COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COMMONWEALTH INTERNATIONAL SERIES TRUST
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(Name of Registrant as Specified in Its Charter)
n/a
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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COMMONWEALTH INTERNATIONAL SERIES TRUST
(formerly known as the Capstone International Series Trust)
COMMONWEALTH NEW ZEALAND FUND
COMMONWEALTH JAPAN FUND
(formerly Capstone New Zealand and Capstone Japan Funds)
[Date]
To the Shareholders of the Commonwealth Family of Funds:
The Commonwealth International Series Trust (formerly known as the Capstone
International Series Trust) (the "Trust") is holding a special meeting of its
shareholders on Friday, December 22, 2000 at 10:00 a.m. Central Time at 5847 San
Felipe, Suite 850, Houston, Texas 77057. If a quorum is not present or
represented by proxy on that date, the meeting will be adjourned to another date
and time without further notice.
The Trust is a Massachusetts business trust, operating as a registered
management investment company. The trust has previously authorized the division
of its shares into two (2) series (each a "Fund" and together the "Funds") and
currently offers shares of the following Funds to the public: Commonwealth New
Zealand Fund (formerly known as the "Capstone New Zealand Fund") and the
Commonwealth Japan Fund (formerly known as the "Capstone Japan Fund"). Each Fund
has only one (1) class of shares.
Enclosed is a proxy statement that has been prepared in anticipation of the
December 22, 2000 special meeting of shareholders of the Commonwealth New
Zealand Fund and the Commonwealth Japan Fund. You are asked to consider five (5)
matters.
First, shareholders of both Funds are being asked to elect a new Board of
Trustees. This action is necessary due to the recent transfer of the Funds'
administration to First Commonwealth Holding Corp, which is the parent
corporation of FCA (the Funds Investment Advisor), after the resignation of the
Capstone Asset Management Company previously acting in this capacity. All prior
board members have tendered their resignations effective upon the election of
their successors and four (4) nominees have been named as their replacement.
Second, shareholders of both Funds are being asked to ratify the selection
of Briggs, Bunting & Dougherty, LLP as independent auditors of the Trust. This
firm has fulfilled this role for the past several years and acts as the current
auditor and includes persons who have heretofore been primarily responsible for
audit of the Trust.
Third, shareholders of each Fund are being asked to approve a new Rule
12b-1 distribution plan on substantially the same terms as the current plan for
each Fund.
Fourth, shareholders of the New Zealand Fund are being asked to modify the
fund's investment objective and policies.
Fifth, shareholders of both Funds are asked to approve such other business
as may properly come before the meeting, or any adjournments thereof.
Each member of both the outgoing and incoming Board of Trustees, believes
that each of these proposals would be in the best interests of the affected Fund
or Funds and that shareholders should vote FOR them. Please read the enclosed
materials, complete and execute the enclosed proxy card and return it promptly
in the enclosed pre-addressed postage-paid envelope.
YOU ARE URGED TO VOTE PROMPTLY TO MINIMIZE EXPENSES OF ADDITIONAL SOLICITATIONS.
As always, we thank you for your confidence and support.
Sincerely,
Robert W. Scharar
President
Commonwealth International Series Trust
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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COMMONWEALTH INTERNATIONAL SERIES TRUST
(formerly Capstone International Series Trust)
COMMONWEALTH NEW ZEALAND FUND
COMMONWEALTH JAPAN FUND
(formerly Capstone New Zealand and Capstone Japan Funds)
5847 San Felipe, Suite 850, Houston, Texas 77057
Toll Free: 1-888-345-1898
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held December 22, 2000
Notice is hereby given that a special meeting of shareholders ("Meeting")
of Commonwealth International Series Trust ("Trust"), including shareholders of
its two series ("Funds"), Commonwealth New Zealand Fund ("New Zealand Fund") and
Commonwealth Japan Fund ("Japan Fund"), will be held at 10:00 a.m., Central
Time, at 5847 San Felipe, Suite 850, Houston, Texas 77057 for the following
purposes:
1. To elect a new Board of Trustees.
2. To ratify the selection of Briggs, Bunting & Dougherty, LLP as
independent auditors of the Trust.
3. To approve a new Rule 12b-1 distribution plan on substantially the
same terms as the current plan.
4. to modify investment objective and policies of the New Zealand Fund.
5. To approve such other business as may properly come before the
meeting, or any adjournments thereof.
The Board of Trustees has fixed the close of business on November 17, 2000
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the Meeting or at any adjournment(s) thereof.
Shareholders are requested to complete, date and sign the enclosed form of
proxy (whether or not they intend to attend the Meeting in person) and to return
the proxy promptly in the enclosed envelope that requires no postage if mailed
in the United States. The enclosed proxy is solicited on behalf the Board of
Trustees of the Trust.
By Order of the Board of Trustees
Terence P. Smith
Assistant Secretary
Houston, Texas
November ___, 2000
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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COMMONWEALTH INTERNATIONAL SERIES TRUST
(formerly Capstone International Series Trust)
COMMONWEALTH NEW ZEALAND FUND
COMMONWEALTH JAPAN FUND
(formerly Capstone New Zealand and Capstone Japan Funds)
5847 San Felipe, Suite 850, Houston Texas 77057
Toll Free: 1-888-345-1898
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PROXY STATEMENT
Dated:
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SPECIAL MEETING OF SHAREHOLDERS
To Be Held December 22, 2000
WHAT IS HAPPENING?
The Board of Trustees (the "Board") of the Commonwealth International Trust
(the "Trust") has voted to call a special meeting of all shareholders of each of
the two (2) separate series listed above (each a "Fund" and together
the"Funds"), in order to seek shareholder approval of five (5) proposals
relating to the Trust. The meeting will be held at the Trust's offices, located
at 5847 San Felipe, Suite 850, Houston Texas 77057 at 10:00 a.m., Central Time,
on Friday, December 22, 2000. If you expect to attend the meeting in person,
please call the Trust at 1-888-345-1898 to inform them of your intentions.
WHAT ITEMS OF TRUST BUSINESS AM I BEING ASKED TO VOTE ON?
The Board is asking you to approve four proposals: (1) Approve a new Board
of Trustees for all Funds, (2) Approve the Board's selection of Briggs, Bunting
& Dougherty, LLP as independent auditors of the Trust, (3) Approve each Fund's
Rule 12b-1 Plan, (4) Approve a change in objectives and policies for the New
Zealand Fund only, and (5) Approve such other business as shall be properly
presented at the meeting.
WHY AM I BEING ASKED TO VOTE ON A PROPOSED NEW 12B-1 DISTRIBUTION PLAN?
The Investment Company Act of 1940 requires a vote of a fund's shareholders
whenever there is a material amendment to, or an assignment of, a 12b-1 Plan.
The 12b-1 Plan for the Fund currently is between the Fund and Capstone Asset
Planning Company. On August 21, 2000, the Board approved an agreement which
effectively transferred all rights, title and interest relative to the
Administration to First Commonwealth Holding Corp. ("FCHC"), the parent company
of FCA Corp. After full consideration, the Board has decided to amend the 12b-1
Plan accordingly.
WHY AM I BEING ASKED TO VOTE ON A CHANGE IN THE FUND'S FUNDAMENTAL INVESTMENT
POLICIES?
The Investment Company Act of 1940 (the "Act") requires a vote of the
shareholders of a fund whenever there is a change in any investment policy which
is "fundamental" to the operation of the Fund. Accordingly, the proposed change
in the investment policies of the Fund requires your approval under the Act as
shareholder of that Fund.
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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HOW WILL THESE CHANGES AFFECT ME AS A FUND SHAREHOLDER?
Your Fund will not change. You will still own the same shares in the same
Fund. The Funds will continue to provide all resources necessary to provide your
fund with top quality investment management and shareholder services. If you
approve the change in the Fund's fundamental investment policies, FCA Corp
believes that it will be much better able to achieve significantly enhanced
performance in the Fund relative to past returns.
WILL THE INVESTMENT ADVISORY AND RULE 12B-1 FEES BE THE SAME?
The Investment Advisory fees will stay the same. The 12b-1 Plan provisions
relative to costs remain unchanged including a cap of .35% of the funds net
assets. If the 12b-1 expenses exceed .35%, such expenses will be paid by the
Investment Advisor without anticipation of reimbursement from the Fund.
WHICH PROPOSALS APPLY TO ME?
The table below summarizes each proposal to be presented at the meeting and
shows the Funds (and share classes) whose shareholders may vote for each
proposal.
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PROPOSAL WHICH SHAREHOLDERS MAY VOTE
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1. Approving a new Board of Trustees All shareholders of all Funds
2. Approving the Board's selection of All shareholders of all Funds
Briggs, Bunting & Dougherty, LLP as
independent auditors of the Trust
3. Approve the Trust's Rule 12b-1 Plan, All shareholders of all Funds
4. Approve a change in objectives and policies Shareholders of the New Zealand Fund
for the New Zealand Fund
5. Approve such other business as shall be All shareholders of all Funds affected
properly presented at the meeting
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AM I ELIGIBLE TO VOTE?
If you were the record owner of any shares of any Fund as of the close of
business on November 17, 2000 (the "Record Date"), then you are eligible to vote
on one or more of the proposals (See the table in the preceding paragraph to
find out which proposals apply to you).
HOW DO I VOTE?
VOTING BY PROXY
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The simplest and quickest way for you to vote is to complete, sign and date
the enclosed proxy card and mail it back to the Trust in the envelope provided.
The Board urges you to fill out and return your proxy card even if you plan to
attend the meeting. Returning your proxy card will not affect your right to
attend the meeting and vote.
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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The Board has named Linda Coyne and Krista Ziegler as proxies, and their
names appear on your proxy card(s). By signing your proxy card and returning it,
you are appointing those persons to vote for you at the meeting. If you properly
fill in your proxy card and return it to the Trust in time to vote, one of the
appointed proxies will vote your shares as you have directed. If you sign and
return your proxy card, but do not make specific choices, one of the appointed
proxies will vote your shares on each proposal as recommended by the Board.
If an additional matter is presented for vote at the meeting, one of the
appointed proxies will vote in accordance with his or her best judgment. At the
time this proxy statement was printed, the Board was not aware of any other
matter that needed to be acted upon at the meeting other than the six (6)
proposals discussed in this proxy statement.
If you appoint a proxy by signing and returning your proxy card, you can
revoke that appointment at any time before it is exercised. You can revoke your
proxy by sending in another proxy with a later date, or by notifying the Trust's
secretary in writing, before the meeting, that you have revoked your proxy, at
the following address: Linda Coyne, Inspector of Election, 5847 San Felipe,
Suite 850, Houston Texas 77057
VOTING IN PERSON
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If you attend the meeting and wish to vote in person, you will be given a
ballot when you arrive. If you have already voted by proxy and wish to vote in
person instead, you will be given an opportunity to do so during the meeting. If
you attend the meeting, but your shares are held in the name of your broker,
bank or other nominee, you must bring with you a letter from that nominee
stating that you are the beneficial owner of the shares on the Record Date and
authorizing you to vote.
HOW DOES THE BOARD RECOMMEND THAT I VOTE?
The Board recommends that you vote "FOR" each of the proposals described in
this proxy statement.
WHAT IS A QUORUM AND WHY IS IT IMPORTANT?
A quorum is the number of outstanding shares, as of the Record Date, that
must be present, in person or by proxy, in order for the Trust to hold a valid
shareholder meeting. The Trust cannot hold a valid shareholder meeting unless
there is a quorum of shareholders present in person or by proxy. The Trust's
Agreement and Declaration of Trust requires that the presence, in person or by
proxy, of a majority of the shares entitled to vote on a matter shall constitute
a quorum, unless a larger number of shares is required pursuant to law. In the
absence of a quorum, the meeting will be adjourned to a later date without
further notice. The table below sets forth the quorum required for each proposal
to be voted at the meeting:
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PROPOSAL NUMBER OF SHARES REQUIRED FOR QUORUM
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1. Approving a new Board of Trustees A majority of all outstanding shares (as of November 17,
2000) of both Funds
2. Approving the Board's selection of A majority of all outstanding shares (as of November 17
Briggs, Bunting & Dougherty, LLP as 2000) of both Funds
independent auditors of the Trust
3. Approve the Trust's Rule 12b-1 Plan, A majority of all outstanding shares (as of November 17
2000) of both Funds
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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4. Approve a change in objectives and policies A majority of all outstanding shares (as of November 17
for the New Zealand Fund 2000) of the New Zealand Fund only
5. Approve such other business as shall be A majority of all outstanding shares (as of November 17
properly presented at the meeting 2000) of the Funds affected
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Under rules applicable to broker-dealers, if your broker holds your shares
in its name, the broker is not allowed to vote your shares on any of the
Proposals unless it has received voting instructions from you. If your broker
does not vote your shares on one or more Proposals because it has not received
instructions from you, those shares will be considered broker non-votes.
Broker non-votes and abstentions with respect to a proposal count as
present for purposes of establishing a quorum.
WHAT IS THE VOTE NECESSARY TO APPROVE EACH PROPOSAL?
The following table describes the votes needed to approve each Proposal:
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PROPOSAL NUMBER OF SHARES REQUIRED TO APPROVE;
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1. Approving a new Board of Trustees The affirmative vote of a majority of the shares entitled
to vote of both Funds are required to approve the Proposal.
2. Approving the Board's selection of The affirmative vote of a majority of the shares entitled
Briggs, Bunting & Dougherty, LLP as to vote of both Funds are required to approve the Proposal.
independent auditors of the Trust
3. Approve the Trust's Rule 12b-1 Plan, The affirmative vote of a majority of the shares entitled
to vote of both Funds are required to approve the Proposal.
4. Approve a change in objectives and policies The affirmative vote of a majority of the shares entitled
for the New Zealand Fund to vote of the New Zealand Fund are required to approve
the Proposal.
5. Approve such other business as shall be The affirmative vote of a majority of the shares entitled
properly presented at the meeting to vote of the Funds affected are required to approve the
Proposal.
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The Investment Company Act of 1940, as amended (the "1940 Act") defines a
"majority" of the outstanding voting securities of a Fund as the lesser of (a)
the vote of holders of at least 67% of the voting securities of the Fund present
in person or by proxy, if more than 50% of such shares are present in person or
by proxy; or (b) the vote of holders of more than 50% of the outstanding voting
securities of the Fund.
Broker non-votes will not count as votes cast and will have the effect of
votes against each Proposal.
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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CAN THE MEETING BE ADJOURNED?
The appointed proxies may propose to adjourn the meeting, either in order
to solicit additional proxies or for other purposes. If there is a proposal to
adjourn the meeting, the affirmative vote of a majority of the shares present at
the meeting, in person or by proxy, is required to approve such proposal.
WHO IS PAYING THE COST OF THE SHAREHOLDER MEETING AND THIS PROXY
SOLICITATION?
The Trust is paying the costs of the shareholder meeting and proxy
solicitation.
WHO DO I CALL IF I HAVE QUESTIONS?
Please call the Trust at 1-888-345-1898 with any questions you may have
relating to this proxy statement. Also, at your request, the Trust will send you
a free copy of its most recent audited annual report. Simply call the Trust to
request a copy of either report.
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PROPOSAL #1: ELECTION OF TRUSTEES
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
All shareholders of record as of November 17, 2000 of all Funds vote for
this proposal.
WHAT IS HAPPENING?
Pursuant to the terms and conditions set forth in an agreement entitled
"Agreement to Transfer Certain Administrative and Distribution Contracts"
between Capstone Asset Management Company and FCA Corp the operations of the
Funds were transferred to First Commonwealth Holding Corp, the parent
corporation of FCA Corp. In conjunction with this transfer, a new Board is being
elected. On November 13, 2000 the current Board of Trustees resigned from their
positions as Trustees of the Trust effective upon the election of their
successors.
WHO ARE THE NOMINEES FOR THE BOARD OF TRUSTEES?
Each of the nominees, John Akard, JR., Kathleen Dennis Kelly, and Jack H.
Ewing would be Independent Trustees and each nominee has indicated his or her
willingness to serve as Trustee if elected. Robert W. Scharar, the Trust's
President, is not an Independent Trustee. Each elected Trustee shall hold office
until the next meeting of shareholders held for election of Trustees and until
his or her successor is duly elected and qualified, unless he or she earlier
resigns or is removed. The Trust does not hold regular annual meetings.
Information about the nominees is contained in the following table:
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NAME AND AGE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
CURRENT TRUSTEESHIPS
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ROBERT W. SCHARAR (52) Mr. Scharar is President of FCA Corp, based in
Houston, Texas, a fee only financial planning
firm. He received his AA from Polk Community
College; and his BSBA in Accounting from the
University of Florida. He later went on to receive
his MBA and JD from Northeastern University;
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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and a LLM in Taxation from Boston University Law
School. Mr. Scharar is a member of the Florida and
Massachusetts Bars; and is a Certified Public
Accountant of Florida. He has experience as an
Accounting Professor at Bentley and Nichols
Colleges, Officer of the United States Trust
Company and Tax Specialist at Coopers & Lybrand.
Mr. Scharar is a Director and past President of
the American Association of Attorney - CPAs, and
the Chairman of United Investors Realty Trust
(UIRT) (a NASDQ listed REIT) as well as a Director
of United Dominion Realty Trust (NYSE). With FCA
Corp he is the current Investment Advisor for the
Commonwealth New Zealand Fund (CNZLX) and
Commonwealth Japan Fund (CNJFX).
JOHN AKARD, JR. (34) Mr. Akard, an Attorney, was admitted to the State
Bar of Texas Bar and United States District Court
for the Southern District of Texas in 1994. After
receiving is B.B.A. in Accounting from Texas A & M
University in 1988, Mr. Akard went on to receive
his J.D. from Texas Tech University, where he
graduated magna cum laude in 1994. As well as
being a Certified Public Accountant Mr. Akard is a
member of the State Bar of Texas, the Houston and
American Bar Associations, the American
Association of Attorney-Certified Public
Accountants. Mr. Akard is also the AAA-CPA Texas
Chapter President, a member of the AAA-CPA Board
of Directors, Chair of the Houston Bar Law Library
Committee, former President of the Sigma Chi
Dallas Alumni Chapter and is currently President
and Treasurer of the Aggie Sigma Chi House
Corporation (a non-profit corporation).
KATHLEEN KELLY (49) Kathleen Kelly founded International Protocol
Advisors in 1993 to assist corporations in
establishing and maintaining a positive working
relationship with foreign government officials.
Before forming her company, Mrs. Kelly headed the
Houston International Protocol Alliance where she
acted as Chief of Protocol for the City of Houston
for more than five years. Operating under contract
to the City of Houston, the Protocol Alliance was
responsible for greeting international visitors of
ambassador rank and higher. Prior to joining the
Protocol Alliance, Mrs. Kelly acquired a strong
background in international business relations
through her work at Business International
Corporation, an international business publishing,
consulting and training firm and United Energy
Resources doing risk analysis for their European
investments and as Manager of Special Projects
International for their UK subsidiary. Later, Mrs.
Kelly formed Interisk, Inc., to develop country
risk analyses for clients with interests in oil
producing countries. Mrs. Kelly serves as Honorary
Consul for New Zealand in Houston, appointed by
The Honorable James Bolger, Prime Minister of New
Zealand in 1995. She is also active in the
community and serves on a number of boards,
including the Houston Committee on Foreign
Relations. She is a past secretary and member of
the Executive Committee of the Consular Corps of
Houston. Mrs. Kelly has received a number of
professional recognitions over the years for her
work. She has lectured widely and has been a guest
on a number of television programs. She has also
been featured in a number of articles in
newspapers and magazines. She appears in the 2001
edition of Who's Who in the World. She holds a BA
in History and European Studies from the
University of Texas at Austin. She also studied at
the Universite de Strasbourg, France.
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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JACK H. EWING (61) Jack Ewing is Executive Director of the
Japan-America Society of Houston -- the center for
all things Japanese in Houston. The Society
sponsors the annual Japan Festival, conducts
Japanese language classes, manages the
Houston-Chiba Sister program, and engages in all
activities that promote the mutual knowledge and
understanding of Japanese and American cultures.
He has been involved actively in the Houston
international business scene through trade
consulting with Houston International Affairs as
President of Vuepoint-Texas, a pioneering
computer-based training company. He was one of the
early developers of The Greater Houston
Partnership where he was responsible for
international trade development: managing inbound
and outbound trade missions, promoting trade
development strategy and infrastructure, and
assisting Houston companies expand imports and
exports. Prior to joining the Greater Houston
Partnership, he founded and managed his own
trading company after a seventeen year career with
Gulf Oil Corporation. There he held a variety of
positions with Gulf Oil Asia, Corporate Business
Development, and Gulf Oil Trading Company, where
he headed the company's Strategic Planning and
Business Development Department. He was also a
professor at the University of Maryland's Far East
Division in Japan where he taught in the Political
Science and Economics Departments. While attending
graduate school, he held a variety of positions in
the U.S. Department of State, U.S. Information
Agency, and the U.S. Senate. He holds a master's
degree in International Affairs from George
Washington University and a bachelor of arts
degree in English and history from the University
of Mississippi.
WHAT IS THE COMPENSATION OF TRUSTEES?
Each Trustee and officer of the Trust is reimbursed for expenses incurred
in attending meetings of the Board of Trustees. Each Independent Trustee is paid
an annual retainer of $2,500 plus $750.00 by each Fund for each Board meeting
attended. Mr. Scharar is not an Independent Trustee and will not receive a
retainer or any fee for attending board meetings.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL #1?
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEE, RECOMMEND THAT
SHAREHOLDERS VOTE TO ELECT EACH NOMINEE AS TRUSTEE.
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PROPOSAL #2: RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
All shareholders of record as of November 17, 2000 of all Funds vote for
this proposal.
WHO IS THE BOARD OF TRUSTEES RECOMMENDING?
At its meeting held November 13, 2000 the Board of Trustees selected
Briggs, Bunting & Dougherty to be independent auditors of the Funds for their
fiscal year ending October 31, 2001. Briggs, Bunting & Dougherty, LLP has been
acting as the Fund's independent auditors for a number of years. The Trustees,
including the
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Independent Trustees, reviewed the qualifications of Briggs, Bunting &
Dougherty, as well as the qualifications of its staff, its business prospects
and general resources to perform its activities. It determined that Briggs,
Bunting & Dougherty, LLP would have the technical capabilities and personnel
required to provide services to the Trust. It also determined that continuity
and efficiency of service would best be assured for the Trust by selecting
Briggs, Bunting & Dougherty, LLP as the Trust's independent accountants, due to
the experience of its personnel in working with the Trust.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL #2?
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT SHAREHOLDERS OF
THE FUNDS VOTE TO RATIFY THE SELECTION OF BRIGG, BUNTING & DOUGHERTY, LLP AS
INDEPENDENT ACCOUNTANTS OF THE TRUST FOR ITS FISCAL YEAR ENDING OCTOBER 31,
2001.
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PROPOSAL #3: APPROVAL OF RULE 12B-1 PLAN
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
All shareholders of record as of November 17, 2000 of all Funds vote for
this proposal.
WHAT IS HAPPENING?
On November 13, 2000 the Board, including a majority of the
"non-interested" Trustees, voted to approve the new Rule 12b-1 Plan and directed
that the Plan be submitted to the Fund shareholders at the Meeting, along with a
recommendation that such shareholders approve the Rule 12b-1 Plan.
If the new Rule 12b-1 Plan is approved by the Fund shareholders, it will
become effective and will replace the current Rule 12b-1 Plan immediately. If
the shareholders do not approve the new Rule 12b-1 Plan, the Board would
consider appropriate action.
WHAT IS A RULE 12B-1 PLAN?
Rule 12b-1 under the 1940 Act (the "Rule"), provides, among other things,
that a management investment company (mutual fund) may bear expenses of
distributing its shares only pursuant to a plan (a "Rule 12b-1 Plan") adopted in
accordance with the Rule.
Due to the transfer of the Funds' Administration to FCHC from Capstone
Asset Management Company, Capstone Asset Planning Company ("CAPCO") is no longer
affiliated with the Funds in any capacity. FCHC will be managing the Funds.
Therefore, as required by the 1940 Act, a new plan must be approved by a
majority of its shareholders. Accordingly, a new Rule 12b-1 Plan is being
submitted for shareholder approval. THE NEW RULE 12b-1 PLAN IS ON THE SAME TERMS
AS COMMONWEALTH'S CURRENT RULE 12b-1 PLAN. The only change is that the
references to CAPCO have been replaced by references to "the Distributor". A
form of the new Rule 12b-1 Plan is attached hereto as Exhibit C.
WHAT DOES THE PLAN SAY?
As noted above, a form of the new Rule 12b-1 Plan is attached as Exhibit C
and this summary is qualified in its entirety by reference to Exhibit C. THE
TERMS OF THE NEW RULE 12b-1 PLAN DESCRIBED BELOW ARE THE SAME AS IN THE CURRENT
RULE 12b-1 PLAN.
Under the new Rule 12b-1 Plan, the distributor may receive a distribution
fee, payable as an expense of the
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COMMONWEALTH INTERNATIONAL SERIES TRUST
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Shares of the Fund, which the distributor would use to pay for distribution
services which it had provided to the Fund. Each Fund bears all the expenses of
providing such services, including the payment of any commissions or
distribution fees. Each Fund will provide for the preparation of advertising or
sales literature and bears the cost of printing and mailing prospectuses.
Further, each Fund bears the cost of qualifying and maintaining the
qualification of Shares for sale under the securities laws of the various
states, and the expense of registering its Shares with the SEC.
Fund Shares are sold to the public at net asset value. Like the current
Plan, the Distributor may receive a distribution fee, payable monthly upon
presentation to the Fund of receipts evidencing proper expenditures, at an
annual rate of not greater than 0.35% of average daily net assets of the Fund
Shares. Pursuant to the Rule 12b-1 Plan, the Distributor will prepare reports to
the Board on a quarterly basis showing the amounts expended pursuant to the Plan
No fees have been paid to date from the current Rule 12b-1 Plan.
The new Rule 12b-1 Plan will continue in effect for an initial term of one
year, and may continue thereafter from year to year if specifically approved at
least annually by vote of "a majority of the outstanding voting securities" of
the Fund, as defined under the 1940 Act, or by the Board, including, in either
event, the vote of a majority of the "non interested" Trustees, cast in person
at a meeting called for such purpose.
WHAT ARE THE BENEFITS OF APPROVAL?
In approving the new Rule 12b-1 Plan, the Board determined, as with the
current Rule 12b-1 Plan, that there is a reasonable likelihood that the new Rule
12b-1 Plan would benefit the Fund and its shareholders. In doing so, the Board
considered several factors, including that the new Rule 12b-1 Plans would likely
(i) facilitate distribution of the Fund's shares, (ii) help maintain the
competitive position of the Commonwealth Series in relation to other funds that
have implemented or are seeking to implement similar distribution arrangements;
and (iii) permit possible economies of scale through increased Fund size.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL #3?
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL
OF THE NEW RULE 12b-1PLANS.
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PROPOSAL #4: CHANGE IN INVESTMENT POLICIES AND OBJECTIVES
WHICH SHAREHOLDERS VOTE FOR THIS PROPOSAL?
All shareholders of record as of November 17, 2000 of the New Zealand Fund
only vote for this proposal.
WHAT IS HAPPENING?
At it's meeting on November 13, 2000 the Board of Trustees of the Fund
voted to change certain investment policies and objectives of the New Zealand
Fund which would expand the investment opportunities and recommend that the
shareholders of the Fund approve investments in Australian companies.
WHAT DOES AUSTRALIA HAVE TO OFFER?
The growth in the Australian economy has been uninterrupted since 1992, one
of its longest periods of
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expansion. The strong economic conditions are forecast to continue with a broad
range of indicators remaining robust, including employment growth and consumer
confidence. Inflation remains well contained, with no emerging pressures. These
conditions lead to increased investo confidence the stock market and as a
result, the market index has recorded a steady growth since 1992.
On August 14th 2000, the chairpersons of the Australia Stock Exchange and
the New Zealand Stock Exchange agreed that a merger of the two exchanges has
some merits. The combination of the stock exchanges was taking place anyway, as
more and more Australian and New Zealan companies have now dual listing. The two
states are becoming more financially and economically integrate over time, and
more New Zealand companies are now adopting Australian accounting conventions.
Some tangible merits of the merger will include a higher visibility of New
Zealand companies and the possibility of more allocation of funds into those
companies by Australian and international money managers. A higher weighting of
the combined stock exchanges in the MSCI indexes and other widely followed
indexes will compel index managers to also increase their allocation to that
region.
Management research indicates that Australia is a 3 million square mile
continent (about the size of the 48 continental United States) with a
predominantly European ethnic population of 18.2 million people. A member of the
British Commonwealth, its government is a democratic, federal-state system. The
country has a western style capitalist economy with a workforce of 9.2 million
people that is concentrated in services, mining, and agriculture. Australia's
agricultural sector specializes in wheat and sheep rearing and together, these
two activities account for more than half of the country's export revenues.
Australia also possesses natural resources such as bauxite, coal, iron ore,
copper, tin, silver, uranium, nickel, tungsten, mineral sands, lead, zinc,
diamonds, natural gas, and oil. The health of the country's domestic economy is
particularly sensitive to movements in the world prices of these commodities.
Primary trading partners are the United States, Japan, South Korea, New Zealand,
the United Kingdom and Germany. Imports revolve around machinery and high
technology equipment. Historically, Australia's strong points were its
agricultural and mining sectors.
WHAT DOES THIS ALL MEAN TO YOU?
The Board of Trustees has voted and agreed to expand its investment profile
to include Australian companies. The Board is confident that expanding this
scope will yield a greater return for the Fund and its investors while reducing
risk due to the broadening of the investment market.
HOW DOES THE BOARD RECOMMEND THAT I VOTE ON PROPOSAL #4?
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL
OF PROPOSAL #4.
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COMMONWEALTH INTERNATIONAL SERIES TRUST
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ABOUT THE BALLOT
----------------
Shown below is the ballot that you will use to vote on the matters described
above and hereafter in these proxy materials.
- --------------------------------------------------------------------------------
PROXY PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
OF COMMONWEALTH INTERNATIONAL SERIES TRUST
for its series
COMMONWEALTH NEW ZEALAND FUND and
COMMONWEALTH JAPAN FUND
SPECIAL MEETING OF SHAREHOLDERS
December 22, 2000 - 10:00 A.M. CENTRAL TIME
The undersigned hereby revokes all previous proxies for his or her shares
and appoints Linda Coyne and Krista Ziegler and each of them, with full power of
substitution, as Proxies, and hereby authorizes them to vote as designated
below, as effectively as the undersigned could do if personally present, all the
shares of Commonwealth International Series Trust ("Trust") held of record by
the undersigned on November 17, 2000, at the Special Meeting of Shareholders, or
any adjournment thereof, to be held at 10:00 a.m. Central Time on December 22,
2000 at 5847 San Felipe, Suite 850, Houston, Texas 77057.
- --------------------------------------------------------------------------------
SHAREHOLDERS OF COMMONWEALTH JAPAN FUND VOTE ON PROPOSALS 1, 2, 3, AND 5.
SHAREHOLDERS OF COMMONWEALTH NEW ZEALAND FUND VOTE ON ALL PROPOSALS.
- --------------------------------------------------------------------------------
1. Election of Board of Trustees. [Commonwealth New Zealand Fund and
Commonwealth Japan Funds shareholders vote on this item.]
/_/ FOR all nominees listed below /_/ WITHHOLD AUTHORITY to vote
(except as indicated to the for all the nominees listed
contrary below) below
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
JOHN AKARD, JR. KATHLEEN D. KELLY JACK H. EWING ROBERT W. SCHARAR
2. To ratify the selection of Briggs, Bunting & Dougherty, LLP as independent
auditors of the Trust [Commonwealth New Zealand Fund and Commonwealth Japan
Funds shareholders vote on this item.]
/_/ FOR /_/ AGAINST /_/ ABSTAIN
3. To approve the Funds' Rule 12b-1 Plan. [Commonwealth New Zealand Fund and
Commonwealth Japan Funds shareholders vote on this item.]
/_/ FOR /_/ AGAINST /_/ ABSTAIN
4. To approve the new investment objectives and policies of the Commonwealth
New Zealand Fund. [Commonwealth New Zealand Fund shareholders vote on this
item.]
/_/ FOR /_/ AGAINST /_/ ABSTAIN
5. To approve the change of name of the Commonwealth New Zealand Fund to the
Commonwealth Australia/New Zealand Fund. [Commonwealth New Zealand Fund
shareholders vote on this item.].
/_/ FOR /_/ AGAINST /_/ ABSTAIN
6. Transaction of such other business as may properly come before the Meeting
or any adjournment(s) thereof. [Commonwealth New Zealand Fund and
Commonwealth Japan Funds shareholders vote on this item.]
/_/ FOR /_/ AGAINST /_/ ABSTAIN
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY IMMEDIATELY IN THE POSTAGE-PAID
ENVELOPE PROVIDED.
This Proxy is solicited on behalf of the Board of Trustees, and when
properly executed, will be voted as specified. If no specification is made, the
undersigned's vote will be cast FOR the election of all Trustees, FOR Proposal 1
(for shareholders of Commonwealth Japan Fund only), and FOR Proposal 3. If any
other matters properly come before the meeting of which the Trustees were not
aware a reasonable time before the solicitation, the undersigned hereby
authorizes proxy holders to vote in their discretion on such matters. The
undersigned acknowledges receipt of the Notice of Meeting and Proxy Statement
dated __________, 2000.
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Please sign exactly as your name or names appear below. When shares are
held by joint tenants, both should sign. If signing as attorney, executor,
trustee or in any other representative capacity, or as a corporate officer,
please give full title. Please date the proxy.
- --------------------------------------------------------------------------------
Signature
Dated: , 2000
---------
/_/ Check here if you plan to attend the Meeting. _______ persons will attend.
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COMMONWEALTH INTERNATIONAL SERIES TRUST
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EXHIBIT A
COMMONWEALTH INTERNATIONAL SERIES TRUST
COMMONWEALTH JAPAN FUND
12b-1 PLAN AGREEMENT
COMMONWEALTH INTERNATIONAL SERIES TRUST
on behalf of
COMMONWEALTH JAPAN FUND
5847 San Felipe, Suite 850
Houston, Texas 77057
SERVICE AND DISTRIBUTION PLAN
INTRODUCTION: It has been determined that Commonwealth Japan Fund (the
"Fund"), a series of Commonwealth International Series Trust (the "Trust"), will
pay for certain costs and expenses incurred in connection with the distribution
of its shares and servicing of its shareholders and adopt the Service and
Distribution Plan (the "Plan") set forth herein pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Act").
The Board of Trustees, in considering whether the Fund should implement the
Plan, has requested and evaluated such information as it deemed necessary to
make an informed determination as to whether the Plan should be implemented and
has considered such pertinent factors as it deemed necessary to form the basis
for a decision to use assets of the Fund for such purposes.
In voting to approve the implementation of the Plan, the Trustees have
concluded, in the exercise of their reasonable business judgment and in light of
their respective fiduciary duties, that there is a reasonable likelihood that
the Plan will benefit the Fund and its existing and future shareholders.
THE PLAN: The material aspects of the financing by the Fund of distribution
expenses to be incurred in connection with securities of which it is the issuer
are as follows:
1. The Fund will reimburse the Distributor (the Distributor") for costs and
expenses incurred in connection with the distribution and marketing of shares of
beneficial interest of the Fund and servicing of Fund shareholders. Such
distribution and servicing costs and expenses may include (1) printing and
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advertising expenses; (2) payments to employees or agents of Distributor who
engage in or support distribution of the Fund's shares, including salary,
commissions, travel and related expenses; (3) the costs of preparing, printing
and distributing prospectuses and reports to prospective investors; (4) expenses
of organizing and conducting sales seminars; (5) expenses related to selling and
servicing efforts, including processing new account applications, transmitting
customer transaction information to the Fund's transfer agent and answering
questions of shareholders; (6) payments of fees to one or more broker-dealers
(which may include Distributor itself), financial institutions or other industry
professionals, such as investment advisers, accountants and estate planning
firms (severally, a "Service Organization"), in respect of the average daily
value of the Fund's shares which are Plan Asset (see below) and which are owned
by shareholders for whom the Service Organization is the dealer of record or
holder of record, or owned by shareholders, with whom the Service Organization
has a servicing relationship; (7) costs and expenses incurred in implementing
and operating the Plan; and (8) such other similar services as the Fund's Board
of Trustees determines to be reasonably calculated to result in the sale of Fund
shares.
Subject to the limitations of applicable law and regulation, including
rules of the National Association of Securities Dealers ("NASD"), Distributor
will be reimbursed monthly for such costs, expenses or payments at an annual
rate of up to but not more than 0.35% of the average daily net assets of the
Fund ("Plan Assets"). Any expense payable hereunder may be carried forward for
reimbursement for up to twelve months beyond the date on which it is incurred,
subject always to the limit payable pursuant to the Plan. The Fund shall incur
no interest or carrying charges for expenses carried forward . In the event the
Plan is terminated as herein provided, the Fund shall have no liability for
expenses that were not reimbursed as of the date of termination.
2. Subject to the limits herein and the requirements of applicable law and
regulations, including rules of the NASD, Distributor may designate as "Service
Fees", as that term is defined by applicable rules and regulatory
interpretations applicable to payments under a plan such as the Plan, some or
all of any payments made to Service Organizations (including Distributor itself)
for services that may be covered by "Service Fees", as so defined. Out of the
amounts received pursuant to Section 1 above, Distributor may periodically pay
amounts totaling in the aggregate up to 0.25% of the Plan Assets to one
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COMMONWEALTH INTERNATIONAL SERIES TRUST
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or more Service Organizations (which may include Distributor itself) as fees in
respect of Plan Assets owned by shareholders for whom the Service Organizations
are the dealers of record or holders of record, or owned by shareholders with
whom the Service Organizations have servicing relationships. Such fees will be
computed daily and paid quarterly by the Distributor at an annual rate not
exceeding 0.25% of the Plan Assets owned by shareholders for whom the Service
Organizations are the dealers of record or holders of record, or owned by
shareholders with whom the Service Organizations have servicing relationships.
The payment to a Service Organization is subject to compliance by the
Service Organization with the terms of a Selling Group Agreement between the
Service Organization and Distributor (the "Agreement"), a form of which is
attached hereto as Exhibit A. If a shareholder of the Fund ceases to be a client
of a Service Organization that has entered into an Agreement with Distributor,
but continues to hold shares of the Fund which are Plan Assets, Distributor will
be entitled to receive a similar payment in respect of the servicing provided to
such investors. For the purposes of determining the fees payable under the Plan,
the average daily net asset value of the Plan Assets shall be computed in the
same manner specified in the Fund's Declaration of Trust and current prospectus
for the computation of the value of the Fund's net asset value per share.
3. The Board of Trustees shall be provided, at least quarterly, with a
written report of all amounts expended pursuant to the Plan. The report shall
state the purposes for which the amounts were expended.
4. The Plan will become effective immediately upon approval by (a) a
majority of the outstanding voting securities of the Fund, and (b) a majority of
the Board of Trustees, including a majority of the Trustees who are not
"interested persons" (as defined in the Act) of the Fund and have no direct or
indirect financial interest in the operation of the Plan or in any agreements
entered into in connection with the Plan (the "Plan Trustees"), pursuant to a
vote cast in person at a meeting called for the purpose of voting on the
approval of the Plan. With regard to the other series of the Trust, the Plan
will become effective as to each such series upon approval by (a) a majority of
the outstanding voting
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securities of such series, and (b) a majority of the Board of Trustees,
including a majority of the Plan Trustees, pursuant to a vote cast in person at
a meeting called for such purpose.
5. The Plan shall continue for a period of one year from its effective
date, unless earlier terminated in accordance with its terms, and thereafter
shall continue automatically for successive annual periods, provided such
continuance is approved by a majority of the Board of Trustees, including a
majority of the Plan Trustees, pursuant to a vote cast in person at a meeting
called for the purpose of voting on the continuance of the Plan.
6. The Plan may be amended at any time by the Board of Trustees provided
that (a) any amendment to increase materially the costs which the Fund or a
series may bear for distribution pursuant to the Plan shall be effective only
upon approval by a vote of a majority of the outstanding voting securities of
the respective series or the Fund and (b) any material amendments of the terms
of the Plan shall become effective only upon approval as provided in paragraph
4(b) hereof.
7. The Plan is terminable without penalty at any time with respect to any
series or the Fund by (a) vote of a majority of the Plan Trustees, or (b) vote
of a majority of the outstanding voting securities of the respective series or
the Fund.
8. Any person authorized to direct the disposition of monies paid or
payable by the Fond pursuant to the Plan or any agreement entered into in
connection with the Plan shall provide to the Board of Trustees, and the Board
of Trustees shall review, at least quarterly, a written report of the amounts
expended pursuant to the Plan and the purposes for which such expenditures were
made.
9. While the Plan is in effect, the selection and nomination of Trustees
who are not "interested persons" (as defined in the Act) of the Fund shall be
committed to the discretion of the Trustees who are not "interested persons".
10. The Fund shall preserve copies of the Plan, any agreement in connection
with the Plan, and any report made pursuant to paragraph 8 hereof, for a period
of not less than six years from the date
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COMMONWEALTH INTERNATIONAL SERIES TRUST
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of the Plan, such agreement or report, the first two years in an easily
accessible place.
COMMONWEALTH INTERNATIONAL SERIES TRUST
on behalf of
COMMONWEALTH JAPAN FUND
Date: _____________________ By:_________________________________
Robert W. Scharar
President
Attest:
___________________________
Terence P. Smith
Assistant Secretary
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COMMONWEALTH INTERNATIONAL SERIES TRUST
PRES14A Preliminary Proxy Statement - Date Filed: 11/3/2000
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EXHIBIT B
COMMONWEALTH INTERNATIONAL SERIES TRUST
COMMONWEALTH NEW ZEALAND FUND
12b-1 PLAN AGREEMENT
COMMONWEALTH INTERNATIONAL SERIES TRUST
on behalf of
COMMONWEALTH NEW ZEALAND FUND
5847 San Felipe, Suite 850
Houston, Texas 77057
SERVICE AND DISTRIBUTION PLAN
INTRODUCTION: It has been determined that Commonwealth New Zealand Fund
(the "Fund"), a series of Commonwealth International Series Trust (the "Trust"),
will pay for certain costs and expenses incurred in connection with the
distribution of its shares and servicing of its shareholders and adopt the
Service and Distribution Plan (the "Plan") set forth herein pursuant to Rule
12b-1 under the Investment Company Act of 1940 (the "Act").
The Board of Trustees, in considering whether the Fund should implement the
Plan, has requested and evaluated such information as it deemed necessary to
make an informed determination as to whether the Plan should be implemented and
has considered such pertinent factors as it deemed necessary to form the basis
for a decision to use assets of the Fund for such purposes.
In voting to approve the implementation of the Plan, the Trustees have
concluded, in the exercise of their reasonable business judgment and in light of
their respective fiduciary duties, that there is a reasonable likelihood that
the Plan will benefit the Fund and its existing and future shareholders.
THE PLAN: The material aspects of the financing by the Fund of distribution
expenses to be incurred in connection with securities of which it is the issuer
are as follows:
1. The Fund will reimburse the Distributor ("the Distributor") for costs
and expenses incurred in connection with the distribution and marketing of
shares of beneficial interest of the Fund and servicing of Fund shareholders.
Such distribution and servicing costs and expenses may include (1)
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printing and advertising expenses; (2) payments to employees or agents of
Distributor who engage in or support distribution of the Fund's shares,
including salary, commissions, travel and related expenses; (3) the costs of
preparing, printing and distributing prospectuses and reports to prospective
investors; (4) expenses of organizing and conducting sales seminars; (5)
expenses related to selling and servicing efforts, including processing new
account applications, transmitting customer transaction information to the
Fund's transfer agent and answering questions of shareholders; (6) payments of
fees to one or more broker-dealers (which may include Distributor itself),
financial institutions or other industry professionals, such as investment
advisers, accountants and estate planning firms (severally, a "Service
Organization"), in respect of the average daily value of the Fund's shares which
are Plan Asset (see below) and which are owned by shareholders for whom the
Service Organization is the dealer of record or holder of record, or owned by
shareholders, with whom the Service Organization has a servicing relationship;
(7) costs and expenses incurred in implementing and operating the Plan; and (8)
such other similar services as the Fund's Board of Trustees determines to be
reasonably calculated to result in the sale of Fund shares.
Subject to the limitations of applicable law and regulation, including
rules of the National Association of Securities Dealers ("NASD"), Distributor
will be reimbursed monthly for such costs, expenses or payments at an annual
rate of up to but not more than 0.35% of the average daily net assets of the
Fund ("Plan Assets"). Any expense payable hereunder may be carried forward for
reimbursement for up to twelve months beyond the date on which it is incurred,
subject always to the limit payable pursuant to the Plan. The Fund shall incur
no interest or carrying charges for expenses carried forward . In the event the
Plan is terminated as herein provided, the Fund shall have no liability for
expenses that were not reimbursed as of the date of termination.
2. Subject to the limits herein and the requirements of applicable law and
regulations, including rules of the NASD, Distributor may designate as "Service
Fees", as that term is defined by applicable rules and regulatory
interpretations applicable to payments under a plan such as the Plan, some or
all of any payments made to Service Organizations (including Distributor itself)
for services that may be covered by "Service Fees", as so defined. Out of the
amounts received pursuant to Section 1 above,
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Distributor may periodically pay amounts totaling in the aggregate up to 0.25%
of the Plan Assets to one or more Service Organizations (which may include
Distributor itself) as fees in respect of Plan Assets owned by shareholders for
whom the Service Organizations are the dealers of record or holders of record,
or owned by shareholders with whom the Service Organizations have servicing
relationships. Such fees will be computed daily and paid quarterly by the
Distributor at an annual rate not exceeding 0.25% of the Plan Assets owned by
shareholders for whom the Service Organizations are the dealers of record or
holders of record, or owned by shareholders with whom the Service Organizations
have servicing relationships.
The payment to a Service Organization is subject to compliance by the
Service Organization with the terms of a Selling Group Agreement between the
Service Organization and Distributor (the "Agreement"), a form of which is
attached hereto as Exhibit A. If a shareholder of the Fund ceases to be a client
of a Service Organization that has entered into an Agreement with Distributor,
but continues to hold shares of the Fund which are Plan Assets, Distributor will
be entitled to receive a similar payment in respect of the servicing provided to
such investors. For the purposes of determining the fees payable under the Plan,
the average daily net asset value of the Plan Assets shall be computed in the
same manner specified in the Fund's Declaration of Trust and current prospectus
for the computation of the value of the Fund's net asset value per share.
3. The Board of Trustees shall be provided, at least quarterly, with a
written report of all amounts expended pursuant to the Plan. The report shall
state the purposes for which the amounts were expended.
4. The Plan will become effective immediately upon approval by (a) a
majority of the outstanding voting securities of the Fund, and (b) a majority of
the Board of Trustees, including a majority of the Trustees who are not
"interested persons" (as defined in the Act) of the Fund and have no direct or
indirect financial interest in the operation of the Plan or in any agreements
entered into in connection with the Plan (the "Plan Trustees"), pursuant to a
vote cast in person at a meeting called for the purpose of voting on the
approval of the Plan. With regard to the other series of the Trust, the Plan
will
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become effective as to each such series upon approval by (a) a majority of the
outstanding voting securities of such series, and (b) a majority of the Board of
Trustees, including a majority of the Plan Trustees, pursuant to a vote cast in
person at a meeting called for such purpose.
5. The Plan shall continue for a period of one year from its effective
date, unless earlier terminated in accordance with its terms, and thereafter
shall continue automatically for successive annual periods, provided such
continuance is approved by a majority of the Board of Trustees, including a
majority of the Plan Trustees, pursuant to a vote cast in person at a meeting
called for the purpose of voting on the continuance of the Plan.
6. The Plan may be amended at any time by the Board of Trustees provided
that (a) any amendment to increase materially the costs which the Fund or a
series may bear for distribution pursuant to the Plan shall be effective only
upon approval by a vote of a majority of the outstanding voting securities of
the respective series or the Fund and (b) any material amendments of the terms
of the Plan shall become effective only upon approval as provided in paragraph
4(b) hereof.
7. The Plan is terminable without penalty at any time with respect to any
series or the Fund by (a) vote of a majority of the Plan Trustees, or (b) vote
of a majority of the outstanding voting securities of the respective series or
the Fund.
8. Any person authorized to direct the disposition of monies paid or
payable by the Fond pursuant to the Plan or any agreement entered into in
connection with the Plan shall provide to the Board of Trustees, and the Board
of Trustees shall review, at least quarterly, a written report of the amounts
expended pursuant to the Plan and the purposes for which such expenditures were
made.
9. While the Plan is in effect, the selection and nomination of Trustees
who are not "interested persons" (as defined in the Act) of the Fund shall be
committed to the discretion of the Trustees who are not "interested persons".
10. The Fund shall preserve copies of the Plan, any agreement in connection
with the Plan, and any report made pursuant to paragraph 8 hereof, for a period
of not less than six years from the date
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of the Plan, such agreement or report, the first two years in an easily
accessible place.
COMMONWEALTH INTERNATIONAL SERIES TRUST
on behalf of
COMMONWEALTH NEW ZEALAND FUND
Date: _____________________ By:_________________________________
Robert M. Scharar
President
Attest:
___________________________
Terence P. Smith
Assistant Secretary
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