered or taken, respectively, at
settlement date are not determined until at or near that date. The
determination is made in accordance with the rules of the exchange on which the
futures contract sale or purchase was made. An index futures contract is
similar except that the parties agree to take or make delivery of an amount of
cash equal to a specified dollar amount times the difference between the
securities index value at the close of the last trading day of the contract and
the price at which the futures contract is originally struck. Futures contracts
are traded only on commodity exchanges -- known as "contract markets" --
approved for such trading by the Commodity Futures Trading Commission ("CFTC"),
and must be executed through a futures commission merchant or brokerage firm
which is a member of a contract market.
Although futures contracts by their terms call for actual delivery or
acceptance of commodities or securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery.
Closing out of a futures contract sale is effected by purchasing a futures
contract for the same aggregate amount of the specific type of financial
instrument or commodity and the same delivery date. If the price of the initial
sale of the futures contract exceeds the price of the offsetting purchase, the
seller is paid the difference and realizes a gain. Conversely, if the price of
the offsetting purchase exceeds the price of the offsetting
purchase, the seller is paid the difference and realizes a
gain. Conversely, if the price of the offsetting purchase
exceeds the price of the initial sale, the seller realizes a loss. Similarly,
the closing out of a futures contract purchase is effected by the purchaser
entering into a futures contract sale. If the offsetting sale price exceeds the
purchase price, the purchaser realizes a gain, and if the purchase price exceeds
the offsetting sale price, he realizes a loss.
The purchase (that is, assuming a long position in) or sale (that is,
assuming a short position in) of a futures contract differs from the purchase or
sale of a security, in that no price or premium is paid or received. Instead,
an amount of cash or U.S. Treasury bills generally not exceeding 5% of the
contract amount must be deposited with the broker. This amount is known as
initial margin. Subsequent payments to and from the broker, known as variation
margin, are made on a daily basis as the price of the underlying futures
contract fluctuates making the long and short positions in the futures contract
more or less valuable, a process known as "marking to market." At any time
prior to the settlement date of the futures contract, the position may be closed
out by taking an opposite position which will operate to terminate the position
in the futures contract. A final determination of variation margin is then
made, additional cash is required to be paid to or released by the broker, and
the purchaser realizes a loss or gain. In addition, a commission is paid on
each completed purchase and sale transaction.
The Fund may engage in transactions in futures contracts for the
purpose of hedging against changes in the values of securities it owns or
intends to acquire. The Fund may sell such futures contracts in anticipation of
a decline in the value of its investments. The risk of such a decline can be
reduced without employing futures as a hedge by selling long-term securities and
either reinvesting the proceeds in securities with shorter maturities or by
holding assets in cash. This strategy, however, entails increased transaction
costs in the form of brokerage commissions and dealer spreads.
The sale of futures contracts provides an alternative means of
hedging the Fund against a decline in the value of its
investments in fixed-income securities. As such values decline, the value of
the Fund's position in the futures contracts will tend to increase, thus
offsetting all or a portion of the depreciation in the market value of the
Fund's fixed-income securities which are being hedged. While the Fund will
incur commission expenses in establishing and closing out futures positions,
commissions on futures transactions may be significantly lower than transaction
costs incurred in the purchase and sale of fixed-income securities. Employing
futures as a hedge may also permit the Fund to assume a defensive posture
without reducing its yield on its investments.
CALL OPTIONS ON FUTURES CONTRACTS. The purchase of a call option on a
futures contract is similar in some respects to the purchase of a call option on
an individual security. Depending on the pricing of the option compared to
either the futures contract upon which it is based, or upon the price of the
underlying debt securities, it may or may not be less risky than ownership of
the futures contract or underlying debt securities. As with the purchase of a
futures contract, the Fund may purchase a call option on a futures contract to
hedge against a market advance when the Fund is not fully invested.
The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the securities or commodities which
are deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is below the exercise price, the Fund will retain the
full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Fund's portfolio holdings.
PUT OPTIONS ON FUTURES CONTRACTS. The purchase of put options on a
futures contract is similar in some respects to the purchase of protective put
options on portfolio securities. The Fund may purchase put options on futures
contracts to hedge the Fund's portfolio against the risk of
rising interest rates or declines in stock market prices. The
Fund may purchase put options on futures contracts in
circumstances where it would sell futures contracts.
The Fund may write a put option on a futures contract as a partial
hedge against increasing prices of the assets which are deliverable upon
exercise of the futures contract. If the futures price at expiration of the
option is higher than the exercise price, the Fund will retain the full amount
of the option premium which provides a partial hedge against any increase in the
price of assets that the Fund intends to purchase.
INDEX FUTURES. A securities index assigns relative values to the
securities comprising the index. An index futures contract is a bilateral
agreement pursuant to which two parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the difference between
the index value at the close of the last trading day of the contract and the
price at which the futures contract is originally struck. No physical delivery
of the underlying securities in the index is made.
The Fund will engage in transactions in index futures contracts only
as a hedge against changes resulting from market conditions in the values of
securities held in the Fund's portfolio or which the Fund intends to purchase.
In connection with its purchase of index futures contracts, the Fund will
deposit an amount of cash and cash equivalents, equal to the market value of the
futures contracts, in a segregated account with its Custodian and/or in the
margin account with a broker.
LIMITATIONS ON THE USE OF OPTIONS AND FUTURES PORTFOLIO STRATEGIES
------------------------------------------------------------------
The Fund will not "over-hedge," that is the Fund will not make open
short positions in futures contracts if, in the aggregate, the
value of its open positions (marked to market) exceeds the
current market value of its securities portfolio plus or minus
the unrealized gain or loss on such open positions, adjusted for the historical
volatility relationship between the portfolio and futures contracts.
The Fund's ability to engage in the options and futures strategies
described above will depend on the availability of liquid markets in such
instruments. Markets in certain options and futures are relatively new and
still developing. It is impossible to predict the amount of trading interest
that may exist in various types of options or futures. Therefore no assurance
can be given that the Fund will be able to utilize these instruments effectively
for the purposes set forth above. Furthermore, the Fund's ability to engage in
options and futures transactions may be limited by tax considerations and CFTC
rules.
RISK FACTORS IN FUTURES TRANSACTIONS
------------------------------------
Investment by the Fund in futures contracts involves risk. Some of
that risk may be caused by an imperfect correlation between movements in the
price of the futures contract and the price of the security or other investment
being hedged. The hedge will not be fully effective where there is such
imperfect correlation. For example, if the price of the futures contract moves
more than the price of the hedged security, the Fund would experience either a
loss or gain on the future which is not completely offset by movements in the
price of the hedged securities. To compensate for imperfect correlations, the
Fund may purchase or sell futures contracts in a greater dollar amount than the
hedged securities if the volatility of the hedged securities is historically
greater than the volatility of the futures contracts. Conversely, the Fund may
purchase or sell fewer contracts if the volatility of the price of the hedged
securities is historically less than that of the futures contracts. The risk of
imperfect correlation generally tends to diminish as the
maturity date of the futures contract approaches.
Futures contracts on U.S. Government securities historically have
reacted to an increase or decrease in interest rates in a manner similar to that
in which the underlying U.S. Government securities reacted.
Futures contracts may be used to hedge against a possible increase in
the price of securities which the Fund anticipates purchasing, or options
thereon. In such instances, it is possible that the market may instead decline.
If the Fund does not then invest in such securities because of concern as to
possible further market decline or for other reasons, the Fund may realize a
loss on the futures contract that is not offset by a reduction in the price of
the securities purchased.
The amount of risk the Fund assumes when it purchases an option on a
futures contract is the premium paid for the option plus related transaction
costs. In addition to the correlation risks discussed above, the purchase of an
option also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the option purchased.
The liquidity of a secondary market in a futures contract may be
adversely affected by "daily price fluctuation limits" established by commodity
exchanges which limit the amount of fluctuation in a futures contract price
during a single trading day. Once the daily limit has been reached in the
contract, no trades may be entered into at a price beyond the limit, thus
preventing the liquidation of open futures positions. Prices have in the past
exceeded the daily limit on a number of consecutive trading days.
The successful use of transactions in futures and related options also
depends on the ability of the Adviser to forecast correctly the direction and
extent of interest rate movements within a given time frame. To the extent
interest rates remain stable during the period in which a
futures contract or related option is held by the Fund or such
rates move in a direction opposite to that anticipated, the
Fund may realize a loss on the hedging transaction which is not fully or
partially offset by an increase in the value of portfolio securities. As a
result, the Fund's total return for such period may be less than if it had not
engaged in the hedging transaction.
CONTINGENT DEFERRED SALES CHARGE (CLASS B SHARES)
AND INITIAL SALES CHARGE (CLASS A SHARES)
As described in the Prospectus under the caption "How to Redeem," the
contingent deferred sales charge is waived on redemptions of Class B shares for
certain classes of individuals or entities on account of: (i) the fact that the
Fund's sales-related expenses are lower for certain of such classes than for
classes for which the contingent deferred sales load is not waived; (ii) waiver
of the contingent deferred sales load with respect to certain of such classes is
consistent with certain Internal Revenue Code policies concerning the favored
tax treatment of accumulations; and (iii) with respect to certain of such
classes, considerations of fairness, and competitive and administrative factors.
As described in the Prospectus under the caption "Alternative Purchase
Arrangements--Initial Sales Charge Alternative - Class A Shares," Class A shares
of the Fund are sold pursuant to an initial sales charge, which declines as the
amount of purchase reaches certain defined levels.
EXCHANGE PRIVILEGE
As described in the Prospectus under the caption "Exchange Privilege,"
a shareholder may exchange shares of the Fund for shares of the Firstar Money
Market Fund at their current net asset values. With respect to
Class B shares, the original purchase date(s) of shares
exchanged will carry over to the investment in the new fund for
purposes of calculating any contingent deferred sales charge. For example, if a
shareholder invests in the Class B shares of the Fund and 6 months later
exchanges those shares for shares of another fund, no sales charge would be
imposed upon the exchange but the investment in the other fund would be subject
to the 5% contingent deferred sales charge until one year after the date of the
shareholder's investment in the first Fund, as described in the Prospectus under
"Alternative Purchase Arrangements." With respect to Class B shares subject to
a contingent deferred sales charge, if less than all of an investment is
exchanged out of the Fund, any portion of the investment attributable to capital
appreciation and/or reinvested dividends or capital gains distributions will be
exchanged first, and thereafter any portions exchanged will be from the earliest
investment made in the Fund from which the exchange was made. The Fund reserves
the right to modify or discontinue the exchange privilege at any time. Orders
for exchanges received after the close of regular trading on the Exchange on any
business day will be executed at the respective net asset values determined at
the close of the next business day.
DISTRIBUTOR AND DISTRIBUTION AND SERVICING PLANS
As stated in the text of the Prospectus under the caption "Distributor
and Distribution and Servicing Plans," shares of the Fund are continuously
offered through firms ("participating brokers") which are members of the
National Association of Securities Dealers, Inc. and which have dealer
agreements with the Distributor, or which have agreed to act as introducing
brokers for the Distributor ("introducing brokers"). Under the Distribution
Agreement between the Fund and the Distributor (the "Distribution Agreement"),
the Distributor is not obligated to sell any specific amount of shares of the
Fund and will purchase shares for resale only against orders for shares.
Pursuant to the Distribution and Servicing Plans
described in the Prospectus, in connection with the
distribution of Class B shares of the Fund, the Distributor receives certain
distribution fees from the Fund, and in connection with personal services
rendered to Class A and Class B shareholders of the Fund and the maintenance of
shareholder accounts, the Distributor receives certain servicing fees from the
Fund. Subject to the percentage limitations on these distribution and servicing
fees set forth in the Prospectus, the distribution and servicing fees may be
paid in respect of services rendered and expenses borne in the past with respect
to each such class as to which no distribution and servicing fees were paid on
account of such limitations. As described in the Prospectus, the Distributor
pays all or a portion of the distribution and servicing fees it receives from
the Fund to participating and introducing brokers.
Each Distribution and Servicing Plan may be terminated with respect to
the class of shares of the Fund by vote of a majority of the trustees who are
not interested persons of the Fund (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of the Plan or the
Distribution Agreement (the "Independent Trustees"), or by vote of a majority of
the outstanding voting securities of that class. Any change in either Plan that
would materially increase the cost to the class of shares of the Fund requires
approval by the affected class of shareholders of the Fund. The trustees review
quarterly a written report of such costs and the purposes for which such costs
have been incurred. The Plan may be amended by vote of the trustees, including
a majority of the Independent trustees, cast in person at a meeting called for
the purpose. For so long as the Plan is in effect, selection and nomination of
those Trustees who are not interested persons of the Fund shall be committed to
the discretion of such disinterested persons.
The Distribution Agreement may be terminated with respect to the Fund
or class of shares thereof at any time on 60 days' written notice without
payment of any penalty either by the Distributor or by the Fund
by vote of a majority of the outstanding voting securities of
the Fund or that class, as the case may be, or by vote of a
majority of the Independent Trustees.
The Distribution Agreement and the Distribution and Servicing Plans
will continue in effect with respect to the Fund and each class of shares
thereof for successive one-year periods, provided that each such continuance is
specifically approved: (i) by the vote of a majority of the Independent
Trustees; and (ii) by the vote of a majority of the entire Board of Trustees
cast in person at a meeting called for that purpose.
If the Distribution Agreement or the Distribution and Servicing Plans
are terminated (or not renewed) with respect to the Fund, they may continue in
effect with respect to any class of the Fund as to which they have not been
terminated (or have been renewed).
The trustees believe that the Distribution Plans provide benefits to
the Fund. The trustees believe that the Plans result in greater sales and/or
fewer redemptions of Fund shares, although it is impossible to know for certain
the level of shares and redemptions of Fund shares in the absence of the Plan or
under an alternative distribution scheme. The effect on sales and/or
redemptions is believed to benefit the Fund by reducing Fund expense ratios
and/or by affording greater flexibility to Fund managers.
The Distributor has undertaken to reimburse the Fund to the extent
that the aggregate annual operating expenses, including the investment advisory
fee but excluding interest, taxes, brokerage commissions and extraordinary
items, exceed that percentage of the average net assets of the Fund for such
year, as determined by valuations made as of the close of each business day of
the year, which is the most restrictive percentage provided by the state laws of
the various states in which the Common Stock is qualified for sale. The Fund
monitors its expense ratio at least on a monthly basis. If the
accrued amount of the expenses of the Fund exceeds the expense
limitation, the Fund creates an account receivable from the
Distributor for the amount of such excess.
In addition to any reimbursement requirement required under the most
restrictive applicable expense limitation of state securities commissions
described above, the Distributor has undertaken to reimburse the Fund for
expenses in excess of 1.15% and 1.90% of average net assets of Class A Shares
and Class B Shares, respectively. Such reimbursements to the Fund may only be
modified or discontinued by the Distributor by amending the Distribution
Agreement. For the fiscal years ended October 31, 1997 and October 31, 1996,
and for the period September 1, 1995 (commencement of operations) through
October 31, 1995, total expenses of the Fund would have exceeded 1.15% and 1.90%
of the average net assets of Class A Shares and Class B Shares, respectively.
As a result, the Distributor reimbursed the Fund, $117,913, $144,639, and
$27,342, respectively, for the same periods.
TRUSTEES AND OFFICERS OF THE FUND
The name, address, principal occupations during the past five years
and other information with respect to each of the trustees and officers of the
Fund are as follows:
LAWRENCE KUJAWSKI*<F2>
- -----------------
13255 West Bluemound Road
Brookfield, Wisconsin 53005
(PRESIDENT, TREASURER AND A TRUSTEE)
Mr. Kujawski has been the President of Matrix Venture Funds, Inc., a
firm specializing in the valuation of closely held securities, acquisitions,
venture capital financing and consulting, since he founded Matrix Venture Funds,
Inc. in 1982.
RICHARD IMPERIALE*<F2>
- -----------------
839 N. Jefferson Street
Milwaukee, Wisconsin 53202
(CHAIRMAN, SECRETARY AND
A TRUSTEE OF THE FUND)
Mr. Imperiale has been the President of Uniplan, Inc., the Fund's
investment advisor, since he founded Uniplan, Inc. in 1985.
F.L. KIRBY*<F2>
- -----------
233 S. Wacker Drive
Chicago, Illinois 60603
(A TRUSTEE OF THE FUND)
Mr. Kirby is an Executive Vice President, a Director, and an Executive
Committee member of Rodman & Renshaw, Inc., the Fund's Distributor, positions he
has held since 1994. In these capacities, he is in charge of all retail sales
for Rodman & Renshaw, Inc. From 1993 through 1994, Mr. Kirby was a senior vice
president at Oppenheimer & Co., another broker-dealer. From
1991 through 1993, he was a senior vice president, a director
and an Executive Committee member of Rodman & Renshaw, Inc.
*<F2>Messrs. Kujawski, Imperiale and Kirby are trustees who are "interested
persons"sofnthe Fund as that term is defined in the Investment Company Act of
1940.
JOHN L. KOMIVES
- ----------------
101 S. Second Street
Milwaukee, Wisconsin 53204
(TRUSTEE)
Dr. Komives is the President of Lakeshore Group Ltd., a position he
has held since he founded the firm in 1975. Dr. Komives is a member of the
board of directors of the following firms: F.W. Boelter Cos., Inc., Milwaukee,
Wisconsin; Eagle Technology, Inc., Mequon, Wisconsin; Ebert and Associates,
Inc., Milwaukee, Wisconsin; Ft. Kincaid Industries, Inc., Milwaukee, Wisconsin;
Metrix Customer Support Systems (MCSS), Waukesha, Wisconsin; Metal Processing
Co., Milwaukee, Wisconsin; Orthokinetics, Inc., Pewaukee, Wisconsin; Premier
Plastics, Inc., Waukesha, Wisconsin; Renquist Associates, Inc., Racine,
Wisconsin; World Venture Management, Inc., Milwaukee, Wisconsin; Zigman, Joseph
& Stephenson, Inc., Milwaukee, Wisconsin. He also serves as a member of the
following boards: Acme Institute of Technology, West Allis, Wisconsin; Board of
Governors, Mount Mary College, Wauwatosa, Wisconsin; and Board of Governors of
the Center for Entrepreneurial Studies, Marquette University, Milwaukee,
Wisconsin.
J. MICHAEL BORDEN
- -----------------
2938 North Shore Drive
Delavan, Wisconsin 53115
(TRUSTEE)
Since 1988, Mr. Borden has been the president of Total Quality
Plastics, Inc., a manufacturer of injection molding, the president of Rock
Valley Trucking, and the president of Freedom Plastics, Inc. Mr. Borden has
been the president and chief executive officer of Hufcor, Inc., a manufacturer
of movable walls and accordion partitions, since 1978. From 1980 through 1994,
he was also a member of the board of directors, a member of the executive
committee, the chairman of the finance and executive committees and a vice
president of Catholic Knights Insurance Society.
DENNIS J. LASSER
- ----------------
Binghampton, New York
(TRUSTEE)
Mr. Lasser is an Associate Professor of Finance, School of Management,
SUNY-Binghamton, New York, a position he has held since 1988.
JAMES L. STANKO
- ----------------
Rancho Santa Fe, California
(TRUSTEE)
Mr. Stanko has been Chairman of Winstar Associates, a company he
founded in 1992. From 1982 until 1992 he was a Managing Director of Oppenheimer
& Co. From 1976 until 1982, Mr. Stanko was Chairman of Carroll McEntee and
McGinley Money Markets, Inc.
The Fund's standard method of compensating trustees is to pay each
trustee who is not an officer of the Fund a fee of $250 for each meeting of the
trustees attended. The Fund also may reimburse its trustees for travel expenses
incurred in order to attend meetings of the trustees. For the fiscal year ended
October 31, 1997, officers and trustees received $4,000 in the aggregate
remuneration from the Fund as set forth more fully in the compensation table:
COMPENSATION TABLE
(for the fiscal year ended October 31, 1997)
Pension or
Retirement
Benefits
Aggregate Accrued as Estimated Total
Compensation Part of Fund Annual Benefits Compensation
Name of Trustee From Registrant Expenses Upon Retirement From Registrant
- --------------- --------------- --------- --------------- ---------------
Lawrence Kujawski 0 0 0 0
Richard Imperiale 0 0 0 0
F.L. Kirby 0 0 0 0
John Komives $1,000 0 0 $1,000
J. Michael Borden 1,000 0 0 1,000
Dennis Lasser 1,000 0 0 1,000
James Stanko 1,000 0 0 1,000
OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
--------------------------------------------------
Percent
of
Name and Address Of Percent of Total
Beneficial Owner Number of Shares Class Fund
----------------- ---------------- --------- -------
Firstar Trust Company - 83,991.118 14.03% 11.67%
Custodian for Sidney Shindell - Class A Shares
IRA Rollover
929 N. Astor Street
Milwaukee, Wisconsin
53202-3454
Donaldson Lufkin Jenrette 59,713.435 9.97% 8.30%
Securities Corporation Inc. Class A Shares
For the exclusive benefit of
our customers 11,114.087 9.18% 1.54%
P.O. Box 2052 Class B Shares -----
Jersey City, NJ 07303-2052
9.84%
Clarke & Co. 59,706.320 9.97% 8.30%
235 West Schrock Rd. Class A. Share
Westerville, Ohio 43081-2874
Marshall & Ilsley Trust 56,736.928 9.48% 7.88%
Company, trustee Class A Shares
FBO Hough Mfg. Corp.
Retirement Trust
1000 N. Water Street
Milwaukee, Wisconsin
53202-3197
Firstar Trust Co. - Custodian 49,891.406 8.33% 6.93%
for Class A Shares
Carlisle F. Meredith IRA
40344 Charleston Pike
Hamilton, Virginia 20158-3216
Wexford Clearing Services Corp. 7,674.643 6.34% 1.07%
Robert J. Haasl & JoAnn Haasl Class B Shares
Jt. Ten.
PDI Inc.
P.O. Box 130
Circle Pines, Minnesota
55014-0130
Officers and Trustees as a 54,947.124 9.18% 7.63%
Group1<F3> Class A Shares
(7 persons)
No person is deemed to "control," as that term is defined in the
Investment Company Act of 1940, the Fund. No other person owns of record or
beneficially 5% or more of the outstanding securities of any class of the Fund.
1<F3> This includes shares held by Uniplan Inc., as well as shares held by Mr.
Imperiale in his capacity as trustee of the Uniplan Inc. Profit Sharing Plan and
by Mr. Imperiale and Mr. Komives in their capacities as custodian under the
Uniform Transfer to Minors Act.
INVESTMENT ADVISOR, ADMINISTRATOR, CUSTODIAN, TRANSFER AGENT
AND ACCOUNTING SERVICES AGENT
As set forth in the Prospectus under the caption "MANAGEMENT OF THE
FUND," the investment adviser to the Fund is Uniplan, Inc. (the "Advisor").
Pursuant to an investment advisory agreement between the Fund and the Advisor
(the "Advisory Agreement") the Advisor furnishes continuous investment advisory
services and management to the Fund. The Advisor is controlled by Richard P.
Imperiale, who owns 90% of its outstanding capital stock. Mr. Imperiale is also
a trustee of the Fund.
The Advisory Agreement will remain in effect as long as its
continuance is specifically approved at least annually, by (i) the trustees of
the Fund, or by the vote of a majority (as defined in the
Investment Company Act of 1940) of the outstanding shares of
the Fund, and (ii) by the vote of a majority of the trustees of
the Fund who are not parties to the Advisory Agreement or interested persons of
the Advisor, cast in person at a meeting called for the purpose of voting on
such approval. The Advisory Agreement provides that it may be terminated at any
time without the payment of any penalty, by the trustees of the Fund or by vote
of a majority of the Fund's shareholders, on sixty days written notice to the
Advisor, and by the Advisor on the same notice to the Fund and that it shall be
automatically terminated if it is assigned.
The Advisory Agreement provides that the Advisor shall not be liable
to the Fund or its shareholders for anything other than willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations or duties. The
Advisory Agreement also provides that the Advisor and its officers, directors
and employees may engage in other businesses, devote time and attention to any
other business whether of a similar or dissimilar nature, and render investment
advisory services to others. For the fiscal years ended October 31, 1997 and
October 31, 1996, and for the period September 1, 1995 (commencement of
operations) through October 31, 1995, the fees paid under the Advisory Agreement
were $38,956, $18,010 and $1,000, respectively.
As set forth in the Prospectus under the caption "MANAGEMENT OF THE
FUND," the administrator to the Fund is Firstar Trust Company (the
"Administrator"), 615 East Michigan Street, Milwaukee, Wisconsin 53202. The
administration agreement entered into between the Fund and the Administrator
(the "Administration Agreement") will remain in effect until terminated by
either party. The Administration Agreement may be terminated at any time,
without the payment of any penalty, by the trustees of the Fund upon the giving
of ninety (90) days' written notice to the Administrator, or by the
Administrator upon the giving of ninety (90) days' written notice to the Fund.
Under the Administration Agreement, the Administrator
is not liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the
performance of the Administration Agreement, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the
Administrator in the performance of its duties or from its reckless disregard of
its duties and obligations under the Administration Agreement. For its services,
the Administrator is entitled to receive fees, payable monthly, based on the
total annual rate of $20,000 in the event that the average net assets of the
Fund is less than $10,000,000 and increasing by $4,000 for every $2,000,000
increase in average net assets of the Fund until the Fund reaches $20,000,000 in
average net assets. At such time, the fee is .25% of the average net assets of
the Fund; such fee decreases to .2% of the average net assets when average net
assets reach $25,000,000 and decreases to .15% of the average net assets when
average net assets reach $30,000,000. At such time as the average net assets
reach $200,000,000, the fees are .06% on the first $200,000,000, .05% on the
next $300,000,000 and .03% on all net assets exceeding $500,000,000. For the
fiscal years ended October 31, 1997 and October 31, 1996, and for the period
September 1, 1995 (commencement of operations) through October 31, 1995, the
fees earned by the Administrator were $21,286, $36,538 and $5,620, respectively.
Firstar Trust Company also serves as custodian of the Fund's assets
pursuant to a Custody Agreement. Under the Custody Agreement, Firstar Trust
Company has agreed to (i) maintain a separate account in the name of the Fund,
(ii) make receipts and disbursements of money on behalf of the Fund, (iii)
collect and receive all income and other payments and distributions on account
of the Fund's portfolio investments, (iv) respond to correspondence from
shareholders, security brokers and others relating to its duties and (v) make
periodic reports to the Fund concerning the Fund's operations. Firstar Trust
Company does not exercise any supervisory function over the purchase and sale of
securities. For its services as custodian, Firstar Trust company is entitled to
receive a fee, payable quarterly, based on the annual rate of .02% of the market
value of the securities owned by the Fund (subject to a minimum
annual $3000 fee). In addition, Firstar Trust Company, as
custodian, is entitled to certain charges for securities
transactions and reimbursement for expenses. For the fiscal years ended October
31, 1997 and October 31, 1996, and for the period September 1, 1995
(commencement of operations) through October 31, 1995, the fees earned by the
custodian were $9,393, $7,440 and $533, respectively.
Firstar Trust Company also serves as transfer agent and dividend
disbursing agent for the Fund under a Shareholder Servicing Agent Agreement. As
transfer and dividend disbursing agent, Firstar Trust Company has agreed to (i)
issue and redeem shares of the Fund, (ii) make dividend and other distributions
to shareholders of the Fund, (iii) respond to correspondence by Fund
shareholders and others relating to its duties, (iv) maintain shareholder
accounts, and (v) make periodic reports to the Fund. For its transfer agency
and dividend disbursing services, Firstar Trust company is entitled to receive
fees based on the average net assets in the Fund (subject to a minimum annual
fee of $15,000). Also, Firstar Trust Company is entitled to certain other
transaction charges and reimbursement for expenses. For the fiscal years ended
October 31, 1997 and October 31, 1996 and the period September 1, 1995
(commencement of operations) through October 31, 1995, the fees earned under the
Shareholder Servicing Agreement were $28,904, $35,605, and $4,218, respectively.
In addition the Fund has entered into a Fund Accounting Servicing
Agreement with Firstar Trust company pursuant to which Firstar Trust Company has
agreed to maintain the financial accounts and records of the Fund and provide
other accounting services to the Fund. For its accounting services, Firstar
Trust Company is entitled to receive fees, payable monthly, based on the total
annual rate of $22,000 for the first $20,000,000 in average net assets of the
Fund; .17% of average net assets when the Fund exceeds $20,000,000 but is less
than $25,000,000; .12% of average net assets when the Fund exceeds $25,000,000
but is less than $30,000,000; and when the Fund exceeds $30,000,000, the fees
are $27,500 for the first $40,0000,000 in average net assets of
the Fund, .01% on the next $200,000,000 of average net assets
of the Fund and .005% on all net assets exceeding $240,000,000.
Firstar Trust Company is also entitled to certain out of pocket expenses,
including pricing expenses. For the fiscal years ended October 31, 1997 and
October 31, 1996, and the period September 1, 1995 (commencement of operations)
through October 31, 1995, the fees earned under the Fund Accounting Servicing
Agreement were $26,255, $26,799 and $3,738, respectively.
DETERMINATION OF NET ASSET VALUE
As set forth in the Prospectus under the caption "Determination of Net
Asset Value," the net asset value of the Fund will be determined as of the close
of regular trading (currently 4:00 p.m. Eastern time) on each day the New York
Stock Exchange is open for trading. The Trust expects the New York Stock
Exchange to be open for trading Monday through Friday except New Year's Day,
Martin Luther King Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Additionally,
if any of the aforementioned holidays falls on a Saturday, the Fund expects that
the New York Stock Exchange will not be open for trading on the preceding Friday
and when any such holiday falls on a Sunday, the Trust expects that the New York
Stock Exchange will not be open for trading on the succeeding Monday, unless
unusual business conditions exist, such as the ending of a monthly or the yearly
accounting period. The Fund's portfolio securities for which market quotations
are readily available are valued at the most recent bid price. Notwithstanding
the above sentence, certain of the Fund's holdings of debt securities are valued
by a pricing service. The pricing service relies on one or more of the
following factors: valuations obtained from recognized dealers, information on
transactions for similar securities, general market information, and matrix
comparisons of various characteristics of debt securities, such as quality,
yield maturity.
CALCULATION OF TOTAL RETURN
Total Return with respect to the Fund's Class A and Class B shares is
a measure of the change in value of an investment in a class of shares of the
Fund over the period covered (in the case of Class A shares, giving effect to
the maximum initial sales charge), which assumes any dividends or capital gains
distributions are reinvested in that class of the Fund's shares immediately
rather than paid to the investor in cash. The formula for Total Return used
herein includes four steps: (1) adding to the total number of shares purchased
by a hypothetical $1,000 investment in the class (deducting in the case of Class
A shares of the maximum applicable initial sales charge) all additional shares
which would have been purchased if all dividends and distributions paid or
distributed during the period had been immediately reinvested; (2) calculating
the value of the hypothetical initial investment of $1,000 as of the end of the
period by multiplying the total number of shares in the class owned at the end
of the period by the net asset value per share of the class on the last trading
day of the period; (3) assuming redemption at the end of the period (deducting
any applicable contingent deferred sales charge); and (4) dividing this account
value for the hypothetical investor by the initial $1,000 investment and
annualizing the result for the periods of less than one year. Specifically, the
Total Return formula is as follows:
P (1 + T)n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the one, five, or ten-year
period at the end of the one, five, or ten-year
period (or fractional portion thereof).
The manner in which Total Return of the Class A and Class B shares
will be calculated for public use is described above.
The total return for the one year ended October 31, 1997 was 9.17% and
8.95% for Class A and Class B Shares, respectively. The total return for the
one year ended October 31, 1996 was 5.51% and 5.10% for Class A and Class B
Shares respectively. The total return for the period September 1, 1995
(commencement of operations) through October 31, 1995, was -5.10% and -4.70% for
Class A and Class B Shares, respectively.
Performance information is computed separately for the Fund's Class A
and Class B shares. The Fund may from time to time include the total return of
its Class A and Class B shares in advertisements or in information furnished to
represent or prospective shareholders. The Fund may from time to time include
in advertisements the total return of each class and the ranking of those
performance figures relative to such figures for groups of mutual funds
categorized by Lipper Analytical Services as having the same investment
objectives.
Information provided to any newspaper or similar listing of the Fund's
net asset values and public offering prices will separately present the Class A
and Class B shares.
The Total Return of each class may also be used to compare the
performance of the Funds' Class A and Class B shares against certain widely
acknowledged standards or indices for stock and bond market performance against
the cost of living (inflation) index, and against hypothetical results based on
a fixed rate of return.
The Standard & Poor's composite Index of 500 stocks
(the "S&P 500") is a market value-weighted and unmanaged index
showing the changes in the aggregate market value of 500 stocks relative to the
base period 1941-43. The S&P 500 is composed almost entirely of common stocks
of companies listed on the New York Stock Exchange, although the common stocks
of a few companies listed on the American Stock Exchange or traded over-the-
counter are included. The 500 companies represented include 385 industrial, 15
transportation, 45 utilities and 55 financial services concerns. The S&P 500
represents about 77% of the market value of all issues traded on the New York
Stock Exchange.
The NASDAQ-OTC Price Index (the "NASDAQ Index") is a market value-
weighted and unmanaged index showing the changes in the aggregate market value
of approximately 3,500 stocks relative to the base measure of 100.00 on February
5, 1971. The NASDAQ Index is composed entirely of common stocks of companies
traded over-the-counter and often through the National Association of Securities
Dealers Automated Quotations ("NASDAQ") system. Only those over-the-counter
stocks have only one market maker or traded on exchanges are excluded.
The Russell 2000 Small Stock Index is an unmanaged index of the 2000
smallest securities in the Russell 3000 Index, representing approximately 7% of
the Russell 3000 Index. The Russell 3000 Index represents approximately 98% of
the U.S. equity market by capitalization.
From time to time, articles or reports about the Fund concerning
performance, rankings and other characteristics of the Fund may appear in
national publications and services including, but not limited to, the Wall
Street Journal, Forbes, Fortune, Money Magazine, Morningstar's Mutual Fund
Values, CDA Investment Technologies and The Donoghue Organization. In
particular, some or all of these publications may publish their own rankings or
performance reviews of mutual funds, including the Fund. References to or
reprints of such articles may be used in the Fund's promotional
literature. References to articles regarding personnel of the
Advisor who has portfolio management responsibility may also be
used in the Fund's promotional literature.
From time to time, the Fund may use, in its advertisements or
information furnished to present or prospective shareholders, data concerning
the performance and ranking of certain countries' stock markets, including
performance and ranking data based on annualized returns over one, three, five
and ten-year periods.
From time to time, the Fund may set forth in its advertisements and
other materials information about the growth of a certain dollar amount
invested in the Fund over a specified period of time and may use charts and
graphs to display that growth.
ALLOCATION OF PORTFOLIO BROKERAGE
Decisions to buy and sell securities for the Fund are made by the
Advisor subject to review by the Fund's trustees. In placing purchase and sale
orders for portfolio securities for the Fund, it is the policy of the Advisor to
seek the best execution of orders at the most favorable price in light of the
overall quality of brokerage and research services provided, as described in
this and the following paragraph. In selecting brokers to effect portfolio
transactions, the determination of what is expected to result in best execution
at the most favorable price involves a number of largely judgmental
considerations. Among these are the Advisor's evaluation of the broker's
efficiency in executing and clearing transactions, block trading capability
(including the broker's willingness to position securities) and the broker's
financial strength and stability. The most favorable price to the Fund means
the best net price without regard to the mix between purchase or sale price and
commission, if any. Over-the-counter securities are generally
purchased and sold directly with principal market makers who
retain the difference in their cost in the security and its
selling price. In some instances, the Advisor feels that better prices are
available from non-principal market makers who are paid commissions directly.
The Advisor may allocate portfolio brokerage on the basis of whether the broker
has sold or is currently selling Shares of the Fund and may also allocate
portfolio brokerage to the Distributor, but, in each case, only if the Advisor
reasonably believes the commissions and transaction quality are comparable to
that available from other qualified brokers. Under the Investment Company Act
of 1940, the Distributor is prohibited from dealing with the Fund as a principal
in the purchase and sale of securities. Since transactions in the over-the-
counter securities market generally involve transactions with dealers acting as
principal for their own account, the Distributor may not serve as the Fund's
dealer in connection with such transactions. All allocations of portfolio
brokerage to the Distributor, if any, will be conducted in compliance with
procedures adopted in accordance with Rule 17e-1 under the Investment Company
Act of 1940. The Distributor, when acting as a broker for the Fund in any of
its portfolio transactions executed on a securities exchange of which the
Distributor is a member, will act in accordance with the requirements of Section
11(a) of the Securities Exchange Act of 1934 and the rules of such exchanges.
In allocating brokerage business for the Fund, the Advisor also takes
into consideration the research, analytical, statistical and other information
and services provided by the broker, such as general economic reports and
information, reports or analyses of particular companies or industry groups,
market timing and technical information, and the availability of the brokerage
firm's analysts for consultation. While the Advisor believes these services
have substantial value, they are considered supplemental to the Advisor's own
efforts in the performance of its duties under the Advisory Agreement. Other
clients of the Advisor may indirectly benefit from the availability of these
services to the Advisor, and the Fund may indirectly benefit from services
available to the Advisor as a result of transactions for other
clients. The Advisory Agreement provides that the Advisor may
cause the Fund to pay a broker which provides brokerage and
research services to the Advisor a commission for effecting a securities
transaction in excess of the amount another broker would have charged for
effecting the transaction, if the Advisor determines in good faith that such
amount of commission is reasonable in relation to the value of brokerage and
research services provided by the executing broker viewed in terms of either the
particular transaction or the Advisor's overall responsibilities with respect to
the Fund and the other accounts as to which he exercises investment discretion.
Pursuant to conditions set forth in rules of the Securities and
Exchange Commission, the Fund may purchase securities from an underwriting
syndicate of which the principal underwriter of the Fund or its affiliates are
members (but not from the principal underwriter itself). Such conditions relate
to the price and amount of the securities purchased, the commission or spread
paid, and the quality of the issuer. The rules further require that such
purchases take place in accordance with procedures adopted and reviewed
periodically by the Trustees, particularly those trustees who are not
"interested persons" of the Fund. Investments by other clients of the
Distributor and the Adviser may limit the ability of the Fund to purchase
securities from such a syndicate.
For the fiscal years ended October 31, 1997 and October 31, 1996, and
the period September 1, 1995 (commencement of operations) through October 31,
1995, respectively, the Fund paid brokerage commissions of $29,721 on total
transactions of $8,839,795, $21,288 on total transactions of $5,619,286, and
$1,532 on total transactions of $545,152. During the same periods, $1,375, $700
and $0 of the total brokerage commissions represent brokerage commissions paid
to the Distributor. Some of the brokers to whom commissions were paid provided
research services to the Advisor.
TAXES
As set forth in the Prospectus under the caption
"DIVIDENDS, DISTRIBUTIONS AND TAXES, the Fund intends to qualify annually for
and elect tax treatment applicable to a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").
Sixty percent of any gain or loss realized by the Fund: (I) from net premiums
from expired listed options and from closing purchase transactions; and (ii)
with respect to listed options upon the exercise thereof, generally will
constitute long-term capital gains or losses and the balance will be short-term
gains or losses. Distributions of long-term capital gains, if designated as
such by the Fund, are taxable to shareholders as long-term capital gain,
regardless of how long a shareholder has held shares. Dividends from the Fund's
net investment income and distributions from the Fund's net realized short-term
capital gains are taxable to shareholders as ordinary income, whether received
in cash or in additional Fund shares. The 70% dividends-received deduction for
corporations will apply to such dividends and distributions, subject to
proportionate reductions if the aggregate dividends received by the Fund from
domestic corporations in any year are less than 100% of the Fund's gross income.
A 4% non-deductible excise tax is imposed on regulated investment
companies that fail to currently distribute specified percentages of their
ordinary taxable income and capital gain net income. The Fund intends to make
sufficient distributions of ordinary taxable income and any capital gain net
income with respect to each calendar year to avoid liability for this excise
tax.
If for any taxable year the Fund does not qualify for the special
federal income tax treatment afforded regulated investment companies, all of its
taxable income will be subject to federal income tax at regular corporate rates
(without any deduction for distributions to its shareholders).
Any dividend or capital gains distribution paid
shortly after a purchase of Fund shares will have the effect of
reducing the per share net asset value of such shares by the
amount of the dividend or distribution. Furthermore, if the net asset value of
the Fund shares immediately after a dividend or distribution is less than the
cost of such shares to the shareholder, the dividend or distribution will be
taxable to the shareholder even though it results in a return of capital to him.
The Fund may be required to withhold Federal income tax at a rate of
31% ("backup withholding") from dividend payments and redemption proceeds if a
shareholder fails to furnish the Fund with his social security or other tax
identification number and certify under penalty of perjury that such number is
correct and that he is not subject to backup withholding due to the under
reporting of income. The certification form is included as part of the share
purchase application and should be completed when the account is opened.
SHAREHOLDER MEETINGS
It is contemplated that the Fund will not hold an annual meeting of
shareholders in any year in which the election of trustees is not required to be
acted on by shareholders under the Investment Company Act of 1940. The Fund's
Trust Instrument and Bylaws also contain procedures for the removal of trustees
by the Fund's shareholders. At any meeting of shareholders, duly called and at
which a quorum is present, the shareholders may, by the affirmative vote of the
holders of at least two-thirds (2/3) of the outstanding shares, remove any
trustee or trustees.
Upon the written request of the holders of shares entitled to not less
than ten percent (10%) of all the votes entitled to be cast at such meeting, the
Secretary of the Fund shall promptly call a special meeting of shareholders for
the purpose of voting upon the question of removal of any trustee. Whenever ten
or more shareholders of record who have been such for at least six months
preceding the date of application, and who hold in the
aggregate either shares having a net asset value of at least
$25,000 or at least one percent (1%) of the total outstanding
shares, whichever is less, shall apply to the Fund's Secretary in writing,
stating that they wish to communicate with other shareholders with a view to
obtaining signatures to a request for a meeting as described above and
accompanied by a form of communication and request which they wish to transmit,
the Secretary shall within five business days after such application either: (1)
afford to such applicants access to a list of the names and addresses of all
shareholders as recorded on the books of the Fund; or (2) inform such applicants
as to the approximate number of shareholders of record and the approximate cost
of mailing to them the proposed communication and form of request.
If the Secretary elects to follow the course specified in clause (2)
of the last sentence of the preceding paragraph, the Secretary, upon the written
request of such applicants, accompanied by a tender of the material to be mailed
and of the reasonable expenses of mailing, shall, with reasonable promptness,
mail such material to all shareholders of record at their addresses as recorded
on the books unless within five business days after such tender the Secretary
shall mail to such applicants and file with the Securities and Exchange
Commission, together with a copy of the material to be mailed, a written
statement signed by at least a majority of the trustees to the effect that in
their opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the basis
of such opinion.
After opportunity for hearing upon the objections specified in the
written statement so filed, the Securities and Exchange Commission may, and if
demanded by the trustees or by such applicants shall, enter an order either
sustaining one or more of such objections or refusing to sustain any of them.
If the Securities and Exchange Commission shall enter an order refusing to
sustain any of such objections, or if, after the entry of an
order sustaining one or more of such objections, the Securities
and Exchange Commission shall find, after notice and
opportunity for hearing, that all objections so sustained have been met, and
shall enter an order so declaring, the Secretary shall mail copies of such
material to all shareholders with reasonable promptness after the entry of such
order and the renewal of such tender.
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick, 777 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, currently serves as the independent accountants for the Fund. KPMG Peat
Marwick conducts an annual audit of the Fund, assists in the preparation of the
Fund's federal and state tax returns and consults with the Fund as to matters of
accounting and Federal and State income taxation.
FINANCIAL STATEMENTS
The following financial statements are incorporated by reference to
the Jefferson Growth and Income Fund Annual Report dated October 31, 1997 (File
No. 811-8958), as filed with the Securities and Exchange Commission on December
30, 1997:
The Jefferson Fund Group Trust
Statement of Assets and Liabilities
Schedule of Investments
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Report of Independent Accountants
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements (financial highlights included in Part A and all
other Financial Statements included in Part B are all incorporated by
reference to the Jefferson Growth and Income Fund Annual Report dated
October 31, 1997 (File No. 811-8958) (as filed with the Securities and
Exchange Commission on December 30, 1997))
The Jefferson Fund Group Trust
Statement of Assets and Liabilities
Schedule of Investments
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Report of Independent Accountants
(b) Exhibits
1.1 Registrant's Certificate of Trust.
1.2 Registrant's Trust Instrument.
2 Registrant's Bylaws.
3 None
4 None
5 Investment Advisory Agreement.
6.1 Distribution Agreement.
6.2 Form of Sales Agreement.
7 None
8 Custodian Agreement with Firstar Trust Company
9.1 Administration Agreement with Firstar Trust Company
9.2 Transfer Agent Agreement with Firstar Trust Company
9.3 Accounting Services Agreement With Firstar Trust Company
10 Opinion of Foley & Lardner, counsel for Registrant
11.1 Consent of Coopers & Lybrand L.L.P.
11.2 Consent of KPMG Peat Marwick
12 None
13 Subscription Agreement
14.1 Restated Form of Individual Retirement Custodial
Account
14.2 Revised Form of Defined
Contribution Retirement Plan
15.1 Distribution and Servicing Plan of Class A Shares
15.2 Distribution and Servicing Plan of Class B Shares
15.3 Distribution Assistance Agreement (Class A)
15.4 Distribution Assistance Agreement (Class B)
16 Schedule for Computation of Performance Quotation (Exhibit 16 to
Post Effective Amendment No. 3 to Registrant's Form N-1A, which
was filed on February 28, 1997 ("Amendment No. 3") is
incorporated by reference).
17 Powers of Attorney for Lawrence Kujawski, John Komives, Michael
Borden, Dennis Lasser and James L. Stanko, Trustees of the Trust.
(Exhibit 17 to Post-Effective Amendment No. 2 to Registrant's
Form N-1A, which was filed on February 28, 1996 ("Amendment No.
2") is incorporated by reference)
17.1 Power of Attorney for F.L. Kirby, Trustee. (Exhibit 17.2 to
Amendment No. 3 is incorporated by reference)
18 Plan pursuant to Rule 18f-3 For Operation of a Multi Class
System. (Exhibit 18 to Amendment No. 2 is incorporated by
reference.)
27 Financial Data Schedule
Item 25. Persons Controlled by or under Common Control with
--------------------------------------------------
Registrant
----------
As of February 27, 1998, Registrant neither controls any person nor is
under common control with any other person.
Item 26. Number of Holders of Securities
-------------------------------
Title of Class Number of Record Holders
-------------- as of February 4, 1998
-----------------------
Class A Shares of Beneficial
Interest, no par value 334
Class B Shares of Beneficial
Interest, no par value 95
Item 27. Indemnification
---------------
Pursuant to Chapter 38 of Title 12 of the Delaware Code, the
Registrant's Trust Instrument, dated January 20, 1995, contains the
following article, which is in full force and effect and has not been
modified or cancelled:
ARTICLE X
---------
LIMITATION OF LIABILITY AND INDEMNIFICATION
-------------------------------------------
Section 10.1. Limitation of Liability. A Trustee, when acting in
------------ -----------------------
such capacity, shall not be personally liable to any person other than the Trust
or a beneficial owner for any act, omission or obligation of the Trust or any
Trustee. A Trustee shall not be liable for any act or omission
or any conduct whatsoever in his capacity as Trustee, provided
that nothing contained herein or in the Delaware Act shall
protect any Trustee against any liability to the Trust or
to Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee hereunder.
Section 10.2. Indemnification.
------------- ---------------
(a) Subject to the exceptions and limitations contained in Section
10.2(b) below:
(i) every Person who is, or has been, a Trustee or officer of
the Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law
against liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court
or body before which the proceeding was brought (A)
to be liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or (B) not to have
acted in good faith in the reasonable belief that his action was in
the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter based
upon a review of readily available facts (as opposed to a full trial-
type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any Shareholder may, by appropriate
legal proceedings, challenge any such determination by the Trustees or
by independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, shall continue as to a person who has ceased
to be a Covered Person and shall inure to the benefit of the heirs,
executors and administrators of such a person. Nothing
contained herein shall affect any rights to
indemnification to which Trust personnel, other than
Covered Persons, and other persons may be entitled by
contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described
in paragraph (a) of this Section 10.2 may be paid by the Trust or Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or Series if it is ultimately determined that
he is not entitled to indemnification under this Section 10.2; provided,
however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust is insured against
losses arising out of any such advance payments or (c) either a majority of
the Trustees who are neither Interested Persons of the Trust nor parties to
the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to believe
that such Covered Person will be found entitled to indemnification under
this Section 10.2.
Section 10.3. Shareholders. In case any Shareholder or former
------------ -------------
Shareholder of any Series shall be held to be personally liable solely by reason
of his being or having been a Shareholder of such Series and not because of his
acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his heirs, executors, administrators or other legal
representatives, or, in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Trust, on behalf of
the affected Series, shall, upon request by the Shareholder,
assume the defense of any claim made against the Shareholder
for any act or obligation of the Series and satisfy any judgment thereon
from the assets of the Series.
Insofar as indemnification for and with respect to liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of Registrant pursuant to the foregoing provisions or
otherwise, Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a director, officer or controlling person or
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
-----------------------------------------------------
Uniplan, Inc. ("Adviser") was organized as a Wisconsin corporation in
1985 and is registered as an investment adviser under the Investment Advisers
Act of 1940. Adviser does not manage any other mutual fund; however, Adviser
does manage various individual, profit-sharing, pension and institutional
accounts.
Set forth below are the substantial business engagements during the
two last fiscal years of each director or officer of Adviser.
NAME BUSINESS AND OTHER CONNECTIONS
---- ------------------------------
Richard Imperiale President and Treasurer of Adviser
Member of Board of Directors of Adviser
Jeffrey DeCora Vice President and Secretary of Adviser
Member of Board of Directors of Adviser
Item 29. Principal Underwriters
----------------------
(a) Rodman and Renshaw (the "Distributor") acts as the Registrant's
principal underwriter.
(b) Information with respect to directors and officers of Distributor is
as follows:
Names and Principal Positions and Offices with Positions and Officers
Addresses Principal Underwriter with Registrant
- ------------------ ---------------------- --------------------
Francis L. Kirby Chief Executive Officer Trustee
Gilbert R. Ott, Jr. General Counsel and Secretary Not Applicable
Robert A. Bade Senior Vice President Not Applicable
Item 30. Location of Accounts and Records
----------------------------------
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules promulgated thereunder are in the physical possession of Registrant,
Registrant's Custodian and Registrant's Administrator as
follows: the documents required to be maintained by paragraphs
(5) and (11) of Rule 31a-1(b) will be maintained by the
Registrant; the documents required to be maintained by paragraphs (3) and
(7) of Rule 31a-1(b) will be maintained by Registrant's
Custodian; and all other records will be maintained by Registrant's
Administrator.
Item 31. Management Services
--------------------
All management-related service contracts entered into by Registrant
are discussed in Parts A and B of this Registration Statement.
Item 32. Undertakings
-------------
Registrant undertakes to, if requested to do so by the holders of at
least 10% of Registrant's outstanding shares, call a meeting of shareholders for
the purpose of voting upon the question of removal of a trustee or trustees and
assist in communications with other shareholders as required by Section 16(c) of
the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amended Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amended Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Milwaukee and State of
Wisconsin on the 27th day of February, 1998.
THE JEFFERSON FUND GROUP TRUST
(Registrant)
By: /s/ Lawrence Kujawski
------------------------------------
Lawrence Kujawski
President, Treasurer and Trustee
Pursuant to the requirements of the Securities Act of 1933, this
Amended Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
Name Title Date
----- ------ ----
/s/ Lawrence Kujawski Principal Executive, Financial February 27, 1998
- --------------------- and Accounting Officer,
Lawrence Kujawski President, Treasurer, and
Trustee
/s/ Richard Imperiale Chairman, Secretary and Trustee February 27, 1998
- ---------------------
Richard Imperiale Trustee February 27, 1998
*<F4>
- --------------------
F.L. Kirby Trustee February 27, 1998
*<F4>
- --------------------
John Komives Trustee February 27, 1998
*<F4>
- ----------------------
J. Michael Borden Trustee February 27, 1998
*<F4>
- ----------------------
Dennis Lasser Trustee February 27, 1998
*<F4>
- -----------------------
James L. Stanko
*<F4>By Richard Imperiale, Attorney-in-fact
EXHIBIT INDEX
-------------
Exhibit No. Exhibit Page No.
----------- -------- --------
(1.1) Registrant's Certificate of Trust
(1.2) Registrant's Trust Instrument
(2) Registrant's Bylaws
(3) None
(4) None
(5) Investment Advisory Agreement
(6.1) Distribution Agreement
(6.2) Form of Sales Agreement
(7) None
(8) Custodian Agreement with
Firstar Trust Company
(9.1) Administration Agreement with
Firstar Trust Company
(9.2) Transfer Agent Agreement with
Firstar Trust Company
(9.3) Accounting Services Agreement
with Firstar Trust Company
(10) Opinion of Foley & Lardner,
counsel for Registrant
(11.1) Consent of Coopers & Lybrand L.L.P.
(11.2) Consent of KPMG Peat Marwick
(12) None
(13) Subscription Agreement
(14.1) Restated Form of Individual Retirement Custodial
Account
(14.2) Revised Form of Defined Contribution Retirement Plan
(15.1) Distribution and Servicing Plan of Class A Shares
(15.2) Distribution and Servicing Plan of Class B Shares
(15.3) Distribution Assistance Agreement (Class A)
(15.4) Distribution Assistance Agreement (Class B)
(16) Schedule for Computation of Performance Quotation*<F5>
(17.1) Power of Attorney for Lawrence Kujawski, John
Komives, Michael Borden, Dennis Lasser and James
Stanko, Trustees of the Trust.*<F5>
(17.2) Power of Attorney for F.L. Kirby*<F5>
(18) Plan pursuant to Rule 18f-3 For Operation of Multi
Class System*<F5>
(27) Financial Data Schedule
*<F5>Incorporated by reference.
EXHIBIT 1.1
CERTIFICATE OF TRUST
OF
THE JEFFERSON FUND GROUP TRUST
This Certificate of Trust is being duly executed and filed on behalf of the
business trust formed hereby by the undersigned, all of the trustees of the
Trust, to form a business trust pursuant to the Delaware Business Trust Act (12
Del. C. 3801 et seq.).
- ------- ------
ARTICLE I
---------
The name of the business trust formed hereby is "The Jefferson Fund Group
Trust" (the "Trust").
ARTICLE II
----------
The Trust is, or will become prior to the issuance of beneficial interests,
a registered investment company under the Investment Company Act of 1940, as
amended (15 U.S.C. 80a-1 et seq.).
------
ARTICLE III
-----------
The address of the registered office of the Trust in the State of Delaware
is 32 Loockerman Square, Suite L-100, in the City of Dover, County of Kent,
State of Delaware 19901. The name of its registered agent is Prentice-Hall.
ARTICLE IV
----------
The Trust Instrument relating to the Trust provides for the issuance of one
or more series of shares of beneficial interest in the Trust. Separate and
distinct records shall be maintained by the Trust for each series and the assets
associated solely with any such series shall be held and accounted for
separately from the assets of the Trust associated solely with any other series.
As provided in the Trust Instrument, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets of such series only,
and not against the assets of the Trust generally.
ARTICLE V
---------
This Certificate of Trust shall become effective upon filing in the office
of the Secretary of State of Delaware.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of Trust
as of this 19th day of January, 1995.
THE JEFFERSON FUND GROUP TRUST
/s/ Keith Pinsoneault
----------------------------------
Keith Pinsoneault, as Trustee
/s/ Richard Imperiale
----------------------------------
Richard Imperiale, as Trustee
/s/ Lawrence Kujawski
----------------------------------
Lawrence Kujawski, as Trustee
/s/ John Komives
----------------------------------
John Komives, as Trustee
EXHIBIT 1.2
THE JEFFERSON FUND GROUP TRUST
TRUST INSTRUMENT
DATED JANUARY 20, 1995
TABLE OF CONTENTS
Page
----
ARTICLE I -- NAME, DEFINITIONS AND CERTIFICATE OF TRUST 1
Section 1.1. Name 1
Section 1.2. Definitions 1
Section 1.3. Certificate of Trust 3
ARTICLE II -- BENEFICIAL INTEREST 3
Section 2.1. Shares of Beneficial Interest 3
Section 2.2. Issuance of Shares 3
Section 2.3. Register of Shares and Share Certificates 4
Section 2.4. Transfer of Shares 5
Section 2.5. Treasury Shares 5
Section 2.6. Establishment of Series 5
Section 2.7. Investment in the Trust 6
Section 2.8. Assets and Liabilities of Series 7
Section 2.9. No Preemptive Rights 8
Section 2.10. Personal Liability of Shareholders 9
Section 2.11. Assent to Trust Instrument 9
ARTICLE III -- THE TRUSTEES 9
Section 3.1. Management of the Trust 9
Section 3.2. Initial Trustees 10
Section 3.3. Term of Office of Trustees 10
Section 3.4. Vacancies and Appointment of Trustees 11
Section 3.5. Temporary Absence of Trustee 12
Section 3.6. Number of Trustees 12
Section 3.7. Effect of Death, Resignation, etc. of a Trustee 12
Section 3.8. Ownership of Assets of the Trust 12
ARTICLE IV -- POWERS OF THE TRUSTEES 13
Section 4.1. Powers 13
Section 4.2. Issuance and Repurchase of Shares 17
Section 4.3. Trustees and Officers as Shareholders 17
Section 4.4. Action by the Trustees 17
Section 4.5. Chairman of the Trustees 18
Section 4.6. Principal Transactions 18
ARTICLE V -- EXPENSES OF THE TRUST 19
Section 5.1. Trustee Reimbursement 19
ARTICLE VI -- INVESTMENT ADVISER, PRINCIPAL UNDERWRITER
AND TRANSFER AGENT 20
Section 6.1. Investment Adviser 20
Section 6.2. Principal Underwriter 21
Section 6.3. Transfer Agent 21
Section 6.4. Parties to Contract 21
Section 6.5. Provisions and Amendments 22
ARTICLE VII -- SHAREHOLDERS' VOTING POWERS AND MEETINGS 22
Section 7.1. Voting Powers 22
Section 7.2. Meetings 24
Section 7.3. Quorum and Required Vote 24
ARTICLE VIII -- CUSTODIAN 25
Section 8.1. Appointment and Duties 25
Section 8.2. Central Certificate System 26
ARTICLE IX -- DISTRIBUTIONS AND REDEMPTIONS 27
Section 9.1. Distributions 27
Section 9.2. Redemptions 27
Section 9.3. Determination of Net Asset Value
and Valuation of Portfolio Assets 28
Section 9.4. Suspension of the Right of Redemption 29
Section 9.5. Redemption of Shares in Order to Qualify as
Regulated Investment Company 30
Section 9.6. Redemption of De Minimis Accounts 30
ARTICLE X -- LIMITATION OF LIABILITY AND INDEMNIFICATION 31
Section 10.1. Limitation of Liability 31
Section 10.2. Indemnification 31
Section 10.3. Shareholders 33
ARTICLE XI -- MISCELLANEOUS 34
Section 11.1. Trust Not a Partnership 34
Section 11.2. Trustee's Good Faith Action, Expert Advice,
No Bond or Surety 34
Section 11.3. Establishment of Record Dates 35
Section 11.4. Termination of Trust 36
Section 11.5. Reorganization 37
Section 11.6. Filing of Copies, References, Headings 38
Section 11.7. Applicable Law 38
Section 11.8. Amendments 39
Section 11.9. Fiscal Year 40
Section 11.10. Provisions in Conflict with Law 40
THE JEFFERSON FUND GROUP TRUST
DATED JANUARY 20, 1995
TRUST INSTRUMENT, dated as of January 20, 1995, by and among Keith
Pinsoneault, Richard Imperiale, Lawrence Kujawski, and John Komives, as
trustees, and each person who becomes a Shareholder (as hereinafter defined) in
accordance with the terms hereof.
WHEREAS, the parties hereto desire to create a business trust pursuant to
the Delaware Act (as hereinafter defined) for the investment and reinvestment of
funds contributed thereto.
NOW, THEREFORE, the parties hereto declare that all money and property
contributed to the trust hereunder shall be held and managed in trust under this
Trust Instrument for the benefit of the Shareholders as herein set forth below.
ARTICLE I
---------
NAME, DEFINITIONS AND CERTIFICATE OF TRUST
------------------------------------------
Section 1.1. Name. The name of the business trust created hereby is "The
- ----------- ----
Jefferson Fund Group Trust".
Section 1.2. Definitions. Wherever used herein, unless otherwise required by
- ----------- -----------
the context or specifically provided:
(a) "Bylaws" means the Bylaws referred to in Article IV, Section 4.1(e)
hereof, as from time to time amended.
(b) The term "Commission" has the meaning given it in the 1940 Act. The
terms "Affiliated Person", "Assignment", "Interested Person" and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as modified by
or interpreted by any applicable order or orders of the Commission or any rules
or regulations adopted or interpretive releases of the Commission thereunder.
"Majority Shareholder Vote" shall have the same meaning as the term "vote of a
majority of the outstanding voting securities" is given in the 1940 Act, as
modified by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretive releases of the Commission
thereunder.
(c) The "Delaware Act" refers to the Delaware Business Trust Act, 12 Del.
---
C. 3801 et seq., as such Act may be amended from time to time.
- - ------
(d) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article IX, Section 9.3 hereof.
(e) "Outstanding Shares" means those Shares shown from time to time in the
books of the Trust or its Transfer Agent as then issued and outstanding, but
shall not include Shares which have been redeemed or repurchased by the Trust
and which are at the time held in the treasury of the Trust.
(f) "Person" means a natural person, partnership, limited partnership,
trust, estate, association, corporation, custodian, nominee or any other
individual or entity in its own or any representative capacity.
(g) "Series" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.6 hereof.
(h) "Shareholder" means a record owner of Outstanding Shares of the Trust.
(i) "Shares" means the equal proportionate transferable units of
beneficial interest into which the beneficial interest of each Series of the
Trust or class thereof shall be divided and may include fractions of Shares as
well as whole Shares.
(j) The "Trust" refers to The Jefferson Fund Group Trust business trust
created hereby, and reference to the Trust, when applicable to one or more
Series of the Trust, shall refer to any such Series.
(k) The "Trustees" means the Persons who have signed this Trust Instrument
as trustees, so long as they shall continue to serve as trustees of the Trust in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed as Trustees in accordance with the provisions of Section
3.4 hereof, and reference herein to a Trustee or to the Trustees shall refer to
such Persons in their capacity as Trustees hereunder.
(l) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of one or
more of the Trust or any Series, or the Trustees on behalf of the Trust or any
Series.
(m) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
Section 1.3. Certificate of Trust. Immediately upon the execution of this
- ----------- --------------------
Trust Instrument, the Trustees shall file a Certificate of Trust with respect to
the Trust in the office of the Secretary of State of the State of Delaware
pursuant to the Delaware Act.
ARTICLE II
----------
BENEFICIAL INTEREST
-------------------
AI)S1)Section 2.1. Shares of Beneficial Interest. The beneficial interest
----------------- -----------------------------
in the Trust shall be divided into such transferable Shares of one or more
separate and distinct Series or classes of a Series as the Trustees shall from
time to time create and establish. The number of Shares of each Series, and
class thereof, authorized hereunder is unlimited. Each Share shall have no par
value. All Shares issued hereunder, including without limitation, Shares issued
in connection with a dividend in Shares or a split or reverse split of Shares,
shall be fully paid and nonassessable.
Section 2.2. Issuance of Shares. The Trustees in their discretion may, from
- ----------- ------------------
time to time, without vote of the Shareholders, issue Shares, in addition to the
then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, subject to
applicable law, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with,
the assumption of liabilities) and businesses. In connection with any issuance
of Shares, the Trustees may issue fractional Shares and Shares held in the
treasury. The Trustees may from time to time divide or combine the Shares into
a greater or lesser number without thereby changing the proportionate beneficial
interests in the Trust. Contributions to the Trust may be accepted for, and
Shares shall be redeemed as, whole Shares and/or 1/1,000th of a Share or
integral multiples thereof.
Section 2.3. Register of Shares and Share Certificates. A register shall be
- ----------- -----------------------------------------
kept at the principal office of the Trust or an office of the Trust's transfer
agent which shall contain the names and addresses of the Shareholders of each
Series, the number of Shares of that Series (or any class or classes thereof)
held by them respectively and a record of all transfers thereof. As to Shares
for which no certificate has been issued, such register shall be conclusive as
to who are the holders of the Shares and who shall be entitled to receive
dividends or other distributions or otherwise to exercise or enjoy the rights of
Shareholders. No Shareholder shall be entitled to receive payment of any
dividend or other distribution, nor to have notice given to him as herein or in
the Bylaws provided, until he has given his address to the transfer agent or
such other officer or agent of the Trustees as shall keep the said register for
entry thereon. The Trustees, in their discretion, may authorize the issuance of
share certificates and promulgate appropriate rules and regulations as to their
use. Such certificates may be issuable for any purpose limited in the Trustees
discretion. In the event that one or more certificates are issued, whether in
the name of a shareholder or a nominee, such certificate or certificates shall
constitute evidence of ownership of Shares for all purposes, including transfer,
assignment or sale of such Shares, subject to such limitations as the Trustees
may, in their discretion, prescribe.
Section 2.4. Transfer of Shares. Except as otherwise provided by the Trustees,
- ----------- ------------------
Shares shall be transferable on the records of the Trust only by the recent
holder thereof or by his agent thereunto duly authorized in writing, upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate, if one is
outstanding, and such evidence of the genuineness of each such execution and
authorization and of such other matters as may be required by the Trustees.
Upon such delivery the transfer shall be recorded on the register of the Trust.
Until such record is made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereunder and neither the Trustees nor
the Trust, nor any transfer agent registrar nor any officer, employee or agent
of the Trust shall be affected by any notice of the proposed transfer.
AI)S2)Section 2.5. Treasury Shares. Shares held in the treasury shall,
----------------- ---------------
until reissued pursuant to Section 2.2 hereof, not confer any voting rights on
the Trustees, nor shall such Shares be entitled to any dividends or other
distributions declared with respect to the Shares.
Section 2.6. Establishment of Series. The Shares issued hereunder shall
- ----------- -----------------------
consist of one or more Series and separate and distinct records shall be main-
tained by the Trust for each Series and the assets associated solely with any
such Series shall be held and accounted for separately from the assets of the
Trust associated solely with any other Series. The Trustees shall have full
power and authority, in their sole discretion, and without obtaining any prior
authorization or vote of the Shareholders of any Series of the Trust, to
establish and designate and to change in any manner any such Series of Shares or
any classes of initial or additional Series and to fix such preferences, voting
powers, rights and privileges of such Series or classes thereof as the Trustees
may from time to time determine, to divide or combine the Shares or any Series
or classes thereof into a greater or lesser number, to classify or reclassify
any issued Shares or any Series or classes thereof into one or more Series or
classes of Shares, and to take such other action with respect to the Shares as
the Trustees may deem desirable. The establishment and designation of any
Series shall be effective upon the adoption of a resolution by a majority of the
Trustees setting forth such establishment and designation and the relative
rights and preferences of the Shares of such Series. A Series may issue any
number of Shares but need not issue any shares. At any time that there are no
Shares outstanding of any particular Series previously established and
designated, the Trustees may by a majority vote abolish that Series and the
establishment and designation thereof.
All references to Shares in this Trust Instrument shall be deemed to be
Shares of any or all Series, or classes thereof, as the context may require.
All provisions herein relating to the Trust shall apply equally to each Series
of the Trust, and each class thereof, except as the context otherwise requires.
Each Share of a Series of the Trust shall represent an equal beneficial
interest in the net assets of such Series. Each holder of outstanding Shares of
a Series shall be entitled to receive his pro rata share of distributions of
income and capital gains, if any, made with respect to such Series. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the funds
and property of such Series of the Trust.
Section 2.7. Investment in the Trust. The Trustees shall accept investments in
- ----------- ------------------------
any Series of the Trust from such Persons and on such terms as they may from
time to time authorize. At the Trustees' discretion, such investments, subject
to applicable law, may be in the form of cash or securities in which the
affected Series is authorized to invest, valued as provided in Article IX,
Section 9.3 hereof. Investments in a Series shall be credited to each
Shareholder's account in the form of full Shares at the Net Asset Value per
Share next determined after the investment is received; provided, however, that
the Trustees may, in their sole discretion, (a) fix the Net Asset Value per
Share of the initial capital contribution, (b) impose a sales charge upon
investments in the Trust in such manner and at such time determined by the
Trustees or (c) issue fractional Shares.
Section 2.8. Assets and Liabilities of Series. All consideration received by
- ------------ --------------------------------
the Trust for the issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
be held and accounted for separately from the other assets of the Trust and of
every other Series and may be referred to herein as "assets belonging to" that
Series. The assets belonging to a particular Series shall belong to that Series
for all purposes, and to no other Series, subject only to the rights of
creditors of that Series. In addition, any assets, income, earnings, profits or
funds, or payments and proceeds with respect thereto, which are not readily
identifiable as belonging to any particular Series shall be allocated by the
Trustees between and among one or more of the Series in such manner as the
Trustees, in their sole discretion, deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of all Series
for all purposes, and such assets, income, earnings, profits or funds, or
payments and proceeds with respect thereto shall be assets belonging to that
Series. The assets belonging to a particular Series shall be so recorded upon
the books of the Trust, and shall be held by the Trustees in trust for the
benefit of the holders of Shares of that Series. The assets belonging to each
particular Series shall be charged with the liabilities of that Series and all
expenses, costs, charges and reserves attributable to that Series. Any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular Series shall be allocated
and charged by the Trustees between or among any one or more of the Series in
such manner as the Trustees in their sole discretion deem fair and equitable.
Each such allocation shall be conclusive and binding upon the Shareholders of
all Series for all purposes. Without limitation of the foregoing provisions of
this Section 2.8, but subject to the right of the Trustees in their discretion
to allocate general liabilities, expenses, costs, charges or reserves as herein
provided, the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Series shall be
enforceable against the assets of such Series only, and not against the assets
of the Trust generally. Notice of this contractual limitation on inter-Series
liabilities may, in the Trustee's sole discretion, be set forth in the
Certificate of Trust of the Trust (whether originally or by amendment) as filed
or to be filed in the Office of the Secretary of State of the State of Delaware
pursuant to the Delaware Act, and upon the giving of such notice in the
Certificate of Trust, the statutory provisions of Section 3804 of the Delaware
Act relating to limitations on inter-Series liabilities (and the statutory
effect under Section 3804 of setting forth such notice in the Certificate of
Trust) shall become applicable to the Trust and each Series. Any Person
extending credit to, contracting with or having any claim against any Series may
look only to the assets of that Series to satisfy or enforce any debt,
liability, obligation or expense incurred, contracted for or otherwise existing
with respect to that Series. No Shareholder or former Shareholder of any Series
shall have a claim on or any right to any assets allocated or belonging to any
other Series.
Section 2.9. No Preemptive Rights. Shareholders shall have no preemptive or
- ----------- --------------------
other right to subscribe to any additional Shares or other securities issues by
the Trust or the Trustees, whether of the same or other Series.
Section 2.10. Personal Liability of Shareholders. Each Shareholder of the
- ------------ ----------------------------------
Trust shall not be personally liable for the debts, liabilities, obligations and
expenses incurred by, contracted for, or otherwise existing with respect to, the
Trust or any Series thereof. The Trustees shall have no power to bind any
Shareholder personally or, except as provided by applicable law, to call upon
any Shareholder for the payment of any sum of money or assessment whatsoever
other than such as the Shareholder may at any time personally agree to pay by
way of subscription for any Shares or otherwise. Every note, bond, contract or
other undertaking issued by or on behalf of the Trust or the Trustees relating
to the Trust or to any Series thereof shall include a recitation limiting the
obligation represented thereby to the Trust or to one or more Series thereof and
its or their assets (but the omission of such a recitation shall not operate to
bind any Shareholder or Trustee of the Trust).
Section 2.11. Assent to Trust Instrument. Every Shareholder, by virtue of
- ------------ --------------------------
having purchased a Share, shall be held to have expressly assented to, and
agreed to be bound by, the terms hereof.
ARTICLE III
-----------
THE TRUSTEES
------------
Section 3.1. Management of the Trust. The Trustees shall have exclusive and
- ----------- -----------------------
absolute control over the Trust Property and over the business of the Trust to
the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Trust Instrument. The Trustees shall have power to conduct
the business of the Trust and carry on its operations in any and all of its
branches and maintain offices both within and without the State of Delaware, in
any and all states of the United States of America, in the District of Columbia,
in any and all commonwealths, territories, dependencies, colonies, or
possessions of the United States of America, and in any foreign jurisdiction and
to do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the Trust
although such things are not herein specifically mentioned. Any determination
as to what is in the interests of the Trust made by the Trustees in good faith
shall be conclusive. In construing the provisions of this Trust Instrument, the
presumption shall be in favor of a grant of power to the Trustees.
The enumeration of any specific power in this Trust Instrument shall not be
construed as limiting the aforesaid power. The powers of the Trustees may be
exercised without order of or resort to any court.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.4 of this Article III, the Trustees shall be elected by
the Shareholders owning of record a plurality of the Shares voting at a meeting
of Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
In the event that less than a majority of the Trustees holding office have been
elected by Shareholders, the Trustees then in office will call a Shareholders'
meeting for the election of Trustees.
Section 3.2. Initial Trustees. The initial Trustees shall be the persons named
- ----------- ----------------
herein. On a date fixed by the Trustees, the Shareholders shall elect at least
three (3) but not more than twelve (12) Trustees, as specified by the Trustees
pursuant to Section 3.6 of this Article III.
Section 3.3. Term of Office of Trustees. The Trustees shall hold office during
- ----------- --------------------------
the lifetime of this Trust, and until its termination as herein provided; except
(a) that any Trustee may resign his trust by written instrument signed by him
and delivered to the other Trustees, which shall take effect upon such delivery
or upon such later date as is specified therein; (b) that any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing to be
retired or who has died, become physically or mentally incapacitated by reason
of disease or otherwise, or is otherwise unable to serve, may be retired by
written instrument signed by a majority of the other Trustees, specifying the
date of his retirement; and (d) that a Trustee may be removed at any meeting of
the Shareholders of the Trust by a vote of Shareholders owning at least two-
thirds of the outstanding Shares.
Section 3.4. Vacancies and Appointment of Trustees. In case of the declination
- ----------- -------------------------------------
to serve, death, resignation, retirement, removal, physical or mental incapacity
by reason of disease or otherwise, or a Trustee is otherwise unable to serve, or
an increase in the number of Trustees, a vacancy shall occur. Whenever a
vacancy in the Board of Trustees shall occur, until such vacancy is filled, the
other Trustees shall have all the powers hereunder and the certificate of the
other Trustees of such vacancy shall be conclusive. In the case of an existing
vacancy, the remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the limitations
under the 1940 Act. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by resolution of the Trustees,
duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to this Section 3.4 shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The power to appoint a Trustee pursuant to this
Section 3.4 is subject to the provisions of Section 16(a) of the 1940 Act.
Section 3.5. Temporary Absence of Trustee. Any Trustee may, by power of
- ----------- ----------------------------
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as herein
otherwise expressly provided.
Section 3.6. Number of Trustees. The number of Trustees shall initially be
- ----------- ------------------
four (4), and thereafter shall be such number as shall be fixed from time to
time by a majority of the Trustees; provided, however, that the number of
Trustees shall in no event be less than three (3) nor more than twelve (12).
Section 3.7. Effect of Death, Resignation, etc. of a Trustee. The declination
- ----------- -----------------------------------------------
to serve, death, resignation, retirement, removal, incapacity, or inability of
the Trustees, or any one of them, shall not operate to terminate the Trust or to
revoke any existing agency created pursuant to the terms of this Trust
Instrument.
AI)S3)Section 3.8. Ownership of Assets of the Trust. The assets of the
----------------- --------------------------------
Trust and of each Series thereof shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. Legal title in all of the assets of the
Trust and the right to conduct any business shall at all times be considered as
vested in the Trustees on behalf of the Trust, except that the Trustees may
cause legal title to any Trust Property to be held by, or in the name of the
Trust, or in the name of any person as nominee. No Shareholder shall be deemed
to have a severable ownership in any individual asset of the Trust or of any
Series or any right of partition or possession thereof, but each Shareholder
shall have, except as otherwise provided for herein, a proportionate undivided
beneficial interest in the Trust or Series. The Shares shall be personal
property giving only the rights specifically set forth in this Trust Instrument
or the Delaware Act.
ARTICLE IV
----------
POWERS OF THE TRUSTEES
----------------------
AI)S4)Section 4.1. Powers. The Trustees in all instances shall act as
----------------- ------
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust. The
Trustees shall not in any way be bound or limited by present or future laws or
customs in regard to trust investments, but shall have full authority and power
to make any and all investments which they, in their sole discretion, shall deem
proper to accomplish the purpose of this Trust without recourse to any court or
other authority. Subject to any applicable limitation in this Trust Instrument
or the Bylaws of the Trust, the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or limited by any
present or future law or custom in regard to investments by trustees, and to
sell, exchange, lend, pledge, mortgage, hypothecate, write options on and lease
any or all of the assets of the Trust;
(b) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations;
(c) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; to endorse, guarantee, or undertake
the performance of an obligation or engagement of any other Person and to lend
Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or by the
Trust itself, or both, or otherwise pursuant to a plan of distribution of any
kind;
(e) To adopt Bylaws not inconsistent with this Trust Instrument providing
for the conduct of the business of the Trust and to amend and repeal them to the
extent that they do not reserve that right to the Shareholders; such Bylaws
shall be deemed incorporated and included in this Trust Instrument;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that are
members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Trust Instrument or in the Bylaws;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the Bylaws;
(j) To delegate such authority as they consider desirable to any officers
of the Trust and to any investment adviser, manager, custodian, underwriter or
other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust, subject to
the provisions of Article XI, Section 11.4(b) hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any trust,
whether in bearer, book entry, unregistered or other negotiable form; or either
in the name of the Trust or in the name of a custodian or a nominee or nominees,
subject in either case to proper safeguards according to the usual practice of
Delaware business trusts or investment companies;
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish classes of
such Series having relative rights, powers and duties as they may provide
consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular Series or
to apportion the same between or among two or more Series, provided that any
liabilities or expenses incurred by a particular Series shall be payable solely
out of the assets belonging to that Series as provided for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern, and to pay calls or
subscriptions with respect to any security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(s) To make distributions of income and of capital gains to Shareholders
in the manner hereinafter provided;
(t) To establish, from time to time, a minimum investment for Shareholders
in the Trust or in one or more Series or class, and to require the redemption of
the Shares of any Shareholders whose investment is less than such minimum upon
giving notice to such Shareholder;
(u) To establish one or more committees, to delegate any of the powers of
the Trustees to said committees and to adopt a committee charter providing for
such responsibilities, membership (including Trustees, officers or other agents
of the Trust therein) and any other characteristics of said committees as the
Trustees may deem proper. Notwithstanding the provisions of this Article IV,
and in addition to such provisions or any other provision of this Trust
Instrument or of the Bylaws, the Trustees may by resolution appoint a committee
consisting of less than the whole number of Trustees then in office, which
committee may be empowered to act for and bind the Trustees and the Trust, as if
the acts of such committee were the acts of all the Trustees then in office,
with respect to the institution, prosecution, dismissal, settlement, review or
investigation of any action, suit or proceeding which shall be pending or
threatened to be brought before any court, administrative agency or other
adjudicatory body;
(v) To interpret the investment policies, practices or limitations of any
Series;
(w) To establish a registered office and have a registered agent in the
state of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more the Trustees in their capacity as such hereunder shall be deemed an action
on behalf of the Trust or the applicable Series, and not an action in an
individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the application
of any payments made or property transferred to the Trustees or upon their
order.
Section 4.2. Issuance and Repurchase of Shares. The Trustees shall have the
- ------------ ----------------------------------
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell,
reissue, dispose of, and otherwise deal in Shares and, subject to the provisions
set forth in Articles II and IX, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property of the
Trust, or the particular Series of the Trust, with respect to which such Shares
are issued.
Section 4.3. Trustees and Officers as Shareholders. Any Trustee, officer or
- ----------- --------------------------------------
other agent of the Trust may acquire, own and dispose of Shares to the same
extent as if he were not a Trustee, officer or agent; and the Trustees may issue
and sell or cause to be issued and sold Shares to and buy such Shares from any
such person or any firm or company in which he is interested, subject only to
the general limitations herein contained as to the sale and purchase of such
Shares; and all subject to any restrictions which may be contained in the
Bylaws.
Section 4.4. Action by the Trustees. The Trustees shall act by majority vote
- ----------- -----------------------
at a meeting only called or by unanimous written consent without a meeting or by
telephone meeting provided a quorum of Trustees participate in any such
telephone meeting, unless the 1940 Act requires that a particular action be
taken only at a meeting at which the Trustees are present in person. At any
meeting of the Trustees, a majority of the Trustees shall constitute a quorum.
Meetings of the Trustees may be called orally or in writing by the Chairman of
the Board of Trustees or by any two other Trustees. Notice of the time, date
and place of all meetings of the Trustees shall be given by the party calling
the meeting to each Trustee by telephone, telefax, or telegram sent to his home
or business address at least twenty-four hours in advance of the meeting or by
written notice mailed to his home or business address at least seventy-two hours
in advance of the meeting. Notice need not be given to any Trustee who attends
the meeting without objecting to the lack of notice or who executes a written
waiver of notice with respect to the meeting. Any meeting conducted by
telephone shall be deemed to take place at the principal office of the Trust, as
determined by the Bylaws or the Trustees. Subject to the requirements of the
1940 Act, the Trustees by majority vote may delegate to any one or more of their
number their authority to approve particular matters or take particular actions
on behalf of the Trust. Written consents or waivers of the Trustees may be
executed in one or more counterparts. Execution of a written consent or waiver
and delivery thereof to the Trust may be accomplished by telefax.
Section 4.5. Chairman of the Trustees. The Trustees shall appoint one of their
- ---------- ------------------------
number to be Chairman of the Board of Trustees. The Chairman shall preside at
all meetings of the Trustees, shall be responsible for the execution of policies
established by the Trustees and the administration of the Trust, and may be (but
is not required to be) the chief executive, financial and/or accounting officer
of the Trust.
Section 4.6. Principal Transactions. Except to the extent prohibited by
- ----------- ----------------------
applicable law, the Trustees may, on behalf of the Trust, buy any securities
from or sell any securities to, or lend any assets of the Trust to, any Trustee
or officer of the Trust or any firm of which any such Trustee or officer is a
member acting as principal, or have any such dealings with any investment
adviser, distributor or transfer agent for the Trust or with any Interested
Person of such person; and the Trust may employ any such person, or firm or
company in which such person is an Interested Person, as broker, legal counsel,
registrar, investment adviser, distributor, transfer agent, dividend disbursing
agent, custodian or in any other capacity upon customary terms.
ARTICLE V
---------
EXPENSES OF THE TRUST
---------------------
Section 5.11. Trustee Reimbursement. Subject to the provisions of Article II,
- ------------ ---------------------
Section 2.8 hereof, the Trustees shall be reimbursed from the Trust estate or
the assets belonging to the appropriate Series for their expenses and
disbursements, including, without limitation, fees and expenses of Trustees who
are not Interested Persons of the Trust, interest expense, taxes, fees and
commissions of every kind, expenses of pricing Trust portfolio securities,
expenses of issue, repurchase and redemption of shares, including expenses
attributable to a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under Federal and State laws
and regulations or under the laws of any foreign jurisdiction, charges of third
parties, including investment advisers, managers, custodians, transfer agents,
portfolio accounting and/or pricing agents, and registrars, expenses of
preparing and setting up in type prospectuses and statements of additional
information and other related Trust documents, expenses of printing and
distributing prospectuses sent to existing Shareholders, auditing and legal
expenses, reports to Shareholders, expenses of meetings of Shareholders and
proxy solicitations therefor, insurance expenses, association membership dues
and for such non-recurring items as may arise, including litigation to which the
Trust (or a Trustee acting as such) is a party, and for all losses and
liabilities by them incurred in administering the Trust, and for the payment of
such expenses, disbursements, losses and liabilities the Trustees shall have a
lien on the assets belonging to the appropriate Series, or in the case of an
expense allocable to more than one Series, on the assets of each such Series,
prior to any rights or interests of the Shareholders thereto. This section
shall not preclude the Trust from directly paying any of the aforementioned fees
and expenses.
ARTICLE VI
----------
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
------------------------------------------------------------
Section 6.1. Investment Adviser. The Trustees may in their discretion, from
- ----------- ------------------
time to time, enter into an investment advisory or management contract or
contracts with respect to the Trust or any Series whereby the other party or
parties to such contract or contracts shall undertake to furnish the Trustees
with such management, investment advisory, statistical and research facilities
and services and such other facilities and services, if any, and all upon such
terms and conditions, as the Trustees may in their discretion determine;
provided, however, that the initial approval and entering into of such contract
or contracts shall be subject to a Majority Shareholder Vote. Notwithstanding
any other provision of this Trust Instrument, the Trustees may authorize any
investment adviser (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales or exchanges of
portfolio securities, other investment instruments of the Trust, or other Trust
Property on behalf of the Trustees, or may authorize any officer, agent, or
Trustee to effect such purchases, sales or exchanges pursuant to recommendations
of the investment advisor (and all without further action by the Trustees). Any
such purchases, sales and exchanges shall be deemed to have been authorized by
all of the Trustees.
The Trustees may authorize, subject to applicable requirements of the 1940
Act, including those relating to Shareholder approval, the investment advisor to
employ, from time to time, one or more sub-advisors to perform such of the acts
and services of the investment advisor, and upon such terms and conditions, as
may be agreed upon between the investment advisor and sub-advisor. Any
reference in this Trust Instrument to the investment advisor shall be deemed to
include such sub-advisors, unless the context otherwise requires.
Section 6.2. Principal Underwriter. The Trustees may in their discretion from
- ----------- ---------------------
time to time enter into an exclusive or non-exclusive underwriting contract or
contracts providing for the sale of Shares, whereby the Trust may either agree
to sell Shares to the other party to the contract or appoint such other party
its sales agent for such Shares. In either case, the contract shall be on such
terms and conditions, if any, as may be prescribed in the Bylaws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article VI, or of the Bylaws; and
such contract may also provide for the repurchase or sale of Shares by such
other party as principal or as agent of the Trust.
Section 6.3. Transfer Agent. The Trustees may in their discretion from time to
- ----------- --------------
time enter into one or more transfer agency and Shareholder service contracts
whereby the other party or parties shall undertake to furnish the Trustees with
transfer agency and Shareholder services. The contract or contracts shall be on
such terms and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Trust Instrument or of the Bylaws.
Section 6.4. Parties to Contract. Any contract of the character described in
- ----------- -------------------
Sections 6.1, 6.2, and 6.3 of this Article VI or any contract of the character
described in Article VIII hereof may be entered into with any corporation, firm,
partnership, trust or association, although one or more of the Trustees or
officers of the Trust may be an officer, director, trustee, shareholder, or
member of such other party to the contract, and no such contract shall be
invalidated or rendered void or voidable by reason of the existence of any
relationship, nor shall any person holding such relationship be disqualified
from voting on or executing the same in his capacity as Shareholder and/or
Trustee, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was not
inconsistent with the provisions of this Article VI or Article VIII hereof or of
the Bylaws. The same person (including a firm, corporation, partnership, trust,
or association) may be the other party to contracts entered into pursuant to
Sections 6.1, 6.2, and 6.3 of this Article VI or pursuant to Article VIII
hereof, and any individual may be financially interested or otherwise affiliated
with persons who are parties to any or all of the contracts mentioned in this
Section 6.4.
AI)S1)Section 6.5. Provisions and Amendments. Any contract entered into
----------------- -------------------------
pursuant to Sections 6.1 or 6.2 of this Article VI shall be consistent with and
subject to the requirements of Section 15 of the 1940 Act or other applicable
Act of Congress hereafter enacted with respect to its continuance in effect, its
termination, and the method of authorization and approval of such contract or
renewal thereof, and no amendment to any contract, entered into pursuant to
Section 6.1 of this Article VI shall be effective unless assented to in a manner
consistent with the requirements of said Section 15, as modified by an
applicable rule, regulation or order of the Commission.
ARTICLE VII
-----------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
Section 7.1. Voting Powers. The Shareholders shall have power to vote only (i)
- ------------ -------------
for the election of Trustees as provided in Article III, Sections 3.1 and 3.2
hereof, (ii) for the removal of Trustees as provided in Article III, Section
3.3(d) hereof, (iii) with respect to any investment advisory or management
contract as provided in Article VI, Sections 6.1 and 6.5 hereof, and (iv) with
respect to such additional matters relating to the Trust as may be required by
law, by this Trust Instrument, or the Bylaws or any registration of the Trust
with the Commission or any State, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall be
voted separately by individual Series, except (i) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series, and (ii)
when the Trustees have determined that the matter affects the interests of more
than one Series, then the Shareholders of all such Series shall be entitled to
vote thereon. The Trustees may also determine that a matter affects only the
interests of one or more classes of a Series, in which case any such matter
shall be voted on by such class or classes. 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. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy or in any manner provided for in the Bylaws. A proxy may
be given in writing. The Bylaws may provide that proxies may also, or may
instead, be given by any electronic or telecommunications device or in any other
manner. Notwithstanding anything else herein or in the Bylaws, in the event a
proposal by anyone other than the officers or Trustees of the Trust is submitted
to a vote of the Shareholders of one or more Series or of the Trust, or in the
event of any proxy contest or proxy solicitation or proposal in opposition to
any proposal by the officers or Trustees of the Trust, Shares may be voted only
in person or by written proxy. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required or
permitted by law, this Trust Instrument or any of the Bylaws of the Trust to be
taken by Shareholders.
Section 7.2. Meetings. The first Shareholders' meeting shall be held in order
- ----------- --------
to elect Trustees as specified in Section 3.2 of Article III hereof at the
principal office of the Trust or such other place as the Trustees may designate.
Meetings may be held within or without the State of Delaware. Special meetings
of the Shareholders of any Series may be called by the Trustees and shall be
called by the Trustees upon the written request of Shareholders owning at least
one-tenth of the Outstanding Shares entitled to vote. Whenever ten or more
Shareholders meeting the qualifications set forth in Section 16(c) of the 1940
Act, as the same may be amended from time to time, seek the opportunity of
furnishing materials to the other Shareholders with a view to obtaining
signatures on such a request for a meeting, the Trustees shall comply with the
provisions of said Section 16(c) with respect to providing such Shareholders
access to the list of the Shareholders of record of the Trust or the mailing of
such materials to such Shareholders of record, subject to any rights provided to
the Trust or any Trustees provided by said Section 16(c). Notice shall be sent,
by First Class Mail or such other means determined by the Trustees, at least 15
days prior to any such meeting.
AI)S2)Section 7.3. Quorum and Required Vote. One-third of Shares entitled
------------------ ------------------------
to vote in person or by proxy shall be a quorum for the transaction of business
at a Shareholders' meeting, except that where any provision of law or of this
Trust Instrument permits or requires that holders of any Series shall vote as a
Series (or that holders of a class shall vote as a class), then one-third 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 that 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 law or by any provision of this Trust
Instrument or the Bylaws, a majority of the Shares voted in person or by proxy
shall decide any questions and a plurality shall elect a Trustee, provided that
where any provision of law or of this Trust Instrument permits or requires that
the holders of any Series shall vote as a Series (or that the holders of any
class shall vote as a class), then a majority of the Shares present in person or
by proxy of that Series or, if required by law, a Majority Shareholder Vote of
that Series (or class), voted on the matter in person or by proxy shall decide
that matter insofar as that Series (or class) is concerned. Shareholders may
act by unanimous written consent. Actions taken by Series (or class) may be
consented to unanimously in writing by Shareholders of that Series.
ARTICLE VIII
------------
CUSTODIAN
---------
AI)S3)Section 8.1. Appointment and Duties. The Trustees shall at all
----------------- ----------------------
times employ a bank, a company that is a member of a national securities
exchange, or a trust company, each having capital, surplus and undivided profits
of at least two million dollars ($2,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements, if
any, as may be contained in the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order confirmed in writing;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the Trustees
may direct; and
(3) to disburse such funds upon orders or vouchers;
and the trust may also employ such custodian as its agent;
(4) to keep the books and accounts of the Trust or of any Series or
class and furnish clerical and accounting services; and
(5) to compute, if authorized to do so by the Trustees, the Net Asset
Value of any Series, or class thereof, in accordance with the provisions
hereof;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian.
The Trustees may also authorize the custodian to employ one or more sub-
custodians from time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank, a company that is a member of a
national securities exchange, or a trust company organized under the laws of the
United States or one of the states thereof and having capital, surplus and
undivided profits of at least two million dollars ($2,000,000) or such other
person as may be permitted by the Commission, or otherwise in accordance with
the 1940 Act.
Section 8.2. Central Certificate System. Subject to such rules, regulations
----------- --------------------------
and orders as the Commission may adopt, the Trustees may direct the custodian to
deposit all or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities exchange or
a national securities association registered with the Commission under the
Securities Exchange Act of 1934, as amended, or such other person as may be
permitted by the Commission, or otherwise in accordance with the 1940 Act,
pursuant to which system all securities of any particular class or series of any
issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its custodians, subcustodians or other agents.
ARTICLE IX
-----------
DISTRIBUTIONS AND REDEMPTIONS
-----------------------------
Section 9.1. Distributions.
- ----------- -------------
(b) The Trustees may from time to time declare and pay dividends or
other distributions with respect to any Series. The amount of such
dividends or distributions and the payment of them and whether they are in
cash or any other Trust Property shall be wholly in the discretion of the
Trustees.
(c) Dividends and other distributions may be paid or made to the
Shareholders of record at the time of declaring a dividend or other
distribution or among the Shareholders of record at such other date or time
or dates or times as the Trustees shall determine, which dividends or
distributions, at the election of the Trustees, may be paid pursuant to a
standing resolution or resolutions adopted only once or with such frequency
as the Trustees may determine. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans
or related plans as the Trustees shall deem appropriate.
(d) Anything in this Trust Instrument to the contrary
notwithstanding, the Trustees may at any time declare and distribute a
stock dividend pro rata among the Shareholders of a particular Series, or
class thereof, as of the record date of that Series fixed as provided in
Section 9.1(b) hereof.
Section 9.2. Redemptions. In case any holder of record of Shares of a
- ----------- ------------
particular Series desires to dispose of his Shares or any portion thereof, he
may deposit at the office of the transfer agent or other authorized agent of
that Series a written request or such other form of request as the Trustees may
from time to time authorize, requesting that the Series purchase the Shares in
accordance with this Section 9.2; and the Shareholder so requesting shall be
entitled to require the Series to purchase, and the Series or the principal
underwriter of the Series shall purchase his said Shares, but only at the Net
Asset Value thereof (as described in Section 9.3 of this Article IX). The
Series shall make payment for any such Shares to be redeemed, as aforesaid, in
cash or property from the assets of that Series and payment for such Shares
shall be made by the Series or the principal underwriter of the Series to the
Shareholder of record within seven (7) days after the date upon which the
request is effective. Upon redemption, shares shall become Treasury shares and
may be re-issued from time to time.
Section 9.3. Determination of Net Asset Value and Valuation of Portfolio
- ----------- -----------------------------------------------------------
Assets. The term "Net Asset Value" of any Series shall mean that amount by
- ------
which the assets of that Series exceed its liabilities, all as determined by or
under the direction of the Trustees. Such value shall be determined separately
for each Series and shall be determined on such days and at such times as the
Trustees may determine. Such determination shall be made with respect to
securities for which market quotations are readily available, at the market
value of such securities; and with respect to other securities and assets, at
the fair value as determined in good faith by the Trustees; provided, however,
that the Trustees, without Shareholder approval, may alter the method of valuing
portfolio securities insofar as permitted under the 1940 Act and the rules,
regulations and interpretations thereof promulgated or issued by the Commission
or insofar as permitted by any Order of the Commission applicable to the Series.
The Trustees may delegate any of their powers and duties under this Section 9.3
with respect to valuation of assets and liabilities. The resulting amount,
which shall represent the total Net Asset Value of the particular Series, shall
be divided by the total number of shares of that Series outstanding at the time
and the quotient so obtained shall be the Net Asset Value per Share of that
Series. At any time the Trustees may cause the Net Asset Value per Share last
determined to be determined again in similar manner and may fix the time when
such redetermined value shall become effective. If, for any reason, the net
income of any Series, determined at any time, is a negative amount, the Trustees
shall have the power with respect to that Series (i) to offset each
Shareholder's pro rata share of such negative amount from the accrued dividend
account of such Shareholder, or (ii) to reduce the number of Outstanding Shares
of such Series by reducing the number of Shares in the account of each
Shareholder by a pro rata portion of that number of full and fractional Shares
which represents the amount of such excess negative net income, or (iii) to
cause to be recorded on the books of such Series an asset account in the amount
of such negative net income (provided that the same shall thereupon become the
property of such Series with respect to such Series and shall not be paid to any
Shareholder), which account may be reduced by the amount, of dividends declared
thereafter upon the Outstanding Shares of such Series on the day such negative
net income is experienced, until such asset account is reduced to zero; (iv) to
combine the methods described in clauses (i) and (ii) and (iii) of this
sentence; or (v) to take any other action they deem appropriate, in order to
cause (or in order to assist in causing) the Net Asset Value per Share of such
Series to remain at a constant amount per Outstanding Share immediately after
each such determination and declaration. The Trustees shall also have the power
not to declare a dividend out of net income for the purpose of causing the Net
Asset Value per Share to be increased. The Trustees shall not be required to
adopt, but may at any time adopt, discontinue or amend the practice of
maintaining the Net Asset Value per Share of the Series at a constant amount.
Section 9.4. Suspension of the Right of Redemption. The Trustees may declare a
- ----------- -------------------------------------
suspension of the right of redemption or postpone the date of payment as
permitted under the 1940 Act. Such suspension shall take effect at such time as
the Trustees shall specify but not later than the close of business on the
business day next following the declaration of suspension, and thereafter there
shall be no right of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or receive payment
based on the Net Asset Value per Share next determined after the termination of
the suspension. In the event that any Series is divided into classes, the
provisions of this Section 9.3, to the extent applicable as determined in the
discretion of the Trustees and consistent with applicable law, may be equally
applied to each such class.
Section 9.5. Redemption of Shares in Order to Qualify as Regulated Investment
- ----------- ----------------------------------------------------------------
Company. If the Trustees shall, at any time and in good faith, be of the
- -------
opinion that direct or indirect ownership of Shares of any Series has or may
become concentrated in any Person to an extent which would disqualify any Series
as a regulated investment company under the Internal Revenue Code, then the
Trustees shall have the power (but not the obligation) by lot or other means
deemed equitable by them (i) to call for redemption by any such person of a
number, or principal amount, of Shares sufficient to maintain or bring the
direct or indirect ownership of Shares into conformity with the requirements for
such qualification and (ii) to refuse to transfer or issue Shares to any person
whose acquisition of the Shares in question would result in such
disqualification. The redemption shall be effected at the redemption price and
in the manner provided in this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in writing
such information with respect to direct and indirect ownership of Shares as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code, or to comply with the requirements of any other taxing authority.
Section 9.6. Redemption of De Minimis Accounts. If, at any time when a request
- ---------- ---------------------------------
for transfer or redemption of Shares of any Series is received by the Trust or
its agent, the value (computed as set forth in Section 9.3 hereof) of the Shares
of such Series in a Shareholder's account is less than One Thousand Dollars
($1,000.00), after giving effect to such transfer or redemption, the Trust may
cause the remaining Shares of such Series in such Shareholder's account to be
redeemed in accordance with such procedures as the Trustees shall adopt.
ARTICLE X
---------
LIMITATION OF LIABILITY AND INDEMNIFICATION
-------------------------------------------
Section 10.1. Limitation of Liability. A Trustee, when acting in such
- ------------ -----------------------
capacity, shall not be personally liable to any person other than the Trust or a
beneficial owner for any act, omission or obligation of the Trust or any
Trustee. A Trustee shall not be liable for any act or omission or any conduct
whatsoever in his capacity as Trustee, provided that nothing contained herein or
in the Delaware Act shall protect any Trustee against any liability to the Trust
or to Shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee hereunder.
Section 10.2. Indemnification.
- ------------- ---------------
(e) Subject to the exceptions and limitations contained in Section
10.2(b) below:
(i) every Person who is, or has been, a Trustee or officer of
the Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law
against liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(f) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter
based upon a review of readily available facts (as opposed to a
full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-
type inquiry);
provided, however, that any Shareholder may, by
appropriate legal proceedings, challenge any such determination by the
Trustees or by independent counsel.
(g) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, shall continue as to a person who has ceased
to be a Covered Person and shall inure to the benefit of the heirs,
executors and administrators of such a person. Nothing contained herein
shall affect any rights to indemnification to which Trust personnel, other
than Covered Persons, and other persons may be entitled by contract or
otherwise under law.
(h) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described
in paragraph (a) of this Section 10.2 may be paid by the Trust or Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or Series if it is ultimately determined that
he is not entitled to indemnification under this Section 10.2; provided,
however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust is insured against
losses arising out of any such advance payments or (c) either a majority of
the Trustees who are neither Interested Persons of the Trust nor parties to
the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to believe
that such Covered Person will be found entitled to indemnification under
this Section 10.2.
AI)S4). Section 10.3. Shareholders. In case any Shareholder or former
---------------------- ------------
Shareholder of any Series shall be held to be personally liable solely by reason
of his being or having been a Shareholder of such Series and not because of his
acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his heirs, executors, administrators or other legal
representatives, or, in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Trust, on behalf of the affected
Series, shall, upon request by the Shareholder, assume the defense of any claim
made against the Shareholder for any act or obligation of the Series and satisfy
any judgment thereon from the assets of the Series.
ARTICLE XI
----------
MISCELLANEOUS
-------------
AI)S5)Section 11.1. Trust Not a Partnership. It is hereby expressly
------------------ -----------------------
declared that a trust and not a partnership is created hereby. No Trustee
hereunder shall have any power to bind personally either the Trust's officers or
any Shareholder. All persons extending credit to, contracting with or having
any claim against the Trust or the Trustees shall look only to the assets of the
appropriate Series or (if the Trustees shall have yet to have established any
separate Series) of the Trust for payment under such credit, contract or claim;
and neither the Shareholders nor the Trustees, nor any of their agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Trust Instrument shall protect a Trustee against any liability to which the
Trustee would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee hereunder.
Section 11.2. Trustee's Good Faith Action, Expert Advice, No Bond or Surety.
- ------------ --------------------------------------------------------------
The exercise by the Trustees of their powers and discretions hereunder in good
faith and with reasonable care under the circumstances then prevailing shall be
binding upon everyone interested. Subject to the provisions of Article X hereof
and to Section 11.1 of this Article XI, the Trustees shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this Trust
Instrument, and subject to the provisions of Article X hereof and Section 11.1
of this Article XI, shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice. The Trustees
shall not be required to give any bond as such, nor any surety if a bond is
obtained.
AI)S6)Section 11.3. Establishment of Record Dates. The Trustees may close
------------------ -----------------------------
the Share transfer books of the Trust for a period not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for the payment
of any dividends or other distributions, or the date for the allotment of
rights, or the date when any change or conversion or exchange of Shares shall go
into effect; or in lieu of closing the stock transfer books as aforesaid, the
Trustees may fix in advance a date, not exceeding sixty (60) days preceding the
date of any meeting of Shareholders, or the date for payment of any dividend or
other distribution, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect, as a record
date for the determination of the Shareholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of any such dividend
or other distribution, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of Shares, and in
such case such Shareholders and only such Shareholders as shall be Shareholders
of record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting, or to receive payment of such dividend or other distribution,
or to receive such allotment or rights, or to exercise such rights, as the case
may be, notwithstanding any transfer of any Shares on the books of the Trust
after any such record date fixed as aforesaid.
Section 11.4. Termination of Trust.
- ------------ ---------------------
(a) This Trust shall continue without limitation of time but subject to
the provisions of sub-section (b) of this Section 11.4.
(b) The Trustees may, subject to a Majority Shareholder Vote of each
Series affected by the matter or, if applicable, to a Majority Shareholder Vote
of the Trust, and subject to a vote of a majority of the Trustees:
(i) sell and convey all or substantially all of the assets of any
affected Series to another Series of the Trust for adequate consideration,
which may include the assumption of all outstanding obligations, taxes and
other liabilities, accrued or contingent, of the affected Series, and which
may include Shares of the acquiring Series;
(ii) sell and convey all or substantially all of the assets of the
Trust or any affected Series to another trust, partnership, association or
corporation, or to a separate series of shares thereof, organized under the
laws of any state which trust, partnership, association or corporation is
an open-end management company as defined in the 1940 Act, or is a series
thereof, for adequate consideration which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued or
contingent, of the Trust or any affected Series, and which may include
shares of beneficial interest, stock or other ownership interests of such
trust, partnership, association or corporation or of a series thereof; or
(iii) at any time sell and convert into money all of the assets of
the Trust or any affected Series.
Upon making reasonable provision, in the determination of the Trustees, for
the payment of all such liabilities in (i), (ii) or (iii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) of each Series (or class) ratably among the holders of Shares
of that Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in sub-section (b), the Trust or any affected
Series shall terminate and the Trustees and the Trust shall be discharged of any
and all further liabilities and duties hereunder and the right, title and
interest of all parties with respect to the Trust or Series shall be cancelled
and discharged.
Upon termination of the Trust, following completion of winding up of its
business, the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.
Section 11.5. Reorganization. Notwithstanding anything else herein, the
- ------------ ---------------
Trustees, in order to change the form of organization of the Trust, may, without
prior Shareholder approval, (i) cause the Trust to merge or consolidate with or
into one or more trusts, partnerships, associations or corporations so long as
the surviving or resulting entity is an open-end management investment company
under the 1940 Act, or is a series thereof, that will succeed to or assume the
Trust's registration under that Act and which is formed, organized or existing
under the laws of a state, commonwealth possession or colony of the Unites
States or (ii) cause the Trust to incorporate under the laws of Delaware. Any
agreement of merger or consolidation or certificate of merge may be signed by a
majority of Trustees and facsimile signatures conveyed by electronic or
telecommunication means shall be valid.
Pursuant to and in accordance with the provisions of Section 3815(f) of the
Delaware Act, and notwithstanding anything to the contrary contained in this
Trust Instrument, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 11.5 may effect any amendment to the
Trust Instrument or effect the adoption of a new trust instrument of the Trust
if it is the surviving or resulting trust in the merger or consolidation.
Section 11.6. Filing of Copies, References, Headings. The original or a copy
- ------------ ---------------------------------------
of this Trust Instrument and of each amendment hereof or Trust Instrument
supplemental hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer or Trustee of the Trust as to whether or not any such
amendments or supplements have been made and as to any matters in connection
with the Trust hereunder, and with the same effect as if it were the original,
may rely on a copy certified by an officer or Trustee of the Trust to be a copy
of this Trust Instrument or of any such amendment or supplemental Trust
Instrument. In this Trust Instrument or in any such amendment or supplemental
Trust Instrument, references to this Trust Instrument, and all expressions like
"herein," "hereof" and "hereunder," shall be deemed to refer to this Trust
Instrument as amended or affected by any such supplemental Trust Instrument.
All expressions like "his", "he", and "him", shall be deemed to include the
feminine and neuter, as well as masculine, genders. Headings are placed herein
for convenience of reference only and in case of any conflict, the text of this
Trust Instrument, rather than the headings, shall control. This Trust
Instrument may be executed in any number of counterparts each of which shall be
deemed an original.
AI)S7)Section 11.7. Applicable Law. This Trust Instrument has been
------------------ --------------
executed and delivered in, and the Trust created hereby will be administered
from, the State of Delaware, and the Trust and this Trust Instrument, and the
rights, obligations and remedies of the Trustees and Shareholders hereunder, are
to be governed by and construed and administered according to the Delaware Act
and the other laws of said State; provided, however, that there shall not be
applicable to the Trust, the Trustees, the Shareholders or this Trust Instrument
(a) the provisions of Section 3540 of Title 12 of the Delaware Code or (b) any
provisions of the laws (statutory or common) of the State of Delaware (other
than the Delaware Act) pertaining to trusts which relate to or regulate (i) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (ii) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the indemnification, acts
or powers of trustees or other Persons, which are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees or officers
of the Trust set forth or referenced in this Trust Instrument. The Trust shall
be of the type commonly called a "business trust," and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust under Delaware law. The Trust specifically reserves
the right to exercise any of the powers or privileges afforded to trusts or
actions that may be engaged in by trusts under the Delaware Act, and the absence
of a specific reference herein to any such power, privilege or action shall not
imply that the Trust may not exercise such power or privilege or take such
actions.
Section 11.8. Amendments. Except as specifically provided herein, the Trustees
- ------------ ----------
may, without shareholder vote, amend or otherwise supplement this Trust
Instrument by making an amendment, a Trust Instrument supplemental hereto or an
amended and restated trust instrument. Shareholders shall have the right to
vote (i) on any amendment which would affect their right to vote granted in
Section 7.1 of Article VII hereof, (ii) on any amendment to this Section 11.8,
(iii) on any amendment as may be required by law or by the Trust's registration
statement filed with the Commission and (iv) on any amendment submitted to them
by the Trustees. Any amendment required or permitted to be submitted to
Shareholders which, as the trustees determine, shall affect the Shareholders of
one or more Series shall be authorized by vote of the Shareholders of each
Series affected and no vote of shareholders of a Series not affected shall be
required. Notwithstanding anything else herein, any amendment to Article 10
hereof shall not limit the rights to indemnification or insurance provided
therein with respect to action or omission of Covered Persons prior to such
amendment.
Section 11.9. Fiscal Year. The fiscal year of the Trust shall end on a
- ------------ -----------
specified date as set forth in the Bylaws, provided, however, that the Trustees
may, without Shareholder approval, change the fiscal year of the Trust.
AI)S8)Section 11.10. Provisions in Conflict with Law. The provisions of
-------------------- -------------------------------
this Trust Instrument are severable, and if the Trustees shall determine, with
the advice of counsel, that any of such provisions is in conflict with the 1940
Act, the regulated investment company provisions of the Internal Revenue Code or
with other applicable laws and regulations, the conflicting provision shall be
deemed never to have constituted a part of this Trust Instrument; provided,
however, that such determination shall not affect any of the remaining
provisions of this Trust Instrument or render invalid or improper any action
taken or omitted prior to such determination. If any provision of this Trust
Instrument shall be held invalid or enforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any other
jurisdiction or any other provision of this Trust Instrument in any
jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees of
the Trust, have executed this instrument this 20th day of January, 1995.
/s/ Keith Pinonseault
------------------------------------
Keith Pinonseault, as Trustee
/s/ Richard Imperiale
------------------------------------
Richard Imperiale, as Trustee
/s/ Lawrence Kujawski
------------------------------------
Lawrence Kujawski, as Trustee
/s/ John Komives
------------------------------------
John Komives, as Trustee
EXHIBIT 2
BYLAWS
OF
THE JEFFERSON FUND GROUP TRUST
These Bylaws of The Jefferson Fund Group Trust, a Delaware business
trust (the "Trust"), are subject to the Trust Instrument of the Trust, dated
January 20, 1995, as from time to time amended, supplemented or restated (the
"Trust Instrument"). Capitalized terms used herein which are defined in the
Trust Instrument are used as therein defined.
ARTICLE I
---------
PRINCIPAL OFFICE
-----------------
The principal office of the Trust shall be located in Milwaukee,
Wisconsin, or such other location as the Trustees may, from time to time,
determine. The Trust may establish and maintain such other offices and places
of business as the Trustees may, from time to time, determine.
ARTICLE II
----------
OFFICERS AND THEIR ELECTION
---------------------------
Section 1. Officers. The officers of the Trust shall be a President,
--------- ---------
a Treasurer, a Secretary, and such other officers as the Trustees may from time
to time elect. The Trustees may delegate to any officer or committee the power
to appoint any subordinate officers or agents. It shall not be necessary for
any Trustee or other officer to be a holder of Shares in the Trust.
Section 2. Election of Officers. The Treasurer and Secretary shall
---------- --------------------
be chosen by the Trustees. The President shall be chosen by the Trustees from
among their number. Two or more offices may be held by a single person, except
the offices of President and Secretary. Subject to the provisions of Article
III, Section 13 hereof, the President, the Treasurer and the Secretary shall
each hold office until their successors are chosen and qualified and all other
officers shall hold office at the pleasure of the Trustees.
Section 3. Resignations. Any officer of the Trust may resign,
--------- ------------
notwithstanding Section 2 hereof, by filing a written resignation with the
President, the Trustees or the Secretary, which resignation shall take effect
upon being so filed or at such time as may be therein specified.
ARTICLE III
-----------
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
------------------------------------------
Section 1. Management of The Trust; General. The business and
--------- --------------------------------
affairs of the Trust shall be managed by, or under the direction of, the
Trustees, and they shall have all powers necessary and desirable to carry out
their responsibilities, so far as such powers are not inconsistent with the laws
of the State of Delaware, the Trust Instrument or with these Bylaws.
Section 2. Executive And Other Committees. The Trustees may elect
---------- ------------------------------
from their own number an executive committee, which shall have any or all the
powers of the Trustees while the Trustees are not in session. The Trustees may
also elect from their own number other committees from time to time. The number
composing such committees and the powers conferred upon the same are to be
determined by vote of a majority of the Trustees. All members of such
committees shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any such committee at any time. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees. The Trustees shall have
power to rescind any action of any committee, but no such rescission shall have
retroactive effect.
Section 3. Compensation. Each Trustee and each committee member may
--------- -------------
receive such compensation for his services and reimbursement for his expenses as
may be fixed from time to time by resolution of the Trustees.
Section 4. Chairman Of the Trustees. The Trustees shall appoint from
---------- ------------------------
among their number a Chairman, who shall serve as such at the pleasure of the
Trustees. When present, he shall preside at all meetings of the Shareholders
and the Trustees, and he may, subject to the approval of the Trustees, appoint
another Trustee to preside at such meetings in his absence. He shall perform
such other duties as the Trustees may from time to time designate.
Section 5. President. The President shall be the chief executive
--------- ---------
officer of the Trust and, subject to the direction of the Trustees, shall have
general administration of the business and policies of the Trust. Except as the
Trustees may otherwise order, the President shall have the power to grant,
issue, execute or sign such powers of attorney, proxies, agreements or other
documents as may be deemed advisable or necessary in the furtherance of the
interests of the Trust or any Series thereof. He shall also have the power to
employ attorneys, accountants and other advisers and agents and counsel for the
Trust. The President shall perform such duties additional to all of the
foregoing as the Trustees may from time to time designate.
Section 6. Treasurer. The Treasurer shall be the principal financial
--------- ---------
and accounting officer of the Trust. He shall deliver all funds and securities
of the Trust which may come into his hands to such company as the Trustees shall
employ as Custodian in accordance with the Trust Instrument and applicable
provisions of law. He shall make annual reports regarding the business and
condition of the Trust, which reports shall be preserved in Trust records, and
he shall furnish such other reports regarding the business and condition of the
Trust as the Trustees may from time to time require. The Treasurer shall
perform such additional duties as the Trustees may from time to time designate.
Section 7. Secretary. The Secretary shall record in books kept for
--------- ---------
the purpose all votes and proceedings of the Trustees and the Shareholders at
their respective meetings. He shall have the custody of the seal of the Trust.
The Secretary shall perform such additional duties as the Trustees may from time
to time designate.
Section 8. Vice President. Any Vice President of the Trust shall
--------- --------------
perform such duties as the Trustees or the President may from time to time
designate. At the request or in the absence or disability of the President, the
Vice President (or, if there are two or more Vice Presidents, then the senior of
the Vice Presidents present and able to act) may perform all the duties of the
President and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
Section 9. Assistant Treasurer. Any Assistant Treasurer of the Trust
--------- -------------------
shall perform such duties as the Trustees or the Treasurer may from time to time
designate, and, in the absence of the Treasurer, the senior Assistant Treasurer,
present and able to act, may perform all the duties of the Treasurer.
Section 10. Assistant Secretary. Any Assistant Secretary of the
---------- -------------------
Trust shall perform such duties as the Trustees or the Secretary may from time
to time designate, and, in the absence of the Secretary, the senior Assistant
Secretary, present and able to act, may perform all the duties of the Secretary.
Section 11. Subordinate Officers. The Trustees from time to time may
---------- --------------------
appoint such other officers or agents as they may deem advisable each of whom
shall have such title, hold office for such period, have such authority and
perform such duties as the Trustees may determine. The Trustees from time to
time may delegate to one or more officers or committees of Trustees the power to
appoint any such subordinate officers or agents and to prescribe their
respective terms of office, authorities and duties.
Section 12. Surety Bonds. The Trustees may require any officer or
---------- ------------
agent of the Trust to execute a bond (including, without limitation, any bond
required by the Investment Company Act of 1940, as amended ("the 1940 Act"), and
the rules and regulations of the Securities and Exchange Commission
("Commission")) to the Trust in such sum and with such surety or sureties as the
Trustees may determine, conditioned upon the faithful performance of his duties
to the Trust including responsibility for negligence and for the accounting of
any of the Trust's property, funds or securities that may come into his hands.
Section 13. Removal. Any officer may be removed from office whenever
---------- -------
in the judgment of the Trustees the best interest of the Trust will be served
thereby, by the vote of a majority of the Trustees given at any regular meeting
or any special meeting of the Trustees. In addition, any officer or agent
appointed in accordance with the provisions of Section 10 hereof may be removed,
either with or without cause, by any officer upon whom such power of removal
shall have been conferred by the Trustees.
Section 14. Remuneration. The salaries or other compensation, if
---------- ------------
any, of the officers of the Trust shall be fixed from time to time by resolution
of the Trustees.
ARTICLE IV
----------
SHAREHOLDERS' MEETINGS
----------------------
Section 1. Special Meetings. A special meeting of the shareholders
---------- ----------------
shall be called by the Secretary whenever (i) ordered by the Trustees or (ii)
requested in writing by the holder or holders of at least ten percent (10%) of
the Outstanding Shares entitled to vote (provided that such holder or holders
prepay the costs to the Trust of preparing and mailing the notice of the
meeting). If the Secretary, when so ordered or requested, refuses or neglects
for more than thirty (30) days to call such special meeting, the Trustees or the
Shareholders so requesting, may, in the name of the Secretary, call the meeting
by giving notice thereof in the manner required when notice is given by the
Secretary. If the meeting is a meeting of the Shareholders of one or more
Series or classes of Shares, but not a meeting of all Shareholders of the Trust,
then only special meetings of the Shareholders of such one or more Series or
Classes shall be called and only the shareholders of such one or more Series or
Classes shall be entitled to notice of and to vote at such meeting.
Section 2. Notices. Except as above provided, notices of any meeting
--------- -------
of the Shareholders shall be given by the Secretary by delivering or mailing,
postage prepaid, to each Shareholder entitled to vote at said meeting, written
or printed notification of such meeting at least fifteen (15) days before the
meeting, to such address as may be registered with the Trust by the Shareholder.
Notice of any Shareholder meeting need not be given to any Shareholder if a
written waiver of notice, executed before or after such meeting, is filed with
the record of such meeting, or to any Shareholder who shall attend such meeting
in person or by proxy. Notice of adjournment of a Shareholders' meeting to
another time or place need not be given, if such time and place are announced at
the meeting or reasonable notice is given to persons present at the meeting and
the adjourned meeting is held within a reasonable time after the date set for
the original meeting.
Section 3. Voting; Proxies. Subject to the provisions of the Trust
--------- ---------------
Instrument, Shareholders entitled to vote may vote either in person or by proxy,
provided that either (i) an instrument authorizing such proxy to act is executed
by the Shareholder in writing and dated not more than eleven (11) months before
the meeting, unless the instrument specifically provides for a longer period, or
(ii) the Trustees adopt by resolution an electronic, telephonic, computerized or
other alternative to execution of a written instrument authorizing the proxy to
act, which authorization is received not more than eleven (11) months before the
meeting. Proxies shall be delivered to the Secretary of the Trust or other
person responsible for recording the proceedings before being voted. A proxy
with respect to Shares held in the name of two or more persons shall be valid if
executed by one of them, unless at or prior to exercise of such proxy the Trust
receives a specific written notice to the contrary from any one of them. Unless
otherwise specifically limited by their terms, proxies shall entitle the holder
thereof to vote at any adjournment of a meeting. A proxy purporting to be
exercised by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden or proving invalidity
shall rest on the challenger. At all meetings of the Shareholders, unless the
voting is conducted by inspectors, all questions relating to the qualifications
of voters, the validity of proxies, and the acceptance or rejection of votes
shall be decided by the Chairman of the meeting. Except as otherwise provided
herein or in the Trust Instrument, as these Bylaws or such Trust Instrument may
be amended or supplemented from time to time, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and the
Shareholders were shareholders of a Delaware corporation.
Section 4. Place Of Meeting. All special meetings of the
--------- ----------------
Shareholders shall be held at the principal place of business of the Trust or at
such other place in the United States as the Trustees may designate.
Section 5. Action Without a Meeting. Any action to be taken by
--------- ------------------------
Shareholders may be taken without a meeting if all Shareholders entitled to vote
on the matter consent to the action in writing and the written consents are
filed with the records of meetings of Shareholders of the Trust. Such consent
shall be treated for all purposes as a vote at a meeting of the Trustees held at
the principal place of business of the Trust.
ARTICLE V
----------
TRUSTEES' MEETINGS
------------------
Section 1. Special Meetings. Special meetings of the Trustees may be
--------- ----------------
called orally or in writing by the Chairman of the Trustees or any two other
Trustees.
Section 2. Regular Meetings. Regular meetings of the Trustees may be
---------- ----------------
held at such places and at such times as the Trustees may from time to time
determine; each Trustee present at such determination shall be deemed a party
calling the meeting and no call or notice will be required to such Trustee,
provided that any Trustee who is absent when such determination is made shall be
given notice of the determination by the Chairman or any two other Trustees, as
provided for in Section 4.04 of the Trust Instrument.
Section 3. Quorum. A majority of the Trustees shall constitute a
-------- ------
quorum for the transaction of business and an action of a majority of the quorum
shall constitute action of the Trustees.
Section 4. Notice. Except as otherwise provided, notice of any
--------- -------
special meeting of the Trustees shall be given by the party calling the meeting
to each Trustee, as provided for in Section 4.04 of the Trust Instrument. A
written notice may be mailed, postage prepaid, addressed to him at his address
as registered on the books of the Trust or, if not so registered, at his last
known address.
Section 5. Place Of Meeting. All special meetings of the Trustees
---------- ----------------
shall be held at the principal place of business of the Trust or such other
place as the Trustees may designate. Any meeting may adjourn to any place.
Section 6. Special Action. When all the Trustees shall be present at
--------- --------------
any meeting, however called or wherever held, or shall assent to the holding of
the meeting without notice, or shall sign a written assent thereto filed with
the record of such meeting, the acts of such meeting shall be valid as if such
meeting had been regularly held.
Section 7. Action By Consent. Any action by the Trustees may be
--------- -----------------
taken without a meeting if a written consent thereto is signed by all the
Trustees and filed with the records of the Trustees' meeting. Such consent
shall be treated, for all purposes, as a vote at a meeting of the Trustees held
at the principal place of business of the Trust.
Section 8. Participation in Meetings By Conference Telephone.
---------- -------------------------------------------------
Trustees may participate in a meeting of Trustees by conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation shall constitute
presence in person at such meeting. Any meeting conducted by telephone shall be
deemed to take place at and from the principal office of the Trust.
ARTICLE VI
----------
SHARES OF BENEFICIAL INTEREST
-----------------------------
Section 1. Beneficial Interest. The beneficial interest in the Trust
--------- --------------------
shall at all times be divided into such transferable Shares of one or more
separate and distinct Series, or classes thereof, as the Trustees shall from
time to time create and establish. The number of Shares is unlimited, and each
Share of each Series or class thereof shall be without par value and shall
represent an equal proportionate interest with each other Share in the Series,
none having priority or preference over another, except to the extent that such
priorities or preferences are established with respect to one or more classes of
shares consistent with applicable law and any rule or order of the Commission.
Section 2. Transfer of Shares. The Shares of the Trust shall be
--------- ------------------
transferable, so as to affect the rights of the Trust, only by transfer recorded
on the books of the Trust, in person or by attorney.
Section 3. Equitable Interest Not Recognized. The Trust shall be
--------- ----------------------------------
entitled to treat the holder of record of any Share or Shares of beneficial
interest as the holder in fact thereof, and shall not be bound to recognize any
equitable or other claim or interest in such Share or Shares on the part of any
other person except as may be otherwise expressly provided by law.
Section 4. Share Certificate. No certificates certifying the
---------- -----------------
ownership of Shares shall be issued except as the Trustees may otherwise
authorize. The Trustees may issue certificates to a Shareholder of any Series
or class thereof for any purpose and the issuance of a certificate to one or
more Shareholders shall not require the issuance of certificates generally. In
the event that the Trustees authorize the issuance of Share certificates, such
certificate shall be in the form proscribed from time to time by the Trustees
and shall be signed by the President or a Vice President and by the Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary. Such signatures may be
facsimiles if the certificate is signed by a transfer or shareholder services
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 have ceased 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 or shareholder services 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.
Section 5. Loss of Certificate. In the 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.
Section 6. 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 VII
-----------
OWNERSHIP OF ASSETS OF THE TRUST
--------------------------------
The Trustees, acting for and on behalf of the Trust, shall be deemed
to hold legal and beneficial ownership of any income earned on securities held
by the Trust issued by any business entity formed, organized or existing under
the laws of any jurisdiction other than a state, commonwealth, possession or
colony of the United States or the laws of the United States.
ARTICLE VIII
------------
INSPECTION OF BOOKS
-------------------
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and regulations
the accounts and books of the Trust or any of them shall be open to the
inspection of the Shareholders; and no Shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees or by resolution of the Shareholders.
ARTICLE IX
----------
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES
----------------------------------------------
The Trust may purchase and maintain insurance on behalf of any Covered
Person or employee of the Trust, including any Covered Person or employee of the
Trust who is or was serving at the request of the Trust as a Trustee, officer or
employee of a corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Trustees would
have the power to indemnify him against such liability.
The Trust may not acquire or obtain a contract for insurance that
protects or purports to protect any Trustee or officer of the Trust against any
liability to the Trust or its Shareholders to which he would otherwise be
subject by reason or willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office.
ARTICLE X
---------
SEAL
----
The seal of the Trust shall be circular in form bearing the
inscription:
"THE JEFFERSON FUND GROUP TRUST -- 1995
THE STATE OF DELAWARE"
The form of the seal shall be subject to alteration by the Trustees
and the seal may be used by causing it or a facsimile to be impressed or affixed
or printed or otherwise reproduced.
Any officer or Trustee of the Trust shall have authority to affix the
seal of the Trust to any document, instrument or other paper executed and
delivered by or on behalf of the Trust; however, unless otherwise required by
the Trustees, the seal shall not be
necessary to be placed on and its absence shall not impair the validity of any
document, instrument, or other paper executed by or on behalf of the Trust.
ARTICLE XI
----------
FISCAL YEAR
-----------
The fiscal year of the Trust shall end on such date as the Trustees
shall from time to time determine.
ARTICLE XII
----------
AMENDMENTS
----------
These Bylaws may be amended at any meeting of the Trustees of the
Trust by a majority vote.
ARTICLE XIII
------------
REPORTS TO SHAREHOLDERS
------------------------
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report of the Trust including financial statements which shall
be certified at least annually by independent public accountants.
XIV
-----
HEADINGS
--------
Headings are placed in these Bylaws for convenience of reference only
and in case of any conflict, the text of these Bylaws rather than the headings
shall control.
EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
Agreement made as of the 4th day of August, 1995, between The Jefferson
Fund Group Trust, a Delaware business trust (the "Trust"), and Uniplan, Inc., a
Wisconsin corporation (the "Adviser").
W I T N E S S E T H :
WHEREAS, the Trust is in the process of registering with the Securities and
Exchange Commission as an open-end management investment company under the
Investment Company Act of 1940 (the "Act");
WHEREAS, the Trust desires to retain the Adviser, which is an investment
adviser registered under the Investment Advisers Act of 1940 as its investment
adviser.
NOW, THEREFORE, the Trust and the Adviser do mutually promise and agree as
follows:
1. Employment. The Trust hereby employs the Adviser to manage the
----------
investment and reinvestment of the assets of Jefferson Growth and Income Fund
(the "Fund") for the period and on the terms set forth in this Agreement. The
Adviser hereby accepts such employment for the compensation herein provided and
agrees during such period to render the services and to assume the obligations
herein set forth.
2. Authority of the Adviser. The Adviser shall supervise and manage the
------------------------
investment portfolio of the Fund, and, subject to such policies as the trustees
of the Trust may determine for the Fund, direct the purchase and sale of
investment securities in the day to day management of the Fund. The Adviser
shall for all purposes herein be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Trust or Fund in any way or otherwise be deemed an
agent of the Trust or Fund. However, one or more shareholders, officers,
directors or employees of the Adviser may serve as trustees and/or officers of
the Trust, but without compensation or reimbursement of expenses for such
services from the Trust. Nothing herein contained shall be deemed to require
the Trust to take any action contrary to its Certificate of Trust or Trust
Instrument, dated January 20, 1995, or any applicable statute or regulation, or
to relieve or deprive the trustees of the Trust of their responsibility for, and
control of, the affairs of the Trust or the Fund.
3. Expenses. The Adviser, at its own expense and without reimbursement
--------
from the Fund, shall furnish office space, and all necessary office facilities,
equipment and executive personnel for managing the investments of the Fund. The
Adviser shall pay the salaries and fees of all officers and trustees of the
Trust affiliated with the Adviser. Fees paid for attendance at meetings of the
Trust's trustees to trustees of the Trust who are not interested persons of the
Adviser, as defined in the Act, as amended, shall be borne by the Trust. The
Fund shall bear all other expenses initially incurred by it, provided that the
total expenses borne by the Fund, including the Adviser's fee but excluding all
federal, state and local taxes, interest, brokerage commissions and
extraordinary items, shall not in any year exceed that percentage of the average
net asset value of the Fund for such year, as determine by valuations made as of
the close of each business day, which is the most restrictive percentage
provided by the state laws of the various states in which the Trust's shares are
qualified for sale. The expenses of the Trust's operations borne by the Trust
include by way of illustration and not limitation, the costs of preparing and
printing its registration statements required under the Securities Act of 1933
and the Act (and amendments thereto), the expense of registering its shares with
the Securities and Exchange Commission and in the various states, the printing
and distribution cost of prospectuses mailed to existing shareholders, trustee
and officer liability insurance, reports to shareholders, reports to government
authorities and proxy statements, interest charges, taxes, legal expenses,
salaries of administrative and clerical personnel, association membership dues,
auditing and accounting services, insurance premiums, brokerage and other
expenses connected with the execution of portfolio securities transactions, fees
and expenses of the custodian of the Fund's assets, expenses of calculating the
net asset value and repurchasing and redeeming shares, charges and expenses of
dividend disbursing agents, registrars and stock transfer agents and the cost of
keeping all necessary shareholder records and accounts.
The Fund shall monitor its expense ratio on a monthly basis. If the accrued
amount of the expenses of the Fund exceed the expense limitation established
herein, the Fund shall create an account receivable from Rodman and Renshaw,
Inc. (the "Distributor").
4. Compensation of the Adviser. For the services and facilities to be
---------------------------
rendered and the charges and expenses to be assumed by the Adviser hereunder,
the Fund shall pay to the Adviser an advisory fee, paid monthly, based on the
average net asset value of the Fund, as determined by valuations made as of the
close of each business day of the month. The advisory fee shall be .60% per
annum of the first $500,000,000 of the Fund's average net asset value, .50% per
annum of the next $500,000,000 of the Fund's average net asset value and .40%
per annum of the Fund's average net asset value exceeding $1,000,000,000. For
any month in which this Agreement is not in effect for the entire month, such
fee shall be reduced proportionately on the basis of the number of calendar days
during which it is in effect and the fee computed upon the average net asset
value of the business days during which it is so in effect.
5. Ownership of Shares of the Fund. Except in connection with the
-------------------------------
initial capitalization of the Fund, the Adviser shall not take, and shall not
permit any of its shareholders, officers, directors or employees to take, a long
or short position in the shares of the Fund, except for the purchase of shares
of the Fund for investment purposes at the same price as that available to the
public at the time of purchase.
6. Exclusivity. The services of the Adviser to the Trust hereunder are
-----------
not to be deemed exclusive and the Adviser shall be free to furnish similar
services to others as long as the services hereunder are not impaired thereby.
7. Liability. In the absence of willful misfeasance, bad faith, gross
----------
negligence or reckless disregard of obligations or duties hereunder on the part
of the Adviser, the Adviser shall not be subject to liability to the Fund or the
Trust or to any shareholder of the Fund for any act or omission in the course
of, or connected with, rendering services hereunder, or for any losses that may
be sustained in the purchase, holding or sale of any security.
8. Brokerage Commissions. The Adviser may cause the Fund to pay a
---------------------
broker-dealer which provides brokerage and research services, as such services
are defined in Section 28(e) of the Securities Exchange Act of 1934 (the
"Exchange Act"), to the Adviser, a commission for effecting a securities
transaction in excess of the amount another broker-dealer would have charged for
effecting such transaction, if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of brokerage and
research services provided by the executing broker-dealer viewed in terms of
either that particular transaction or its overall responsibilities with respect
to the accounts as to which it exercises investment discretion (as defined in
Section 3(a)(35) of the Exchange Act).
9. Amendments. This Agreement may be amended by the mutual consent of
----------
the parties; provided, however, that in no event may it be amended without the
approval of the trustees of the Trust in the manner required by the Act, and, if
required by the Act, by the vote of the majority of the outstanding voting
securities of the Fund, as defined in the Act.
10. Termination. This Agreement may be terminated at any time, without
------------
the payment of any penalty, by the trustees of the Trust or by a vote of the
majority of the outstanding voting securities of the Fund, as defined in the
Act, upon giving sixty (60) days' written notice to the Adviser. This Agreement
may be terminated by the Adviser at any time upon the giving of sixty (60) days'
written notice to the Trust. This Agreement shall terminate automatically in
the event of its assignment (as defined in Section 2(a)(4) of this Act).
Subject to prior termination as hereinbefore provided, this Agreement shall
continue in effect for two (2) years from the date hereof and indefinitely
thereafter, but only so long as the continuance after such two (2) year period
is specifically approved annually by: (I) the trustees of the Trust or by the
vote of the majority of the outstanding voting securities of the Fund, as
defined in the Act; and (ii) the trustees of the Trust in the manner required by
the Act, provided that any such approval may be made effective not more than
sixty (60) days thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day first above written.
UNIPLAN, INC.
(the "Adviser")
By: /s/ Richard Imperiale
--------------------------------
Its: President
THE JEFFERSON FUND GROUP TRUST
(the "Trust")
By: /s/ Richard Imperiale
-------------------------------
Its: Chairman
EXHIBIT 6.1
DISTRIBUTION AGREEMENT
----------------------
AGREEMENT made this 21st day of August, 1995 between RODMAN & RENSHAW,
INC., (hereinafter called the "Distributor") and
THE JEFFERSON FUND GROUP TRUST, a Delaware business trust ("Trust").
W I T N E S S E T H :
-------------------
WHEREAS, the Trust is in the process of registering as an open-end
management investment company under the Investment Company Act of 1940 and the
rules and regulations thereunder (the "Act");
WHEREAS, Jefferson Growth and Income Fund is a "series" of the Trust
as that term is contemplated under the Act;
WHEREAS, the Distributor is a registered broker-dealer under state and
federal laws and regulations and is a member of the National Association of
Securities Dealers, Inc.; and
WHEREAS, the Trust desires to retain the Distributor as the
distributor of shares of its Class A and Class B Common Stock (the "Shares").
NOW, THEREFORE, the Trust and Distributor mutually agree and promise
as follows:
1. APPOINTMENT OF DISTRIBUTOR.
--------------------------
The Trust hereby appoints the Distributor its exclusive agent for
the distribution of the Shares in jurisdictions wherein the Shares may legally
be offered for sale; provided, however, that the Trust in its absolute
discretion may (a) issue or sell Shares directly to holders of Shares of the
Fund upon such terms and conditions and for such consideration, if any, as it
may determine, whether in connection with the distribution of subscription or
purchase rights, the payment or reinvestment of dividends or distributions, or
otherwise; (b) issue or sell Shares at net asset value to the shareholders of
any other investment company, as defined in the Act, for which the Distributor
shall act as exclusive distributor, who wish to exchange all or a portion of
their investment in shares of such other investment company for Shares of the
Fund, without a sales charge being imposed; (c) issue shares in connection with
a merger, consolidation or acquisition of assets on such terms and conditions
and for such consideration, if any, as may be authorized or permitted under the
Act; and (d) issue or sell shares at net asset value to directors and employees
of the Trust and the Distributor and to licensed securities representatives of
the Distributor, without a sales charge being imposed.
2. ACCEPTANCE: SERVICES OF DISTRIBUTOR.
------------------------------------
The Distributor hereby accepts appointment as agent for the
distribution of the Shares and agrees that it will use its best efforts with
reasonable promptness to sell such part of the authorized Shares remaining
unissued as from time to time shall be effectively registered under the
Securities Act of 1933 ("Securities Act"), at prices determined as hereinafter
provided and on terms hereinafter set forth, all subject to applicable federal
and state laws and regulations and to the Certificate of Trust and Bylaws of the
Trust.
3. MANNER OF SALE: COMPLIANCE WITH SECURITIES LAWS
-----------------------------------------------
AND REGULATIONS.
---------------
(A) The Distributor may sell Shares to or through qualified
dealers with whom the Distributor has selling agreements or directly to
prospective purchasers in such manner, not inconsistent with the provisions
hereof and the then effective Registration Statement of the Trust under the
Securities Act (and related Prospectus and Statement of Additional Information),
as the Distributor may determine from time to time, provided that no dealer or
other person shall be appointed or authorized to act as agent of the Trust
without the prior consent of the Trust. The Distributor shall cause
subscriptions for Shares to be transmitted to the Trust's custodian in
accordance with the Share Purchase Application then in force for the purchase of
Shares. All such Share Purchase Applications are subject to acceptance or
rejection by the Trust. Shares are to be sold for cash, payable at the time the
Share Purchase Application and payment for such Shares are received by the
Trust's custodian. The Distributor and the Trust shall cooperate in
implementing procedures to insure that the sales charges payable on the purchase
of Shares is paid to the Distributor in a timely manner.
(B) The Distributor, as agent of and for the account of the
Trust, may repurchase Shares at such prices and upon such terms and conditions
as shall be specified in the current Prospectus or Statement of Additional
Information of the Trust but not at a price lower than the redemption or
repurchase price quoted by the Trust.
(C) The Trust will furnish to the Distributor from time to time
such information with respect to the Fund and its Shares as the Distributor may
reasonably request for use in connection with the sale of the Shares. The
Distributor agrees that it will not use or distribute or authorize the use,
distribution or dissemination by its dealers or others, in connection with the
sale of such Shares, any statements, other than those contained in the Trust's
current Prospectus and Statement of Additional Information, except such
supplemental literature or advertising as shall be lawful under federal and
state securities laws and regulations, and that it will furnish the Trust with
copies of all such material.
(D) In selling or reacquiring Shares for the account of the
Fund, the Distributor will in all respects conform to the requirements of all
state and federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. relating to such sale or reacquisition,
as the case may be, and will indemnify and hold harmless the Trust and each
person who has been, is or may hereafter be a director or officer of the Trust
from any damage or expense on account of any wrongful act by the Distributor or
any employee, representative or agent of the Distributor. The term "expense"
includes amounts paid in satisfaction of judgments or in settlement. The
Distributor will observe and be bound by all the provisions of the Certificate
of Trust and Bylaws of the Trust (and of any fundamental policies adopted by the
Fund pursuant to the Act, notice of which shall have been given to the
Distributor) which at the time in any way require, limit, restrict or prohibit
or otherwise regulate any action on the part of the Distributor.
(E) The Distributor will require each dealer to conform to the
provisions hereof and the Registration Statement (and related Prospectus and
Statement of Additional Information) at the time in effect under the Securities
Act with respect to the public offering price of the Shares.
(F) The Distributor shall not take, nor shall it permit any of
its shareholders, officers, directors or employees to take, a long or short
position in the Shares, except for the purchase of Shares for investment
purposes at the same price as that available to the public at the time of
purchase except that the Trust may sell Shares without a sales charge being
imposed in accordance with Section 1 hereof.
4. PRICE OF SHARES
---------------
(A) All Shares offered for sale or sold by the Distributor for
the account of the Fund shall be sold at the public offering price, which will
be the net asset value per share as determined in the manner provided in the
Certificate of Trust or Bylaws of the Trust, as now in effect or as they may be
amended, next after application and payment are received in the manner provided
in the Trust's then current Prospectus and Statement of Additional Information,
plus a sales charge, adjusted to the nearest full cent, equal to the percentages
of the public offering price indicated in such Prospectus or Statement of
Additional Information, giving effect to the quantity discounts, combined
purchase privilege, accumulation privilege, reinvestment privilege, letter of
intent procedures, the right of the Trust to sell Shares without a sales charge
being imposed pursuant to Section 1 hereof, and any other modifications of such
sales charges from time to time described in the Trust's current Prospectus and
Statement of Additional Information. The Distributor may retain such sales
charge or may reallow up to all of such sale commissions to its sales
representative and to brokers and dealers with whom it may enter into selling
agreements with respect to Shares from time to time.
(B) The Fund shall receive the application net asset value on
all sales of Shares by the Distributor as agent of the Fund.
5. REGISTRATION OF SHARES AND DISTRIBUTOR.
--------------------------------------
(A) The Trust agrees that it will use its best effort to keep
effectively registered under the Securities Act for sale as herein contemplated
such Shares as the Distributor shall reasonably request and as the Securities
and Exchange Commission shall permit to be so registered.
(B) The Trust will execute any and all documents and furnish any
and all information which may be reasonably necessary in connection with the
qualification of its Shares for sale (including the qualification of the Fund or
the Trust as a dealer where necessary or advisable) in such states as the
Distributor may reasonably request (it being understood that the Fund or the
Trust shall not be required without its consent to comply with any requirement
which in its opinion is unduly burdensome). The Trust shall not be obligated to
register or qualify the Shares for sale in any state where the applicable "blue
sky" or securities laws require the fees paid by the Fund pursuant to its
Distribution and Servicing Plans adopted pursuant to Rule 12b-1 under the Act be
included in the calculation of the expense limitation provided for in the
Trust's Investment Advisory Agreement with respect to the Fund. The
Distributor, at its own expense, will effect all required qualifications of the
Distributor as dealer or broker under all applicable state or federal laws.
(C) Notwithstanding any other provision hereof, the Fund may
terminate, suspend or withdraw the offering of Shares whenever, in its sole
discretion, it deems such action to be desirable.
6. EXPENSES
--------
The Trust will pay or cause to be paid expenses (including the fees
and disbursements of its own counsel) of any registration of the Shares under
the Securities Act of 1933, expenses of qualifying or continuing the
qualification of the Shares for sale, and in connection therewith, of qualifying
or continuing the qualification of the Trust as a dealer or broker, under the
laws of such states as may be designated by the Distributor under the conditions
herein specified, and expenses incident to the issuance of Shares, such as the
cost of share certificates, issue taxes, and fees of the transfer agent, out of
assets belonging to the Fund. The Distributor will pay all other expenses
(other than expenses which one or more dealers may bear pursuant to any selling
agreement with the Distributor) incident to the sale and distribution of the
Shares issued or sold hereunder, including, without limiting the generality of
the foregoing, all (a) expenses of printing and distributing or disseminating
any other literature, advertising and selling aids in connection with such
offering of the Shares for sale (except that such expenses shall not include
expenses incurred by the Trust in connection with the preparation, printing and
distribution of any report or other communication to holders of Shares in their
capacity as such) and (b) expenses of advertising in connection with such
offering. No transfer taxes, if any, which may be payable in connection with
the issue or delivery of Shares sold as herein contemplated or of the
certificates for such Shares shall be borne by the Trust, and the Distributor
will indemnify and hold harmless the Trust against liability for all such
transfer taxes. Notwithstanding anything in this paragraph to the contrary, the
Trust shall monitor its expense ratio on a monthly basis whereby if the accrued
amount of the expense of the Trust exceeds the expense limitation set forth
therein, the Trust shall create an account receivable from the Distributor for
the amount of such excess.
7. DURATION AND TERMINATION.
------------------------
(A) The Agreement shall become effective on August 21, 1995 and shall
continue in effect until August 21, 1997 and from year to year thereafter, but
only so long as such continuance is specifically approved each year by the
Trustees of the Trust or by the affirmative vote of a majority of the Fund's
outstanding voting securities (as defined in the Act). In addition to the
foregoing, each renewal of this Agreement must be approved by the vote of a
majority of the Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval. Prior to voting on the renewal of this
Agreement, the Trustees of the Trust shall request and evaluate, and Distributor
shall furnish, such information as may reasonably be necessary to enable the
Trustees to evaluate the terms of this Agreement.
(B) Notwithstanding whatever may be provided herein to the contrary,
this Agreement may be terminated at any time, without payment of any penalty, by
vote of a majority of the Trustees of the Trust (as defined in the Act), or by
vote of a majority of the outstanding voting securities of the Fund, or by the
Distributor, in each case, upon sixty (60) days' written notice to the other
party and shall terminate automatically in the event of its assignment.
8. NOTICE.
-------
Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage postpaid, to the other party at such address as
such other party may designate for the receipt of such notice.
9. ASSIGNMENT.
-----------
This Agreement shall neither be assignable nor subject to pledge or
hypothecation and in the event of assignment, pledge or hypothecation shall
automatically terminate. For purposes of determining whether an "assignment"
has occurred, the definition of "assignment" in Section 2(a)(4) of the Act shall
control.
10. MISCELLANEOUS.
-------------
(A) This Agreement shall be construed in accordance with the
laws of the State of Illinois, provided that nothing herein shall be construed
in a manner inconsistent with the Act, the Securities Act of 1933, the
Securities Exchange Act of 1934 or any rule or order of the Securities and
Exchange Commission thereunder.
(B) The captions of this Agreement are included for convenience
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
(C) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
IN WITNESS WHEREOF, the parties have each caused this Agreement to be
executed on its behalf by an officer thereunto duly authorized and its corporate
seal to be affixed on the day and year first above written.
THE JEFFERSON FUND GROUP TRUST
BY:/s/Keith Pinsoneault
--------------------------------
ITS: President
RODMAN & RENSHAW, INC.
(THE "DISTRIBUTOR")
BY:/s/Keith Pinsoneault
---------------------------------
ITS: Chief Operating Officer
EXHIBIT 6.2
SALES AGREEMENT
BETWEEN
AND
RODMAN & RENSHAW, INC.
THIS AGREEMENT is entered into between ----------------------------
("Broker") and Rodman & Renshaw, Inc. ("Rodman") for Jefferson Growth and Income
Fund of The Jefferson Fund Group Trust (the "Fund") for which Rodman serves as
Distributor of shares of capital stock ("Shares").
1. STATUS OF BROKER AS "REGISTERED BROKER-DEALER".
Broker represents and warrants to Rodman that it is a broker-dealer
registered with the Securities and Exchange Commission and a member of the
National Association of Securities Dealers, Inc. ("NASD"). It agrees to abide
by all of the rules and regulations of the NASD including, without limitation,
the NASD Rules of Fair Practice. Broker agrees to notify Rodman immediately in
the event of (i) its expulsion or suspension from the NASD, or (ii) its being
found to have violated any applicable federal or state law, rule or regulation
arising out of its activities as a broker-dealer or in connection with this
Agreement, or which may otherwise affect in any material way its ability to act
in accordance with the terms of this Agreement. Broker's expulsion from the
NASD will automatically terminate this Agreement immediately without notice.
Suspension of Broker from the NASD for violation of any applicable federal or
state law, rule or regulation will terminate this Agreement effective
immediately upon Rodman's written notice of termination to Broker.
2. BROKER ACTS AS AGENT FOR ITS CUSTOMERS.
The parties agree that in each transaction in the Shares: (a) Broker
is acting as agent for the customer; (b) each transaction is initiated solely
upon the order of the customer; (c) as between Broker and its customer, the
customer will have full beneficial ownership of all Shares; (d) each transaction
shall be for the account of the customer and not for Broker's account; and (e)
each transaction shall be without recourse to Broker provided that Broker acts
in accordance with the terms of this Agreement. Broker shall not have any
authority in any transaction to act as Rodman's agent or as agent for the Fund.
3. EXECUTION OF ORDERS FOR PURCHASE AND REDEMPTION OF SHARES.
(a) All orders for the purchase of any Shares shall be executed at
the then current public offering price per share (i.e., the net asset value
per share plus the applicable sales load, if any) and all orders for the
redemption of any Shares shall be executed at the net asset value per
share, plus any applicable contingent deferred sales load, in each case as
described in the prospectus of the Fund. Rodman and the Fund reserve the
right to reject any purchase request at their sole discretion. If required
by law, each transaction shall be confirmed in writing on a fully disclosed
basis and, if confirmed by Rodman, a copy of each confirmation shall be
sent simultaneously to Broker if Broker so requests.
(b) The procedures relating to all orders and the handling of them
will be subject to the terms of the prospectus of the Fund and Rodman's
written instructions to Broker from time to time.
(c) Payments for Shares shall be made as specified in the Fund's
prospectus. If payment for any purchase order is not received in
accordance with the terms of the Fund's prospectus, Rodman reserves the
right, without notice, to cancel the sale and to hold Broker responsible
for any loss sustained as a result thereof.
(d) Broker agrees to provide such security as is necessary to prevent
any unauthorized use of the Fund's recordkeeping system, accessed via any
computer hardware or software provided to Broker by Rodman.
4. PAYMENT OF DEALER COMMISSION TO BROKER.
Rodman agrees to pay to Broker commissions on sales of Shares as set
forth in a written schedule delivered to Broker pursuant to this Agreement.
These fees may be changed at any time at Rodman's sole discretion upon
thirty (30) days written notice to Broker.
5. PAYMENT OF ADMINISTRATIVE FEES TO BROKER.
Broker agrees to render or cause to be rendered such administrative
support services to the Fund for the accounts of Broker's customers who are
shareholders of the Fund, as the parties mutually agree are necessary to
facilitate the opening and closing of accounts, entering of purchase and
redemption transactions, transferring of funds, recordkeeping and accounting,
distribution of prospectuses and shareholder reports and communicating with
shareholders. During the term of this Agreement, Rodman will pay Broker fees
established by Rodman in a written schedule delivered to Broker pursuant to this
Agreement. These fees may be changed at any time at Rodman's sole discretion
upon thirty (30) days' written notice to Broker.
6. PAYMENT OF RULE 12B-1 FEES TO BROKER.
(a) Subject to and in accordance with the terms of the Fund's
prospectus and the Rule 12b-1 Plan adopted by resolution of the Board of
Directors and the shareholders of the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, Rodman may pay fees to securities dealers
providing services intended to result in sales of Shares. The services to
be provided may include, but are not limited to, the following:
(i) communicating account openings through computer terminals
located on the Broker's premises ("computer terminals"), through a
toll-free telephone number or otherwise;
(ii) communicating account closing through the computer
terminals, through a toll-free telephone number or otherwise;
(iii) entering purchase transactions through the computer
terminals, through a toll-free telephone number or otherwise;
(iv) entering redemption transactions through the computer
terminals, through a toll-free telephone number or otherwise;
(v) electronically transferring and receiving funds for Fund
Share purchases and redemptions, and confirming and reconciling all
such transactions;
(vi) reviewing the activity in Fund accounts;
(vii) providing training and supervision of its personnel;
(viii) maintaining and distributing current copies of
prospectuses and shareholder reports;
(ix) advertising the availability of its services and products;
(x) providing assistance and review in designing materials to
send to customers and potential customers and developing methods of
making such materials accessible to customers and potential customers;
and
(xi) responding to customers' and potential customers' questions
about the Fund.
The services listed above are illustrative. Broker is not required to
perform each service and may at any time perform either more or fewer
services than described above.
(b) During the term of the Agreement, Rodman will pay Broker fees as
set forth in a written schedule delivered to Broker pursuant to this
Agreement. Rodman's fee schedule for Broker may be changed by Rodman
sending a new fee schedule to Broker. For the payment period in which this
Agreement becomes effective or terminates, there shall be an appropriate
prorating of the fee on the basis of the number of days that this Agreement
is in effect during the period.
(c) Broker will not perform or provide any duties which would cause
it to be a fiduciary under Section 4975 of the Internal Revenue Code, as
amended. For purposes of that Section, Broker understands that any person
who exercises any discretionary authority or discretionary control with
respect to any individual retirement account or its assets, or who renders
investment advice for a fee, or has any authority or responsibility to do
so, or has any discretionary authority or discretionary responsibility in
the administration of such an account, is a fiduciary.
(d) Broker understands that the Department of Labor views ERISA as
prohibiting fiduciaries of discretionary ERISA assets from receiving
compensation from funds in which the fiduciary's discretionary ERISA assets
are invested. To date, the Department of Labor has not issued any
exempting order or advisory opinion that would exempt fiduciaries from this
interpretation. Without specific authorization from the Department of
Labor, fiduciaries should carefully avoid investing discretionary assets in
any fund pursuant to an arrangement where the fiduciary is to be
compensated by the fund for such investment. Receipt of such compensation
could violate ERISA provisions against fiduciary self-dealing and conflict
of interest and could subject the fiduciary to substantial penalties.
7. DELIVERY OF PROSPECTUS TO CUSTOMERS.
Broker will deliver or cause to be delivered to each customer, at or
prior to the time of any purchase of Shares, a copy of the prospectus of the
Fund. Broker shall not make any representation concerning any Shares other than
those contained in the prospectus of the Fund or in any promotional materials or
sales literature furnished to Broker by Rodman or the Fund.
8. INDEMNIFICATION.
(a) Broker shall indemnify and hold harmless Rodman, the Fund, the
transfer agent of the Fund, and their respective subsidiaries, affiliates,
officers, directors, agents and employees from all direct or indirect
liabilities, losses or costs (including attorney's fees) arising from,
related to or otherwise connected with: (a) any breach by Broker of any
provision of this Agreement; or (2) any actions or omissions of Rodman, any
Fund, the transfer agent of the Fund, and their subsidiaries, affiliates,
officers, directors, agents and employees in reliance upon any oral,
written or computer or electronically transmitted instructions believed to
be genuine and to have been given by or on behalf of Broker.
(b) Rodman shall indemnify and hold harmless Broker and its
subsidiaries, affiliates, officers, directors, agents and employees from
and against any and all direct or indirect liabilities, losses or costs
(including attorney's fees) arising from, related to or otherwise connected
with: (a) any breach by Rodman of any provision of this Agreement; or (2)
any alleged or untrue statement of a material fact contained in the Fund's
registration statement or prospectus, or as a result of or based upon any
alleged omission to state a material fact required to be stated, or
necessary to make the statements not misleading.
(c) The agreement of the parties in this paragraph to indemnify each
other is conditioned upon the party entitled to indemnification
(Indemnified Party) giving notice to the party required to provide
indemnification (Indemnifying Party) promptly after the summons or other
first legal process for any claim as to which indemnity may be sought is
served on the Indemnified Party. The Indemnified Party shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting from it, provided that counsel for the Indemnifying
Party who shall conduct the defense of such claim or litigation shall be
approved by the Indemnified Party (which approval shall not unreasonably be
withheld), and that the Indemnified Party may participate in such defense
at its expense. The failure of the Indemnified Party to give notice as
provided in this subparagraph (c) shall not relieve the Indemnifying Party
from any liability other than its indemnity obligation under this
paragraph. No Indemnifying Party, in the defense of any such claim or
litigation, shall, without the consent of the Indemnified Party, consent to
entry of any judgment or enter into any settlement that does not include as
an unconditional term the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect to such claim
or litigation.
(d) The provisions for this paragraph 8 shall survive the termination
of this Agreement.
9. CUSTOMER NAMES PROPRIETARY TO BROKER.
(a) The names of Broker's customers are and shall remain Broker's
sole property and shall not be used by Rodman or its affiliates for any
purpose except the performance of its duties and responsibilities under
this Agreement and except for servicing and informational mailings relating
to the Fund. Notwithstanding the foregoing, this paragraph 9 shall not
prohibit Rodman or any of its affiliates from utilizing the names of
Broker's customers for any purpose if the names are obtained in any manner
other than from Broker pursuant to this Agreement.
(b) Neither party shall use the name of the other party in any manner
without the other party's written consent, except as required by any
applicable federal or state law, rule or regulation, and except pursuant to
any mutually agreed upon promotional programs.
(c) The provisions of this paragraph 9 shall survive the termination
of this Agreement.
10. SOLICITATION OF PROXIES.
Broker agrees not to solicit or cause to be solicited directly, or
indirectly, at any time in the future, any proxies from the shareholders of the
Fund in opposition to proxies solicited by management of the Fund, unless a
court of competent jurisdiction shall have determined that the conduct of a
majority of the Trustees of the Trust constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard of their duties. This paragraph
10 will survive the term of this Agreement.
11. CERTIFICATION OF CUSTOMERS' TAXPAYER IDENTIFICATION NUMBERS.
Broker agrees to obtain any taxpayer identification number
certification from its customers required under Section 3406 of the Internal
Revenue Code, and any applicable Treasury regulations, and to provide Rodman or
its designee with timely written notice of any failure to obtain such taxpayer
identification number certification in order to enable the implementation of any
required backup withholding.
12. NOTICES.
Except as otherwise specifically provided in this Agreement, all
notices required or permitted to be given pursuant to this Agreement shall be
given in writing and delivered by personal delivery or by postage prepaid,
registered or certified United States first class mail, return receipt
requested, or the telex, telegram or similar means of same day delivery (with a
confirming copy by mail as provided herein). Unless otherwise notified in
writing, all notices to Rodman shall be given or sent to Rodman at its offices
located at 120 S. LaSalle Street, Chicago, Illinois 60603, and all notices to
Broker shall be given or sent to it at its address shown below.
13. TERMINATION AND AMENDMENT.
(a) This Agreement shall continue in effect for one year from the
date of its execution, and thereafter for successive periods of one year if
the form of this Agreement is approved at least annually by the Trustees of
the Trust, including a majority of the Trustees who are not interested
persons of the Trust and have no direct or indirect financial interest in
the operation of the Fund's 12b-1 Plan or in any related documents to the
12b-1 Plan ("Disinterested Trustees") cast in person at a meeting called
for that purpose.
(b) Notwithstanding subparagraph (a), this Agreement may be
terminated as follows:
(i) at any time, without the payment of any penalty, by the vote
of a majority of the Disinterested Trustees of the Trust or by a vote
of a majority of the outstanding voting securities of the Fund as
defined in the Investment Company Act of 1940 on not more than sixty
(60) days' written notice to the parties to this Agreement;
(ii) automatically in the event of the Agreement's assignment as
defined in the Investment Company Act of 1940 or upon the termination
of any Distribution Assistance Agreement between the Fund and Rodman;
and
(iii) by either party to the Agreement without cause by
giving the other party at least sixty (60) days' written notice of its
intention to terminate.
(c) This Agreement may be amended by Rodman from time to time by the
following procedure. Rodman will mail a copy of the amendment to Broker's
address, as shown below. If Broker does not object to the amendment within
thirty (30) days after its receipt, the amendment will become part of the
Agreement. Broker's objection must be in writing and be received by Rodman
within such thirty (30) days.
14. PRIOR AGREEMENTS.
This Agreement supersedes any prior service agreements between the
parties for the Fund.
15. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
State of Illinois.
--------------------------------------
Broker Name
(Please Print or Type)
--------------------------------------
Address
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City State Zip Code
--------------------------------
By: Date:
--------------------------------
Authorized Signature
--------------------------------
Title
--------------------------------
Please Print or Type Name
RODMAN & RENSHAW, INC.
By:
--------------------------------
--------------------------------
Title
--------------------------------
Please Print or Type Name
FEE SCHEDULE FOR SELLING AGREEMENT
BETWEEN
AND
RODMAN & RENSHAW, INC.
1. Commission. In connection with original purchases of Shares, Rodman will
pay Broker commissions as follows:
(a) For sales of Class A Shares, Broker shall receive a one-time fee,
based on the value of an individual sale, in accordance with the following
table:
Sales Dealer Commission*<F1>
$0 - 9,999 4.75%
$10,0000- 24,999 3.75%
$25,000 - 49,999 3.00%
$50,000 - 99,999 2.00%
$100,000 - 499,999 1.00%
$500,000 - 999,999 0.75%
$1,000,000+ 0.25%
*<F1>As a percentage of the public offering price.
(b) For sales of Class B Shares, Broker shall receive a one-time fee
of 4% of the original offering price of such shares.
(c) The fees described in (a) and (b) above shall only be payable
with respect to the original purchase of Shares and shall not be paid for
Shares acquired through dividend reinvestment. The fee will be paid by
Rodman by the tenth business day of the month following the month in which
the Shares are purchased.
2. Trailer. Rodman will pay Broker an annual fee calculated at the annual
rate of .25% of the aggregate daily net asset value of a Class A Shares and/or
Class B Shares held in an individually titled account that have been so held for
a minimum of 365 days after the settlement date of the purchase of such Shares.
The first installment of the annual fee shall be payable by the tenth business
day of the calendar quarter end following the month in which the Shares shall
have been so held for 365 days. For purposes of determining the annual fee
payable pursuant to this paragraph 2, "Shares held in an individually titled
account that have been so held for a minimum of 365 days" shall include all
Shares originally purchased plus Shares acquired through the reinvestment of
dividends paid with respect to such Shares. For the month in which payments
pursuant to this paragraph 2 commence, there shall be an appropriate prorating
of the fee on the basis of the number of days in the month following the
aforesaid 365th day or on the basis of the number of days that the account or
Sales Agreement is in effect during the month, as the case may be. No fee will
be paid to the Broker in the month in which the account or Sales Agreement
terminates.
EXHIBIT 8
CUSTODIAN AGREEMENT
THIS AGREEMENT made on March 16, 1995, between The Jefferson Fund
Group Trust, a Delaware business trust (hereinafter called the ("Fund"), and
FIRSTAR TRUST COMPANY, a corporation organized under the laws of the State of
Wisconsin (hereinafter called "Custodian"),
WITNESSETH:
WHEREAS, the Fund desires that its securities and cash shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Fund by any two of the
President, a Vice President, the Secretary and the Treasurer of the Fund, or any
other persons duly authorized to sign by the Board of Trustees.
The word "Board" shall mean Board of Trustees of the Fund.
2. NAMES, TITLES, AND SIGNATURES OF THE FUND'S OFFICERS
An officer of the Fund will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board of
Trustees, together with any changes which may occur from time to time.
3. RECEIPT AND DISBURSEMENT OF MONEY
A. Custodian shall open and maintain a separate account or accounts
in the name of the Fund, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it from or
for the account of the Fund. Custodian shall make payments of cash to, or for
the account of, the Fund from such cash only:
(a) for the purchase of securities for the portfolio of the Fund upon
the delivery of such securities to Custodian, registered in the
name of the Fund or of the nominee of Custodian referred to in
Section 7 or in proper form for transfer;
(b) for the purchase or redemption of shares of the common stock of the
Fund upon delivery thereof to Custodian, or upon proper
instructions from the Fund;
(c) for the payment of interest, dividends, taxes, investment adviser's
fees or operating expenses (including, without limitation thereto,
fees for legal, accounting, auditing and custodian services and
expenses for printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund held by
or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution of the
Board of the Trustees of the Fund.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c), or (d) of this
Subsection A, and also, in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument, or
any other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Fund issues appropriate oral or
facsimile instructions to Custodian and an appropriate officers' certificate is
received by Custodian within two business days thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of the Fund.
C. Custodian shall, upon receipt of proper instructions, make federal
funds available to the Fund as of specified times agreed upon from time to time
by the Fund and the custodian in the amount of checks received in payment for
shares of the Fund which are deposited into the Fund's account.
4. SEGREGATED ACCOUNTS
Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account(s) for and on behalf of the portfolio, into which
account(s) may be transferred cash and/or securities.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any securities of
the Fund held by it pursuant to this Agreement. Custodian agrees to transfer,
exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund upon
receipt by Custodian of payment therefore;
(b) when such securities are called, redeemed or retired or otherwise
become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone or
other securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment, or
otherwise;
(e) upon conversion of such securities pursuant to their terms into
other securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock of the
Fund upon delivery thereof to Custodian; or
(i) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a), (b), (d),
(e), (f), and (g), securities or cash receivable in exchange therefore shall be
deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such transfer,
exchange or delivery, and stating that it is for a purpose permitted under the
terms of items (a), (b), (c), (d), (e), (f), (g), or (h) of this Section 5 and
also, in respect of item (i), upon receipt of an officers' certificate
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate need not precede
any such transfer, exchange or delivery of a money market instrument, or any
other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Fund issues appropriate oral or
facsimile instructions to Custodian and an appropriate officers' certificate is
received by Custodian within two business days thereafter.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other income
items held by it for the account of the Fund, which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund ; (b) collect interest and cash dividends received, with notice to
the Fund, for the account of the Fund; (c) hold for the account of the Fund
hereunder all stock dividends, rights and similar securities issued with respect
to any securities held by it hereunder; and (d) execute, as agent on behalf of
the Fund, all necessary ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States Treasury Department or
under the laws of any state now or hereafter in effect, inserting the Fund's
name on such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so.
7. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the name of
a registered nominee of Custodian as defined in the Internal Revenue Code and
any Regulations of the Treasury Department issued hereunder or in any provision
of any subsequent federal tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. Custodian shall use its best efforts to the end that the
specific securities held by it hereunder shall be at all times identifiable in
its records.
The Fund shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund.
8. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation to
such securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
9. TRANSFER TAX AND OTHER DISBURSEMENTS
The Fund shall pay or reimburse Custodian from time to time for any
transfer taxes payable upon transfers of securities made hereunder, and for all
other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any state, to exempt
from taxation any exemptable transfers and/or deliveries of any such securities.
10. CONCERNING CUSTODIAN
Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing, such compensation
shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such document which it may in good
faith believe to have been validly executed.
The Fund agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) incurred or assessed against it or by its nominee in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct. Custodian is authorized to charge any account of the for such
items. In the event of any advance of cash for any purpose made by Custodian
resulting from orders or instructions of the Fund, or in the event that
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund shall be security therefore.
11. SUBCUSTODIANS
Custodian is hereby authorized to engage another bank or trust company
as a Subcustodian for all or any part of the 's assets, so long as any such bank
or trust company is a bank or trust company organized under the laws of any
state of the United States, having an aggregate capital, surplus and undivided
profit, as shown by its last published report, of not less than Two Million
Dollars ($2,000,000) and provided further that, if the Custodian utilizes the
services of a Subcustodian, the Custodian shall remain fully liable and
responsible for any losses caused to the Fund by the Subcustodian as fully as if
the Custodian was directly responsible for any such losses under the terms of
the Custodian Agreement.
Notwithstanding anything contained herein, if the Fund requires the
Custodian to engage specific Subcustodians for the safekeeping and/or clearing
of assets, the Fund agrees to indemnify and hold harmless Custodian from all
claims, expenses and liabilities incurred or assessed against it in connection
with the use of such Subcustodian in regard to the Fund's assets, except as may
arise from its own negligent action, negligent failure to act or willful
misconduct.
12.REPORTS BY CUSTODIAN
Custodian shall furnish the Fund periodically as agreed upon with a
statement summarizing all transactions and entries for the account of the Fund .
Custodian shall furnish to the Fund, at the end of every month, a list of the
portfolio securities showing the aggregate cost of each issue. The books and
records of Custodian pertaining to its actions under this Agreement shall be
open to inspection and audit at reasonable times by officers of, and of auditors
employed by, the Fund.
13. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Fund, or by Custodian, on
ninety (90) days notice, given in writing and sent by registered mail to
Custodian at P.O. Box 2054, Milwaukee, Wisconsin 53201, or to the Fund at 120
South LaSalle Street, Chicago, Illinois 60603, as the case may be. Upon any
termination of this Agreement, pending appointment of a successor to Custodian
or a vote of the shareholders of the Fund to dissolve or to function without a
custodian of its cash, securities and other property, Custodian shall not
deliver cash, securities or other property of the Fund to the Fund, but may
deliver them to a bank or trust company of its own selection, having an
aggregate capital, surplus and undivided profits, as shown by its last published
report of not less than Two Million Dollars ($2,000,000) as a Custodian for the
Fund to be held under terms similar to those of this Agreement, provided,
however, that Custodian shall not be required to make any such delivery or
payment until full payment shall have been made by the Fund of all liabilities
constituting a charge on or against the properties then held by Custodian or on
or against Custodian, and until full payment shall have been made to Custodian
of all its fees, compensation, costs and expenses, subject to the provisions of
Section 10 of this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Fund, authorized or approved by a resolution of its Board of Trustees.
14. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board of Trustees of the Fund approves by resolution the
use of such central securities clearing agency or securities depository.
15. RECORDS
To the extent that Custodian in any capacity prepares or maintains any
records required to be maintained and preserved by the Fund pursuant to the
provisions of the Investment Company Act of 1940, as amended, or the rules and
regulations promulgated thereunder, Custodian agrees to make any such records
available to the Fund upon request and to preserve such records for the periods
prescribed in Rule 31a-2 under the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their respective corporate seals to be affixed hereto as of the
date first above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
Attest: FIRSTAR TRUST COMPANY
/s/ Gail M. Zess By /s/ James Tyler
Assistant Secretary Vice President
Attest: The Jefferson Fund Group Trust
/s/ Richard J. Schwartz By /s/ Charles Provini
Jefferson Growth and Income Fund
Custody Services
Annual Fee Schedule - Domestic Funds
- - Annual fee based upon market value
- 2 basis points per year
- minimum annual fee per fund - $3,000
- - Investment transactions (purchase, sale, exchange, tender, redemption,
maturity, receipt, delivery):
- $12.00 per book entry security (depository or Federal Reserve
System)
- $25.00 per definitive security (physical)
- $25.00 per mutual fund trade
- $75.00 per Euroclear
- $8.00 per principal reduction on pass-through certificates
- $35.00 per option/futures contract
- $15.00 per variation margin
- $15.00 per Fed wire deposit or withdrawal
- - Variable Amount Demand Notes: Used as a short-term investment, variable
amount notes offer safety and prevailing high interest rates. Our charge,
which is 1/4 of 1%, is deducted from the variable amount note income at the time
it is credited to your account.
- - Plus out-of-pocket expenses, and extraordinary expenses based upon
complexity.
- - Fees are billed monthly, based upon market value at the beginning of the
month.
EXHIBIT 9.1
FUND ADMINISTRATION SERVICING AGREEMENT
This Agreement is made and entered into on this 16th day of March, 1995, by and
between The Jefferson Fund Group Trust (hereinafter referred to as the "Fund")
and Firstar Trust Company, a corporation organized under the laws of the State
of Wisconsin (hereinafter referred to as "FTC").
WHEREAS, The Fund an open-ended management investment company which is
registered under the Investment Company Act of 1940;
WHEREAS, FTC is a trust company and, among other things, is in the business of
providing fund administration services for the benefit of its customers;
NOW, THEREFORE, the Fund and FTC do mutually promise and agree as follows:
I. Duties and Responsibilities of FTC
A. General Fund Management
1. Act as liaison among all fund service providers
2. Coordinate board communication by:
a. Assisting fund counsel in establishing meeting agendas
b. Preparing board reports based on financial and administrative
data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and officers
liability coverage, if requested
3. Audits
a. Prepare appropriate schedules and assist independent auditors
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
4. Assist in overall operations of the Fund
B. Compliance
1. Regulatory Compliance
a. Periodically monitor compliance with Investment Company Act of
1940 requirements
1) Asset diversification tests
2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule 31a-3
4) Code of ethics
b. Periodically monitor prospectus investment limitation
2. Blue Sky Compliance
a. File initial state application and all subsequent reports
b. Monitor status in each state
3. SEC Registration and Reporting
a. Assisting Fund's counsel in updating prospectus, statement of
additional information, proxy statements, and Rule 248-2 notice,
b. Annual and semiannual reports
4. IRS Compliance
a. Periodically monitor Fund's status as a regulated investment
company under Subchapter M through review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Monitor short short testing
c. Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by fund prospectus and statement of
additional information
2. Prepare financial reports for shareholders, the board, the SEC, and
independent auditors
3. Monitor expense accruals and payments
D. Tax Reporting
1. Prepare appropriate federal and state tax returns including forms
1120/8610 with any necessary schedules
2. Prepare state income breakdowns where relevant
3. File 1099 Miscellaneous for payments to directors and other service
providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate shareholders
II. Compensation
The Fund agrees to pay FTC for performance of the duties listed in this
Agreement and the fees and out-of-pocket expenses as set forth in the
attached Schedule A.
These fees may be changed from time to time, subject to mutual written
Agreement between the Fund and FTC.
The Fund agrees to pay all fees and reimbursable expenses within ten (10)
business days following the mailing of the billing notice.
III. Performance of Service; Limitation of Liability
FTC shall exercise reasonable care in the performance of its duties under
the Agreement. The Fund agrees to reimburse and make FTC whole for any
loss or damages (including reasonable fees and expenses of legal counsel)
arising out of or in connection with its actions under this Agreement so
long as FTC acts in good faith and is not negligent or guilty of any
willful misconduct.
FTC shall not be liable or responsible for delays or errors occurring by
reason of circumstances beyond its control, including acts of civil or
military authority, natural or state emergencies, fire, mechanical
breakdown, flood or catastrophe, act of God, insurrection, war, riots, or
failure of transportation, communication, or power supply.
In the event of a mechanical breakdown beyond its control, FTC shall take
all reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FTC's control. FTC will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FTC. FTC agrees
that it shall, at all times, have reasonable contingency plans with
appropriate parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate equipment is
available. Representatives of the Fund shall be entitled to inspect FTC's
premises and operating capabilities at any time during regular business
hours of FTC, upon reasonable notice to FTC.
This indemnification includes any act, ommission to act, or delay by FTC
in reliance upon, or in accordance with, any written or oral instruction
it receives from any duly authorized officer of the Fund.
Regardless of the above, FTC reserves the right to reprocess and correct
administrative errors at its own expense.
IV. Confidentiality
FTC shall handle, in confidence, all information relating to the Fund's
business which is received by FTC during the course of rendering any
service hereunder.
V. Data Necessary to Perform Service
The Fund or its agent, which may be FTC, shall furnish to FTC the data
necessary to perform the services described herein at times and in such
form as mutually agreed upon.
VI. Terms of Agreement
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue in effect with respect
to the Fund for a period of two years. Thereafter, if not terminated, this
Agreement shall continue automatically in effect for successive annual
periods unless otherwise terminated by either party upon giving ninety (90)
days prior written notice to the other party or such shorter period as is
mutually agreed upon by the parties.
VII. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
FTC's duties or responsibilities hereunder is designated by the Fund by
written notice to FTC, FTC will promptly, upon such termination and at the
expense of the Fund, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by FTC
under this Agreement in a form reasonably acceptable to the Fund (if such
form differs from the form in which FTC has maintained, the Fund shall pay
any expenses associated with transferring the data to such form), and will
cooperate in the transfer of such duties and responsibilities, including
provision for assistance from FTC's personnel in the establishment of
books, records, and other data by such successor.
VIII. Choice of Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin.
THE JEFFERSON FUND GROUP TRUST FIRSTAR TRUST COMPANY
By: /s/ Charles Provini By: /s/ James C. Tyler
Attest: /s/ Richard J. Schwartz Attest: /s/ Gail M. Zess
JEFFERSON GROWTH AND INCOME FUND
FUND ADMINSTRATION AND COMPLIANCE
ANNUAL FEE SCHEDULE
- - Annual Fee based upon fund group assets
- 6 basis points on the first $200 million
- 5 basis points on the next $300 million
- 3 basis points on the balance
- Minimum annual fee $40,000 for both classes
EFFECTIVE NOVEMBER 1, 1996, THE FEES WERE REDUCED AS FOLLOWS:
- 50% discount until the fund reaches $10 million $20,000/year
- 40% discount until the fund reaches $12 million $24,000/year
- 30% discount until the fund reaches $14 million $28,000/year
- 20% discount until the fund reaches $16 million $32,000/year
- 10% discount until the fund reaches $18 million $36,000/year
- Over $20 million fee schedule will be as follows:
- 25 basis points on $20 million $60,000/year
- 20 basis points on $25 million $50,000/year
- 15 basis points on $30 million $45,000/year
- - Plus out-of-pocket expenses, including but not limited to:
- Postage
- Programming
- Stationary
- Proxies
- Retention of records
- Special reports
- Federal and state regulatory filing fees
- Certain insurance premiums
- Expenses from Board of Trustees meetings
- Auditing and legal expenses
- All other out-of-pocket expenses
- - Fees are billed monthly
EXHIBIT 9.2
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this 16th day of March, 1995, by
and between The Jefferson Fund Group Trust (hereinafter referred to as the
"Fund") and Firstar Trust Company, a corporation organized under the laws of the
State of Wisconsin (hereinafter referred to as the "Agent").
W I T N E S S E T H:
WHEREAS, the Fund is an open-ended management investment company which is
registered under the Investment Company Act of 1940; and
WHEREAS, the Agent is a trust company and, among other things, is in the
business of administering transfer and dividend disbursing agent functions for
the benefit of its customers;
NOW, THEREFORE, the Fund and the Agent do mutually promise and agree as
follows:
1. TERMS OF APPOINTMENT; DUTIES OF THE AGENT
Subject to the terms and conditions set forth in this Agreement, the Fund
hereby employs and appoints the Agent to act as transfer agent and dividend
disbursing agent.
The Agent shall perform all of the customary services of a transfer agent
and dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive orders for the purchase of shares, with prompt delivery, where
appropriate, of payment and supporting documentation to the Fund's
custodian;
B. Process purchase orders and issue the appropriate number of
certificated or uncertificated shares with such uncertificated shares
being held in the appropriate shareholder account;
C. Process redemption requests received in good order and, where relevant,
deliver appropriate documentation to the Fund's custodian;
D. Pay monies (upon receipt from the Fund's custodian, where relevant) in
accordance with the instructions of redeeming shareholders;
E. Process transfers of shares in accordance with the shareowner's
instructions;
F. Process exchanges between funds within the same family of funds;
G. Issue and/or cancel certificates as instructed; replace lost, stolen or
destroyed certificates upon receipt of satisfactory indemnification or
surety bond;
H. Prepare and transmit payments for dividends and distributions declared
by the Fund;
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (i.e., systematic withdrawal, automatic
investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain, pursuant to
Section Rule 17ad-10(e), a record of the total number of shares of the
Fund which are authorized, issued and outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail, receive and
tabulate proxies;
L. Mail shareholder reports and prospectuses to current shareholders;
M. Prepare and file U.S. Treasury Department forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders;
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Fund; and
O. Provide a Blue Sky System which will enable the Fund to monitor the
total number of shares sold in each state. In addition, the Fund shall
identify to the Agent in writing those transactions and assets to be
treated as exempt from the Blue Sky reporting to the Fund for each
state. The responsibility of the Agent for the Fund's Blue Sky state
registration status is solely limited to the initial compliance by the
Fund and the reporting of such transactions to the Fund.
2. COMPENSATION
The Fund agrees to pay the Agent for performance of the duties listed in
this Agreement; the fees and out-of-pocket expenses include, but are not limited
to the following: printing, postage, forms, stationery, record retention,
mailing, insertion, programming, labels, shareholder lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Fund and the Agent.
The Fund agrees to pay all fees and reimbursable expenses within ten (10)
business days following the mailing of the billing notice.
3. REPRESENTATIONS OF AGENT
The Agent represents and warrants to the Fund that:
A. It is a trust company duly organized, existing and in good standing
under the laws of Wisconsin;
B. It is duly qualified to carry on its business in the state of
Wisconsin;
C. It is empowered under applicable laws and by its charter and bylaws to
enter into and perform this Agreement;
D. All requisite corporate proceedings have been taken to authorize it to
enter and perform this Agreement; and
E. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
4. REPRESENTATIONS OF THE FUND
The Fund respresents and warrants to the Agent that:
A. The Fund is an open-ended diversified investment company under the
Investment Company Act of 1940;
B. The Fund is a business trust organized, existing, and in good standing
under the laws of Deleware;
C. The Fund is empowered under applicable laws and by its Corporate
Charter and bylaws to enter into and perform this Agreement;
D. All necessary proceedings required by the Corporate Charter have been
taken to authorize it to enter into and perform this Agreement;
E. The Fund will comply with all applicable requirements of the Securities
Act of 1933 and 1934, as amended, the Investment Company Act of 1940,
as amended, and any laws, rules and regulations of governmental
authorities having jurisdiction; and
F. A registration statement under the Securities Act of 1933 is currently
effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect
to all shares of the Fund being offered for sale.
5. COVENANTS OF THE FUND AND AGENT
The Fund shall furnish the Agent a certified copy of the resolution of the
Board of Trustees of the Fund authorizing the appointment of the Agent and the
execution of this Agreement. The Fund shall provide to the Agent a copy of the
Corporate Charter, bylaws of the Corporation and all amendments.
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the rules thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such section and rules and will be surrendered
to the Fund on and in accordance with its request.
6. INDEMNIFICATION; REMEDIES UPON BREACH
The Agent agrees to use reasonable care and act in good faith in performing
its duties hereunder.
Notwithstanding the foregoing, the Agent shall not be liable or responsible
for delays or errors occurring by reason of circumstances beyond its control,
including acts of civil or military authority, national or state emergencies,
fire, mechanical or equipment failure, flood or catstrophe, acts of God,
insurrection or war. In the event of a mechanical breakdown beyond its control,
the Agent shall take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond the Agent's control. The
Agent will make every reasonable effort to restore any lost or damaged data, and
the correcting of any errors resulting from such a breakdown will be at the
Agent's expense. The Agent agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Respresentatives of the Fund shall be entitled to
inspect the Agent's premises and operating capabilities at any time during
regular business hours of the Agent, upon reasonable notice to the Agent.
The Fund will indemnify and hold the Agent harmless against any and all
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses) resulting from any claim, demand, action, or suit not
resulting from the Agent's bad faith or negligence, and arising out of or in
connection with the Agent's duties on behalf of the Fund hereunder.
Further, the Fund will indemnify and hold the Agent harmless against any
and all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit as a
result of the negligence of the Fund or the principal underwriter (unless
contributed to by the Agent's own negligence or bad faith); or as a result of
the Agent acting upon telephone instructions relating to the exchange or
redemption of shares received by the Agent and reasonably believed by the Agent
to have originated from the record owner of the subject shares; or as a result
of the Agent acting upon any instructions executed or orally communicated by a
duly authorized officer or employee of the Fund, according to such lists of
authorized officers and employees furnished to the Agent and as amended from
time to time in writing by a resolution by the Board of Trustees of the Fund; or
as a result of acting in reliance upon any genuine instrument or stock
certificate signed, countersigned, or executed by any person or persons
authorized to sign, countersign, or execute the same.
In order for this section to apply, it is understood that if in any case
the Fund may be asked to indemnify or hold harmless the Agent, the Fund shall be
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Agent will use reasonable care to notify the Fund
promptly concerning any situation which presents or appears likely to present a
claim for indemnification against the Fund. The Fund shall have the option to
defend the Agent against any claim which may be the subject of this
indemnification and, in the event that the Fund so elects, the Agent will so
notify the Fund, and thereupon the Fund shall take over complete defense of the
claim and the Agent shall sustain no further legal or other expenses in such
situation for which the Agent shall seek indemnification under this section.
The Agent will in no case confess any claim or make any compromise in any case
in which the Fund will be asked to indemnify the Agent, except with the Fund's
prior written consent.
7. CONFIDENTIALITY
The Agent agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the Fund and its
shareholders and shall not be disclosed to any other party, except after prior
notification to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the Agent may be exposed to
civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities.
8. WISCONSIN LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of Wisconsin.
9. AMENDMENT, ASSIGNMENT, TERMINATION AND NOTICE
A. This Agreement may be amended by the mutual written consent of the
parties.
B. After the first full year, this Agreement may be terminated upon ninety
(90) day's written notice given by one party to the other.
C. This Agreement and any right or obligation hereunder may not be
assigned by either party without the signed, written consent of the
other party.
D. Any notice required to be given by the parties to each other under the
terms of this Agreement shall be in writing, addressed and delivered,
or mailed to the principal
place of business of the other party.
E. In the event that the Fund gives to the Agent its written intention to
terminate and appoint a successor transfer agent, the Agent agrees to
cooperate in the transfer of its duties and responsibilities to the
successor, including any and all relevant books, records and other data
established or maintained by the Agent under this Agreement.
F. Should the Fund excercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
paid by the Fund.
The Jefferson Fund Group Trust Firstar Trust Company
By: /s/ Charles Provini By: /s/ James C. Tyler
Attest: /s/ Richard J. Schwartz Attest: /s/ Gail M. Zess
Assistant Secretary
JEFFERSON GROWTH AND INCOME FUND
TRANSFER AGENT AND SHAREHOLDER SERVICING
ANNUAL FEE SCHEDULE
- - $15.00 per shareholder account
Subject to a minimum of $30,000 for both classes
EFFECTIVE NOVEMBER 1, 1996, THE FEES WERE REDUCED AS FOLLOWS:
- 50% discount until the fund reaches $10 million $15,000/year
- 40% discount until the fund reaches $12 million $18,000/year
- 30% discount until the fund reaches $14 million $21,000/year
- 20% discount until the fund reaches $16 million $24,000/year
- 10% discount until the fund reaches $18 million $27,000/year
- Over $20 million fee schedule will be as follows:
- 25 basis points on $20 million $50,000/year
- 15 basis points on $25 million $45,000/year
- 12 basis points on $30 million $36,000/year
- - Plus out-of-pocket expenses, including but not limited to:
- Telephone - toll-free lines
- Postage
- Programming
- Stationery/envelopes
- Mailing
- Insurance
- Proxies
- Retention of records
- Microfilm/fiche of records
- Special reports
- ACH Fees
- NSCC charges
- All other out-of-pocket expenses
- - Fees and out-of-pocket expenses are billed to the fund monthly
EXHIBIT 9.3
FUND ACCOUNTING SERVICING AGREEMENT
This contract between The Jefferson Fund Group Trust, a Deleware business trust,
hereinafter called the "Fund," and Firstar Trust Company, a Wisconsin
corporation, hereinafter called "FTC," is entered into on this 16th day of
March, 1995.
WITNESSETH:
WHEREAS, The Jefferson Fund Group Trust is a financial services company
providing investment opportunities throug mutual funds to various investors; and
WHEREAS, the manager has entered into an Investment Advisory Agreement with
the Fund (the "Investment Advisory Agreement") whereby manager has agreed to
make certain payments and pay certain expenses on behalf of the Fund and
portfolios;
WHEREAS, Firstar Trust Company ("FTC") is in the business of providing,
among other things, mutual fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. SERVICES. FTC agrees to provide the following mutual fund accounting
services to the Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis using
security trade information communicated from the investment manager on
a timely basis.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Trustees and apply those prices to the
portfolio positions. For those securities where market quotations are
not readily available, the Board of Trustees shall approve, in good
faith, the method for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on security sales and identify them as to
short-short, short- or long-term status; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual amounts
as directed by the Fund as to methodology, rate or dollar amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Fund.
(3) Account for fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FTC and
the Fund.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for fund share purchases, sales, exchanges, transfers,
dividend reinvestments, and other fund share activity as reported by
the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Fund.
(3) Determine net investment income (earnings) for the Fund as of
each valuation date. Account for periodic distributions of earnings to
shareholders and maintain undistributed net investment income balances
as of each valuation date.
(4) Maintain a general ledger for the Fund in the form as agreed
upon.
(5) For each day the Fund is open as defined in the prospectus,
determine the net asset value of the according to the accounting
policies and procedures set forth in the prospectus.
(6) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of fund operation at such time
as required by the nature and characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolio of
the Fund to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax
cost basis designated by the Fund.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to the
transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the fund accounting records available
to the Fund, the Securities and Exchange Commission, and the outside
auditors.
(2) Maintain accounting records according to the Investment
Company Act of 1940 and regulations provided thereunder.
2. The Fund reserves the right to override the price(s) of any security
valued by FTC's pricing service for any given price date. The Fund shall
promptly notify FTC of any such price changes upon receipt by the Fund of that
day's Securities Pricing Report. If there is no price available for any given
security, the Fund shall provide such price(s) to be manually entered into FTC's
Fund Accounting System.
All pricing changes made by the Fund will be in writing, and must
specifically identity the securities to be changed by CUSIP, name of security,
new price or rate to be applied, and if applicable, the time period for which
the new price(s) is (are) effective.
3. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the Board
of Trustees that affects accounting practices and procedures under this
agreement shall be effective upon written receipt and acceptance by the FTC.
4. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. FTC reserves the right to
make changes from time to time, as it deems advisable, relating to its services,
systems, programs, rules, operating schedules and equipment, so long as such
changes do not adversely affect the service provided to the Fund under this
Agreement.
5. COMPENSATION. FTC shall be compensated for providing the services set
forth in this Agreement in accordance with the Fee Schedule attached hereto as
Exhibit A and as mutually agreed upon and amended from time to time.
6. PERFORMANCE OF SERVICE. FTC shall exercise reasonable care in the
performance of its duties under this Agreement. The Fund agrees to reimburse
and make FTC whole for any loss or damages (including reasonable fees and
expenses of legal counsel) arising out of or in connection with its actions
under this Agreement so long as FTC acts in good faith and is not negligent or
guilty of any willful misconduct.
FTC shall not be liable or responsible for delays or errors occurring
by reason of circumstances beyond its control, including acts of civil or
military authority, natural or state emergencies, fire, mechanical breakdown,
flood or catastrophe, acts of God, insurrection, war, riots or failure of
transportation, communication or power supply.
In the event of a mechanical breakdown beyond its control, FTC shall
take all reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FTC's control. FTC will make every
reasonable effort to restore any lost or damaged data and the correcting of any
errors resulting from such a breakdown will be at the expense of FTC. FTC
agrees that it shall at all times have reasonable contingency plans with
appropriate parties, making reasonable provision for emergency use of electrical
data processing equipment to the extent appropriate equipment is available.
Representatives of the Fund shall be entitled to inspect FTC's premises and
operating capabilities at any time during regular business hours of FTC, upon
reasonable notice to FTC.
This indemnification includes any act, omission to act, or delay by FTC
in reliance upon, or in accordance with, any written or oral instruction it
receives from any duly authorized officer of the Fund.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
7. NO AGENCY RELATIONSHIP. Nothing herein contained shall be deemed to
authorize or empower FTC to act as agent for any other party to this Agreement,
or to conduct business in the name of, or for the account of, any other party to
this Agreement.
8. OWNERSHIP OF RECORDS. All records prepared or maintained by FTC on
behalf of the Fund remain the property of the Fund and will be surrendered
promptly on the written request of an authorized officer of the Fund.
9. CONFIDENTIALITY. FTC shall handle in confidence all information
relating to the Fund's business, which is received by FTC during the course of
rendering any service hereunder.
10. DATA NECESSARY TO PERFORM SERVICES. The Fund or its agent, which may
be FTC, shall furnish to FTC the data necessary to perform the services
described herein at times and in such form as mutually agreed upon.
11. NOTIFICATION OF ERROR. The Fund will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of any
reports rendered by FTC to the Fund, or within three (3) business days after
discovery of any error or omission not covered in the balancing or control
procedure, or within three (3) business days of receiving notice from any
shareholder.
12. TERM OF AGREEMENT. This Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. However, this
Agreement may be replaced or modified by a subsequent agreement between the
parties.
13. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a Successor to any of FTC's duties or responsibilities
hereunder is designated by the Fund by written notice to FTC, FTC will promptly,
upon such termination and at the expense of the Fund, transfer to such Successor
all relevant books, records, correspondence and other data established or
maintained by FTC under this Agreement in a form reasonably acceptable to the
Fund (if such form differs from the form in which FTC has maintained the same,
the Fund shall pay any expenses associated with transferring the same to such
form), and will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from FTC's personnel in the establishment of
books, records and other data by such successor.
14. CHOICE OF LAW. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
ATTEST: Firstar Trust Company
/s/ Gail M. Zess By /s/ James C. Tyler
ATTEST: The Jefferson Fund Group Trust
/s/ Richard J. Schwartz By /s/ Charles Provini
JEFFERSON GROWTH AND INCOME FUND
FUND ACCOUNTING SERVICES
ANNUAL FEE SCHEDULE
Domestic Equity and Balanced Funds
- $27,500 for the first $40 million
- 1 basis point on the next $200 million
- 1/2 basis point on the balance
EFFECTIVE NOVEMBER 1, 1996, THE FEES WERE REDUCED AS FOLLOWS:
- 20% discount until the fund reaches $20 million $22,000/year
- 17 basis points on $20 million $34,000/year
- 12 basis points on $25 million $30,000/year
- Over $30 million return to regular fee schedule
All fees are billed monthly plus out-of-pocket expenses, including pricing
service:
- Domestic and Canadian Equities $.15
- Options $.15
- Corp/Govt/Agency Bonds $.50
- CMO's $.80
- International Equities and Bonds $.50
- Municipal Bonds $.80
- Money Market Instruments $.80
EXHIBIT 10
January 20, 1995
The Jefferson Fund Group Trust
839 North Jefferson Street
Milwaukee, Wisconsin 53202
Gentlemen:
We have acted as counsel for you in connection with the preparation of a
Registered Statement on Form N-1A relating to the sale by you of an indefinite
amount of shares of beneficial interest, no par value, of The Jefferson Fund
Group Trust (such shares of beneficial interest being hereinafter referred to as
the "Shares") in the manner set forth in the Registration Statement to which
reference is made. In this connection we have examined: (a) the Registration
Statement on Form N1-A; (b) your Certificate of Trust, Trust Instrument and
Bylaws; (c) proceedings relative to the authorization for issuance of the
Shares; and (d) such other proceedings, documents and records as we have deemed
necessary to enable us to render this opinion.
Based upon the foregoing, we are of the opinion that the Shares when sold
as contemplated in the Registration Statement will be legally issued, fully paid
and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the Form N-1A
Registration Statement. In giving this consent, we do not admit that we are
experts within the meaning of Section 11 of the Securities Act of 1933, as
amended, or within the category of persons whose consent is required by Section
7 of said Act.
Very truly yours,
/s/ Foley & Lardner
FOLEY & LARDNER
Exhibit 11.1
Consent of Independent Accountants
To the Board of Trustees of
The Jefferson Fund Group Trust
We consent to the reference to our Firm under the caption "Financial Highlights"
in the Prospectus which is a part of Post-Effective Amendment No. 4 to the
Registration Statement of The Jefferson Fund Group Trust on Form N-1A.
/s/ Coopers & Lybrand LLP
Milwaukee, Wisconsin
February 26, 1998
Exhibit 11.2
CONSENT OF INDEPENDENT AUDITORS
The Shareholders and Board of Trustees
The Jefferson Fund Group Trust
We consent to the use of our report incorporated herein by reference and to
the reference to our Firm under the heading "Independent Accountants" in the
Statement of Additional Information.
/s/ KPMG Peat Marwick LLP
Milwaukee, Wisconsin
February 25, 1998
EXHIBIT 13
SUBSCRIPTION AGREEMENT
----------------------
The Jefferson Fund Group Trust
233 South Wacker Drive
Suite 4500
Chicago, Illinois 60606
Gentlemen:
The undersigned hereby subscribes to 10,000 shares of beneficial
interest, no par value, of Jefferson Growth and Income Fund series of The
Jefferson Fund Group Trust, in consideration for which the undersigned agrees to
transfer to you upon demand cash in the amount of $100,000.
It is understood that upon receipt by you of payment therefor, said
shares shall be issued and shall be deemed to be fully paid and nonassessable.
The undersigned agrees that the shares are being purchased for
investment with no present intention of reselling or redeeming said shares.
Dated and effective as of this 7th day of June, 1995.
UNIPLAN, INC.
By: /s/ Richard Imperiale
-------------------------------
Its: President
ACCEPTANCE
The foregoing subscription is hereby accepted. Dated and effective
as of this 7th day of June, 1995.
THE JEFFERSON FUND GROUP TRUST
By: /s/ Richard Imperiale
----------------------------------
Its: Chairman
EXHIBIT 14.1
THE JEFFERSON FUNDS
TRADITIONAL INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
The following constitutes an agreement establishing an Individual Retirement
Account (under Section 408(a) of the Internal Revenue Code) between the
Depositor and the Custodian.
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in Section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in Section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in Section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a simplified employee pension plan as described in Section
408(k).
ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance contracts,
nor may the assets of the custodial account be commingled with other property
except in a common trust fund or common investment fund (within the meaning of
Section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within the
meaning of Section 408(m)) except as otherwise permitted by Section 408(m)(3)
which provides an exception for certain gold and silver coins and coins issued
under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall be made
in accordance with the following requirements and shall otherwise comply with
Section 408(a)(6) and Proposed Regulations Section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations Section 1.401(a)(9)-
2, the provisions of which are herein incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin to
the Depositor under Item 3, or to the surviving spouse under Item 4, other than
in the case of a life annuity, life expectancies shall be recalculated annually.
Such election shall be irrevocable as to the Depositor and the surviving spouse
and shall apply to all subsequent years. The life expectancy of a nonspouse
beneficiary may not be recalculated.
3. The Depositor's entire interest in the custodial account must be, or begin
to be, distributed by the Depositor's required beginning date, April 1 following
the calendar year end in which the Depositor reaches age 70 1/2. By that date,
the Depositor may elect, in a manner acceptable to the Custodian, to have the
balance in the custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period that
may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period that
may not be longer than the joint life and last survivor expectancy of the
Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her interest has
begun, distribution must continue to be made in accordance with Item 3.
(b) If the Depositor dies before distribution of his or her interest has begun,
the entire remaining interest will, at the election of the Depositor or, if the
Depositor has not so elected, at the election of the beneficiary or
beneficiaries, either:
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the life or
life expectancy of the designated beneficiary or beneficiaries starting by
December 31 of the year following the year of the Depositor's death. If,
however, the beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of the year in which
the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has irrevocably
commenced, distributions are treated as having begun on the Depositor's required
beginning date, even though payments may actually have been made before that
date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
5. In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment for
each year, divide the Depositor's entire interest in the custodial account as of
the close of business on December 31 of the preceding year by the life
expectancy of the Depositor (or the joint life and last survivor expectancy of
the Depositor and the Depositor's designated beneficiary, or the life expectancy
of the designated beneficiary, whichever applies). In the case of distributions
under Item 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and designated
beneficiary as of their birthdays in the year the Depositor reaches age 70 1/2.
In the case of a distribution in accordance with Item 4(b)(ii), determine life
expectancy using the attained age of the designated beneficiary as of the
beneficiary's birthday in the year distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
alternative method described in Notice 88-38, 1988-1 C.B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under Section 408(i) and
Regulations Section 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service and
the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with Section 408(a) and related
regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the provisions
of the Code and related regulations.
ARTICLE VIII
1. Investment of Account Assets
(a) All contributions to the custodial account shall be invested in the shares
of the Jefferson Growth & Income Fund or, if available, any other series of
Jefferson Growth & Income Fund or other regulated investment companies for which
Uniplan, Inc. serves as Investment Advisor or designates as being eligible for
investment (Investment Company). Shares of stock of an Investment Company shall
be referred to as Investment Company Shares. To the extent that two or more
funds are available for investment, contributions shall be invested in
accordance with the Depositor's investment election.
(b) Each contribution to the custodial account shall identify the Depositor's
account number and be accompanied by a signed statement directing the investment
of that contribution. The Custodian may return to the Depositor, without
liability for interest thereon, any contribution which is not accompanied by
adequate account identification or an appropriate signed statement directing
investment of that contribution.
(c) Contributions shall be invested in whole and fractional Investment Company
Shares at the price and in the manner such shares are offered to the public. All
distributions received on Investment Company Shares, including both dividend and
capital gain distributions, held in the custodial account shall be reinvested in
like shares. If any distribution of Investment Company Shares may be received in
additional like shares or in cash or other property, the Custodian shall elect
to receive such distribution in additional like Investment Company Shares.
(d) All Investment Company Shares acquired by the Custodian shall be registered
in the name of the Custodian or its nominee. The Depositor shall be the
beneficial owner of all Investment Company Shares held in the custodial account
and the Custodian shall not vote any such shares, except upon written direction
of the Depositor, timely received, in a form acceptable to the Custodian. The
Custodian agrees to forward to the Depositor each prospectus, report, notice,
proxy and related proxy soliciting materials applicable to Investment Company
Shares held in the custodial account received by the Custodian.
(e) The Depositor may, at any time, by written notice to the Custodian, in a
form acceptable to the Custodian, redeem any number of shares held in the
custodial account and reinvest the proceeds in the shares of any other
Investment Company upon the terms and within the limitations imposed by then
current prospectus of such other Investment Company in which the Depositor
elects to invest. By giving such instructions, the Depositor will be deemed to
have acknowledged receipt of such prospectus. Such redemptions and reinvestments
shall be done at the price and in the manner such shares are then being redeemed
or offered by the respective Investment Companies.
2. Amendment and Termination
(a) Uniplan, Inc., the Investment Advisor for Jefferson Growth & Income Fund,
may amend the Custodial Account (including retroactive amendments) by delivering
to Custodian and to the Depositor written notice of such amendment setting forth
the substance and effective date of the amendment. The Custodian and the
Depositor shall be deemed to have consented to any such amendment not objected
to in writing by the Custodian or Depositor as applicable within thirty (30)
days of receipt of the notice, provided that no amendment shall cause or permit
any part of the assets of the custodial account to be diverted to purposes other
than for the exclusive benefit of the Depositor or his or her beneficiaries.
(b) The Depositor may terminate the custodial account at any time by delivering
to the Custodian a written notice of such termination.
(c) The custodial account shall automatically terminate upon distribution to
the Depositor or his or her beneficiaries of its entire balance.
3. Taxes and Custodial Fees
Any income taxes or other taxes levied or assessed upon or in respect of the
assets or income of the custodial account and any transfer taxes incurred shall
be paid from the custodial account. All administrative expenses incurred by the
Custodian in the performance of its duties, including fees for legal services
rendered to the Custodian, in connection with the custodial account, and the
Custodian's compensation shall be paid from the custodial account, unless
otherwise paid by the Depositor or his or her beneficiaries. Sufficient shares
will be liquidated from the custodial account to pay such fees and expenses.
The Custodian's fees are set forth in a schedule provided to the Depositor.
Extraordinary charges resulting from unusual administrative responsibilities not
contemplated by the schedule will be subject to such additional charges as will
reasonably compensate the Custodian. Fees for refund of excess contributions,
transferring to a successor trustee or custodian, or redemption/reinvestment of
Investment Company Shares will be deducted from the refund or redemption
proceeds and the remaining balance will be remitted to the Depositor, or
reinvested or transferred in accordance with the Depositor's instructions.
4. Reports and Notices
(a) The Custodian shall keep adequate records of transactions it is required to
perform hereunder. After the close of each calendar year, the Custodian shall
provide to the Depositor or his or her legal representative a written report or
reports reflecting the transactions effected by it during such year and the
assets and liabilities of the Custodial Account at the close of the year.
(b) All communications or notices shall be deemed to be given upon receipt by
the Custodian at: Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin
53201-0701 or the Depositor at his or her most recent address shown in the
Custodian's records. The Depositor agrees to advise the Custodian promptly, in
writing, of any change of address.
5. Designation of Beneficiary
The Depositor may designate a beneficiary or beneficiaries to receive benefits
from the custodial account in the event of the Depositor's death. In the event
the Depositor has not designated a beneficiary, or if all beneficiaries shall
predecease the Depositor, the following persons shall take in the order named:
(a) The spouse of the Depositor;
(b) If the spouse shall predecease the Depositor or if the Depositor does not
have a spouse, then to the Depositor's estate.
The Depositor may also change or revoke any previously made designation of
beneficiary. A designation or change or revocation of a designation shall be
made by written notice in a form acceptable to and filed with the Custodian,
prior to the complete distribution of the balance in the custodial account. The
last such designation on file at the time of the Depositor's death shall govern.
If a beneficiary dies after the Depositor, but prior to receiving his or her
entire interest in the custodial account, the remaining interest in the
custodial account shall be paid to the beneficiary's estate.
6. Multiple Individual Retirement Accounts
In the event the Depositor maintains more than one individual retirement account
(as defined in Section 408(a)) and elects to satisfy his or her minimum
distribution requirements described in Article IV above by making a distribution
for another individual retirement account in accordance with Item 6 thereof, the
Depositor shall be deemed to have elected to calculate the amount of his or her
minimum distribution under this custodial account in the same manner as under
the individual retirement account from which the distribution is made.
7. Inalienability of Benefits
The benefits provided under this custodial account nor the assets held therein
shall be subject to alienation, assignment, garnishment, attachment, execution
or levy of any kind and any attempt to cause such benefits or assets to be so
subjected shall not be recognized except to the extent as may be required by
law.
8. Rollover Contributions and Transfers
The Custodian shall have the right to receive rollover contributions and to
receive direct transfers from other custodians or trustees. All contributions
must be made in cash or check.
9. Conflict in Provisions
To the extent that any provisions of this Article VIII shall conflict with the
provisions of Articles IV, V and/or VII, the provisions of this Article VIII
shall govern.
10. Applicable State Law
This custodial account shall be construed, administered and enforced according
to the laws of the State of Wisconsin.
11. Resignation or Removal of Custodian
The Custodian may resign at any time upon thirty (30) days notice in writing to
the Investment Company. Upon such resignation, the Investment Company shall
notify the Depositor, and shall appoint a successor custodian under this
Agreement. The Depositor or the Investment Company at any time may remove the
Custodian upon 30 days written notice to that effect in a form acceptable to and
filed with the Custodian. Such notice must include designation of a successor
custodian. The successor custodian shall satisfy the requirements of Section
408(h) of the Code. Upon receipt by the Custodian of written acceptance of such
appointment by the successor custodian, the Custodian shall transfer and pay
over to such successor the assets of and records relating to the Custodial
Account. The Custodian is authorized, however, to reserve such sum of money as
it may deem advisable for payment of all its fees, compensation, costs and
expenses, or for payment of any other liability constituting a charge on or
against the assets of the Custodial Account or on or against the Custodian, and
where necessary may liquidate shares in the Custodial Account for such payments.
Any balance of such reserve remaining after the payment of all such items shall
be paid over to the successor Custodian. The Custodian shall not be liable for
the acts or omissions of any predecessor or successor custodian or trustee.
12. Limitation on Custodian Responsibility
The Custodian will not under any circumstances be responsible for the timing,
purpose or propriety of any contribution or of any distribution made hereunder,
nor shall the Custodian incur any liability or responsibility for any tax
imposed on account of any such contribution or distribution. Further, the
custodian shall not incur any liability or responsibility in taking or omitting
to take any action based on any notice, election, or instruction or any written
instrument believed by the Custodian to be genuine and to have been properly
executed. The Custodian shall be under no duty of inquiry with respect to any
such notice, election, instruction, or written instrument, but in its discretion
may request any tax waivers, proof of signatures or other evidence which it
reasonably deems necessary for its protection. The Depositor and the successors
of the Depositor including any executor or administrator of the Depositor shall,
to the extent permitted by law, indemnify the Custodian and its successors and
assigns against any and all claims, actions or liabilities of the Custodian to
the Depositor or the successors or beneficiaries of the Depositor whatsoever
(including without limitation all reasonable expenses incurred in defending
against or settlement of such claims, actions or liabilities) which may arise in
connection with this Agreement or the Custodial Account, except those due to the
Custodian's own bad faith, gross negligence or willful misconduct. The Custodian
shall not be under any duty to take any action not specified in this Agreement,
unless the Depositor shall furnish it with instructions in proper form and such
instructions shall have been specifically agreed to by the Custodian, or to
defend or engage in any suit with respect hereto unless it shall have first
agreed in writing to do so and shall have been fully indemnified to its
satisfaction.
ROTH INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
The following constitutes an agreement establishing a Roth IRA (under Section
408A of the Internal Revenue Code) between the depositor and the custodian.
ARTICLE I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then, except
in the case of a rollover contribution described in Section 408A(e), the
custodian will accept only cash contributions and only up to a maximum amount of
$2,000 for any tax year of the depositor.
2. If this Roth IRA is designated as a Roth Conversion IRA, no contributions
other than IRA Conversion Contributions made during the same tax year will be
accepted.
ARTICLE II
The $2,000 limit described in Article I is gradually reduced to $0 between
certain levels of adjusted gross income (AGI). For a single depositor, the
$2,000 annual contribution is phased out between AGI of $95,000 and $110,000;
for a married depositor who files jointly, between AGI of $150,000 and $160,000;
and for a married depositor who files separately, between $0 and $10,000. In the
case of a conversion, the custodian will not accept IRA Conversion Contributions
in a tax year if the depositor's AGI for that tax year exceeds $100,000 or if
the depositor is married and files a separate return. Adjusted gross income is
defined in Section 408A(c)(3) and does not include IRA Conversion Contributions.
ARTICLE III
The depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE IV
1. No part of the custodial funds may be invested in life insurance contracts,
nor may the assets of the custodial account be commingled with other property
except in a common trust fund or common investment fund (within the meaning of
Section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within the
meaning of Section 408(m) except as otherwise permitted by Section 408(m)(3),
which provides an exception for certain gold, silver, and platinum coins, coins
issued under the laws of any state, and certain bullion.
ARTICLE V
1. If the depositor dies before his or her entire interest is distributed to
him or her and the grantor's surviving spouse is not the sole beneficiary, the
entire remaining interest will, at the election of the depositor or, if the
depositor has not so elected, at the election of the beneficiary or
beneficiaries, either:
(a) Be distributed by December 31 of the year containing the fifth anniversary
of the depositors death, or
(b) Be distributed over the life expectancy of the designated beneficiary
starting no later than December 31 of the year following the year of the
depositor's death.
If distributions do not begin by the date described in (b), distribution method
(a) will apply.
2. In the case of distribution method 1.(b) above, to determine the minimum
annual payment for each year, divide the grantor's entire interest in the trust
as of the close of business on December 31 of the preceding year by the life
expectancy of the designated beneficiary using the attained age of the
designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence and subtract 1 for each subsequent year.
3. If the depositor's spouse is the sole beneficiary on the depositor's date
of death, such spouse will then be treated as the depositor.
ARTICLE VI
1. The depositor agrees to provide the custodian with information necessary
for the custodian to prepare any reports required under Section 408(i) and
408A(d)(3)(E), regulations Sections 1.408-5 and 1.408-6, and under guidance
published by the Internal Revenue Service.
2. The custodian agrees to submit reports to the Internal Revenue Service and
the depositor prescribed by the Internal Revenue Service.
ARTICLE VII
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV and this sentence will be controlling. Any
additional articles that are not consistent with Section 408A, the related
regulations, and other published guidance will be invalid.
ARTICLE VIII
This Agreement will be amended from time to time to comply with the provisions
of the Code, related regulations, and other published guidance. Other amendments
may be made with the consent of the persons whose signatures appear below.
ARTICLE IX
1. Investment of Account Assets.
(a) All contributions to the custodial account shall be invested in the shares
of any regulated investment company (Investment Company) for which Uniplan,
Inc. serves as Investment Advisor, or any other regulated investment company
designated by the Investment Advisor. Shares of stock of an Investment Company
shall be referred to as Investment Company Shares.
(b) Each contribution to the custodial account shall identify the depositor's
account number and be accompanied by a signed statement directing the investment
of that contribution. The custodian may return to the depositor, without
liability for interest thereon, any contribution which is not accompanied by
adequate account identification or an appropriate signed statement directing
investment of that contribution.
(c) Contributions shall be invested in whole and fractional Investment Company
Shares at the price and in the manner such shares are offered to the public. All
distributions received on Investment Company Shares held in the custodial
account shall be reinvested in like shares. If any distribution of Investment
Company Shares may be received in additional like shares or in cash or other
property, the custodian shall elect to receive such distribution in additional
like Investment Company Shares.
(d) All Investment Company Shares acquired by the custodian shall be registered
in the name of the custodian or its nominee. The depositor shall be the
beneficial owner of all Investment Company Shares held in the custodial account
and the custodian shall not vote any such shares, except upon written direction
of the depositor. The custodian agrees to forward to the depositor each
prospectus, report, notice, proxy and related proxy soliciting materials
applicable to Investment Company Shares held in the custodial account received
by the custodian.
(e) The depositor may, at any time, by written notice to the custodian, redeem
any number of shares held in the custodial account and reinvest the proceeds in
the shares of any other Investment Company. Such redemptions and reinvestments
shall be done at the price and in the manner such shares are then being redeemed
or offered by the respective Investment Companies.
2. Amendment and Termination.
(a) The custodian may amend the Custodial Account (including retroactive
amendments) by delivering to the depositor written notice of such amendment
setting forth the substance and effective date of the amendment. The depositor
shall be deemed to have consented to any such amendment not objected to in
writing by the depositor within thirty (30) days of receipt of the notice,
provided that no amendment shall cause or permit any part of the assets of the
custodial account to be diverted to purposes other than for the exclusive
benefit of the depositor or his or her beneficiaries.
(b) The depositor may terminate the custodial account at any time by delivering
to the custodian a written notice of such termination.
(c) The custodial account shall automatically terminate upon distribution to
the depositor or his or her beneficiaries of its entire balance.
3. Taxes and Custodial Fees.
Any income taxes or other taxes levied or assessed upon or in respect of the
assets or income of the custodial account and any transfer taxes incurred shall
be paid from the custodial account. All administrative expenses incurred by the
custodian in the performance of its duties, including fees for legal services
rendered to the custodian, and the custodian's compensation shall be paid from
the custodial account, unless otherwise paid by the depositor or his or her
beneficiaries.
The custodian's fees are set forth in a schedule provided to the depositor.
Extraordinary charges resulting from unusual administrative responsibilities not
contemplated by the schedule will be subject to such additional charges as will
reasonably compensate the custodian. Fees for refund of excess contributions,
transferring to a successor trustee or custodian, or redemption/reinvestment of
Investment Company Shares will be deducted from the refund or redemption
proceeds and the remaining balance will be remitted to the depositor, or
reinvested or transferred in accordance with the depositor's instructions.
4. Reports and Notices.
(a) The custodian shall keep adequate records of transactions it is required to
perform hereunder. After the close of each calendar year, the custodian shall
provide to the depositor or his or her legal representative a written report or
reports reflecting the transactions effected by it during such year and the
assets and liabilities of the Custodial Account at the close of the year.
(b) All communications or notices shall be deemed to be given upon receipt by
the custodian at 615 E. Michigan St., Milwaukee, WI 53202 or the depositor at
his most recent address shown in the custodian's records. The depositor agrees
to advise the custodian promptly, in writing, of any change of address.
5. Designation of Beneficiary.
The depositor may designate a beneficiary or beneficiaries to receive benefits
from the custodial account in the event of the depositor's death. In the event
the depositor has not designated a beneficiary, or if all beneficiaries shall
predecease the depositor, the following persons shall take in the order named:
(a) The spouse of the depositor;
(b) If the spouse shall predecease the depositor or if the depositor does not
have a spouse, then to the personal representative of the depositor's estate.
6. Inalienability of Benefits.
The benefits provided under this custodial account shall not be subject to
alienation, assignment, garnishment, attachment, execution or levy of any kind
and any attempt to cause such benefits to be so subjected shall not be
recognized except to the extent as may be required by law.
7. Rollover Contributions and Transfers.
Subject to the restrictions in Article I, the custodian shall have the right to
receive rollover contributions and to receive direct transfers from other
custodians or trustees. All contributions must be made in cash or check.
8. Conflict in Provisions.
To the extent that any provisions of this Article VIII shall conflict with the
provisions of Articles V, VI and/or VIII, the provisions of this Article IX
shall govern.
9. Applicable State Law.
This custodial account shall be construed, administered and enforced according
to the laws of the State of Wisconsin.
EDUCATION INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
The deposit whose name appears above is establishing an education individual
retirement custodial account under Section 530 for the benefit of the designated
beneficiary whose name appears above exclusively to pay for the qualified higher
education expenses, within the meaning of Section 530(b)(2), of such designated
beneficiary.
The custodian named above has provided the depositor with a concise statement
disclosing the provisions governing Section 530. This disclosure statement must
include an explanation of the statutory requirements applicable to, and the
income tax consequences of establishing and maintaining an account under,
Section 530. Providing the depositor with a copy of Notice 97-60, 1997-46 I.R.B.
8 (November 17, 1997) is considered a sufficient disclosure statement. The
custodian also will provide a copy of this form and the disclosure statement to
the responsible individual, as defined in Article VI below, if the responsible
individual is not the same person as the depositor.
The depositor and the custodian make the following agreement:
ARTICLE I
The custodian may accept additional cash contributions. These contributions may
be from the depositor, or from any other individual, for the benefit of the
designated beneficiary, provided the designated beneficiary has not attained the
age of 18 as of the date such contributions are made. Total contributions that
are not rollover contributions described in Section 530(d)(5) are limited to a
maximum amount of $500 for the taxable year.
ARTICLE II
The maximum aggregate contribution that an individual may make to the custodial
account in any year may not exceed the $500 in total contributions that the
custodial account can receive. In addition, the maximum aggregate contribution
that an individual may make to the custodial account in any year is phased out
for unmarried individuals who have modified adjusted gross income (AGI) between
$95,000 and $110,000 for the year of the contribution and for married
individuals who file joint returns with modified AGI between $150,000 and
$160,000 for the year of the contribution. Unmarried individuals with modified
AGI above $110,000 for the year and married individuals who file joint returns
and have modified AGI above $160,000 for the year may not make a contribution
for that year. Modified AGI is defined in Section 530(c)(2).
ARTICLE III
No part of the custodial account funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common investment fund (within the meaning of Section
530(b)(1)(D)).
ARTICLE IV
1. Any balance to the credit of the designated beneficiary on the date on
which such designated beneficiary attains age 30 shall be distributed to the
designated beneficiary within 30 days of such date.
2. Any balance to the credit of the designated beneficiary shall be
distributed to the estate of the designated beneficiary within 30 days of the
date of such designated beneficiary's death.
ARTICLE V
The depositor shall have the power to direct the custodian regarding the
investment of the above-listed amount assigned to the custodial account
(including earnings thereon) in the investment choices offered by the custodian.
The responsible individual, however, shall have the power to redirect the
custodian regarding the investment of such amounts, as well as the power to
direct the custodian regarding the investment of all additional contributions
(including earnings thereon) to the custodial account. In the event that the
responsible individual does not direct the custodian regarding the investment of
additional contributions (including earnings thereon), the initial investment
direction of the depositor also will govern all additional contributions made to
the custodial account until such time as the responsible individual otherwise
directs the custodian. Unless otherwise provided in this agreement, the
responsible individual also shall have the power to direct the custodian
regarding the administration, management, and distribution of the account.
ARTICLE VI
The responsible individual named by the depositor shall be a parent or guardian
of the designated beneficiary. The custodial account shall have only one
responsible individual at any time. If the responsible individual becomes
incapacitated or dies while the designated beneficiary is a minor under state
law, the successor responsible individual shall be the person named to succeed
in that capacity by the preceding responsible individual in a witnessed writing
or, if no successor is so named, the successor responsible individual shall be
the designated beneficiary's other parent or successor guardian. Unless
otherwise directed by checking the option below, at the time that the designated
beneficiary attains the age of majority under state law, the designated
beneficiary becomes the responsible individual.
Option (This provision is effective only if checked): The responsible
individual shall continue to serve as the responsible individual for the
custodial account after the designated beneficiary attains the age of majority
under state law and until such time as all assets have been distributed from the
custodial account and the custodial account terminates. If the responsible
individual becomes incapacitated or dies after the designated beneficiary
reaches the age of majority under state law, the responsible individual shall be
the designated beneficiary.
ARTICLE VII
The responsible individual may or may not change the beneficiary designated
under this agreement to another member of the designated beneficiary's family
described in Section 529(e)(2) in accordance with the custodian's procedures.
ARTICLE VIII
1. The depositor agrees to provide the custodian with the information
necessary for the custodian to prepare any reports required under Section
530(h).
2. The custodian agrees to submit reports to the Internal Revenue Service and
the responsible individual as prescribed by the Internal Revenue Service.
ARTICLE IX
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV will be controlling. Any additional articles
that are not consistent with Section 530 and related regulations will be
invalid.
ARTICLE X
This agreement will be amended from time to time to comply with the provisions
of the Code and related regulations. Other amendments may be made with the
consent of the depositor and the custodian whose signatures appear below.
ARTICLE XI
1. Investment of Account Assets.
(a) All contributions to the custodial account shall be invested in the shares
of any regulated investment company (Investment Company) for which Uniplan, Inc.
serves as Investment Advisor, or any other regulated investment company
designated by the Investment Advisor. Shares of stock of an Investment Company
shall be referred to as Investment Company Shares.
(b) Each contribution to the custodial account shall identify the designated
beneficiary's account number and shall be accompanied by a signed statement
directing the investment of that contribution into the designated beneficiary's
account. The custodian may return to the contributor, without liability for
interest thereon, any contribution which is not accompanied by such information
and such appropriate signed statement directing investment of that contribution.
(c) Contributions shall be invested in whole and fractional Investment Company
Shares at the price and in the manner such shares are offered to the public. All
distributions received on Investment Company Shares held in the custodial
account shall be reinvested in like shares. If any distribution of Investment
Company Shares may be received in additional like shares or in cash, the
custodian shall elect to receive such distribution in additional like Investment
Company Shares.
(d) All Investment Company Shares acquired by the custodian shall be registered
in the name of the custodian or its nominee. The designated beneficiary shall be
the beneficial owner of all Investment Company Shares held in the custodial
account and the custodian shall not vote any such shares, except upon written
direction of the responsible individual. The custodian agrees to forward to the
responsible individual each prospectus, report, notice, proxy and related proxy
soliciting materials applicable to Investment Company Shares held in the
custodial account received by the custodian.
(e) The responsible individual may, at any time, by written notice to the
custodian, redeem any number of shares held in the custodial account and
reinvest the proceeds in the shares of any other Investment Company. Such
redemptions and reinvestments shall be done at the price and in the manner such
shares are then being redeemed or offered by the respective Investment
Companies.
(f) To the extent a responsible individual for the designated beneficiary makes
or has power to make decisions as to the investment of the designated
beneficiary's account, that party acknowledges that such decisions are binding
and nonvoidable.
2. Amendment and Termination
(a) The custodian may amend the Custodial Account (including retroactive
amendments) by delivering to the responsible individual written notice of such
amendment setting forth the substance and effective date of the amendment. The
responsible individual shall be deemed to have consented to any such amendment
not objected to in writing by the responsible individual within thirty (30) days
of receipt of the notice, provided that no amendment shall cause or permit any
part of the assets of the custodial account to be diverted to purposes other
than for the exclusive benefit of the designated beneficiary.
(b) The responsible individual may terminate the custodial account at any time
by delivering to the custodian a written notice of such termination.
(c) The custodial account shall automatically terminate upon distribution to
the designated beneficiary or his or her estate of its entire balance.
3. Taxes and Custodial Fees
Any income taxes or other taxes levied or assessed upon or in respect of the
assets or income of the custodial account and any transfer taxes incurred shall
be paid from the custodial account. All administrative expenses incurred by the
custodian in the performance of its duties, including fees for legal services
rendered to the custodian, and the custodian's compensation shall be paid from
the custodial account, unless otherwise paid by the beneficiary or his or her
estate.
The custodian's fees are set forth in a schedule provided to the responsible
individual. Extraordinary charges resulting from unusual administrative
responsibilities not contemplated by the schedule will be subject to such
additional charges as will reasonably compensate the custodian. Fees for refund
of excess contributions, transferring to a successor trustee or custodian, or
redemption /reinvestment of Investment Company Shares will be deducted from the
refund or redemption proceeds and the remaining balance will be remitted to the
designated beneficiary, or reinvested or transferred in accordance with the
responsible individual's instructions.
4. Reports and Notices
(a) The custodian shall keep adequate records of transactions it is required to
perform hereunder. After the close of each calendar year, the custodian shall
provide to the responsible individual a written report or reports reflecting the
transactions effected by it during such year and the assets and liabilities of
the Custodial Account at the close of the year.
(b) All communications or notices shall be deemed to be given upon receipt by
the custodian at 615 E. Michigan St., Milwaukee, WI 53202 or the responsible
individual at his most recent address shown in the custodianOs records. The
responsible individual agrees to advise the custodian promptly, in writing, of
any change of address.
5. Monitoring of Contribution Limitations Information
The custodian shall not be responsible for monitoring the amount of
contributions made to the designated beneficiary's account or the income levels
of any depositor or contributor for purposes of assuring compliance with
applicable state or federal tax laws.
6. Inalienability of Benefits
The benefits provided under this custodial account shall not be subject to
alienation, assignment, garnishment, attachment, execution or levy of any kind
and any attempt to cause such benefits to be so subjected shall not be
recognized except to the extent as may be required by law. However, the
responsible individual may change the designated beneficiary under the agreement
to another member of the designated beneficiaryOs family described in Internal
Revenue Code Section 529(e)(2) in accordance with the custodian's procedures.
7. Rollover Contributions and Transfers
The custodian shall have the right to receive rollover contributions and to
receive direct transfers from other custodians or trustees. All contributions
must be made in cash or check.
8. Conflict in Provisions
To the extent that any provisions of this Article XI on the Education IRA
Application shall conflict with the provisions of Articles V through VIII or X,
the provisions of this Article XI shall govern.
9. Applicable State Law
This custodial account shall be construed, administered and enforced according
to the laws of the State of Wisconsin.
Exhibit 14.2
THE JEFFERSON FUND GROUP TRUST
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN
Profit Sharing Plan AA - Plan No. 01-001
Pension Plan AA - Plan No. 01-002
THE JEFFERSON FUND GROUP TRUST
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN
Profit Sharing Plan AA - Plan No. 01-001
Pension Plan AA - Plan No. 01-002
THE JEFFERSON FUND GROUP TRUST
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN
Table of Contents
-----------------
Page
----
ARTICLE I. INTRODUCTION 1
ARTICLE II. DEFINITIONS 2
ARTICLE III. PARTICIPATION.................................. 10
Section 3.1..Participation at Effective Date 10
Section 3.2..Participation after Effective Date 10
Section 3.3..Reentry 10
Section 3.4..Participation by an Owner-Employee of More Than
One Trade or Business........................... 10
ARTICLE IV. CONTRIBUTIONS....................................... 12
Section 4.1. Employer Profit Sharing Contributions.......... 12
Section 4.2. Employer Pension Contributions................. 13
Section 4.3. Participant Voluntary Contributions............ 14
Section 4.4. Time for Making Contributions.................. 15
Section 4.5. Leased Employees............................... 15
Section 4.6. Rollovers and Transfers........................ 15
ARTICLE V. CASH OR DEFERRED ARRANGEMENT (CODE SECTION 401(k)) 16
Section 5.1.Cash or Deferred Arrangement (Code Section 401(k)) 16
Section 5.2. Elective Deferrals............................. 16
Section 5.3. Matching Contributions......................... 20
Section 5.4. Qualified Matching Contributions and Qualified
Non-Elective Contributions..................... 24
Section 5.5. Special Distribution Rules..................... 24
Section 5.6. Definitions.................................... 26
ARTICLE VI. SECTION 415 LIMITATIONS........................... 30
Section 6.1. Employers Maintaining Only this Plan........... 30
Section 6.2..Employers Maintaining Other Master or Prototype
Defined Contribution Plans.................... 31
Section 6.3.Employers Maintaining Other Defined Contribution
Plans.......................................... 32
Section 6.4..Employers Maintaining Defined Benefit Plans 32
Section 6.5. Definitions.................................... 32
ARTICLE VII. PARTICIPANTS' ACCOUNTS............................ 36
Section 7.1. Separate Accounts.............................. 36
Section 7.2. Vesting........................................ 36
Section 7.3. Computation of Vesting Service................. 36
Section 7.4. Allocation of Forfeitures...................... 37
ARTICLE VIII. PAYMENT OF BENEFITS............................... 38
Section 8.1. Benefits Payable Under the Plan................ 38
Section 8.2. Manner of Distributions........................ 39
Section 8.3. Commencement of Payments....................... 43
Section 8.4. Payment of Small Amounts....................... 47
Section 8.5. Persons Under Legal or Other Disability........ 48
Section 8.6. Withdrawals from Profit Sharing Plan........... 48
Section 8.7.Transfer of Benefits to Eligible Retirement Plan 49
ARTICLE IX. ESTABLISHMENT OF TRUST ACCOUNT; INVESTMENTS....... 50
Section 9.1. Trust Account.................................. 50
Section 9.2. Receipt of Contributions....................... 50
Section 9.3. Investment of Account Assets................... 50
Section 9.4. Exclusive Benefit.............................. 51
Section 9.5. Expenses....................................... 51
Section 9.6. Voting......................................... 51
Section 9.7. Reports of the Trustee and Administrator....... 52
Section 9.8. Limitation of Trustee's Duties and Liability... 52
ARTICLE X. AMENDMENT AND TERMINATION......................... 54
Section 10.1. Amendment..................................... 54
Section 10.2. Termination................................... 55
ARTICLE XI. FIDUCIARY RESPONSIBILITIES........................ 56
Section 11.1. Administrator................................. 56
Section 11.2. Powers of Administrator....................... 56
Section 11.3. Records and Reports........................... 56
Section 11.4. Other Administrative Provisions............... 56
Section 11.5. Claims Procedure.............................. 57
Section 11.6. Claims Review Procedure....................... 57
ARTICLE XII. AMENDMENT AND CONTINUATION OF ORIGINAL PLAN....... 58
ARTICLE XIII. TOP-HEAVY PROVISIONS.............................. 60
Section 13.1. Effect of Top-Heavy Status.................... 60
Section 13.2. Additional Definitions........................ 60
Section 13.3. Minimum Allocations........................... 62
Section 13.4. Benefit Limit Change.......................... 63
ARTICLE XIV. MISCELLANEOUS..................................... 64
Section 14.1. Rights of Employees and Participants.......... 64
Section 14.2. Merger With Other Plans....................... 64
Section 14.3. Non-Alienation of Benefits.................... 64
Section 14.4. Failure to Qualify............................ 64
Section 14.5. Mistake of Fact; Disallowance of Deduction.... 65
Section 14.6. Participation under Prototype Plan............ 65
Section 14.7. Gender........................................ 65
Section 14.8. Headings...................................... 65
Section 14.9. Governing Law................................. 65
THE JEFFERSON FUND GROUP TRUST
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN
ARTICLE I. INTRODUCTION
-----------------------
This Plan, which is made available by The Jefferson Fund Group Trust
has been adopted by the Employer named in the Adoption Agreement(s) as a
qualified money purchase pension and/or profit sharing plan for its eligible
employees which is intended to qualify under Code Section 401(a). The
Employer's Plan shall consist of the following provisions, together with the
Adoption Agreement(s).
ARTICLE II. DEFINITIONS
------------------------
Section 2.1. "Account" means the account or accounts maintained by the Trustee
------------ -------
for a Participant, as described in Article VII.
Section 2.2. "Administrator" means the plan administrator and fiduciary of the
------------ -------------
Plan with authority and responsibility to control and manage the operation and
administration of the Plan in accordance with its terms and to comply with the
reporting, disclosure and other requirements of ERISA. Unless a different
Administrator is appointed by the Employer, the Administrator shall be the
Employer.
Section 2.3. "Beneficiary" means the person or persons designated by a
----------- ----------
Participant or otherwise entitled to receive benefits in the event of the
Participant's death as provided herein. Such designation shall be made in
writing and in such form as may be required by the Administrator, and shall be
filed with the Administrator. Any designation may include contingent or
successive Beneficiaries. Where such designation has been properly made,
distribution of benefits shall be made directly to such Beneficiary or
Beneficiaries. The Beneficiary or Beneficiaries designated by a Participant may
be changed or withdrawn at any time from time to time, by the Participant, but
only by filing with the Administrator a new designation, and revoking all prior
designations. The most recent valid designation on file with the Administrator
at the time of the Participant's death shall be the Beneficiary.
Notwithstanding the foregoing, in the event the Participant is married at the
time of his death, the Beneficiary shall be the Participant's surviving spouse
unless such spouse consented in writing to the designation of an alternative
Beneficiary after notice of the spouse's rights and such consent was witnessed
by a Plan representative appointed by the Administrator or a notary public as
provided in Section 8.2(a) hereof. In the event no valid designation of
Beneficiary is on file with the Administrator at the date of death or no
designated Beneficiary survives him, the Participant's spouse shall be deemed
the Beneficiary; in the further event the Participant is unmarried or his spouse
does not survive him, the Participant's estate shall be deemed to be his
Beneficiary.
Section 2.4. "Break in Service" means a Plan Year in which a Participant fails
----------- ----------------
to complete at least five hundred one (501) Hours of Service. Breaks in Service
and Years of Service will be measured on the same vesting computation period.
Section 2.5. "Code" means the Internal Revenue Code of 1986, as interpreted by
----------- ----
applicable regulations and rulings issued pursuant thereto, all as amended and
in effect from time to time. Reference to a Code Section shall include that
Section, and any comparable section or sections of any future legislation that
amends, supplements or supersedes that Section.
Section 2.6. "Compensation" is defined as wages within the meaning of Section
----------- ------------
3401(a) of the Code and all other payments of compensation to the Employee by
the Employer (in the course of the Employer's trade or business) for which the
Employer is required to furnish the Employee a written statement under Sections
6041(d), 6051(a)(3) and 6052 of the Code, determined without regard to any rules
under Section 3401(a) that limit the remuneration included in wages based on the
nature or locations of the employment or the services performed. For any Self-
Employed Individual covered under the Plan, Compensation shall mean such
individual's Earned Income.
For Plan Years beginning after December 31, 1988, the maximum amount
of Compensation taken into account under the Plan for a Participant in any Plan
Year shall not exceed two hundred thousand dollars ($200,000) or such greater
amount as permitted by the Secretary of the Treasury, except that the dollar
increase in effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the $200,000
limitation is effective on January 1, 1990. If the Plan determines Compensation
on a period of time that contains fewer than 12 calendar months, then the annual
compensation limit is an amount equal to the annual compensation limit for the
calendar year in which the compensation period begins multiplied by the ratio
obtained by dividing the number of full months in the period by 12.
For purposes of this limitation, the family aggregation rules of Code
Section 414(q)(6) shall apply, except that the term "family" shall include only
the spouse of the Participant and any lineal descendants of the Participant who
have not attained age nineteen (19) before the close of such year. If, as a
result of the application of such rules the adjusted two hundred thousand
dollars ($200,000) limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if the Plan
provides for permitted disparity), the limitation shall be prorated among the
affected individuals in proportion to each such individual's Compensation as
determined under this Section prior to the application of this limitation. If
Compensation for any prior Plan Year is taken into account in determining an
Employee's contributions or benefits for the current year, the Compensation for
such prior year is subject to the applicable annual compensation limit in effect
for that prior year. For this purpose, for years beginning before January 1,
1990, the applicable annual compensation limit is $200,000.
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual Compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit st forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000
Section 2.7. "Disability" means a mental or physical condition of injury or
----------- ----------
sickness, as determined by the Administrator based upon the report of a medical
examiner satisfactory to the Employer, which prevents a Participant from
carrying out the duties of his position and which is likely to be permanent.
Any such determination by the Administrator shall be made in a uniform and
nondiscriminatory manner.
Section 2.8. "Earned Income" means net earnings from self-employment in the
----------- -------------
trade or business with respect to which the Plan is established for which the
personal services of the individual are a material income-producing factor. Net
earnings shall be determined without regard to items not included in gross
income and the deductions allocable to such items. Net earnings shall be
reduced by contributions by the Employer to a qualified plan to the extent
deductible under Code Section 404. Net earnings shall be determined with regard
to the deduction allowed to the Employer under Code Section 164(f) for taxable
years beginning after December 31, 1989.
Section 2.9. "Effective Date" means the date as of which this Plan is
----------- --------------
initially effective as indicated in item 3 of the Adoption Agreement.
Section 2.10. "Elective Deferrals" means any Employer contributions made to the
------------ ------------------
Plan at the election of a participating Employee, in lieu of payment of an equal
amount to the participating Employee in cash as Compensation pursuant to Section
5.2 hereof, and shall include contributions made pursuant to a salary reduction
agreement or other deferral method. With respect to any taxable year, a
participating Employee's Elective Deferrals are the sum of all employer
contributions made on behalf of such Employee pursuant to an election to defer
under any qualified CODA as described in Code Section 401(k), any simplified
employee pension cash or deferred arrangement as described in Code Section
402(h)(1)(B), any eligible deferred compensation plan under Code Section 457,
any plan as described under Code Section 501(c)(18), and any employer
contributions made on the behalf of a participating Employee for the purchase of
an annuity contract under Code Section 403(b) pursuant to a salary reduction
agreement.
Section 2.11. "Employee" means an individual employed by the Employer
- ------------ --------
(including any eligible Self-Employed Individual) or any Related Employer
adopting this Plan except as excluded pursuant to item 4 of the Adoption
Agreement. The term Employee shall also include any individual who is a Leased
Employee, unless excluded pursuant to item 4 of the Adoption Agreement.
Section 2.12. "Employer" means any entity adopting the Plan.
- ------------ ---------
Section 2.13. "Employer Pension Contributions" means the contributions made by
- ------------ ------------------------------
the Employer pursuant to Section 4.2 hereof if elected in item 6 of the Adoption
Agreement (Pension Plan).
Section 2.14. "Employer Profit Sharing Contributions" means the contributions
- ------------- ------------------------------------
made by the Employer pursuant to Section 4.1 hereof if elected in item 6 of the
Adoption Agreement (Profit Sharing Plan).
Section 2.15. "ERISA" means the Employee Retirement Income Security Act of
- ------------ -----
1974, as interpreted and applied under regulations and rulings issued pursuant
thereto, all as amended and in effect from time to time.
Section 2.16. "Hour of Service" means:
- ------------ ----------------------
(a) Each hour for which an Employee is paid, or entitled to payment
for the performance of duties for the Employer. These hours shall be credited
to the Employee for the computation period in which the duties are performed;
and
(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than five hundred one
(501) Hours of service shall be credited under this paragraph for any single
continuous period (whether or not such period occurs in a single computation
period). Hours of Service under this paragraph shall be calculated and credited
pursuant to Section 2530.200b-2 of the Department of Labor Regulations which are
incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under subsection (a) or subsection (b), as
the case may be, and under this subsection (c). These hours shall be credited
to the Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award,
agreement or payment is made.
(d) Solely for purposes of determining whether a Break in Service, as
defined in Section 2.4, for participation and vesting purposes has occurred in a
computation period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or in any
case in which such hours cannot be determined, eight (8) hours of service per
normal workday of such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence:
(i) by reason of the pregnancy of the individual;
(ii) by reason of a birth of a child of the
individual;
(iii) by reason of the placement of a child with
the individual in connection with the
adoption of such child by such
individual; or
(iv) for purposes of caring for such child for a
period beginning immediately following
such birth or placement.
The Hours of Service credited under this Section 2.16 shall be credited (i) in
the computation period in which the absence begins if the crediting is necessary
to prevent a Break in Service in that period, or (ii) in all other cases the
following computation period.
(e) Hours of Service shall be determined on the basis of actual hours
for which an Employee is paid or entitled to payment unless a different method
of determining Hours of Service is selected in item 4(A) of the Adoption
Agreement.
(f) In the event the Employer maintains the plan of a predecessor
employer, service for such predecessor employer shall be treated as service for
the Employer. Hours of Service will be credited for employment with members of
an affiliated service group under Code Section 414(m), a controlled group of
corporations under Code Section 414(b), or a group of trades or businesses under
common control under Code Section 414(c) of which the Employer is a member and
any other entity required to be aggregated with the Employer pursuant to Code
Section 414(o) and the Regulations thereunder. Hours of Service will also be
credited for any Leased Employee for purposes of this Plan under Code Sections
414(n) or (o) and the Regulations thereunder, unless excluded under item 4 of
the Adoption Agreement.
Section 2.17. "Investment Company" means the Jefferson Growth and Income Fund
- ------------ -------------------
and/or any other regulated investment company designated by the Plan Sponsor as
being available for the investment of contributions hereunder.
Section 2.18. "Investment Company Shares" means the shares of each Investment
- ------------ --------------------------
Company.
Section 2.19. "Leased Employee" means any individual who is considered a
- ------------ ---------------
leased employee within the meaning of Code Sections 414(n) or (o). For purposes
of this Section, a Leased Employee means any person who, pursuant to an
agreement between the Employer and any other person (which may include the
Leased Employee), has performed services for the Employer (or for the Employer
and any Related Employer) in a capacity other than as a common law employee on a
substantially full-time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business field
of the Employer. Notwithstanding the foregoing, no individual shall be
considered to be a Leased Employee if (a) such individual is covered by a money
purchase pension plan providing: (i) a non-integrated employer contribution
rate of at least ten percent (10%) of compensation, as defined in Code Section
415(c)(3), but including amounts contributed pursuant to a salary reduction
agreement which are excludable from the individual's gross income under Code
Sections 125, 402(a)(8), 402(h) or 403(b), (ii) immediate participation, and
(iii) full and immediate vesting and (b) Leased Employees do not constitute more
than twenty percent (20%) of the Employer's nonhighly compensated work force.
Contributions or benefits provided to a Leased Employee by the leasing
organization which are attributable to services performed for the Employer shall
be treated as provided by the Employer.
Section 2.20. "Matching Contribution" means an Employer contribution made to
- ----------- ---------------------
the Plan or any other defined contribution plan on behalf of a participating
Employee on account of a participating Employee's Elective Deferrals pursuant to
Section 5.3 hereof or on account of any employee contributions or elective
deferrals made to any other plan.
Section 2.21. "Net Profits" means the current or accumulated earnings of the
- ------------ -----------
Employer before federal and state taxes and contributions to this or any other
qualified plan.
Section 2.22. "Normal Retirement Age" means age 65 or such other age as
- ------------ ---------------------
selected in item 12 of the Adoption Agreement (Profit Sharing Plan) and item 9
of the Adoption Agreement (Pension Plan). If the Employer enforces a mandatory
retirement age, the Normal Retirement Age shall be the lesser of such mandatory
retirement age or the age specified in the Adoption Agreement.
Section 2.23. "Original Plan" means any defined contribution plan which meets
- ------------ -------------
the requirements of Code Section 401 and referred to in Article XIII of the
Plan.
Section 2.24. "Owner-Employee" means an individual who is a sole proprietor, or
- ------------ --------------
who is a partner owning more than ten percent (10%) of either the capital or
profits interest of the partnership.
Section 2.25. "Participant" means each Employee (including any eligible Self-
- ------------ ----------
Employed Individual) who has completed the requirements for eligibility
specified in Section 3.1 hereof. Each such Employee shall become a Participant
as of the earlier of: (i) the first day of the Plan Year or (ii) the first day
of the seventh month of the Plan Year beginning after he completes such
requirements.
Section 2.26. "Participant Voluntary Contributions" means contributions by a
- ------------- -----------------------------------
Participant under the Plan pursuant to Section 4.3, if elected in item 9 of the
Adoption Agreement (Profit Sharing Plan) and item 8 of the Adoption Agreement
(Pension Plan).
Section 2.27. "Pension Plan" means the feature of the Plan pursuant to which
- ------------ ------------
the Employer makes Employer Pension Contributions. Such feature applies only to
the extent elected in item 6 of the Adoption Agreement (Pension Plan).
Section 2.28. "Plan" means this prototype profit sharing plan and/or money
- ------------ ----
purchase pension plan and trust, together with the appropriate Adoption
Agreement(s), as set forth herein and as may be amended from time to time. As
used herein, the term Plan shall mean either or both the money purchase pension
plan and the profit-sharing plan depending on whether the Employer has adopted
one or both plans.
Section 2.29. "Plan Sponsor" means Uniplan, Inc.
- ------------ ------------
Section 2.30. "Plan Year" means the twelve (12) consecutive month period
- ------------ ---------
designated in item 2 of the Adoption Agreement. The first Plan Year shall
commence on the Effective Date.
Section 2.31. "Profit Sharing Plan" means the features of the Plan pursuant to
- ------------ -------------------
which all contributions, other than Employer Pension Contributions, are made to
the Plan, including any contributions pursuant to the cash or deferred
arrangement (Section 401(k)) described in Article V hereof. Such features apply
only to the extent elected in items 6 and/or 8 of the Adoption Agreement (Profit
Sharing Plan).
Section 2.32. "Related Employer" means an organization which, together with the
- ------------ ----------------
Employer, constitutes (i) a controlled group of corporations as defined in Code
Section 414(b); (ii) trades or businesses under common control as defined in
Code Section 414(c); (iii) an affiliated service group as defined in Code
Section 414(m); or (iv) a group of employers required to be aggregated under
Code Section 414(o).
Section 2.33. "Self-Employed Individual" means an individual who has Earned
- ----------- ------------------------
Income for the taxable year from the trade or business for which.the Plan was
established or who would have had Earned Income but for the fact that the trade
or business had no Net Profits for the taxable year.
Section 2.34. "Trustee" means Firstar Trust Company, or any successor thereto.
- ------------ -------
Section 2.35. "Trust Fund" means all of the assets held under the Plan.
- ------------ ----------
Section 2.36. "Valuation Date" means the last day of each Plan Year and such
- ------------ ---------------
other times as shall be determined by the Administrator.
Section 2.37. "Year of Employment" means the twelve (12) consecutive month
- ------------ ------------------
period, beginning on the date the Employee first performs an Hour of Service or
any anniversary thereof, in which the Employee completes at least one thousand
(1,000) Hours of Service or such lesser number of Hours of Service as selected
in item 4 of the Adoption Agreement.
Section 2.38."Year of Service" means a Plan Year in which the Employee
- ----------- ----------------
completes at least one thousand (1,000) Hours of Service or such lesser number
of Hours of Service as selected in item 7 of the Adoption Agreement.
ARTICLE III. PARTICIPATION
--------------------------
Section 3.1. Participation at Effective Date. Each Employee shall become a
- ----------- -------------------------------
Participant on the Effective Date, if on the Effective Date such Employee has
completed the number of Years of Employment and has attained age 21 or such
lesser age as elected in item 4 of the Adoption Agreement.
Section 3.2. Participation after Effective Date. Each Employee who did not
- ----------- -----------------------------------
become a Participant as of the Effective Date, including future Employees, shall
be entitled to become a Participant in accordance with Section 2.27 after such
Employee has completed the number of Years of Employment and has attained age 21
or such lesser age as elected in item 4 of the Adoption Agreement.
Section 3.3. Reentry. A former Participant shall become a Participant
- ----------- -------
immediately upon his return to employment with the Employer or his return to an
eligible class of Employees, whichever is applicable. In the event an Employee
who is not a member of the eligible class of Employees becomes a member of the
eligible class, such Employee will become a Participant in accordance with
Section 3.2 above; provided that if the Employee has previously satisfied the
eligibility requirements of Section 3.2, the Employee shall become a Participant
immediately upon becoming a member of the eligible class of Employees.
Section 3.4. Participation by an Owner-Employee of More Than One Trade or
- ----------- ------------------------------------------------------------
Business.
- ---------
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business with respect to which this Plan is
established, and one or more other trades or businesses, this Plan and the plan
established with respect to such other trades or businesses must, when looked at
as a single plan, satisfy Code Sections 401(a) and (d) with respect to the
employees of this and all such other trades or businesses.
(b) If this Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of each such other trade or business must be included in a plan which
satisfies Code Section 401(a) and (d) and which provides contributions and
benefits not less favorable than provided for such Owner-Employees under this
Plan.
(c) If an individual is covered as an Owner-Employee under the plans
of two or more trades or businesses which he does not control, and such
individual controls a trade or business, then the contributions or benefits of
the employees under the plan of the trade or business which he or she does
control must be as favorable as those provided for him or her under the most
favorable plan of the trade or business which he or she does not control.
(d) For purposes of the preceding subparagraphs, an Owner-Employee,
or two or more Owner-Employees, shall be considered to control a trade or
business if such Owner-Employee, or such two or more Owner-Employees together,
own the entire interest in an unincorporated trade or business, or, in the case
of a partnership, own more than fifty percent (50%) of either the capital
interest or the profits interest in such partnership. For purposes of the
preceding sentence, an Owner-Employee, or two or more Owner-Employees, shall be
treated as owning any interest in a partnership which is owned, directly or
indirectly, by a partnership which such Owner-Employee, or such two or more
Owner-Employees, are considered to control within the meaning of the preceding
sentence.
(e) Employees and Owner-Employees of trades or businesses which are
under common control (within the meaning of Code Section 414(c)) and Employees
and Owner-Employees of the members of an affiliated service group (within the
meaning of Code Section 414(m)) or of a group of aggregated employers (under
Code Section 414(o)) will be treated as employed by a single Employer for
purposes of employee benefit requirements of Code Section 414(m)(4).
ARTICLE IV. CONTRIBUTIONS
-------------------------
Section 4.1. Employer Profit Sharing Contributions.
- ----------- -------------------------------------
(a) If elected in item 6 of the Adoption Agreement (Profit Sharing
Plan), the Employer shall make an Employer Profit Sharing Contribution for each
Plan Year ending on or after the Effective Date in the amount determined under
such Adoption Agreement.
(b) The total amount of such Employer Profit Sharing Contribution for
a Plan Year shall be allocated to the Account of each eligible Participant as
follows:
(i) Unless otherwise elected in item 6(C) of the Adoption Agreement,
the total amount of such Employer Profit Sharing Contribution shall be allocated
based on the ratio that such eligible Participant's Compensation and/or Earned
Income for the Plan Year bears to the total Compensation and Earned Income of
all eligible Participants for the Plan Year.
(ii) If the Integration Formula is selected in item 6(C) of the
Adoption Agreement, the total amount of such Employer Profit Sharing
Contribution shall be allocated based on the ratio that such eligible
Participant's Compensation and/or Earned Income for the Plan Year in excess of
the integration level for the Plan Year bears to the total Compensation and
Earned Income for all eligible Participants in excess of the integration level
for the Plan Year; provided, however, that contributions allocated to a
Participant with respect to Compensation and/or Earned Income in excess of the
integration level shall not represent a greater percentage of such excess
Compensation and/or Earned Income than the lesser of
(A) 200% of the base contribution percentage, or
(B) the base contribution percentage plus the greater of
(I) 5.7%, or
(II) the rate of tax under Code Section 3111(a) which is attributable
to old-age insurance in effect at the beginning of the Plan
Year.
Any Employer Profit Sharing Contribution remaining after the allocation in this
subsection (ii) shall be allocated in accordance with subsection (i) above. The
"integration level" shall be the taxable wage base or such lesser level of
Compensation and/or Earned Income selected in item 6(C) of the Adoption
Agreement. The "base contribution percentage" shall mean the percentage of
Compensation and/or Earned Income which is contributed under the Plan with
respect to each Participant's Compensation and/or Earned Income not in excess of
the integration level.
If the integration level exceeds the greater of ten thousand dollars
($10,000) or one-fifth (1/5) of the taxable wage base but is not more than
eighty percent (80%) of the taxable wage base, the percentage referred to in (I)
above shall be reduced to 4.3% and a proportionate reduction shall be made to
the rate described in (II) above. If the integration level is more than eighty
percent (80%) but less than one hundred percent (100%) of the taxable wage base,
the percentage referred to in (I) above shall be reduced to 5.4% and a
proportionate reduction shall be made to the rate described in (II) above. The
"taxable wage base" shall be the maximum amount of earnings which may be
considered wages for a year under Code Section 3121(a)(1) in effect as of the
beginning of the applicable Plan Year.
Notwithstanding the above, for any Plan Year in which the Plan is top-
heavy (as defined in Section 13.1 hereof) the Employer Profit Sharing
Contribution shall be allocated
(A) first, to each eligible Participant based on the ratio
that such Participant's Compensation and/or Earned Income
for the Plan Year bears to the total Compensation and Earned
Income of all eligible Participants for the Plan Year, but
not more than three percent (3%) of such Participant's
Compensation and/or Earned Income,
(B) second, to each eligible Participant based on the ratio
that such Participant's Compensation and/or Earned Income in
excess of the integration level for the Plan Year bears to
the total Compensation and Earned Income of all eligible
Participants in excess of the integration level for the Plan
Year, but not more than three percent (3%) of such
Participant's excess Compensation and/or Earned Income, and
(C) any remaining Employer Profit Sharing Contribution
shall be allocated pursuant to the provisions of this
subsection (ii) above.
(c) A Participant will be considered eligible for an allocation of
the Employer Profit Sharing Contribution if the Participant (i) is employed by
the Employer on the last day of the Plan Year or (ii) has completed at least
Five Hundred one (501) Hours of Service during the Plan Year.
(d) If elected in item 6(B) of the Adoption Agreement, Employer
Profit Sharing Contributions for a Plan Year shall not exceed the Net Profits of
the Employer for such Plan Year.
Section 4.2. Employer Pension Contributions.
- ----------- ------------------------------
(a) If elected in item 6 of the Adoption Agreement (Pension Plan),
the Employer shall make an Employer Pension Contribution for each eligible
Participant for each Plan Year ending on or after the Effective Date in an
amount determined under such Adoption Agreement.
(b) The total amount of such Employer Pension Contribution for a Plan
Year shall be allocated to the Account of each eligible Participant as follows:
(i) Unless otherwise elected in item 6(B) of the Adoption Agreement,
each eligible Participant shall be allocated an amount equal to the percentage
of such eligible Participant's Compensation and/or Earned Income as specified in
the Adoption Agreement.
(ii) If the Integration Formula is selected in item 6(B) of the
Adoption Agreement, the total amount of such Employer Pension Contribution shall
be allocated in accordance with the method described in Section 4.1(b)(ii)
above. Notwithstanding the foregoing, if the Integration Formula is selected
under the Profit Sharing Plan, the Employer Pension Contribution shall be
allocated in accordance with subsection (b)(i) above.
(c) A Participant will be considered eligible for an Employer Pension
Contribution if the Participant (i) is employed by the Employer on the last day
of the Plan Year or (ii) has completed at least Five Hundred one (501) Hours of
Service during the Plan Year.
Section 4.3. Participant Voluntary Contributions.
- ----------- -----------------------------------
(a) If elected in item 9 of the Adoption Agreement (Profit Sharing
Plan) or item 8 of the Adoption Agreement (Pension Plan), a Participant may
voluntarily contribute to the Plan an amount up to ten percent (10%) of his
aggregate Compensation for all years since becoming a Participant under this
Plan and all other qualified plans of the Employer. Any Participant Voluntary
Contributions shall be limited in accordance with the provisions of Section 5.3,
even if the Employer does not elect the Cash or Deferred Arrangement (Section
401(k)) under item 8 of the Adoption Agreement (Profit Sharing Plan). If the
Profit Sharing Plan is elected, all Participant Voluntary Contributions shall be
deemed made to such plan. Participant Voluntary Contributions shall be limited
to Participants who are not highly compensated employees (within the meaning of
Code Section 414(q)) if elected in the Adoption Agreement.
(b) A Participant shall be entitled to withdraw from his appropriate
Account at any time upon thirty (30) days' notice from the Administrator to the
Trustee (which notice shall specify the amount of the withdrawal), a sum not in
excess of the capital amount contributed by him as Participant Voluntary
Contributions under the provisions of this Section 4.3, or the value of such
Account, whichever is less, provided that no ordinary income or capital gains
attributable to such contributions shall be subject to withdrawal.
Notwithstanding anything to the contrary herein, (i) all withdrawals are subject
to the provisions of Article VIII, and (ii) no forfeiture shall occur solely as
a result of a Participant's withdrawal of all or any portion of his Participant
Voluntary Contributions.
(c) No deductible voluntary employee contributions may be made for
taxable years beginning after December 31, 1986. Such contributions made prior
to that date will be maintained in a separate Account which will be
nonforfeitable at all times. The Account will share in the gains or losses in
the same manner as described in Section 9.3 of the Plan. No part of the
deductible voluntary contribution Account will be used to purchase life
insurance. Subject to Section 8.2, a Participant may withdraw any part of the
deductible voluntary contribution Account by making a written application to the
Administrator.
Section 4.4. Time for Making Contributions. Employer Pension Contributions
- ----------- -----------------------------
and Employer Profit Sharing Contributions must be made no later than the due
date, including extensions thereof, for filing the Employer's Federal income tax
return for the year coincident with or within which the Plan Year ends (or such
later time as authorized by Treasury Regulations). Participant Voluntary
Contributions for any Plan Year shall be made no later than thirty (30) days
after the end of such Plan Year. The Employer may establish a payroll deduction
system or other procedure to assist the making of Participant Voluntary
Contributions and shall transfer such contributions to the Trustee as soon as
practicable after collected.
Section 4.5. Leased Employees. Contributions or benefits provided to a Leased
- ----------- ----------------
Employee by the leasing organization (within the meaning of Code Section 414(n))
which are attributable to services performed for the Employer shall be treated
as provided by the Employer for purposes of this Plan.
Section 4.6. Rollovers and Transfers. In the discretion of the Administrator
- ----------- ------------------------
according to such uniform and nondiscriminatory rules established by the
Administrator, and in accordance with Sections 402 and 408 of the Code, a
Participant may make a rollover to the Plan or the Plan may accept a direct
transfer (including voluntary after-tax contributions) from another plan
qualified under Section 401(a) of the Code or from an individual retirement
account. If the Employer has adopted the Profit Sharing Plan, any rollover or
transfer shall be made to such Plan.
ARTICLE V. CASH OR DEFERRED ARRANGEMENT (CODE SECTION 401(k))
-------------------------------------------------------------
Section 5.1. Cash or Deferred Arrangement (Code Section 401(k)). The
- ----------- --------------------------------------------------
provisions of this Article shall be effective as of the first day of the Plan
Year in which this cash or deferred arrangement is elected in item 8 of the
Adoption Agreement (Profit Sharing Plan). Under no circumstances shall the
provisions of this Article apply prior to the time specified in the preceding
sentence.
Section 5.2. Elective Deferrals. (a) Election. (i) An Employee who has
- ----------- ------------------ --------
satisfied the minimum age and service requirements set forth in item 8(A) of the
Adoption Agreement (Profit Sharing Plan) may elect to have Elective Deferrals
made to the Plan pursuant to a salary reduction agreement to the extent
permitted in item 8(A) of the Adoption Agreement (Profit Sharing Plan). Such an
election shall be effective as of the time specified in item 8(A) of the
Adoption Agreement (Profit Sharing Plan) and may not be made effective
retroactively.
(ii) An eligible Employee may also base Elective Deferrals, to the
extent provided in item 8(A) of the Adoption Agreement (Profit Sharing Plan), on
cash bonuses that, at the Employee's election, may be contributed to the Plan or
received by the Employee. Such an election shall be effective as of the time
specified in item 8(A) of the Adoption Agreement (Profit Sharing Plan) and may
not be made effective retroactively.
(b) Change in Rate. The rate at which Elective Deferrals are made
--------------
shall remain in effect until modified in accordance with item 8(A) of the
Adoption Agreement (Profit Sharing Plan). Notwithstanding the foregoing,
Elective Deferrals may be suspended entirely by an Employee at any time by
written notice to the Administrator. Any such suspension shall be effective as
soon as administratively practicable following the Administrator's receipt of
such notice.
(c) Vesting. A Participant shall at all times have a fully vested
-------
and nonforfeitable interest in his Elective Deferrals.
(d) Excess Elective Deferrals. (i) No Participating Employee shall
-------------------------
be permitted to have Elective Deferrals made under this Plan or any other
qualified plan maintained by the Employer during any taxable year pursuant to
Code Sections 401(k), 408(k) or 403(b) in excess of the dollar limitation
contained in Code Section 402(g) in effect at the beginning of such taxable
year.
(ii) A Participating Employee may assign to the Plan any Excess
Elective Deferrals made during a taxable year of such Employee by notifying the
Administrator on or before the date specified below of the Excess Elective
Deferrals to be assigned to the Plan. Notwithstanding any other provision of
the Plan, Excess Elective Deferrals, plus any income and minus any loss
allocable thereto, may be distributed no later than April 15 to any
Participating Employee to whose Accounts Excess Elective Deferrals were assigned
for the preceding year and who claims Excess Elective Deferrals for such taxable
year. A Participating Employee's claim for Excess Elective Deferrals shall be
made in writing and shall be submitted to the Administrator not later than the
March 1 immediately preceding the relevant April 15. Such claim shall specify
the amount of the Participating Employee's Excess Elective Deferrals for the
preceding taxable year and shall be accompanied by the Participating Employee's
written statement that if such amounts are not distributed, such Excess Elective
Deferrals, when added to amounts deferred under other plans or arrangements
described in Code Sections 401(k), 408(k) or 403(b), exceed the limit imposed on
the Participating Employee by Code Section 402(g) for the year of the deferral.
(iii) Excess Elective Deferrals shall be adjusted for any income or
loss up to the date of distribution. The income or loss allocable to Excess
Elective Deferrals is the sum of:
(A) income or loss allocable to the participating Employee's Elective
Deferrals Account for the taxable year for which the Excess
Elective Deferrals occurred multiplied by a fraction, the
numerator of which is such Participating Employee's Excess
Elective Deferrals for such taxable year and the denominator
of which is such Participating Employee's Elective Deferrals
Account balance as of the end of the taxable year without
regard to any income or loss occurring during such taxable
year; and
(B) income or loss allocable to the Participating Employee's Elective
Deferrals Account for the period between the end of such
taxable year and the date of distribution under (A) above;
or, at the option of the Employer, ten percent (10%) of the
amount determined under (A) above multiplied by the number
of whole calendar months between the end of such taxable
year and the date of distribution, counting the month of
distribution if distribution occurs after the fifteenth
(15th) of such month.
The amount of Excess Elective Deferrals that may be distributed with respect to
a Participating Employee shall be reduced by any Excess Contributions previously
distributed or recharacterized with respect to such Participating Employee for
the Plan Year beginning with or within such taxable year. In no event may the
amount distributed exceed the Participating Employee's total Elective Deferrals
for such taxable year.
(e) Actual Deferral Percentage. (i) The Actual Deferral Percentage
--------------------------
for Participating Employees who are Highly Compensated Employees for each Plan
Year and the Actual Deferral Percentage for Participating Employees who are not
Highly Compensated Employees for the same Plan Year must satisfy one of the
following tests:
(A) The Actual Deferral Percentage for Participating Employees who
are Highly Compensated Employees for the Plan Year shall not
exceed the Actual Deferral Percentage for Participating
Employees who are not Highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
(B) The Actual Deferral Percentage for Participating Employees who
are Highly Compensated Employees for the Plan Year shall not
exceed the Actual Deferral Percentage for Participating
Employees who are not Highly Compensated Employees for the
same Plan Year multiplied by 2.0, provided that the Actual
Deferral Percentage for Participating Employees who are
Highly Compensated Employees does not exceed the Actual
Deferral Percentage for Participating Employees who are not
Highly Compensated Employees by more than two (2) percentage
points.
(ii) The Actual Deferral Percentage for any Participating Employee who
is a Highly Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both) allocated to his Accounts under two or more
arrangements described in Code Section 401(k), that are maintained by the
Employer, shall be determined as if such Elective Deferrals (and, if applicable,
such Qualified Non-Elective Contributions or Qualified Matching Contributions,
or both) were made under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have different
Plan Years, contributions for such employee shall be aggregated for purposes of
this subsection (e). Contributions which are required to be aggregated are any
contributions made under all cash or deferred arrangements ending with or within
the same calendar year.
(iii) In the event that the Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4) or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such Code
Sections only if aggregated with this Plan, then this subsection shall be
applied by determining the Actual Deferral Percentage of Participating Employees
as if all such plans were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy Code Section
401(k) only if they have the same Plan Year.
(iv) For purposes of determining the Actual Deferral Percentage of a
Participating Employee who is a five (5) percent owner or one of the ten (10)
most highly-paid Highly Compensated Employees, the Elective Deferrals (and
Qualified Non-Elective Contributions and Qualified Matching Contributions, or
both) and Compensation of such Participating Employee shall include the Elective
Deferrals (and, if applicable, Qualified Non-Elective Contributions and
Qualified Matching Contributions, or both) and Compensation for the Plan Year of
Family Members. Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate employees in determining the Actual
Deferral Percentage both for Participating Employees who are not Highly
Compensated Employees and for Participating Employees who are Highly Compensated
Employees.
(v) For purposes of determining the Actual Deferral Percentage test,
Elective Deferrals, Qualified Non-Elective Contributions and Qualified Matching
Contributions must be made before the last day of the twelve-month period
immediately following the Plan Year to which such contributions relate.
(vi) The Employer shall maintain records sufficient to demonstrate
satisfaction of the Actual Deferral Percentage test and the amount of Qualified
Non-Elective Contributions or Qualified Matching Contributions, or both, used in
such test.
(vii) The determination and treatment of the Actual Deferral Percentage
amounts of any Participating Employee shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(f) Distribution of Excess Contributions. (i) Notwithstanding any
------------------------------------
other provision of this Plan, Excess Contributions, plus any income and minus
any loss allocable thereto, shall be distributed no later than the last day of
each Plan Year to Participating Employees to whose Accounts such Excess
Contributions were allocated for the preceding Plan Year. If such excess
amounts are distributed more than two and one-half (21/2) months after the last
day of the Plan Year in which such excess amounts arose, a ten percent (10%)
excise tax will be imposed on the Employer with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on the basis of the
respective portions of the Excess Contributions attributable to each of such
Employees. Excess Contributions shall be allocated to Participating Employees
who are subject to the family member aggregation rules of Code Section 414(q)(6)
in the manner prescribed by the regulations. Excess Contributions (including
any amounts recharacterized) shall be treated as Annual Additions for purposes
of Article VI of the Plan.
(ii) Excess Contributions shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess
Contributions is the sum of:
(A) income or loss allocable to the Participating Employee's Elective
Deferrals Account (and, if applicable, the Qualified Non-
Elective Contributions Account or the Qualified Matching
Contributions Account, or both) for the Plan Year for which
the Excess Contributions occurred multiplied by a fraction,
the numerator of which is such Participating Employee's
Excess Contributions for such Plan Year and the denominator
of which is such Participating Employee's Account balance(s)
attributable to Elective Deferrals (and Qualified Non-
Elective Contributions or Qualified Matching Contributions,
or both) as of the end of the Plan Year without regard to
any income or loss occurring during such Plan Year; and
(B) income or loss allocable to the Participant's Elective Deferrals
Account (and, if applicable, the Qualified Non-Elective
Contribution Account or the Qualified Matching Contribution
Account, or both) for the period between the end of such
Plan Year and the date of distribution multiplied by the
fraction determined under (A) above; or, at the option of
the Employer, ten percent (10%) of the amount determined
under (A) above multiplied by the number of whole calendar
months between the end of such Plan Year and the date of
distribution, counting the month of distribution if
distribution occurs after the fifteenth (15th) of such
month.
(iii) Excess Contributions shall be distributed from the Participating
Employee's Elective Deferrals Account and Qualified Matching Contributions
Account (if applicable) in proportion to the Participating Employee's Elective
Deferrals and Qualified Matching Contributions (to the extent used in the Actual
Deferral Percentage test) for the Plan Year. Excess Contributions shall be
distributed from the Participating Employee's Qualified Non-Elective
Contributions Account only to the extent that such Excess Contributions exceed
the balance in the Participating Employee's Elective Deferrals Account and
Matching Contributions Account.
(g) Recharacterization. (i) A Participating Employee may treat his
------------------
Excess Contributions as an amount distributed to the Participating Employee and
then contributed by the Participating Employee to the Plan. Recharacterized
amounts will remain nonforfeitable and subject to the same distribution
requirements as Elective Deferrals. Amounts may not be recharacterized by a
Highly Compensated Employee to the extent that such amount in combination with
other Participant Voluntary Contributions would exceed any stated limit under
the Plan on Participant Voluntary Contributions. Recharacterizing Excess
Contributions shall be limited to Participants who are not Highly Compensated
Employees if elected in the Adoption Agreement.
(ii) Recharacterization must occur no later than two and one-half
(21/2) months after the end of the Plan Year in which such Excess Contributions
arose and is deemed to occur no earlier than the date the last Highly
Compensated Employee is informed in writing of the amount recharacterized and
the consequences thereof. Recharacterized amounts will be taxable to the
Participating Employee for such Participating Employee's taxable year in which
the Participating Employee would have received them in cash.
Section 5.3. Matching Contributions. (a) The Employer shall make Employer
- ----------- ----------------------
Matching Contributions to the Plan to the extent elected in item 8(B) of the
Adoption Agreement (Profit Sharing Plan).
(b) A Participant shall have a vested interest in his Matching
Contributions Account as determined under the vesting schedule elected in item
8(B) of the Adoption Agreement (Profit Sharing Plan). Forfeitures derived from
Matching Contributions which become available because of the vesting provisions
above, shall be applied to reduce the Employer Matching Contributions that would
otherwise be due for the Plan Year, or subsequent Plan Years.
(c) Actual Contribution Percentage. (i) The Actual Contribution
------------------------------
Percentage for Participating Employees who are Highly Compensated Employees for
each Plan Year and the Actual Contribution Percentage for Participating
Employees who are not Highly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
(A) The Actual Contribution Percentage for Participating Employees
who are Highly Compensated Employees for the Plan Year shall
not exceed the Actual Contribution Percentage for
Participating Employees who are not Highly Compensated
Employees for the same Plan Year multiplied by 1.25; or
(B) The Actual Contribution Percentage for Participating Employees
who are Highly Compensated Employees for the Plan Year shall
not exceed the Actual Contribution Percentage for
Participating Employees who are not Highly Compensated
Employees for the same Plan Year multiplied by two (2),
provided that the Actual Contribution Percentage for
Participating Employees who are Highly Compensated Employees
does not exceed the Actual Contribution Percentage for
Participating Employees who are not Highly Compensated
Employees by more than two (2) percentage points.
(ii) If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the Actual Contribution
Percentage test maintained by the Employer and the sum of the Actual Deferral
Percentage and the Actual Contribution Percentage of those Highly Compensated
Employees subject to either or both tests exceeds the Aggregate Limit, then the
Actual Contribution Percentage of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be reduced (beginning with
such Highly Compensated Employee whose Actual Contribution Percentage is the
highest) so that the limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amount is reduced shall be
treated as an Excess Aggregate Contribution. The Actual Deferral Percentage and
the Actual Contribution Percentage of the Highly Compensated Employees are
determined after any corrections required to meet the Actual Deferral Percentage
and the Actual Contribution Percentage tests. Multiple use does not occur if
both the Actual Deferral Percentage and the Actual Contribution Percentage of
the Highly Compensated Employees does not exceed 1.25 multiplied by the Actual
Deferral Percentage and the Actual Contribution Percentage of the Participating
Employees who are not Highly Compensated Employees.
(iii) For purposes of this subsection, the Contribution Percentage for
any Participating Employee who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his account under
two or more plans described in Code Section 401(a), or arrangements described in
Code Section 401(k) that are maintained by the Employer, shall be determined as
if the total of such Contribution Percentage Amounts was made under each plan.
If a Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement.
(iv) In the event that this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4) or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such Code
Sections only if aggregated with this Plan, then this subsection shall be
applied by determining the Contribution Percentage of employees as if all such
plans were a single plan. For plan years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Code Section 401(m) only if they
have the same plan year.
(v) For purposes of determining the Contribution Percentage of a
Participating Employee who is a five percent owner or one of the ten (10) most
highly-paid Highly Compensated Employees, the Contribution Percentage Amounts
and Compensation of such Participating Employee shall include the Contribution
Percentage Amounts and Compensation for the Plan Year of Family Members. Family
Members, with respect to Highly Compensated Employees, shall be disregarded as
separate employees in determining the Contribution Percentage both for
Participating Employees who are not Highly Compensated Employees and for
Participating Employees who are Highly Compensated Employees.
(vi) For purposes of determining the Contribution Percentage test,
Employee Contributions are considered to have been made in the Plan Year in
which contributed to the trust. Matching Contributions and Qualified Non-
Elective Contributions shall be considered made for a Plan Year if made no later
than the end of the twelve-month period beginning on the day after the close of
the Plan Year.
(vii) The Employer shall maintain records sufficient to demonstrate
satisfaction of the Actual Contribution Percentage test and the amount of
Qualified Non-Elective Contributions or Qualified Matching Contributions, or
both, used in such test.
(viii) The determination and treatment of the Contribution Percentage of
any Participating Employee shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(d) Distribution of Excess Aggregate Contributions. (i)
-----------------------------------------------
Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall be
forfeited, if forfeitable, or if not forfeitable, distributed no later than the
last day of each Plan Year to Participating Employees to whose Accounts such
Excess Aggregate Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions shall be allocated to Participating Employees who
are subject to the family member aggregation rules of Code Section 414(q)(6) in
the manner prescribed by the regulations. If such Excess Aggregate
Contributions are distributed more than two and one-half (21/2) months after the
last day of the Plan Year in which such excess amounts arose, a ten percent
(10%) excise tax will be imposed on the Employer with respect to those amounts.
Excess Aggregate Contributions shall be treated as Annual Additions for purposes
of Article VI of the Plan.
(ii) Excess Aggregate Contributions shall be adjusted for any income
or loss up to the date of distribution. The income or loss allocable to Excess
Aggregate Contributions is the sum of:
(A) income or loss allocable to the Participating Employee's
Participant Voluntary Contributions Account, Matching
Contributions Account, Qualified Matching Contribution
Account (if any, and if all amounts therein are not used in
the Actual Deferral Percentage test) and, if applicable,
Qualified Non-Elective Contributions Account and Elective
Deferrals Account for the Plan Year for which the Excess
Aggregate Contributions occurred multiplied by a fraction,
the numerator of which is such Participating Employee's
Excess Aggregate Contributions for such Plan Year and the
denominator of which is the Participating Employee's Account
balance(s) attributable to Contribution Percentage Amounts
as of the end of the Plan Year without regard to any income
or loss occurring during such Plan Year; and
(B) income or loss allocable to the Participating Employee's
Participant Voluntary Contribution Account, Matching
Contributions Account, Qualified Matching Contribution
Account (if any, and if all amounts therein are not used in
the Actual Deferral Percentage test) and, if applicable,
Qualified Non-Elective Contributions Account and Elective
Deferrals Account for the period between the end of such
Plan Year and the date of distribution multiplied by the
fraction determined under (A) above; or, at the election of
the Employer, ten percent (10%) of the amount determined
under (A) above multiplied by the number of whole calendar
months between the end of such Plan Year and the date of
distribution, counting the month of distribution if
distribution occurs after the fifteenth (15th) of such
month.
(iii) Forfeitures of Excess Aggregate Contributions shall be applied to
reduce Employer contributions for subsequent Plan Years.
(iv) Excess Aggregate Contributions shall be forfeited, if
forfeitable, or distributed on a pro rata basis from the Participating
Employee's Participant Voluntary Contributions Account, Matching Contributions
Account and Qualified Matching Contribution Account (and, if applicable, the
Participating Employee's Qualified Non-Elective Contributions Account or
Elective Deferrals Account, or both).
Section 5.4. Qualified Matching Contributions and Qualified Non-Elective
- ----------- -----------------------------------------------------------
Contributions.
- -------------
(a) Qualified Matching Contributions. The Employer may elect to make
--------------------------------
Qualified Matching Contributions under the Plan in item 8(C) of the Adoption
Agreement. Qualified Matching Contributions may be made in lieu of distributing
Excess Contributions as provided in Section 5.2(f) hereof. Qualified Matching
Contributions may be either (i) additional amounts contributed to the Plan by
the Employer and allocated to the Accounts of Participating Employees who are
not Highly Compensated Employees based on such Employees' Elective Deferrals or
(ii) Matching Contributions otherwise made to the Plan pursuant to Section
5.3(a) hereof which the Employer designates as Qualified Matching Contributions.
The amount of Qualified Matching Contributions (if any) shall be determined by
the Employer for each year. All Qualifying Matching Contributions shall be used
to satisfy the Actual Deferral Percentage test pursuant to regulations under the
Code.
(b) The Employer may elect to make Qualified NonElective
Contributions under the Plan in item 8(C) of the Adoption Agreement. Qualified
Non-Elective Contributions may be made in lieu of distributing Excess
Contributions as provided in Section 5.2(f) or Excess Aggregate Contributions as
provided in Section 5.3(d) hereof. Qualified Non-Elective Contributions may be
either (i) additional amounts contributed to the Plan by the Employer and
allocated to the Accounts of Participating Employees who are not Highly
Compensated Employees based on such Employees' Compensation or (ii) Profit
Sharing Contributions otherwise made to the Plan pursuant to Section 4.1(a)
hereof which the Employer designates as Qualified Non-Elective Contributions.
The amount of Qualified Non-Elective Contributions (if any) shall be determined
by the Employer for each year. All Qualified Non-Elective Contributions shall
be used to satisfy either the Actual Deferral Percentage test or the Average
Contribution Percentage test, or both, pursuant to regulations under the Code.
(c) Separate accounts for Qualified Non-Elective Contributions and
Qualified Matching Contributions will be maintained for each Participant
consistent with Section 7.1 hereof. Each account will be credited with the
applicable contributions and earnings thereon.
(d) For purposes of the special distribution rules in Section 5.5,
Qualified Matching Contributions and Qualified Non-Elective Contributions shall
be treated as Elective Deferrals.
(e) Qualified Matching Contributions and Qualified Non-Elective
Contributions shall be appropriately designated when contributed.
Section 5.5. Special Distribution Rules. Except as provided below, Elective
- ----------- --------------------------
Deferrals, Qualified Non-Elective Contributions and Qualified Matching
Contributions, and income allocable to each, are not distributable to a
Participant or a Beneficiary, in accordance with such Participant's or
Beneficiary's election, earlier than upon separation from service, death, or
disability.
(a) Financial Hardship. (i) If elected by the Employer in item 8(D)
of the Adoption Agreement (Profit Sharing Plan), a Participant may elect to
withdraw all or any portion of his Elective Deferrals (excluding net earnings
credited thereto after December 31, 1988) on account of financial hardship. For
purposes of this Section 5.5, a financial hardship shall mean an immediate and
heavy financial need of the Participant which cannot be satisfied from other
resources reasonably available to such Participant. Hardship withdrawals are
subject to the spousal consent requirements of Code Sections 401(a)(11) and 417.
(ii) A withdrawal is made on account of an immediate and heavy
financial need of a Participant only if it is made on account of: (A)
unreimbursed medical expenses described in Code Section 213(d) of the
Participant or the Participant's spouse or dependents (as defined in Code
Section 152); (B) the purchase (excluding mortgage payments) of a principal
residence for the Participant; (C) payment of tuition for the next term of
post-secondary education for the Participant or the Participant's spouse,
children or dependents; or (D) the need to prevent the Participant's eviction
from, or foreclosure on the mortgage of, the Participant's principal residence
or such other events as may be approved by the Commissioner of Internal Revenue
in rulings, notices or other published documents.
(iii) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Participant only if: (A) the
Participant has obtained all distributions, other than hardship distributions,
and all nontaxable loans under all plans maintained by the Employer; (B) all
plans maintained by the Employer provide that the Participant's Elective
Deferrals and any other elective contributions or employee contributions under
this Plan and any other plan maintained by the Employer (both qualified and
nonqualified) will be automatically suspended for twelve (12) months after the
receipt of the hardship distribution; (C) the distribution is not in excess of
the amount of an immediate and heavy financial need; and (D) all plans
maintained by the Employer provide that the Participant may not make Elective
Deferrals for the Participant's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable limit under Code
Section 402(g) for such taxable year less the amount of such Participant's
Elective Deferrals for the taxable year of the hardship distribution.
(iv) A request for a hardship distribution shall be made in writing
and in such form as may be prescribed by the Administrator. Processing of
applications and distributions of amounts under this Section, on account of a
bona fide financial hardship, shall be made as soon as administratively
feasible.
(b) Elective Deferrals at Age 59 1/2. Upon attaining age fifty-nine
--------------------------------
and one-half (591/2), a Participant may elect to withdraw all or any portion of
his Elective Deferrals Account and/or Employer Matching Contributions Account,
as of the last day of any month, even if he is still employed.
Section 5.6. Definitions. For purposes of this Article, the following words
- ----------- -----------
and phrases shall have the following meanings:
(a) "Actual Deferral Percentage" means, for a specified group of
Participating Employees for a Plan Year, the average of the ratios (calculated
separately for each Participating Employee in such group) of (i) the amount of
Employer contributions actually paid over to the trust on behalf of such
Participating Employee for the Plan Year to (ii) the Participating Employee's
Compensation for such Plan Year (whether or not the Employee was a Participating
Employee for the entire Plan Year). Employer contributions on behalf of any
Participating Employee shall include: (i) any Elective Deferrals made pursuant
to the Participating Employee's deferral election, including Excess Elective
Deferrals of Highly Compensated Employees, but excluding Elective Deferrals that
are taken into account in the Contribution Percentage test (provided the Actual
Deferral Percentage test is satisfied both with and without exclusion of these
Elective Deferrals); and (ii) at the election of the Employer, Qualified Non-
Elective Contributions and Qualified Matching Contributions. For purposes of
computing Actual Deferral Percentages, an Employee who would be a Participating
Employee but for the failure to make Elective Deferrals shall be treated as a
Participating Employee on whose behalf no Elective Deferrals are made.
(b) "Aggregate Limit" means the sum of (i) one hundred twenty-five
percent (125%) of the greater of the Actual Deferral Percentage of the
Participating Employees who are not Highly Compensated Employees for the Plan
Year or the Actual Contribution Percentage of Participating Employees who are
not Highly Compensated Employees under the Plan subject to Code Section 401(m)
for the Plan Year beginning with or within the Plan Year of the cash or deferred
arrangement and (ii) the lesser of two hundred percent (200%) or two (2) plus
the lesser of such Actual Deferral Percentage or Actual Contribution Percentage.
"Lesser" is substituted for "greater" in (i) above and "greater" is substituted
for "lesser" after "two plus the" in (ii) above if it would result in a larger
Aggregate Limit.
(c) "Average Contribution Percentage" means the average of the
Contribution Percentages of the Employees in a group who are eligible to make
Participant Voluntary Contributions, or Elective Deferrals (if the Employer
takes such contributions into account in the calculation of the Contribution
Percentage), or to receive Matching Contributions (including forfeitures) or
Qualified Matching Contributions.
(d) "Contribution Percentage" means the ratio (expressed as a
percentage) of the Participating Employee's Contribution Percentage Amounts to
the Participating Employee's Compensation for the Plan Year (whether or not the
Employee was a Participating Employee for the entire Plan Year).
(e) "Contribution Percentage Amounts" means the sum of the
Participant Voluntary Contributions, Matching Contributions, and Qualified
Matching Contributions (to the extent not taken into account for purposes of the
Actual Deferral Percentage test) made under the Plan on behalf of the
Participating Employee for the Plan Year. Such Contribution Percentage Amounts
shall include forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participating Employee's Accounts which shall be
taken into account in the year in which such forfeiture is allocated. The
Employer may elect to include Qualified Non-Elective Contributions in the
Contribution Percentage Amounts. The Employer also may elect to use all or part
of the Elective Deferrals for the Plan Year in the Contribution Percentage
Amounts so long as the Actual Deferral Percentage test is satisfied both
including and excluding the Elective Deferrals that are included in the
Contribution Percentage Amounts.
(f) "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of:
(i) the aggregate Contribution Percentage Amounts taken into account
in computing the numerator of the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such Plan Year, over
(ii) the maximum Contribution Percentage Amounts permitted by the
Actual Contribution Percentage test (determined by reducing contributions made
on behalf of Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to Section 5.2(d) hereof and then determining Excess
Contributions pursuant to Section 5.2(f) hereof.
(g) "Excess Contributions" means, with respect to any Plan Year, the
excess of:
(i) the aggregate amount of Employer contributions actually taken
into account in computing the Actual Deferral Percentage of Highly Compensated
Employees for such Plan Year, over
(ii) the maximum amount of such contributions permitted by the Actual
Deferral Percentage test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the Actual Deferral Percentages,
beginning with the highest of such percentages).
(h) "Excess Elective Deferrals" means those Elective Deferrals that
are includible in a Participating Employee's gross income for a taxable year
under Code Section 402(g) because they exceed the limitation specified in
Section 5.2(d)(i) hereof. Excess Elective Deferrals shall be treated as Annual
Additions under the Plan.
(i) "Family Member" means the spouse, lineal ascendants and
descendants of the employee or former employee and the spouses of such lineal
ascendants and descendants, all within the meaning of Code Section 414(q)(6).
(j) "Highly Compensated Employee" means both highly compensated
active employees and highly compensated former employees.
(i) A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and who, during
the look-back year: (i) received compensation from the Employer in excess of
$75,000 (as adjusted pursuant to Code Section 415(d)); (ii) received
compensation from the Employer in excess of $50,000 (as adjusted pursuant to
Code Section 415(d)) and was a member of the top-paid group for such year; or
(iii) was an officer of the Employer and received compensation during such year
that is greater than 50 percent of the dollar limitation in effect under Code
Section 415(b)(1)(A). The term Highly Compensated Employee also includes: (i)
employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
employee is one of the 100 employees who received the most compensation from the
Employer during the determination year; and (ii) employees who are 5 percent
owners at any time during the look-back year or determination year. If no
officer has satisfied the compensation requirement of (iii) above during either
a determination year or look-back year, the highest paid officer for such year
shall be treated as a Highly Compensated Employee. For this purpose, the
determination year shall be the Plan Year. The look-back year shall be the
twelve-month period immediately preceding the determination year.
(ii) A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's
fifty-fifth (55th) birthday.
(iii) If an employee is, during a determination year or look-back year,
a Family Member of either a five percent owner who is an active or former
employee or a Highly Compensated Employee who is one of the ten (10) most highly
compensated employees ranked on the basis of Compensation paid by the Employer
during such year, then the Family Member and the five percent owner or top-ten
Highly Compensated Employee shall be aggregated. In such case, the Family
Member and five percent owner or top-ten Highly Compensated Employee shall be
treated as a single employee receiving Compensation and Plan contributions or
benefits equal to the sum of such Compensation and contributions or benefits of
the Family Member and five percent owner or top-ten Highly Compensated Employee.
(iv) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of employees in the top-
paid group, the top 100 employees, the number of employees treated as officers
and the Compensation that is considered, will be made in accordance with Code
Section 414(q).
(k) "Participating Employee" means an Employee who is eligible to
make Elective Deferrals or Participant Voluntary Contributions (if the Employer
takes such contributions into account in the calculation of the Contribution
Percentage), or to receive Matching Contributions (including forfeitures) or
Qualified Matching Contributions. If an Employee contribution is required as a
condition of participation in the Plan, any Employee who would be a Participant
in the Plan if such Employee made such a contribution shall be treated as a
Participating Employee on behalf of whom no Employee contributions are made.
(l) "Qualified Matching Contributions" means Matching Contributions
which are one hundred percent (100%) vested and nonforfeitable at all times and
which are distributable only in accordance with the distribution provisions
applicable to Elective Deferrals.
(m) "Qualified Non-Elective Contributions" means contributions (other
than Matching Contributions or Qualified Matching Contributions) made by the
Employer and allocated to Participating Employees' Accounts that the
Participating Employees may not elect to receive in cash until distributed from
the Plan, are one hundred percent (100%) vested and nonforfeitable when made,
and are distributable only in accordance with the distribution provisions
applicable to Elective Deferrals.
ARTICLE VI. SECTION 415 LIMITATIONS
-----------------------------------
Section 6.1. Employers Maintaining Only this Plan.
- ----------- ------------------------------------
(a) If the Participant does not participate in, and has never
participated in another qualified plan, a welfare benefit fund (as defined in
Code Section 419(e)) or an individual medical account (as defined in Code
Section 415(1)(2)) maintained by the Employer, the amount of Annual Additions
which may be credited to a Participant's Account under this Plan for a
Limitation Year shall not exceed the lesser of the Maximum Permissible Amount or
any other limitation contained in this Plan. If the Employer's contribution
that would otherwise be contributed or allocated to the Participant's Account
would cause the Annual Additions for the Limitation Year to exceed the Maximum
Permissible Amount, the amount contributed or allocated will be reduced so that
the Annual Additions for the Limitation Year will equal the Maximum Permissible
Amount.
(b) Prior to the determination of the Participant's actual
compensation for a Limitation Year, the Maximum Permissible Amount may be
determined on the basis of the Participant's estimated annual compensation for
such Limitation Year. Such estimated annual compensation shall be determined on
a reasonable basis and shall be uniformly determined for all Participants
similarly situated. Any Employer contributions based on estimated annual
compensation shall be reduced by any Excess Amounts carried over from prior
years.
(c) As soon as it is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation Year shall
be determined on the basis of the Participant's actual Compensation for such
Limitation Year.
(d) If, pursuant to Section 6.1(c) and notwithstanding the provisions
of Section 6.1(a) hereof which require a reduction of contributions so as not to
exceed the limitations of this Article VI, there is an Excess Amount with
respect to a Participant for a Limitation Year, such Excess Amount shall be
disposed of as follows:
(i) Any Participant Voluntary Contributions, to the extent that the
return would reduce the Excess Amount, shall be returned to the Participant.
(ii) In the event that the Participant is covered by this Plan at the
end of the Limitation Year, remaining Excess Amounts after the application of
clause (i) shall be applied to reduce future Employer contributions (including
any allocation of forfeitures) for such Participant under this Plan in the next
Limitation Year (and each succeeding year, as necessary).
(iii) In the event that the Participant is not covered by this Plan at
the end of the Limitation Year, remaining Excess Amounts after the application
of clause (i) shall not be distributed to the Participant, but shall be held
unallocated in a suspense account and shall be applied to reduce future Employer
contributions (including any allocation of forfeitures) for all remaining
Participants in the next Limitation Year (and each succeeding year, as
necessary).
(iv) If a suspense account is in existence at any time during the
Limitation Year pursuant to this Section, it will not participate in the
allocation of any investment gains and losses, and all amounts in the suspense
account must be allocated and reallocated to Participants' Accounts before any
Employer or Employee contributions may be made to the Plan for such Limitation
Year. Excess amounts may not be distributed to Participants or former
Participants.
Section 6.2. Employers Maintaining Other Master or Prototype Defined
- ----------- -------------------------------------------------------
Contribution Plans.
- -------------------
(a) If, in addition to this Plan, the Participant is covered under
another qualified defined contribution plan which qualifies as a Master or
Prototype Plan or a welfare benefit fund (as defined in Code Section 419(e)) or
an individual medical account (as defined in Code Section 415(1)(2)) maintained
by the Employer during any Limitation Year, the amount of Annual Additions which
may be allocated under this Plan on the Participant's behalf for such Limitation
Year, shall not exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to a Participant's account under such other plans, welfare
benefit funds or individual medical accounts for the same Limitation Year. If
the Annual Additions with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained by the Employer are less
than the Maximum Permissible Amount and the Employer contribution that would
otherwise be contributed or allocated to the Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced so that the
Annual Additions under all such plans and funds for the Limitation Year will
equal the Maximum Permissible Amount. If the Annual Additions with respect to
the Participant under such other defined contribution plans and welfare benefit
funds in the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the Participant's Account
under this Plan for the Limitation Year.
(b) Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amounts referred to in subsection (a)
above may be determined on the Participant's estimated annual compensation for
such Limitation Year. Such estimated annual compensation shall be determined on
a reasonable basis and shall be uniformly determined for all Participants
similarly situated. Any Employer contribution based on estimated annual
compensation shall be reduced by any Excess Amounts carried over from prior
years.
(c) As soon as it is administratively feasible after the end of the
Limitation Year, the amounts referred to in subsection (a) above shall be
determined on the basis of the Participant's actual Compensation for such
Limitation Year.
(d) If a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount for a Limitation Year, such Excess Amount
shall be deemed to consist of the Annual Additions last allocated, except that
Annual Additions attributable to a welfare benefit fund or individual medical
account will be deemed to have been allocated first regardless of the actual
allocation date.
(e) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of another
plan, the Excess Amount attributed to this Plan will be the product of:
(i) the total Excess Amount allocated as of such date (including any
amount which would have been allocated but for the limitations of Code Section
415), times
(ii) the ratio of (A) the amount allocated to the Participant as of
such date under this Plan, divided by (B) the total amount allocated as of such
date under all qualified master or prototype defined contribution plans
(determined without regard to the limitations of Code Section 415).
(f) Any Excess Amounts attributed to this Plan shall be disposed of
as provided in Section 6.1(d).
Section 6.3. Employers Maintaining Other Defined Contribution Plans. If the
- ----------- ------------------------------------------------------
Participant is covered under another plan which is a qualified defined
contribution plan which is not a Master or Prototype Plan maintained by the
Employer, Annual Additions allocated under this Plan on behalf of any
Participant shall be limited in accordance with the provisions of Section 6.2,
as though the other plan were a Master or Prototype Plan, unless the Employer
provides other limitations in the Adoption Agreement.
Section 6.4. Employers Maintaining Defined Benefit Plans. If the Participant
- ----------- --------------------------------------------
is covered or was covered at any time under a qualified defined benefit plan
maintained by the Employer, the projected annual benefit thereunder and the
Annual Additions credited to any such Participant's Account under this Plan and
any other qualified defined contribution plan in any Limitation Year will be
limited so that the sum of the Defined Contribution Fraction and the Defined
Benefit Fraction with respect to such Participant will not exceed 1.0 in any
Limitation Year. The Annual Additions which may be credited to the
Participant's Account under this Plan for any Limitation Year will be limited in
accordance with the Adoption Agreement.
Section 6.5. Definitions. For purposes of this Article VI, the following
- ----------- -----------
terms shall be defined as follows:
(a) Annual Additions -- The sum of the following amounts allocated to
a Participant's Account for a Limitation Year: (i) all Employer contributions;
(ii) all Participant contributions (other than a qualified rollover contribution
as described in Code Section 402(a)(5)); (iii) all forfeitures; (iv) all amounts
allocated, after March 31, 1984, to an individual medical account (as defined in
Code Section 415(1)(2)) which is part of a defined benefit or annuity plan
maintained by the Employer are treated as Annual Additions to a defined
contribution plan; and (v) amounts derived from contributions paid or accrued
after December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the separate
account of a "key employee" (as defined in Code Section 419A(d)(3)) under a
welfare benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, are treated as Annual Additions to a defined contribution plan.
For the purposes of this Article VI, amounts reapplied under Sections 6.1(d) and
6.2(f) of the Plan to reduce Employer contributions shall also be included as
Annual Additions.
(b) Compensation -- wages within the meaning of Section 3401(a) of
the Code and all other payments of compensation to the Employee by the Employer
(in the course of the Employer's trade or business) for which the Employer is
required to furnish the Employee a written statement under Sections 6041(d),
6051(a)(3) and 6052 of the Code, determined without regard to any rules under
Section 3401(a) that limit the remuneration included in wages based on the
nature or locations of the employment or the services performed. For any Self-
Employed Individual covered under the Plan, Compensation shall mean such
individual's Earned Income.
For Limitation Years beginning after December 31, 1991, for purposes
of applying the limitations of this Article, Compensation for a Limitation Year
is the Compensation actually paid or includible in gross income during such
Limitation Year. Notwithstanding the preceding sentence, Compensation for a
participant in a defined contribution plan who is permanently and totally
disabled (as defined in Code Section 22(e)(3)) is the Compensation such
participant would have received for the Limitation Year if the participant had
been paid at the rate of Compensation paid immediately before becoming
permanently and totally disabled. Such imputed Compensation for a disabled
participant may be taken into account only if the participant is not a highly
compensated employee (as defined in Code Section 414(q)) and contributions made
on behalf of such participant are nonforfeitable when made.
(c) Defined Benefit Fraction -- A fraction, the numerator of which is
the sum of a Participant's Projected Annual Benefits under all the qualified
defined benefit plans whether or not terminated) maintained by the Employer
determined at the end of the Limitation Year, and the denominator of which is
the lesser of (i) one hundred and twenty-five percent (125%) of the dollar
limitation for such Limitation Year under Code Sections 415(b) and (d) (or such
higher amount determined by the Commissioner of Internal Revenue applicable to
the calendar year with which or within which the Limitation Year ends) or (ii)
one hundred and forty percent (140%) of the Participant's average Compensation
(or Earned Income) for the three highest consecutive calendar years of service
during which the Participant was in the Plan including any adjustments under
Code Section 415(b). Notwithstanding the above, if the Participant was a
Participant as of the first limitation year beginning after December 31, 1986 in
one or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction will not be less than
the product of 1.25 times the sum of the annual benefits under such plans which
the Participant had accrued as of the close of the last Limitation Year
beginning after January 1, 1987, disregarding any changes in the terms and
conditions of the Plan after May 5, 1986. The preceding sentence applies only
if the defined benefit plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all Limitation Years beginning before
January 1, 1987.
(d) Employer -- The Employer that adopts this Plan and in the case of
a group of employers which constitutes (i) a controlled group of corporations
(as defined in Code Section 414(b) as modified by Code Section 415(h)); (ii)
trades or businesses (whether or not incorporated) which are under common
control (as defined in Section 414(c) as modified by Code Section 415(h)); (iii)
an affiliated service group (as defined in Code Section 414(m)); or (iv) a group
of entities required to be aggregated (pursuant to Code Section 414(o)) all such
employers shall be considered a single employer for purposes of applying the
limitations of this Article VI.
(e) Excess Amount -- The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(f) Limitation Year -- A calendar year or any other twelve (12)
consecutive month period adopted by the Employer in item 12 of the Adoption
Agreement (Profit Sharing Plan) or item 10 of the Adoption Agreement (Pension
Plan). All qualified plans maintained by the Employer shall use the same
Limitation Year. If the Limitation Year is amended to a different twelve (12)
consecutive month period, the new Limitation Year shall begin on the date within
the Limitation Year in which the amendment is made.
(g) Master or Prototype Plan -- A plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
(h) Maximum Permissible Amount -- For a Limitation Year, the Maximum
Permissible Amount with respect to any Participant shall be the lesser of (i)
the Defined Contribution Dollar Limitation or (ii) twenty-five percent (25%) of
the Participant's Compensation for the Limitation Year. The Compensation
limitation described in (ii) shall not apply to any contribution for medical
benefits (within the meaning of Code Sections 401(h) or 419A(f)(2)) which is
otherwise treated as an Annual Addition under Code Sections 415(1)(1) or
419A(d)(2). If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different twelve (12) consecutive month
period, the Maximum Permissible Amount shall not exceed the defined contribution
dollar limitation in Code Section 415(c)(1)(A) multiplied by a fraction, the
numerator of which is the number of months in the short Limitation Year and the
denominator of which is twelve (12).
(i) Projected Annual Benefit -- A Participant's annual retirement
benefit (adjusted to the actuarial equivalent of a straight life annuity if
expressed in a form other than a straight life or qualified joint and survivor
annuity) under the Plan, assuming that the Participant will continue employment
until the later of current age or Normal Retirement Age, and that the
Participant's Compensation for the Limitation Year and all other relevant
factors used to determine benefits under the Plan will remain constant for all
future Limitation Years.
(j) Defined Contribution Fraction -- A fraction, the numerator of
which is the sum of the Annual Additions credited to the Participant's account
under this and all other qualified defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all prior Limitation
Years (including the Annual Additions attributable to the Participant's non-
deductible employee contributions to all qualified defined benefit plans
(whether or not terminated) maintained by the Employer for the current and all
prior Limitation Years and the Annual Additions attributable to all welfare
benefit funds (as defined in Code Section 419(e)) and individual medical
accounts (as defined in Code Section 415(1)(2) maintained by the Employer), and
the denominator of which is the sum of the maximum aggregate amounts for the
current and all prior Limitation Years of service with the Employer (regardless
of whether a defined contribution plan was maintained by the Employer). The
maximum aggregate amount in any Limitation Year is the lesser of (i) one hundred
and twenty-five percent (125%) of the dollar limitation determined under Code
Sections 415(b) and (d) in effect under Code Section 415(c)(1)(A) or (ii)
thirty-five percent (35%) of the Participant's Compensation for such Limitation
Year.
If the Employee was a participant as of the end of the first day of
the first Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in existence on
May 5, 1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of:
(i) the excess of the sum of the fractions over 1.0 times (ii) the denominator
of this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the Code Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987. The annual
addition for any Limitation Year beginning before January 1, 1987, shall not be
computed to treat all Employee contributions as Annual Additions.
(k) Defined Contribution Dollar Limitation -- For a Limitation Year,
thirty thousand dollars ($30,000) or, if greater, one-fourth of the defined
benefit dollar limitation set forth in Code Section 415(b)(1) as in effect for
such Limitation Year.
(l) Highest Average Compensation -- The average Compensation for the
three consecutive Years of Service with the Employer which produces the highest
average.
ARTICLE VII. PARTICIPANTS' ACCOUNTS
------------------------------------
Section 7.1. Separate Accounts. Separate Accounts will be maintained for each
- ----------- ------------------
Participant for each of the following types of contributions, and the income,
expenses, gains and losses attributable thereto:
(a) Employer Profit Sharing Contributions pursuant to Section 4.1
hereof;
(b) Employer Pension Contributions pursuant to Section 4.2 hereof;
(c) Participant Voluntary Contributions pursuant to Section 4.3
hereof;
(d) Elective Deferrals pursuant to Section 5.2 hereof;
(e) Matching Contributions pursuant to Section 5.3 hereof;
(f) Rollover Contributions pursuant to Section 4.6 hereof.
The Trustee shall establish such other separate Accounts as may be necessary
under the Plan. These Accounts shall be for accounting purposes only and the
Trustee shall not be required to establish separate Trust Accounts for these
contributions.
Section 7.2. Vesting. (a) A Participant shall at all times have a fully
- ------------ --------
vested and nonforfeitable interest in all his Accounts except his Employer
Profit Sharing Contributions Account and/or his Employer Pension Contributions
Account.
(b) A Participant shall have a vested interest in his Employer Profit
Sharing Contributions Account and/or his Employer Pension Contributions Account
as determined under the vesting schedule elected in item 7 of the Adoption
Agreement.
Section 7.3. Computation of Vesting Service. All of a Participant's Years of
- ----------- ------------------------------
Service with the Employer shall be counted to determine the nonforfeitable
percentage of his Employer Profit Sharing Contributions Account and/or his
Employer Pension Contributions Account except those Years of Service excluded
under item 7 of the Adoption Agreement. A former Participant who had a
nonforfeitable right to all or a portion of his Account balance derived from
Employer contributions at the time of his termination shall receive credit for
Years of Service prior to his Break in Service upon completing a Year of Service
after his return to the employ of the Employer. A former Participant who did
not have a nonforfeitable right to any portion of his Account balance derived
from Employer contributions at the time of termination from service will be
considered a new employee for vesting purposes, if the number of consecutive one
year Breaks in Service equals or exceeds the greater of (i) five (5) years or
(ii) the aggregate number of Years of Service before such Breaks in Service. If
such a former Participant's Years of Service before termination from service may
not be disregarded pursuant to the preceding sentence, such former Participant's
prior Years of Service shall not be cancelled hereunder.
Section 7.4. Allocation of Forfeitures.
- ----------- -------------------------
(a) As of the end of the Plan Year, forfeitures derived from Employer
Profit Sharing Contributions Accounts which become available for reallocation
during such Plan Year because of the operation of the vesting provisions of
Section 7.2(b), shall be allocated to the Employer Profit Sharing Contribution
Accounts of the Participants who are eligible to share in an Employer Profit
Sharing Contributions for the Plan Year. Such amounts shall be allocated
according to the ratio that each such Participant's Compensation or Earned
Income for the Plan Year bears to the total Compensation and Earned Income of
all such Participants for the Plan Year. Forfeitures under this subsection (a)
will be allocated only for the benefit of Participants of the Employer adopting
this Plan.
(b) Forfeitures derived from Employer Pension Contributions which
become available for reallocation during a Plan Year shall be applied to reduce
the Employer Pension Contributions that would otherwise be due for such Plan
Year under Section 4.2. Forfeitures under this subsection (b) will only be used
to reduce the Employer Pension Contributions of the Employer adopting this Plan.
(c) If a benefit is forfeited because a Participant or Beneficiary
cannot be found, such benefit will be reinstated if a claim is made by the
Participant or Beneficiary.
(d) No forfeiture will occur solely as a result of a Participant's
withdrawal of any Employee contributions.
ARTICLE VIII. PAYMENT OF BENEFITS
----------------------------------
Section 8.1. Benefits Payable Under the Plan.
- ----------- -------------------------------
(a) Normal Retirement. A Participant's interest in all Employer
-----------------
contributions allocated to his Accounts shall be fully vested and nonforfeitable
on and after his Normal Retirement Age. Such Participant may retire at any time
on or after that date and shall be entitled to receive, in accordance with the
provisions of Sections 8.2 and 8.3 hereof, the total amount credited to his
Accounts. Any Participant who is employed beyond his Normal Retirement Age
shall continue to share in Employer contributions until his actual retirement.
(b) Death Benefits. Upon the death of a Participant while employed
--------------
by the Employer, the total amount credited to such Participant's Accounts (plus
such Participant's share of the Employer contributions for the year of his
death), shall be payable to such Participant's Beneficiary in accordance with
Sections 8.2 and 8.3 hereof. Upon the death of a Participant following his
termination of employment with the Employer, the vested portion of his Accounts
which has not been distributed shall be payable to such Participant's
Beneficiary in accordance with Sections 8.2 and 8.3 hereof.
(c) Other Termination of Employment. A Participant who terminates
-------------------------------
employment with the Employer on account of Disability shall be entitled to
receive, in accordance with Sections 8.2 and 8.3 hereof, the total amount
credited to his Account. A Participant whose employment with the Employer is
terminated prior to his Normal Retirement Date for any reason other than death
or Disability shall be entitled to receive, in accordance with the provisions of
Sections 8.2 and 8.3 hereof, the portions of his Accounts that have vested
pursuant to Section 7.2 hereof.
(d) Forfeitures. Any amounts in a Participant's Accounts which are
-----------
not payable under subsection (c) above when his employment with the Employer is
terminated shall remain in such Accounts and shall continue to share in profits
or losses on investments under Section 9.3 hereof until such former Participant
incurs five (5) consecutive Breaks in Service, whereupon they shall be forfeited
and administered in accordance with Section 7.4 hereof. In the event a former
Participant is reemployed by the Employer before incurring five (5) consecutive
Breaks in Service his Accounts shall continue to vest in accordance with the
vesting schedule specified in the applicable Adoption Agreement.
Notwithstanding the foregoing, if a terminated Participant receives a
distribution on account of termination of his participation in the Plan of his
entire vested interest in the Pension Plan or the Profit Sharing Plan, such
Participant's nonvested interest in the relevant plan shall be treated as a
forfeiture and administered in accordance with Section 7.4 hereof. If the
Participant elects to have distributed less than the entire vested portion of
his Account balance derived from Employer contributions, the part of the
nonvested portion that will be treated as a forfeiture is the total nonvested
portion multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator of which
is the total value of the vested Employer derived Account balance. For purposes
of this Section, if the value of an employee's vested account balance is zero,
the Employee shall be deemed to have received a distribution of such vested
account balance. A Participant's vested account balance shall not include
accumulated deductible employee contributions within the meaning of Code Section
72(o)(5)(B) for plan years beginning prior to January 1, 1989. If a Participant
receives or is deemed to receive a distribution pursuant to this subsection (d)
and such Participant subsequently resumes employment covered under the Plan, the
forfeited amounts shall be restored from current forfeitures, or if those are
insufficient by a special Employer contribution, provided that the Participant
repays to the Plan the full amount of the distribution attributable to Employer
contributions prior to the earlier of (i) five (5) years after the Participant
is reemployed, or (ii) the time the Participant incurs five (5) consecutive
Breaks in Service. In the event a former Participant is reemployed after
incurring five (5) consecutive Breaks in Service, separate Accounts will be
maintained for Employer contributions allocated before and after the Break in
Service, and Years of Service earned after his return to employment shall be
disregarded in determining the Participant's vested percentage in his pre-break
Employer contributions.
Section 8.2. Manner of Distributions.
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(a) Distributions From Pension Plan. Distributions from the Pension
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Plan shall be made as follows:
(i) A Participant's vested interest in the Plan shall be paid by
purchasing an annuity contract from a licensed insurance company, unless the
Participant elects to receive his interest in one of the alternate forms of
benefit described in subsection (c) below. If a Participant is not married at
his annuity starting date, the annuity contract shall provide a monthly benefit
for his life. If a Participant is married at his annuity starting date, the
annuity shall be in the form of a qualified joint and survivor annuity. A
"qualified joint and survivor annuity" is an immediate annuity for the life of
the Participant with a survivor annuity for the life of the spouse which is
equal to fifty percent (50%) of the amount of the annuity which is payable
during the joint lives of the Participant and the spouse and which is the amount
of benefit which can be purchased with the Participant's vested Account balance.
The Participant may elect to have such annuity distributed upon attainment of
the earliest retirement age under the Plan. Any annuity contract purchased
hereunder and distributed in accordance with this Section 8.2 shall be
nontransferable and shall comply with the terms of this Plan. For purposes of
this Section, the earliest retirement age shall be the Participant's age on the
earliest date on which the Participant could elect to receive retirement
benefits.
(ii) Unless an optional form of benefit is selected in accordance with
subsection (c) below, if a Participant has a spouse and dies prior to his
annuity starting date (the date annuity payments commence), the Participant's
vested Account balance in the Plan shall be applied toward the purchase of a
life only annuity contract from a licensed insurance company providing a benefit
for the life of the surviving spouse. The surviving spouse may elect to have
such annuity distributed within a reasonable period after the Participant's
death.
(iii) For any distribution subject to the annuity requirements in
subsection (i) above, a Participant or Beneficiary may elect in writing, within
the ninety (90) day period ending on the annuity starting date (the date annuity
or any other form of benefit payments commence), to receive his vested interest
in the Plan in one of the alternate forms of benefit set forth in subsection (c)
below in lieu of the form of benefit otherwise payable hereunder. Any waiver of
the joint and survivor annuity by a married Participant shall not be effective
unless: (A) the Participant's spouse consents in writing to the election; (B)
the election designates a specific Beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be changed without
spousal consent (or the spouse expressly permits designations by the Participant
without any further spousal consent); (C) the spouse's consent acknowledges the
effect of the election; and (D) the spouse's consent is witnessed by a Plan
representative or notary public. Additionally, a Participant's waiver of the
joint and survivor annuity shall not be effective unless the election designates
a form of benefit payment which may not be changed without spousal consent (or
the spouse expressly permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction of a Plan
representative that there is no spouse or that the spouse cannot be located, a
waiver will be deemed a qualified election. Any consent by a spouse obtained
under this provision (or establishment that the consent of a spouse may not be
obtained) shall be effective only with respect to such spouse. A consent that
permits designations by the Participant without any requirement of further
consent by such spouse must acknowledge that the spouse has the right to limit
consent to a specific Beneficiary, and a specific form of benefit where
applicable, and that the spouse voluntarily elects to relinquish either or both
of such rights. A revocation of a prior election may be made by a Participant
without the consent of the spouse at any time before the commencement of
benefits. The number of revocations shall not be limited. No consent obtained
under this provision shall be valid unless the Participant and the spouse have
received notice as provided in subsection (v) below.
(iv) A Participant may elect in writing to waive the surviving spouse
benefit otherwise payable under subsection (ii) above. The benefit may be
waived at any time during the period which begins on the first day of the Plan
Year in which the Participant attains age 35 and ends on the date of the
Participant's death. A Participant and the spouse may waive the pre-retirement
survivor death benefit prior to age 35, provided that such early waiver becomes
invalid in the Plan Year the Participant attains age 35 and a new waiver must be
made pursuant to this subsection (iv). If the Participant separates from
service prior to the first day of the Plan Year in which he attains age 35, the
surviving spouse benefit may be waived, with respect to the Participant's
account balance as of the date of separation, at any time during the period
which begins on the date of such separation and ends on the date of the
Participant's death. Notwithstanding the foregoing, any election by a
Participant to waive the surviving spouse benefit payable under subsection (ii)
above shall not be effective unless: (A) the Participant's spouse consents in
writing to the election; (B) the spouse's consent acknowledges the effect of the
election; and (C) the spouse's consent is witnessed by a Plan representative or
notary public. If it is established to the satisfaction of a Plan
representative that there is no spouse or that the spouse cannot be located, a
waiver will be deemed a qualified election. Any consent by a spouse obtained
under this provision (or establishment that the consent of a spouse may not be
obtained) shall be effective only with respect to such spouse. A revocation of
a prior election may be made by a Participant without the consent of the spouse
at any time before the commencement of benefits. The number of revocations
shall not be limited. No consent obtained under this provision shall be valid
unless the Participant and the spouse have received notice as provided in
subsection (v) below.
(v) The Administrator shall provide the Participant and the Spouse,
as applicable, with a written explanation of: (A) the terms and conditions of
the annuity described in subsections (i) or (ii), as applicable; (B) the
Participant's or Spouse's, as applicable, right to waive the payment of benefits
in the form of an annuity; (C) the rights of the Participant's spouse; and (D)
the right to make, and the effect of, the revocation of a previous election to
waive the payment of benefits in the form of an annuity described in subsections
(i) or (ii) hereof. In the case of the annuity described in subsection (i),
such explanation shall be provided no less than thirty (30) days and no more
than ninety (90) days prior to the annuity starting date. In the case of the
annuity described in subsection (ii), such explanation shall be provided within
the applicable period for such Participant. The applicable period for a
Participant is whichever of the following periods ends last: (A) the period
beginning with the first day of the Plan Year in which the Participant attains
age 32 and ending with the close of the Plan Year preceding the Plan Year in
which the Participant attains age 35; (B) a reasonable period ending after the
individual becomes a Participant; (C) a reasonable period ending after this
Article first applies to the Participant. Notwithstanding the foregoing, notice
must be provided within a reasonable period ending after separation from service
in the case of a Participant who separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period ending
after the enumerated events described in (B) and (C) is the end of the two-year
period beginning one year prior to the date the applicable event occurs, and
ending one year after that date. In the case of a Participant who separates
from service before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one year prior to separation and
ending one year after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such Participant shall
be redetermined. A written explanation comparable to the notices described
above shall be provided to a Participant who is waiving the surviving spouse
benefit prior to attaining age 35.
(vi) The Administrator shall be responsible for the purchase of any
annuity contracts required to be purchased in accordance with the terms of this
Plan.
(b) Distributions from Profit Sharing Plan. Distributions from the
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Profit Sharing Plan shall be made in the form elected by the Participant (or
Beneficiary) as described in subsection (c) below. Notwithstanding the
foregoing, if the Profit Sharing Plan is a direct or indirect transferee of a
defined benefit plan, a money purchase pension plan (including a target benefit
plan), or a stock bonus or profit sharing plan or is an amendment of an original
Plan which is (or was) subject to the survivor annuity requirements of Code
Sections 401(a)(11) or 417 then distributions shall be made in accordance with
the provisions of subsection (a) above. Notwithstanding any provision of this
plan to the contrary, to the extent that any optional form of benefit under this
plan permits a distribution prior to the employee's retirement, death,
disability, or severance from employment, and prior to plan termination, the
optional form of benefit is not available with respect to benefits attributable
to assets (including the post-transfer earnings thereon) and liabilities that
are transferred, within the meaning of section 414(l) of the Internal Revenue
Code, to this plan from a money purchase pension plan qualified under section
401(a) of the Internal Revenue Code (other than any portion of those assets and
liabilities attributable to voluntary employee contributions).
(c) Optional Forms of Distribution. All distributions required under
------------------------------
this subsection shall be determined and made in accordance with the Income Tax
Regulations under Code Section 401(a)(9), including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of such Regulations.
(i) Amounts payable to a Participant shall be distributed in one of
the following forms as elected by the Participant, with spousal consent, as
applicable:
(A) a lump sum; or
(B) installments over a period certain not to exceed the life
expectancy of the Participant or the joint life expectancy
of the Participant and his Beneficiary.
Such election shall be made in writing and in such form as shall be acceptable
to the Administrator. If the Participant fails to elect any of the methods of
distribution described above within the time specified for such election, the
Administrator shall distribute the Participant's Account in the form of a single
sum cash payment by the April 1 following the calendar year in which the
Participant attains age seventy and one-half (70 1/2).
(ii) If a Participant's benefit is to be distributed in installment
payments under (B) above, the amount distributed for each calendar year,
beginning with distributions for the first distribution calendar year, must at
least equal the quotient obtained by dividing the Participant's benefit by the
applicable life expectancy. The life expectancy (or joint and last survivor
expectancy) is calculated using the attained age of the Participant (or
Beneficiary) as of the Participant's (or Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year which has elapsed
since the date life expectancy was first calculated. If life expectancy is
being recalculated, the applicable life expectancy shall be the life expectancy
as so recalculated. The applicable calendar year shall be the first
distribution calendar year, and, if life expectancy is being recalculated, such
succeeding calendar year.
Unless otherwise elected by the Participant (or the Participant's
spouse) by the time distributions are required to begin, life expectancies shall
be recalculated annually. Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse Beneficiary may not be recalculated. Life expectancy
and joint life expectancy are computed by use of the expected return multiples
in Tables V and VI of Section 1.72-9 of the Income Tax Regulations.
Notwithstanding anything herein to the contrary, for calendar years
beginning before January 1, 1989, if the Participant's spouse is not the
designated Beneficiary, the method of distribution selected must assure that at
least fifty percent (50%) of the present value of the amount available for
distribution is paid within the life expectancy of the Participant. For
calendar years beginning after December 31, 1988, the amount to be distributed
each year shall not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (A) the applicable life expectancy or (B)
if the Participant's spouse is not the designated Beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of
the Income Tax Regulations. Distributions after the death of the Participant
shall be distributed using the applicable return multiple specified in Section
1.72-9 of the Income Tax Regulations as the relevant divisor without regard to
Section 1.401(a)(9)-2 of the Income Tax Regulations.
(iii) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the Participant's required
beginning date as described in Section 8.3(c) hereof. The minimum distribution
for other calendar years, including the minimum distribution for the
distribution calendar year in which such required beginning date occurs, must be
made on or before December 31 of that distribution calendar year.
(d) In any case where the Participant or Beneficiary has determined
payment to be on an installment basis, such Participant or Beneficiary may by
written request directed to the Administrator, at any time following
commencement of such installment payments, accelerate all or any portion of the
unpaid balance.
(e) For purposes of this Section a "spouse" shall include the spouse
or surviving spouse of a Participant, provided that a former spouse shall be
treated as the spouse or surviving spouse and a current spouse will not be
treated as a spouse or surviving spouse to the extent provided under a qualified
domestic relations order as described in Code Section 414(p).
(f) The payment of benefits in either a lump sum or in installments
under this Section 8.2 may be made in cash or in Investment Company Shares.
Section 8.3. Commencement of Payments. (a) Subject to the provisions of this
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Section 8.3, payment of benefits, under whichever method is selected, shall be
made or commence as soon as administratively practicable after the Valuation
Date immediately following the Participant's retirement, death or other
termination of employment.
(b) If the Participant's vested Account balance in the Pension Plan
or the Profit Sharing Plan exceeds (or at the time of any prior distribution
exceeded) three thousand five hundred dollars ($3,500), no distribution of that
interest shall be made prior to the Participant's Normal Retirement Age without
the written consent of the Participant and, in the case of the Pension Plan, the
Participant's spouse (or where either the Participant or the spouse has died,
the survivor). The consent of the Participant and the Participant's spouse
shall be obtained in writing within the ninety (90) day period ending on the
annuity starting date. The annuity starting date is the first day of the first
period for which an amount is paid as an annuity or any other form. The
Administrator shall notify the Participant and the Participant's spouse of the
right to defer any distribution until the Participant's Account balance is no
longer immediately distributable. Such notification shall include a general
description of the material features, and an explanation of the relative values
of the optional forms of benefit available under the Plan in a manner that would
satisfy the notice requirements of Code Section 417(a)(3), and shall be provided
no less than thirty (30) days and no more than ninety (90) days prior to the
annuity starting date; provided that if a distribution is one to which Sections
401(a)(11) and 417 of the Internal Revenue Code do not apply, such distribution
may commence less than 30 days after the notice required under Section 1.411(a)-
11(c) of the Income Tax Regulations is given, provided that:
(1) the Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a qualified joint and survivor
annuity while the Account balance is immediately distributable. (Furthermore,
if payment in the form of a qualified joint and survivor annuity is not required
with respect to the Participant pursuant to Section 8.2(b) of the Plan, only the
Participant need consent to the distribution of an Account balance that is
immediately distributable.) Neither the consent of the Participant nor the
Participant's spouse shall be required to the extent that a distribution is
required to satisfy Code Sections 401(a)(9) or 415. In addition, upon
termination of this Plan if the Plan does not offer an annuity option (purchased
from a commercial insurance company), the Participant's Account balance may,
without the Participant's consent, be distributed to the Participant or
transferred to another defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)) within the same controlled
group.
An Account balance is immediately distributable if any part of the
Account balance could be distributed to the Participant (or surviving spouse)
before the Participant attains (or would have attained if not deceased) the
later of his Normal Retirement Age or age sixty-two (62).
For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first Plan Year
beginning after December 31, 1988, a Participant's vested Account balance shall
not include amounts attributable to accumulated deductible employee
contributions within the meaning of Code Section 72(o)(5)(B).
(c) Unless the Participant (or the Participant's Beneficiary, if the
Participant is dead) elects to defer commencement under (b) above, distribution
of benefits shall begin no later than the sixtieth (60th) day after the close of
the Plan Year in which occurs the latest of (i) the Participant's attainment of
age 65 (or normal retirement age, if earlier); (ii) the tenth (10th) anniversary
of the year in which the Participant commenced participation in the Plan; or
(iii) the date the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and the spouse to
consent to a distribution while a benefit is immediately distributable, within
the meaning of Section 8.1 of the Plan, shall be deemed to be an election to
defer commencement of payment of any benefit sufficient to satisfy this Section.
(d) Notwithstanding anything herein to the contrary, payment of
benefits to a Participant shall commence by the Participant's required beginning
date, even if the Participant is still employed. A Participant's required
beginning date is the April 1 of the calendar year following the calendar year
in which the Participant attains age seventy and one-half (70 1/2); provided
that the required beginning date of a Participant who attains age 70 1/2 before
January 1, 1988, shall be determined in accordance with (i) or (ii) below:
(i) The required beginning date of a Participant who is not a 5-
percent owner is the first day of April of the calendar year following the
calendar year in which the later of retirement or attainment of age seventy and
one-half (70 1/2) occurs.
(ii) The required beginning date of a Participant who is a 5-percent
owner during any year beginning after December 31, 1979, is the first day of
April following the later of the calendar year in which the Participant attains
age seventy and one-half (70 1/2), or the earlier of the calendar year with or
within which ends the Plan Year in which the Participant becomes a 5-percent
owner, or the calendar year in which the Participant retires.
The required beginning date of a Participant who is not a 5-percent owner who
attains age seventy and one-half (70 1/2) during 1988 and who has not retired as
of January 1, 1989, is April 1, 1990.
A Participant is treated as a 5-percent owner for purposes of this
subsection (d) if such Participant is a 5-percent owner as defined in Code
Section 416(i) (determined in accordance with Code Section 416, but without
regard to whether the Plan is top-heavy) at any time during the Plan Year ending
with or within the calendar year in which such owner attains age sixty-six and
one-half (66 1/2) or any subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this
subsection (d), they must continue to be distributed, even if the Participant
ceases to be a 5-percent owner in a subsequent year.
Distributions may be delayed pursuant to an election made prior to
January 1, 1984, under Section 242 of the Tax Equity and Fiscal Responsibility
Act of 1982; provided that the method of distribution selected must be in
accordance with the requirements of Code Section 401(a)(9) as in effect prior to
amendment by the Deficit Reduction Act of 1984. If such an election is revoked,
any subsequent distribution must satisfy the requirements of Code Section
401(a)(9). If a designation is revoked subsequent to the date distributions are
required to begin, the Plan must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy Code Section 401(a)(9), but for such Section 242(b)(2) election. For
calendar years beginning after December 31, 1988, such distributions must meet
the minimum distribution incidental benefit requirements in Section 1.401(a)(9)-
2 of the Income Tax Regulations. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a revocation of
the designation, so long as such substitution or addition does not alter the
period over which distributions are to be made under the designation, directly
or indirectly (for example, by altering the relevant measuring life).
(e)(i) If a Participant dies after benefit payments have begun, the
Participant's remaining interest in the Plan shall be distributed to his
designated Beneficiary at least as rapidly as under the method of distribution
being used prior to the Participant's death.
(ii) If the Participant dies before benefit payments have commenced,
distribution of the Participant's entire interest in the Plan shall be completed
by the December 31 of the calendar year containing the fifth (5th) anniversary
of the Participant's death, except to the extent that an election is made to
receive distributions in accordance with the following: (A) if any portion of
the Participant's interest is payable to a designated Beneficiary, distributions
may be made over the life or over a period certain not greater than the life
expectancy of the designated Beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year in which the
Participant died; (B) if the designated Beneficiary is the Participant's
surviving spouse, the date distributions are required to begin in accordance
with (A) above shall not be earlier than the later of December 31 of the
calendar year immediately following the calendar year in which the Participant
died and December 31 of the calendar year in which the Participant would have
attained age seventy and one-half (701/2).
If the Participant has not made an election pursuant to this
subsection (ii) by the time of his death, the designated Beneficiary must elect
the method of distribution no later than the earlier of December 31 of the
calendar year in which distributions would be required to begin under this
subsection (e) or December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
designated Beneficiary, or if the designated Beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest in the Plan
must be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
For purposes of this subsection (ii), if the surviving spouse dies
after the Participant, but before payments to such spouse begin, the provisions
of this subsection (ii), with the exception of paragraph (B) above, shall be
applied as if the surviving spouse were the Participant. Any amount paid to a
child of the Participant will be treated as if it had been paid to the surviving
spouse if the amount becomes payable to the surviving spouse when the child
reaches the age of majority.
For the purposes of this subsection (e), distribution of a
Participant's interest is considered to begin on the Participant's required
beginning date (or the date distribution is required to begin to the surviving
spouse). If a distribution in the form of an annuity irrevocably commences to
the Participant before the required beginning date, the date the distribution is
considered to begin is the date distribution actually commences.
(iii) A Participant's interest in the Plan is his Account balance as of
the last valuation date in the calendar year immediately preceding the
distribution calendar year (the valuation calendar year) increased by the amount
of any contributions or forfeitures allocated to the Account balance as of dates
in the valuation calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after the valuation date. If
any portion of the minimum distribution for the first distribution calendar year
is made in the second distribution calendar year on or before the required
beginning date, the amount of the minimum distribution made in the second
distribution calendar year shall be treated as if it had been made in the
immediately preceding distribution calendar year.
The distribution calendar year is a calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's required beginning
date. For distributions beginning after the Participant's death, the first
distribution calendar year is the calendar year in which distributions are
required to begin pursuant to subsection (ii) above.
For purposes of this subsection (e), the designated Beneficiary is the
individual who is designated as the Beneficiary under the Plan in accordance
with Code Section 401(a)(9) and the proposed regulations thereunder.
Section 8.4. Payment of Small Amounts. Notwithstanding anything herein to the
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contrary, if the present value of the Participant's vested interest in the
Pension Plan does not exceed (nor at the time of any prior distribution
exceeded) three thousand five hundred dollars ($3,500) as of the date the
Participant's employment with the Employer terminates, the Administrator shall
distribute the present value of such interest to the Participant in a lump sum
as soon as administratively practicable after the end of the Plan Year in which
termination occurs. Likewise, if the total present value of the Participant's
vested interest in the Profit Sharing Plan and Cash or Deferred Arrangement does
not exceed (nor at any time of any prior distribution exceeded) three thousand
five hundred dollars ($3,500) as of the date the Participant's employment with
the Employer terminates, the Administrator shall distribute the present value of
this interest to the Participant in a lump sum as soon as administratively
practicable after the end of the Plan Year in which termination occurs. A
Participant whose entire vested interest in the Pension Plan and/or the Profit
Sharing Plan has been distributed or who has no vested interest in the Pension
Plan and/or the Profit Sharing Plan shall be deemed cashed out from the Pension
Plan and/or the Profit Sharing Plan, as applicable.
Section 8.5. Persons Under Legal or Other Disability. In the event a
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Participant or Beneficiary is declared incompetent and a guardian or other
person legally charged with the care of his person or of his property is
appointed, any benefits to which such Participant or Beneficiary is entitled
shall be paid to such guardian or other person legally charged with the care of
his person or of his property.
Section 8.6. Withdrawals from Profit Sharing Plan. (a) If elected in item 10
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of the Adoption Agreement (Profit Sharing Plan), a Participant shall be
permitted to withdraw the specified percentage of his vested Employer Profit
Sharing Account while he is still employed after attainment of age fifty-nine
and one-half (591/2) or prior to attainment of such age on account of a
financial hardship; provided, that such Participant has been an active
Participant in the Plan for at least five (5) years. A Participant may not make
another withdrawal on account of financial hardship under this Section 8.6 until
he has been an active Participant for at least an additional five (5) years from
the date of his last hardship withdrawal. For purposes of this Section 8.6, a
financial hardship shall mean a financial need or emergency which requires the
distribution of a Participant's Plan account in order to meet such need or
emergency. The determination of the existence of a financial hardship and the
amount required to be distributed to meet the hardship shall be made by the
Administrator in accordance with such uniform and nondiscriminatory rules as may
be established by the Administrator. A request for a withdrawal shall be made
in writing in a form prescribed by the Administrator and shall be made in
accordance with procedures and limitations established by the Administrator.
Notwithstanding the above, no withdrawal under this Section 8.6 shall be
permitted if the Integration Formula is selected in item 6 of the Adoption
Agreement (Profit Sharing Plan).
(b) If a distribution is made pursuant to this Section 8.6 at a time
when the Participant has a nonforfeitable right to less than one hundred percent
(100%) of his Account balance derived from Employer contributions and the
Participant may increase the nonforfeitable percentage in the Account:
(i) A separate Account will be established for the Participant's
interest in the Plan as of the time of the distribution; and
(ii) At any relevant time the Participant's nonforfeitable portion of
the separate Account will be equal to an amount ("X") determined by the formula:
X = P(AB + (R x D)) - (R x D)
For purposes of applying the formula above: P is the nonforfeitable percentage
at the relevant time, AB is the Account balance at the relevant time, D is the
amount of the distribution, and R is the ratio of the Account balance at the
relevant time to the Account balance after distribution.
Section 8.7. Transfer of Benefits to Eligible Retirement Plan. (a) This
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Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Article VIII, a distributee may elect,
at the time and in the manner prescribed by the Administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(b) An eligible rollover distribution is any distribution of all or
any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include (i) any distribution that is one
of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; (ii) any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code; and (iii) the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(c) An eligible retirement plan is an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.
(d) A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
(e) A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee.
ARTICLE IX. ESTABLISHMENT OF TRUST ACCOUNT; INVESTMENTS
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Section 9.1. Trust Account. (a) Unless the Employer elects otherwise in the
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Adoption Agreement, the Trustee shall open and maintain separate Trust Accounts
for each individual that the Employer shall from time to time certify to the
Trustee as a Participant in the Plan. Such Trust Accounts shall reflect the
various Participant Accounts described at Section 7.1 hereof.
(b) If the Employer so elects in the Adoption Agreement the Trustee
shall open and maintain a single Trust Account in the name of the Employer. If
only a single Trust Account is established, the Employer shall be responsible
for maintaining the records for the individual Participant accounts.
(c) In the event that separate balances are not maintained for the
portion of a Participant's Account balance derived from Employer contributions
and Participant Voluntary Contributions, the Account balance derived from
Participant Voluntary Contributions shall be the Participant's total account
balance multiplied by a fraction, the numerator of which is the total amount of
Participant Voluntary Contributions (less any withdrawals) and the denominator
of which is the sum of the numerator and the total Employer contributions
(including Elective Deferrals) made on behalf of such Participant.
Section 9.2. Receipt of Contributions. The Trustee shall accept such
- ---------- ------------------------
contributions of money on behalf of Participants as it may receive from time to
time from the Employer. The Trustee may, in its sole discretion, also accept
money or Investment Company Shares held under a preceding plan of the Employer
qualified under Code Section 401(a) or which qualify as rollover contributions
or transfers under Section 4.6 of the Plan. All such contributions shall be
accompanied by written instructions, in a form acceptable to the Trustee, from
the Employer specifying the Participant Accounts to which they are to be
credited.
Section 9.3. Investment of Account Assets. (a) Upon written instructions
- ------------ ---------------------------
given by the Employer on a uniform and nondiscriminatory basis as between
Participants, the Trustee shall invest and reinvest contributions credited to a
Participant Account(s) in Investment Company Shares. All Participant Accounts
shall share in the profits or losses of the investments on a pro rata basis
(i.e., in the ratio that the Participant's Account balance bears to all Account
balances, other than Accounts which are self-directed under subsection (b)
below), subject to adjustment by the Administrator on a fair and equitable basis
for contributions, distributions and/or withdrawals during the year. The amount
of each contribution credited to a Participant Account to be applied to the
purchase of Investment Company Shares shall be invested by the Trustee at the
applicable offering price. These purchases shall be credited to such Account
with notation as to cost. The Trustee shall have no discretionary investment
responsibility and in no event be liable to any person for following investment
instructions given by the Employer or the Participant in the manner provided
herein.
(b) Each Participant, through his separate Participant Account(s),
shall be the beneficial owner of all investments held in such Account(s). The
Employer however shall direct the Trustee (in a nondiscriminatory manner)
regarding the selection of specific Investment Company Shares to be purchased
for the Accounts of the Participants. The Employer may permit (in a
nondiscriminatory manner) the individual Participants to select and direct the
purchase of specific Investment Company Shares for their own Account(s). In
such a situation, the Employer shall transmit all such directions to the
Trustee. Notwithstanding the foregoing, unless otherwise elected in the
Adoption Agreement the individual Participant may direct the investment of his
Account(s) and select the specific Investment Company Shares for purchase for
his individual Account(s) by directly communicating with the Trustee.
(c) All income, dividends and capital gain distributions received on
the Investment Company Shares held in each Participant Account shall be
reinvested in such shares which shall be credited to such Account. If any
distribution on Investment Company Shares may be received at the election of the
Participant in additional shares or in cash or other property, the Trustee shall
elect to receive it in additional shares. All investments acquired by the
Trustee shall be registered in the name of the Trustee or its registered
nominee.
(d) Participant Accounts may also be invested in any common,
collective, or commingled trust fund maintained by the Trustee, or by any bank
or trust company acting as agent to the Trustee, or by any affiliated bank or
trust corporation and designated by the Trustee as an available investment under
the Plan. Such fund(s) must be maintained exclusively for qualified plans under
Code Section 401(a) and qualified as tax-exempt under the provisions of Code
Section 501. During such period of time as an investment through any such
fund(s) shall exist, the declaration of trust establishing such fund(s) shall
constitute a part of this Plan, and shall be incorporated herein by reference.
For purposes of this Plan, interests in such fund(s) shall be treated in a
manner consistent with the treatment of Investment Company Shares.
Section 9.4. Exclusive Benefit. The Trust Account or Accounts established
- ----------- -----------------
hereby shall not be used or diverted to purposes other than the exclusive
benefit of Participants or their Beneficiaries.
Section 9.5. Expenses. All expenses and charges in respect of the Plan and
- ----------- --------
the Trust Account, including, without limitation, the Trustee's fees and
commissions and taxes of any kind upon or with respect to the Plan, shall be
paid by the Employer; provided, however, that the Trustee shall be authorized to
pay such charges and expenses from the Plan if the Employer shall fail to make
payment within thirty (30) days after it has been billed therefor by the Trustee
or such charges have otherwise become due.
Section 9.6. Voting. The Trustee shall deliver, or cause to be executed and
- ----------- -------
delivered, to the Employer all notices, prospectuses, financial statements,
proxies and proxy soliciting materials received by the Trustee relating to
investments held in Participants' Accounts. The Trustee shall vote all proxies
only in accordance with instructions received from the Employer.
Section 9.7. Reports of the Trustee and Administrator. (a) The Trustee shall
- ---------- ----------------------------------------
keep accurate and detailed records of all receipts, investments, disbursements
and other transactions required to be performed hereunder. Not later than sixty
(60) days after the close of each calendar year (or after the Trustee's
resignation or removal), the Trustee shall file with the Employer a written
report reflecting the receipts, disbursements and other transactions effected by
it during such year (or period ending with such resignation or removal) and the
assets of this Plan at its close. Such report shall be open to inspection by
any Participant for a period of thirty (30) days immediately following the date
on which it is filed with the Employer. Upon the expiration of such thirty (30)
day period, the Trustee shall be forever released and discharged from all
liability and accountability to anyone with respect to its acts, transactions,
duties, obligations or responsibilities as shown in or reflected by such report,
except with respect to any such acts or transactions as to which the Employer
shall have filed written objections with the Trustee within such thirty (30) day
period.
(b) Annual reports provided to the Employer by the Trustee shall be,
in the Trustee's discretion, on a calendar year basis unless otherwise required
by law. The Employer shall compute the valuation of all Plan assets at least
annually at the fair market value as of the last day of each calendar year.
(c) The Trustee shall keep such records, make such identifications
and file such returns and other information concerning the Plan as may be
required of the Trustee under the Code or forms adopted thereunder.
(d) The Administrator shall be solely responsible for the filing of
any reports or information required under the Code or forms adopted thereunder.
Section 9.8. Limitation of Trustee's Duties and Liability. (a) The Trustee's
- ----------- --------------------------------------------
duties are limited to those set forth in this Plan, and the Trustee shall have
no other responsibility in the administration of the Plan or for compliance by
the Employer with any provision thereof. The Trustee shall not be responsible
for the collection of contributions provided for under the Plan; the purpose or
propriety of any distribution; or any action or nonaction taken by the Employer
or pursuant to the Employer's request. The Trustee shall have no responsibility
to determine if instructions received by it from the Employer, or the Employer's
designated agent, comply with the provisions of the Plan. The Trustee shall not
have any obligation either to give advice to any Participant on the taxability
of any contributions or payments made in connection with the Plan or to
determine the amount of excess contribution and net income attributable thereto.
The Trustee may employ suitable agents and counsel and pay their reasonable
expenses and compensation, and such agents or counsel may or may not be agent or
counsel for the Employer, and may be the Plan Sponsor, or an Investment Company,
or the investment manager for any Investment Company.
(b) The Employer shall at all times fully indemnify and hold harmless
the Trustee, its agents, counsel, successors and assigns, from any liability
arising from distributions made or actions taken, and from any and all other
liability whatsoever which may arise in connection with this Plan, except
liability arising from the negligence or willful misconduct of the Trustee. The
Trustee shall be under no duty to take any action other than as herein specified
with respect to this Plan unless the Employer shall furnish the Trustee with
instructions in a form acceptable to the Trustee; or to defend or engage in any
suit with respect to this Plan unless the Trustee shall have first agreed in
writing to do so and shall have been fully indemnified to the satisfaction of
the Trustee. The Trustee (and its agents) may conclusively rely upon and shall
be protected in acting upon any written order from the Employer or any other
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed, and, so long as it acts in
good faith, in taking or omitting to take any other action. No amendment to the
Plan shall place any greater burden on the Trustee without its written consent.
The Trustee shall not be liable for interest on any cash balances maintained in
the Plan.
(c) The Employer shall have the sole authority to enforce the terms
of the Plan on behalf of any and all persons having or claiming any interest
therein by virtue of the Plan.
(d) The Trustee, its agents, counsel, successors and assigns, shall
not be liable to the Employer, or to any Participants or Beneficiary for any
depreciation or loss of assets, or for the failure of this Plan to produce any
or larger net earnings. The Trustee further shall not be liable for any act or
failure to act of itself, its agents, employees, or attorneys, so long as it
exercises good faith, is not guilty of negligence or willful misconduct, and has
selected such agents, employees, and attorneys with reasonable diligence. The
Trustee shall have no responsibility for the determination or verification of
the offering or redemption prices or net asset values of Investment Company
Shares, and shall be entitled to rely for such prices and net asset values upon
statements issued by or on behalf of the Investment Company issuing the
Investment Company Shares. The Trustee shall have no duty to inquire into the
investment practices of such Investment Company; such Investment Company shall
have the exclusive right to control the investment of its funds in accordance
with its stated policies, and the investments shall not be restricted to
securities of the character now or hereafter authorized for trustees by law or
rules of court. The Trustee shall not be liable or responsible for any
omissions, mistakes, acts or failures to act of such Investment Company, or its
successors, assigns or agents. Notwithstanding the foregoing, nothing in this
Plan shall relieve the Trustee of any responsibility or liability under ERISA.
ARTICLE X. AMENDMENT AND TERMINATION
-------------------------------------
Section 10.1. Amendment. (a) The Employer reserves the right at any time and
- -----------------------
from time to time to amend or terminate the Plan. No part of the Plan shall by
reason of any amendment or termination be used for or diverted to purposes other
than the exclusive benefit of Participants and their Beneficiaries, and further
that no amendment or termination may retroactively change or deprive any
Participant or Beneficiary of rights already accrued under the Plan except
insofar as such amendment is necessary to preserve the qualification and tax
exemption of the Plan pursuant to Code Section 401. No amendment shall increase
the duties of the Trustee or otherwise adversely affect the Trustee unless the
Trustee expressly agrees thereto. However, if the Employer amends any provision
of this Plan (including a waiver of the minimum funding requirements under Code
Section 412(d)) other than by changing any election made in the Adoption
Agreement, adopting an amendment stated in the Adoption Agreement which allows
the Plan to satisfy Code Section 415, to avoid duplication of minimum benefits
under Code Section 416 or to add certain model amendments published by the
Internal Revenue Service which specifically provide that their adoption will not
cause the Plan to be treated as an individually designed plan, such Employer
shall no longer participate under this prototype plan and the Employer's Plan
shall be deemed to be an individually designed plan. The Employer hereby
irrevocably delegates (retaining, however, the right and power to change any
election made in the Adoption Agreement) to the Plan Sponsor the right and power
to amend the Plan at any time, and from time to time, and the Employer by
adopting the Plan shall be deemed to have consented thereto. The Plan Sponsor
shall notify the Employer of any amendment to the Plan. For purposes of any
Plan Sponsor amendments, the mass submitter shall be recognized as the agent of
the Plan Sponsor. If the Plan Sponsor does not adopt the amendments made by the
mass submitter, it will no longer be identical to or a minor modifier of the
mass submitter plan.
(b) No amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's accrued benefit except to the
extent permitted by Code Sections 412(c)(8) and 411(d)(6). For purposes of this
subsection, a Plan amendment which has the effect of decreasing a Participant's
Account balance or eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment shall be treated as
reducing an accrued benefit. Furthermore, if the vesting schedule of a Plan is
amended, in the case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's right
to his Employer-derived accrued benefit will not be less than his percentage
computed under the Plan without regard to such amendment.
(c) Notwithstanding subsection (a) above, an Employer may amend the
Plan by adding overriding plan language to the Adoption Agreement where such
language is necessary to satisfy Code Sections 415 or 416 because of the
required aggregation of multiple plans under such Code Sections.
Section 10.2. Termination. Upon complete discontinuance of the Employer's
- ------------ -----------
Profit Sharing Contributions (if the Employer has adopted a Profit Sharing Plan
by completing the appropriate Adoption Agreement) or termination or partial
termination of the Plan, each affected Participant's Account shall become
nonforfeitable. Upon termination or partial termination of the Plan, the
Employer shall instruct the Trustee whether currently to distribute to each
Participant the entire amount of the Participant's Account, in such one or more
of the methods described in Article VIII, or whether to continue the Plan and to
make distributions therefrom as if the Plan had continued; provided that, in the
event the Plan is continued, the Plan must continue to satisfy the requirements
of Code Section 401(a). The Employer shall in all events exercise such
discretion in a nondiscriminatory manner. The Plan shall continue in effect
until the Trustee shall have completed the distribution of all of the Plan asset
and the accounts of the Trustee have been settled.
ARTICLE XI. FIDUCIARY RESPONSIBILITIES
--------------------------------------
Section 11.1. Administrator. The Administrator shall have the power to
- ------------ -------------
allocate fiduciary responsibilities and to designate other persons to carry out
such fiduciary responsibilities; provided such allocation is in writing and
filed with the Plan records. The Administrator may employ one or more persons
to render advice to the Administrator with regard to its responsibilities under
the Plan, and consult with counsel, who may be counsel to the Employer.
Section 11.2. Powers of Administrator. The Administrator shall administer the
- ------------ -----------------------
Plan in accordance with its terms and shall have all powers necessary to carry
out its terms. The Administrator shall have discretionary authority to
determine eligibility for benefits and to interpret and construe the terms of
the Plan, and any such determination, interpretation or construction shall be
final and binding on all parties unless arbitrary and capricious. Any such
discretionary authority shall be carried out in a uniform and nondiscriminatory
manner.
Section 11.3. Records and Reports. The Administrator, or those to whom it has
- ------------ --------------------
delegated fiduciary duties, shall keep a record of all proceedings and actions,
and shall maintain all such books of account, records and other data as shall be
necessary for the proper administration of the Plan. The Administrator, or
those to whom it has delegated fiduciary duties, shall have responsibility for
compliance with the provisions of ERISA relating to such office, including
filing with the Secretary of Labor and Internal Revenue Service of all reports
required by the Code and/or ERISA and furnishing Participants and Beneficiaries
with descriptions of the Plan and reports required by ERISA.
Section 11.4. Other Administrative Provisions.
- ------------ -------------------------------
(a) No bond or other security shall be required of the Administrator,
and/or any officer or Employee of the Employer to whom fiduciary
responsibilities are allocated, except as may be required by ERISA.
(b) The Administrator or the Employer may shorten, extend or waive
the time (but not beyond sixty days) required by the Plan for filing any notice
or other form with the Administrator or the Employer, or taking any other action
under the Plan, except a response to an appeal under Section 11.6, from a
decision of the Administrator.
(c) The Administrator or the Employer may direct that such reasonable
expenses as may be incurred in the administration of the Plan shall be paid out
of the funds of the Plan, unless the Employer shall pay them.
(d) The Administrator, the Trustee, and any other persons performing
fiduciary duties under the Plan shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims, and no such person shall be
liable, to the maximum extent permitted by ERISA, for any act of commission or
omission in accordance with the foregoing standard.
Section 11.5. Claims Procedure. Any claim relating to benefits under the Plan
- ------------ ----------------
shall be filed with the Administrator on a form prescribed by the Administrator.
If a claim is denied in whole or in part, the Administrator shall give the
claimant written notice of such denial within ninety (90) days after the filing
of such claim, which notice shall specifically set forth:
(a) The reasons for the denial;
(b) The pertinent Plan provisions on which the denial was based;
(c) Any additional material or information necessary for the claimant
to perfect the claim and an explanation of why such material or information is
needed; and
(d) An explanation of the Plan's procedure for review of the denial
of the claim.
In the event that the claim is not granted and notice of denial of a claim is
not furnished by the ninetieth (90th) day after such claim was filed, the claim
shall be deemed to have been denied on that day for the purpose of permitting
the claimant to request review of the claim.
Section 11.6. Claims Review Procedure.
- ------------ -----------------------
(a) Any person whose claim filed pursuant to Section 11.5 has been
denied in whole or in part by the Administrator may request review of the claim
by the Employer, by filing a written request with the Administrator. The
claimant shall file such request (including a statement of his position) with
the Employer no later than sixty (60) days after the mailing or delivery of the
written notice of denial provided for in Section 11.5, or, if such notice is not
provided, within sixty (60) days after such be in writing and shall specifically
set forth:
(i) The reasons for the decision; and
(ii) The pertinent Plan provisions on which the decision is
based.
Any such decision of the Employer shall bind the claimant and the Employer, and
the Administrator shall take appropriate action to carry out such decision.
(b) Any person whose claim has been denied in whole or in part must
exhaust the administrative review procedures provided in subsection (a) above
prior to initiating any claim for judicial review.
ARTICLE XII. AMENDMENT AND CONTINUATION OF ORIGINAL PLAN
---------------------------------------------------------
Notwithstanding any of the foregoing provisions of the Plan to the
contrary, an employer that has previously established an Original Plan may, in
accordance with the provisions of the Original Plan, amend and continue the
Original Plan in the form of this Plan and become an Employer hereunder, subject
to the following:
(a) subject to the conditions and limitations of the Plan, each
person who is a Participant under the Original Plan immediately prior to the
effective date of the amendment and continuation thereof in the form of this
Plan will continue as a Participant in this Plan;
(b) no election may be made in the Adoption Agreement if such
election would reduce the benefits of a Participant under the Original Plan to
less than the benefits to which he would have been entitled if he had resigned
from the employ of the Employer on the date of the Amendment and continuation of
the Original Plan in the form of this Plan;
(c) the amounts, if any, of a Participant's or former Participant's
Accounts immediately prior to the effective date of the amendment and
continuation of the Original Plan in the form of this Plan shall be reduced to
cash, deposited with the Trustee and constitute the opening balances in such
Participant's Account under this Plan;
(d) amounts being paid to individuals in accordance with the
provisions of the Original Plan shall continue to be paid under this Plan, but
in the form that they were being paid under the Original Plan;
(e) any Beneficiary designation in effect under the Original Plan
immediately before its amendment and continuation in the form of this Plan which
effectively meets the requirements contained in Section 2.3 hereof shall be
deemed to be a valid Beneficiary designation pursuant to Section 2.3 of this
Plan, unless and until the Participant or former Participant revokes such
Beneficiary designation or makes a new Beneficiary designation under this Plan.
If the Beneficiary designation form does not meet the requirements of Section
2.3 hereunder, the Participant's spouse shall be deemed to be his Beneficiary.
If the Participant is unmarried, or his spouse does not survive him, his estate
shall be deemed his Beneficiary.
(f) if the Original Plan's vesting schedule (or this Plan's vesting
schedule) or the Plan is amended or changed in any way that directly or
indirectly affects the computation of a Participant's nonforfeitable interest in
his Account derived from Employer contributions, each such Participant with at
least three (3) Years of Service with the Employer may elect, within a
reasonable period after the adoption of the amendment or change, to have his
nonforfeitable percentage computed under the Plan without regard for the
amendment or change. For any Participant who does not have at least one (1)
Hour of Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "five (5) Years of Service"
for "three (3) Years of Service" where such language appears therein. Any such
election must be made during the period commencing on the date of the amendment
or change and ending on the latest of: (i) sixty (60) days after that date;
(ii) sixty (60) days after the effective date of the amendment or change; or
(iii) sixty (60) days after such Participant is issued written notice of the
amendment or change by the Plan Administrator or Employer.
ARTICLE XIII. TOP-HEAVY PROVISIONS
----------------------------------
Section 13.1. Effect of Top-Heavy Status. The Plan shall be a "Top-Heavy Plan"
- ------------ --------------------------
for any Plan Year commencing after December 31, 1983, if any of the following
conditions exist:
(a) If the Top-Heavy Ratio for this Plan exceeds sixty percent (60%)
and this Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group.
(b) If this Plan is a part of a Required Aggregation Group but not
part of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of
plans exceeds sixty percent (60%).
(c) If this Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds sixty percent (60%).
If the Plan is a Top-Heavy Plan in any Plan Year beginning after December 31,
1983, the provisions of Sections 13.3 through 13.6 shall supersede any
conflicting provisions of the Plan or the Adoption Agreement.
Section 13.2. Additional Definitions. Solely for purposes of this Article, the
- ------------- ----------------------
following terms shall have the meanings set forth below:
(a) "Key Employee" means any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the Determination Period
was an officer of the Employer if such individual's annual compensation exceeds
50 percent of the dollar limitation under Code Section 415(b)(1) (A), an owner
(or considered an owner under Code Section 318) of one of the ten largest
interests in the Employer if such individual's compensation exceeds 100 percent
(100%) of the dollar limitation under Code Section 415(c)(1)(A), a five percent
(5%) owner of the Employer, or one percent (1%) owner of the Employer who has an
annual compensation of more than $150,000. Annual compensation means
compensation as defined in Code Section 415(c)(3), of the Code, but including
amounts contributed by the Employer pursuant to a salary reduction agreement
which are excludible from the Employee's gross income under Code Sections 125,
402(a)(8), 402(h) or 403(b). The determination period is the plan year
containing the Determination Date and the four (4) preceding Plan Years.
The determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(1) and the Regulations thereunder.
(b) "Determination Date" means the last day of the preceding Plan
Year. For the first Plan Year of the Plan Determination Date shall mean the
last day of that year.
(c) "Top-Heavy Ratio" means:
(i) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer has not
maintained any defined benefit plan which during the five (5) year period ending
on the Determination Date(s) has or has had accrued benefits, the Top-Heavy
Ratio for this plan alone or for the Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the determination date(s) (including any
part of any account balance distributed in the five (5) year period ending on
the Determination Date(s)), and the denominator of which is the sum of all
account balances (including any part of any account balance distributed in the
five (5) year period ending on the Determination Date(s)), both computed in
accordance with Code Section 416 and the Regulations thereunder. Both the
numerator and denominator of the Top-Heavy Ratio are increased to reflect any
contribution not actually made as of the Determination Date, but which is
required to be taken into account on that date under Code Section 416 and the
Regulations thereunder.
(ii) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer maintains or
has maintained one or more defined benefit plans which during the five (5) year
period ending on the Determination Date(s) has or has had any accrued benefits,
the Top-Heavy Ratio for any Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which is the sum of account balances
under the aggregated defined contribution plan or plans for all Key Employees,
determined in accordance with (i) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all participants, determined in accordance with (i) above, and the
present value of accrued benefits under the defined benefit plan or plans for
all participants as of the Determination Date(s), all determined in accordance
with Code Section 416 and the Regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator and denominator of the Top-
Heavy Ratio are increased for any distribution of an accrued benefit made in the
five (5) year period ending on the Determination Date.
(iii) For purposes of (i) and (ii) above the value of account balances
and the present value of accrued Valuation Date that falls within or ends with
the twelve (12) month period ending on the Determination Date, except as
provided in Code Section 416 and the Regulations thereunder for the first and
second plan years of a defined benefit plan. The account balances and accrued
benefits of a participant (A) who is not a Key Employee but who was a Key
Employee in a prior year, or (B) who has not been credited with at least one (1)
hour of service with any employer maintaining the plan at any time during the
five (5) year period ending on the Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in accordance with
Code Section 416 and the Regulations thereunder. Deductible employee
contributions will not be taken into account for purposes of computing the Top-
Heavy Ratio. When aggregating plans the value of account balances and accrued
benefits will be calculated with reference to the determination dates that fall
within the same calendar year.
(iv) The accrued benefit of a participant other than a Key Employee
shall be determined under (i) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by the employer, or
(ii) if there is no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional rule of Code
Section 411(b)(1)(C).
(d) "Permissive Aggregation Group" means the Required Aggregation
Group of plans plus any other plan or plans of the Employer which, when
considered as a group with the Required Aggregation Group, would continue to
satisfy the requirements of Code Sections 401(a)(4) and 410.
(e) "Required Aggregation Group" means (i) each qualified plan of the
Employer in which at least one Key Employee participates or participated at any
time during the five (5) year period ending on the Determination Date
(regardless of whether the plan has terminated), and (ii) any other qualified
plan of the Employer which enables a plan described in (i) to meet the
requirements of Code Sections 401(a)(4) or 410.
(f) "Valuation Date" means (i) in the case of a defined contribution
plan, the Determination Date, and (ii) in the case of a defined benefit plan,
the date as of which funding calculations are generally made within the twelve
(12) month period ending on the Determination Date.
(g) "Employer" means the employer or employers whose employees are
covered by this Plan and any other employer which must be aggregated with any
such employer under Code Sections 414(b), (c), (m) and (o).
(h) "Present Value" means the value based on an interest rate of five
percent (5%) and mortality assumptions based on the 1971 GAM Mortality Table or
such other interest rate or mortality assumptions as may be specified in the
Adoption Agreement.
Section 13.3. Minimum Allocations. (a) For any year in which the Plan is a
- ------------ -------------------
Top-Heavy Plan, each Participant who is not a Key Employee and who is not
separated from service at the end of the Plan Year shall receive allocations of
Employer contributions and forfeitures under this Plan at least equal to three
percent (3%) of Compensation (as defined in Section 2.6) for such year or, if
less, the largest percentage of the first two hundred thousand dollars
($200,000) of compensation allocated on behalf of the Key Employee for the Plan
Year where the Employer has no defined benefit plan which designates this Plan
to satisfy Code Section 401. This minimum allocation shall be determined
without regard for any Social Security contribution and shall be provided even
though under other provisions the Participant would not otherwise be entitled to
receive an allocation or would have received a lesser allocation because of (i)
the Participant's failure to complete One Thousand (1,000) Hours of Service (or
any equivalent provided in the Plan), or (ii) the Participant's failure to make
mandatory Employee contributions to the Plan, or (iii) Compensation less than a
stated amount.
(b) The provision in (a) above shall not apply to any Participant to
the extent the Participant is covered under any other plan or plans of the
employer and the employer has provided in the Adoption Agreement that the
minimum allocation or benefit requirement applicable to top-heavy plans will be
met in the other plan or plans.
(c) The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b)) may not be forfeited under Code Sections
411(a)(3)(B) or 411(a)(3)(D).
(d) For purposes of subsection (a) above, neither Elective Deferrals
nor Employer Matching Contributions shall be taken into account for the purposes
of satisfying the minimum top-heavy benefits requirement.
Section 13.4. Benefit Limit Change. If the Employer maintains both the Plan
- ------------ ---------------------
and a defined benefit plan which cover one or more of the same Key Employees and
the plans are Top-Heavy in a Plan Year, then Section 6.5(c) and (j) hereof shall
be amended to substitute "one hundred percent (100%)" for the number "one
hundred and twenty-five percent (125%)" where the latter appears therein.
ARTICLE XIV. MISCELLANEOUS
--------------------------
Section 14.1. Rights of Employees and Participants. No Employee or Participant
- ------------ ------------------------------------
shall have any right or claim to any benefit under the Plan except in accordance
with the provisions of the Plan, and then only to the extent that there are
funds available therefor in the hands of the Trustee. The establishment of the
Plan shall not be construed as creating any contract of employment between the
Employer and any Employee or otherwise conferring upon any Employee or other
person any legal right to continuation of employment, nor as limiting or
qualifying the right of the Employer to discharge any Employee without regard to
the effect that such discharge might have upon his rights under the Plan.
Section 14.2. Merger With Other Plans. The Plan shall not be merged or
- ----------- -----------------------
consolidated with, nor transfer its assets or liabilities to, any other plan
unless each Participant, Beneficiary and other person entitled to benefits,
would (if the Plan then terminated) receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive if the Plan had terminated immediately
prior to the merger, consolidation or transfer.
Section 14.3. Non-Alienation of Benefits. The right to receive a benefit under
- ------------ ---------------------------
the Plan shall not be subject in any manner to anticipation, alienation, or
assignment, nor shall such right be liable for or subject to debts, contracts,
liabilities or torts, either voluntarily or involuntarily. Any attempt by the
Participant, Beneficiary or other person to anticipate, alienate or assign his
interest in or right to a benefit or any claim against him seeking to subject
such interest or right to legal or equitable process shall be null and void for
all purposes hereunder to the extent permitted by ERISA and the Code.
Notwithstanding the foregoing or any other provision of the Plan, the
Administrator shall recognize and give effect to a qualified domestic relations
order with respect to child support, alimony payments or marital property rights
if such order is determined by the Administrator to meet the applicable
requirements of Code Section 414(p). If any such order so directs, distribution
of benefits to the alternate payee may be made at any time, even if the
Participant is not then entitled to a distribution. The Administrator shall
establish reasonable procedures relating to notice to the Participant and
determinations respecting the qualified status of any domestic relations order.
Section 14.4. Failure to Qualify. Notwithstanding anything in this Plan to the
- ------------ ------------------
contrary, all contributions under the Plan made prior to the receipt by the
Employer of a determination by the Internal Revenue Service to the effect that
the Plan is qualified under Code Section 401 shall be made on the express
condition that such a determination will be received, and in the event that the
Internal Revenue Service determines upon initial application for a determination
that the Plan is not so qualified or tax exempt, all contributions made by the
Employer or Participants prior to the date of determination must be returned
within one (1) year from the date of such determination, but only if the
application for qualification is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan is adopted or such
later date as the Secretary of the Treasury may prescribe.
Section 14.5. Mistake of Fact; Disallowance of Deduction. Notwithstanding
- ------------ ---------------
anything in this Plan to the contrary, any contributions made by the Employer
which are conditioned on the deductibility of such amount under Code Section
404, to the extent of the amount disallowed, or which are made because of a
mistake of fact must be returned to the Employer within one year after such
disallowance or such mistaken contribution.
Section 14.6. Participation under Prototype Plan. If the Plan as adopted by
- ------------ ----------------------------------
the Employer either fails to attain or maintain qualification under the Code,
such Plan will no longer participate in this prototype plan and will be
considered an individually designed plan.
Section 14.7. Gender. Where the context admits, words used in the singular
- ------------ -------
include the plural, words used in the plural include the singular, and the
masculine gender shall include the feminine and neuter genders.
Section 14.8. Headings. The headings of Sections are included solely for
- ------------ --------
convenience of reference, and if there is any conflict between such headings and
the text of the Plan, the text shall control.
Section 14.9. Governing Law. Except to the extent governed by ERISA and any
- ------------ -------------
other applicable federal law, the Plan shall be construed, administered and
enforced according to the laws of the state in which the Employer has its
principal place of business.
THE JEFFERSON FUND GROUP TRUST
PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN
ADOPTION AGREEMENT
(PENSION PLAN)
The undersigned Employer hereby adopts and establishes The Jefferson
Fund Group Trust Prototype Defined Contribution Retirement Plan. This Plan is
subject to the terms set forth below in this Adoption Agreement.
1. EMPLOYER INFORMATION
Name: ------------------------------------------------------------
Address: ------------------------------------------------------------
------------------------------------------------------------
Telephone
Number: (----) --------------------------------------------------
Employer Identification Number:-----------------------------------------
Type of Entity: --- Corporation
--- Partnership
--- Sole Proprietorship
--- Other (please describe)
-----------------------------------------------
Employer's Taxable Year is --- calendar year or --- fiscal year beginning -----
- --------------------
2. PLAN INFORMATION
Plan Administrator (if other than the Employer):
Name: ------------------------------------------------------------
Address: ------------------------------------------------------------
------------------------------------------------------------
Telephone
Number: (----) -----------------------------------------------
Plan Year is the --- calendar year, --- Employer's fiscal year, or --- year
beginning ----------------------
3. EFFECTIVE DATE
Execution of this Adoption Agreement (check one):
--- Establishes a new plan.
--- Is an amendment to an Original Plan. This amendment is effective
-----------------, 19--.
--- Is an amendment to an Original Plan under which no further
contributions will be made or participation permitted (a "frozen plan"). This
amendment is effective ------------, 19--. (You need not complete items 4, 5 or
6 and check item 7(A)(1)).
The Effective Date of the Plan is ----------------, 19--. (If this is an
amended plan enter the date the Original Plan first started.)
4. ELIGIBILITY REQUIREMENTS
(A) Please check one:
--- An Employee need not complete any waiting
period.
--- In order to become a Participant, an employee must satisfy the
following Age and Service Requirements:
(1) An Employee must complete ----- (enter 1 or 2) Year(s) of
Employment. If more than 1 year is selected, you must also
----
check item 7(A)(1).
A Year of Employment shall mean the 12 consecutive month
period beginning on the date an Employee first performs an
Hour of Service or an anniversary thereof during which the
Employee has completed --------- (insert 1,000 or less)
Hours of Service.
Hours of Service shall be determined on the basis of the
method elected below. Only one method may be elected. The
method elected shall be applied to all Employees covered
under the Plan.
--- On the basis of actual hours for which an Employee
is paid or entitled to payment.
--- On the basis of days worked:
An Employee shall be credited with 10 Hours of Service
if the Employee would be credited with at least 1 Hour
of Service during the day.
--- On the basis of weeks worked:
An Employee shall be credited with 45 Hours of Service
if the Employee would be credited with at least 1 Hour
of Service during the week.
--- On the basis of months worked:
An Employee shall be credited with 190 Hours of Service
if the Employee would be credited with at least 1 Hour
of Service during the month.
An Employee must attain age ---- (not greater than age 21).
(B) Union Employees shall be:
--- Included as eligible employees.
--- Excluded from participation in the Plan.
Note: Union Employees must be covered by a collective bargaining
agreement between the Employer and employee representatives under
which retirement benefits were the subject of good faith
bargaining. The term "employee representatives" does not include
any organization more than one-half of whose members are
officers, executives or owners of the Employer.
5. COMPENSATION
(A) A Participant's "Compensation" shall include (check one):
--- All taxable earnings for the Plan Year.
--- Only amounts earned after completion of the eligibility
requirements selected in 4 above.
(B) For any self-employed individual, Compensation means Earned Income.
6. EMPLOYER PENSION CONTRIBUTIONS
(A) The Employer Pension Contribution (including forfeitures available for
allocation) for each Plan Year shall be -----% (not more than 25%) of
the aggregate Compensation and Earned Income of eligible Participants.
(B) Allocation Formulas
The Employer Pension Contribution shall be allocated pursuant to the
following formula (check one):
--- Compensation Formula
The Employer Pension Contribution shall be allocated based on
each eligible Participant's total Compensation for the Plan Year.
Note: If the Integration Formula is elected under the Profit
Sharing Plan, the Compensation Formula must be elected under this
Plan.
--- Integration Formula
The Employer Pension Contribution shall be allocated based on
each eligible Participant's Compensation in excess of the
Integration Level and total Compensation for the Plan Year,
subject to the limitations set forth in Section 4.2(b) of the
Plan.
--- The Integration Level shall be the taxable wage base for
FICA tax purposes.
--- The Integration Level shall be $----------- (not to exceed
the FICA taxable wage base).
Note: If the Plan is top-heavy all eligible Participants
must first be allocated 3% of their total Compensation and
any remaining contribution may be allocated pursuant to the
Integration Formula.
7. VESTING
(A) A Participant shall have a nonforfeitable and fully vested interest in his
Employer Pension Contribution Account under the following vesting
schedule (check one):
(1) --- A Participant shall at all times have a nonforfeitable and fully
vested interest.
(2) --- A Participant shall be fully vested after ----- (not more than 3)
Years of Service.
(3) --- A Participant shall become vested in accordance with the following
schedule:
Vested
Years of Service Percentage
--------------- ----------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(B) A "Year of Service" shall mean any Plan year in which an Employee completes
at least ----- (insert 1,000 or less) Hours of Service. Years of
Service shall include all Years of Service with the Employer except as
noted below (check one, both or none):
(1) --- All Years of Service prior to the effective date of this Plan (or a
predecessor plan) shall be excluded.
(2) --- All Years of Service before the Plan Year in which the Participant
attained age 18 shall be excluded.
8. PARTICIPANT AFTER-TAX CONTRIBUTIONS
Participant Voluntary Contributions (check one):
--- Participant Voluntary Contributions are permitted.
--- Participant Voluntary Contributions are permitted only for non-highly
----
compensated employees.
--- Participant Voluntary Contributions are not permitted.
9. NORMAL RETIREMENT AGE
The Normal Retirement Age shall be age ---- [insert an age not to exceed
65].
10. LIMITATION ON ALLOCATIONS
"Limitation Year", if other than a calendar year, shall mean the 12
consecutive month period ending on the last day of -----------------------.
Follow these instructions only if the Employer maintains (or has ever
maintained) another qualified plan (other than the Profit Sharing Plan)
which is either (i) a qualified defined contribution plan other than a
Master or Prototype Plan or (ii) a qualified defined benefit plan in which
any Participant in this Plan is (or was) a participant or could become a
participant, or if the Employer maintains a welfare benefit fund or an
individual medical account.
To comply with Internal Revenue Code requirements, please attach
appropriate provisions that limit the amount of Annual Additions allocated
to any Participant's Account.
If you do not attach the appropriate provisions, Sections 6.3. and 6.4 of
the Plan will automatically apply.
11. TOP-HEAVY PROVISIONS
The interest rate and mortality assumptions for determining Top-Heavy
status shall be the assumptions designated under Section 13.2(h) of the
Plan, unless different assumptions are selected below.
The interest rate and mortality assumptions for determining present values
to compute the Top-Heavy ratio shall be:
Interest Rate: -------%
Mortality Table: ----------------------------
12. ESTABLISHMENT OF ACCOUNTS
(A) Unless elected below, the Trustee shall establish individual Trust Accounts
for each Participant.
--- The Trustee shall establish a single Trust Account in the name of
the Employer and the Employer shall keep all records for the
individual Participants.
(B) Unless elected below, a Participant shall be permitted to direct the
investment of his Account balance.
--- Participant self-direction of the investment of his Account
balance is not permitted.
13. TRUSTEE
The undersigned as Employer hereby appoints the Firstar Trust Company or
its agents to invest all contributions received under the Plan in
Investment Company Shares designated by the Employer and in accordance with
the Plan.
14. FEES
The Trustee shall receive fees for its services in respect to each
Participant's Account in accordance with the attached fee schedule. The
fee schedule may be changed by the Trustee with advance notice from time to
time. Annual maintenance fees for each Participant's Account and any fees
directly related to activity in that Participant's Account shall be
deducted annually and activity fees will be deducted at the time incurred.
Sufficient Investment Company Shares will be redeemed to cover this fee.
Extraordinary services resulting from unusual administrative
responsibilities not contemplated by this schedule will be subject to such
additional charges as will reasonably compensate the Trustee for the
services performed.
15. FUNDING WAIVER
In the event the Employer obtains a funding waiver under Code Section 412
from the Internal Revenue Service, the Employer shall amend the Plan by
adding language which will override the affected provisions of the Plan and
this Adoption Agreement (attach appropriate overriding language to this
Adoption Agreement to comply with the Code).
Note: An Employer that amends the Plan because of a waiver of the minimum
funding requirements under Code Section 412 will no longer participate in
this prototype Plan and will be considered to have adopted an individually
designed plan.
16. REPRESENTATION OF EMPLOYER
The Employer represents that it has consulted its legal and tax advisors
with respect to the Plan. The Employer acknowledges that it may not
continue participation under the Plan if it fails to attain or maintain tax
qualification of the Plan or if it amends the Plan other than by a change
in the Adoption Agreement. The Employer agrees that whenever a Participant
contribution is made, the Employer will determine that the Participant has
received the appropriate current Investment Company prospectus. The
Employer represents that the Participant has received such prospectus by
depositing contributions with the Trustee.
The Employer acknowledges that if it has ever maintained or later adopts
any plan (including after December 31, 1985, a welfare benefit fund, as
defined in Code Section 419(e), which provides post-retirement medical
benefits allocated to separate accounts for key employees, as defined in
Code Section 419A(d)(3) or an individual medical account, as defined in
Code Section 415(l)(2)) in addition to this Plan (or the Profit Sharing
Plan), it may not rely on an opinion letter issued by the National Office
of the Internal Revenue Service as evidence that this Plan is qualified
under Code Section 401. If the Employer adopts or maintains multiple plans
and wishes reliance that the Plan is qualified, application for an
individual determination letter should be made to the appropriate District
Office of the Internal Revenue Service.
17. ADDITIONAL INFORMATION
This Plan is sponsored by:
The Jefferson Fund Group Trust
839 North Jefferson Street
Milwaukee, WI 53202
(414) 225-9990
Further information regarding this Plan may be obtained by contacting the
Plan Sponsor at the address or telephone number listed above.
The Plan Sponsor will inform the undersigned Employer of any amendments
made to this Plan or of the discontinuance or abandonment of this Plan.
Failure to properly fill out this Adoption Agreement may result in
disqualification of this Plan.
This Adoption Agreement can only be used with Plan document No. 01.
Signature of Employer: ------------------------------------------------------
Name of person signing above (please print): --------------------------------
Date: -----------------------
TRUSTEE ACCEPTANCE
The undersigned hereby accepts appointment as Trustee under the Plan.
FIRSTAR TRUST COMPANY
By: -------------------------------------
Date: -----------------------------------
THE JEFFERSON FUND GROUP TRUST
PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN
ADOPTION AGREEMENT
(PROFIT-SHARING PLAN)
The undersigned Employer hereby adopts and establishes The Jefferson
Fund Group Trust Prototype Defined Contribution Retirement Plan. This Plan is
subject to the terms set forth below in this Adoption Agreement.
1. EMPLOYER INFORMATION
Name: ------------------------------------------------------------
Address: ------------------------------------------------------------
------------------------------------------------------------
Telephone
Number: (----) --------------------------------------------------
Employer Identification Number:-----------------------------------------
Type of Entity: --- Corporation
--- Partnership
--- Sole Proprietorship
--- Other (please describe)
------------------------------------------------
Employer's Taxable Year is --- calendar year or --- fiscal year beginning -----
- ------------------------
2. PLAN INFORMATION
Plan Administrator (if other than the Employer):
Name: ------------------------------------------------------------
Address: ------------------------------------------------------------
------------------------------------------------------------
Telephone
Number: (----) -------------------------------------------------
Plan Year is the --- calendar year, --- Employer's fiscal year, or --- year
beginning --------------------------
3. EFFECTIVE DATE
Execution of this Adoption Agreement (check one):
--- Establishes a new plan.
--- Is an amendment to an Original Plan. This amendment is effective ----
------------, 19--.
--- Is an amendment to an Original Plan under which no further
contributions will be made or participation permitted (a "frozen
plan"). This amendment is effective ----------------, 19--. (You
need not complete items 4, 5 or 6 and check item 7(A)(1).)
The Effective Date of the Plan is -----------------, 19--. (If this is an
amended plan enter the date the Original Plan first started.)
4. ELIGIBILITY REQUIREMENTS
(A) Please check one:
--- An Employee need not complete any waiting period.
--- In order to become a Participant, an Employee must satisfy the
following Age and Service Requirements:
(1) An Employee must complete ----- (enter 1 or 2) Year(s) of
Employment. If more than 1 year is selected, you must also
check item 7(A)(1).
A Year of Employment shall mean the 12 consecutive month
period beginning on the date an Employee first performs an
Hour of Service or an anniversary thereof during which the
Employee completed ---------- (insert 1,000 or less) Hours
of Service.
Hours of Service shall be determined on the basis of the
method elected below. Only one method may be elected. The
method elected shall be applied to all Employees covered
under the Plan.
--- On the basis of actual hours for which an Employee
is paid or entitled to payment.
--- On the basis of days worked:
An Employee shall be credited with 10 Hours of Service
if the Employee would be credited with at least 1 Hour
of Service during the day.
--- On the basis of weeks worked:
An Employee shall be credited with 45 Hours of Service
if the Employee would be credited with at least 1 Hour
of Service during the week.
--- On the basis of months worked:
An Employee shall be credited with 190 Hours of Service
if the Employee would be credited with at least 1 Hour
of Service during the month.
(2) An Employee must attain age ----- (not greater than age 21).
(B) Union Employees shall be:
--- Included as eligible employees.
--- Excluded from participation in the Plan.
Note: Union Employees must be covered by a collective bargaining
agreement between the Employer and employee representatives under
which retirement benefits were the subject of good faith
bargaining. The term "employee representatives" does not include
any organization more than one-half of whose members are
officers, executives or owners of the Employer.
5. COMPENSATION
(A) A Participant's "Compensation" shall include (check one):
--- All taxable earnings for the Plan Year.
--- Only amounts earned after completion of the eligibility
requirements selected in item 4 above.
(B) For any self-employed individual covered under the Plan, Compensation means
Earned Income.
6. EMPLOYER PROFIT SHARING CONTRIBUTIONS
(A) The Employer Profit Sharing Contributions for each Plan Year shall be
(check one):
--- A discretionary amount determined by the Employer, but not more
than 15% of the aggregate Compensation and Earned Income of
Participants eligible to share in such contribution for the Plan
Year.
--- An amount equal to -----% (not more than 15%) of the aggregate
Compensation and Earned Income of Participants eligible to share
in such contribution for the Plan Year.
(B) Employer Profit Sharing Contributions:
--- Shall be made out of Net Profits.
--- May be made without regard to Net Profits.
(C) Allocation Formulas
The Employer Profit Sharing Contributions (and forfeitures) shall be
allocated to the accounts of eligible Participants pursuant to the
following formula (elect one):
(1) --- Compensation Formula
Employer Profit Sharing Contributions (and forfeitures)
shall be allocated based on each eligible Participant's
total Compensation for the Plan Year.
NOTE: If the Integration Formula is selected under the
Pension Plan, the Compensation Formula must be selected
under this Plan.
(2) --- Integration Formula
Employer Profit Sharing Contributions (and forfeitures)
shall be allocated based on each eligible Participant's
Compensation in excess of the Integration Level and total
Compensation for the Plan Year, subject to the limitation
set forth in Section 4.1(b) of the Plan.
--- The Integration Level shall be the taxable wage
base for FICA tax purposes.
--- The Integration Level shall be $---------------
(not to exceed the FICA taxable wage base).
NOTE: If the Plan is top-heavy all eligible Participants must
first be allocated 3% of their total Compensation and any
remaining contributions may be allocated pursuant to the
Integration Formula.
7. VESTING
(A) A Participant shall have a nonforfeitable and fully vested interest in his
Employer Profit Sharing Contribution Account under the following
vesting schedule (check one):
(1) --- A Participant shall at all times have a nonforfeitable and fully
vested interest.
(2) --- A Participant shall be fully vested after ----- (not more than 3)
Years of Service.
(3) --- A Participant shall become vested in accordance with the following
schedule:
Vested
Years of Service Percentage
---------------- ----------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(B) A "Year of Service" means any Plan Year in which an Employee completes at
least ----- (insert 1,000 or less) Hours of Service. Years of Service
shall include all Years of Service with the Employer, except as noted
below (check one, both or none).
"All Years of Service prior to the effective date of this Plan (or a
predecessor plan) shall be excluded.
"All Years of Service before the Plan Year in which the Participant
attained age 18 shall be excluded.
8. CASH OR DEFERRED ARRANGEMENT (Section 401(k))
Please check one:
--- This Plan will include a cash or deferred arrangement (complete the
remainder of this Section). The Effective Date of this Cash or
Deferred Arrangement (Section 401(k)) is ----------------, 19--.
--- This Plan will not include a cash or deferred arrangement (do not
complete the remainder of this Section).
(A) Elective Deferrals.
(1) An Employee shall be eligible to make Elective Deferrals under Article
V of the Plan upon satisfying the following eligibility
requirements:
--- An Employee must complete --- (not greater than 1 year)
Years of Employment.
--- An Employee must attain age --- (not greater than 21).
--- Union Employees are excluded from making Elective Deferrals.
--- All Employees are eligible to make Elective Deferrals.
(2) An Employee may elect to make Elective Deferrals to the Plan equal to
a percentage of regular salary or wages for a pay period as
specified in a salary reduction agreement. The maximum
percentage of Elective Deferrals shall be ----%.
--- Elective Deferrals may be based on cash bonuses paid to the
Employee. The maximum percentage of such Elective Deferrals
shall be -----%.
(3) An Employee may change the rate of his Elective Deferrals:
--- On the first day of each Plan Year.
--- And on the following additional dates: ----------------.
(B) Matching Contributions
(1) The percentage of Elective Deferral contributions which are matched
is:
--- -----%
--- ----- of the first ------% of Elective Deferrals.
--- A percentage determined by the Employer, but will not be
more than 100%
(2) Matching Contributions are made:
--- Each pay period in which Elective Deferrals are made.
--- At the end of the Plan Year for Employees meeting the
requirements for annual contributions.
(3) Matching Contributions will vest under the following schedule (elect
one):
--- Employee shall at all times have a nonforfeitable and fully
vested interest in any Matching Contributions.
NOTE: If this option is selected, Matching Contributions
may be used under the average deferral tests for purposes of
Elective Deferrals under the Cash or Deferred Arrangement
(Section 401(k)).
--- An Employee shall be fully vested in any Matching
Contributions after ---- (not more than 3) Years of Service.
--- An Employee shall become vested in any Matching
Contributions in accordance with the following schedule:
Nonforfeitable
Years of Service Percentage
---------------- --------------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(C) Special Conditions
--- The Employer may make Qualified Matching Contributions
subject to Section 5.4 of the Plan.
--- The Employer may make Qualified Non-Elective Contributions
subject to Section 5.4 of the Plan.
Note: These special contributions are used to satisfy the
nondiscrimination tests which apply to elective deferral and
matching contributions.
(D) Hardship Withdrawals
--- Withdrawals on account of financial hardship are allowed in
accordance with Section 5.5(a) of the Plan.
--- Withdrawals on account of financial hardship are not
allowed.
9. PARTICIPANT AFTER-TAX CONTRIBUTIONS
Participant Voluntary Contributions (check one):
--- Participant Voluntary Contributions are permitted.
--- Participant Voluntary Contributions are permitted only for non-highly
compensated employees.
--- Participant Voluntary Contributions are not permitted.
10. WITHDRAWAL OF EMPLOYER PROFIT SHARING CONTRIBUTIONS
--- A Participant who has participated in the Plan for at least 5 years
may withdraw up to ----% of his vested Employer Profit Sharing
Contribution Account after attaining age 59 1/2 or on account of a
financial hardship in accordance with Section 8.6 of the Plan.
Note: Withdrawals are not permitted if the Integration Formula is
---
selected in item 6(C)(2).
--- Withdrawals are not permitted.
11. NORMAL RETIREMENT AGE
The Normal Retirement Age shall be age ---- [insert an age not to exceed
65].
12. LIMITATION ON ALLOCATIONS
"Limitation Year", if other than a calendar year, shall mean the 12
consecutive month period ending on the last day of -----------------------.
Follow these instructions only if you maintain (or have ever maintained)
another plan which is either (i) a qualified defined contribution plan
other than a Master or Prototype Plan, or (ii) a qualified defined benefit
plan in which any Participant in this Plan is (or was) a participant or
could become a participant, or if the Employer maintains a welfare benefit
fund or an individual medical account.
To comply with Internal Revenue Code requirements, please attach
appropriate provisions that limit the amount of Annual Additions allocated
to any Participant's account.
If you do not attach the appropriate provisions, Sections 6.3. and 6.4 of
the Plan will automatically apply.
13. TOP-HEAVY PROVISIONS
The interest rate and mortality assumptions for determining Top-Heavy
status shall be the assumptions designated under Section 13.2(h) of the
Plan, unless different assumptions are selected below.
The interest rate and mortality assumptions for determining present values
to compute the Top-Heavy ratio shall be:
Interest Rate: -----%
Mortality Table: ------------------------
14. ESTABLISHMENT OF ACCOUNTS
(A) Unless elected below, the Trustee shall establish individual Trust Accounts
for each Participant.
--- The Trustee shall establish a single Trust Account in the name of
the Employer and the Employer shall keep all records for the
individual Participants.
(B) Unless elected below, a Participant shall be permitted to direct the
investment of his Account balance.
" Participant self-direction of the investment of his Account
balance is not permitted.
15. TRUSTEE
The undersigned as Employer hereby appoints the Firstar Trust Company or
its agents to invest all contributions received under the Plan in
Investment Company Shares designated by the Employer and in accordance with
the Plan.
16. FEES
The Trustee shall receive fees for its services in respect to each
Participant's Account in accordance with the attached fee schedule. The
fee schedule may be changed by the Trustee with advance notice. Annual
maintenance fees for each Participant's Account and any fees directly
related to activity in that Participant's Account shall be deducted
annually and activity fees will be deducted at the time incurred.
Sufficient Investment Company Shares will be redeemed to cover this fee.
Extraordinary services resulting from unusual administrative
responsibilities not contemplated by this schedule will be subject to such
additional charges as will reasonably compensate the Trustee for the
services performed.
17. REPRESENTATION OF EMPLOYER
The Employer represents that it has consulted its legal and tax advisors
with respect to the Plan. The Employer acknowledges that it may not
continue participation under the Plan if it fails to attain or maintain tax
qualification of the Plan or if it amends the Plan other than by a change
in the Adoption Agreement. The Employer agrees that whenever a Participant
Contribution is made, the Employer will determine that the Participant has
received the appropriate current Investment Company prospectus. The
Employer represents that the Participant has received such prospectus by
depositing contributions with the Trustee.
The Employer acknowledges that if it has ever maintained or later adopts
any plan (including after December 31, 1985, a welfare benefit fund, as
defined in Code Section 419(e), which provides post-retirement medical
benefits allocated to separate accounts for key employees, as defined in
Code Section 419A(d)(3) or an individual medical account, as defined in
Code Section 415(1)(2)) in addition to this Plan (or the Pension Plan), it
may not rely on an opinion letter issued by the National Office of the
Internal Revenue Service as evidence that this Plan is qualified under Code
Section 401. If the Employer adopts or maintains multiple plans and wishes
reliance that the Plan is qualified, application for an individual
determination letter should be made to the appropriate District Office of
the Internal Revenue Service.
18. ADDITIONAL INFORMATION
This Plan is sponsored by:
The Jefferson Fund Group Trust
839 North Jefferson Street
Milwaukee, WI 53202
(414) 225-9990
Further information regarding this Plan may be obtained by contacting the
Plan Sponsor at the address or telephone number listed above.
The Plan Sponsor will inform the undersigned Employer of any amendments
made to this Plan or of the discontinuance of this Plan.
Failure to properly fill out this Adoption Agreement may result in
disqualification of this Plan.
This Adoption Agreement can only be used with Plan document No. 01.
Signature of Employer: ------------------------------------------------------
Name of person signing above (please print): --------------------------------
Date: ------------------------
TRUSTEE ACCEPTANCE
The undersigned hereby accepts appointment as Trustee under the Plan.
FIRSTAR TRUST COMPANY
By: ------------------------------------
Date: ----------------------------------
EXHIBIT 15.1
DISTRIBUTION AND SERVICING PLAN (CLASS A)
OF
JEFFERSON GROWTH AND INCOME FUND
--------------------------------
WHEREAS, JEFFERSON GROWTH AND INCOME FUND (the "Fund") is a series of
The Jefferson Fund Group Trust (the "Trust") as that term is contemplated under
the Investment Company Act of 1940, and the rules and regulations thereunder
(the "Act");
WHEREAS, the Trust is in the process of registering as an open-end
management investment company under the Act;
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that this Distribution and Servicing Plan will benefit the
Fund and its shareholders; and
WHEREAS, the Trust intends to employ Rodman & Renshaw, Inc.
("Distributor") as distributor of shares of its Class A Common Stock ("Common
Stock").
NOW THEREFORE, the Trust hereby adopts the Distribution and Servicing
Plan (the "Plan") with respect to the Fund in accordance with Rule 12b-1 under
the Act having the following terms and conditions:
1. PAYMENT TO DISTRIBUTOR. The Trust shall pay out of the assets
----------------------
belonging to the Fund to Distributor (as the distributor of the Common Stock), a
fee (the "Servicing Fee") for services rendered and expenses borne by the
Distributor in connection with personal services rendered to Class A shareholder
accounts at the rate of the lesser of (a) .25% per annum of the Fund's average
daily net assets or (b) the Distributor's total costs incurred during the year
in the servicing of the Class A shareholder accounts. Such servicing fee shall
be calculated and accrued daily and paid monthly or at such other intervals as
the Trustees shall determine or as otherwise required by the Act. Such payments
shall be in addition to any payments received by the Distributor pursuant to a
Distribution Agreement between the Trust and the Distributor with respect to the
Fund.
2. PERMITTED EXPENDITURES. The Servicing Fee may be spent by the
-----------------------
Distributor on personal services rendered to Class A shareholders of the Trust
and/or maintenance of Class A shareholder accounts (but may not be spent on
recordkeeping charges, accounting expenses, transfer costs, or custodian fees).
The Distributor's expenditures may include, but shall not be limited to,
compensation to, and expenses (including telephone and overhead expenses) of,
financial consultants or other employees of the Distributor or of participating
or introducing brokers who aid in the processing of purchase or redemption
requests for Class A shares or the processing of dividend payments with respect
to Class A shares, who provide information periodically to shareholders showing
their positions in a Fund's Class A shares, who forward communications from the
Trust to Class A shareholders, who render ongoing advice concerning the
suitability of particular investment opportunities offered by the Trust in light
of the shareholder's needs, who respond to inquiries from Class A shareholders
relating to such services, or who train personnel in the provision of such
services.
3. EFFECTIVE DATE OF PLAN. This Plan shall not take effect until
----------------------
(a) it has been approved by a vote of at least a majority of the outstanding
shares of Common Stock (as defined in the Act) and (b) (together with any
related agreements) by votes of a majority of both (i) the Board of Trustees of
the Trust, and (ii) those Trustees of the Trust who are not "interested persons"
of the Trust (as defined in the Act) and have no direct or indirect financial
interest in the operation of this Plan or any agreements related to it (the
"Rule 12b-1 Trustees"), cast in person at a meeting (or meetings) called for the
purpose of voting on this Plan and such related agreements.
4. CONTINUANCE. This Plan shall continue in effect for as long as
-----------
such continuance is specifically approved at least annually in the manner
provided for approval of this Plan in paragraph 3(b).
5. REPORTS. The Distributor and other persons authorized to direct
-------
the disposition of monies paid or payable by the Fund pursuant to this Plan or
any related agreement shall provide to the Trustees of the Trust and the
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made. The
Distributor shall annually certify in writing that the aggregate payments
received from the Fund pursuant to the Plan during the year did not exceed its
total costs incurred during the year (including reasonable allocation of
overhead) in the servicing of the Common Stock.
6. TERMINATION. This Plan may be terminated at any time by vote of
-----------
a majority of the Rule 12b-1 Trustees, or by a vote of a majority of the
outstanding shares of Common Stock (as defined in the Act).
7. AMENDMENTS. This Plan may not be amended to increase materially
----------
the amount of payments provided for in paragraph 1 hereof unless such amendment
is approved in the manner provided for initial approval in paragraph 3 hereof.
8. SELECTION OF TRUSTEES. While this Plan is in effect, the
---------------------
selection and nomination of Trustees who are not interested persons (as defined
in the Act) of the Trust shall be committed to the discretion of the Trustees
who are not interested persons.
9. RECORDS. The Trust shall preserve copies of this Plan and any
-------
related agreements and all reports made pursuant to paragraph 5 hereof, for a
period of not less than six years from the date of this Plan, or the agreements
or such reports, as the case may be, the first two years in an easily accessible
place.
10. ALLOCATION OF CERTAIN EXPENSES. For purposes of Paragraph 1, 2
------------------------------
and 5 hereof the following allocations will be made in determining permitted
expenditures. Salaries and other compensation of employees of the Distributor
may be reimbursed in proportion to the amount of time the employee devoted to
activities primarily related to servicing Class A shareholder's accounts.
Overhead expenses, including rent, utilities and support staff compensation,
will be allocated using similar principles. For example, rent will be allocated
pursuant to the following formula:
(a) The total rent paid by the Distributor will be multiplied by
a fraction, the numerator of which is the square feet utilized by an employee
who is engaged in Servicing activities and the denominator of which is the total
square feet rented by the Distributor.
(b) The product obtained will be multiplied by the percentage of
the employee's time devoted to Servicing activities.
(c) The product obtained will be added to the products similarly
calculated for all other employees engaged in Servicing Activities.
Dated: August 29, 1995
EXHIBIT 15.2
DISTRIBUTION AND SERVICING PLAN (CLASS B)
OF
JEFFERSON GROWTH AND INCOME FUND
-------------------------------
WHEREAS, JEFFERSON GROWTH AND INCOME FUND (the "Fund") is a series of
The Jefferson Fund Group Trust (the "Trust") as that term is contemplated under
the Investment Company Act of 1940 and the rules and regulations thereunder (the
"Act");
WHEREAS, the Trust is in the process of registering as an open-end
management investment company under the Act;
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that this Distribution and Servicing Plan will benefit the
Fund and its shareholders; and
WHEREAS, the Trust intends to employ Rodman & Renshaw, Inc.
("Distributor") as distributor of shares of its Class B Common Stock ("Common
Stock").
NOW THEREFORE, the Trust hereby adopts the Distribution and Servicing
Plan (the "Plan") with respect to the Fund in accordance with Rule 12b-1 under
the Act having the following terms and conditions:
1. PAYMENT TO DISTRIBUTOR. The Trust shall pay out of the assets
-----------------------
belonging to the Fund to Distributor a fee (the "Distribution Fee") for services
rendered and expenses borne by the Distributor in connection with the
distribution of Class B shares of the Fund and another fee (the "Servicing Fee")
in connection with personal services rendered to Class B shareholders of the
Fund and/or maintenance of Class B shareholder accounts. The Distribution Fee
shall be paid at an annual rate of the lesser of (a) 0.75 of 1% of the Fund's
average daily net assets attributable to its Class B shares or (b) the
Distributor's total costs incurred during the year in the distribution of the
Class B shares. The Servicing Fee shall be paid at an annual rate of the lesser
of 0.25 of 1% of the Fund's average daily net assets attributable to Class B
shares or (b) the Distributor's total costs incurred during the year in the
servicing of the Class B shareholder accounts. Subject to such limits and
subject to the provisions of Section 9 hereof, the Distribution and Servicing
Fees shall be as approved from time to time by (a) the Trustees of the Fund and
(b) the Independent Trustees of the Fund. The Distribution and Servicing Fees
shall be accrued daily and paid monthly or at such other intervals as the
Trustees shall determine. Such payments shall be in addition to any payments
received by the Distributor pursuant to a Distribution Agreement between the
Trust and the Distributor with respect to the Fund.
2. PERMITTED EXPENDITURES. The Servicing Fee may be spent by the
-----------------------
Distributor on personal services rendered to Class B shareholders of the Trust
and/or maintenance of Class B shareholder accounts (but may not be spent on
recordkeeping charges, accounting expenses, transfer costs, or custodian fees).
The Distributor's expenditures may include, but shall not be limited to,
compensation to, and expenses (including telephone and overhead expenses) of,
financial consultants or other employees of the Distributor or of participating
or introducing brokers who aid in the processing of purchase or redemption
requests for Class B shares or the processing of dividend payments with respect
to Class B shares, who provide information periodically to shareholders showing
their positions in a Fund's Class B shares, who forward communications from the
Trust to Class B shareholders, who render ongoing advice concerning the
suitability of particular investment opportunities offered by the Trust in light
of the shareholder's needs, who respond to inquiries from Class B shareholders
relating to such services, or who train personnel in the provision of such
services.
3. EFFECTIVE DATE OF PLAN. This Plan shall not take effect until
----------------------
(a) it has been approved by a vote of at least a majority of the outstanding
shares of Common Stock (as defined in the Act) and (b) (together with any
related agreements) by votes of a majority of both (i) the Board of Trustees of
the Trust, and (ii) those Trustees of the Trust who are not "interested persons"
of the Fund (as defined in the Act) and have no direct or indirect financial
interest in the operation of this Plan or any agreements related to it (the
"Rule 12b-1 Trustees"), cast in person at a meeting (or meetings) called for the
purpose of voting on this Plan and such related agreements.
4. CONTINUANCE. This Plan shall continue in effect for as long as
-----------
such continuance is specifically approved at least annually in the manner
provided for approval of this Plan in paragraph 3(b).
5. REPORTS. The Distributor and other persons authorized to direct
-------
the disposition of monies paid or payable by the Fund pursuant to this Plan or
any related agreement shall provide to the Board of Trustees of the Trust and
the Trustees shall review, at least quarterly, a written report of the amounts
so expended and the purposes for which such expenditures were made. The
Distributor shall annually certify in writing that the aggregate payments
received from the Fund pursuant to the Plan during the year did not exceed its
total costs incurred during the year (including reasonable allocation of
overhead) in the distribution and servicing of the Common Stock.
6. TERMINATION. This Plan may be terminated at any time by vote of
-----------
a majority of the Rule 12b-1 Trustees, or by a vote of a majority of the
outstanding shares of Common Stock (as defined in the Act).
7. AMENDMENTS. This Plan may not be amended to increase materially
----------
the amount of payments provided for in paragraph 1 hereof unless such amendment
is approved in the manner provided for initial approval in paragraph 3 hereof.
8. SELECTION OF TRUSTEES. While this Plan is in effect, the
---------------------
selection and nomination of Trustees who are not interested persons (as defined
in the Act) of the Trust shall be committed to the discretion of the Trustees
who are not interested persons.
9. RECORDS. The Trust shall preserve copies of this Plan and any
-------
related agreements and all reports made pursuant to paragraph 5 hereof, for a
period of not less than six years from the date of this Plan, or the agreements
or such reports, as the case may be, the first two years in an easily accessible
place.
10. ALLOCATION OF CERTAIN EXPENSES. For purposes of Paragraph 1, 2
------------------------------
and 5 hereof the following allocations will be made in determining permitted
expenditures. For the Distribution Fee, salaries and other compensation of
employees of the Distributor may be reimbursed in proportion to the amount of
time the employee devoted to activities primarily intended to result in the sale
of Common Stock (such activities being referred to as "Distribution
Activities"). Overhead expenses, including rent, utilities and support staff
compensation, will be allocated using similar principles. For the Servicing
Fee, salaries and other compensation of employees of the Distributor may be
reimbursed in proportion to the amount of time the employee devoted to
activities primarily related to servicing Class B shareholder accounts. For
example, for purposes of the Distribution Fee, rent will be allocated pursuant
to the following formula:
(a) The total rent paid by the Distributor will be multiplied by
a fraction, the numerator of which is the square feet utilized by an employee
who is engaged in Distribution Activities and the denominator of which is the
total square feet rented by the Distributor.
(b) The product obtained will be multiplied by the percentage of
the employee's time devoted to Distribution Activities.
(c) The product obtained will be added to the products similarly
calculated for all other employees engaged in Distribution Activities.
Dated: August 29, 1995
EXHIBIT 15.3
DISTRIBUTION ASSISTANCE AGREEMENT FOR CLASS A SHARES
----------------------------------------------------
AGREEMENT made this 21st day of August, 1995 between RODMAN & RENSHAW,
INC., a corporation (hereinafter called the "Distributor") and THE JEFFERSON
FUND GROUP TRUST, a Delaware business trust (the "Trust").
W I T N E S S E T H :
-------------------
WHEREAS, the Trust is in the process of registering as an open-end
management investment company under the Investment Company Act of 1940 (the
"Act");
WHEREAS, Jefferson Growth and Income Fund (the "Fund") is a "series" of the
Trust as that term is contemplated under the Act;
WHEREAS, the Trust and the Distributor are parties to a Distribution
Agreement with respect to the Fund (the "Distribution Agreement") pursuant to
which the Distributor is the agent for the Trust for the distribution of shares
of the Trust's Class A Common Stock (the "Stock");
WHEREAS, the Distribution Agreement provides that the Distributor will pay
certain expenses in connection with the distribution of the Stock;
WHEREAS, the Trust and the Distributor recognize that the compensation to
be received by the Distributor pursuant to the Distribution Agreement will be
inadquate for it to provide the services required to be performed by it and pay
the expenses required to be paid by it pursuant to the Distribution Agreement;
and
WHEREAS, the Trust has adopted a Distribution and Servicing Plan with
respect to Class A Shares (the "Shares") of the Fund (the "Distribution and
Servicing Plan") pursuant to Rule 12b-1 under the Act which contemplates the
payment by the Trust out of assets belonging to the Fund of a servicing fee for
distribution of the Shares, which fee shall be in addition to the payments to
the Distributor pursuant to the Distribution Agreement.
NOW, THEREFORE, the Trust and the Distributor mutually agree and promise as
follows:
1. COMPENSATION OF DISTRIBUTOR.
---------------------------
The Trust shall pay the Distributor out of assets belonging to the Fund
compensation for servicing services as provided in Paragraph 1 of the
Distribution and Servicing Plan, which compensation shall be in addition to that
provided in Section 4 of the Distribution Agreement. The Distributor agrees
that such additional compensation shall be used to make the expenditures
permitted by Paragraph 2 of the Distribution and Servicing Plan.
2. REPORTS.
-------
The Distributor agrees to provide the reports and certifications required
by Paragraph 5 of the Distribution and Servicing Plan.
3. DURATION AND TERMINATION.
------------------------
This Agreement shall become effective as of August 21, 1995. Unless
terminated as herein provided, this Agreement shall remain in full force and
effect until August 21, 1997 and shall continue in full force and effect for
periods of one year thereafter so long as such continuance is approved at least
annually (a) by either the trustees of the Fund or by a vote of a majority of
the outstanding voting shares (as defined in the Act) of the Fund, and (b) in
either event, by the vote of a majority of the Trustees of the Fund who are not
parties to this Agreement or "interested persons" (as defined in the Act) of any
such party and who have no direct or indirect financial interest in this
Agreement or in the operation of the Distribution and Servicing Plan or in any
agreement related thereto, cast in person at a meeting called for the purpose of
voting on such approval.
This Agreement shall automatically terminate in the event of its assignment
and may be terminated at any time without the payment of any penalty by the
Trust or by the Distributor on sixty (60) days' written notice to the other
party. The Trust may effect such termination by a vote of (i) a majority of the
Trustees of the Trust, (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust and who have no direct or indirect financial
interest in this Agreement or in any agreement related to the Distribution and
Servicing Plan under the Act, or (iii) a majority of the outtanding voting
securities (as defined in the Act) of the Fund.
4. MISCELLANEOUS.
--------------
(a) This Agreement shall be construed in accordance with the laws of the
state of Illinois, provided that nothing herein shall be construed in a manner
inconsistent with the Act, the Securities Act of 1933, the Securities Exchange
Act of 1934 or any rule or order of the Securities and Exchange Commission
thereunder.
(b) The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
(c) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(d) The obligations of the Trust and the Distributor under the
Distribution Agreement shall not be affected by this Distribution Assistance
Agreement for Class A Shares.
IN WITNESS WHEREOF, the parties hereto have caused this Distribution
Assistance Agreement to be executed on the day first above written.
THE JEFFERSON FUND GROUP TRUST
By: /s/ Keith F. Pinsoneault
-----------------------------
Its: President
RODMAN & RENSHAW, INC.
By: /s/ Keith F. Pinsoneault
---------------------------------
Its: Chief Operating Officer
EXHIBIT 15.4
DISTRIBUTION ASSISTANCE AGREEMENT FOR CLASS B SHARES
----------------------------------------------------
AGREEMENT made this 21st day of August, 1995 between RODMAN & RENSHAW,
INC., a corporation (hereinafter called the "Distributor") and THE JEFFERSON
FUND GROUP TRUST, a Delaware business trust (the "Trust").
W I T N E S S E T H :
-------------------
WHEREAS, the Trust is in the process of registering as an open-end
management investment company under the Investment Company Act of 1940 (the
"Act");
WHEREAS, Jefferson Growth and Income Fund (the "Fund") is a "series" of the
Trust as that term is contemplated under the Act;
WHEREAS, the Trust and the Distributor are parties to a Distribution
Agreement with respect to the Fund (the "Distribution Agreement") pursuant to
which the Distributor is the agent for the Trust for the distribution of shares
of the Trust's Class A and Class B Common Stock (the "Stock");
WHEREAS, the Distribution Agreement provides that the Distributor will pay
certain expenses in connection with the distribution of the Stock;
WHEREAS, the Trust and the Distributor recognize that the compensation to
be received by the Distributor pursuant to the Distribution Agreement will be
inadequate for it to provide the services required to be performed by it and pay
the expenses required to be paid by it pursuant to the Distribution Agreement;
and
WHEREAS, the Trust has adopted a Distribution and Servicing Plan with
respect to Class B Shares (the "Shares") of the Fund (the "Distribution and
Servicing Plan") pursuant to Rule 12b-1 under the Act which contemplates the
payment by the Trust out of assets belonging to the Fund of a distribution and
servicing fee for distribution of the Shares, which fee shall be in addition to
the payments to the Distributor pursuant to the Distribution Agreement.
NOW, THEREFORE, the Trust and the Distributor mutually agree and promise as
follows:
1. COMPENSATION OF DISTRIBUTOR.
---------------------------
The Trust shall pay the Distributor out of assets belonging to the Fund
compensation for distribution and servicing as provided in Paragraph 1 of the
Distribution and Servicing Plan, which compensation shall be in addition to that
provided in Section 4 of the Distribution Agreement. The Distributor agrees
that such additional compensation shall be used to make the expenditures
permitted by Paragraph 2 of the Distribution and Servicing Plan.
2. REPORTS.
-------
The Distributor agrees to provide the reports and certifications required
by Paragraph 5 of the Distribution and Servicing Plan.
3. DURATION AND TERMINATION.
------------------------
This Agreement shall become effective as of August 21, 1995. Unless
terminated as herein provided, this Agreement shall remain in full force and
effect until August 21, 1997 and shall continue in full force and effect for
periods of one year thereafter so long as such continuance is approved at least
annually (a) by either the trustees of the Fund or by a vote of a majority of
the outstanding voting shares (as defined in the Act) of the Fund, and (b) in
either event, by the vote of a majority of the Trustees of the Fund who are not
parties to this Agreement or "interested persons" (as defined in the Act) of any
such party and who have no direct or indirect financial interest in this
Agreement or in the operation of the Distribution and Servicing Plan or in any
agreement related thereto, cast in person at a meeting called for the purpose of
voting on such approval.
This Agreement shall automatically terminate in the event of its assignment
and may be terminated at any time without the payment of any penalty by the
Trust or by the Distributor on sixty (60) days' written notice to the other
party. The Trust may effect such termination by a vote of (i) a majority of the
Trustees of the Trust, (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust and who have no direct or indirect financial
interest in this Agreement or in any agreement related to the Distribution and
Servicing Plan under the Act, or (iii) a majority of the outstanding voting
securities (as defined in the Act) of the Fund.
4. MISCELLANEOUS.
--------------
(a) This Agreement shall be construed in accordance with the laws of the
state of Illinois, provided that nothing herein shall be construed in a manner
inconsistent with the Act, the Securities Act of 1933, the Securities Exchange
Act of 1934 or any rule or order of the Securities and Exchange Commission
thereunder.
(b) The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
(c) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(d) The obligations of the Trust and the Distributor under the
Distribution Agreement shall not be affected by this Distribution Assistance
Agreement for Class B Shares.
IN WITNESS WHEREOF, the parties hereto have caused this Distribution
Assistance Agreement to be executed on the day first above written.
THE JEFFERSON FUND GROUP TRUST
By: /s/ Keith F. Pinsoneault
----------------------------
Its: President
RODMAN & RENSHAW, INC.
By: /s/ Keith F. Pinsoneault
-----------------------------
Its: Chief Operating Officer
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<AVG-DEBT-OUTSTANDING> 0
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<PERIOD-START> NOV-1-1996
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<INVESTMENTS-AT-VALUE> 8,066,224
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<DISTRIBUTIONS-OF-INCOME> 13,897
<DISTRIBUTIONS-OF-GAINS> 2,292
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 72,259
<NUMBER-OF-SHARES-REDEEMED> 2,462
<SHARES-REINVESTED> 1,374
<NET-CHANGE-IN-ASSETS> 3,045,608
<ACCUMULATED-NII-PRIOR> 10,799
<ACCUMULATED-GAINS-PRIOR> 25,978
<OVERDISTRIB-NII-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 198,454
<AVERAGE-NET-ASSETS> 778,611
<PER-SHARE-NAV-BEGIN> 10.87
<PER-SHARE-NII> .20
<PER-SHARE-GAIN-APPREC> 1.39
<PER-SHARE-DIVIDEND> .21
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.20
<EXPENSE-RATIO> 1.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
