UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2)
[ ] Soliciting Material Under Rule 14a-12
Country Mutual Funds Trust
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(Name of Registrant as Specified In Its Charter)
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Notes:
COUNTRY GROWTH FUND, INC.
COUNTRY ASSET ALLOCATION FUND, INC.
COUNTRY TAX EXEMPT BOND FUND, INC.
COUNTRY TAXABLE FIXED INCOME SERIES FUND, INC.
808 IAA Drive
Bloomington, Illinois 61702
Proxy Statement Materials
IMPORTANT VOTING INFORMATION INSIDE
Table of Contents
Letter from the Chairman of the Boards
Notice of Annual Meeting of Shareholders
Proxy Statement
Proxy Card
Exhibit A: Agreement and Plan of Reorganization
Exhibit B: Declaration of Trust
COUNTRY GROWTH FUND, INC.
COUNTRY ASSET ALLOCATION FUND, INC.
COUNTRY TAX EXEMPT BOND FUND, INC.
COUNTRY TAXABLE FIXED INCOME SERIES FUND, INC.
808 IAA Drive
Bloomington, Illinois 61702
August 31, 2001
Dear Shareholder:
We are pleased to invite you to an Annual Meeting of Shareholders of COUNTRY
GROWTH FUND, INC., COUNTRY ASSET ALLOCATION FUND, INC., COUNTRY TAX EXEMPT BOND
FUND, INC. and COUNTRY TAXABLE FIXED INCOME SERIES FUND, INC. to be held in the
Board of Directors room of the Illinois Agricultural Association(R)building,
1701 N. Towanda Avenue, Bloomington, Illinois on Monday, October 29, 2001 at
10:30 a.m. central time. At the meeting you will be asked to vote on important
proposals affecting the Funds. The Boards of Directors of the Funds unanimously
agreed that these proposals are in the Funds' and your best interests.
I am sure that you, like most people, lead a busy life and are tempted to put
this proxy aside for another day. Please do not delay. When shareholders fail to
return their proxies, additional expenses incur to pay for follow-up mailings
and telephone calls. PLEASE REVIEW THIS PROXY STATEMENT AND SIGN AND RETURN THE
PROXY CARD TODAY.
After reviewing each matter carefully, the Boards of Directors unanimously
recommend that you vote 'FOR' each proposal.
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
Detailed information about the proposals and the reasons for them are contained
in the proxy statement. Please take the time to review the material, cast your
vote on the enclosed proxy card and return the Proxy Card in the enclosed
postage-paid envelope.
We thank you for your time in considering these important proposals and for your
continuing investment in and support of COUNTRY Mutual Funds.
Sincerely,
Ronald R. Warfield
President & Director
COUNTRY GROWTH FUND, INC.
COUNTRY ASSET ALLOCATION FUND, INC.
COUNTRY TAX EXEMPT BOND FUND, INC.
COUNTRY TAXABLE FIXED INCOME SERIES FUND, INC.
808 IAA Drive
Bloomington, Illinois 61702
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held Monday, October 29, 2001
THIS IS THE FORMAL AGENDA FOR THE FUNDS' ANNUAL MEETING. IT
TELLS YOU WHAT MATTERS WILL BE VOTED ON AND THE TIME
AND PLACE OF THE MEETING, IN CASE YOU WANT TO ATTEND
IN PERSON.
TO OUR SHAREHOLDERS:
An Annual Meeting of Shareholders of COUNTRY GROWTH FUND, INC., COUNTRY ASSET
ALLOCATION FUND, INC., COUNTRY TAX EXEMPT BOND FUND, INC. and COUNTRY TAXABLE
FIXED INCOME SERIES FUND, INC. (collectively with their series, the "Funds"),
will be held in the Board of Directors room of the Illinois Agricultural
Association(R)building, 1701 N. Towanda Avenue, Bloomington, Illinois on Monday,
October 29, 2001 at 10:30 a.m., Central Time, to vote on the following
proposals:
1. A proposal to approve an Agreement and Plan of Reorganization providing for
the reorganization of the Funds from Maryland corporations into a Delaware
business trust, Country Mutual Funds Trust (the "Trust") with individual
series for each of the Funds (the "Successor Funds"). THE BOARDS OF
DIRECTORS RECOMMEND THAT YOU VOTE FOR THIS PROPOSAL.
2. A proposal to elect the nominees named in the attached proxy statement to
serve on the Funds' Boards of Directors. THE BOARDS OF DIRECTORS RECOMMEND
THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE.
3. Any other business that may properly come before the meeting or any
adjournment.
Shareholders of record at the close of business on August 31, 2001 are entitled
to receive notice of and to vote at the Annual Meeting or any postponements or
adjournments.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
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As a shareholder of the Fund(s), you are asked to attend the Meeting either in
person or by proxy. If you are unable to attend the Meeting, we urge you to
complete, sign, date and return the enclosed proxy card in the enclosed postage
prepaid envelope. Your prompt return of the proxy card will help assure a quorum
at the Meeting and avoid additional expenses to the Fund associated with further
solicitation. Sending in your proxy card will not prevent you from voting your
shares in person at the Meeting and you may revoke your proxy by advising the
Secretary of the Fund in writing (by subsequent proxy or otherwise) of such
revocation at any time before it is voted.
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By Order of the Boards of Directors,
Paul M. Harmon
Secretary
Bloomington, Illinois
August 31, 2001
PROXY STATEMENT
OF
COUNTRY GROWTH, INC.
COUNTRY ASSET ALLOCATION FUND, INC.
COUNTRY TAX EXEMPT BOND FUND, INC.
COUNTRY TAXABLE FIXED INCOME SERIES FUND, INC.
This proxy statement contains the information you should know before voting on
the proposals summarized below regarding Country Growth Fund, Inc., Country
Asset Allocation Fund, Inc., Country Tax Exempt Bond Fund, Inc. and Country
Taxable Fixed Income Series Fund, Inc. (the "Companies") (the Companies and
their series are collectively referred to herein as the "Funds" and individually
as the "Fund").
The Funds will furnish without charge a copy of their Annual Report and most
recent Semi-Annual Report to any shareholder who asks for them. Shareholders who
want to obtain a copy of the Funds' reports should write to: Country Mutual
Funds, PO Box 701, Milwaukee, WI 53201-0701 or should call (800) 245-2100.
INTRODUCTION
This proxy statement is being used by the Boards of Directors to solicit proxies
to be voted at an Annual Meeting of Shareholders of the Funds. This meeting will
be held in the Board of Directors room of the Illinois Agricultural
Association(R) Building, 1701 N. Towanda Avenue, Bloomington, Illinois 61702, at
10:30 a.m., central time, on Monday, October 29, 2001 to consider and act upon
the following:
1. A proposal to approve an Agreement and Plan of Reorganization providing for
the reorganization of the Funds from Maryland corporations into a Delaware
business trust, Country Mutual Funds Trust (the "Trust") with individual
series for each of the Funds (the "Successor Funds") . THE BOARDS OF
DIRECTORS RECOMMEND THAT YOU VOTE FOR THIS PROPOSAL.
2. A proposal to elect the nominees named in the attached proxy statement to
serve on the Funds' Boards of Directors. THE BOARDS OF DIRECTORS RECOMMEND
THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE.
3. Any other business that may properly come before the meeting or any
adjournment.
These proposals affect shareholders of all Funds. This proxy statement and the
proxy card are being mailed to the Funds' shareholders on or about August 31,
2001.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record on August 31, 2001 are entitled to attend and vote on
each proposal at the meeting or any adjourned meeting. Each share is entitled to
one vote. Shares represented by properly executed proxies, unless revoked before
or at the meeting, will be voted according to shareholders' instructions. If you
sign a proxy, but do not fill in a vote, your shares will be voted to approve
the proposals. If any other business comes before the meeting, your shares will
be voted at the discretion of the persons named as proxies.
PROPOSAL 1
TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION
At the meeting, the shareholders of each of the Companies will be asked to
approve the reorganization. If shareholder approval is obtained for each of the
Funds, and the other conditions to the closing of the reorganization (the
"Closing") are met, shareholders will receive shares of the Successor Fund equal
in value to their holdings of Fund shares immediately before the reorganization.
Each Fund will then be terminated and liquidated, and the Companies will be
dissolved under Maryland law and deregistered under the Investment Company Act
of 1940, as amended (the "1940 Act").
Each Successor Fund will differ in some respects from the Funds, and these
differences are described in more detail below. The following sections describe:
>> Purpose of the Reorganization
>> Description of the Reorganization
>> Governance of the Trust
>> Changes to Names & Investment Strategies of Certain Funds
>> New Share Classes of the Funds
>> Comparison of Investment Policies & Restrictions
>> Ratification of Election of Trustees
>> Other Information About the Reorganization
PURPOSE OF THE REORGANIZATION
At the meeting of the Funds' Boards of Directors on July 30, 2001, the
Directors, including the Directors who are not "interested persons" of the Funds
or their Adviser ("Independent Directors"), unanimously approved and recommended
that the Funds' shareholders approve a reorganization of the Funds as series of
a business trust under the laws of the state of Delaware. The Funds are
currently organized through four (4) separate corporations under the laws of the
state of Maryland. The most efficient way for the Funds to become a Delaware
business trust is by a tax-free reorganization of the type described in this
proxy statement.
By operating all six (6) Funds under one Delaware business trust, the Funds will
take advantage of the greater operational flexibility available under the
Delaware Business Trust Act and the efficiencies of operating under one
corporate charter. These advantages include:
o Cost savings relating to the reduction of certain accounting, legal and
securities registration costs, through streamlining our corporate structure
from four (4) corporations into one (1) business trust;
o Granting the Funds' Trustees greater power to act without shareholder
approval, thus avoiding the time and expense of calling a shareholder
meeting, mailing proxy materials and soliciting shareholders; and
o Enabling the Funds to adopt new methods of operation and employ new
technologies that are expected to reduce costs of operation and are
generally not expressly permitted under Maryland law, such as electronic
communications with shareholders.
Also, as described below, reorganization of the Funds will entail several other
changes that will benefit shareholders. These changes include new names and
investment strategies for some of the Funds, the creation of new classes of
shares of the Funds and streamlined investment restrictions.
Based on information provided by the Funds' Adviser, COUNTRYSM Trust Bank, and
distributor, Quasar Distributors, LLC, the Boards of Directors believe that
reorganizing the Funds as series of a Delaware business trust offers certain
advantages over the current form of organization. The Funds' management expects
that shareholders ultimately will benefit from these advantages. In addition,
the new form of organization will not change the investment objectives, policies
or procedures of the Funds, except as described in this proxy statement. Because
it believes that these advantages would allow the Funds to operate more
efficiently, the Boards of Directors have determined that the proposed
reorganization would be in the best interests of the Funds and their
shareholders.
DESCRIPTION OF REORGANIZATION
The reorganization will take place according to the terms and conditions of an
Agreement and Plan of Reorganization between the Funds and the Delaware business
trust. You are being asked to approve the Agreement and Plan of Reorganization,
a copy of which is attached to this proxy statement as Exhibit A. The agreement
provides for the reorganization of the Funds as series of a Delaware business
trust on the following terms:
A new Delaware business trust has been created with one trustee and
shareholder. The sole shareholder will, prior to the reorganization,
elect a full Board of Trustees, authorize the issuance of the proper
series and classes of shares, approve the investment advisory
agreement, distribution plan and other agreements, approve the
selection of auditors and all other actions necessary for the Trust to
begin operations.
The reorganization is scheduled to occur on or about October 31, 2001.
The Funds will transfer all of their assets to a corresponding series
of the new Delaware trust and the new series will assume all of the
Funds' liabilities. Until the completion of this transfer and the
actions described below, the Successor Funds will have no assets.
Each Successor Fund will issue to the corresponding Fund a number of
Class Y shares identical to the number of, and with the same net asset
value per share as, the corresponding Fund's common shares.
Each Fund will distribute shares of the corresponding Successor Fund
to shareholders of record of the Fund on the reorganization date. As a
result, shareholders of the Funds will end up as Class Y shareholders
of the Successor Funds.
After the reorganization, the Funds will be terminated and you will own shares
of the Successor Funds, which will continue to carry on the business of the
Funds in substantially the same manner as before the reorganization.
The Funds' Boards of Directors may terminate the Agreement and Plan of
Reorganization (even if the shareholders of the Funds have already approved it)
at any time before the reorganization date, if the Boards believe that
proceeding with the reorganization would no longer be advisable.
GOVERNANCE OF THE FUND
If shareholders approve this proposal, the Funds will be governed by one
Delaware Declaration of Trust rather than by four Maryland Articles of
Incorporation. The table below will answer several questions that you might have
about how the Successor Funds' operations under the Delaware Declaration of
Trust will differ from operation of the Funds under the Maryland Articles of
Incorporation.
MARYLAND DELAWARE
DIFFERENCES IN FUND OPERATIONS CORPORATIONS BUSINESS TRUST
o Liability for state franchise taxes? Yes No
o Can the fund issue unlimited number of shares? No Yes
o Can the fund offer multiple classes of shares, without amending No Yes
governing documents.
o Do the Directors/Trustees have the power to amend the governing Generally no Generally yes
instrument without shareholder approval?
o Termination possible without shareholder approval? No Yes
o Can the Directors/Trustees amend the bylaws with a majority (as No Yes
opposed to a supermajority) vote?
o Can Directors/Trustees act without a meeting, with the written No Yes
approval of a majority of members?
o Can Directors/Trustees effect a merger or consolidation with No Yes
another entity without shareholder approval?
o Can Directors/Trustees cause any series to become a separate No Yes
trust without shareholder approval?
o Can Directors/Trustees change the corporation's or trust's No Yes
domicile without shareholder approval?
o Can Directors/Trustees approve a share split without Generally no Yes
shareholder approval?
o Is dollar based voting (i.e., one vote per dollar of net asset No Yes
value, rather than one vote per share) permissible?
o Does state law impose additional Director/Trustee liability Yes No
other than what the federal securities law already prescribes?
o Does state law impose additional possible shareholder liability Yes No
for receipt of distributions in excess of legal limits?
o Quorum of Shareholder Requirements Majority of Shares 33 1/3 % of Shares
o Quorum of Director/Trustee Requirements Majority of 1/3rd of Trustees
Directors
The above discussion is only a summary of certain of the differences between (i)
The Trust, its Declaration of Trust and Bylaws and Delaware law, and (ii) the
Funds, their Articles of Incorporation and Bylaws and Maryland law. It is not a
complete list of differences. You may refer to the provisions of the Articles of
Incorporation and Bylaws of the Funds and Maryland law, and the Declaration of
Trust, Trust Bylaws and Delaware law for a more thorough comparison. The
Declaration of Trust is attached as Exhibit B. You can also obtain a copy of the
Companies' Articles of Incorporation, Bylaws, and the Declaration of Trust and
Trust Bylaws without charge by calling the Secretary of the Funds at (309)
557-2542.
CHANGES TO NAMES AND INVESTMENT STRATEGIES OF CERTAIN FUNDS
As previously noted, there will be some differences between the names and
investment strategies of the Funds and the Successor Funds. By approving the
reorganization, shareholders will approve the following changes:
- --------------------------------- ----------------------------- ---------------------------- -------------------------
Current Name New Name Change In Investment Change In Strategy
Limitations
- --------------------------------- ----------------------------- ---------------------------- -------------------------
Country Asset Allocation Fund Country Balanced Fund Balanced Fund will be None. The Fund has
required to invest no less historically been
than 25% in bonds and no operated within these
more than 75% in stocks constraints, although
(and no less than 25% in it was not required to
stocks and no more than do so.
75% in bonds).
- --------------------------------- ----------------------------- ---------------------------- -------------------------
Country Short-Term Government Country Short-Term Bond Fund The Short-Term Bond Fund Greater flexibility to
Bond Fund will not be required to invest in corporate
invest 80% of its assets bonds. Under previous
in Government. Under SEC rules, the Fund
as it would have been could invest up to 35%
under new SEC rules if of assets in non-Government
"Government" was left in bonds, which amount would
the name of the Successor have been reduced to 20% under
Fund, under the new SEC new SEC rules. By eliminating
rules. "Government" from the name, the
Successor Fund will be able
to invest freely in both government
and corporate bonds.
- --------------------------------- ----------------------------- ---------------------------- -------------------------
Country Long-Term Bond Fund Country Bond Fund The Successor Fund will More flexibility in
not be required to average maturity of the
maintain a dollar-weighted Fund. The Successor
average maturity of ten Fund will be able to
(10) or more years, as it maintain a maturity of
would have under new SEC five (5) years or
rules, if "Long-Term" were more. Therefore, it is
left in the name of the likely that at times
Fund. the Bond Fund will
operate with a
lower average maturity
than at present as the
Long-Term Bond Fund.
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CLASSES OF SHARES OF EACH FUND
One difference between operation of the Funds and the Successor Funds is that
the Successor Funds (except the Money Market Fund) will begin offering two
classes of shares for sale to the public. As described in more detail below,
shareholders of the Funds as of the Closing will receive Class Y shares of the
applicable Successor Fund . Class Y shares will not be subject to an initial
sales charge (although they will have a 12b-1 Plan of Distribution, in
substantially the same form as currently used by the Funds). On a going forward
basis after the reorganization, the Successor Funds will begin the sale of Class
A shares of each series (except the Money Market Fund). Class A shares will be
subject to an initial sales charge of 5.25% (for the Growth and Balanced Funds)
and 2.5% (for the Tax Exempt Bond, Short-Term Bond and Bond Funds) and will also
have a 12b-1 Plan of Distribution in substantially the same form as currently
used by the Funds.
The purpose for offering Class A shares is to grow the assets of the Trust, with
resulting reductions in the relative expenses of the Successor Funds.
Existing shareholders of the Funds will not be adversely affected by the
creation of Class A shares, because they will not be subject to a sales charge
on their existing shares and will be eligible to purchase Class Y shares of any
of the COUNTRY Mutual Funds. Others eligible to purchase Class Y shares will
include: trust and investment management customers of COUNTRY Trust Bank (the
"Adviser"), and employees and agents of the Adviser and its affiliated
companies. A complete list of those eligible to purchase Class Y shares will be
provided in the new Prospectus of the Successor Funds.
Comparison of Investment Policies and Restrictions
Except as described in these Proxy Materials, the Funds' investment objective,
principal investment strategies and investment risks will not change as a result
of the reorganization. However, as noted, after the reorganization, the
Successor Funds will have a more streamlined set of fundamental and
non-fundamental investment policies and restrictions. Some of the Funds' current
investment policies and restrictions may limit their respective portfolio
managers from investing in a security that is both consistent with the
investment objective of such Fund and that may be a good investment. One reason
for changing some of these investment policies is to remove restrictions that
unnecessarily hamper the portfolio managers' investment discretion. Many of
these restrictions were put in place by the Funds as a result of the directives
of various state securities commissions. Changes to federal securities laws have
superseded these directives. Another reason is the desire to create consistency
between the investment restrictions of the various COUNTRY Mutual Funds.
Finally, some of the changes have been made to comply with new SEC rules
relating to the names of mutual funds.
The following chart describes some of the changes to the Fundamental Investment
Restrictions:
- ------------------- --------------------------------------------- --------------------------------------
Fund Change Purposes / Intended Effect
- ------------------- --------------------------------------------- --------------------------------------
All Change borrowing and loan restrictions to Consistency between Successor Funds.
prohibit borrowing by and loans to the Simplify language and create greater
to Successor Funds, except as permitted by flexibility the adapt to future changes
1940 Act. in laws and regulations.
- ------------------- --------------------------------------------- --------------------------------------
All Add exception for underwriting restrictions Prevent inadvertent violations of
to permit normal purchases and sales of Fundamental Investment Restrictions.
securities that may technically be
considered "underwriting."
- ------------------- --------------------------------------------- --------------------------------------
All Add exception to real estate restrictions Clarify permitted practices and prevent
to permit investments in real estate inadvertent violations of Fundamental
companies and real estate acquired through Investment Restrictions.
default, liquidation or other distributions.
- ------------------- --------------------------------------------- --------------------------------------
Money Market Add provision permitting investments in the Prevent inadvertent violations of Fundamental
securities of any one issuer in the manner Investment Restrictions and Rule 2a-7.
prescribed by Rule 2a-7 of the 1940 Act.
- ------------------- --------------------------------------------- --------------------------------------
Growth Add exception to per-issuer limitation for Create consistency with other Successor Funds.
25% of the Successor Funds' assets. Greater flexibility for portfolio managers.
Eliminate restriction that went beyond
requirements of 1940 Act.
- ------------------- --------------------------------------------- --------------------------------------
Short-Term Bond, Add restrictions that require 80% of assets Comply with new SEC Rule 35d-1 under the
Bond and Tax be invested in bonds. Add restriction for 1940 Act.
Exempt Bond Fund Tax Exempt Bond Fund that requires that 80%
of assets be invested in securities that
the income of which is exempt from federal
income tax.
- ------------------- --------------------------------------------- --------------------------------------
Balanced Add restriction requiring that the Balanced Comply with SEC guidance for
Fund, at all times, be invested at least 25% Balanced Funds.
in equities and 25% in bonds.
- ------------------- --------------------------------------------- --------------------------------------
This discussion is only a summary of certain of the differences between the
Fundamental Investment Restrictions found in the SAI of the Funds and the
Successor Funds. For a thorough comparison of the Fundamental Investment
Restrictions and changes to the Non-fundamental Investment Restrictions and
other investment policies, you may refer to the provisions of the current SAI of
the Funds and the proposed SAI of the Successor Funds. You can obtain a copy of
the current and proposed SAI by calling the Secretary of the Funds at (309)
557-2542.
RATIFICATION OF THE ELECTION OF TRUSTEES
As series of a Delaware business trust, the Funds will be governed by a Board of
Trustees whose duties and responsibilities in governing mutual funds are
essentially the same as those of the Boards of Directors. By voting in favor of
the reorganization, stockholders of the Funds effectively will be ratifying the
election by the Trust's sole initial shareholder of the Board of Trustees
comprised of the members described below in the description of Proposal 2.
OTHER INFORMATION ABOUT THE REORGANIZATION
Shareholder Accounts & Election
The Funds' transfer agent will establish accounts for all fund shareholders
containing the appropriate number of shares of the Trust to be received by each
shareholder at the close of the reorganization. Each account and its elections
will be identical in all material respects to those currently maintained by the
Funds for their shareholders.
Service Providers
The Funds and Successor Funds have the same service providers. Upon completion
of the reorganization, these service providers will continue to serve the
Successor Funds in the capacities indicated:
- --------------------------------------------------------------------------------
Service Providers to Country Mutual Funds
- -------------------------------------- -----------------------------------------
Investment Adviser Country Trust Bank
- -------------------------------------- -----------------------------------------
Distributor Quasar Distributors, LLC
- -------------------------------------- -----------------------------------------
Custodian Country Trust Bank
- -------------------------------------- -----------------------------------------
Transfer Agent Firstar Mutual Fund Services, LLC
- -------------------------------------- -----------------------------------------
Administrator Firstar Mutual Fund Services, LLC
- -------------------------------------- -----------------------------------------
Accounting Service Provider Firstar Mutual Fund Services, LLC
- -------------------------------------- -----------------------------------------
Independent Auditors PricewaterhouseCoopers LLP
- -------------------------------------- -----------------------------------------
Selection of Auditors
By voting in favor of the reorganization, stockholders of the Funds effectively
will be ratifying the selection by the Trust's sole initial shareholder of
PricewaterhouseCoopers, LLP as auditors for the Trust for the fiscal year ending
June 30, 2002. PricewaterhouseCoopers, LLP currently serves as auditors of the
Funds. PricewaterhouseCoopers, LLP has no direct or indirect financial interest
in the Funds or the Trust, except as auditors and independent accountants.
Investment Advisory Agreement
Country Trust Bank currently serves as investment adviser to the Funds, and the
Trust and Country Trust Bank will enter into an Investment Advisory Agreement
that is identical in substance to the current agreements between the Funds and
the Adviser. By voting in favor of the reorganization, stockholders of the Funds
effectively will be ratifying the selection of Country Trust Bank as investment
adviser to the Trust and the approval by the Trust's sole initial shareholder of
the Investment Advisory Agreement.
Distribution Plan
The Trust will adopt a Distribution Plan that is identical in substance to the
current Plans adopted by the Funds. By voting in favor of the reorganization,
stockholders of the Funds effectively will be ratifying the adoption of a Plan
of Distribution under Rule 12b-1 for all of the Successor Funds (except the
Money Market Fund) and the approval of the Trust's sole initial shareholder of
the Plan of Distribution.
Expenses of the Reorganization
The costs of the reorganization are expected to be approximately $__________.
Country Trust Bank and Country Capital Management Company will bear the costs of
the reorganization. However, the Successor Funds will have some additional costs
associated with operating multiple classes of shares and due to other changes
associated with the reorganization.
Tax Consequences
The reorganization will be tax-free for federal income tax purposes and will not
take place unless the Funds receive a satisfactory opinion from Dechert, counsel
to the Funds, substantially to the effect that:
The reorganization will be a "reorganization" within the meaning of
Section 368(a)(1) of the Internal Revenue Code of 1986 (the "Code"),
and each fund will be "a party to a reorganization" within the meaning
of Section 368(b) of the Code:
No gain or loss will be recognized by the Funds upon (1) the transfer
of all of its assets and liabilities to the new series as described
above or (2) the distribution by the Funds of shares of the Successor
Funds to the Funds' shareholders;
No gain or loss will be recognized by the Successor Funds upon the
receipt of the Funds' assets solely in exchange for the issuance of
shares of the Successor Funds and the assumption of all of the Funds'
liabilities by the Successor Funds;
The tax basis of the assets of the Funds acquired by the Successor
Funds will be the same as the tax basis of those assets in the hands
of the Funds immediately before the transfer;
The tax holding period of the assets of the Funds in the hands of the
Successor Funds will include the Funds' tax holding period for those
assets;
The shareholders of the Funds will not recognize gain or loss upon the
exchange of all their shares of the Funds solely for shares of the
Successor Funds as part of the reorganization;
The tax basis of shares of the Successor Funds received by the Funds'
shareholders in the reorganization will be the same as the tax basis
of the shares of the Funds surrendered in exchange; and
The tax holding period of the shares of the Successor Funds received
by the Funds' shareholders will include the tax holding period of the
Funds' shares surrendered in the exchange, provided that the shares of
the Funds were held as capital assets on the date of the exchange.
Surrender of Share Certificates
If your shares are represented by one or more share certificates before the
reorganization date, you must either surrender the certificates to the Funds or
deliver to the Funds a lost certificate affidavit, in the form that the Funds
require. In addition, the Funds may require a surety bond to accompany the
affidavit. On the reorganization date, all certificates that have not been
surrendered: will be canceled, will not evidence ownership of a Fund's shares
and will evidence ownership of a Successor Fund's shares.
Shareholders may not redeem or transfer shares of the Successor Funds received
in the reorganization until they have surrendered their Fund share certificates
or delivered a lost certificate affidavit. THE SUCCESSOR FUND WILL NOT ISSUE
SHARE CERTIFICATES IN THE REORGANIZATION.
BOARD EVALUATION AND RECOMMENDATION
For the reasons described above, the Boards of Directors of the Funds, including
the Independent Directors, unanimously approved the reorganization. In
particular, the Directors determined that the reorganization was in the best
interests of the Funds and that the interests of the Funds' shareholders would
not be diluted as a result of the reorganization.
THE DIRECTORS RECOMMEND THAT THE FUNDS' SHAREHOLDERS VOTE FOR THE PROPOSAL TO
APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION.
REQUIRED VOTE
The affirmative vote of two-thirds (2/3rds) of each of the Fund's shares
outstanding and entitled to vote is required to approve the reorganization of
the Funds as series of a Delaware business trust.
PROPOSAL 2
ELECTION OF BOARDS OF DIRECTORS
If the stockholders of each of the Funds do not approve the reorganization,
stockholders will be asked to elect each of the seven nominees described below
as Directors of the Funds. Directors elected at the Meeting will serve as
Directors until the next meeting of stockholders called for this purpose or
until their successors are elected and qualified. Of those seven individuals,
Messrs. Warfield, Shauman and Phelps and Ms. Erickson, Miller and Cole currently
serve on the Boards of the Funds. Mr. Grace has not previously served on the
Boards. Mr. Allen is not standing for reelection. Unless you direct otherwise,
the persons named on the accompanying proxy card intend to vote at the meeting
for the election of each nominee.
The following table sets forth each nominee's position(s) with the fund, age,
address, principal occupation or employment during the past five years and
Directorships.
- ---------------------------------------------------------------------------------------------------------------------
Interested Directors (1)
- ------------------------------- ------------------ ------------------------------------------------------------------
NAME, AGE, POSITION(S) WITH FIRST BECAME PRINCIPAL OCCUPATION OR EMPLOYMENT AND OTHER DIRECTORSHIPS
THE FUND, ADDRESS (2) DIRECTOR
- ------------------------------- ------------------ ------------------------------------------------------------------
Ronald R. Warfield, 58 1994 Director and President: Illinois Agricultural Association and
Director & President Affiliated Companies, 1993 to date(3); Director and President:
Country Trust Bank(4), 1993 to date; Director: American Farm
Bureau Federation and certain of its Affiliated Companies, 1996
to date. Farmer.
- ------------------------------- ------------------ ------------------------------------------------------------------
Robert L. Phelps, 49 2000 Director: Illinois Agricultural Association and Affiliated
Director Companies, 1992 to date; Director: Country Trust Bank, 1996 to
date. Farmer.
- ------------------------------- ------------------ ------------------------------------------------------------------
Wendell L. Shauman, 56 1999 Director: Illinois Agricultural Association and Affiliated
Director Companies, 1992 to 2000; Director: Country Trust Bank, 1998 to
2000. Farmer.
- ---------------------------------------------------------------------------------------------------------------------
Non-Interested (Independent) Directors
- ------------------------------- ------------------ ------------------------------------------------------------------
NAME, AGE, POSITION(S) WITH FIRST BECAME PRINCIPAL OCCUPATION OR EMPLOYMENT AND OTHER DIRECTORSHIPS
THE FUND, ADDRESS (2) DIRECTOR
- ------------------------------- ------------------ ------------------------------------------------------------------
Nancy J. Erickson, 44 1995 President of McHatton Farm Management, Inc., 1981 to date.
Director Farmer.
- ------------------------------- ------------------ ------------------------------------------------------------------
Ailene Miller, 75 1991 McLean County (Illinois) Board Member, 1986 to date; Member of
Director IAA Foundation Trustee Emeritus, 1988 to date.
- ------------------------------- ------------------ ------------------------------------------------------------------
Charlot R. Cole, 60 1996 Property Developer, 1979 to date; Member Macoupin-Greene County
Director Cooperation Extension Council (formerly Macoupin County
Cooperative Extension Council), 1992 to date and President, 1995
to date; Secretary/Treasurer, Cole Farms,Inc., 1993 to date.
Farmer.
- ------------------------------- ------------------ ------------------------------------------------------------------
Roger D. Grace, 54 Nominee Director, Illini FS, Inc., 1990 to date; Secretary, Illini FS,
Director Inc., 1997 to date. Farmer.
- ------------------------------- ------------------ ------------------------------------------------------------------
- ------------------------
(1) Each of the interested Directors/nominees serves (or in the
case of Mr. Shauman, served within the past two (2) years)
as a Director of the Illinois Agricultural Association
(IAA), Illinois Agricultural Holding Co. (IAHC), Country
Life Insurance Company (CLIC), Country Mutual Insurance
Company (CMIC), Country Trust Bank (CTB) and Country Capital
Management Company (CCMC). IAA owns 98.3% of the outstanding
voting securities of IAHC. IAHC owns 99.9% of the
outstanding voting securities of CLIC. CLIC owns 95% (and
CMIC owns 5% of) the outstanding voting securities of CTB.
CLIC owns 100% of the outstanding voting securities of CCMC.
Ronald R. Warfield is President of IAA, IAHC, CLIC, CMIC and
CTB and Chairman of the Board of CCMC.
(2) The mailing address for all the Funds' Officers and
Directors is in care of the COUNTRY Mutual Funds, 808 IAA
Drive, Bloomington, Illinois 61702.
(3) Affiliated Companies of the Illinois Agricultural
Association include without limitation members of the
COUNTRY Insurance & Financial Services Group, Illinois
Agricultural Holding Co., AgriVisor Services, Inc., Illinois
Agricultural Service Company and IAA Foundation.
(4) Country Trust Bank was formed on May 1, 2000 and is the
successor to IAA Trust Company an Illinois corporation with
trust powers which was reorganized into a federal thrift.
As of June 30, 2001, the Officers, Directors and nominees, as a group, owned
less than one percent (1%) of the outstanding shares of each of the Funds.
Information about beneficial ownership of shares is based on information
provided to the Funds by the Officers, Directors and nominees.
The same seven individuals serve on the Boards of all four corporations,
representing the six Funds that comprise the COUNTRY Mutual Funds complex.
The following individual currently serves on the Boards of the Funds, but is not
standing for reelection as a Director of the Companies:
- ---------------------------------- ---------------------------------------------
NAME, AGE, POSITION WITH THE FUND PRINCIPAL OCCUPATION OR EMPLOYMENT AND OTHER
DIRECTORSHIPS
- ---------------------------------- ---------------------------------------------
Herbert G. Allen, 71 Farmer.
Director
- ---------------------------------- ---------------------------------------------
During the fiscal year ended June 30, 2001, the Boards of Directors held four
meetings. All of the nominees then serving as Directors attended at least 75% of
the meetings of the Boards or applicable committee, if any, held during the
fiscal year.
All of the nominees, except for Wendell L. Shauman, Roger D. Grace, and Robert
L. Phelps were most recently elected as Directors of the Fund at the Annual
Meeting of Stockholders held on September 30, 1996 to serve until the next
meeting of stockholders or until their successors are elected and qualified. All
nominees have consented to serve as Directors and the Boards of Directors has no
reason to believe that any of the persons named will become unavailable for
election. Should any nominee withdraw from the election or otherwise be unable
to serve, the named proxies will vote for the election of such substitute
nominee as the Boards of Directors may recommend, unless a decision is made to
reduce the number of Directors serving on the Boards of Directors.
Equity Securities Beneficially Owned by Directors & Nominees
- ---------------------------------------- ------------------------------------------ ----------------------------------
Name of Director or Nominee Dollar Range of Equity Securities In The Aggregate Dollar Range of Equity
Funds Securities In All Funds Overseen
or to be Overseen by Director or
Nominee in Family of Investment
Companies
- ---------------------------------------- ------------------------------------------ ----------------------------------
Ronald R. Warfield Growth: $10,001-$50,000
Asset Allocation: $10,001-$50,000
Tax Exempt: None Over $100,000
Short-Term Gov't: $1-$10,000
Long-Term: $10,001-$50,000
Money Market: $10,001-$50,000
- ---------------------------------------- ------------------------------------------ ----------------------------------
Robert L. Phelps Growth: $10,001-$50,000
Asset Allocation: $1-$10,000
Tax Exempt: None $10,001-$50,000
Short-Term Gov't: None
Long-Term: None
Money Market:$1-$10,000
- ---------------------------------------- ------------------------------------------ ----------------------------------
Charlot R. Cole Growth: $10,001-$50,000
Asset Allocation: $10,001-$50,000
Tax Exempt: $1-$10,000 $10,001-$50,000
Short-Term Gov't: None
Long-Term: None
Money Market: $1-$10,000
- ---------------------------------------- ------------------------------------------ ----------------------------------
Nancy J. Erickson Growth: None
Asset Allocation: None
Tax Exempt: None None
Short-Term Gov't: None
Long-Term: None
Money Market: None
- ---------------------------------------- ------------------------------------------ ----------------------------------
Ailene Miller Growth: Over $100,000
Asset Allocation: None
Tax Exempt: None Over $100,000
Short-Term Gov't: None
Long-Term: None
Money Market: None
- ---------------------------------------- ------------------------------------------ ----------------------------------
Wendell L. Shauman Growth: $1-$10,000
Asset Allocation: $10,001-$50,000
Tax Exempt: None $10,001-$50,000
Short-Term Gov't: None
Long-Term: None
Money Market: $1-$10,000
- ---------------------------------------- ------------------------------------------ ----------------------------------
Roger D. Grace Growth: None
Asset Allocation: None
Tax Exempt: None None
Short-Term Gov't: None
Long-Term: None
Money Market: None
- ---------------------------------------- ------------------------------------------ ----------------------------------
No Directors or Nominees hold any interest in the Funds' Adviser, Principal
Underwriter or any person directly or indirectly controlling, controlled by or
under common control with the Funds' Adviser or Principal Underwriter.
EXECUTIVE OFFICERS
Following is a list of the Funds' Executive Officers who are neither Directors
nor Director nominees. Each Executive Officer was elected by the Directors is
expected to serve until a successor is chosen and qualified, or until
resignation or removal by the Boards. The business address of the Officers of
the Funds is 1701 N. Towanda Avenue, Bloomington, Illinois 61702.
- ------------------------------- ------------------ -----------------------------------------------------------
Name of Officer, Age & Service Since Principal Occupation(s) for Last Five Years
Position With Funds
- ------------------------------- ------------------ -----------------------------------------------------------
- ------------------------------- ------------------ -----------------------------------------------------------
John Blackburn, 53 2001 Chief Executive Officer: COUNTRY Insurance & Financial
Vice President Services(1), 2001 to date; Senior Vice President
Marketing: COUNTRY Insurance & Financial Services, 1996
to 2001.
- ------------------------------- ------------------ -----------------------------------------------------------
Robert W. Rush, Jr. , 56 Vice 1999 Executive Vice President & Trust Officer: Country Trust
President Bank, 1999 to date: Chairman, President & CEO: Bank One
Illinois, 1972 to 1999
(includes predeccesor
positions and companies).
- ------------------------------- ------------------ -----------------------------------------------------------
Bruce D. Finks, 48 1996 Vice President - Investments: Country Trust Bank, 1995 to
Vice President date.
- ------------------------------- ------------------ -----------------------------------------------------------
Richard M. Miller, 63 1992 Senior Vice President and Senior Trust Officer: Country
Vice President Trust Bank, 1991 to date.
- ------------------------------- ------------------ -----------------------------------------------------------
Phillip T. Nelson, 44 Vice 2000 Director and Vice President: Illinois Agricultural
President Association and Affiliated Companies, 1999 to date; Vice
President: Country Trust Bank, 1999 to date; President -
LaSalle County Farm Bureau 1993 to 1999. Farmer.
- ------------------------------- ------------------ -----------------------------------------------------------
Paul M. Harmon, 59 General 1995 General Counsel: Illinois Agricultural Association and
Counsel & Secretary (Secretary 1996 Affiliated Companies, 1996 to date; Secretary: Illinois
(General Counsel) Agricultural Association and affiliated
companies, 1998 to date; General Counsel & Secretary,
Country Trust Bank, 1996 to date.
- ------------------------------- ------------------ -----------------------------------------------------------
David A. Magers, 46 Treasurer 1999 Vice President- Finance & Treasurer: Illinois
Agricultural Association and Affiliated Companies, 1998
to date; Controller: Illinois Agricultural Association
and Affiliated Companies, 1988 to date. Treasurer:
Country Trust Bank, 1998 to date.
- ------------------------------- ------------------ -----------------------------------------------------------
Richard F. Day, 61 1992 Controller, Country Trust Bank, 1974 to date.
Controller
- ------------------------------- ------------------ -----------------------------------------------------------
(1) COUNTRY Insurance & Financial Services is a group of
insurance and financial services companies which includes:
Country Mutual Insurance Company, Country Preferred
Insurance Company, Country Casualty Insurance Company,
Country Life Insurance Company, Country Investors Life
Assurance Company, Country Medical Plans, Inc., Country
Capital Management Company, Country Trust Bank and CC
Services, Inc. and other Affiliated Companies.
REMUNERATION OF DIRECTORS AND OFFICERS
Directors of the Funds are entitled to $200 (Growth Fund) and $50 (each other
Fund) for each day or a portion thereof spent in a meeting or meetings of the
Boards of Directors or while engaged in special work authorized by the President
or the Boards of Directors and to reimbursement of expenses for each Directors'
meeting attended or while engaged in special work authorized by the President or
by the Boards of Directors, but no fees are paid to any Director if such
Director is also a director, officer or employee of the investment adviser of
the Funds. Directors and Officers receive no other compensation from the Fund
for their services. During the fiscal year ended June 30, 2001, the aggregate
amount of fees and expenses paid by the Funds to Directors and Officers was
- -----------------.
The following table provides information about the compensation paid by the
Funds to the nominees for their services as Fund Directors during the most
recent fiscal year. The Funds paid no pension or retirement benefits to the
Directors. The Funds pay no salary or other compensation to its Officers or the
Interested Directors, who are compensated for their services by the Illinois
Agricultural Association and its affiliated companies.
- --------------------------- -------------------------------------- --------------------------------------
NAME OF PERSON, POSITION AGGREGATE COMPENSATION FROM EACH TOTAL COMPENSATION FROM EACH FUND
FUND FOR FISCAL YEAR ENDED JUNE 30, AND FUND COMPLEX FOR FISCAL YEAR
2001 ENDED JUNE 30, 2001
- --------------------------- -------------------------------------- --------------------------------------
Charlot R. Cole, Director Growth:
Asset Allocation:
Tax Exempt:
Short-Term Gov't:
Long-Term:
Money Market:
- --------------------------- -------------------------------------- --------------------------------------
Nancy J. Erickson, Director Growth:
Asset Allocation:
Tax Exempt:
Short-Term Gov't:
Long-Term:
Money Market:
- --------------------------- -------------------------------------- --------------------------------------
Ailene Miller, Director Growth:
Asset Allocation:
Tax Exempt:
Short-Term Gov't:
Long-Term:
Money Market:
- --------------------------- -------------------------------------- --------------------------------------
BOARDS' RECOMMENDATION
THE FUNDS' DIRECTORS RECOMMEND THAT THE SHAREHOLDERS VOTE
FOR THE ELECTION OF EACH NOMINEE TO SERVE AS A DIRECTOR OF THE FUNDS UNTIL
THE ELECTION OR APPOINTMENT OF THEIR SUCCESSOR(S).
Required Vote
A plurality of the shares of each of the Funds present in person or by proxy at
the Meeting and entitled to vote is required to elect the Nominees.
OTHER MATTERS
INFORMATION CONCERNING THE CURRENT ORGANIZATION OF THE FUNDS
The Funds are open-end management investment companies organized as corporations
under the laws of the state of Maryland on August 5, 1965 (Growth Fund), March
20, 1978 (Asset Allocation Fund & Tax Exempt Bond Fund) and April 14, 1981
(Taxable Fixed Income Series Fund).
INFORMATION CONCERNING THE FUNDS' ADVISER
Country Trust Bank 808 IAA Drive, Bloomington, Illinois 61702, serves as
investment adviser to the Funds, pursuant to Advisory Agreements dated September
29, 1992 (for the Growth, Tax Exempt and Money Market Funds), April 23, 1993
(for the Asset Allocation Fund) and October 1, 1996 (for the Short-Term
Government Bond and Long-Term Bond Fund). The Adviser is organized as a federal
thrift and is a bank as that term is defined in the Investment Company Act of
1940. The Adviser was previously organized as an Illinois corporation on
December 30, 1970 and was reorganized as a federal thrift effective May 1, 2000.
The Adviser exercises fiduciary powers as permitted by its charter with the
Office of Thrift Supervision. For the fiscal year ended June 30, 2001,
approximately 17% of the Adviser's income was received from trust service fees.
The Adviser is supervised by the Office of Thrift Supervision.
INFORMATION CONCERNING THE FUNDS' DISTRIBUTOR AND ADMINISTRATOR
Quasar Distributors, LLC (the 'Distributor') is the distributor of the Funds
pursuant to Distribution Agreements with each of the Funds dated September 1,
2000. The Distributor is a Wisconsin limited liability company formed on
_______________, and is a broker-dealer registered with the SEC and a member of
the National Association of Securities Dealers, Inc. The Distributor, located at
615 E. Michigan Street, Milwaukee, WI 53202 is a wholly-owned subsidiary of
Firstar Mutual Fund Services, LLC (the administrator, transfer agent and
accounting/pricing agent for the Fund). Firstar Mutual Fund Services, LLC is
located at the same address as the Distributor. At the present time, the
Distributor serves as distributor for ______ other nonaffiliated Fund groups.
INFORMATION CONCERNING THE FUNDS' INDEPENDENT ACCOUNTANTS
Audit services performed by PricewaterhouseCoopers LLP during the most recent
fiscal year included examination of the financial statements of the Fund, review
of filings with the Securities and Exchange Commission and preparation of tax
returns.
During the fiscal year ended June 30, 2001, the Funds paid the following fees to
PricewaterhouseCoopers LLP:
- ------------------- ---------------------------------- -------------------------
Audit Fees Financial Information Systems All Other Fees1
Design and Implementation Fees1
- ------------------- ---------------------------------- -------------------------
$----- $ ----- $-----
- ------------------- ---------------------------------- -------------------------
1 The aggregate fees billed for financial information systems
design and implementation services and all other fees
include services rendered by PricewaterhouseCoopers LLP to
the Funds, its investment adviser, and entities controlling,
controlled by or under common control with the investment
adviser that provide services to the Fund.
Effective February 5, 2001, new Securities and Exchange Commission rules
generally require the disclosure in a Fund's proxy statement of whether the
Fund's Audit Committee considered whether the provision of non-audit services to
the Fund and of professional services to the Fund's adviser and to entities
controlling, controlled by, and under common control with, the Fund's adviser
that provide services to the Fund is compatible with maintaining the
independence of the Fund's independent accountants.
INFORMATION CONCERNING COMMITTEES
The Funds currently have an Executive Committee, Nominating Committee and an
Audit Committee, but do not have a Compensation Committee.
The Executive Committee is currently comprised of Directors Warfield, Allen and
Miller. Under the Bylaws of the Funds, the Executive Committee is empowered to
exercise any and all of the powers of the Boards of Directors in the management
of the business and affairs of the Funds. The Executive Committee did not hold
any meetings during the last fiscal year. It is anticipated that the Trust will
have an Executive Committee substantially identical to the current committee of
the Funds.
The four (4) disinterested Directors (currently Herb Allen, Charlot Cole, Nancy
Erickson and Ailene Miller) of the Funds serve on the Audit and Nominating
Committee of the Funds' Boards of Directors. The functions of the Audit
Committee include recommending independent auditors to the Boards, monitoring
the independent auditors' performance, reviewing the results of audits and
responding to certain other matters deemed appropriate by the Boards. The Audit
Committee was formed by the Boards of Directors on April 30, 2001 and did not
hold any meetings during the last fiscal year, but met subsequently on July 30,
2001. It is anticipated that the Trust will have an Audit Committee
substantially identical to the current committee of the Funds.
The function of the Nominating Committee is to nominate for election (or
appointment) non-interested Directors of the Funds. The Nominating Committee did
not hold any meetings during the last fiscal year, but met subsequently on July
30, 2001 and nominated Roger D. Grace for election by the shareholders. It is
anticipated that the Trust will have a Nominating Committee substantially
identical to the current committee of the Funds.
INFORMATION CONCERNING THE MEETING
VOTING RIGHTS
Each share of the Funds is entitled to one vote and each fractional share is
entitled to that fractional vote. The vote required to approve each proposal is
described in the proposal.
Shares of the Funds represented in person or by proxy, including shares that
abstain or do not vote on a proposal, will be counted for purposes of
determining whether there is a quorum at the meeting. Accordingly, an abstention
from voting has the same effect as a vote against a proposal.
SOLICITATION OF PROXIES
In addition to the mailing of these proxy materials, proxies may be solicited by
telephone, by fax or in person by the Directors, Officers and employees of the
Funds, by personnel of the Adviser, the Funds' principal distributor, and the
Funds' transfer agent or by broker-dealer firms.
The mailing address of the Funds and the Adviser is 1701 N. Towanda Avenue,
Bloomington, Illinois 61702. The address of the distributor, Quasar
Distributors, LLC, is 615 E. Michigan Street, Milwaukee, Wisconsin 53202.
REVOKING PROXIES
A shareholder signing and returning a proxy has the power to revoke it at any
time before it is exercised:
By filing a written notice of revocation with the Funds' distributor,
Quasar Distributors, LLC, 615 E. Michigan Street, Milwaukee, Wisconsin
53202.
By returning a duly executed proxy with a later date before the time
of the meeting, or
If a shareholder has executed a proxy but is present at the meeting
and wishes to vote in person, by notifying the Secretary of the Funds
(without complying with any formalities) at any time before it is
voted.
Being present at the meeting alone does not revoke a previously executed and
returned proxy.
OUTSTANDING SHARES AND QUORUM
As of June 30, 2001 the following number of shares of common stock of the each
of the Funds were outstanding: Growth Fund, __________________________; Asset
Allocation Fund, __________________; Tax Exempt Bond Fund
________________________; Taxable Fixed Income Series Fund,
__________________________ .
Only shareholders of record on August 31, 2001 (record date) are entitled to
notice of and to vote at the meeting. A majority of the outstanding shares of
each Fund that are entitled to vote will be considered a quorum for the
transaction of business.
VOTING REQUIREMENTS
1. Approving the reorganization: two-thirds (2/3rds) of the outstanding shares
of Country Growth Fund, Inc., Country Asset Allocation Fund, Inc., Country
Tax Exempt Bond Fund, Inc. and Country Taxable Fixed Income Series Fund,
Inc.
2. Election of Directors: A plurality of the shares of the Funds present in
person or by proxy at the Meeting and entitled to vote.
OTHER BUSINESS
The Funds' Boards of Directors know of no business to be presented for
consideration at the meeting other than the proposals in this proxy statement
and the approval of the minutes of the 1996 annual meeting. Approval of the
minutes indicates only that the minutes accurately reflect the events of the
meeting. If other business is properly brought before the meeting, proxies will
be voted according to the best judgment of the persons named as proxies.
ADJOURNMENTS
If a quorum is not present in person or by proxy at the time any session of the
meeting is called to order, the persons named as proxies may vote those proxies
that have been received to adjourn the meeting to a later date. If a quorum is
present but there are not sufficient votes in favor of a proposal, the persons
named as proxies may propose one or more adjournments of the meeting to permit
further solicitation of proxies concerning that proposal. Any adjournment will
require the affirmative vote of a majority of the Funds' shares present at the
session of the meeting to be adjourned. If an adjournment of the meeting is
proposed because there are not sufficient votes in favor of a proposal, the
persons named as proxies will vote those proxies favoring that proposal in favor
of adjournment, and will vote those proxies against the proposal against
adjournment.
TELEPHONE AND ELECTRONIC VOTING
In addition to soliciting proxies by mail, by fax or in person, the Funds may
arrange to have votes recorded by telephone by Officers and employees of the
Funds or by personnel of the Adviser or transfer agent. The telephone and
electronic voting procedures are designed to verify a shareholder's identity, to
allow a shareholder to authorize the voting of shares in accordance with the
shareholder's instructions and to confirm that the voting instructions have been
properly recorded.
A shareholder will be called on a recorded line at the telephone
number in the Funds' account records and will be asked to provide the
shareholder's social security number of other identifying information.
The shareholder will then be given an opportunity to authorize proxies
to vote his or her shares at the meeting in accordance with the
shareholder's instructions.
To ensure that the shareholder's instructions have been recorded
correctly, the shareholder will also receive a confirmation of the
voting instructions by mail.
A toll-free number will be available in case the voting information contained in
the confirmation is incorrect.
If the shareholder decides after voting by telephone to attend the meeting, the
shareholder can revoke the proxy at that time and vote the shares at the
meeting.
OWNERSHIP OF SHARES OF THE FUND
To the knowledge of the Funds, as of June 30, 2001, the following persons owned
of record or beneficially 5% or more of the outstanding shares of the Funds.
- ------------------------------- ---------------------------- ---------------------- ----------------------------
FUND ACCOUNT NAME NUMBER OF SHARES PERCENT OF SHARES
BENEFICIALLY OWNED
DIRECTLY OR INDIRECTLY ON
JUNE 30, 2001
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Country Growth Fund, Inc. IAATCO
c/o COUNTRYSM Trust Bank 4,546,021.42 56.8%
808 IAA Drive
Bloomington, IL 61702
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Country Asset Allocation IAATCO
Fund, Inc. c/o COUNTRYSM Trust Bank 1,001,127.47 75.4%
808 IAA Drive
Bloomington, IL 61702
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Country Tax Exempt Bond Fund, IAATCO
Inc. c/o COUNTRYSM Trust Bank 149,788.81 8.2%
808 IAA Drive
Bloomington, IL 61702
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Country Money Market Fund IAATCO
c/o COUNTRYSM Trust Bank 54,073,246.09 83.4%
808 IAA Drive
Bloomington, IL 61702
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Country Short-Term Government IAATCO
Bond Fund c/o COUNTRYSM Trust Bank 2,578,784.88 93.0%
808 IAA Drive
Bloomington, IL 61702
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Country Long-Term Bond Fund IAATCO
c/o COUNTRYSM Trust Bank 4,126,769.8 96.8%
808 IAA Drive
Bloomington, IL 61702
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Country Asset Allocation COUNTRY Life Insurance 96,227.589 7.24%
Fund, Inc. Company(R)
P.O. Box 2000
Bloomington, IL 61702-2000
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Country Short-Term Government COUNTRY Life Insurance 149,455.984 5.39%
Bond Fund Company(R)
P.O. Box 2000
Bloomington, IL 61702-2000
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Country Tax Exempt Bond Fund COUNTRY Mutual Insurance 234,484.573 12.8%
Company(R)
1701 Towanda Avenue
Bloomington, IL 61702
- ------------------------------- ---------------------------- ---------------------- ----------------------------
Security Ownership of Management: The Officers and Directors (and nominee
Directors/Trustees) of each of the Funds do not own, as a group, more than one
percent of any of the Funds.
Approximately 99.99% of the issued and outstanding stock of COUNTRY Life
Insurance Company is owned by Illinois Agricultural Holding Co. and 98.30% of
the shares of the latter company are owned by Illinois Agricultural
Association(R) of 1701 N. Towanda Avenue, Bloomington, Illinois, an Illinois
not-for-profit corporation which was formed to promote agriculture and the
mutual interests of its members therein.
Respectfully Submitted,
August 31, 2001 Paul M. Harmon
Bloomington, Illinois Secretary
APPENDIX 1
PROXY CARD
COUNTRY GROWTH FUND, INC.
COUNTRY ASSET ALLOCATION FUND, INC.
COUNTRY TAX EXEMPT BOND FUND, INC.
COUNTRY TAXABLE FIXED INCOME SERIES FUND, INC.
- --------------------------------------------------------------------------------
The undersigned holder of shares of beneficial interest of the COUNTRY Growth
Fund, Inc., COUNTRY ASSET ALLOCATION FUND, INC., COUNTRY TAX EXEMPT BOND FUND,
INC. or COUNTRY TAXABLE FIXED INCOME SERIES FUND, INC., (the "Funds") hereby
constitutes and appoints Paul M. Harmon, or in his absence, David A. Magers, as
proxies and attorneys of the undersigned, with full power of substitution to
each, for and in the name of the undersigned, to vote and act upon all matters
at the Annual Meeting of Shareholders of the Funds to be held on Monday, October
29, 2001 at Earl Smith Hall, Illinois Agricultural Association(R) Building, 1701
N. Towanda Avenue, Bloomington, Illinois, at 10:30 a.m. central time, and at any
and all adjournments thereof, relating to all shares of the Fund(s) held by the
undersigned or relating to all shares of the Fund(s) held by the undersigned
which the undersigned would be entitled to vote or act, with all the powers the
undersigned would possess if personally present. All proxies previously given by
the undersigned relating to the meeting are hereby revoked.
Specify your desired action by check marks in the appropriate space. This proxy
will be voted as specified. If no specification is made, the proxy will be voted
in favor of each item. The persons named as proxies have discretionary
authority, which they intend to exercise in favor of the proposals referred to
and according to their best judgment as to any other matters that properly come
before the meeting.
- --------------------------------------------------------------------------------
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
Please complete, sign, date and return this proxy in the enclosed envelope as
soon as possible.
Please sign exactly as your name or names appear above. When signing as
attorney, executor, administrator, Trustee or guardian, please give your full
title as such.
If a corporation, please sign in full corporate name by president or other
authorized Officer.
If a partnership, please sign in partnership name by authorized person.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- -------------------------------------------------------------------------- -------------- ------------- --------------
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
- -------------------------------------------------------------------------- -------------- ------------- --------------
1. To approve the Agreement and Plan of Reorganization [ ] [ ] [ ]
- -------------------------------------------------------------------------- -------------- ------------- --------------
VOTE ON TRUSTEES FOR AGAINST ABSTAIN
ALL ALL
(Except as
Marked)*
- -------------------------------------------------------------------------- -------------- ------------- --------------
2. To elect the all of the nominees listed below to the Boards of
Directors (except as marked to the contrary below). [ ] [ ] [ ]
* Instruction: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.
- ---------------------------------------------------------------------------------------------------------------------
Ronald R. Warfield
Robert L. Phelps
Charlot R. Cole
Nancy J. Erickson
Ailene Miller
Wendell L. Shauman
Roger D. Grace
- -------------------------------------------------------------------------- -------------- ------------- --------------
3. To transact any other business that may properly come before the
meeting or any adjournment. [ ] [ ] [ ]
- -------------------------------------------------------------------------- -------------- ------------- --------------
Signature (Joint Owners) Date
EXHIBIT A
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
COUNTRY GROWTH FUND, INC.
COUNTRY ASSET ALLOCATION FUND, INC.
COUNTRY TAX EXEMPT BOND FUND, INC.
COUNTRY TAXABLE FIXED INCOME SERIES FUND, INC.
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this _____ day of _______, 2001 by and between COUNTRY GROWTH FUND, INC, a
Maryland corporation, for itself and on behalf of its sole series Country Growth
Fund, COUNTRY ASSET ALLOCATION FUND, INC., a Maryland corporation, for itself
and on behalf of its sole series Country Asset Allocation Fund, COUNTRY TAX
EXEMPT BOND FUND, INC., a Maryland corporation, for itself and on behalf of its
sole series Country Tax Exempt Bond Fund, COUNTRY TAXABLE FIXED INCOME SERIES
FUND, INC., a Maryland corporation, for itself and on behalf of its three series
Country Money Market Fund, Country Short-Term Government Bond Fund, and Country
Long-Term Bond Fund, and COUNTRY MUTUAL FUNDS TRUST, a Delaware business trust,
on behalf of its six series Country Growth Fund, Country Balanced Fund, Country
Tax Exempt Bond Fund, Country Money Market Fund, Country Short-Term Bond Fund,
and Country Bond Fund
WHEREAS, the COUNTRY GROWTH FUND, INC., COUNTRY ASSET ALLOCATION FUND,
INC., COUNTRY TAX EXEMPT BOND FUND, INC., and COUNTRY TAXABLE FIXED INCOME
SERIES FUND, INC., (each a "Company" and collectively, the "Companies") and the
COUNTRY MUTUAL FUNDS TRUST, (the "Trust") are open-end management investment
companies registered with the Securities and Exchange Commission (the "SEC")
under the Investment Company Act of 1940, as amended (the "Act").
WHEREAS, the parties desire that the Fund Assets and Liabilities (as
defined below) of the Country Growth Fund, Country Asset Allocation Fund,
Country Tax Exempt Bond Fund, Country Money Market Fund, Country Short-Term
Government Bond Fund, and Country Long-Term Bond Fund (each an "Acquired Fund"
and collectively, the "Acquired Funds") be conveyed to and, acquired and
assumed, respectively, by the Trust's Country Growth Fund, Country Balanced
Fund, Country Tax Exempt Bond Fund, Country Money Market Fund, Country
Short-Term Bond Fund, and Country Bond Fund, respectively (each an "Acquiring
Fund" and collectively, the "Acquiring Funds") in exchange for shares of equal
U.S. dollar value of such Acquiring Fund which shall thereafter promptly be
distributed to the shareholders of the Acquired Funds in connection with their
liquidation as described in this Agreement and set forth in Schedule A attached
hereto (each such acquisition and assumption of an Acquired Fund's Fund Assets
and Liabilities by the corresponding Acquiring Fund a "Reorganization," and
collectively, the "Reorganizations"); and
WHEREAS, the parties intend that each Reorganization qualify as a
"reorganization," within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that each Acquiring Fund and
corresponding Acquired Fund will each be a "party to a reorganization," within
the meaning of Section 368(b) of the Code, with respect to each respective
Reorganization.
NOW, THEREFORE, in accordance with the terms and conditions described
herein, the Acquired Funds and Acquiring Funds shall be consolidated as follows:
1. Conveyance of Fund Assets and Liabilities of the Acquired Funds.
(a) Except as provided below, at the Effective Time of the
Reorganization (as defined in Section 8) all assets of every
kind, and all interests, rights, privileges and powers of the
Acquired Funds (the "Fund Assets"), subject to all liabilities of
the Acquired Funds existing as of the Effective Time of the
Reorganization (the "Liabilities"), shall be transferred by each
Acquired Fund to each corresponding Acquiring Fund and shall be
accepted and assumed by such Acquiring Fund, as more particularly
set forth in this Agreement, such that at and after the Effective
Time of the Reorganization: (i) all Fund Assets of each Acquired
Fund shall become the assets of the corresponding Acquiring Fund;
and (ii) all Liabilities of each Acquired Fund shall attach to
the corresponding Acquiring Fund, enforceable against each
Acquiring Fund to the same extent as if originally incurred by
such Acquiring Fund.
(b) It is understood and agreed that the Fund Assets shall include
all property and assets of any nature whatsoever, including,
without limitation, all cash, cash equivalents, securities,
claims (whether absolute or contingent, known or unknown, accrued
or unaccrued) and receivables (including dividend and interest
receivables) owned or exercisable by an Acquired Fund, and any
deferred or prepaid expenses shown as an asset on such Acquired
Fund's books, that the Liabilities of an unknown accrued or
unaccrued, absolute or contingent, in all cases, existing at the
Effective Time of the Reorganization.
(c) At least fifteen (15) business days prior to the Closing Date (as
defined in Section 8), each Acquired Fund will provide to, or
cause to be provided to, the corresponding Acquiring Fund, a
schedule of its securities, other assets and its known
liabilities. It is understood and agreed that each such Acquired
Fund may sell any of the securities or other assets shown on such
schedule prior to the Effective Time of the Reorganization but
will not, without the prior approval of the corresponding
Acquiring Fund, acquire any additional securities other than
securities that the Acquiring Fund is permitted to purchase in
accordance with its stated investment objective and policies. At
least ten (10) business days prior to the Closing Date, each
Acquiring Fund will advise each corresponding Acquired Fund of
any investments of each such Acquired Fund shown on such schedule
that such Acquiring Fund would not be permitted to hold, pursuant
to its stated investment objective and policies or otherwise.
Each Acquired Fund, if requested by the corresponding Acquiring
Fund, will dispose of any such securities prior to the Closing
Date to the extent practicable and consistent with applicable
legal requirements. In addition, if it is determined that the
investment portfolios of an Acquired Fund and its corresponding
Acquiring Fund, when aggregated, would contain investments
exceeding certain percentage limitations applicable to such
Acquiring Fund, an Acquired Fund, if requested by the
corresponding Acquiring Fund, will dispose of a sufficient amount
of such investments as may be necessary to avoid violating such
limitations as of the Effective Time of the Reorganization.
(d) The Fund Assets shall be transferred and conveyed to the
Acquiring Funds on the following basis:
(1) In exchange for the transfer of the Fund Assets, each
Acquiring Fund shall simultaneously issue to the
corresponding Acquired Fund at the Effective Time of the
Reorganization full and fractional Shares of the Acquiring
Funds, as set forth in Schedule A attached hereto, having an
aggregate net asset value equal to the net value of the Fund
Assets minus Liabilities so conveyed and assumed, all
determined in accordance with this Agreement. In this
regard, the number of full and fractional shares of the
Acquiring Funds delivered to each Acquired Fund shall be
determined by dividing the value of the Fund Assets minus
Liabilities, computed in the manner and as of the time and
date set forth in this Agreement, by the net asset value of
one Acquiring Fund share of such designated class, computed
in the manner and as of the time and date set forth in this
Agreement.
(2) The net asset value of shares to be delivered by each
Acquiring Fund, and the net value of the Fund Assets minus
Liabilities to be conveyed by each Acquired Fund and assumed
by the Acquiring Funds, shall, in each case, be determined
as of the Valuation Time as defined in Section 3. The net
asset value of Shares of the Acquiring Funds shall be
computed in accordance with its then current valuation
procedures. In determining the value of the Fund Assets,
each security to be included in the Fund Assets shall be
priced in accordance with each Acquiring Fund's then current
valuation procedures.
2. Liquidation of Each Acquired Fund. At the Effective Time of the
Reorganization, each Acquired Fund shall make a liquidating
distribution to its shareholders as follows: Shareholders of record of
an Acquired Fund shall be credited with full and fractional shares of
the respective Shares that are issued by the corresponding Acquiring
Fund in connection with the Reorganization corresponding to the
Acquired Fund shares that are held of record by the shareholder at the
Effective Time of the Reorganization. Each such shareholder also shall
have the right to receive any unpaid dividends or other distributions
which were declared before the Effective Time of the Reorganization
with respect to the Acquired Fund shares that are held of record by
the shareholder at the Effective Time of the Reorganization, and the
Trust shall record on its books the ownership of the respective
Acquiring Fund shares by such shareholders (the "Transferor Record
Holders"). All of the issued and outstanding shares of an Acquired
Fund at the Effective Time of the Reorganization shall be redeemed and
canceled on the books of each Company at such time. As soon as
reasonably possible after the Effective Time of the Reorganization,
each Company shall wind up the affairs of each Acquired Fund and shall
file any final regulatory reports, including but not limited to any
Form N-SAR and Rule 24f-2 filings, with respect to each Acquired Fund,
and also shall take all other steps as are necessary and proper to
effect the termination or declassification of the Acquired Funds in
accordance with all applicable laws.
3. Valuation Time. The "Valuation Time" shall be the time as of which the
net asset value of each class of shares of the Acquired Funds and the
Acquiring Funds is determined pursuant to their respective valuation
procedures on the Closing Date or such earlier or later time as may be
mutually agreed to in writing by the parties hereto.
4. Certain Representations, Warranties and Agreements of each Company on
behalf of its corresponding Acquired Funds. Each Company, for itself
and, where appropriate, on behalf of its corresponding Acquired
Fund(s), represents and warrants to, and agrees with, the Trust, on
behalf of each Acquiring Fund as follows, with such representations,
warranties and agreements made on behalf of the Acquired Funds on a
several (and not joint, or joint and several) basis:
(a) Each Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of
Maryland. Each Company is registered with the SEC as an open-end
management investment company under the 1940 Act, and such
registration is in full force and effect.
(b) Each Company has the power to own all of its properties and
assets and to consummate the transactions contemplated herein,
and has all necessary federal, state and local authorizations to
carry on its business as now being conducted and to consummate
the transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized by the Board of Directors
of each Company on behalf of each Acquired Fund, and has been
executed and delivered by duly authorized officers of each
Company, and represents a valid and binding contract, enforceable
in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, arrangement, moratorium,
and other similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles. The
execution and delivery of this Agreement does not, and, subject
to the approval of shareholders referred to in Section 7, the
consummation of the transactions contemplated by this Agreement
will not, violate the Articles of Incorporation or the By-Laws of
each Company, or any material agreement or arrangement to which
each Company is a party or by which it is bound.
(d) Each Acquired Fund has elected to qualify and has qualified as a
regulated investment company under Part I of Subchapter M of
Subtitle A, Chapter 1, of the Code, as of and since its first
taxable year; each has been a regulated investment company under
such Part of the Code at all times since the end of its first
taxable year when it so qualified; and each qualifies and shall
continue to qualify as a regulated investment company for its
taxable year ending upon its liquidation.
(e) Each Company has valued, and will continue to value, the
portfolio securities and other assets of its corresponding
Acquired Fund(s) in accordance with applicable legal
requirements.
(f) The proxy statement and form of proxy included within each
Company's Schedule 14A (the "Proxy Statement"), from its
effective date with the SEC through the time of the shareholders
meeting referred to in Section 6 and the Effective Time of the
Reorganization, insofar as they relate to each Company, or the
Acquired Funds (i) shall comply in all material respects with the
provisions of the Securities Exchange Act of 1934, as amended
(the "1934 Act") and the 1940 Act, the rules and regulations
thereunder, and applicable state securities laws, and (11) shall
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements made therein not misleading.
(g) All of the issued and outstanding shares of each Company's
Acquired Funds have been validly issued and are fully paid and
non-assessable, and were offered for sale and sold in conformity
with the registration requirements of all applicable federal and
state securities laws.
(h) Each Company shall operate the business of its corresponding
Acquired Fund(s) in the ordinary course between the date hereof
and the Effective Time of the Reorganization, except that each
Company shall complete all measures in respect of its
corresponding Acquired Fund(s) prior to the Effective Time of the
Reorganization to ensure that each Reorganization qualifies as a
"reorganization" within the meaning of Section 368(a) of the
Code, regardless of whether such measures are in the ordinary
course. It is understood that such ordinary course of business
will include the declaration and payment of customary dividends
and distributions and any other dividends and distributions
deemed advisable in anticipation of the Reorganizations.
Notwithstanding anything herein to the contrary, each Company
shall take all appropriate action necessary in order for each
Company to receive the opinion provided for in Sections 9(f), (g)
and (h) .
(i) At the Effective Time of the Reorganization, each Company's
Acquired Fund(s) will have good and marketable title to the Fund
Assets and full right, power and authority to assign, deliver and
otherwise transfer such assets.
(j) At the Effective Time of the Reorganization, all federal and
other tax returns and reports of the Acquired Funds required by
law to have been filed by such time shall have been filed, and
all federal and other taxes shall have been paid so far as due,
or provision shall have been made for the payment thereof and, to
the best knowledge of management of each Company, no such return
or report shall be currently under audit and no assessment shall
have been asserted with respect to such returns or reports.
5. Certain Representations, warranties and Agreements of the Trust on
behalf of the Acquiring Funds. The Trust, on behalf of itself and
where appropriate, on behalf of each Acquiring Fund, represents and
warrants to, and agrees with, each Company on behalf of each Acquired
Fund as follows, with such representations, warranties and agreements
made on behalf of the Acquiring Funds on a several (and not joint, or
joint and several) basis:
(a) The Trust is a business trust duly created, validly existing and
in good standing under the laws of the State of Delaware and is
registered with the SEC as an open-end management investment
company under the 1940 Act and such registration is in full force
and effect.
(b) The Trust has the power to own all of its properties and assets
and to consummate the transactions contemplated herein, and has
all necessary federal, state and local authorizations to carry on
its business as now being conducted and to consummate the
transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized by the Board of Trustees
of the Trust on behalf of the Acquiring Funds, and executed and
delivered by duly authorized officers of the Trust, and
represents a valid and binding contract, enforceable in
accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, arrangement, moratorium
and other similar laws of general applicability relating to or
affecting creditors rights and to general equity principles. The
execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement
will not, violate the Amended and Restated Declaration of Trust
of the Trust or any material agreement or arrangement to which it
is a party or by which it is bound.
(d) Each Acquiring Fund has elected to qualify and has qualified as a
regulated investment company under Part i of Subchapter M of
Subtitle A, Chapter 1, of the Code, as of and since its first
taxable year; has been a regulated investment company under such
Part of the Code at all times since the end of its first taxable
year when it so qualified; and qualifies and shall continue to
qualify as a regulated investment company for its current taxable
year.
(e) The Trust has valued, and will continue to value, the portfolio
securities and other assets of the Acquiring Fund in accordance
with applicable legal requirements.
(f) The Proxy Statement, from its effective date with the SEC through
the time of the shareholders meeting referred to in Section 7 and
at the Effective Time of the Reorganization, insofar as it
relates to the Trust, or the Acquiring Funds (i) shall comply in
all material respects with the provisions of the 1934 Act and the
1940 Act, the rules and regulations thereunder, and state
securities laws, and (11) shall not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made
therein not misleading.
(g) The shares of the Acquiring Fund to be issued and delivered to
the corresponding Acquired Funds for the account of the
shareholders of each Acquired Fund, pursuant to the terms hereof,
shall have been duly authorized as of the Effective Time of the
Reorganization and, when so issued and delivered, shall be duly
and validly issued, fully paid and non-assessable, and no
shareholder of the Acquiring Funds shall have any preemptive
right of subscription or purchase in respect thereto.
(h) All of the issued and outstanding shares of the Acquiring Funds
have been validly issued and are fully paid and non-assessable,
and were offered for sale and sold in conformity with the
registration requirements of all applicable federal and state
securities laws.
(i) The Trust shall operate the business of the Acquiring Funds in
the ordinary course between the date hereof and the Effective
Time of the Reorganization, it being understood that such
ordinary course of business will include the declaration and
payment of customary dividends and distributions and any other
dividends and distributions deemed advisable in anticipation of
the Reorganizations. Notwithstanding anything herein to the
contrary, the Trust shall take all appropriate action necessary
in order for the Trust to receive the opinion provided for in
Sections 10(d), (e) and (f).
(j) At the Effective Time of the Reorganization, all federal and
other tax returns and reports of the Acquiring Fund required by
law to have been filed by such time shall have been filed, and
all federal and other taxes shall have been paid so far as due,
or provision shall have been made for the payment thereof and, to
the best knowledge of management of the Trust, no such return or
report shall be currently under audit and no assessment shall
have been asserted with respect to such returns or reports.
6. Regulatory Filings. Each Company has filed the Proxy Statement with
the SEC.
7. Shareholder Action. After the effective date of the Proxy Statement
each Company shall hold a meeting(s) of the shareholders of each
Acquired Fund for the purpose of considering and voting upon:
(a) approval of this Agreement and the Reorganization contemplated
hereby; and
(b) such other matters as may be determined by the Board of Directors
of each Company.
8. Closing Date, Effective Time of the Reorganization. The "Closing Date"
shall be October 31, 2001, or such earlier or later date as may be
mutually agreed in writing by the parties hereto. Delivery of the Fund
Assets and the shares of each Acquiring Fund to be issued pursuant to
Section 1 and the liquidation of the Acquired Funds pursuant to
Section 2 shall occur on the day following the Closing Date, whether
or not such day is a business day, or on such other date, and at such
place and time, as may be mutually agreed in writing, by the parties
hereto. The date and time at which such actions are taken are referred
to herein as the "Effective Time of the Reorganization." To the extent
any Fund Assets are, for any reason, not transferred at the Effective
Time of the Reorganization, each Company shall cause such Fund Assets
to be transferred in accordance with this Agreement at the earliest
practicable date thereafter.
9. Conditions to the Trust's Obligations on Behalf of the Acquiring
Funds. The obligations of the Trust hereunder shall be subject to the
following conditions precedent:
(a) This Agreement and the Reorganization shall have been approved by
the Board of Directors of each Company and by a requisite vote of
the shareholders of the Acquired Funds in the manner required by
each Company's Articles of Incorporation, By-Laws, applicable law
and this Agreement.
(b) All representations and warranties of each Company made in
this Agreement shall be true and correct in all material
respects as if made at and as of the Valuation Time and the
Effective Time of the Reorganization.
(c) Each Company shall have delivered to the Trust a statement
of assets and liabilities of each Acquired Fund, showing the
tax basis of such assets for federal income tax purposes by
lot and the holding periods of such assets, as of the
Valuation Time.
(d) Each Company shall have duly executed and delivered to the
Trust such bills of sale, assignments, certificates and
other instruments of transfer ("Transfer Documents") as the
Trust may deem necessary or desirable to transfer all of the
Acquired Funds' rights, title and interest in and to the
Fund Assets.
(e) Each Company shall have delivered a certificate executed in
its name by an appropriate officer, in a form reasonably
satisfactory to the Trust and dated as of the Closing Date,
to the effect that the representations and warranties of
each Company on behalf of each Acquired Fund made in this
Agreement are true and correct at and as of the Valuation
Time and that, to the best of its knowledge, the Fund Assets
include only assets which the corresponding Acquiring Fund
may properly acquire under its investment objectives,
policies and limitations and may otherwise be lawfully
acquired by such Acquiring Fund.
(f) Each Company shall have received an opinion of Dechert, upon
which each Acquiring Fund and their shareholders may rely,
based upon representations made in certificates provided by
each Company, and/or its affiliates and/or principal
shareholders of the Acquired Funds to Dechert, addressed to
each Company in a form reasonably satisfactory to it, and
dated as of the Closing Date, substantially to the effect
that, for federal income tax purposes, each Reorganization
will qualify as a "reorganization" within the meaning of
Section 368(a) of the Code, and the Acquired Funds and the
Acquiring Funds will be a party to a "reorganization,"
within the meaning of Section 368 (b) of the Code, with
respect to the Reorganizations.
(g) The Proxy Statement shall have become effective and no stop
order suspending the effectiveness shall have been
instituted, or to the knowledge of each Company,
contemplated by the SEC.
(h) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it
is sought to restrain or prohibit, or obtain damages or
other relief in connection with, this Agreement or the
transactions contemplated herein.
(i) The SEC shall not have issued any unfavorable advisory
report under Section 25(b) of the 1940 Act nor instituted
any proceeding seeking to enjoin consummation of the
transactions contemplated by this Agreement under Section
25(c) of the 1940 Act.
(j) Each Company on behalf of each Acquired Fund shall have
performed and complied in all material respects with each of
its agreements and covenants required by this Agreement to
be performed or complied with by it prior to or at the
Valuation Time and the Effective Time of the Reorganization.
(k) Each Company shall have received a duly executed instrument
whereby each Acquiring Fund assumes all of the liabilities
of each Company's corresponding Acquired Fund.
(l) Prior to the Valuation Time, each Acquired Fund shall have
declared a dividend or dividends, with a record date and
ex-dividend date prior to the Valuation Time, which,
together with all previous dividends, shall have the effect
of distributing to its shareholders all of its "net
investment company taxable income" (as defined in the Code
and computed without regard to any deduction for dividends
paid), if any, for all taxable periods or years ending on or
before the Effective Time of the Reorganization, and all of
its net capital gain, if any, realized in taxable periods of
years ending on or before Effective Time of the
Reorganization.
10. Conditions to each Company's Obligations on behalf of the Acquired
Funds. The obligations of each Company hereunder shall be subject to
the following conditions precedent:
(a) This Agreement and the Reorganization shall have been approved by
the Board of Trustees of the Trust on behalf of each Acquiring
Fund.
(b) All representations and warranties of the Trust made in this
Agreement shall be true and correct in all material respects as
if made at and as of the Valuation Time and the Effective Time of
the Reorganization.
(c) The Trust shall have delivered a certificate executed in its name
by an appropriate officer, in a form reasonably satisfactory to
each Company and dated as of the Closing Date, to the effect that
the representations and warranties of each Acquiring Fund made in
this Agreement are true and correct at and as of the Valuation
Time.
(d) The Trust shall have received an opinion of Dechert, upon which
each Acquired Fund and its shareholders may rely, based upon
representations made in certificates provided by the Trust,
and/or its affiliates and/or principal shareholders of the
Acquiring Funds to Dechert, addressed to the Trust in a form
reasonably satisfactory to it, and dated as of the Closing Date,
substantially to the effect that, for federal income tax
purposes, each Reorganization will qualify as a "reorganization"
within the meaning of Section 368 (a) of the Code, and the
Acquired Funds and the Acquiring Funds will each be a party to a
"reorganization," within the meaning of Section 368 (b) of the
Code, with respect to the Reorganizations.
(e) The Proxy Statement shall have become effective and no stop order
suspending such effectiveness shall have been instituted or, to
the knowledge of the Trust, contemplated by the SEC.
(f) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit or obtain damages or other relief
in connection with this Agreement or the transactions
contemplated herein.
(g) The SEC shall not have issued any unfavorable advisory report
under Section 25 (b) of the 1940 Act nor instituted any
proceeding seeking to enjoin consummation of the transactions
contemplated by this Agreement under Section 25 (c) of the 1940
Act.
(h) The Trust on behalf of each Acquiring Fund shall have performed
and complied in all material respects with each of its agreements
and covenants required by this Agreement to be performed or
complied with by it prior to or at the Valuation Time and the
Effective Time of the Reorganization.
11. Tax Matters.
(a) Each Company and the Trust hereby represent and warrant and that
each shall use its best efforts to cause each Reorganization to
qualify, and will not (whether before or after consummation of
the Reorganizations) take any actions that could prevent each
Reorganization from qualifying, as a "reorganization" under the
provisions of Section 368 of the Code.
(b) Except where otherwise required by law, the parties shall not
take a position on any tax returns inconsistent with the
treatment of each Reorganization for tax purposes as a
"reorganization," within the meaning of Section 368 (a) of the
Code and each Acquiring Fund and each Acquired Fund will comply
with the record keeping and information filing requirements of
Section 1.368-3 of the Treasury Regulation in accordance
therewith.
12. Survival of Representations and Warranties. The representations and
warranties of the Trust on behalf of each Acquiring Fund set forth in
this Agreement shall survive the delivery of the Fund Assets to such
Acquiring Fund and the issuance of the shares of each Acquiring Fund
at the Effective Time of the Reorganization to the corresponding
Acquired Fund shareholders.
13. Termination of Agreement. This Agreement may be terminated by a party
at or, in the case of Subsection 13(c), below, at any time prior to,
the Effective Time of the Reorganization by a vote of a majority of
its Board members as provided below:
(a) By the Trust on behalf of its Acquiring Funds if the conditions
set forth in Section 9 are not satisfied as specified in said
Section;
(b) By each Company on behalf of its Acquired Funds if the conditions
set forth in Section 10 are not satisfied as specified in said
Section;
(c) By mutual written consent of the Trust and each Company.
14. Governing Law. This Agreement and the transactions contemplated hereby
shall be governed, construed and enforced in accordance with the laws
of the State of Delaware, except to the extent preempted by federal
law.
15. Brokerage Fees and Expenses.
(a) The Trust represents and warrants that there are no brokers or
finders entitled to receive any payments in connection with the
transactions provided for herein.
(b) The Companies and/or their affiliates will be responsible for the
expenses related to entering into and carrying out the provisions
of this Agreement, whether or not the transactions contemplated
hereby are consummated.
16. Amendments
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of
each Company, acting on behalf of the Acquired Funds or the Trust, acting
on behalf of the Acquiring Funds; provided, however, that following the
meeting of the shareholders of an Acquired Fund, no such amendment may have
the effect of changing the provisions for determining the number of shares
of the Acquiring Funds to be issued to the Transferor Record Holders under
this Agreement to the detriment of such Transferor Record Holders, or
otherwise materially and adversely affecting an Acquired Fund, without such
Acquired Fund obtaining its shareholders' further approval:
(a) At any time prior to or (to the fullest extent permitted by law)
after approval of this Agreement by the shareholders of an
Acquired Fund, each Company on behalf of an Acquired Fund, may
waive any breach by the Trust, on behalf of an Acquiring Fund, or
the failure to satisfy any of the conditions to its obligations
(such waiver to be in writing and signed by an officer of such
registered investment companies);
(b) At any time prior to or (to the fullest extent permitted by law)
after approval of this Agreement by the shareholders of an
Acquired Fund, the Trust, on behalf of an Acquiring Fund, may
waive any breach by each Company on behalf of an Acquired Fund,
or the failure to satisfy any of the conditions to either of
their obligations (such waiver to be in writing and signed by an
officer of such registered investment companies).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers designated below as of the
date first written above.
Dated: _______________, 2001
COUNTRY GROWTH FUND, INC.
By: __________________________
Its: __________________________
ATTEST: _____________________
Secretary
COUNTRY ASSET ALLOCATION FUND, INC.
By: __________________________
Its: __________________________
ATTEST: _____________________
Secretary
COUNTRY TAX EXEMPT BOND FUND, INC.
By: __________________________
Its: __________________________
ATTEST: _____________________
Secretary
COUNTRY TAXABLE FIXED INCOME SERIES FUND, INC.
By: __________________________
Its: __________________________
ATTEST: _____________________
Secretary
COUNTRY MUTUAL FUNDS TRUST
on behalf of its series Country Growth Fund, Country Balanced Fund, Country Tax
Exempt Bond Fund, Country Short Term Bond Fund, Country Money Market Fund and
Country Bond Fund By: __________________________
Its: __________________________
ATTEST: _____________________
Secretary
SCHEDULE A
SHAREHOLDERS OWNING SHARES OF WOULD RECEIVE SHARES OF THE
THE FOLLOWING ACQUIRED FUND FOLLOWING ACQUIRING FUND AND
AND SERIES OF EACH COMPANY: SERIES OF THE TRUST:
COUNTRY Growth Fund COUNTRY Growth Fund
COUNTRY Asset Allocation Fund COUNTRY Balanced Fund
COUNTRY Tax Exempt Bond Fund COUNTRY Tax Exempt Bond Fund
COUNTRY Money Market Fund COUNTRY Money Market Fund
COUNTRY Short-Term Government Bond Fund COUNTRY Short-Term Bond Fund
COUNTRY Long-Term Bond Fund COUNTRY Bond Fund
EXHIBIT B
DECLARATION OF TRUST
OF
COUNTRY MUTUAL FUNDS TRUST
a Delaware Business Trust
Dated as of August 9, 2001
Principal Place of Business
Bloomington, Illinois
TABLE OF CONTENTS
Page
ARTICLE I Name and Definitions.................................................1
Section 1. Name.....................................................1
Section 2. Definitions..............................................1
(a) "Bylaws".................................................1
(b) "Certificate of Trust"...................................1
(c) "Class"..................................................1
(d) "Commission".............................................1
(e) "Declaration of Trust"...................................1
(f) "Delaware Act"...........................................1
(g) "Interested Person"......................................2
(h) "Manager"................................................2
(i) "1940 Act"...............................................2
(j) "Person".................................................2
(k) "Principal Underwriter"..................................2
(l) "Series".................................................2
(m) "Shareholder"............................................2
(n) "Shares".................................................2
(o) "Trust"..................................................2
(p) "Trust Property".........................................2
(q) "Trustees"...............................................2
ARTICLE II Purpose of Trust....................................................2
ARTICLE III Shares 3
Section 1. Division of Beneficial Interest..........................3
Section 2. Ownership of Shares......................................4
Section 3. Transfer of Shares.......................................4
Section 4. Investments in the Trust.................................4
Section 5. Status of Shares and Limitation of Personal Liability....4
Section 6. Establishment and Designation of Series or Class.........4
(a) Assets Held with Respect to a Particular Series..........5
(b) Liabilities Held with Respect to a Particular Series.....5
(c) Dividends, Distributions, Redemptions, and Repurchases...6
(d) Equality.................................................6
(e) Fractions................................................6
(f) Exchange Privilege.......................................6
(g) Combination of Series or Class...........................7
Section 7. Indemnification of Shareholders..........................7
ARTICLE IV Trustees 7
Section 1. Number, Election and Tenure..............................7
Section 2. Effect of Death, Resignation, . . . etc. of a Trustee....7
Section 3. Powers...................................................8
Section 4. Payment of Expenses by the Trust........................11
Section 5. Payment of Expenses by Shareholders.....................11
Section 6. Ownership of Assets of the Trust........................12
Section 7. Service Contracts.......................................12
Section 8. Trustees and Officers as Shareholders...................13
Section 9. Independent Trustees....................................13
ARTICLE V Shareholders' Voting Powers and Meetings............................14
Section 1. Voting Powers, Meetings, and Record Dates...............14
Section 2. Quorum and Required Vote................................14
Section 3. Record Dates............................................15
Section 4. Additional Provisions...................................15
ARTICLE VI Net Asset Value, Distributions and Redemptions.....................15
Section 1. Determination of Net Asset Value, Net Income,
and Distributions.......................................15
Section 2. Redemptions and Repurchases.............................15
ARTICLE VII Compensation, Limitation of Liability and Indemnification
of Trustees.......................................................17
Section 1. Compensation............................................17
Section 2. Limitation of Liability.................................17
Section 3. Indemnification.........................................18
Section 4. Trustee's Good Faith Action, Expert Advice, No Bond
or Surety...............................................19
Section 5. Insurance...............................................19
ARTICLE VIII Miscellaneous....................................................19
Section 1. Liability of Third Persons Dealing with Trustees........19
Section 2. Termination of the Trust or Any Series or Class.........20
Section 3. Reorganization..........................................20
Section 4. Amendments..............................................21
Section 5. Filing of Copies, References, Headings..................21
Section 6. Applicable Law..........................................22
Section 7. Provisions in Conflict with Law or Regulations..........22
Section 8. Business Trust Only.....................................22
DECLARATION OF TRUST
OF
COUNTRY MUTUAL FUNDS TRUST
THIS DECLARATION OF TRUST is made and entered into as of the date set forth
below by the Trustees named hereunder for the purpose of forming a Delaware
business trust in accordance with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby direct that the Certificate of Trust be
filed with the office of the Secretary of State of the State of Delaware and do
hereby declare that the Trustees will hold IN TRUST all cash, securities, and
other assets which the Trust now possesses or may hereafter acquire from time to
time in any manner and manage and dispose of the same upon the following terms
and conditions for the benefit of the holders of Shares of this Trust.
ARTICLE I
Name and Definitions
Section 1. Name. This Trust shall be known as Country Mutual Funds Trust
and the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) "Bylaws" shall mean the Bylaws of the Trust as amended from time
to time, which Bylaws are expressly herein incorporated by reference as
part of the "governing instrument" within the meaning of the Delaware Act;
(b) "Certificate of Trust" means the certificate of trust, as amended
or restated from time to time, filed by the Trustees in the office of the
Secretary of State of the State of Delaware in accordance with the Delaware
Act;
(c) "Class" means a class of Shares of a Series of the Trust
established in accordance with the provisions of Article III hereof;
(d) "Commission" shall have the meaning given such term in the 1940
Act;
(e) "Declaration of Trust" means this Declaration of Trust, as amended
or restated from time to time;
(f) "Delaware Act" means the Delaware Business Trust Act 12 Del.
Codess.ss.3801 et seq., as amended from time to time;
(g) "Interested Person" shall have the meaning given it in section
2(a)(19) of the 1940 Act;
(h) "Manager" means a party furnishing services to the Trust pursuant
to any contract described in Article IV, section 7(a) hereof;
(i) "1940 Act" means the Investment Company Act of 1940 and the rules
and regulations thereunder, all as amended from time to time;
(j) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates, and other
entities, whether or not legal entities, and governments and agencies and
political subdivisions thereof, whether domestic or foreign;
(k) "Principal Underwriter" shall have the meaning given such term in
the 1940 Act;
(l) "Series" means each series of Shares established and designated
under or in accordance with the provisions of Article III hereof;
(m) "Shareholder" means a record owner of outstanding Shares;
(n) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and
includes fractions of shares as well as whole shares;
(o) "Trust" means the Delaware Business Trust established under the
Delaware Act by this Declaration of Trust and the filing of the Certificate
of Trust in the office of the Secretary of State of the State of Delaware;
(p) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is from time to time owned or held by or for
the account of the Trust; and
(q) "Trustees" means the Person or Persons who have signed this
Declaration of Trust and all other Persons who may from time to time be
duly elected or appointed to serve as Trustees in accordance with the
provisions hereof, in each case so long as such Person shall continue in
office in accordance with the terms of this Declaration of Trust, and
reference herein to a Trustee or the Trustees shall refer to such Person or
Persons in his or her or their capacity as Trustees hereunder.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the business
of an open-end management investment company registered under the 1940 Act
through one or more Series investing primarily in securities, and to carry on
such other business as the Trustees may from time to time determine pursuant to
their authority under this Declaration of Trust.
ARTICLE III
Shares
Section 1. Division of Beneficial Interest. The beneficial interest in the
Trust shall be divided into one or more Series. The Trustees may divide each
Series into two or more Classes. Subject to the further provisions of this
Article III and any applicable requirements of the 1940 Act, the Trustees shall
have full power and authority, in their sole discretion, and without obtaining
any authorization or vote of the Shareholders of any Series or Class thereof,
(i) to divide the beneficial interest in each Series or Class thereof into
Shares, with or without par value as the Trustees shall determine, (ii) to issue
Shares without limitation as to number (including fractional Shares) to such
Persons and for such amount and type of consideration, subject to any
restriction set forth in the Bylaws, including cash or securities, at such time
or times and on such terms as the Trustees may deem appropriate, (iii) to
establish and designate and to change in any manner any Series or Class thereof
and to fix such preferences, voting powers, rights, duties and privileges and
business purpose of each Series or Class thereof as the Trustees may from time
to time determine, which preferences, voting powers, rights, duties and
privileges may be senior or subordinate to (or in the case of business purpose,
different from) any existing Series or Class thereof and may be limited to
specified property or obligations of the Trust or profits and losses associated
with specified property or obligations of the Trust, (iv) to divide or combine
the Shares of any Series or Class thereof into a greater or lesser number
without thereby materially changing the proportionate beneficial interest of the
Shares of such Series or Class thereof in the assets held with respect to that
Series, (v) to classify or reclassify any issued Shares of any Series or Class
thereof into Shares of one or more Series or Classes, (vi) to change the name of
any Series or Class thereof, (vii) to abolish any one or more Series or Classes
thereof, and (viii) to take such other action with respect to the Shares as the
Trustees may deem desirable.
Subject to the distinctions permitted among Classes of the same Series as
established by the Trustees, consistent with the requirements of the 1940 Act,
each Share of a Series of the Trust shall represent an equal beneficial interest
in the net assets of such Series, and each holder of Shares of a Series shall be
entitled to receive such holder's pro rata share of distributions of income and
capital gains, if any, made with respect to such Series. Upon redemption of the
Shares of any Series, the applicable Shareholder shall be paid solely out of the
funds and property of such Series of the Trust.
All references to Shares in this Declaration of Trust 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.
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 non-assessable. Except as otherwise provided by the
Trustees, Shareholders shall have no preemptive or other right to subscribe to
any additional Shares or other securities issued by the Trust.
Section 2. Ownership of Shares. The ownership of Shares shall be recorded
on the books of the Trust or those of a transfer or similar agent for the Trust,
which books shall be maintained separately for the Shares of each Series or
Class of the Trust. No certificates certifying the ownership of Shares shall be
issued except as the Trustees may otherwise determine from time to time. The
Trustees may make such rules as they consider appropriate for the issuance of
Share certificates, the transfer of Shares of each Series or Class of the Trust
and similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to the
identity of the Shareholders of each Series or Class of the Trust and as to the
number of Shares of each Series or Class of the Trust held from time to time by
each Shareholder.
Section 3. Transfer of Shares. Except as otherwise provided by the
Trustees, Shares shall be transferable on the books of the Trust only by the
record holder thereof or by his or her duly authorized agent 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, and
subject to any further requirements specified by the Trustees or contained in
the Bylaws, the transfer shall be recorded on the books of the Trust. Until a
transfer is so recorded, the Shareholder of record of Shares 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 or registrar or any officer, employee, or
agent of the Trust, shall be affected by any notice of a proposed transfer.
Section 4.Investments in the Trust. Investments may be accepted by the
Trust from Persons, at such times, on such terms, and for such consideration as
the Trustees from time to time may authorize.
Section 5.Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof. The death,
incapacity, dissolution, termination, or bankruptcy of a Shareholder during the
existence of the Trust shall not operate to terminate the Trust, nor entitle the
representative of any such Shareholder to an accounting or to take any action in
court or elsewhere against the Trust or the Trustees, but entitles such
representative only to the rights of such Shareholder under this Declaration of
Trust. Ownership of Shares shall not entitle the Shareholder to any title in or
to the whole or any part of the Trust Property or right to call for a
participation or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders as partners. No Shareholder
shall 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. Neither the Trust nor the Trustees, nor any officer, employee, or
agent of the Trust shall have any power to bind personally any Shareholders,
nor, except as specifically provided herein, to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
Section 6.Establishment and Designation of Series or Class. The
establishment and designation of any Series or Class of Shares of the Trust
shall be effective upon the adoption by a majority of the then Trustees of a
resolution that sets forth such establishment and designation and the relative
rights and preferences of such Series or Class of the Trust, whether directly in
such resolution or by reference to another document including, without
limitation, any registration statement of Trust, or as otherwise provided in
such resolution.
Shares of each Series or Class of the Trust established pursuant to this
Article III, unless otherwise provided in the resolution establishing such
Series or Class, shall have the following relative rights and preferences:
(a) Assets Held with Respect to a Particular 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 from
whatever source derived (including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets and any funds
or payments derived from any reinvestment of such proceeds in whatever form
the same may be) shall irrevocably be held separately with respect to that
Series for all purposes, subject only to the rights of creditors of such
Series from the assets of the Trust and every other Series, and shall be so
recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits and proceeds thereof, from whatever
source derived, (including, without imitation, 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, are herein referred to as "assets held with respect to" that
Series. In the event that there are any assets, income, earnings, profits
and proceeds thereof, funds or payments which are not readily identifiable
as assets held with respect to any particular Series (collectively "General
Assets"), the Trustees shall allocate such General Assets to, between or
among any one or more of the Series in such manner and on such basis as the
Trustees, in their sole discretion, deem fair and equitable, and any
General Assets so allocated to a particular Series shall be held with
respect to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for all
purposes. Separate and distinct records shall be maintained for each Series
and the assets held with respect to each Series shall be held and accounted
for separately from the assets held with respect to all other Series and
the General Assets of the Trust not allocated to such Series.
(b) Liabilities Held with Respect to a Particular Series. The assets
of the Trust held with respect to each particular Series shall be charged
against the liabilities of the Trust held with respect to that Series and
all expenses, costs, charges, and reserves attributable to that Series,
except that liabilities and expenses allocated solely to a particular Class
shall be borne by that Class. Any general liabilities of the Trust which
are not readily identifiable as being held with respect to any particular
Series or Class shall be allocated and charged by the Trustees to and among
any one or more of the Series or Classes in such manner and on such basis
as the Trustees in their sole discretion deem fair and equitable. All
liabilities, expenses, costs, charges, and reserves so charged to a Series
or Class are herein referred to as "liabilities held with respect to" that
Series or Class. Each allocation of liabilities, expenses, costs, charges,
and reserves by the Trustees shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes. Without limiting
the foregoing, but subject to the right of the Trustees 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 held with respect to such Series only and not against
the assets of the Trust generally or against the assets held with respect
to any other Series. Notice of this contractual limitation on liabilities
among Series may, in the Trustees' 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 liabilities among
Series (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, 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.
(c) Dividends, Distributions, Redemptions, and Repurchases.
Notwithstanding any other provisions of this Declaration of Trust,
including, without limitation, Article VI, no dividend or distribution,
including, without limitation, any distribution paid upon termination of
the Trust or of any Series or Class with respect to, nor any redemption or
repurchase of, the Shares of any Series or Class, shall be effected by the
Trust other than from the assets held with respect to such Series, nor
shall any Shareholder of any particular Series or Class otherwise have any
right or claim against the assets held with respect to any other Series
except to the extent that such Shareholder has such a right or claim
hereunder as a Shareholder of such other Series. The Trustees shall have
full discretion, to the extent not inconsistent with the 1940 Act, to
determine which items shall be treated as income and which items as
capital, and each such determination and allocation shall be conclusive and
binding upon the Shareholders.
(d) Equality. All the Shares of each particular Series shall represent
an equal proportionate interest in the assets held with respect to that
Series (subject to the liabilities held with respect to that Series or
Class thereof and such rights and preferences as may have been established
and designated with respect to any Class within such Series), and each
Share of any particular Series shall be equal to each other Share of that
Series. With respect to any Class of a Series, each such Class shall
represent interests in the assets of that Series and have identical voting,
dividend, liquidation and other rights and the same terms and conditions,
except that expenses allocated to a Class may be borne solely by such Class
as determined by the Trustees, and voting rights of each Series or Class
shall be determined in accordance with Article V.
(e) Fractions. Any fractional Share of a Series or Class thereof,
shall carry proportionately all the rights and obligations of a whole Share
of that Series or Class, including rights with respect to voting, receipt
of dividends and distributions, redemption of Shares and termination of the
Trust.
(f) Exchange Privilege. The Trustees shall have the authority to
provide that the holders of Shares of any Series or Class shall have the
right to exchange said Shares for Shares of one or more other Series of
Shares or Class of Shares of the Trust or of other investment companies
registered under the 1940 Act in accordance with such requirements and
procedures as may be established by the Trustees.
(g) Combination of Series or Class. The Trustees shall have the
authority, without the approval of the Shareholders of any Series or Class
unless otherwise required by applicable law, to combine the assets and
liabilities held with respect to any two or more Series or Classes into
assets and liabilities held with respect to a single Series or Class.
Section 7. Indemnification of Shareholders. In case any 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 IV
Trustees
Section 1. Number, Election and Tenure. The number of Trustees shall
initially be one, who shall be Paul M. Harmon. Hereafter, the number of Trustees
shall at all times be at least one and no more than fifteen as determined, from
time to time, by the Trustees pursuant to Section 3 of this Article IV. To the
extent required by applicable law, the Shareholders may elect Trustees at any
meeting of Shareholders called by the Trustees for that purpose. Any Trustee may
be removed at any meeting of Shareholders by a vote of two-thirds of the
outstanding Shares of the Trust. Each Trustee shall serve during the lifetime of
the Trust until he or she dies, resigns, has reached the mandatory retirement
age as set by the Trustees, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed, or, if sooner, until the election and
qualification of his or her successor. In the event that less than the majority
of the Trustees holding office have been elected by the Shareholders, the
Trustees then in office shall call a meeting of Shareholders for the election of
Trustees. Any Trustee may resign at any time by written instrument signed by him
or her and delivered to any officer of the Trust or to a meeting of the
Trustees. Such resignation shall be effective upon receipt unless specified to
be effective at some other time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal. The
Shareholders may elect Trustees at any meeting of Shareholders called by the
Trustees for that purpose.
Section 2. Effect of Death, Resignation, . . . etc. of a Trustee. The
death, resignation, declination to serve, retirement, removal or incapacity of
one or more Trustees, or all of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration of
Trust. Whenever there shall be fewer than the designated number of Trustees,
until additional Trustees are elected or appointed as provided herein to bring
the total number of Trustees equal to the designated number, the Trustees in
office, regardless of their number, shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by this
Declaration of Trust. As conclusive evidence of such vacancy, a written
instrument certifying the existence of such vacancy may be executed by an
officer of the Trust or by a majority of the Trustees. In the event of the
death, declination, resignation, retirement, removal, or incapacity of all the
then Trustees within a short period of time and without the opportunity for at
least one Trustee being able to appoint additional Trustees to replace those no
longer serving, the Trust's Manager(s) are empowered to appoint new Trustees
subject to the provisions of section 16(a) of the 1940 Act. In that case, any
officer of the Trust may call a Shareholders meeting for the election of
Trustees.
Section 3. Powers. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by the Trustees, and the Trustees
shall have all powers necessary or convenient to carry out that responsibility
including the power to engage in securities transactions of all kinds on behalf
of the Trust. Without limiting the foregoing, the Trustees may: adopt Bylaws not
inconsistent with this Declaration of Trust providing for the management of the
affairs of the Trust and may amend and repeal such Bylaws to the extent that
such Bylaws do not reserve that right to the Shareholders; enlarge or reduce the
number of Trustees; remove any Trustee with or without cause at any time by
written instrument signed by a least two-thirds of the number of Trustees prior
to such removal, specifying the date when such removal shall become effective,
and fill vacancies caused by enlargement of their number or by the death,
resignation, retirement or removal of a Trustee; elect and remove, with or
without cause, such officers and appoint and terminate such agents as they
consider appropriate; establish and terminate one or more committees, that may
exercise the powers and authority of the Board of Trustees to the extent that
the Trustees so determine; employ one or more custodians of the assets of the
Trust and may authorize such custodians to employ subcustodians and to deposit
all or any part of such assets in a system or systems for the central handling
of securities or with a Federal Reserve Bank; employ an administrator for the
Trust and may authorize such administrator to employ subadministrators; employ
an investment adviser or other Manager of the Trust and may authorize such
Person to employ subadvisers; retain a transfer agent or a Shareholder servicing
agent, or both; provide for the issuance and distribution of Shares by the Trust
directly or through one or more Principal Underwriters or otherwise; redeem,
repurchase and transfer Shares pursuant to applicable law; set record dates for
the determination of Shareholders with respect to various matters; declare and
pay dividends and distributions to Shareholders of each Series from the assets
of such Series; and in general delegate such authority as they consider
desirable to any officer of the Trust, to any committee established by the
Trustees and to any agent or employee of the Trust or to any such custodian,
transfer or Shareholder servicing agent, Principal Underwriter, investment
adviser, administrator or other Manager. 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 Declaration of Trust, the presumption shall
be in favor of a grant of power to the Trustees. Unless otherwise specified
herein or in the Bylaws or required by law, any action by the Trustees shall be
deemed effective if approved or taken by a majority of the Trustees present at a
meeting of Trustees at which a quorum of Trustees is present, within or without
the State of Delaware.
Without limiting the foregoing, the Trustees shall have the power and
authority to cause the Trust (or to act on behalf of the Trust):
(a) To invest and reinvest cash and other property, to hold cash and
other property uninvested, and to subscribe for, invest in, reinvest in,
purchase or otherwise acquire, own, hold, pledge, sell, assign, transfer,
exchange, distribute, write options on, lend or otherwise deal in or
dispose of contracts for the future acquisition or delivery of, securities,
property and instruments of every nature and kind, including, without
limitation, all types of bonds, debentures, stocks, negotiable or
non-negotiable instruments, obligations, evidences of indebtedness,
certificates of deposit or indebtedness, commercial papers, repurchase
agreements, bankers' acceptances, currency (including foreign currency) and
other securities, property, and instruments of any kind, issued, created,
guaranteed, or sponsored by any and all Persons, including without
limitation, states, territories, and possessions of the United States and
the District of Columbia and any political subdivision, agency, or
instrumentality thereof, and foreign government or any political
subdivision of the United States Government or any foreign government, or
any international instrumentality, or by any bank or savings institution,
or by any corporation or organization organized under the laws of the
United States or of any state, territory, or possession thereof, or by any
corporation or organization organized under any foreign law, or in "when
issued" contracts for any such securities, property or instruments, to
change the investments of the assets of the Trust; and to exercise any and
all rights, powers, and privileges of ownership or interest in respect of
any and all such investments of every kind and description, including,
without limitation, the right to consent and otherwise act with respect
thereto, with power to designate one or more Persons, to exercise any of
said rights, powers, and privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or
write options (including, options on futures contracts) in respect to, or
otherwise deal in any property rights relating to, any or all of the assets
of the Trust or any Series;
(c) 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 proxies or powers of attorney to such Person or Persons as the
Trustees shall deem proper, granting to such Person or Persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(d) To exercise powers and right of subscription or otherwise which in
any manner arise out of ownership or securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in its
own name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise;
(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which
is held in the Trust; to consent to any contract, lease, mortgage, purchase
or sale of property by such corporation or issuer; and to pay calls or
subscriptions with respect to any security held in the Trust;
(g) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay and to pay, such
portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(h) To compromise, arbitrate or otherwise, adjust claims in favor of
or against the Trust or any matter in controversy, including, but not
limited to, claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(j) To borrow funds or other property in the name of the Trust
exclusively for Trust purposes and in connection therewith issue notes or
other evidence of indebtedness; and to mortgage and pledge the Trust
Property or any part thereof to secure any or all of such indebtedness;
(k) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge
the Trust Property or any part thereof to secure any of or all of such
obligations;
(l) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct
of the business, including, without limitation, insurance policies insuring
the assets of the Trust or payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, Principal
Underwriters, or independent contractors of the Trust, individually against
all claims and liabilities of every nature arising by reason of holding,
being or having held any such office or position, or by reason of any
action, alleged to have been taken or omitted by any such Person as
Trustee, officer employee, agent, investment adviser, Principal
Underwriter, or independent contractor, including any action taken or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have
the power to indemnify such Person against liability;
(m) To adopt, establish and carry out pension, profit-sharing, Share
bonus, Share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of
the Trust;
(n) To operate as and carry out the business of an investment company,
and exercise all the powers necessary or appropriate to the conduct of such
operations;
(o) To enter into contracts of any kind and description;
(p) To employ as custodian of any assets of the Trust 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 the Trust, subject to any conditions set forth in this
Declaration of Trust or in the Bylaws;
(q) To employ auditors, counsel or other agents of the Trust, subject
to any conditions set forth in this Declaration of Trust or in the Bylaws;
(r) To interpret the investment policies, practices, or limitations of
any Series or Class; and
(s) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and
with separate Shares representing beneficial interests in such Series, and
to establish separate Classes, all in accordance with the provisions of
Article III;
(t) To the full extent permitted by Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a particular
Series and liabilities and expenses to a particular Class or to apportion
the same between or among two or more Series or Classes, provided that any
liabilities or expenses incurred by a particular Series or Class shall be
payable solely out of the assets belonging to that Series or Class as
provided for in Article III;
(u) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Series or Classes, and to
require the redemption of the Shares of any Shareholders whose investment
is less than such minimum, or who does not satisfy any other criteria the
Trustees may set from time to time, upon giving any requisite notice to
such Shareholder; and
(v) Subject to the 1940 Act, to engage in any other lawful act or
activity in which a business trust organized under the Delaware Act may
engage.
The Trust shall not be limited to investing in obligations maturing before
the possible termination of the Trust or one or more of its Series. The Trust
shall not in any way be bound or limited by any present or future law or custom
in regard to investment by fiduciaries. The Trust shall not be required to
obtain any court order to deal with any assets of the Trust or take any other
action hereunder.
Section 4. Payment of Expenses by the Trust. The Trustees are authorized to
pay or cause to be paid out of the principal or income of the Trust, or partly
out of the principal and partly out of income, as they deem fair, all expenses,
fees, charges, taxes and liabilities incurred or arising in connection with the
Trust, or in connection with the management thereof, including, but not limited
to, the Trustees' compensation and such expenses and charges for the services of
the Trust's officers, employees, investment adviser or other Manager, Principal
Underwriter, auditors, counsel, custodian, transfer agent, Shareholder servicing
agent, and such other agents or independent contractors and such other expenses
and charges as the Trustees may deem necessary or proper to incur, which
expenses, fees, charges, taxes and liabilities shall be allocated in accordance
with Article III, Section 6 hereof.
Section 5. Payment of Expenses by Shareholders. The Trustees shall have the
power, as frequently as they may determine, to cause each Shareholder, or each
Shareholder of any particular Series, to pay directly, in advance or arrears,
expenses of the Trust as described in Section 4 of this Article IV ("Expenses"),
in an amount fixed from time to time by the Trustees, by setting off such
Expenses due from such Shareholder from declared but unpaid dividends owed such
Shareholder and/or by reducing the number of Shares in the account of such
Shareholder by that number of full and/or fractional Shares which represents the
outstanding amount of such Expenses due from such Shareholder, provided that the
direct payment of such Expenses by Shareholders is permitted under applicable
law.
Section 6. Ownership of Assets of the Trust. Title to all of the assets of
the Trust shall at all times be considered as vested in the Trust, except that
the Trustees shall have power to cause legal title to any Trust Property to be
held by or in the name of one or more of the Trustees, or in the name of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine. The right, title and interest of the Trustees in the
Trust Property shall vest automatically in each Person who may hereafter become
a Trustee. upon the resignation, removal or death of a Trustee, he or she shall
automatically cease to have any right, title or interest in any of the Trust
Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 7. Service Contracts.
(a) Subject to such requirements and restrictions as may be set forth
under federal and/or state law and in the Bylaws, including, without
limitation, the requirements of Section 15 of the 1940 Act, the Trustees
may, at any time and from time to time, contract for exclusive or
nonexclusive advisory, management and/or administrative services for the
Trust or for any Series (or Class thereof) with any corporation, trust,
association, or other organization or Person (each, a Manager); and any
such contract may contain such other terms as the Trustees may determine,
including, without limitation, authority for the Managers to supervise and
direct the investment of all assets held, and to determine from time to
time without prior consultation with the Trustees what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets
of the Trust shall be held uninvested and to make changes in the Trust's
investments; authority for a Manager to delegate certain or all of its
duties under such contracts to qualified investment advisers and
administrators (each, a Sub-Manager); and authority to conduct such other
activities as may specifically be delegated to such party.
(b) The Trustees may also, at any time and from time to time, contract
with any corporation, trust, association, or other organization, appointing
it exclusive or nonexclusive distributor or Principal Underwriter for the
Shares of one or more of the Series (or Classes) or other securities to be
issued by the Trust. Every such contract shall comply with such
requirements and restrictions as may be set forth under federal and/or
state law and in the Bylaws, including, without limitation, the
requirements of Section 15 of the 1940 Act; and any such contract may
contain such other terms as the Trustees may determine.
(c) The Trustees are also empowered, at any time and from time to
time, to contract with any corporations, trusts, associations or other
organizations, appointing it or them the custodian, transfer agent and/or
Shareholder servicing agent for the Trust or one or more of its Series.
Every such contract shall comply with such requirements and restrictions as
may be set forth under federal and/or state law and in the Bylaws or
stipulated by resolution of the Trustees.
(d) Subject to applicable law, the Trustees are further empowered, at
any time and from time to time, to contract with any Person to provide such
other services to the Trust or one or more of the Series, as the Trustees
determine to be in the best interests of the Trust and the applicable
Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of the Trust
is a Shareholder, director, officer, partner, trustee,
employee, Manager, adviser, Principal Underwriter,
distributor, or affiliate or agent of or for any
corporation, trust, association, or other organization, or
for any parent or affiliate of any organization with which
an advisory, management, or administration contract, or
Principal Underwriter's or distributor's contract, or
transfer agent, Shareholder servicing agent or other type of
service contract may have been or may hereafter be made, or
that any such organization, or any parent or affiliate
thereof, is a Shareholder or as an interest in the Trust; or
that
(ii) any corporation, trust, association or other organization
with which an advisory, management, or administration
contract or Principal Underwriter's or distributor's
contract, or transfer agent or Shareholder servicing agent
contract may have been or may hereafter be made also has an
advisory, management, or administration contract, or
Principal Underwriter's or distributor's or other service
contract with one or more other corporations, trusts,
associations, or other organizations, or has other business
or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or its
Shareholders, provided approval of each such contract is made pursuant to the
requirements of the 1940 Act.
Section 8. Trustees and Officers as Shareholders. Any Trustee, officer or
agent of the Trust may acquire, own and dispose of Shares to the same extent as
if he or she were not a Trustee, officer or agent; and the Trustees may issue
and sell and cause to be issued and sold Shares to, and redeem such Shares from,
any such Person or any firm or company in which such Person is interested,
subject only to the general limitations contained herein or in the Bylaws
relating to the sale and redemption of such Shares.
Section 9. Independent Trustees. In accordance with Section 3801(h) of the
Delaware Act, a Trustee is an independent Trustee if the Trustee is not an
Interested Person of the Trust; provided that the receipt of compensation for
service as an independent Trustee of the Trust and also for service as an
independent Trustee of one or more other investment companies managed by a
single investment adviser (or an affiliated person, as defined in Section
2(a)(3) of the 1940 Act, of such investment adviser) shall not affect the status
of the Trustee as an independent Trustee under the Delaware Act. An independent
Trustee shall be deemed to be independent and disinterested for all purposes.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers, Meetings, and Record Dates. The Shareholders
shall have power to vote only: (i) for the election or removal of Trustees as
provided in Article IV, Section 1 hereof, and (ii) with respect to such
additional matters relating to the Trust as may be required by applicable law,
this Declaration of Trust, the Bylaws or any registration of the Trust with the
Commission (or any successor agency), or as the Trustees may consider necessary
or desirable. Each whole Share shall be entitled to one vote for each dollar
value invested as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote.
Notwithstanding any other provision of this Declaration of Trust, on any matters
submitted to a vote of the Shareholders, all Shares of the Trust then entitled
to vote shall be voted in aggregate except: (i) when required by the 1940 Act,
Shares shall be voted by individual Series and/or Classes; (ii) when the matter
involves any action that the Trustees have determined will affect only the
interests of one or more Series, then only Shareholders of such Series shall be
entitled to vote thereon; and (iii) when the matter involves any action that the
Trustees have determined will affect only the interests of one or more Classes,
then only the Shareholders of such Class or Classes shall be entitled to vote
thereon. There shall be no cumulative voting in the election of Trustees. Shares
may be voted in person or by proxy. A proxy may be given by any means acceptable
under applicable law, including by an electronic or telecommunications device if
so authorized by the Trustees. Notwithstanding anything else contained 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 Classes thereof 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 by written proxy or in person
at a meeting. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or the Bylaws to be taken by the Shareholders. Meetings of the Shareholders
shall be called and notice thereof and record dates therefor shall be given and
set as provided in the Bylaws.
Section 2. Quorum and Required Vote. Except when a larger quorum is
required by applicable law, by the Bylaws or by this Declaration of Trust,
thirty-three and one-third percent (33-1/3%) of the Shares entitled to vote
shall constitute a quorum at a Shareholders' meeting. When any one or more
Series (or Classes) is to vote as a single Class separate from any other Shares,
thirty-three and one-third percent (33-1/3%) of the Shares of each such Series
(or Class) entitled to vote shall constitute a quorum at a Shareholders' meeting
of that Series (or Class). Except when a larger vote is required by any
provision of this Declaration of Trust or the Bylaws or by applicable law, when
a quorum is present at any meeting, a majority of the Shares voted shall decide
any questions and a plurality of the Shares voted shall elect a Trustee,
provided that where any provision of law or of this Declaration of Trust
requires that the holders of any Series shall vote as a Series (or that holders
of a Class shall vote as a Class), then a majority of the Shares of that Series
(or Class) voted on the matter (or a plurality with respect to the election of a
Trustee) shall decide that matter insofar as that Series (or Class) is
concerned.
Section 3. Record Dates. For the purpose of determining the Shareholders of
any Series (or Class) who are entitled to receive payment of any dividend or of
any other distribution, the Trustees may from time to time fix a date, which
shall be before the date for the payment of such dividend or such other payment,
as the record date for determining the Shareholders of such Series (or Class)
having the right to receive such dividend or distribution. Without fixing a
record date, the Trustees may for distribution purposes close the register or
transfer books for one or more Series (or Classes) at any time prior to the
payment of a distribution. Nothing in this Section shall be construed as
precluding the Trustees from setting different record dates for different Series
(or Classes).
Section 4. Additional Provisions. The Bylaws may include further provisions
for Shareholders' votes and meetings and related matters.
ARTICLE VI
Net Asset Value, Distributions and Redemptions
Section 1. Determination of Net Asset Value, Net Income, and Distributions.
Subject to applicable law and Article III, Section 6 hereof, the Trustees, in
their absolute discretion, may prescribe and shall set forth in the Bylaws or in
a duly adopted vote of the Trustees such bases and time for determining the per
Share or net asset value of the Shares of any Series or Class or net income
attributable to the Shares of any Series or Class, or the declaration and
payment of dividends and distributions on the Shares of any Series or Class, as
they may deem necessary or desirable.
Section 2. Redemptions and Repurchases.
(a) The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of a proper instrument of
transfer together with a request directed to the Trust, or a Person
designated by the Trust, that the Trust purchase such Shares or in
accordance with such other procedures for redemption as the Trustees may
from time to time authorize; and the Trust will pay therefor the net asset
value thereof as determined by the Trustees (or on their behalf), in
accordance with any applicable provisions of the Bylaws and applicable law.
Payment for said Shares shall be made by the Trust to the Shareholder in
accordance with the 1940 Act and any rules and regulations thereunder or as
otherwise required by the Commission. The obligation set forth in this
Section 2 is subject to the provision that, in the event that any time the
New York Stock Exchange, Inc. (the "Exchange") is closed other than for
weekends or holidays, or if permitted by the rules and regulations or an
order of the Commission during periods when trading on the Exchange is
restricted or during any emergency which makes it impracticable for the
Trust to dispose of the investments of the applicable Series or to
determine fairly the value of the net assets held with respect to such
Series or during any other period permitted by order of the Commission for
the protection of investors, such obligation may be suspended or postponed
by the Trustees. In the case of a suspension of the right of redemption as
provided herein, a Shareholder may either withdraw the request for
redemption or receive payment based on the net asset value per Share next
determined after the termination of such suspension.
(b) Payment for any Shares which are presented for redemption shall be
made in cash or property from the assets of the relevant Series and payment
for such Shares shall be made within seven (7) days after the date upon
which the redemption request is effective, or such longer period as
provided above, or as otherwise may be required. Subject to the foregoing,
the fair value, selection and quantity of securities or other property so
paid or delivered as all or part of the redemption price may be determined
by or under authority of the Trustees in accordance with any procedures
adopted by the Board of Trustees. In no case shall the Trust be liable for
any delay of any Manager or other Person in transferring securities
selected for delivery as all or part of any payment-in-kind.
(c) If the Trustees shall, at any time and in good faith, determine
that direct or indirect ownership of Shares of any Series or Class thereof
has or may become concentrated in any Person to an extent that would
disqualify any Series as a regulated investment company under the Internal
Revenue Code of 1986, as amended (or any successor statute thereto), then
the Trustees shall have the power (but not the obligation) by such means as
they deem equitable (i) to call for the 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, (ii) to refuse to transfer or issue
Shares of any Series or Class thereof to such Person whose acquisition of
the Shares in question would result in such disqualification, or (iii) to
take such other actions as they deem necessary and appropriate to avoid
such disqualification. Any such redemption shall be effected at the
redemption price and in the manner provided in this Article VI.
(d) 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 of 1986, as amended (or any successor statute
thereto), or to comply with the requirements of any other taxing authority.
(e) The Trust shall have the right at any time without prior notice to
the Shareholder to redeem Shares of any Shareholder for their then current
net asset value per Share if:
(i) at such time the Shareholder owns Shares having an aggregate
net asset value of less than an amount set from time to time
by the Trustees subject to such terms and conditions as the
Trustees may approve, and subject to the Trust's giving
general notice to all Shareholders of its intention to avail
itself of such right, either by publication in the Trust's
registration statement, if any, or by such other means as
the Trustees may determine;
(ii) the Trustees believe that it is in the best interest of the
Trust to do so because of prior involvement by the
Shareholder in fraudulent acts relating to securities
transactions; or
(iii)the Trustees determine in light of relevant circumstances
that redemption is appropriate, and such redemption is
permitted under the Delaware Act and any other applicable
law.
ARTICLE VII
Compensation, Limitation of Liability and Indemnification of Trustees
Section 1. Compensation. The Trustees in such capacity shall be
entitled to reasonable compensation from the Trust and they may fix the
amount of such compensation. However, the Trust will not compensate those
Trustees who are Interested Persons of the Trust, its Manager, Sub-Manager,
distributor or Principal Underwriter. Nothing herein shall in any way
prevent the employment of a Trustee for advisory, management, legal,
accounting, investment banking or other services and payment for such
services by the Trust.
Section 2. Limitation of Liability. A Trustee, when acting in such
capacity, shall not be personally liable to any Person, other than the
Trust or a Shareholder to the extent provided in this Article VII, for any
act, omission or obligation of the Trust, any Trustee, or any officer,
Manager, Sub-Manager, agent, employee, or Principal Underwriter of the
Trust. 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 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, provided
however, that a Trustee shall not be liable for errors of judgment or
mistakes of fact or law.
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 of the Trust for payment under such credit, contract, or
claim; and neither the Trustees nor the Shareholders, nor any of the Trust's
officers, employees, or agents, whether past, present, or future, shall be
personally liable therefor.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees by any of them in connection with the Trust shall
conclusively be deemed to have been executed or done only in or with respect to
his, her or their capacity as Trustee or Trustees, and such Trustee or Trustees
shall not be personally liable thereon. At the Trustees' discretion, any note,
bond, contract, instrument, certificate or undertaking made or issued by the
Trustees or by any officer or officers may give notice that the Certificate of
Trust is on file in the office of the Secretary of State of the State of
Delaware and that a limitation on liability of Series exists and such note,
bond, contract, instrument, certificate or undertaking may, if the Trustees so
determine, recite that the same was executed or made on behalf of the Trust by a
Trustee or Trustees in such capacity and not individually and that the
obligations of such instrument are not binding upon any of them or the
Shareholders individually but are binding only on the assets and property of the
Trust or a Series thereof, and may contain such further recital as such Person
or Persons may deem appropriate. The omission of any such notice or recital
shall in no way operate to bind any Trustee, officer, or Shareholder
individually.
Section 3. Indemnification.
(a) Subject to the exceptions and limitations contained in Section
3(b) of this Article:
(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 all liabilities and against all
expenses reasonably incurred or paid by him or her in
connection with any claim, action, suit or proceeding in
which he or she becomes involved as a party or otherwise by
virtue of his or her being or having been a Trustee or
officer and against amounts paid or incurred by him or her
in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil,
criminal, administrative, investigative or other, including
appeals), threatened, pending or completed, 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
all other liabilities whatsoever.
(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 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.
(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).
(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 Section 3(a) of this Article shall be paid by the Trust or Series 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 or her to
the Trust, unless it is ultimately determined that he or she is entitled to
indemnification under this Section 3; provided, however, that either (i)
such Covered Person shall have provided appropriate security for such
undertaking, or (ii) the Trust is insured against losses arising out of any
such advance payments, or (iii) 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 Section 3.
Section 4. Trustee's Good Faith Action, Expert Advice, No Bond or Surety.
The exercise by the Trustees of their powers and discretion hereunder shall be
binding upon everyone interested. A Trustee shall not be liable to the Trust and
to any Shareholder except for his or her own willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee, and 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 Declaration of Trust,
and shall be under no liability for any act or omission in accordance with such
advice nor 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 required.
Section 5. Insurance. The Trustees shall be entitled and empowered to the
fullest extent permitted by law to purchase with Trust assets insurance for
liability and for all expenses reasonably incurred or paid or expected to be
paid by a Trustee, officer, employee, or agent of the Trust in connection with
any claim, action, suit, or proceeding in which he or she may become involved by
virtue of his or her present capacity or former capacity as a Trustee of the
Trust.
ARTICLE VIII
Miscellaneous
Section 1. Liability of Third Persons Dealing with Trustees. No Person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
Section 2. Termination of the Trust or Any Series or Class.
(a) Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote
of a majority of the Shares of each Series entitled to vote, voting
separately by Series, or by the Trustees by written notice to the
Shareholders. Any Series of Shares or Class thereof may be terminated at
any time by vote of a majority of the Shares of such Series or Class
entitled to vote, or by the Trustees by written notice to the Shareholders
of such Series or Class.
(b) Upon the requisite Shareholder vote or action by the Trustees to
terminate the Trust or any one or more Series or Class, after paying or
otherwise providing for all charges, taxes, expenses, and liabilities,
whether due or accrued or anticipated, of the Trust or of the particular
Series or Class as may be determined by the Trustees, the Trust shall in
accordance with such procedures as the Trustees may consider appropriate
reduce the remaining assets of the Trust or of the affected Series or Class
to distributable form in cash or Shares (if any Series remain) or other
securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the Series or Classes involved, ratably according to the
number of Shares of such Series or Class held by the Shareholders of such
Series or Class on the date of distribution. Thereupon, the Trust or any
affected Series or Class shall terminate and the Trustees and the Trust
shall be discharged of any and all further liabilities and duties relating
thereto or arising therefrom, and the right, title, and interest of all
parties with respect to the Trust or such Series or Class shall be canceled
and discharged.
(c) 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 3. Reorganization.
(a) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval unless such approval is specifically required by
applicable law, (i) cause the Trust or any Series or Class thereof to sell,
lease, exchange, transfer, pledge or otherwise dispose of all or
substantially all of the Trust Property or the property of any Series or
Class, including its good will, upon such terms and conditions and for such
consideration as authorized by the Trustees, (ii) cause the Trust or any
one or more Series (or Classes) of the Trust to merge or consolidate with
or into one or more trusts (or Series or Classes thereof to the extent
permitted by law), partnerships, associations, corporations or other
business entities (including trusts, partnerships, associations,
corporations or other business entities created by the Trustees to
accomplish such merger or consolidation), or any one or more other Series
(or Classes) of the Trust, (iii) cause the Shares to be exchanged under or
pursuant to any state or federal statute to the extent permitted by law, or
(iv) cause the Trust to reorganize as a corporation, business trust,
limited liability company or limited liability partnership under the laws
of Delaware or any other state or jurisdiction. Any agreement of merger or
consolidation or exchange or certificate of merger or consolidation shall
be approved and, to the extent required by applicable law, signed by a
majority of the Trustees.
(b) 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 Declaration of Trust, an agreement of merger or
consolidation approved by the Trustees in accordance with this Section 3
may (i) effect any amendment to the governing instrument of the Trust or
(ii) effect the adoption of a new governing instrument of the Trust if the
Trust is the surviving or resulting trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to which all
or any part of the assets, liabilities, profits, or losses of the Trust or
any Series or Class thereof may be transferred any may provide for the
conversion of Shares in the Trust or any Series or Class thereof into
beneficial interests in any such newly created trust or trusts or any
series of classes thereof.
Section 4. Amendments. Except as specifically provided in this Section 4,
the Trustees may, without Shareholder vote, restate, amend, or otherwise
supplement this Declaration of Trust. Shareholders shall have the right to vote
on (i) any amendment that would affect their right to vote granted in Article V,
Section 1 hereof, (ii) any amendment to this Section 4 of Article VIII affecting
their rights; (iii) any amendment that requires their vote under applicable law
or by the Trust's registration statement, as filed with the Commission, and (iv)
any amendment submitted to them for their vote by the Trustees. Any amendment
required or permitted to be submitted to the Shareholders that, as the Trustees
determine, shall affect the Shareholders of one or more Series shall be
authorized by a 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, no amendment hereof shall limit the rights to
indemnification or insurance provided by Article VII hereof with respect to any
acts or omissions of Persons covered thereby prior to such amendment. The
Trustees may, without Shareholder vote, restate, amend, or otherwise supplement
the Certificate of Trust as they deem necessary or desirable.
Section 5. Filing of Copies, References, Headings. The original or a copy
of this instrument and of each restatement and/or amendment 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 of the Trust as
to whether or not any such restatements and/or amendments 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 of the
Trust to be a copy of this instrument or of any such restatements and/or
amendments. In this instrument and in any such restatements and/or amendments,
references to this instrument, and all expressions such as "herein," "hereof,"
and "hereunder," shall be deemed to refer to this instrument as amended or
affected by any such restatements and/or amendments. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning construction or effect of this instrument.
Whenever the singular number is used herein, the same shall include the plural;
and the neuter, masculine and feminine genders shall include each other, as
applicable. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.
Section 6. Applicable Law.
(a) The Trust is created under, and this Declaration of Trust is to be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware. The Trust shall be of the type commonly called a
business trust, and without limiting the provisions hereof, the Trust
specifically reserves the right to exercise any of the powers or privileges
afforded to business trusts or actions that may be engaged in by business
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.
(b) Notwithstanding the first sentence of Section 6(a) of this Article
VIII, there shall not be applicable to the Trust, the Trustees, or this
Declaration of Trust either the provisions of Section 3540 of Title 12 of
the Delaware Code or any provisions of the laws (statutory or common) of
the State of Delaware (other than the Delaware Act) pertaining to trusts
that 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 a court or other governmental approval concerning the
acquisition, holding, or disposition of real or personal property; (iv)
fees or other sums applicable 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 acts or powers or liabilities or authorities and powers
of trustees that are inconsistent with the limitations or liabilities or
authorities and powers of Trustees set forth or referenced in this
Declaration of Trust.
Section 7. Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration of Trust are severable, and if
the Trustees shall determine, with the advice of counsel, that any such
provision is in conflict with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code of 1986, as amended (or any
successor statute thereto), and the regulations thereunder, the Delaware
Act or with other applicable laws and regulations, the conflicting
provision shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration of Trust or
render invalid or improper any action taken or omitted prior to such
determination.
(b) If any provision of this Declaration of Trust shall be held
invalid or nenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction
and shall not in any manner affect such provision in any other jurisdiction
or any other provision of this Declaration of Trust in any jurisdiction.
Section 8. Business Trust Only. It is the intention of the Trustees to
create a business trust pursuant to the Delaware Act. It is not the intention of
the Trustees to create a general partnership, limited partnership, joint stock
association, corporation, bailment, or any form of legal relationship other than
a business trust pursuant to the Delaware Act. Nothing in this Declaration of
Trust shall be construed to make the Shareholders, either by themselves or with
the Trustees, partners, or members of a joint stock association.
IN WITNESS WHEREOF, the Trustee named below does hereby make and enter
into this Declaration of Trust as of the 9th day of August, 2001.
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Paul M. Harmon, as Trustee, and not individually
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS:
Bloomington, Illinois