-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UF+raZ/cViVs+2tDUQa3TX35Kw0Fe4Sas2p8Dfv8BshFg01Xa2ZZYgWuziPhSu9B XHJubtYF3yuffy90n1pLPw== 0001021408-98-000476.txt : 19980717 0001021408-98-000476.hdr.sgml : 19980717 ACCESSION NUMBER: 0001021408-98-000476 CONFORMED SUBMISSION TYPE: N-1A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980716 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEWITT MONEY MARKET FUND CENTRAL INDEX KEY: 0001065899 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: N-1A SEC ACT: SEC FILE NUMBER: 333-59221 FILM NUMBER: 98667381 FILING VALUES: FORM TYPE: N-1A SEC ACT: SEC FILE NUMBER: 811-08885 FILM NUMBER: 98667382 BUSINESS ADDRESS: STREET 1: HEWITT INVESTMENT GROUP STREET 2: 100 HALF DAY RD CITY: LINCOLNSHIRE STATE: IL ZIP: 60069 BUSINESS PHONE: 8472955000 MAIL ADDRESS: STREET 1: HEWITT INVESTMENT GROUP STREET 2: 100 HALF DAY RD CITY: LINCOLNSHIRE STATE: IL ZIP: 60069 N-1A 1 FORM N-1A As filed with the Securities and Exchange Commission on July 16, 1998 Securities Act File No. 33-____ Investment Company Act File No. 811-___ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________ FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] Pre-Effective Amendment No. ___ [ ] Post-Effective Amendment No. ___ [ ] and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] Amendment No. ___ [ ] (Check appropriate box or boxes.) _______________ HEWITT SERIES TRUST (Exact Name of Registrant as Specified in Charter) 100 Half Day Road Lincolnshire, Illinois 60069 (Address of Principal Executive Offices) (847) 295-5000 (Registrant's Telephone Number, Including Area Code) Peter E. Ross, Esq. 100 Half Day Road Lincolnshire, Illinois 60069 copy to: Kenneth S. Gerstein, Esq. Schulte Roth & Zabel LLP 900 Third Avenue New York, New York 10022 (Name and address of Agent for Service) As soon as practicable after this registration statement becomes effective. (Approximate Date of Proposed Public Offering) The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. FORM N-1A HEWITT SERIES TRUST CROSS REFERENCE SHEET
N-1A ITEM NUMBER ---------------- PART A CAPTION ------ ------- 1. Front and Back Cover Pages Front and Back Cover Pages 2. Risk/Return Summary: Investments, About The Fund Risks and Performance 3. Risk/Return Summary: Fee Table Investor Expenses 4. Investment Objectives, Principal Investment Objective and Investment Strategies, and Related Risks Policies; Additional Information 5. Management's Discussion of Fund Not Applicable (Registrant Performance is a newly-formed entity.) 6. Management, Organization, and Capital Management Arrangements Structure 7. Shareholder Information How To But Shares; How To Redeem Shares; Net Asset Value; Dividends and Distributions; Taxes 8. Distribution Arrangements Distribution and Servicing Arrangements 9. Financial Highlights Information Not Applicable (Registrant is a newly-formed entity.)
PART B CAPTION ------ ------- 10. Cover Page and Table of Contents Cover Page and Table of Contents 11. Fund History Not Applicable (Registrant is a newly-formed entity.) 12. Description of the Fund and Its Investment Policies and Investments and Risks Practices; Investment Restrictions 13. Management of the Fund Management 14. Control Persons and Principal Holders Additional Information of Securities 15. Investment Advisory and Other Services Management; Distribution Arrangements; Expenses; Additional Information 16. Brokerage Allocation and Other Portfolio Transactions Practices 17. Capital Stock and Other Securities Additional Information 18. Purchase, Redemption and Pricing of Purchase and Redemption of Shares Shares; Determination of Net Asset Value 19. Taxation of the Fund Taxes 20. Underwriters Distribution Arrangements 21. Calculation of Performance Data Performance Information 22. Financial Statements Report and Audit of Statement of Assets and Liabilities
PART C - ------ Information required to be included in Part C is set forth under the appropriate Item, so numbered, in Part C to this Registration statement. SUBJECT TO COMPLETION DATED: JULY 16, 1998 The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where an offer or sale is not permitted. HEWITT MONEY MARKET FUND A SERIES OF HEWITT SERIES TRUST INSTITUTIONAL SHARES ADMINISTRATIVE SHARES Prospectus [ ], 1998 - -------------------------------------------------------------------------------- Hewitt Money Market Fund (the "Fund") is a series of Hewitt Series Trust, a diversified, open-end management investment company. The Fund is a money market fund. The investment objective of the Fund is to provide a high level of income, while preserving capital and liquidity, by investing in high quality, short-term securities. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. - -------------------------------------------------------------------------------- TABLE OF CONTENTS ________________________________________________________________________________ HEWITT MONEY MARKET FUND A SERIES OF HEWITT SERIES TRUST INSTITUTIONAL SHARES ADMINISTRATIVE SHARES ---------------------------------------------------------------------- ABOUT THE FUND 3 ---------------------------------------------------------------------- INVESTOR EXPENSES 3 ---------------------------------------------------------------------- INVESTMENT OBJECTIVE AND POLICIES 4 ---------------------------------------------------------------------- MANAGEMENT ARRANGEMENTS 6 ---------------------------------------------------------------------- HOW TO BUY SHARES 7 ---------------------------------------------------------------------- HOW TO REDEEM SHARES 8 ---------------------------------------------------------------------- NET ASSET VALUE 10 ---------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS 10 ---------------------------------------------------------------------- TAXES 11 ---------------------------------------------------------------------- DISTRIBUTION AND SERVICING 11 ARRANGEMENTS ---------------------------------------------------------------------- PERFORMANCE INFORMATION 12 ---------------------------------------------------------------------- ADDITIONAL INFORMATION 12 ________________________________________________________________________________
2 ABOUT THE FUND Investment Goals. Hewitt Money Market Fund (the "Fund") is a series of Hewitt Series Trust (the "Trust"), a diversified, open-end management investment company. The Fund is a money market fund. Its investment objective is to provide a high level of income, while preserving capital and liquidity, by investing in high quality, short-term securities. The Fund is designed for use as an investment option by employee benefit plans, individual retirement accounts and other investors who seek income and stability of capital. Unlike most other money market funds, the Fund does not maintain a stable net asset value per share because it declares dividends on a monthly basis (rather than daily). This will not affect the return on your investment in the Fund. Principal Investment Strategies. The Fund pursues its investment objective by investing all of its investable assets in the Money Market Master Portfolio (the "Portfolio"), which is a series of Master Investment Portfolio ("MIP"). The Portfolio has the same investment objective and substantially the same investment policies as the Fund. Barclays Global Fund Advisors, Inc. (the "Investment Adviser") serves as the Portfolio's investment adviser. The Portfolio is a diversified portfolio that invests in the following types of money market instruments: . U.S. Government Obligations . Bank Obligations . Commercial Paper and Short-Term Corporate Debt Instruments . Repurchase Agreements . Letters of Credit . Floating- and Variable-Rate Obligations Principal Risks. Because the Portfolio invests in debt securities, a decline in short-term interest rates will reduce the overall yield of the Fund and the return on an investment. Strong equity markets or a weak economy could cause a decline in short-term interest rates. Although the Portfolio invests only in high quality obligations, if an issuer fails to pay interest or to repay principal, the return on an investment in the Fund would be adversely affected and the net asset values of the Fund's shares could decline. An investment in the Fund is not a deposit account of Barclays Global Fund Advisors, Inc. or any of its affiliates and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. It is possible to lose money by investing in the Fund. INVESTOR EXPENSES The following Table summarizes the fees and expenses that you may pay if you buy and hold shares of the Fund. It is based on estimates of expenses for the current year.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) Institutional Administrative Shares Shares ------ ------ Maximum Sales Charge (Load) Imposed on Purchases...................................... None None Maximum Deferred Sales Charge (Load).................................................. None None Maximum Sales Charge (Load) Imposed on Reinvested Dividends........................... None None Redemption Fee........................................................................ None None
3
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) (as a percentage of average net assets) Management Fees/1/.................................................................................. 0.10% 0.10% Shareholder Servicing Fees.......................................................................... 0.20% 0.20% Distribution (12b-1) Fees........................................................................... None 0.25% Other Expenses/2/................................................................................... 0.15% 0.20% Total Annual Fund Operating Expenses................................................................ 0.45% 0.75%
The following Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all your shares at the end of those periods. It also assumes that your investment has a 5% return each year and that the Fund's operating expenses are as estimated above and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be: EXAMPLE 1 Year 3 YEARS ---------------------------------------- ------ ------- Institutional Shares $46.04 $144.64 Administrative Shares $76.64 $239.96 INVESTMENT OBJECTIVE AND POLICIES Investment Objective. The Fund seeks to provide a high level of income, while preserving capital and liquidity, by investing in high quality, short-term securities. Investment Policies. The Fund pursues its investment objective by investing all of its investable assets in the Money Market Master Portfolio (the "Portfolio"). The Portfolio is a series of Master Investment Portfolio ("MIP"), which is an investment company, and has the same investment objective and substantially the same investment policies as the Fund. It invests exclusively in high quality, short-term debt securities (money market instruments), including: U.S. Government obligations; certificates of deposit, time deposits and other obligations issued by domestic banks; commercial paper and other debt obligations of corporations; and repurchase agreements with respect to these obligations. The Portfolio maintains a dollar-weighted average maturity of 90 days or less, and invests only in securities having remaining maturities of 397 days or less. All investments must be U.S. dollar denominated. Securities purchased by the Portfolio, including repurchase agreements, must be determined by the Investment Adviser to present minimal credit risks pursuant to procedures adopted by the Board of Trustees of MIP. Investments purchased by the Portfolio will at the time of purchase be rated as high quality by at least two nationally recognized statistical rating organizations ("NRSROs") (or by one NRSRO if the instrument is rated by only one such organization). However, the Portfolio may purchase an unrated investment if __________________________ /1/ Includes investment advisory fee and estimated ordinary operating expenses of the Portfolio. Reflects the contractual fee currently payable by the Fund. The Investment Adviser may elect, in its sole discretion, to waive or reimburse all or a portion of its fees charged to, or expenses paid by, the Fund. Any waivers or reimbursements would reduce the Fund's total expenses. /2/ The Fund's Administrator, Hewitt Associates LLC, has agreed to waive its fees or absorb expenses of the Fund to the extent necessary to assure that total ordinary operating expenses of Institutional Shares of the Fund do not exceed annually .45% of the average daily net assets attributable to Institutional Shares. The Administrator has also agreed to waive its fees or absorb expenses to the extent necessary to assure that total ordinary operating expenses of Administrative Shares do not exceed annually .75% of the average daily net assets attributable to Administrative Shares. The Administrator may not modify or terminate these waiver agreements without the approval of the Board of Trustees of the Trust. Without this agreement, it is estimated that Total Annual Fund Operating Expenses would be ___% of average daily net assets for Institutional Shares and ___% of average daily net assets for Administrative Shares, assuming in each case average net assets of $____ million. 4 it is determined by the Investment Adviser to be of comparable quality to an investment rated as high quality, in accordance with procedures established by the Board of Trustees of MIP. Subsequent to its purchase by the Portfolio, an issue of securities may cease to be rated or its rating may be reduced below the minimum required rating. The Investment Adviser will consider any such event in determining whether the Portfolio should continue to hold the securities. If the Portfolio continues to hold the securities, it may be subject to additional risk of default. Types of Investments. Subject to applicable investment policies and restrictions, the Investment Adviser purchases and sells securities for the Portfolio based on its assessment of current market conditions and its expectations regarding future changes in interest rates and economic conditions. The Portfolio may invest in the following types of securities: U.S. GOVERNMENT OBLIGATIONS - These obligations include debt securities issued or guaranteed as to principal and interest by the U.S. Government or one of its agencies or instrumentalities. Payment of principal and interest on U.S. Government obligations (i) may be backed by the full faith and credit of the United States (as with U.S. Treasury obligations and GNMA certificates) or (ii) may be backed solely by the issuing or guaranteeing agency or instrumentality itself (as with FNMA notes). In the latter case, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation for ultimate repayment. There can be no assurance that the U.S. Government would provide financial support to its agencies or instrumentalities where it is not obligated to do so. Certain types of U.S. Government obligations are subject to fluctuations in yield or value due to their structure or contract terms. BANK OBLIGATIONS - These obligations include, but are not limited to, negotiable certificates of deposit ("CDs"), bankers' acceptances and fixed time deposits of U.S. banks, foreign banks, foreign branches of U.S. banks, and U.S. branches of foreign banks. The Portfolio may invest 25% or more of its total assets in obligations of banks, to the extent that the SEC, by rule or interpretation, permits funds to reserve freedom to concentrate in such obligations. Fixed time deposits are bank obligations that are payable at stated maturity dates and bear fixed rates of interest. They generally may be withdrawn on demand, but may be subject to early withdrawal penalties which vary depending upon market conditions and the remaining maturity of the obligation. Although fixed time deposits do not have an established market, there are no contractual restrictions on the Portfolio's right to transfer a beneficial interest in the deposit to a third party. The Portfolio will not invest in fixed time deposits subject to withdrawal penalties, other than overnight deposits, if as a result more than 10% of the value of its net assets would be invested in illiquid securities. Obligations of foreign banks and foreign branches of U.S. banks involve somewhat different investment risks from those affecting domestic obligations. Liquidity could be impaired because of political and economic developments and the obligations may be less marketable than comparable obligations of U.S. banks. A foreign jurisdiction might impose withholding taxes on interest income payable on those obligations and there is a risk that foreign deposits may be seized or nationalized. Foreign governmental restrictions (such as foreign exchange controls) may be adopted which might adversely affect the payment of principal and interest on those obligations and the selection of those obligations may be more difficult because there may be less publicly available information concerning foreign banks or the accounting, auditing and financial reporting standards, practices and requirements applicable to foreign banks may differ from those applicable to U.S. banks. Foreign banks are not subject to examination by any U.S. Government agency. COMMERCIAL PAPER AND SHORT-TERM CORPORATE DEBT INSTRUMENTS Commercial paper is a short-term, unsecured promissory note issued by a corporation to finance its short-term credit needs. It is usually sold on a discount basis and has a maturity at the time of issuance not exceeding nine months. Variable amount master demand notes are a type of commercial paper. These notes are demand obligations that permit the investment of fluctuating amounts at varying market rates of interest pursuant to arrangements between the issuer and a commercial bank acting as agent for the payee of the notes. Both parties have the right to vary the amount of the outstanding indebtedness on the notes. 5 Corporate debt securities include non-convertible bonds and debentures that have not more than thirteen months remaining to maturity at the time of their purchase by the Portfolio. REPURCHASE AGREEMENTS - These agreements involve the purchase of a security by the Portfolio coupled with the agreement of the seller of the security to repurchase that security on a future date and at a specified price together with interest. The maturities of repurchase agreements are typically quite short, often overnight or a few days. The Portfolio may enter into repurchase agreements with respect to securities that it may purchase under its investment policies without regard to the maturity of the securities underlying the agreements. All repurchase transactions are fully collateralized. However, the Portfolio may incur a loss on a repurchase transaction if the seller defaults and the value of the underlying collateral declines or the Portfolio's ability to sell the collateral is restricted or delayed. The Fund may participate in pooled repurchase agreement transactions with other funds advised by the Investment Adviser. LETTERS OF CREDIT - Debt obligations which the Portfolio is permitted to purchase may be backed by an unconditional and irrevocable letter of credit of a bank, savings and loan association or insurance company which assumes the obligation for payment of principal and interest in the event of default by the issuer. Letter of credit-backed investments must, in the opinion of the Investment Adviser, be of investment quality comparable to other permitted investments. FLOATING-RATE AND VARIABLE-RATE OBLIGATIONS - Debt obligations purchased by the Portfolio may have interest rates that are periodically adjusted at specified intervals or whenever a benchmark rate or index changes. These floating- and variable-rate instruments may include certificates of participation in such instruments. Borrowings. The Fund and the Portfolio do not borrow to make investments. However, they each may borrow money from banks in an amount not exceeding 10% of the value of its net assets (calculated at the time of the borrowing) for temporary purposes to meet redemptions. Additional investments will not be made by the Fund or the Portfolio while it has outstanding borrowings in excess of 5% of its net assets. The Fund and the Portfolio may pledge their assets to secure permitted borrowings. Illiquid Securities. The Portfolio may invest up to 10% of the current value of its net assets in securities that are illiquid because they lack a readily available market or because of legal or contractual restrictions on resale. Fixed time deposits that are subject to withdrawal penalties and that have maturities of more than seven days, and repurchase agreements with maturities of more than seven days, are treated as illiquid. The absence of a trading market for illiquid securities can make it difficult to ascertain a market value for those investments. Disposing of these securities may involve time-consuming negotiation and legal expenses, and it may be difficult or impossible to sell these securities promptly at acceptable prices. Investment Restrictions. The Fund and the Portfolio are subject to various additional restrictions on their investments in addition to those described in this Prospectus. Certain of those restrictions, as well as the restrictions on borrowings and concentration of investments described above and the investment objective of the Fund and the Portfolio, are deemed fundamental policies. These fundamental policies cannot be changed without the approval of the holders of a majority of the Fund's or the Portfolio's outstanding voting securities, as defined in the Investment Company Act of 1940 (the "Investment Company Act"). MANAGEMENT ARRANGEMENTS Board of Trustees. The business and affairs of the Fund are managed under the direction and supervision of the Trust's Board of Trustees. Investment Adviser. Barclays Global Fund Advisors (the "Investment Adviser") serves as the investment adviser of the Portfolio. The Investment Adviser is an indirect subsidiary of Barclays Bank PLC and is located at 45 Fremont Street, San Francisco, California 94105. As of April 30, 1998, the Investment Adviser and its affiliates provided investment advisory services to accounts with assets of approximately $575 billion. The Portfolio pays the Investment Adviser a monthly fee which is computed at the annual rate of 6 0.10% of the Fund's average daily net assets. In consideration of this fee, the Investment Adviser provides investment advice and is obligated to bear all of the ordinary operating expenses of the Portfolio. The Investment Adviser manages the assets of the Portfolio in accordance with the Portfolio's investment objective and policies. The primary responsibility of the Investment Adviser is to formulate a continuing investment program and to make all decisions regarding the purchase and sale of securities for the Portfolio. Administrator. Hewitt Associates LLC (the "Administrator") provides administrative services to the Fund. The Administrator is located at 100 Half Day Road, Lincolnshire IL 60069. Services provided by the Administrator include, but are not limited to: managing the daily operations and business affairs of the Fund, subject to the supervision of the Board of Trustees; overseeing the preparation and maintenance of all documents and records required to be maintained by the Fund and the Trust; preparing or assisting in the preparation of regulatory filings, prospectuses and shareholder reports; providing, at its own expense, the services of its personnel to serve as officers of the Trust; and preparing and disseminating material for meetings of the Board of Trustees and shareholders. The Fund pays the Administrator a monthly fee calculated at an annual rate of 0.10% of the Fund's average daily net assets. The Administrator also serves as the Shareholder Servicing Agent for the Fund and is paid compensation by the Fund for furnishing various shareholder related services. See "Distribution and Servicing Arrangements." HOW TO BUY SHARES The Fund offers two classes of its shares to investors: Institutional Shares and Administrative Shares. No sales commissions or other charges are imposed when shares are purchased or redeemed. Institutional Shares. These shares are offered for sale exclusively to employee benefit plans which are recordkeeping clients of Hewitt Associates LLC (the "Shareholder Servicing Agent"). Employee benefit plans may include 401(k) plans and plans qualified under Sections 401(a) or 403(b) of the Internal Revenue Code of 1986, as amended (the "Code"), health and welfare plans and executive deferred compensation plans. Participants in any employee benefit plan that allows participants to direct the investment of their plan accounts should contact their plan administrator if they wish to purchase shares of the Fund for their plan accounts. The plan administrator will provide information regarding the procedures to be followed to purchase shares. For additional information on purchasing Institutional Shares, please call the Shareholder Servicing Agent at [_________]. The appropriate plan fiduciary must submit a completed account application before the plan or its participants may purchase Institutional Shares. Administrative Shares. These shares are available for purchase by individual retirement accounts ("IRAs") and other investors, including individuals, trusts and corporations. They can be purchased through Hewitt Services LLC, which serves as distributor of the Fund's shares (the "Distributor"). Administrative Shares bear certain distribution related expenses. See "Distribution and Servicing Arrangements." You should contact the Distributor to purchase Administrative Shares. If you do not have a brokerage account with the Distributor, you will need to submit a completed Account Application before purchasing Administrative Shares. For additional information on purchasing Administrative Shares or to request an Account Application, please call the Distributor at [______________]. Minimum Initial and Subsequent Investment Amounts. Generally, no minimum initial or subsequent investment requirements apply to the purchase of Institutional Shares or Administrative Shares. However, if Administrative Shares are not held in an IRA or other account with a financial intermediary (including the Distributor) that maintains record ownership of shares on an omnibus basis for its customers: (i) the initial purchase of Administrative Shares must be in an amount of $10,000 or more; (ii) subsequent purchases of Administrative Shares must be $1,000 or more; and (iii) the Fund will have the right to effect a mandatory redemption of those shares if, as a result of one or more redemptions, your shares have an aggregate value of less than $5,000. Before the Fund effects a mandatory redemption of shares, you will be notified and given 60 days to increase the amount of your investment in the Fund. 7 Shareholder Accounts. The Fund does not issue share certificates for Institutional Shares or Administrative Shares. Instead, an account is maintained for each shareholder by [ ], as the Fund's transfer agent (the "Transfer Agent"), or by the Shareholder Servicing Agent. Your account will reflect the full and fractional shares of the Fund that you own. Shareholders will be sent confirmations of each transaction in shares and monthly statements showing account balances. General Information. Shares of the Fund may be purchased on any Business Day. A Business Day is any day that the New York Stock Exchange (NYSE) is open and that is not a federal bank holiday. All purchases of shares are effected at the net asset value per share next determined after (i) an order in proper form is received by the Shareholder Servicing Agent (for Institutional Shares) or the Distributor (for Administrative Shares) and (ii) federal funds are received by the Fund's custodian. Purchase orders received prior to the close of regular trading on the NYSE (normally, 4:00 p.m., Eastern time) are effected at the net asset value per share determined as of the close of regular trading on the NYSE on that Business Day. See "Net Asset Value." Orders received after the close of regular trading on the NYSE are effected at the net asset value per share determined on the next Business Day. Purchase by Federal Funds Wire. Shares may be purchased by wiring federal funds to the Fund's custodian. The Fund does not impose any transaction charges; however, wire charges may be imposed by the bank which transmits the wire. Purchase payments should be wired to: [Wire instructions] Purchase by Check (Administrative Shares Only). Administrative Shares may be purchased by sending a check as described below. If you purchase shares by check, your purchase order will not become effective until federal funds are credited to the Fund's account, which normally will occur on the Business Day following receipt of the check. Checks to purchase Administrative Shares should be sent to: [Address] HOW TO REDEEM SHARES You may redeem all or a portion of your shares of the Fund on any Business Day without any charge by the Fund. Shares are redeemed at their net asset value per share next computed after the receipt of a redemption request in proper form. Requests to redeem shares may be made as described below. Institutional Shares. Participants in any employee benefit plan that allows participants to direct the investment of their plan accounts should contact their plan administrator for information and instructions on redeeming shares. Requests by employee benefit plans to redeem Institutional Shares may be transmitted to the Shareholder Servicing Agent in accordance with procedures established by the plans with the Shareholder Servicing Agent. Redemption proceeds for Institutional Shares will be paid by federal funds wire to a bank account designated by the plan. For additional information on redeeming Institutional Shares, please call [ ]. Administrative Shares. Requests to redeem Administrative Shares may be made in writing or by telephone as described below. Redemption proceeds for Administrative Shares will be paid by check or, if you request, by federal funds wire (minimum wire amount $ _______ ) to a pre-designated bank account. If you purchase shares by sending a check (including a certified or cashiers check), the payment of the proceeds of a redemption of those shares may be delayed until the check has cleared. This may take up to 15 days. For this reason, if you need immediate access to your investment, you should purchase shares by wiring federal funds. In order to redeem Administrative Shares that are not held through a financial intermediary (including the Distributor), a completed Account Application must be on file with the Distributor. See "How to Buy Shares." You may designate a bank account to receive redemption payments on the Account Application. You may change this designation at any time, by providing written instructions to the Distributor. These instructions must be signed by each person shown on the account registration as an owner of the account, and 8 the signatures must be guaranteed by an eligible guarantor institution as described under "Written Redemption Requests" below. Signature guarantees may also be required for you to change your address on the Fund's records. For additional information on redeeming Administrative Shares, please call [___________]. General Information. Redemption requests are effected at the net asset value per share next computed after receipt by the Shareholder Servicing Agent (for Institutional Shares) or the Distributor (for Administrative Shares) of a redemption request in proper form. Requests received prior to the close of regular trading on the NYSE (normally, 4:00 p.m., Eastern time) are effected at the net asset value per share determined as of the close of regular trading on the NYSE on that Business Day. See "Net Asset Value." Requests received after the close of regular trading on the NYSE are effected at the net asset value per share determined on the next Business Day. Redemption proceeds are usually mailed or wired on the Business Day following the day a redemption is effected. In unusual circumstances, the Fund may suspend the right of redemption or postpone the payment of redemption proceeds for more than seven days as permitted under the Investment Company Act. The Fund may pay redemption proceeds by distributing securities held by the Portfolio, but only in the unlikely event that the Board of Trustees of the Trust determines that payment of the proceeds in cash would adversely affect other shareholders of the Fund. A shareholder who redeems during any 90 day period shares having a value not exceeding the lesser of (i) $250,000 or (ii) 1% of the net assets of the Fund, will not be subject to this procedure. Telephone Redemption Procedures (Administrative Shares Only). You may redeem Administrative Shares by calling the Distributor at [ ]. You will be asked to provide the account name and number, and the amount of the redemption. Proceeds of the redemption will be paid by sending you a check, unless you request payment by federal funds wire to a pre-designated bank account (minimum wire amount $ _______ ). A TELEPHONE REDEMPTION REQUEST MAY BE MADE ONLY IF THE TELEPHONE REDEMPTION PROCEDURE HAS BEEN SELECTED ON THE ACCOUNT APPLICATION OR IF WRITTEN INSTRUCTIONS AUTHORIZING TELEPHONE REDEMPTION HAVE BEEN FILED WITH THE DISTRIBUTOR. The Distributor uses certain reasonable procedures to confirm that telephone redemption requests are genuine, such as recording telephone calls, providing written confirmation of transactions, or requiring a form of personal identification or other information prior to effecting a telephone redemption. If these procedures are used, the Fund, the Distributor and the Transfer Agent will not be liable to you for any loss due to fraudulent or unauthorized telephone instructions. During periods of severe market or economic conditions, it may be difficult to contact the Distributor by telephone. In that event, you should follow the procedures described below for written redemption requests, but send the request by overnight delivery service to: [Give street address] Written Redemption Requests (Administrative Shares Only). You may redeem Administrative Shares by sending a written redemption request. The request must include the complete account name and address and the amount of the redemption and must be signed by each person shown on the account registration as an owner of the account. The signature of each person signing the request must be guaranteed by an eligible guarantor institution if the redemption is [$ _____ ] or more. Organizations that may qualify as eligible guarantor institutions include banks, brokers, dealers, national securities exchanges, clearing agencies, credit unions, and savings associations. The Fund reserves the right to request additional information from, and to make reasonable inquiries of, any eligible guarantor institution. Proceeds of the redemption will be paid by sending you a check, unless you request payment by federal funds wire to a pre- designated bank account (minimum wire amount $ _______ ). Written redemption requests should be sent to: [Give p.o. box address] 9 NET ASSET VALUE The net asset values per share of Institutional Shares and Administrative Shares are computed separately on each Business Day. Institutional Shares and Administrative Shares will not have the same net asset values because the expenses of the two share classes differ. Net asset value per share is determined as of the close of regular trading on the NYSE (normally, 4:00 p.m. Eastern time). However, on any day the trading markets for both U.S. Government securities and money market instruments close early, net asset value will be computed as of the earlier closing time. Unlike most other money market funds, the Fund does not seek to maintain a stable net asset value per share. Net asset value per share of each class of the Fund's shares is calculated by dividing the value of the Fund's total assets attributable to that class, less the liabilities (including accrued expenses) of the class and its allocable share of the Fund's liabilities (and accrued expenses), by the number of shares of the class outstanding. Because the Fund invests in the Portfolio, its assets will consist primarily of an interest in the Portfolio. The value of this interest will depend on the value of the assets of the Portfolio and its liabilities and expenses. In determining the value of the Portfolio's assets, securities held by the Portfolio are valued using the "amortized cost" method of valuation. This method involves valuing each investment at cost and thereafter assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the investment. Amortized cost valuation provides certainty in valuation, but may result in periods during which the value of an investment, as determined by amortized cost, is higher or lower than the price that would be received if the investment were sold. The Investment Adviser monitors the deviation between the net asset value of the Portfolio determined by using available market quotations or market equivalents and its net asset value determined by using amortized cost. If it is determined that use of amortized cost valuation will result in material dilution or other unfair results, the assets of the Portfolio may be valued based upon market quotations. DIVIDENDS AND DISTRIBUTIONS Dividends are declared and paid monthly on each class of the Fund's shares from net investment income (after deduction of expenses) and any realized short-term capital gains allocable to that class. Distributions of net realized long-term capital gains, if any, are declared and paid annually at the end of the Fund's fiscal year. All dividends and other distributions are automatically reinvested in full and fractional shares of the Fund at the applicable net asset value per share in effect on the payment date, unless otherwise requested. Plans may request that dividends and other distributions on Institutional Shares be paid by check by notifying the Shareholder Servicing Agent. Shareholders who own Administrative Shares may request that dividends and other distributions be paid by check by sending a written request to the Distributor. Any such request must be received by the Shareholder Servicing Agent or the Distributor at least five Business Days prior to a payment date in order to be effective on that date. Dividends are payable to all shareholders of record as of the time of declaration. Shares become entitled to any dividend declared beginning on the day on which they are purchased and are entitled to receive any dividends declared through the day before they are redeemed. In order to satisfy certain distribution requirements of the Code, the Fund may declare special or regular year-end dividend and capital gains distributions during October, November or December. If received by shareholders by January 31, these distributions are deemed to have been paid by the Fund and received by shareholders on December 31 of the prior year. 10 TAXES Taxation of the Fund. The Fund has elected and intends to qualify each year as a "regulated investment company" under Subchapter M of the Code. If so qualified, the Fund will not be subject to federal income tax to the extent it distributes its net income to shareholders. Federal Taxation of Shareholders. Dividend distributions, whether received in cash or reinvested in additional shares, will be taxable as ordinary income. Although the Fund does not expect to distribute any long-term capital gains, investors will also be subject to tax on any capital gains distributions they receive. Since the Fund does not expect to earn dividend income, the dividends and other distributions the Fund pays will generally not qualify for the dividends-received deduction available to corporate investors. In January of each year, the Fund sends each shareholder a statement showing the tax status of distributions for the past calendar year. The redemption of shares of the Fund is a taxable event and will result in a gain (or loss) for federal income tax purposes, depending on the amount you receive and the cost of your shares. The Fund is required to withhold 31% of all taxable distributions and redemption proceeds paid to shareholders who either have not complied with IRS taxpayer identification regulations or are otherwise subject to backup withholding. Investors are asked to certify in their Account Applications that their taxpayer identification numbers are correct and that they are not subject to backup withholding. Failure to provide this certification will result in backup withholding. State and Local Taxes. Dividends and other distributions paid by the Fund and received by an investor may be subject to state and local taxes. Although shareholders of the Fund do not directly receive interest on U.S. Government securities held by the Fund, certain states and localities may allow the character of the Fund's income to pass through to shareholders. If so, the portion of dividends paid by the Fund that is derived from interest on certain U.S. Government securities may be exempt from state and local taxes. Applicable rules vary from state to state, and interest on certain securities of U.S. Government agencies may not qualify for the exemption in some states. The United States Supreme Court has ruled that income from certain types of repurchase agreements involving U.S. Government securities does not constitute interest on U.S. Government securities for this purpose. However, it is not clear whether the Court's holding extends to all types of repurchase agreements involving U.S. Government securities in which the Fund may invest. Any exemption from state and local income taxes does not preclude states from assessing other taxes (such as intangible property taxes) on the ownership of U.S. Government securities. The discussion set forth above regarding federal and state income taxation is included for general information only. Prospective investors should consult their own tax advisors concerning the federal and state tax consequences of an investment in the Fund. DISTRIBUTION AND SERVICING ARRANGEMENTS Distributor. Hewitt Services LLC (the "Distributor"), a broker-dealer affiliated with the Administrator, serves as the distributor of the Fund's shares. The Distributor is located at 100 Half Day Road, Lincolnshire IL 60069. Shareholder Servicing Arrangements. The Fund has retained Hewitt Associates LLC to serve as Shareholder Servicing Agent. The Shareholder Servicing Agent is responsible for receiving on behalf of the Transfer Agent orders by employee benefit plans to purchase and redeem Institutional Shares and for maintaining records showing the number of Institutional Shares allocable to individual participant accounts in those plans. In addition, the Shareholder Servicing Agent is responsible for maintaining records showing the number of Administrative Shares owned by IRAs established through the Distributor and by other investors who have purchased Administrative Shares through the Distributor. Another responsibility of the Shareholder Servicing Agent is to send all shareholder communications relating to the Fund to plan participants and to Fund shareholders or arrange for these materials to be sent. For these services, the Fund pays the Shareholder Servicing Agent a monthly fee calculated at an annual rate of 0.20% of the Fund's average daily net assets. The Fund also reimburses the Shareholder Servicing Agent for certain out-of-pocket expenses. Distribution Fee (Administrative Shares only). The Fund has adopted a plan pursuant to Rule 12b-1 under the Investment Company Act which allows the Fund to pay expenses relating to the distribution of Administrative Shares. Under the plan, the Fund pays a fee to the Distributor, calculated at an annual rate of 0.25% of the average daily net assets of Administrative Shares, as compensation for 11 services rendered in connection with the sale and distribution of Administrative Shares. This fee is an expense of Administrative Shares only and is not borne by Institutional Shares. Because the fee is paid out of Fund assets on an on-going basis, over time the fee will increase the cost of an investment in Administrative Shares. PERFORMANCE INFORMATION The Fund may publish its "current yield" and "effective yield" in advertisements, sales materials and shareholder reports. Current yield refers to the income generated by an investment in the Fund over a seven-day period; the income is then annualized. In annualizing income, the amount of income generated by the investment during the period is assumed to be generated each week over a 52-week period and is shown as a percentage of the investment. The effective yield is calculated in the same manner, but when annualized, the income earned by an investment in the Fund is assumed to be reinvested. The effective yield will be slightly higher than the current yield because of the compounding effect of the assumed reinvestment. All quotations of investment performance are based upon historical investment results and are not intended to predict future performance. In addition, comparative performance information may be used from time to time in advertisements, sales literature and shareholder reports. This information may include data, ratings and rankings from Lipper Analytical Services, Inc., IBC Financial Data Money Fund Report, The Bank Rate Monitor, Morningstar and other industry publications, business periodicals and services. Comparisons to recognized market indices and to the returns on specific money market securities or types of securities or investments may also be used. The Fund may disseminate yields for periods longer than seven days, and may report its total return. The "total return" of the Fund refers to the average annual compounded rate of return over a specified period (as stated in the advertisement) that would equate an initial amount invested at the beginning of the period to the end of period redeemable value of the investment, assuming the reinvestment of all dividends and distributions. ADDITIONAL INFORMATION Organization. The Trust is a Delaware business trust that was organized on July 7, 1998. It is authorized to issue an unlimited number of shares of beneficial interest, $.001 par value. As of the date of this Prospectus, the Trust has only one series of its shares outstanding, representing interests in the Fund. These shares are divided into two classes of shares (Institutional Shares and Administrative Shares). The Board of Trustees has the power to establish additional series of shares, representing interests in separate investment portfolios and, subject to applicable laws and regulations, to issue two or more classes of shares of each series. Shares are fully paid and non-assessable, and have no preemptive or conversion rights. Shareholders of the Fund are entitled to vote, together with the holders of any other series of the Trust's shares, on the election of Trustees and the ratification of the Trust's independent auditors when those matters are voted upon at a meeting of shareholders. Shareholder will also be entitled to vote on certain other matters as required by the Investment Company Act or the Trust's Declaration of Trust. On these other matters, shares of the Fund will generally be voted as a separate class from other series of the Trust's shares. Institutional Shares and Administrative Shares will also vote as separate classes on certain matters. Each share (and fractional share) is entitled to one vote (or fraction thereof). However, if shares of more than one class or series vote together on a matter, each share will have that number of votes which equals the net asset value of such share (or fraction thereof). All shares have non-cumulative voting rights, meaning that shareholders entitled to cast more than 50% of the votes for the election of Trustees can elect all of the Trustees standing for election if they choose to do so. As discussed below, the Fund will pass through to its shareholders the right to vote on Portfolio matters requiring shareholder approval. Information Concerning Investment Structure. The Fund does not invest directly in securities. Instead, it invests all of its investable assets in the Portfolio, a separate series of MIP. The Portfolio has the same investment objective and substantially the same investment policies as the Fund. The Portfolio, in turn, purchases, holds and sells investments in accordance with that objective and those policies. The Trustees of the Trust believe that the per share expenses of the Fund (including its share of the Portfolio's expenses) will be less than or approximately equal to the expenses that the Fund would incur if its assets were invested directly in securities and other investments. 12 The Fund may withdraw its assets from the Portfolio at any time, and will do so if the Trustees believe it to be in the best interest of the Fund's shareholders. If the Fund withdraws its investment in the Portfolio, it will either invest directly in securities in accordance with the investment policies described in this Prospectus or will invest in another pooled investment vehicle that has the same investment objective and policies as the Fund. In connection with the withdrawal of its interest in the Portfolio, the Fund could receive securities and other investments from the Portfolio instead of cash. This could cause the Fund to incur certain expenses. A change in the investment objective, policies or restrictions of the Portfolio may cause the Fund to withdraw its investment in the Portfolio. Alternatively, the Fund could seek to change its objective, policies or restrictions to conform to those of the Portfolio. The investment objective and certain of the investment restrictions of the Portfolio may not be changed without the approval of investors in the Portfolio. When the Fund is asked to vote on such a change or on other matters concerning the Portfolio, the Fund will hold a shareholders meeting and vote its interest in the Portfolio in the same manner as shares of the Fund are voted. Shares of the Portfolio will be held by investors other than the Fund. These investors may include other series of the Trust, other mutual funds and other types of pooled investment vehicles. When investors in the Portfolio vote on matters affecting the Portfolio, the Fund could be outvoted by other investors. The Fund may also otherwise be adversely affected by other investors in the Portfolio. These other investors offer shares (or interests) to their investors which have costs and expenses that differ from those of the Fund. Thus, the investment returns for investors in other funds that invest in the Portfolio may differ the investment return of shares of the Fund. These differences in returns are also present in other fund structures. Information about other holders of shares of the Portfolio is available from the Shareholder Servicing Agent or the Distributor. Custodian. [____________________] (the "Custodian") is the Fund's custodian. The Custodian maintains custody of all securities and cash assets of the Fund and the Portfolio and is authorized to hold these assets in securities depositories and to use subcustodians. Transfer Agent. [____________________] (the "Transfer Agent") is the Fund's transfer agent and dividend disbursing agent. The Transfer Agent has entered into arrangements with the Shareholder Servicing Agent under which the Shareholder Servicing Agent is authorized to receive and is responsible to transmit to the Transfer Agent orders to purchase and redeem Institutional Shares that are received from employee benefit plans. Pursuant to these arrangements, the Shareholder Servicing Agent also maintains records showing the number of Institutional Shares allocable to individual participant accounts in employee benefit plans and the number of Administrative Shares owned by IRAs established through the Distributor and by other investors who have purchased Administrative Shares through the Distributor. Year 2000. Many computer software systems in use today recognize dates using a two digit year code. These systems cannot distinguish between years preceding the year 2000 and years beginning after 1999. This is known as the "Year 2000" problem. Most of the services provided to the Fund and the Portfolio depend on the smooth functioning of computer systems. Any failure to adapt these systems prior to the year 2000 could interfere with the proper operations of the Fund or the Portfolio. The principal service providers to the Fund and the Portfolio have advised the Trust and MIP that they are working to implement necessary changes to their systems and that they expect their systems to be adapted in time. However, there can be no assurance of success. In addition, because the Year 2000 problem affects virtually all organizations, companies in which the Portfolio invests could be adversely impacted by this issue. The extent of the impact of Year 2000 problems on the Fund and the Portfolio cannot be predicted. No person has been authorized to give any information or to make any representations other than those contained in this Prospectus. If given or made, such other information and representations should not be relied upon as having been authorized by the Trust. This Prospectus does not constitute an offer in any state in which, or to any person, to whom , such offer may not lawfully be made. 13 INVESTMENT ADVISER Barclays Global Fund Advisors, Inc. 45 Fremont Street San Francisco, California 94105 DISTRIBUTOR Hewitt Services LLC 100 Half Day Road Lincolnshire, Illinois 60069 ADMINISTRATOR AND SHAREHOLDER SERVICING AGENT Hewitt Associates LLC 100 Half Day Road Lincolnshire, Illinois 60069 TRANSFER AGENT [ ] CUSTODIAN [ ] INDEPENDENT AUDITORS [ ] LEGAL COUNSEL Schulte Roth & Zabel LLP 900 Third Avenue New York, New York 10022 The Fund sends annual and semi-annual reports to shareholders. These reports contain information regarding the investments of the Portfolio and the Fund's investment performance and are available without charge from the Distributor, the Shareholder Servicing Agent or your plan administrator. If you have questions regarding the Fund, shareholder accounts, dividends or share purchase and redemption procedures, or if you wish to receive the most recent annual or semi-annual reports, please call 1-800-[ ]. The first annual report will be available beginning [ ]. This Prospectus sets forth concisely the information about the Fund and the Trust that you should know before investing. Additional information about the Fund and the Trust has been filed with the Securities and Exchange Commission (SEC) in a Statement of Additional Information (SAI) dated __________, 1998, which is incorporated herein by reference and is available without charge by writing to the Distributor or Shareholder Servicing Agent or by calling [1-800- xxx-xxxx]. Information about the Fund (including the SAI) can be reviewed and copied at the SEC's Public Reference Room in Washington D.C. (1-800-SEC-0330). Information about the Fund is also available on the SEC's Internet site at http://www.sec.gov and copies of this information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, Washington, D.C. 20549-6009. [40 Act File Number] 14 SUBJECT TO COMPLETION DATED: JULY 16, 1998 The information in this Statement of Additional Information is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Statement of Additional Information is not an offer to sell securities and is not soliciting an offer to buy these securities in any state where an offer or sale is not permitted. HEWITT MONEY MARKET FUND STATEMENT OF ADDITIONAL INFORMATION [ ], 1998 INSTITUTIONAL SHARES ADMINISTRATIVE SHARES ____________________________ Hewitt Money Market Fund (the "Fund") is a series of Hewitt Series Trust (the "Trust"), a diversified, open-end, management investment company. This Statement of Additional Information ("SAI") contains information about the Fund which supplements the information contained in the Fund's Prospectus. The investment objective and policies of the Fund are described in the Prospectus. This SAI is not a prospectus and should be read in conjunction with the Fund's current Prospectus, dated [________], 1998. A copy of the Prospectus may be obtained without charge by writing Hewitt Associates LLC, the Fund's administrator, at 100 Half Day Road, Lincolnshire, Illinois 60069 or by calling [1-800-xxx-xxxx]. TABLE OF CONTENTS
Page ---- INTRODUCTION.............................................................. 1 INVESTMENT RESTRICTIONS................................................... 1 INVESTMENT POLICIES AND PRACTICES......................................... 3 MANAGEMENT................................................................ 7 DISTRIBUTION ARRANGEMENTS................................................. 9 EXPENSES.................................................................. 10 DETERMINATION OF NET ASSET VALUE.......................................... 11 PURCHASE AND REDEMPTION OF SHARES......................................... 12 PORTFOLIO TRANSACTIONS.................................................... 13 TAXES..................................................................... 14 PERFORMANCE INFORMATION................................................... 15 ADDITIONAL INFORMATION.................................................... 16 REPORT AND AUDIT OF STATEMENT OF ASSETS AND LIABILITIES................... 19 SAI APPENDIX.............................................................. 21
-i- INTRODUCTION The Trust is a registered under the Investment Company Act of 1940 (the "1940 Act") as an open-end, management investment company. The Fund, which is currently the sole investment portfolio of the Trust, pursues its investment objective by investing all of its investable assets in the Money Market Master Portfolio (the "Portfolio"). The Portfolio is a series of Master Investment Portfolio ("MIP") and has the same investment objective and investment restrictions as the Fund. MIP, like the Trust, is registered under the 1940 Act as an open-end management investment company. INVESTMENT RESTRICTIONS Fundamental Investment Restrictions. The Fund and the Portfolio are ----------------------------------- subject to certain investment restrictions which are fundamental policies. These restrictions may not be changed without the approval of a majority of the outstanding voting securities of the Fund or the Portfolio, as defined by the 1940 Act. A "majority of the outstanding voting securities" of a Fund or of the Portfolio means the lesser of (i) 67% of the shares of that Fund or of the Portfolio represented at a meeting at which holders of more than 50% of the outstanding shares are present in person or represented by proxy or (ii) more than 50% of the outstanding shares of the Fund or the Portfolio. Under these fundamental restrictions, neither the Fund nor the Portfolio may: (1) purchase the securities of issuers conducting their principal business activity in the same industry if, immediately after the purchase and as a result thereof, the value of the Fund's investments in that industry would be 25% or more of the current value of the Fund's total assets, provided that there is no limitation with respect to investments in (i) obligations of the U.S. Government, its agencies or instrumentalities; (ii) obligations of domestic banks; and provided further, that the Fund may invest all its assets in a diversified, open-end management investment company, or a series thereof, having substantially the same investment objective, policies and restrictions as the Fund; (2) purchase or sell real estate or real estate limited partnerships (other than securities secured by real estate or interests therein or securities issued by companies that invest in real estate or interests therein); (3) purchase commodities or commodity contracts (including futures contracts), except that the Fund and the Portfolio may purchase securities of an issuer which invests or deals in commodities or commodity contracts; (4) purchase interests, leases, or limited partnership interests in oil, gas, or other mineral exploration or development programs; (5) purchase securities on margin (except for short-term credits necessary for the clearance of transactions and except for margin payments in connection with options, futures and options on futures) or make short sales of securities; (6) underwrite securities of other issuers, except to the extent that the purchase of permitted investments directly from the issuer thereof or from an underwriter for an issuer and the later disposition of such securities in accordance with the Fund's or the Portfolio's investment program may be deemed to be an underwriting; and provided further, that the purchase by the Fund of securities issued by a diversified, open-end management investment company, or a series thereof, having substantially the same investment objective, policies and restrictions as the Fund shall not constitute an underwriting for this purpose; (7) make investments for the purpose of exercising control or management; provided that the Fund may invest all its assets in a diversified, open-end management investment company, or a series thereof, having substantially the same investment objective, policies and restrictions as the Fund; (8) borrow money or issue senior securities as defined in the Investment Company Act of 1940, except that the Fund and the Portfolio may each borrow from banks up to 10% of the current value of its net assets for temporary purposes only in order to meet redemptions, and these borrowings may be secured by the pledge of up to 10% of the current value of its net assets (but investments may not be purchased while any such outstanding borrowing in excess of 5% of net assets exists); (9) write, purchase or sell puts, calls, straddles, spreads, warrants, options or any combination thereof, except that the Fund and the Portfolio may purchase securities with put rights in order to maintain liquidity; (10) purchase securities of any issuer (except securities issued or guaranteed by the U.S. Government, its agencies and instrumentalities) if, as a result, with respect to 75% of total assets, more than 5% of the value of the Fund's or the Portfolio's total assets would be invested in the securities of any one issuer or, with respect to 100% of total assets, the Fund's or the Portfolio's ownership would be more than 10% of the outstanding voting securities of such issuer, provided that the Fund may invest all its assets in a diversified, open-end management investment company, or a series thereof, having substantially the same investment objective, policies and restrictions as the Fund; or (11) make loans, except that the Fund and the Portfolio may purchase or hold debt instruments or lend its portfolio securities in accordance with its investment policies, and may enter into repurchase agreements (but neither the Fund nor the Portfolio intend to lend portfolio securities during the coming year). Non-Fundamental Investment Restrictions. The Fund and the Portfolio --------------------------------------- are also subject to the following additional investment restrictions which are non-fundamental policies. These restricitons may be changed by the Board of Trustees of the Trust or the Board of Trustees of MIP, as the case may be. (1) The Fund and the Portfolio may not invest more than 10% of the current value of its net assets in fixed time deposits that are subject to withdrawal penalties and that have maturities of more than seven days, repurchase agreements maturing in more than seven days, or other illiquid securities. (2) The Fund and the Portfolio, as provided in Rule 2a-7 under the 1940 Act, may each only purchase "Eligible Securities" (as defined in Rule 2a-7) and only if, immediately after such purchase: it would have no more than 5% of its total assets in "First Tier Securities" (as defined in Rule 2a-7) of any one issuer, excluding government securities and except as otherwise permitted for temporary purposes and for certain guarantees and unconditional puts; it would own no more than 10% of the voting securities of any one issuer; it would have no more than 5% of its total assets in "Second Tier Securities" (as defined in Rule 2a-7); and it would have no more than the greater of $1 million or 1% of its total assets in Second Tier Securities of any one issuer. (3) The Fund and the Portfolio may each invest in shares of other open-end, management investment companies, subject to the limitations of Section 12(d)(1) of the 1940 Act. Except when shares of other investment companies are purchased as part of a merger or a similar plan of reorganization, and except to the extent that the Fund may pursue its investment objective by investing all its assets in a diversified, open-end management investment company, or a series thereof, having substantially the same investment objective, policies and restrictions as the Fund, any purchases of investment company shares will be limited to temporary investments in shares of unaffiliated investment companies. If such an investment is made, any investment advisory fees otherwise payable by the Fund or the Portfolio will be waived with respect to that portion of the Fund's or the Portfolio's assets so invested. Neither the Fund nor the Portfolio intends to invest more than 5% of its net assets in shares of other investment companies during the coming year. General. Unless otherwise specified, all percentage and other ------- restrictions, requirements and limitations on investments set forth in this Statement of Additional Information, as well as those set forth in the Prospectus, apply immediately after the purchase of an investment, and subsequent changes and events do not constitute a violation or require the sale of any investment by the Portfolio or the Fund. INVESTMENT POLICIES AND PRACTICES General. The following information supplements the description of the ------- investment policies and practices of the Portfolio as described in the Prospectus. Currently, the Fund pursues its investment objective by investing all of its investable assets in the Portfolio. The Fund may withdraw its investment from the Portfolio at any time if the Board of Trustees of the Trust (the "Board of Trustees") determines that it is in the best interest of the Fund to do so. Upon any such withdrawal, the Fund's assets would be invested in accordance with the investment policies described below with respect to the Portfolio. The assets of the Portfolio consist only of obligations maturing within thirteen months from the date of acquisition, as determined in accordance with applicable rules of the the regulations of the Securities and Exchange Commission (the "SEC"), and the dollar-weighted average maturity of the investments of the Portfolio may not exceed 90 days. The securities in which the Portfolio may invest will not yield as high a level of current income as could be achieved by investing in securities having longer maturities, less liquidity and less safety. There can be no assurance that the investment objective of the Portfolio or the Fund, as described in the Prospectus, will be achieved. Treasury, Government and Agency Securities. The Portfolio invests in ------------------------------------------- short-term debt securities that are issued or guaranteed by the U.S. government or an agency or instrumentality of the U.S. government ("Government Securities"). These securities include obligations issued by the U.S. Treasury ("Treasury Securities"), including Treasury bills, notes and bonds. These are direct obligations of the U.S. government and differ primarily in their rates of interest and the length of their original maturities. Treasury Securities are backed by the full faith and credit of the U.S. government. Government Securities include Treasury Securities as well as securities issued or guaranteed by the U.S. government or its agencies and instrumentalities ("Agency Securities"). Agency Securities are in some cases backed by the full faith and credit of the U.S. government. In other cases, Agency Securities are backed solely by the credit of the governmental issuer. Certain issuers of Agency Securities have the right to borrow from the U.S. Treasury, subject to certain conditions. Government Securities purchased by the Portfolio may include variable and floating rate securities. Bank Obligations. Domestic commercial banks organized under federal ---------------- law are supervised and examined by the Comptroller of the Currency and are required to be members of the Federal Reserve System. Domestic banks organized under state law are supervised and examined by state banking authorities but are members of the Federal Reserve System only if they elect to join. As a result of federal or state laws and regulations, domestic banks, among other things, generally are required to maintain specified levels of reserves, limited in the amounts which they can loan to a single borrower and subject to other regulations designed to promote financial soundness. Investments in obligations of foreign banks involve various risks that are not generally associated with investments in the obligations of domestic banks. Unrated Investments and Changes in Ratings. The Portfolio may ------------------------------------------ purchase securities that are not rated if, in the opinion of Barclays Global Advisors, Inc. (the "Investment Adviser"), the investment adviser of the Portfolio, such obligations are of a quality comparable to that of the rated investments in which the Portfolio may invest, if they are purchased in accordance with procedures adopted by MIP's Board of Trustees in accordance with Rule 2a-7 under the 1940 Act. These procedures require approval or ratification by the MIP Trustees of the purchase of unrated securities. The Portfolio will not invest in an unrated security if as a result the Portfolio's investment in such securities would exceed 5% of its net assets. After purchase by the Portfolio, a security may cease to be rated or its rating may be reduced below the minimum required for purchase by the Fund and the Portfolio. Neither event will require an immediate sale of such security by the Portfolio provided that, when a security ceases to be rated, the MIP Board of Trustees determines that such security presents minimal credit risks and, provided further that, when a security rating is downgraded below the eligible quality for investment or no longer presents minimal credit risks, the MIP Board finds that the sale of such security would not be in the Portfolio's shareholder's best interest. To the extent the ratings given by Moody's Investor Service, Inc. ("Moody's") or Standard & Poors Corporation ("S&P") may change as a result of changes in such organizations or their rating systems, the Fund will attempt to use comparable ratings as standards for investments in accordance with the investment policies contained in the Prospectus and in this SAI. The ratings categories used by Moody's and S&P are more fully described in the Appendix. Pass-Through Obligations. Certain of the debt obligations in which ------------------------ the Portfolio may invest may be pass-through obligations that represent an ownership interest in a pool of mortgages and the resultant cash flow from those mortgages. Payments by homeowners on the loans in the pool flow through to certificate holders in amounts sufficient to repay principal and to pay interest at the pass-through rate. The stated maturities of pass-through obligations may be shortened by unscheduled prepayments of principal on the underlying mortgages. Therefore, it is not possible to predict accurately the average maturity of a particular pass-through obligation. Variations in the maturities of pass-through obligations will affect the yield of any fund investing in such obligations. Furthermore, as with any debt obligation, fluctuations in interest rates will inversely affect the market value of pass-through obligations. Loans of Portfolio Securities. The Portfolio may lend its securities ----------------------------- to brokers, dealers and financial institutions, provided the loan is secured continuously by collateral consisting of cash, Government Securities or a letter of credit. This collateral is marked to market daily to ensure that the loan is fully collateralized at all times. Under procedures adhered to by the Portfolio, the loan must be callable by the Portfolio at any time and the Portfolio must have the right to obtain the return of the securities loaned. The Portfolio also has the right to receive any interest paid on the securities loaned. The Portfolio will not lend securities having an aggregate market value exceeding one-third of its total assets. Loans of securities will only be made to firms deemed by the Board of Trustees of MIP to be creditworthy (such creditworthiness will be monitored on an ongoing basis by the Investment Adviser) and when the income expected to be earned from such loans justifies the attendant risks. There may be delays in the recovery of the loaned securities or a loss of rights in the collateral supplied should the borrower fail financially, in which case the Portfolio could suffer a loss. In addition, securities lending involves a form of leverage, and the Portfolio may incur a loss if securities purchased with the collateral from securities loans decline in value or if the income earned does not cover transaction costs. The Portfolio may pay reasonable finder's, administrative and custodial fees in connection with loans of securities. Loans of securities provides a way for the Portfolio to earn either through the reinvestment of the cash collateral or the payment of fees by the borrower of the securities. The Portfolio does not intend to lend securities during the coming year. Repurchase Agreements. The Portfolio may enter into repurchase --------------------- agreements with respect to any security in which they are authorized to invest, although the underlying security may mature in more than thirteen months. In a repurchase agreement the Portfolio purchases a security and the seller of the security to the Portfolio agrees to repurchase that security from the Portfolio at a mutually agreed-upon time and price. The maturity of repurchase agreements are generally not more than seven days. Any repurchase agreements having longer maturities are deemed to be illiquid and are subject to the limitation on the purchase of illiquid securities by the Portfolio. The custodian of the Portfolio's assets or a subcustodian approved by MIP maintains custody of securities acquired through repurchase agreements. These securities serve as collateral to secure the obligation of the seller to repurchase the underlying security and the seller is required to post additional collateral if the value of the securities should decrease below the resale price including accrued interest under the repurchase agreement. Repurchase agreements are considered by the staff of the SEC to be loans by the Portfolio. The Investment Adviser monitors on an ongoing basis the value of the collateral. Certain costs may be incurred by the Portfolio in connection with the sale of the underlying securities if the seller does not repurchase them in accordance with the terms of the repurchase agreement. In addition, if bankruptcy proceedings are commenced with respect to the seller of the securities, disposition of the securities by the Portfolio may be delayed or limited. This could cause the Portfolio to suffer a loss if the value of the securities declines in value. Although it is not possible to eliminate all risks from these transactions (particularly the possibility of a decline in the market value of the underlying securities, as well as delay and costs to the Fund in connection with insolvency proceedings), it is the policy of the Portfolio to effect repurchase agreements only with securities dealers, domestic banks or other financial institutions determined by the Investment Adviser to meet certain requirements as to creditworthiness. Municipal Obligations. The Portfolio may invest in municipal --------------------- obligations. Municipal bonds generally have a maturity at the time of issuance of up to 40 years. Medium-term municipal notes are generally issued in anticipation of the receipt of tax funds, of the proceeds of bond placements, or of other revenues. The ability of an issuer to make payments on notes is therefore especially dependent on such tax receipts, proceeds from bond sales or other revenues, as the case may be. Municipal commercial paper is a debt obligation with a stated maturity of 270 days or less that is issued to finance seasonal working capital needs or as short-term financing in anticipation of longer-term debt. The Portfolio may invest in the following municipal obligations with remaining maturities not exceeding 13 months: (i) long-term municipal bonds rated at the date of purchase "Aa" or better by Moody's or "AA" or better by S&P; (ii) municipal notes rated at the date of purchase "MIG1" or "MIG2" (or "VMIG1" or "VMIG2" in the case of an issuer having a variable rate with a demand feature) by Moody's or "SP-1+", "SP-1" or "SP-2" by S&P; and (iii) short-term municipal commercial paper rated at the date of purchase "P-1" by Moody's or "A- 1+", "A-1" or "A-2" by S&P. Floating-and Variable-Rate Obligations. The the Portfolio may -------------------------------------- purchase floating- and variable-rate obligations as described in the Prospectus. These obligations may include floating- and variable-rate demand notes and bonds, which are obligations ordinarily having stated maturities in excess of thirteen months, but which permit the holder to demand payment of principal at any time, or at specified intervals not exceeding thirteen months. Variable rate demand notes include master demand notes that are obligations that permit the Portfolio to invest fluctuating amounts, which may change daily without penalty, pursuant to direct arrangements between the Portfolio, as lender, and the borrower. The interest rates on these notes fluctuate from time to time. The issuer of these obligations ordinarily has a corresponding right, after a given period, to prepay in its discretion the outstanding principal amount of the obligations plus accrued interest upon a specified number of days' notice to the holders of the obligations. The interest rate on a floating-rate demand obligation is based on a specified lending rate, such as a bank's prime rate, and is adjusted automatically each time that rate is adjusted. The interest rate on a variable-rate demand obligation is adjusted automatically at specified intervals. Frequently, these obligations are secured by letters of credit or other credit support arrangements provided by banks. Because these obligations are direct lending arrangements between the lender and borrower, it is not contemplated that the obligations generally will be traded, and there generally is no established secondary market for these obligations, although they are redeemable at face value. Where these obligations are not secured by letters of credit or other credit support arrangements, the Portfolio's right to redeem is dependent on the ability of the borrower to pay principal and interest on demand. Such obligations frequently are not rated by credit rating agencies and the Portfolio may invest in obligations which are not so rated only if the Investment Adviser determines that at the time of investment the obligations are of comparable quality to the other obligations in which the Portfolio may invest. The Investment Adviser considers on an ongoing basis the creditworthiness of the issuers of the floating-and variable-rate demand obligations in which the Portfolio invests. The Fund will not invest more than 10% of the value of its total net assets in floating or variable-rate demand obligations whose demand feature is not exercisable within seven days. Such obligations may be treated as liquid if an active secondary market exists. Forward Commitments, When-Issued Purchases and Delayed-Delivery --------------------------------------------------------------- Transactions. The Portfolio may purchase securities on a when-issued or forward - ------------ commitment (sometimes called a delayed-delivery) basis, which means that the price is fixed at the time of commitment, but delivery and payment ordinarily take place a number of days after the date of the commitment to purchase. The Portfolio will make commitments to purchase such securities only with the intention of actually acquiring the securities, but the Portfolio may sell these securities before the settlement date if it is deemed advisable. The Portfolio will not accrue income in respect of a security purchased on a forward commitment basis prior to its stated delivery date. Securities purchased on a when-issued or forward commitment basis are subject to changes in value and the Portfolio is subject to the risk that such fluctuations may occur prior to the actual delivery of the securities. Purchasing securities on a when-issued or forward commitment basis also involves the risk that the yield available in the market when the delivery takes place may be higher than that obtained by the Portfolio. When the Portfolio purchases a security on a when-issued or forward commitment basis, it will establish a segregated account with its custodian, consisting of cash or high quality liquid debt securities at least equal at all times to the amount of the when-issued or forward commitment. Purchasing securities on a forward commitment basis when the Portfolio is fully or almost fully invested may result in greater potential fluctuation in the value of the Portfolio's net assets. In addition, because the Portfolio will set aside cash and other high quality liquid debt securities as described above, the liquidity of the Portfolio's investment portfolio may decrease as the proportion of securities purchased on a when-issued or forward commitment basis increases. The value of the securities underlying a when-issued purchase or a forward commitment to purchase securities, and any subsequent fluctuations in their value, is taken into account when determining the Portfolio's net asset value starting on the day the Portfolio agrees to purchase the securities. The Fund does not earn interest on the securities it has committed to purchase until the securities are paid for and delivered on the settlement date. When the Portfolio makes a forward commitment to sell securities it owns, the proceeds to be received upon settlement are included in the Portfolio's assets, and fluctuations in the value of the underlying securities are not reflected in the Portfolio's net asset value as long as the commitment remains in effect. Illiquid Securities. The Portfolio may invest up to 10% of the ------------------- current value of its net assets in illiquid securities. Illiquid securities are those securities which the Portfolio cannot sell or dispose of in the ordinary course of business within seven days at approximately the value at which the Fund carries the securities. These securities may include restricted securities, fixed time deposits that are subject to withdrawal penalties and that have maturities of more than seven days, and repurchase agreements maturing in more than seven days. Restricted securities are securities that may not be sold to the public without an effective registration statement under the Securities Act of 1933, as amended (the "1933 Act"), and thus, may be sold only in privately negotiated transactions or pursuant to an exemption from registration. Certain restricted securities that may be sold to institutional investors pursuant to Rule 144A under the 1933 Act and non-exempt commercial paper may be determined to be liquid by the Investment Adviser under procedures adopted by the Board of Trustees of MIP. The purchase of these securities could have the effect of decreasing the Portfolio's liquidity if qualified institutional buyers become uninterested in purchasing those securities. Illiquid securities involve the risk that the securities will not be able to be sold at the time desired by the Investment Adviser or at prices approximating the value at which the Portfolio is carrying the securities. Foreign Obligations. Investments in foreign obligations involve ------------------- certain considerations that are not typically associated with investing in domestic obligations. There may be less publicly available information about a foreign issuer than about a domestic issuer. Foreign issuers also are not generally subject to uniform accounting, auditing and financial reporting standards or governmental supervision comparable to those applicable to domestic issuers. In addition, with respect to certain foreign countries, taxes may be withheld at the source under foreign income tax laws, and there is a possibility of expropriation or confiscatory taxation, political or social instability or diplomatic developments that could adversely affect investments in, the liquidity of, and the ability to enforce contractual obligations with respect to, securities of issuers located in those countries. The Portfolio may invest up to 25% of its assets in foreign obligations. Obligations of foreign banks and foreign branches of U.S. banks involve somewhat different investment risks from those affecting obligations of U.S. banks, including the possibilities that liquidity could be impaired because of future political and economic developments; the obligations may be less marketable than comparable obligations of U.S. banks; a foreign jurisdiction might impose withholding taxes on interest income payable on those obligations; foreign deposits may be seized or nationalized; foreign governmental restrictions (such as foreign exchange controls) may be adopted which might adversely affect the payment of principal and interest on those obligations; and the selection of those obligations may be more difficult because there may be less publicly available information concerning foreign banks. In addition, the accounting, auditing and financial reporting standards, practices and requirements applicable to foreign banks may differ from those applicable to U.S. banks. In that connection, foreign banks are not subject to examination by any U.S. Government agency or instrumentality. MANAGEMENT Directors and Officers. The Board of Trustees of the Trust has the ---------------------- overall responsibility for monitoring the operations of the Trust and the Fund and for supervising its operations. The officers of the Trust are responsible for managing the day-to-day operations of the Trust and the Fund. MIPs Board of Trustees has similar responsibilities with respect to the operations of the Portfolio. Set forth below is information with respect to each of the Trustees and officers of the Trust, including their principal occupations during the past five years.
NAME, POSITION WITH TRUST, AGE PRINCIPAL OCCUPATIONS AND ADDRESS DURING LAST FIVE YEARS ---------------------------------- ----------------------------- *E. Scott Peterson Member, Hewitt Associates LLC Trustee [Additional trustees who are not interested persons of the Trust to be added in pre-effective amendment] Stacy L. Schaus Member, Hewitt Associates LLC President Peter E. Ross Member, Hewitt Associates LLC Secretary James B. Lee Member, Hewitt Associates LLC Treasurer, Chief Financial Officer
- -------------------- * Trustee who is an "interested person" of the Trust, as defined in the 1940 Act, because of positions held with the Trust and her affiliations with [the distributor of the Fund's shares][or companies affiliated with the distributor.] Except as otherwise indicated above, the address of each Trustee and officer of the Trust is 100 Half Day Road Lincolnshire, Illinois 60069. Trustees who are not employed by Hewitt Associates LLC or one of its affiliates are paid an annual retainer of $[______]and receive an attendance fee of $750 for each meeting of the Board of Trustees they attend. If such Trustees serve as members of the Audit Committee they receive an attendance fee of $750 for each Audit Committee meeting not held on the same day as a Board meeting that they attend. The Chairman of the Audit Committee receives an additional $[______]annual fee. The Audit Committee is comprised of each of the Trustees who is not an "interested person" of the Trust, as defined by the 1940 Act. Officers of the Trust receive no compensation from the Trust. Trustees who are not employees of Hewitt Associates LLC or one of its affiliates are reimbursed for reasonable out-of-pocket expenses incurred in connection with the performance of their responsibilities, including travel related expenses. As of the date of this Statement of Additional Information, the Trustees and officers of the Trust, as a group, owned less than 1% of the outstanding shares of the Trust and the Fund. Trustee compensation for the coming year is estimated as follows: COMPENSATION TABLE*
Name of Person Aggregate Compensation Pension or Retirement Total Compensation from Trust Benefits Accrued from Trust Paid as Part of Fund Expenses to Trustees [name] $ 0 $ 0 $ 0 [name] $ [ ] $ 0 $ [ ] [name] $ [ ] $ 0 $ [ ]
Investment Adviser. The Investment Adviser, Barclays Global Fund ------------------ Advisors, located at 45 Fremont Street, San Francisco, California 94105, is a subsidiary of Barclays Global Investors, N.A., which in turn is an indirect subsidiary of Barclays Bank PLC. It provides investment advisory services to the Portfolio pursuant to an investment advisory agreement with MIP dated ____________ , 1998 (the "Advisory Agreement"). Pursuant to the Advisory Agreement, the Investment Adviser is responsible for the management of the investments of the Portfolio and makes all decisions regarding, and places all orders for, the purchase and sale of securities. As compensation for services rendered and expenses assumed by the Investment Adviser, the Portfolio pays the Investment Adviser a monthly fee which is computed at the annual rate of 0.10% of the net assets of the Portfolio. Because the Fund is an investor in the Portfolio, shareholders of the Fund indirectly bear this fee. Under the Advisory Agreement, the Investment Adviser is obligated to bear all of the ordinary operating expenses of the Portfolio. The Advisory Agreement was approved on [ ], 1998, by the Board of Trustees of MIP, including a majority of the Trustees of MIP who are not "interested persons," as defined by the 1940 Act of MIP or the Investment Adviser. It has an initial term expiring [ ], 2000 and may be continued in effect from year to year thereafter if approved annually by either (i) MIP's Board of Trustees or (ii) vote of a majority of the outstanding voting securities of the Fund (as defined in the 1940 Act); or by MIP's Board of Trustees, and provided that the continuance also is approved by a majority of MIP's Board of Trustees who are not "interested persons" (as defined in the 1940 Act) of the MIP or the Investment Adviser, by vote cast in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement is terminable without penalty, on 60 days' written notice by the Board of Trustees of MIP or by vote of the holders of a majority of the outstanding voting securities of the Portfolio. As required by the 1940 Act, the Advisory Agreement provides for its automatic termination in the event of its assignment (as defined by the 1940 Act). Administrator. Hewitt Associates LLC (the "Administrator") provides ------------- administrative services to the Fund pursuant to the terms of an administration agreement dated [ ], 1998, entered into by the Trust and the Administrator. Services provided by the Administrator include, but are not limited to: managing the daily operations and business affairs of the Fund, subject to the supervision of the Board of Trustees; overseeing the preparation and maintenance of all documents and records required to be maintained by the Fund and the Trust; preparing or assisting in the preparation of regulatory filings, prospectuses and shareholder reports; providing, at its own expense, the services of its personnel to serve as officers of the Trust; and preparing and disseminating material for meetings of the Board of Trustees and shareholders. The Fund pays the Administrator a monthly fee calculated at an annual rate of 0.10% of the Fund's average daily net assets. The Administration Agreement was approved by the Board of Trustees of the Trust, including a majority of the Trustees who are not "interested persons" of the Trust or of Investment Adviser or the Distributor, as defined by the 1940 Act (the "Independent Trustees"), at a meeting held in person on [ ], 1998. It has an initial term expiring [ ], 2000, and may be continued in effect from year to year thereafter if such continuance is approved annually by the Board of Trustees, including the vote of a majority of the Independent Trustees. The Administration Agreement terminates automatically in the event of its "assignment" (as defined by the 1940 Act), and may be terminated by either party without penalty on not less than 60 days' written notice. Pursuant to the Administration Agreement, the Trust has acknowledged that the name "Hewitt" is a property right of the Administrator and its affiliates and has agreed that the Administrator and its affiliated companies may use and permit others to use that name. If the Administration Agreement is terminated, the Trust may be required to cease using the name Hewitt as part of its name or the name of the Fund, unless otherwise permitted by the Administrator or any successor to its interest in such name. The Administrator also serves as the Shareholder Servicing Agent for the Fund and is paid compensation by the Fund for furnishing various shareholder related services. See "Shareholder Servicing Arrangements," below. Shareholder Servicing Arrangements. The Fund has retained Hewitt ---------------------------------- Associates LLC to serve as the Fund's Shareholder Servicing Agent pursuant to the terms of a shareholder servicing agreement dated [_________], 1998 (the "Servicing Agreement"). The responsibilities of the Shareholder Servicing Agent are described in the Prospectus. Pursuant to the Servicing Agreement, the Fund pays the Shareholder Servicing Agent a monthly fee calculated at an annual rate of 0.20% of the Fund's average daily net assets. The Fund also reimburses the Shareholder Servicing Agent for certain out-of-pocket expenses. The Servicing Agreement was approved by the Board of Trustees of the Trust, including a majority of the Independent Trustees, at a meeting held in person on [ ], 1998. It has an initial term expiring [________], 2000, and may be continued in effect from year to year thereafter if such continuance is approved annually by the Board of Trustees of the Trust, including the vote of a majority of the Independent Trustees. The Servicing Agreement terminates automatically in the event of its "assignment" (as defined by the 1940 Act), and may be terminated by either party without penalty on not less than 60 days' written notice. DISTRIBUTION ARRANGEMENTS Hewitt Services LLC, an affiliate of the Administrator, serves as the distributor of shares of the Fund (the "Distributor"). Distribution Agreement. The Distributor serves as the exclusive ---------------------- distributor of shares of the Fund pursuant to a distribution agreement with the Trust dated as of [ ], 1998 (the "Distribution Agreement"). Pursuant to the Distribution Agreement, the Distributor is authorized to enter into selling agreements with securities dealers and other financial institutions for the distribution of shares. Shares of the Fund are available for purchase on a continuous basis from the Distributor, as agent, although the Distributor is not obligated to sell any particular amount of shares. The Fund has appointed the Shareholder Servicing Agent as its agent for purposes of accepting orders to purchase and redeem Institutional Shares on behalf of the Distributor and transmitting those orders to the Fund's transfer agent. The Distribution Agreement was approved by the Board of Trustees of the Trust, including a majority of the Independent Trustees, at a meeting held in person on [ ], 1998. It has an initial term expiring [_______], 2000, and may be continued in effect from year to year thereafter if such continuance is approved annually by the Board of Trustees, including the vote of a majority of the Independent Trustees. The Distribution Agreement may be terminated at any time, without penalty, by either party upon 60 days written notice and terminates automatically in the event of an "assignment" as defined by the 1940 Act. Under the Distribution Agreement, the Distributor is required to bear all of the costs associated with distribution of shares of the Fund, including the incremental cost of printing prospectuses, annual reports and other periodic reports for distribution to prospective investors and the costs of preparing, distributing and publishing sales literature and advertising materials. As described below, Administrative Shares of the Fund pay a fee to the Distributor for services it renders in connection with the distribution of Administrative Shares. Distribution Plan (Administrative Shares Only). The Trust has ----------------------------------------------- adopted a plan and agreement of distribution pursuant to Rule 12b-1 under the Investment Company Act which allows the Fund to pay expenses relating to the distribution of Administrative Shares (the "Distribution Plan"). Under the Distribution Plan, the Fund pays a fee to the Distributor, calculated at an annual rate of 0.25% of the average daily net assets of Administrative Shares, as compensation for the services the Distributor renders and the expenses it bears in connection with the sale and distribution of Administrative Shares. This fee is an expense of Administrative Shares only and is not borne by Institutional Shares. The Distribution Plan was approved by the Board of Trustees of the Trust, including a majority of the Trustees who are not "interested persons" (as defined by the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Distribution Plan or in any agreement related to the Plan ("Qualified Trustees"), at a meeting held in person on [ ], 1998. It provides that it will continue in effect for a period of one year from the date of its execution, and may be continued in effect from year to year thereafter, provided that each such continuance is approved annually by a vote of both a majority of the Trustees and a majority of the Qualified Trustees. The Distribution Plan requires that the Trust provide the Board of Trustees of the Trust, and that the Board review, at least quarterly, a written report of the amounts expended (and the purposes therefor) under the Distribution Plan. In addition, the Distribution Plan provides that the selection and nomination of Qualified Trustees shall be committed to the discretion of those Trustees, who are not "interested persons" (as defined by the 1940 Act) of the Distributor, then in office. The Distribution Plan may be terminated at any time by a vote of a majority of the Qualified Trustees or by vote of a majority of the outstanding voting shares of the Fund (as defined by the 1940 Act). It may not be amended to increase materially the amount of permitted expenses thereunder without the approval of the holders of Administrative Shares and may not be materially amended in any other respect without a vote of the majority of both the Trustees and the Qualified Trustees. Since payments made pursuant to the Distribution Plan are not directly tied to actual expenses, the amount of payments by Administrative Shares to the Distributor during any year may be more or less than actual expenses incurred by the Distributor in providing services. For this reason, this type of distribution fee arrangement is characterized by the staff of the Securities and Exchange Commission as being of the "compensation variety" (in contrast to "reimbursement" arrangements under which payments by a fund are made only to reimburse specific expenses). However, Administrative Shares are not liable to pay any distribution related expenses incurred by the Distributor in excess of the amounts paid pursuant the Distribution Plan. The Distribution Plan was adopted by the Board of Trustees of the Trust to foster the distribution of Administrative Shares. The Trustees believe that the Distribution Plan will provide an incentive for the Distributor to make Administrative Shares available to its customers and that, without the Distribution Plan, the Distributor would not offer shares of the Fund to its customers. In addition, the Trustees believe that the Distribution Plan will help assure that assets of the Fund attributable to Administrative Shares reach a level that will enable the per share expenses of Administrative Shares to be competitive with the per share expenses of other money market funds. For these reasons, the Board of Trustees determined that adoption of the Distribution Plan will benefit the Fund and shareholder who own Administrative Shares. The Trustee and officers of the Trust who are members or employees of the Distributor, or of any company affiliated with or controlling the Distributor, may be deemed to have a direct or indirect interest in the operation of the Distribution Plan. EXPENSES All expenses of the Trust and the Fund not expressly assumed by the Administrator or the Distributor are paid by the Fund. In addition, as an investor in the Portfolio, the Fund bears a pro rata portion of the expenses of the Portfolio. Expenses borne by the Fund and the Portfolio include, but are not limited to: fees for investment advisory and administration services; fees paid to the Shareholder Servicing Agent; the distribution fee payable by Administrative Shares; the fees and expenses of any registrar, custodian, accounting agent, transfer agent or dividend disbursing agent; brokerage commissions; taxes; registration costs; the cost and expense of printing, including typesetting, and distributing prospectuses and supplements thereto to shareholders; all expenses of shareholders' and Trustees' meetings and of preparing, printing and mailing of proxy statements and reports to shareholders; fees and travel expenses of Trustees or members of any advisory board or committee who are not employees of the Administrator, the Distributor or the Investment Adviser; all expenses incident to any dividend, withdrawal or redemption options; charges and expenses of any outside service used for pricing shares of the Trust; fees and expenses of legal counsel; fees and expenses of independent auditors; membership dues of industry associations; interest on borrowings; postage; insurance premiums on property or personnel (including officers and Trustees) of the Trust and MIP which inure to its benefit; and extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification relating thereto). The costs of organizing the Trust have been advanced by the Administrator. The Fund will be obligated to reimburse the Administrator for these costs if and when the net assets of the Fund are in excess of $ __ million for a period of __ days. These costs, if paid by the Fund, will be treated as an expense in the year incurred. DETERMINATION OF NET ASSET VALUE Days and Times Net Asset Value Per Share is Computed. The Prospectus ---------------------------------------------------- describes the days on which the net asset values per share of the Fund are computed for purposes of purchases and redemptions of shares by investors, and also sets forth the times as of which such computations are made. Shares of the Fund may be purchased on any that the New York Stock Exchange (NYSE) is open and that is not a federal bank holiday. The following days are either days on which the NYSE is closed or which are federal bank holidays: New Year's Day; Martin Luther King's Birthday (third Monday in January); Presidents' Day (third Monday in February); Good Friday (Friday before Easter); Memorial Day (last Monday in May); Independence Day; Labor Day (first Monday in September); Columbus Day (second Monday in October); Veterans Day; Thanksgiving Day (fourth Thursday in November); and Christmas Day. Net asset value is computed as of the closing time of the U.S. government securities markets on days when the Public Securities Association recommends an early closing of such markets. Early closings may occur the Fridays preceding the following holidays: Martin Luther King's Birthday; Presidents' Day; Memorial Day; Labor Day; and Columbus Day. Early closings may also occur on the business days preceding the following holidays: Independence Day; Veterans Day; Thanksgiving Day; Christmas Day; New Year's Day, and the Friday following Thanksgiving Day. The net asset values per share of Institutional Shares and Administrative Shares are computed separately. Net asset value per share of each class of the Fund's shares is calculated by dividing the value of the Fund's total assets attributable to that class, less the liabilities (including accruedd expenses) of the class and its allocable share of the Fund's liabilities (and accrued expenses), by the number of shares of the class outstanding. The value of the Portfolio's net assets (its securities and other assets, less its liabilities, including expenses payable or accrued) is determined at the same time and on the same days as the net asset values per share of the Fund are determined. Unlike most other money market funds, the Fund does not seek to maintain a stable net asset value per share. Amortized Cost Valuation. The Fund and the Portfolio use the ------------------------ amortized cost method of valuation to determine the value of their portfolio securities in accordance with the provisions of Rule 2a-7 under the 1940 Act. The amortized cost method involves valuing a security at its cost and amortizing any discount or premium over the period until maturity, regardless of the impact of fluctuating interest rates on the market value of the security. This method of valuation does not take into account unrealized capital gains and losses resulting from changes in the market values of the securities due to changes in prevailing interest rate levels or other factors. While this method provides certainty in valuation, it may result in periods during which the value, as determined by amortized cost, is higher or lower than the price that the Fund would receive if the security were sold. During these periods the yield to a shareholder may differ somewhat from that which could be obtained from a similar fund that uses a method of valuation based upon market prices. Thus, during periods of declining interest rates, if the use of the amortized cost method resulted in a lower net asset value of the Fund's portfolio on a particular day, a prospective investor in the Fund would be able to obtain a somewhat higher yield than would result from investment in a fund using solely market values, and existing Fund shareholders would receive correspondingly less income. The converse would apply during periods of rising interest rates. Rule 2a-7 provides that in order to value its portfolio using the amortized cost method, the Fund (or to the extent the Fund invests in the Portfolio, the Portfolio) must maintain a dollar-weighted average portfolio maturity of 90 days or less, purchase securities having remaining maturities (as defined in Rule 2a-7) of thirteen months or less and invest only in those high- quality securities that are determined by the Board of Trustees of the Trust (or MIP) to present minimal credit risks. The maturity of an instrument is generally deemed to be the period remaining until the date when the principal amount thereof is due or the date on which the instrument is to be redeemed. However, Rule 2a-7 provides that the maturity of an instrument may be deemed shorter in the case of certain instruments, including certain variable- and floating-rate instruments subject to demand features. In addition, Rule 2a-7 requires that the Portfolio invest only in securities which have been determined by the Investment Adviser, under procedures adopted by the Board of Trustees of MIP, to present minimal credit risks and to be of eligible credit quality under applicable regulations. PURCHASE AND REDEMPTION OF SHARES The procedures to be used in purchasing and redeeming Institutional Shares and Administrative Shares are set forth in the Prospectus under "How To Buy Shares" and "How To Redeem Shares". The Company reserves the right to reject any purchase order and to change the amount of the minimum investment and subsequent purchases in the Funds. Purchases by Check (Administrative Shares Only). Administrative ----------------------------------------------- Shares may be purchased by check as described in the Prospectus. If a check to purchase Administrative Shares does not clear, the shares purchased may be redeemed by the Distributor and the investor will be responsible for any loss or expenses incurred by the Fund or the Distributor as a result of the redemption or non-clearance. Mandatory Redemption of Shares. Under the Declaration of Trust, the ------------------------------ Trust has the right to redeem all shares of the Fund held by a shareholder if as a result of one or more redemptions the aggregate value of shares held in the shareholder's account is less than such dollar amount of $1 million or such lesser amount as may be specified by the Trustees, which amount may be no greater than the then applicable minimum initial investment amount. There is currently no minimum required investment for Institutional Shares. There is also currently no minimum required initial investment for Administrative Shares, if those shares are held in an account with a financial intermediary (including the Distributor) that holds shares for its customers on an omnibus basis. Thus, Institutional Shares and Administrative Shares held as described above are not subject to the mandatory redemption procedure described above. As described in the Prospectus, Administrative Shares not held on an omnibus basis may be subject to mandatory redemption if the value of Administrative Shares held by a shareholder is less than $5,000. The Trust is under no obligation to compel the redemption of any account. Suspension of Redemptions. Redemption proceeds are normally paid as ------------------------- described in the Prospectuses. The payment of redemption proceeds by the Fund may be postponed for more than seven days or the right of redemption suspended at times (a) when the New York Stock Exchange is closed for other than customary weekends and holidays, (b) when trading on the New York Stock Exchange is restricted, (c) when an emergency exists as a result of which disposal by the Fund of securities owned by it is not reasonably practicable or it is not reasonably practicable for the Fund to determine fairly the value of its net assets, or (d) during any other period when the Securities and Exchange Commission (the "SEC"), by order, so permits for the protection of shareholders. Applicable rules and regulations of the SEC will govern as to whether the conditions described in (b) or (c) exist. Redemption in Kind. In the event that the Board of Trustees ------------------ determines that it would be detrimental to the best interests of remaining shareholders of the Fund to pay any redemption or redemptions in cash, a redemption payment by a Fund may be made in whole or in part by a distribution in kind of portfolio securities, subject to applicable rules of the SEC. Any securities distributed in kind will be readily marketable and will be valued, for purposes of the redemption, in the same manner as such securities are normally valued in computing net asset value per share. In the unlikely event that shares are redeemed in kind, the redeeming shareholder would incur transaction costs in converting the distributed securities to cash. The Trust has elected to be governed by Rule 18f-1 under the 1940 Act and is therefore obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net asset value of a Fund during any 90 day period for any one shareholder. PORTFOLIO TRANSACTIONS Purchases and sales of debt securities generally are principal transactions. Debt securities acquired for the Portfolio normally are purchased or sold from or to dealers serving as market makers for the securities at a net price. Debt securities also may be purchased in underwritten offerings and may be purchased directly from the issuer. Generally, Government Securities and other money market securities are traded on a net basis and do not involve brokerage commissions. The cost of executing transactions in debt securities consists primarily of dealer spreads and underwriting commissions. Under the 1940 Act, persons affiliated with the Trust are prohibited from dealing with the Trust as a principal in the purchase and sale of securities unless an exemptive order allowing such transactions is obtained from the SEC or an exemption is otherwise available. However, the Portfolio may purchase securities from underwriting syndicates in which the Investment Adviser or an affiliate of the Investment Adviser is a member under certain conditions in accordance with the provisions of a rule adopted under the 1940 Act and in compliance with procedures adopted by the MIP Board of Trustees. MIP has no obligation to deal with any dealer or group of dealers in the execution of transactions in portfolio securities. Subject to policies established by the MIP Board of Trustees, the Investment Adviser is responsible for the Portfolio's investment decisions and the placing of orders to purchase and sell securities. In placing orders, it is the policy of the Portfolio to obtain the best overall terms taking into account the dealer's general execution and operational facilities, the type of transaction involved and other factors such as the dealer's risk in positioning the securities involved. While the Investment Adviser generally seeks reasonably competitive spreads or commissions, the Portfolio will not necessarily be paying the lowest spread or commission available. In assessing the best overall terms available for any transaction, the Investment Adviser considers factors deemed relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. The Investment Adviser may cause the Portfolio to pay a broker which furnishes brokerage and research services a higher commission than that which might be charged by another broker for effecting the same transaction, provided that the Investment Adviser determines in good faith that such commission is reasonable in relation to the value of the brokerage and research services provided by that broker, viewed in terms of either the particular transaction or the overall responsibilities of the Investment Adviser. Such brokerage and research services might consist of reports and statistics relating to specific companies or industries, general summaries of groups of stocks or bonds and their comparative earnings and yields, or broad overviews of the stock, bond, and government securities markets and the economy. Supplementary research information so received is in addition to, and not in lieu of, services required to be performed by the Investment Adviser and does not reduce the advisory fees payable by the Portfolio. The MIP Board of Trustees will periodically review the commissions paid by the Portfolio to consider whether commissions paid over representative periods of time appear to be reasonable in relation to the benefits inuring to the Portfolio. It is possible that certain of the supplementary research or other services received will primarily benefit one or more other investment companies or other accounts for which the Investment Adviser exercises investment discretion. Conversely, the Portfolio may be the primary beneficiary of the research or services received as a result of portfolio transactions effected for such other accounts or investment companies. Under Section 28(e) of the Securities Exchange Act of 1934, an adviser shall not be "deemed to have acted unlawfully or to have breached its fiduciary duty" solely because under certain circumstances it has caused the account to pay a higher commission than the lowest available. To obtain the benefit of Section 28(e), an adviser must make a good faith determination that the commissions paid are "reasonable in relation to the value of the brokerage and research services provided...viewed in terms of either that particular transaction or its overall responsibilities with respect to the accounts as to which it exercises investment discretion and that the services provided by a broker provide an adviser with lawful and appropriate assistance in the performance of its investment decision-making responsibilities." Accordingly, the price to the Portfolio in any brokerage transaction may be less favorable than that available from another broker if the difference is reasonably justified by other aspects of the portfolio execution services offered. Broker-dealers utilized by the Investment Adviser may furnish statistical, research and other information or services which are deemed by the Investment adviser to be beneficial to the Portfolio's investment program. Research services received from brokers supplement the Investment Adviser's own research and may include the following types of information: statistical and background information on industry groups and individual companies; forecasts and interpretations with respect to U.S. and foreign economics, securities, markets, specific industry groups and individual companies; information on political developments; portfolio management strategies; performance information on securities and information concerning prices of securities; and information supplied by specialized services to the Investment Adviser and to the Portfolio with respect to the performance, investment activities and fees and expenses of other mutual funds. Such information may be communicated electronically, orally or in written form. Research services may also include the providing of equipment used to communicate research information, the arranging of meetings with management of companies and the providing of access to consultants who supply research information. The outside research assistance is useful to the Investment Adviser since the brokers utilized by the Investment Adviser as a group tend to follow a broader universe of securities and other matters than the staff of the Investment Adviser can follow. In addition, this research provides the Investment Adviser with a diverse perspective on financial markets. Research services which are provided to the Investment Adviser by brokers are available for the benefit of all accounts managed or advised by the Investment Adviser. It is the opinion of the Investment Adviser that this material is beneficial in supplementing their research and analysis; and, therefore, it may benefit the Portfolio by improving the quality of the Investment Adviser's investment advice. TAXES It is the policy of the Trust to distribute each fiscal year substantially all of the Fund's net investment income and net realized capital gains, if any, to shareholders. The Trust intends that the Fund will qualify as a regulated investment company under the provisions of the Internal Revenue Code of 1986, as amended (the "Code"). If so qualified, the Fund will not be subject to federal income tax on that part of its net investment income and net realized capital gains which it distributes to its shareholders. To qualify for such tax treatment, the Fund must generally, among other things: (a) derive at least 90% of its gross income from dividends, interest, payments received with respect to loans of stock and securities, and gains from the sale or other disposition of stock or securities and certain related income; and (b) diversify its holdings so that at the end of each fiscal quarter (i) 50% of the market value of the Fund's assets is represented by cash, Government Securities, securities of other regulated investment companies, and other securities limited, in respect of any one issuer, to an amount not greater than 5% of the Fund's assets or 10% of the voting securities of any issuer, and (ii) not more than 25% of the value of its assets is invested in the securities of any one issuer (other than Government Securities). The Portfolio has elected to be treated as a partnership for federal income tax purposes and therefore believes that it will not be required to pay any federal or state income or excise taxes. Any interest, dividends, gains and losses of the Portfolio will be deemed to pass through to the Fund in proportion to the Fund's ownership interest in the Portfolio. Thus, to the extent that the Portfolio accrues but does not distribute incom or gains, the Fund will be deemed to have realized and recognized its proportionate share of interest, dividends and gains, regardless of whether there has been a distribution of such items to the Fund. The Portfolio will seek to minimize recognition by its investors, including the Fund, of interest, dividends and gains without a distribution.0 The Code requires regulated investment companies to pay a nondeductible 4% excise tax to the extent they do not distribute 98% of their ordinary income, determined on a calendar year basis, and 98% of their capital gains, determined on an October 31 year end. The Trust intends to distribute the income and capital gains of the Funds in the manner necessary to avoid imposition of the 4% excise tax by the end of each calendar year. Dividends of the Funds declared in October, November or December and paid the following January will be taxable to shareholders as if received on December 31 of the year in which they are declared. PERFORMANCE INFORMATION Calculation of Yield. Quotations of the "current yield" and -------------------- "effective yield" of Institutional Shares and Administrative Shares may be used in advertisements, sales materials and shareholder reports. Current yield is the simple annualized yield for an identified seven calendar day period. This yield calculation is based on a hypothetical account having a balance of exactly one share of the Fund at the beginning of the seven-day period. The base period return is the net change in the value of the hypothetical account during the seven-day period, including dividends declared on any shares purchased with dividends on the shares but excluding any capital changes. Yield will vary as interest rates and other conditions change. Yields also depend on the quality, length of maturity and type of instruments held and operating expenses of the Fund. Because the expenses of Institutional Shares and Administrative Shares differ, the yield of each class of the Fund's shares will differ. Effective yield is computed by compounding the unannualized seven-day period return as follows: by adding 1 to the unannualized seven-day base period return, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the result. 365/7 Effective yield = [(base period return + 1) ]-1 Calculation of Total Return. Quotations of average annual total --------------------------- return and other total return data relating to Institutional Shares and Administrative Shares may also be used in advertisements, sales materials and shareholder reports. Average annual total return quotations for the specified periods are computed by finding the average annual compounded rates of return (based on net investment income and any realized and unrealized capital gains or losses on investments over such periods) that would equate the initial amount invested to the redeemable value of such investment at the end of each period. In making these computations, all dividends and distributions are assumed to be reinvested and all applicable recurring and non-recurring expenses are taken into account. The Fund also may quote annual, average annual and annualized total return and aggregate total return performance data, both as a percentage and as a dollar amount based on a hypothetical investment amount, for various periods. The total return of Institutional Shares and Administrative Shares will differ because their expenses differ. Total return quotations will be computed in accordance with the following formula, except that as required by the periods of the quotations, actual annual, annualized or aggregate data, rather than average annual data, may be quoted: n P (1+T) = ERV Where: P = a hypothetical initial payment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of the hypothetical $1,000 payment made at the beginning of the period. Actual annual or annualized total return data generally will be lower than average annual total return data because the average rates of return reflect compounding of return. Aggregate total return data, which is calculated according to the following formula, generally will be higher than average annual total return data because the aggregate rates of return reflect compounding over longer periods of time: ERV - P ------- P Where: P = a hypothetical initial payment of $1,000. ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the period. Yield and total return quotations are based upon historical investment performance and is not intended to indicate future performance. Yield and total return will fluctuate and will depend upon not only changes in prevailing interest rates, but also upon any realized gains and losses and changes in expenses. Performance Comparisons. From time to time and only to the extent the ----------------------- comparison is appropriate, the performance of Institutional Shares and Administrative Shares may be compared to the performance of various indices and investments for which reliable performance data is available. Performance of Institutional Shares and Administrative Shares may also be compared to averages, performance rankings and other information prepared by recognized mutual fund statistical services. Quotations of performance used in advertising and other types of literature may be compared to the 91-Day Treasury Bill Average (Federal Reserve), Lipper Money Market Fund Average, Donoghue Taxable Money Market Fund Average, Salomon Three-Month Treasury Bill Index, or Bank Averages, which are calculated from figures supplied by the U.S. League of Savings Institutions based on effective annual rates of interest on both passbook and certificate accounts. Savings accounts offer a guaranteed return of principal and a fixed rate of interest. The performance of Institutional Shares and Administrative Shares also may be compared to the Consumer Price Index, as published by the U.S. Bureau of Labor Statistics, which is an established measure of change over time in the prices of goods and services in major expenditure groups. Performance comparisons to other mutual funds having investment objectives similar to those of the Fund may also be used. This comparative performance could be expressed as a ranking prepared by Lipper Analytical Services, Inc., Donoghue's Money Fund Report, including Donoghue's Taxable Money Market Fund Average or Morningstar, Inc., independent services which monitor the performance of mutual funds. Of course, past performance is no guarantee of future investment results. ADDITIONAL INFORMATION Description of the Trust and its Shares. The Trust was organized on --------------------------------------- July 7, 1998, as a business trust under the laws of the State of Delaware. Interests in the Fund are represented by shares of beneficial interest, $.001 par value. The Trust is authorized to issue an unlimited number of shares, and may issue shares in series, with each series representing interests in a separate portfolio of investments (a "series"). As of the date of this Statement of Additional Information, shares representing interests in the Fund constitute the sole series of the Trust's shares outstanding. Two classes of the Fund's shares (Institutional Shares and Administrative Shares) have been authorized. Each share of each class represents an equal proportionate interest in that Fund with each other share of of that class, without any priority or preference over other shares. All consideration received for the sales of the Fund, all assets in which such consideration is invested, and all income, earnings and profits derived therefrom are allocated to and belong to that Fund. As such, the interest of shareholders in the Fund will be separate and distinct from the interest of shareholders of any other funds which may be represented by other series of shares of the Trust, and shares of the Fund will be entitled to dividends and distributions only out of the net income and gains, if any, of the Fund as declared by the Board of Trustees of the Trust. The assets of the Fund and those of each other series of the Trust that may be authorized will be segregated on the Trust's books and will be charged with the expenses and liabilities of that series and a pro rata share of the general expenses and liabilities of the Trust not attributable solely to any particular series. The Board of Trustees determines those expenses and liabilities deemed to be general expenses and liabilities of the Trust, and these items will be allocated among Fund and other series of the Trust in a manner deemed fair and equitable by the Board of Trustees in its sole discretion. The Board of Trustees may create additional classes of shares of the Funds. Except for the different distribution related and other specific costs borne by each class of the Fund's shares, shares of each class have the same voting and other rights. These varying costs will result in different dividends for each class. Annual meetings of shareholders of the Trust will not be held except as required by the 1940 Act or other applicable law. A meeting will be held on the removal of a Trustee or Trustees of the Trust if requested in writing by shareholders representing not less than 10% of the outstanding shares of the Trust. The Trust will assist in communications among shareholders as required by Section 16(c) of the 1940 Act. The Portfolio and MIP. The Fund pursues its investment objective by --------------------- investing all of its investable assets in the Portfolio. The Portfolio is a newly formed series of MIP, an open-end management investment company that is organized as a Delaware business trust. MIP was formed on October 21, 1993. In accordance with Delaware law and in connection with the tax treatment sought by MIP, the Declaration of Trust of MIP provides that investors in MIP are personally responsible for Trust liabilities and obligations, but only to the extent that MIP's property is insufficient to satisfy such liabilities and obligations. The MIP Declaration of Trust also provides that MIP shall maintain appropriate insurance (for example, fidelity bonding and errors and ommissions insurance) for the protection of the MIP, its investors, Trustees of MIP, officers, employees and agents covering possible tort and other liabilities, and that investors will be indemnified to the extent that they are held liable for a disproportionate share of MIP's obligations. Interests in the Portfolio have substantially identical voting and other rights as those right discussed above with respect to the Trust. Whenever the Fund has the right to vote on any matter relating to MIP or the Portfolio by virtue of its investment in the Portfolio, the Fund will hold a meeting of its shareholders and will cast its vote as an investor in the Portfolio in the same proportion as shares of the Fund are voted. Trustee and Officer Liability. Under the Trust's Declaration of Trust ----------------------------- and its By-Laws, and under Delaware law, the Trustees, officers, employees and agents of the Trust are entitled to indemnification under certain circumstances against liabilities, claims and expenses arising from any threatened, pending or completed action, suit or proceeding to which they are made parties by reason of the fact that they are or were such Trustees, officers, employees or agents of the Trust, subject to the limitations of the 1940 Act which prohibit indemnification which would protect such persons against liabilities to the Trust or its shareholders to which they would otherwise be subject by reason of their own bad faith, willful misfeasance, gross negligence or reckless disregard of duties. Similar provisions are contained in the Declaration of Trust of MIP. Control Persons. As of the date of this Statement of Additional --------------- Information, [Hewitt Associates LLC] was the sole owner of shares of the Fund. So long as such ownership of shares continues to exceed 25% of the outstanding shares of the Fund, Hewitt Associates LLC will be deemed to control the Fund by virtue of such ownership. Through the exercise of voting rights with respect to shares of the Fund, Hewitt Associates LLC may be able to determine the outcome of shareholder voting on matters as to which approval of shareholders is required. Independent Auditors. [_______________________], [address], are the -------------------- independent auditors of the Trust. The independent auditors are responsible for auditing the financial statements annually and prepare the tax returns of the Fund. [ ] also serve as the independent auditors of MIP and audit the financial statements of the Porfolio. The selection of the independent auditors for the Trust and MIP is approved annually by their respective Boards of Trustees. Custodian. [ ], [address], serves as custodian --------- of the Fund [and the Portfolio] and maintains custody of the securities and similar assets of the Fund and the Portfolio. Cash held by the custodian, which may at times be substantial, is insured by the Federal Deposit Insurance Corporation up to the amount of available insurance coverage limits (presently, $100,000). Transfer Agent. [____________________] (the "Transfer Agent") serves -------------- as the Fund's transfer agent and dividend disbursing agent. Fund Accounting Services. [ ] provides ------------------------ accounting services to the Fund and maintains the accounting records of the Fund. The Fund pays a fee for these services. Shareholder Reports. Shareholders of the Fund are kept fully informed ------------------- through annual and semi-annual reports showing diversification of investments, securities owned and other information regarding the activities of the Fund. Legal Counsel. Schulte Roth & Zabel LLP, New York, New York, serves ------------- as counsel to the Trust. Registration Statement. This Statement of Additional Information and ---------------------- the Prospectus do not contain all of the information set forth in the Registration Statement the Trust has filed with the SEC. The complete Registration Statement may be obtained from the SEC upon payment of the fee prescribed by the rules and regulations of the SEC. Financial Statements. The statement of assets and liabilities of the -------------------- Fund as of [ ], 1998, included in this Statement of Additional Information has been audited by [ ], independent public accountants, as indicated by their report thereon. The financial statements are included herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. AUDIT OF STATEMENT OF ASSETS AND LIABILITIES AS OF [______________], 1998 To be added by pre-effective amendment. REPORT ON AUDIT OF STATEMENT OF ASSETS AND LIABILITIES AS OF [_____________], 1998 To be added by pre-effective amendment. SAI APPENDIX The following is a description of the ratings given by Moody's and S&P to corporate bonds and commercial paper. CORPORATE BONDS Moody's: The four highest ratings for corporate bonds are "Aaa," ------- "Aa," "A" and "Baa." Bonds rated "Aaa" are judged to be of the "best quality" and carry the smallest amount of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. Bonds rated "Aa" are of "high quality by all standards," but margins of protection or other elements make long-term risks appear somewhat greater than "Aaa" rated bonds. Bonds rated "A" possess many favorable investment attributes and are considered to be upper medium grade obligations. Bonds rated "Baa" are considered to be medium grade obligations; interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds have speculative characteristics as well. Moody's applies numerical modifiers "1," "2" and "3" in each rating category from "Aa" through "Baa" in its rating system. The modifier "1" indicates that the security ranks in the higher end of its category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates that the issue ranks in the lower end. S&P: The four highest ratings for corporate bonds are "AAA," "AA," --- "A" and "BBB." Bonds rated "AAA" have the highest ratings assigned by S&P and have an extremely strong capacity to pay interest and repay principal. Bonds rated "AA" have a "very strong capacity to pay interest and repay principal" and differ "from the highest rated issued only in small degree." Bonds rated "A" have a "strong capacity" to pay interest and repay principal, but are "somewhat more susceptible" to adverse effects of changes in economic conditions or other circumstances than bonds in higher rated categories. Bonds rated "BBB" are regarded as having an "adequate capacity" to pay interest and repay principal, but changes in economic conditions or other circumstances are more likely to lead to a "weakened capacity" to make such repayments. The ratings from "AA" to "BBB" may be modified by the addition of a plus or minus sign to show relative standing within the category. CORPORATE COMMERCIAL PAPER Moody's: Moody's employs the designations of "Prime-1," "Prime-2" and ------- "Prime-3" to indicate the relative capacity of the rated issuers or borrowers to repay punctually. The highest rating for corporate commercial paper is "Prime- 1." Issuers rated "Prime-1" have a "superior capacity for repayment of short- term promissory obligations," and will normally be evidenced by leading market positions in well established industries, high rates of return on funds employed, conservative capitalization structures with moderate reliance on debt and ample asset protection, broad margins in earnings coverage of fixed financial charges and highinternal cash generation, and well established access to a range of financial markets and assured sources of alternate liquidity. Issuers rated "Prime-2" "have a strong capacity for repayment of short-term promissory obligations," but earnings trends, while sound, will be subject to more variation. S&P: The "A-1" rating for corporate commercial paper indicates that --- the "degree of safety regarding timely payment is either overwhelming or very strong." Commercial paper with "overwhelming safety characteristics" will be rated "A-1+." Commercial paper with a strong capacity for timely payments on issues will be rated "A-2." PART C OTHER INFORMATION Item 23. Exhibits. Exhibit Number Description ------ ----------- (a) Declaration of Trust dated July 6, 1998. (b) By-Laws of Registrant. (c) Certificate of Trust dated July 6, 1998. (d) Investment Advisory Agreement, to be filed in a pre-effective amendment to this registration statement. (e) Distribution Agreement, to be filed in a pre- effective amendment to this registration statement. (f) Not Applicable (g) Custodian Agreement, to be filed in a pre- effective amendment to this registration statement. (h)(1) Administration Agreement, to be filed in a pre-effective amendment to this registration statement. (h)(2) Transfer Agent Agreement, to be filed in a pre-effective amendment to this registration statement. (h)(3) Shareholder Services Agreement, to be filed in a pre-effective amendment to this registration statement. (i) Legal Opinion, to be filed in a pre-effective amendment to this registration statement. (j) Consent of Independent Auditors, to be filed in a pre-effective amendment to this registration statement. (k) Not Applicable. (l) Agreement Regarding Initial Capital, to be filed in a pre-effective amendment to this registration statement. (m) Rule 12b-1 Plan, to be filed in a pre- effective amendment to this registration statement. (n) Financial Data Schedule, to be filed in a pre-effective amendment to this registration statement. (o) Rule 18f-3 Plan, to be filed in a pre- effective amendment to this registration statement. Item 24. Persons Controlled by or Under Common Control with Registrant. Hewitt Associates LLC, which serves as the Administrator of Registrant, will supply the initial seed capital and be the sole initial owner of shares of Registrant. The officers and initial Trustee of Registrant are employed by Hewitt Associates LLC. Therefore, Registrant may be deemed to be controlled by Hewitt Associates LLC and Hewitt ________, and may also be deemed to be under common control with Hewitt Services LLC, which will serve as the Distributor of shares of Registrant. Item 25. Indemnification. As permitted by Section 17(h) and (i) of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and pursuant to Article VI of Registrant's By-Laws, officers, trustees, employees and agents of Registrant may be indemnified against certain liabilities in connection with Registrant, [and pursuant to Section __ of the Distribution Agreement, Hewitt Services LLC as principal underwriter of Registrant, may be indemnified against certain liabilities which it may incur]. Such Article VI of the By-Laws [and Section ___ of the Distribution Agreement] are hereby incorporated by reference in their entirety. Registrant intends to maintain an insurance policy insuring its officers and trustees against certain liabilities, and certain costs of defending claims against such officers and trustees, and to bear the costs of such policy except for such costs as is determined to be attributable to coverage protecting such persons against liabilities to which they may become subject as a consequence of their own willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties. The insurance policy will also insure Registrant against the cost of indemnification payments to officers and trustees under certain circumstances. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "1933 Act"), may be permitted to trustees, officers and controlling persons of Registrant and the principal underwriter pursuant to the foregoing provisions or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such C-2 indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a trustee, officer, or controlling person of Registrant and the principal underwriter in connection with the successful defense of any action, suit or proceeding) is asserted against Registrant by such trustee, officer or controlling person or the principal underwriter in connection with the shares being registered, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. Registrant hereby undertakes that it will apply the indemnification provisions of its By-Laws in a manner consistent with Release No. 11330 of the Securities and Exchange Commission under the Investment Company Act so long as the interpretations of Sections 17(h) and 17(i) of the Investment Company Act remain in effect and are consistently applied. Item 26. Business and Other Connections of Investment Adviser. Registrant does not have an investment adviser because it pursues its investment objective by investing its assets in the Money Market Master Portfolio, a series of Master Investment Portfolio, a registered open-end management company. The Investment Adviser of Money Market Master Portfolio is Barclays Global Fund Advisors. The information required by this Item 26 with respect to Barclays Global Fund Advisors is incorporated by reference to Form N- 1A of Masterworks Fund Inc., filed July 2, 1998, accession number 0000929624-98- 00127. Item 27. Principal Underwriters. (a) Not Applicable (b) The information required by this Item 29 (b) will be filed by pre-effective amendment. (c) The Distributor does not receive compensation for its services as principal underwriter, except that it will be paid a fee for services rendered in connection with the distribution of Administrative Shares of Registrant. See "Distribution and Servicing Arrangements" in Part A and "Distribution Arrangements" in Part B. Item 28. Location of Accounts and Records. All accounts books and other documents required to be maintained by Registrant by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder are maintained at the offices of Hewitt Associates LLC, 100 Half Day Road, Lincolnshire, Illinois 60069, except for the following records which will be maintained by the persons and at the places so indicated: [To be added by pre-effective amendment.] C-3 Item 29. Management Services. Not Applicable. Item 30. Undertakings. Not Applicable. C-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, as amended, the Registrant, Hewitt Series Trust, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the city of Lincolnshire and State of Illinois, on the 10th day of July, 1998. Hewitt Series Trust By: /s/ Stacy L. Schaus -------------------- Stacy L. Schaus President Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- /s/ E. Scott Peterson Trustee July 10, 1998 - ---------------------- E. Scott Peterson /s/ Stacy L. Schaus President July 10, 1998 - ---------------------- Stacy L. Schaus (Principal Executive Officer) /s/ James B. Lee Treasurer and July 10, 1998 - ---------------------- James B. Lee Chief Financial Officer (Principal Financial Officer)
C-5 INDEX TO EXHIBITS (a) Declaration of Trust (b) By-Laws (c) Certificate of Trust EX-99.A 2 DECLARATION OF TRUST DECLARATION OF TRUST OF HEWITT SERIES TRUST A DELAWARE BUSINESS TRUST PRINCIPAL PLACE OF BUSINESS: 100 Half Day Road Lincolnshire, IL 60069
TABLE OF CONTENTS ARTICLE I NAME AND DEFINITIONS................................................ 1 Section 1. Name ............................................................ 1 Section 2. Definitions...................................................... 1 ARTICLE II PURPOSE OF TRUST.................................................. 3 ARTICLE III SHARES OF BENEFICIAL INTEREST..................................... 3 Section 1. Description of Shares............................................ 3 Section 2. Ownership of Shares.............................................. 4 Section 3. Investments in the Trust; Consideration.......................... 4 Section 4. Status of Shares and Limitation of Personal Liability............ 4 Section 5. Power of Board of Trustees to Change Provisions Relating to Shares............................................... 5 Section 6. Establishment and Designation of Series and Classes.............. 5 Section 7. Indemnification of Shareholders.................................. 7 ARTICLE IV THE BOARD OF TRUSTEES............................................. 8 Section 1. Number, Election and Tenure...................................... 8 Section 2. Effect of Death, Resignation, etc. of a Trustee.................. 8 Section 3. Powers........................................................... 9 Section 4. Payment of Expenses by the Trust.................................12 Section 5. Payment of Expenses by Shareholders..............................12 Section 6. Ownership of Assets of the Trust.................................12 Section 7. Service Contracts................................................13 ARTICLE V SHAREHOLDERS' VOTING POWERS........................................14 ARTICLE VI NET ASSET VALUE, DISTRIBUTIONS AND REDEMPTIONS....................14 Section 1. Determination of Net Asset Value, Net Income, Dividends and Distributions....................................................14 Section 2. Redemptions and Repurchases......................................15 Section 3. Redemptions at the Option of the Trust...........................15 ARTICLE VII COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES.............15 Section 1. Compensation.....................................................15 Section 2. Indemnification and Limitation of Liability......................15 Section 3. Trustee's Good Faith Action; Expert Advice; No Bond or Surety....16 Section 4. Insurance........................................................16 ARTICLE VIII MISCELLANEOUS...................................................16 Section 1. Liability of Third Persons Dealing with Trustees.................16 Section 2 Termination of Trust or Series...................................17 Section 3. Merger and Consolidation.........................................17 Section 4. Amendments.......................................................18 Section 5. Filing of Copies; References; Headings...........................18 Section 6. Applicable Law...................................................18 Section 7. Provisions in Conflict with Law or Regulations...................18 Section 8. Business Trust Only..............................................19 Section 9. Use of the Name "Hewitt".........................................19
DECLARATION OF TRUST OF HEWITT SERIES TRUST WHEREAS, THIS DECLARATION OF TRUST (the "Declaration") is made and entered into as of the date set forth below by the Trustee hereunder (the "Initial Trustee") for the purpose of forming a Delaware business trust in accordance with the provisions hereinafter set forth, NOW, THEREFORE, the Initial Trustee is filing a Certificate of Trust with the Office of the Secretary of State of the State of Delaware and hereby declares that all money and property contributed to the trust established hereby shall be held and managed in trust for the benefit of the persons who may from time to time hold beneficial interests issued hereunder and subject to the provisions hereof, to wit: ARTICLE I NAME AND DEFINITIONS Section 1. Name. The name of the trust established hereby (the "Trust") is HEWITT SERIES TRUST and, insofar as may be practicable, the Trustees shall conduct the Trust's activities, execute all documents and sue or be sued under that name, which name (and the word "Trust" wherever herein used) shall refer to the Trustees as trustees, and not as individuals, or personally, and shall not refer to the officers, agents, employees or Shareholders of the Trust. If the Trustees determine that the Trust's use of such name is not advisable or if the Trust is required to discontinue the use of such name pursuant to Article VIII, Section 9 hereof, then, subject to that section, the Trustees may adopt such other name for the Trust as they deem proper and the Trust may hold its property and conduct its activities under such other name. Section 2. Definitions. Whenever used herein, unless otherwise required by the context or specifically provided: (a) The "Trust" refers to the Delaware business trust established hereby, by whatever name it be known, inclusive of each and every Series established hereunde r; (b) The "Trust Property" means any and all assets and property, real or personal, tangible or intangible, which are owned or held by or for the account of the Trust or the Trustees, including without limitation the rights referenced in Article VIII, Section 9 hereof; -1- (c) "Trustee" refers to the individual Initial Trustee who has signed this Declaration, so long as such persons continue in office in accordance with the terms hereof, and all other individuals who may from time to time be duly elected or appointed to serve as Trustees hereunder in accordance with the provisions hereof, so long as such persons continue in office in accordance with the terms hereof, and all references herein to a Trustee or the Trustees shall refer to such person or persons in their capacity as trustees hereunder; (d) "Shares" means the units 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; (e) "Shareholder" means a record owner of outstanding Shares; (f) "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; (g) The "1940 Act" refers to the Investment Company Act of 1940 and the rules and regulations thereunder, all as amended from time to time and any orders thereunder which may from time to time be applicable to the Trust; (h) The terms "Commission" and "Principal Underwriter" shall have the meanings given them in the 1940 Act; (i) "Declaration" shall mean this Declaration of Trust, as amended and in effect from time to time. Reference in this Declaration of Trust to "Declaration," "hereof," "herein," "hereby," and "hereunder" shall be deemed ----------- ------ ------ ------ --------- to refer to this Declaration rather than the article or section in which such words appear; (j) "By-Laws" shall mean the By-Laws of the Trust referred to in Article IV, Section 3 hereof, as amended from time to time and incorporated herein by reference; (k) The term "Interested Person" has the meaning given it in the 1940 Act; (l) "Investment Manager" means a party furnishing services to the Trust pursuant to any contract described in Article IV, Section 7(a) hereof; (m) "Series" refers to each Series of the Trust established and designated under or in accordance with the provisions of Article III hereof; (n) "Class" means a separately designated class of shares of a Series established in accordance with the provisions of Article III of this Declaration with such varying rights from each other Class of such Series as may be established in accordance with the provisions of Article III of this Declaration; and -2- (o) "Board of Trustees" means such individuals who at any given time constitute the Trustees. ARTICLE II PURPOSE OF TRUST The purpose of the Trust is to conduct, operate and carry on the business of a management investment company registered under the 1940 Act through one or more Series investing primarily in securities. ARTICLE III SHARES OF BENEFICIAL INTEREST Section 1. Description of Shares. The beneficial interest in the Trust shall at all times be divided into transferable units to be called Shares of Beneficial Interest, each with a par value of one tenth of one cent ($.001). The Trustees may, from time to time, authorize the division of Shares into separate Series and the division of any Series into two or more separate Classes of Shares, as they deem necessary and desirable. The different Series shall be established and designated, and the variations in the relative rights and preferences as between the different Series shall be fixed and determined, by the Trustees, without the requirement of Shareholder approval. The sole initial Series of Shares shall have the rights and preferences provided for herein and in Article III, Section 6 hereof to the extent relevant and not otherwise provided for herein, and all references to Series (and Classes) shall be construed (as the context may require) to refer to the Trust. Subject to the provisions of Section 6 of this Article III, each Share shall have voting rights as provided in Article V hereof and in the By- Laws, and holders of the Shares of any Series shall be entitled to receive dividends, if and when declared, with respect thereto in the manner provided in Article VI, Section 1 hereof. No Shares shall have any priority or preference over any other Share of the same Series or Class with respect to dividends or distributions upon termination of the Trust or of such Series or Class made pursuant to Article VIII, Section 2 hereof. All dividends and distributions shall be made ratably among all Shareholders of a particular Series or Class thereof from the assets held with respect to such Series according to the number of Shares of such Series or Class thereof from the assets held with respect to such Series according to the number of Shares of such Series or Class held of record by such Shareholder on the record date for any dividend or distribution or on the date of termination, as the case may be. Shareholders shall have no preemptive or other right to subscribe to any additional Shares or other securities issued by the Trust or any Series or Class. The Trustees may from time to time divide or combine the Shares of any particular Series or Class without thereby materially changing the proportionate beneficial interest of the Shares of that Series or Class in the assets held with respect to that Series or materially affecting the rights of Shares of any other Series or Class. The number of authorized Shares and the number of Shares of each Series and Class that may be issued is unlimited. The Trustees may classify or reclassify any unissued -3- Shares or any Shares previously issued and reacquired of any Series or Class into one or more Series or Classes that are now or hereafter established and designated from time to time. The Trustees may hold as treasury Shares, reissue for such consideration and on such terms as they may determine, or cancel, at their discretion from time to time, any Shares of any Series or Class reacquired by the Trust. Section 2. Ownership of Shares. The ownership of Shares shall be recorded on the books of the Trust or of a transfer or similar agent for the Trust, which books shall be maintained separately for the Shares of each Series or Class. No certificates certifying the ownership of Shares shall be issued except as the Board of Trustees may otherwise determine from time to time. The Trustees may make such rules as they consider appropriate for the transfer of Shares of each Series or Class 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 who are the Shareholders of each Series or Class and as to the number of Shares of each Series or Class held by each Shareholder. Section 3. Investments in the Trust; Consideration. Shares of the Trust shall be offered for sale and sold in such manner and at such times, and subject to such requirements and for such consideration, as may be determined from time to time by the Trustees, subject to applicable requirements of law, including the 1940 Act. To the extent permitted by applicable law, Shares may be sold subject to imposition of such sales charges, deferred sales charges, asset-based sales charges and redemption fees as may be determined by the Trustees. All Shares when issued on the terms determined by the Trustees shall be fully paid and nonassessable. Section 4. Status of Shares and Limitation of Personal Liability. Shares shall be deemed to be personal property giving only the rights provided in this instrument. Every Shareholder by virtue of having become a Shareholder shall be held to have expressly assented and agreed to the terms hereof and to have become a party hereto. The death of a Shareholder shall not operate to terminate the Trust, and shall not entitle the representative of any deceased Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees, but entitles such representative only to the rights of said deceased Shareholder under this Trust. Ownership of Shares shall not entitle the Shareholder to any title in or to the whole or any part of the Trust Property or to any right to call for a partition or division of the same or for an accounting, nor shall the ownership of Shares constitute the Shareholders as partners. Neither the Trust nor the Trustees, nor any officer, employee or agent of the Trust shall have any power to bind personally any 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. -4- Section 5. Power of Board of Trustees to Change Provisions Relating to Shares. Notwithstanding any other provisions of this Declaration and without limiting the power of the Board of Trustees to amend the Declaration as provided elsewhere herein, the Board of Trustees shall have the power to amend this Declaration, at any time and from time to time, in such manner as the Board of Trustees may determine in its sole discretion, without the need for Shareholder action, so as to add to, delete, replace or otherwise modify any provisions relating to the Shares contained in this Declaration, provided that before adopting any such amendment without Shareholder approval the Board of Trustees shall determine that it is consistent with the fair and equitable treatment of all Shareholders or that Shareholder approval is not otherwise required by the 1940 Act or other applicable law. If Shares have been issued, Shareholder approval shall be required to adopt any amendments to this Declaration which would adversely affect to a material degree the rights and preferences of the Shares of any Series or Class or to increase or decrease the par value of the Shares of any Series or Class. Subject to this Section 5, the Board of Trustees may amend the Declaration of Trust to amend any of the provisions set forth in paragraphs (a) through (g) of Section 6 of this Article III. Section 6. Establishment and Designation of Series and Classes. The sole initial Series of Shares of the Trust (the "Initial Series"), which Series is hereby established and designated, is HEWITT MONEY MARKET FUND. Until such time as may otherwise be determined by the Trustees in accordance with this Declaration, there shall be two Classes of Shares of such initial Series: INSTITUTIONAL SHARES and ADMINISTRATIVE SHARES. The relative rights and preferences of each Class of Hewitt Money Market Fund shall be as set forth herein; however, the varying obligations of such Classes with respect to certain of the expenses of Hewitt Money Market Fund shall be as set forth in a written plan meeting the requirements of and adopted by the Trustees in accordance with Rule 18f-3 under the 1940 Act, which plan shall be adopted prior to commencement of the operations of Hewitt Money Market Fund. The establishment and designation of any additional Series or Class shall be effective upon the execution by a majority of the Trustees of an instrument setting forth such establishment and designation and the relative rights and preferences of the Shares of such Series or Class, or as otherwise provided in such instrument. Each instrument referred to in this paragraph shall have the status of an amendment to this Declaration. Shares of the Initial Series, and Shares of each additional Series hereafter established pursuant to this Section 6, unless otherwise provided herein or in the instrument establishing such Series, shall have the following relative rights and preferences: (a) Assets Held With Respect to a Particular Series or -------------------------------------------------- Class. All consideration received by the Trust for the issuance or sale of - ----- Shares of a particular Series or Class, together with all assets in which such consideration is invested or reinvested, all income, earnings and profits thereon, and the proceeds thereof, from whatever source derived, including, -5- 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 with respect to that Series or Class for all purposes, subject only to the rights of creditors of such Series, and shall be so recorded upon the books of account of the Trust. All such consideration, assets, income, earnings, profits and proceeds thereof of a Series or Class, are herein referred to as "assets held with respect to" that Series or Class. 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 or Class (collectively "General Assets"), the Trustees shall allocate such General Assets to, between or 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, and any General Assets so allocated to a particular Series or Class shall be assets held with respect to that Series or Class. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all Series and Classes for all purposes. (b) Liabilities Attributable to a Particular Series or Class. -------------------------------------------------------- The assets of the Trust held with respect to each particular Series and Class thereof shall be charged with all liabilities, expenses, costs, charges and reserves attributable to that Series or Class. All such liabilities, expenses, costs, charges, and reserves so charged to a Series or Class are herein referred to as "liabilities attributable to" that Series or Class. Any liabilities of the Trust which are not readily identifiable as being attributable to any particular Series or Class thereof ("General Liabilities") shall be allocated and charged by the Trustees to, between or 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, and any General Liabilities so allocated to a particular Series or Class shall be liabilities attributable to that Series or Class. Each such allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the holders of all Series and Classes for all purposes. All Persons who have extended credit which has been allocated to a particular Series, or who have a claim or contract which has been allocated to any particular Series, shall look, and shall be required by contract to look exclusively, to the assets of that particular Series for payment of such credit, claim or contract. In the absence of an express contractual agreement so limiting the claims of such creditors, claimants and contract providers, each creditor, claimant and contract provider will be deemed nevertheless to have impliedly agreed to such limitation unless an express provision to the contrary has been incorporated in the written contract or other document establishing the claimant relationship. (c) Dividends, Distributions, Redemptions and Repurchases. ----------------------------------------------------- Notwithstanding any other provisions of this Declaration, including, without limitation, Article VI: (i) 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 or Class, and (ii) except as specifically provided in Section 7 of this Article III, no Shareholder of any particular Series or Class shall otherwise have any right or claim against the assets held with respect to any other Series or Class except to the extent that such Shareholder has such a right or claim hereunder as a Shareholder of such other Series or -6- Class. The Trustees shall have full discretion, to the extent not inconsistent with the 1940 Act, to determine which items shall be treated as income or capital gains and which items shall be treated as capital; and each such determination and allocation shall be conclusive and binding upon the Shareholders. (d) Voting. All Shares of the Trust entitled to vote on a matter ------ shall vote separately by Series and by Class: that is, the Shareholders of each Series and Class shall have the right to approve or disapprove matters affecting the Trust and that Series and Class as if the Series or Class were separate companies. There are, however, two exceptions to voting by separate Series and Classes. First, if as to any matter the 1940 Act requires or permits all Shares entitled to vote with respect to such matter to be voted in the aggregate without differentiation between the separate Series or Classes, then all Shares entitled to vote on such matter shall vote as a single class. Second, if any matter affects only the interests of some but not all Series or Classes, then only the Shareholders of such affected Series or Classes shall be entitled to vote on the matter. (e) Equality. All the Shares of each particular Series or Class -------- shall represent an equal proportionate interest in the assets held with respect to that Series or Class (subject to the liabilities attributable to that Series or Class and such rights and preferences as may have been established and designated with respect to such Series or Class), and each Share of any particular Series or Class shall be equal to each other Share of that Series or Class. (f) Fractional Shares. Any fractional Share of a Series or Class ----------------- 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. (g) 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 or Classes of Shares in accordance with such requirements, limitations and procedures as may be established by the Trustees. Section 7. Indemnification of Shareholders. If any Shareholder or former Shareholder shall be exposed to liability by reason of a claim or demand relating to his or her being or having been a Shareholder, and not because of his or her acts or omissions, the Shareholder or former Shareholder (or his or her 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 to be held harmless from and indemnified out of the assets of the Trust against all loss and expense arising from such claim or demand. -7- ARTICLE IV THE BOARD OF TRUSTEES Section 1. Number, Election and Tenure. The number of Trustees constituting the Board of Trustees shall be fixed from time to time by a written instrument signed, or by resolution approved at a duly constituted meeting, by a majority of the Board of Trustees; provided, however, that the number of Trustees shall in no event be less than one (1) nor more than fifteen (15). Except as required by the 1940 Act, Trustees need not be elected by Shareholders. The Board of Trustees, by action of a majority of the then Trustees at a duly constituted meeting, may fill vacancies in the Board of Trustees or remove Trustees with or without cause; except that a vacancy shall be filled only by a person elected by Shareholders if required by the 1940 Act. Each Trustee shall serve during the continued lifetime of the Trust until he dies, resigns, is declared bankrupt or incompetent by a court of appropriate jurisdiction, or is removed, or, if sooner, until the next meeting of Shareholders called for the purpose of electing Trustees and until the election and qualification of his successor. Any Trustee may resign at any time by written instrument signed by him 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 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. Any Trustee may be removed at any meeting of Shareholders by a vote of two-thirds of the outstanding Shares of the Trust. A meeting of Shareholders for the purpose of electing or removing one or more Trustees shall be called (i) by the Trustees upon their own vote, or (ii) upon the demand of a Shareholder or Shareholders owning Shares representing 10% or more of all votes entitled to be cast by outstanding Shares. Section 2. Effect of Death, Resignation, etc. of a Trustee. The death, declination, resignation, 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. Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is filled as provided in Article IV, Section 1, 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. 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 Board of 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 fill vacancies, the Trust's Investment Manager is hereby empowered to appoint new Trustees, subject to the provisions of Section 16(a) of the 1940 Act. -8- Section 3. Powers. Subject to the provisions of this Declaration, the business of the Trust shall be managed by the Board of Trustees, and such Board shall have all powers necessary or convenient to carry out that responsibility. Without limiting the foregoing, the Trustees may: (i) adopt By-Laws not inconsistent with this Declaration providing for the regulation and management of the affairs of the Trust and may amend and repeal the By-Laws to the extent that such By-Laws do not reserve that right to the Shareholders; (ii) elect persons to serve as Trustees and fill vacancies in the Board of Trustees, and remove Trustees from such Board in accordance with the provisions of this Declaration, and may elect and remove such officers and appoint and terminate such agents as they consider appropriate; (iii) appoint from their own number and establish and terminate one or more committees consisting of one or more Trustees which may exercise the powers and authority of the Board of Trustees to the extent that the Trustees determine; (iv) employ one or more custodians of the assets of the Trust and may authorize such custodians to employ sub- custodians 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, retain a transfer agent or a shareholder servicing agent, or both, and employ such other Persons as the Trustees may deem desirable for the transaction of business of the Trust or any Series; (v) provide for the issuance, sale and distribution of Shares by the Trust directly or through one or more Principal Underwriters or otherwise; (vi) redeem, repurchase, retire, cancel, acquire, hold, resell, reissue, classify, reclassify, and transfer and otherwise deal in Shares pursuant to applicable law; (vii) set record dates for the determination of Shareholders with respect to various matters; (viii) declare and pay dividends and distributions to Shareholders of each Series or Class from the assets of such Series or Class; (ix) collect all property due to the Trust, pay all claims, including taxes, against the Trust Property, prosecute, defend, compromise or abandon any claims relating to the Trust Property, foreclose any security interest securing any obligations by virtue of which any property is owed to the Trust, and enter into releases, agreements and other instruments; (x) incur and pay any expenses which, in the opinion of the Trustees, are necessary or incidental to carry out the purposes of the Trust, and pay reasonable compensation from the funds of the Trust to themselves as Trustees; (xi) engage in and prosecute, defend, compromise, abandon, or adjust, by arbitration or otherwise, any actions, suits, proceedings, disputes, claims and demands relating to the Trust expenses incurred in connection therewith, including those of litigation; (xii) indemnify any Person with whom the Trust has dealings, including the Shareholders, Trustees, officers, employees, agents, Investment Managers, or Principal Underwriters of the Trust, to the extent permitted by law and not inconsistent with any applicable provisions of the By- Laws as the Trustees shall determine; (xiii) determine and change the fiscal year of the Trust or any Series and the method by which its accounts shall be kept; (xiv) adopt a seal for the Trust or any Series; and (xv) in general, delegate such authority as they consider desirable to any officer of the Trust, to any committee of the Trustees and to any agent or employee of the Trust or to any such custodian, transfer or shareholder servicing agent, Investment Manager or Principal Underwriter. Any determination made by the Trustees in good faith as to what is in the interests of the Trust shall be conclusive. In construing the provisions of this Declaration, the presumption shall be in favor of a grant of power to the Trustees. Unless otherwise specified or required by law, any -9- action by the Board of Trustees shall be deemed effective if approved or taken by a majority of the Trustees then in office. Without limiting the foregoing, the Trust shall have power and authority: (a) To invest and reinvest cash, to hold cash 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 of every nature and kind, including, without limitation, all types of stocks, bonds, bills, notes, debentures, options, negotiable or non- negotiable instruments, obligations, evidences of indebtedness, certificates of deposit or indebtedness, commercial paper, repurchase agreements, bankers' acceptances and other securities 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, any political subdivision of the U.S. Government or any foreign government, or any international instrumentality, or by any bank or saving 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" or "delayed delivery" contracts for any such securities, 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 with 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 rights to subscription or otherwise which in any manner arise out of ownership of 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 sub-custodian 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 -10- 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 a claim 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; (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; (l) To purchase and pay for 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 Managers, Principal Underwriters, or independent contractors of the Trust, individually against all claims and liabilities of every nature arising by reason of holding Shares, holding 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 Manager, Principal Underwriter, 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, subject to such limitations as may be imposed by law; (m) To adopt, establish and carry out pension, profit-sharing, share bonus, share purchase, savings, thrift and other retirement, incentive and benefit plans, trusts and provisions, 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 enter into futures contracts (including, but not limited to, interest rate and stock index futures contracts) and options thereon; and -11- (o) To conduct, operate and carry on any other lawful business and engage in any other lawful business activity which the Trustees, in their sole and absolute discretion, consider to be (i) incidental to the business of the Trust as an investment company, (ii) conducive to or expedient for the benefit or protection of the Trust or any Series or the Shareholders, or (iii) calculated in any other manner to promote the interests of the Trust or any Series or the Shareholders. 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 Managers, Principal Underwriters, 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. 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, for charges of the Trust's custodian or transfer, Shareholder servicing or similar agent, an amount fixed from time to time by the Trustees, by setting off such charges 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 charges due from such Shareholder. 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 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. -12- Section 7. Service Contracts. (a) Subject to such requirements and restrictions as may be set forth in the By-Laws, the Trustees may, at any time and from time to time, contract for exclusive or nonexclusive investment advisory, management and administrative services for the Trust or for any Series with any corporation, trust, association or other organization; and any such contract may contain such other terms as the Trustees may determine, including without limitation, authority for one or more Investment Managers 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, or 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. (c) The Trustees are also empowered, at any time and from time to time, to contract with any corporation, trust, association or other organization, appointing it the administrator, custodian, transfer agent or shareholder servicing agent for the Trust or one or more of its Series. (d) The Trustees are further empowered, at any time and from time to time, to contract with any entity to provide such other services to the Trust or any Series or Class, as the Trustees determine to be in the best interests of the Trust or the Series or Class. (e) The fact that: (i) any of the Shareholders, Trustees, or officers of the Trust is a shareholder, director, officer, partner, trustee, employee, Investment Manager, 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, shareholder servicing 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 has 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, shareholder servicing or other type of service contract may have been or may hereafter be made also has an advisory, management or administration contract, or principal underwriter's or distributor's contract, or transfer, shareholder servicing or other service contract with other organizations, or has other business or interests, -13- 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. ARTICLE V SHAREHOLDERS' VOTING POWERS Subject to the provisions of Article III, Section 6(d), the Shareholders shall have power to vote only (i) for the election or removal of Trustees as provided in Article IV, Section 1, and (ii) with respect to such additional matters relating to the Trust as may be required by this Declaration, the By-Laws, the 1940 Act or any registration of the Trust with the Commission (or any successor agency) or any state, or as the Trustees may consider necessary or desirable. Each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote, except that (i) Shares held in the Treasury as of the record date, as determined in accordance with the By-Laws, shall not be voted, and (ii) when Shares of more than one Series or Class vote together on a matter as a single class, each Share (or fraction thereof) shall be entitled to that number of votes which is equal to the net asset value of such Share (or fractional Share) determined as of the applicable record date. There shall be no cumulative voting in the election of Trustees. Until Shares are issued, the Trustees may exercise all rights of Shareholders and may take any action that the law, this Declaration or the By- Laws require to be taken by Shareholders. ARTICLE VI NET ASSET VALUE, DISTRIBUTIONS AND REDEMPTIONS Section 1. Determination of Net Asset Value, Net Income, Dividends and Distributions. Subject to Article III, Section 6 hereof, the Trustees, in their absolute discretion, may prescribe such bases and times for valuing the net assets of the Trust and determining the net asset value of Shares, which net asset value shall be separately determined for each Series and Class, for determining the net income attributable to the Shares of any Series or Class, or for declaring and paying dividends and other distributions on Shares of any Series or Class, as they may deem necessary or desirable. The Trustees shall, in their sole discretion, consistent with applicable law, determine whether any cash or property of the Trust or any stock dividends received by the Shareholders shall be treated as income or as principal and whether any item of expense shall be charged to the income or the principal amount, and any such determination made in good faith shall be conclusive and binding upon the Shareholders. -14- Section 2. Redemptions and Repurchases. 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 by wire or check, in accordance with applicable law, less the amount of any deferred sales charge or redemption fee that is applicable. Payment for said Shares shall be made by the Trust to the Shareholder within seven days after the date on which the request is made in proper form, except as may otherwise be permitted by the 1940 Act. The redemption price may in any case or cases be paid wholly or partly in kind if the Trustees determine that it would be detrimental to the best interests of remaining Shareholders of the Series for which the Shares are being redeemed to pay any redemption or redemptions in cash. 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 no case shall the Trust be liable for any delay of any corporation or other Person in transferring securities selected for delivery as all or part of any payment in kind. Section 3. Redemptions at the Option of the Trust. The Trust shall have the right at its option and at any time to redeem Shares from any Shareholder at the net asset value thereof as described in Section 1 of this Article VI if at such time, and as a result of one or more redemptions of one or more Shares by such Shareholder, the aggregate net asset value of the Shares in such Shareholder's account with the Trust or any Series or Class is, as a result (in whole or part) of a redemption of Shares, less than the minimum initial investment amount then applicable for investments in the Trust or the applicable Series or Class, or such lesser amount, as the Trustees may from time to time determine. ARTICLE VII COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES Section 1. Compensation. The Trustees as such shall be entitled to reasonable compensation from the Trust, and they may fix the amount of such compensation. Nothing herein shall in any way prevent the employment of any Trustee for advisory, management, legal, accounting, investment banking or other services and payment for the same by the Trust. Section 2. Indemnification and Limitation of Liability. The Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, Investment Manager or Principal Underwriter of the -15- Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee, and the Trust out of its assets shall indemnify and hold harmless each and every Trustee from and against any and all claims and demands whatsoever arising out of or related to each Trustee's performance of his duties as a Trustee of the Trust to the fullest extent permitted by law; provided that nothing herein contained shall indemnify, hold harmless or protect any Trustee from or against any liability to the Trust or any Shareholder to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. Every note, bond, contract, instrument, certificate or undertaking and every other act or thing whatsoever issued, executed or done by or on behalf of the Trust or the Trustees or any of them in connection with the Trust shall be conclusively deemed to have been issued, executed or done only in or with respect to their or his capacity as Trustees or Trustee, and such Trustees or Trustee shall not be personally liable thereon. Section 3. Trustee's Good Faith Action; Expert Advice; No Bond or Surety. The exercise by the Trustees of their powers and discretions hereunder shall be binding upon everyone interested. A Trustee shall be liable to the Trust and to any Shareholder solely for his 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, 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 4. 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 or officer in connection with any claim, action, suit or proceeding in which he becomes involved by virtue of his capacity or former capacity with 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. -16- Section 2. Termination of Trust or Series or Class. Unless terminated as provided herein, the Trust shall continue without limitation of time. The Trust may be terminated at any time by vote of the holders of a majority of the outstanding Shares of each Series entitled to vote, voting separately by Series, or by the Trustees by written notice to the Shareholders. Any Series or Class may be terminated at any time by vote of the holders of a majority of the outstanding Shares of that Series or Class respectively or by the Trustees by written notice to the Shareholders of that Series or Class. Upon termination of the Trust (or any Series or Class, as the case may be), after paying or otherwise providing for all charges, taxes, expenses and liabilities held, severally, with respect to each Series (or the applicable Series or Class), whether due or accrued or anticipated as may be determined by the Trustees, the Trust shall, in accordance with such procedures as the Trustees consider appropriate, reduce the remaining assets held, severally, with respect to each Series (or the applicable Series or Class) to distributable form in cash or shares or other securities, or any combination thereof, and distribute the proceeds held with respect to each Series (or the applicable Series or Class) to the Shareholders of that Series or Class, as a Series or Class, ratably according to the number of Shares of that Series or Class held by the several Shareholders on the date of termination. Section 3. Merger and Consolidation. The Trustees may cause (i) the Trust or one or more of its Series to the extent consistent with applicable law to be merged into or consolidated with another trust or company, (ii) Shares of the Trust or any Series to be converted into beneficial interests in another business trust (or series thereof) created pursuant to this Section 3 of Article VIII, (iii) the sale of substantially all of the assets of the Trust or one or more of its Series to another trust or company in exchange for the assumption of the liabilities of the Trust or the Series and the issuance of beneficial interests in such trust or company, or (iv) Shares to be exchanged under or pursuant to any state or federal statute to the extent permitted by law. Such merger or consolidation, Share conversion, sale of assets or Share exchange must be authorized by vote of the holders of a majority of the outstanding Shares of the affected Series; provided that in all respects not governed by applicable law, the Trustees shall have the power to prescribe the procedures necessary or appropriate to accomplish the transaction including the power to create one or more separate business trusts to which all or any part of the assets, liabilities, profits or losses of the Trust may be transferred and to provide for the conversion of Shares of the Trust or any Series into beneficial interests in such separate business trust or trusts (or series thereof). The Trustees may also cause substantially all of the assets of any Series (the "Acquired Series") to be sold to another Series if authorized by vote of the holders of a majority of the outstanding Shares of the Acquired Series, and to the extent not governed by applicable law, the Trustees shall have the power to prescribe the procedures necessary or appropriate to accomplish the transaction. Upon consummation of any transaction contemplated by this Section 3, the Trust or applicable Series, as the case may be, shall distribute its remaining assets to Shareholders and terminate as provided by Section 2 of this Article VIII. -17- Section 4. Amendments. (a) This Declaration may be restated or amended at any time by an instrument in writing signed by a majority of the Trustees and, if required by applicable law or this Declaration or the By-Laws, by approval of such amendment by Shareholders in accordance with Article V hereof and the By-Laws. Any such restatement or amendment hereto shall be effective immediately upon execution and approval. The Certificate of Trust of the Trust may be restated or amended by a similar procedure, and any such restatement or amendment shall be effective immediately upon filing with the Office of the Secretary of State of the State of Delaware or upon such future date as may be stated therein. (b) Nothing contained in this Declaration shall permit the amendment of this Declaration to impair the exemption from personal liability of the Shareholders, Trustees, officers, employees and agents of the Trust or to permit assessments on Shareholders. Section 5. Filing of Copies; References; Headings. The original or a copy of this Declaration and of each restatement and 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 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 Declaration or of any such restatement or amendment. 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 Declaration. 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 Declaration may be simultaneously executed in any number of counterparts each of which shall be deemed an original, and such counterparts together shall constitute one and the same instrument, which shall be sufficiently evidenced by any such original counterpart. Section 6. Applicable Law. This Declaration is created under and is to be governed by and construed and administered according to the laws of the State of Delaware and the Delaware Business Trust Act, as amended from time to time (the "Delaware Act"). The Trust shall be a Delaware business trust pursuant to the Delaware Act, and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a business trust. Section 7. Provisions in Conflict with Law or Regulations. (a) The provisions of this Declaration are severable, and if the Trustees shall determine, with the advice of counsel, that any of such provisions is in conflict with the 1940 Act, the regulated investment company provisions of the Internal Revenue Code of 1986, as amended, or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of the Declaration of Trust; provided, however, that -18- such determination shall not affect any of the remaining provisions of the Declaration of Trust or render invalid or improper any action taken or omitted prior to such determination. (b) If any provision of the Declaration shall be held invalid or unenforceable 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 the Declaration 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 and thereby to create only the relationship of trustee and beneficial owners within the meaning of the Delaware Act between the Trustees and each Shareholder. 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 shall be construed to make the Shareholders, either by themselves or with the Trustees, partners or members of a joint stock association. Section 9. Use of the Name "Hewitt". The Trust acknowledges that the name "Hewitt" and all rights to the use of the name "Hewitt" in the name of the Trust and in connection with its operations belongs to Hewitt Associates LLC. Hewitt Associates LLC has consented to the use by the Trust of the identifying word "Hewitt" and has granted to the Trust a non-exclusive license to use such words as part of the name of the Trust and the name of any Series of Shares. In the event Hewitt Associates LLC or an affiliate of Hewitt Associates LLC is not appointed as administrator or distributor of the Trust or ceases to be the administrator or distributor of the Trust or of any Series, the non-exclusive license granted herein may be revoked in whole or in part by Hewitt Associates LLC and the Trust shall cease using the name Hewitt as part of its name or the name of any Series of Shares, unless otherwise consented to by Hewitt Associates LLC or any successor to its interest in such name. IN WITNESS WHEREOF, the Trustee named below hereby makes and enters into this Declaration of Trust as of the 6th day of July, 1998. /s/ E. Scott Peterson ------------------------- E. Scott Peterson -19- EX-99.B 3 BY-LAWS OF REGISTRANT BY-LAWS OF HEWITT SERIES TRUST A DELAWARE BUSINESS TRUST AS ADOPTED JULY 6, 1998 TABLE OF CONTENTS ARTICLE I OFFICES.................................................... 5 SECTION 1. PRINCIPAL OFFICE......................................... 5 SECTION 2. DELAWARE OFFICE.......................................... 5 SECTION 3. OTHER OFFICES............................................ 5 ARTICLE II MEETINGS OF SHAREHOLDERS.................................. 6 SECTION 1. TIME AND PLACE OF MEETINGS............................... 6 SECTION 2. MEETINGS................................................. 6 SECTION 3. NOTICE OF MEETINGS....................................... 6 SECTION 4. QUORUM; ADJOURNMENTS..................................... 6 SECTION 5. VOTE REQUIRED............................................ 7 SECTION 6. VOTING................................................... 7 SECTION 7. PROXIES.................................................. 7 SECTION 8. PROCEDURES AT MEETINGS................................... 8 SECTION 9. INFORMAL ACTION BY SHAREHOLDERS.......................... 8 ARTICLE III TRUSTEES................................................. 8 SECTION 1. POWERS................................................... 8 SECTION 2. NUMBER OF TRUSTEES....................................... 8 SECTION 3. VACANCIES................................................ 8 SECTION 4. ANNUAL MEETINGS OF THE TRUSTEES.......................... 8 SECTION 5. REGULAR AND SPECIAL MEETINGS OF THE TRUSTEES............. 9 SECTION 6. NOTICE OF SPECIAL MEETING................................ 9 SECTION 7. QUORUM; ADJOURNMENT...................................... 9 SECTION 8. VOTING................................................... 9 SECTION 9. EXECUTIVE AND OTHER COMMITTEES........................... 9 SECTION 10. PARTICIPATION IN MEETINGS BY TELEPHONE..................10 SECTION 11. INFORMAL ACTION BY TRUSTEES.............................10 SECTION 12. COMPENSATION............................................10
ARTICLE IV WAIVER OF NOTICE........................................... 11 ARTICLE V OFFICERS.................................................... 11 SECTION 1. EXECUTIVE OFFICERS........................................ 11 SECTION 2. OTHER OFFICERS AND AGENTS................................. 11 SECTION 3. TENURE, RESIGNATION AND REMOVAL........................... 12 SECTION 4. VACANCIES................................................. 12 SECTION 5. COMPENSATION.............................................. 12 SECTION 6. AUTHORITY AND DUTIES...................................... 12 SECTION 7. CHAIRMAN.................................................. 12 SECTION 8. PRESIDENT................................................. 13 SECTION 9. VICE-PRESIDENTS........................................... 13 SECTION 10. ASSISTANT VICE-PRESIDENT................................. 13 SECTION 11. SECRETARY................................................ 13 SECTION 12. ASSISTANT SECRETARIES.................................... 14 SECTION 13. TREASURER................................................ 14 SECTION 14. ASSISTANT TREASURERS..................................... 14 ARTICLE VI INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND OTHER AGENTS.......................................................... 14 SECTION 1. AGENTS, PROCEEDINGS AND EXPENSES.......................... 14 SECTION 2. ACTIONS OTHER THAN BY TRUST............................... 15 SECTION 3. ACTIONS BY THE TRUST...................................... 15 SECTION 4. EXCLUSION OF INDEMNIFICATION.............................. 15 SECTION 5. SUCCESSFUL DEFENSE BY AGENT............................... 16 SECTION 6. REQUIRED APPROVAL......................................... 16 SECTION 7. ADVANCE OF EXPENSES....................................... 16 SECTION 8. OTHER CONTRACTUAL RIGHTS.................................. 17 SECTION 9. LIMITATIONS............................................... 17 SECTION 10. INSURANCE................................................ 17 SECTION 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN..................... 17
ARTICLE VII RECORDS AND REPORTS....................................... 18 SECTION 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER.............. 18 SECTION 2. MAINTENANCE AND INSPECTION OF BY-LAWS..................... 18 SECTION 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS............... 18 SECTION 4. INSPECTION BY TRUSTEES.................................... 18 SECTION 5. FINANCIAL STATEMENTS...................................... 18 ARTICLE VIII CONTRACTS, CHECKS AND DRAFTS............................. 19 SECTION 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS.................. 19 SECTION 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED................... 19 ARTICLE IX SHARES OF BENEFICIAL INTEREST.............................. 19 SECTION 1. CERTIFICATES OF SHARES.................................... 19 SECTION 2. TRANSFERS OF SHARES....................................... 19 SECTION 3. LOST CERTIFICATE.......................................... 20 SECTION 4. FIXING OF RECORD DATE..................................... 20 ARTICLE X FISCAL YEAR................................................. 21 ARTICLE XI SEAL....................................................... 21 ARTICLE XII FEDERAL SUPREMACY......................................... 21 ARTICLE XIII DECLARATION OF TRUST..................................... 21 ARTICLE XIV AMENDMENTS................................................ 21
BY-LAWS OF HEWITT SERIES TRUST A DELAWARE BUSINESS TRUST These By-Laws are made and adopted pursuant to Article IV, Section 3, of the Declaration of Trust establishing Hewitt Series Trust (the "Trust"), dated July 6, 1998, as from time to time amended (the "Declaration"). All words capitalized in these By-Laws that are not otherwise defined herein shall have the meaning or meanings set forth for such words or terms in the Declaration. ARTICLE I OFFICES SECTION 1. PRINCIPAL OFFICE. The Board of Trustees shall fix and, from time to time, may change the location of the principal executive office of the Trust at any place within or without the State of Delaware. SECTION 2. DELAWARE OFFICE. The Board of Trustees shall establish a registered office in the State of Delaware and shall appoint as the Trust's registered agent for service of process in the State of Delaware an individual resident in the State of Delaware or a Delaware corporation or a foreign corporation authorized to transact business in the State of Delaware; provided that, in each case, the business office of such registered agent for service of process shall be identical with the registered Delaware office of the Trust. SECTION 3. OTHER OFFICES. The Board of Trustees may at any time establish an office or offices in Linconshire, Illinois and at such other places within or without the State of Delaware as the Trustees may from time to time designate or the business of the Trust may require. ARTICLE II MEETINGS OF SHAREHOLDERS SECTION 1. TIME AND PLACE OF MEETINGS. All meetings of Shareholders shall be held at such time and place, whether within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. SECTION 2. MEETINGS. Meetings of Shareholders of the Trust or any Series (or Class) shall be held whenever a vote of such Shareholders is required by the Declaration and at such other times as the Trustees may determine to be necessary, appropriate or advisable. Meetings of Shareholders to consider any matter as to which a vote of Shareholders is required by the 1940 Act or is permitted to be requested by Shareholders pursuant to the 1940 Act and as to which the Trustees have not called a meeting of Shareholders shall be called by the secretary upon the written request of the holders of Shares entitled to cast not less than ten percent (10%) of all the votes then entitled to be cast on such matter at a meeting of Shareholders. Such request shall state the purpose or purposes of such meeting and the matters proposed to be acted on thereat. The secretary shall inform such Shareholders of the estimated reasonable cost of preparing and mailing such notice of the meeting. Upon payment to the Trust of such costs, the secretary shall give notice stating the purpose or purposes of the meeting to each Shareholder entitled to vote at such meeting. Unless requested by Shareholders entitled to cast a majority of all votes entitled to be cast on such matter, a meeting need not be called to consider any matter which is substantially the same as a matter voted on at any meeting of Shareholders held during the preceding twelve (12) months. SECTION 3. NOTICE OF MEETINGS. Written notice of each meeting of Shareholders stating the place, date and hour thereof, and in the case of a special meeting, specifying the purpose or purposes thereof, shall be given, to each Shareholder entitled to vote thereat, not less than ten (10) nor more than ninety (90) days prior to the meeting either by mail or by presenting it to such Shareholder personally or by leaving it at his residence or usual place of business. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, addressed to the Shareholder at his post office address as it appears on the records of the Trust. If action is proposed to be taken at any meeting for approval of (i) a contract or transaction in which a Trustee has a direct or indirect financial interest, (ii) an amendment of the Declaration, (iii) a reorganization of the Trust, or (iv) a voluntary dissolution of the Trust, the notice shall state the general nature of that proposal. SECTION 4. QUORUM; ADJOURNMENTS. Except as otherwise provided by law, by the Declaration or by these By- Laws, at all meetings of Shareholders the holders of Shares representing forty percent (40%) of the Shares entitled to vote on a matter, present in person or represented by proxy, shall be requisite and shall constitute a quorum for the transaction of business as to such matter. This section shall not affect any applicable requirement of law or the Declaration for the vote necessary for the adoption of any measure. In the absence of a quorum, the Shareholders present in person or represented by proxy and entitled to vote on a matter shall have power to adjourn the meeting with respect to such matter from time to time without notice other than announcement at the meeting until such quorum shall be present. The holders of Shares entitled to cast not less than a majority of all the votes entitled to be cast at such meeting on a matter shall also have the power to adjourn the meeting. Written notice shall be given as required by this Article II, Section 3, if a meeting is adjourned to a date more than one hundred twenty (120) days after the record date originally scheduled with respect to the meeting. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted had a quorum been present at the time originally fixed for the meeting. SECTION 5. VOTE REQUIRED. Except as otherwise provided by applicable law, by the Declaration or by these By-Laws and subject to the provisions of Article III, Section 6(d) of the Declaration, when a quorum is present at any meeting, a majority of the Shares voted shall decide all questions and a plurality shall elect a Trustee. SECTION 6. VOTING. At any meeting of Shareholders, each Shareholder having the right to vote shall be entitled to vote in person or by proxy, and each Shareholder of record shall be entitled to cast such number of votes as specified by Article V of the Declaration for each Share (and fractional share) entitled to vote so registered in his name on the records of the Trust on the date fixed as the record date for the determination of Shareholders entitled to vote at such meeting. Shares held by two or more persons (whether as joint tenants, co-fiduciaries or otherwise) will be voted as follows, unless written instrument or court order providing to the contrary has been filed with the secretary of the Trust: (1) if only one votes, his vote will bind all; (2) if more than one votes, the vote of the majority will bind all; and (3) if more than one votes and the vote is evenly divided, the Shares will be voted in accordance with the determination of a majority of such persons and any person appointed to act by a court of competent jurisdiction, or, in the absence of such appointment, the vote will be cast proportionately. SECTION 7. PROXIES. Each proxy shall be in writing executed by the Shareholder giving the proxy or by his duly authorized attorney. Notwithstanding the foregoing, a Shareholder may authorize another person or persons to act for him as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the Shareholder. No proxy shall be valid after the expiration of eleven (11) months from its date, unless a longer period is provided for in the proxy. SECTION 8. PROCEDURES AT MEETINGS. At all meetings of Shareholders, all questions relating to the qualification of voters, the validity of proxies, the acceptance or rejection of votes, the order and manner in which matters are submitted to a vote, and all other matters relating to questions of procedure shall be decided by the chairman, or co-chairmen, of the meeting, in a manner consistent with these By- Laws. SECTION 9. INFORMAL ACTION BY SHAREHOLDERS. Any action required or permitted to be taken at a meeting of Shareholders may be taken without a meeting if (i) a consent in writing, setting forth such action, is signed by the holders of outstanding Shares having not less than the minimum number of votes that would be necessary to authorize such action at a meeting of Shareholders at which all Shares issued and outstanding and entitled to vote thereat were present in person or by proxy, and (ii) such consents are filed with the records of the Trust. ARTICLE III TRUSTEES SECTION 1. POWERS. Subject to the applicable provisions of the Declaration and these By-Laws relating to action required to be approved by the Shareholders or by the outstanding Shares, the business and affairs of the Trust shall be managed and all powers shall be exercised by or under the direction of the Board of Trustees. SECTION 2. NUMBER OF TRUSTEES. The exact number of Trustees within the limits specified in the Declaration shall be fixed from time to time by a written instrument signed, or by resolution approved at a duly constituted meeting, by a majority of the Board of Trustees. SECTION 3. VACANCIES. Vacancies in the Board of Trustees may be filled by a majority of the then remaining Trustees at a duly constituted meeting; except that a vacancy shall be filled only by a person elected by Shareholders if required by the 1940 Act. SECTION 4. ANNUAL MEETINGS OF THE TRUSTEES. The Trustees shall hold an annual meeting for the election of officers and the transaction of other business which may come before the meeting. SECTION 5. REGULAR AND SPECIAL MEETINGS OF THE TRUSTEES. The Trustees may in their discretion provide for regular or special meetings of the Trustees. Regular meetings of the Trustees may be held without further notice, except as otherwise required by the 1940 Act in which case notice shall be given as prescribed in Section 6 of this Article III, and may be held at such time and place as shall be fixed in advance by the Trustees. Special meetings of the Trustees may be called at any time by the chairman, or co-chairmen, and shall be called by the chairman, or co-chairmen, vice-president or the secretary upon the request of any two (2) Trustees or, if there shall be only one (1) Trustee, upon the request of such sole Trustee. SECTION 6. NOTICE OF SPECIAL MEETING. Notice of any special meeting of the Trustees shall be given by oral or written notice delivered personally, telephoned, telegraphed, mailed or electronically transmitted to each Trustee at his business or residence address. Personally delivered, telegram or electronically transmitted notice shall be given at least twenty-four (24) hours prior to the meeting. Notice by mail shall be given at least five (5) days prior to the meeting. If mailed, such notice will be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed given when the telegram is delivered to the telegraph company. Neither the business to be transacted at, nor the purpose of, any special meeting of the Trustees need be stated in the notice, unless specifically required by the 1940 Act. SECTION 7. QUORUM; ADJOURNMENT. A majority of the authorized number of Trustees shall constitute a quorum for the transaction of business; provided, that if less than a majority of such number of Trustees is present at any such meeting, a majority of the Trustees present or the sole Trustee present may adjourn the meeting from time to time without further notice until a quorum is present. SECTION 8. VOTING. The action of a majority of the Trustees present at a meeting at which a quorum is present shall be the action of the Trustees, unless the concurrence of a greater proportion or of any specified group of Trustees is required for such action by law, the Declaration or these By-Laws. SECTION 9. EXECUTIVE AND OTHER COMMITTEES. The Trustees may designate one or more committees, each committee to consist of one (1) or more Trustees and to have such title as the Trustees may consider to be properly descriptive of its function, except that not more than one committee shall be designated as the Executive Committee and that the Executive Committee shall consist of two (2) or more Trustees. Each such committee shall serve at the pleasure of the Trustees. In the absence of any member of such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint a Trustee to act in the place of such absent member. The Trustees may delegate to any of the committees appointed under this Article III, Section 9, any of the powers of the Trustees, except the power to: (1) amend the Declaration; (2) authorize the merger or consolidation of the Trust or the sale, lease or exchange of all or substantially all of the Trust Property belonging to the Trust or any Series (or Class); (3) approve the incorporation of the Trust; (4) approve the termination of the Trust; (5) declare dividends or distributions on Shares; (6) issue Shares except pursuant to a general formula or method specified by the Trustees by resolution; (7) amend these By-Laws; or (8) elect, appoint or remove Trustees. Each committee, as and when requested by the Trustees, shall keep minutes or other appropriate written evidence of its meetings or proceedings and shall report the same to the Trustees and shall observe such other procedures with respect to its meetings as may be prescribed by the Trustees in the resolution appointing such committee, or, if and to the extent not so prescribed, as are prescribed in these By-Laws with respect to meetings of the Trustees. SECTION 10. PARTICIPATION IN MEETINGS BY TELEPHONE. Any Trustee may participate in a meeting of the Trustees or of any committee of the Trustees by means of conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting except where the 1940 Act requires Trustee action at a meeting held in person. SECTION 11. INFORMAL ACTION BY TRUSTEES. Unless an in person meeting is required by the 1940 Act, any action required or permitted to be taken at any meeting of the Trustees or of any committee of the Trustees may be taken without a meeting, if a consent in writing to such action is signed by each Trustee in the case of a meeting of Trustees, or each Trustee who is a member of the committee, in the case of a meeting of a committee, and such written consent is filed with the minutes of proceedings of the Trustees or of the committee. Any such consent may be executed in counterparts. SECTION 12. COMPENSATION. The Trustees shall determine and from time to time fix by resolution the compensation payable to Trustees for their services to the Trust in that capacity. Such compensation may, but need not, consist of an annual fee or a fee for attendance at meetings of the Trustees or of any committee of the Trustees of which the Trustees receiving such fees are members, or a combination of an annual fee and a fee for attendance. The chairman, or co-chairmen, of the Board of Trustees and the chairman, if any, of each committee of Trustees, may be paid additional amounts for services rendered in such capacities. In addition, the Trustees may authorize the reimbursement of Trustees for their expenses for attendance at meetings of the Trustees and at meetings of any committee of the Trustees of which they are members. Nothing herein contained shall be construed to preclude any Trustee from serving the Trust in any other capacity and receiving compensation therefor. ARTICLE IV WAIVER OF NOTICE Whenever any notice is required to be given pursuant to law, the Declaration or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to such notice, or, in the case of any waiver of notice of any meeting of Shareholders, signed by the proxy for a person entitled to notice thereof, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice, unless specifically required by law, the Declaration or these By-Laws. The attendance by any person at any meeting in person, or in the case of a meeting of Shareholders, by proxy, shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. ARTICLE V OFFICERS SECTION 1. EXECUTIVE OFFICERS. The executive officers of the Trust shall be a President, a Secretary and a Treasurer. If the Trustees shall elect a Chairman pursuant to Section 7 of this Article V, then the Chairman shall also be an executive officer of the Trust. If the Trustees shall elect one or more Vice-Presidents, each such Vice- President shall be an executive officer. The Chairman, if there be one, shall be elected from among the Trustees, but no other executive officer need be a Trustee. Any two or more executive offices, except those of President and Vice- President, may be held by the same person. A person holding more than one office may not act in more than one capacity to execute, acknowledge or verify on behalf of the Trust an instrument required by law to be executed, acknowledged and verified by more than one officer. The executive officers of the Trust shall be elected annually at a meeting of Trustees. SECTION 2. OTHER OFFICERS AND AGENTS. The Trustees may also elect or may delegate to the President, authority to appoint, remove, or fix the duties, compensation or terms of office of one or more Assistant Vice-Presidents, Assistant Secretaries and Assistant Treasurers, and such other officers and agents as the Trustees shall at any time and from time to time deem to be advisable. SECTION 3. TENURE, RESIGNATION AND REMOVAL. Each officer of the Trust shall hold office until his successor is elected or appointed or until his earlier displacement from office by resignation, removal or otherwise; provided, that if the term of office of any officer elected or appointed pursuant to Section 2 of this Article V shall have been fixed by the Trustees or by the President acting under authority delegated by the Trustees, such officer shall cease to hold such office no later than the date of expiration of such term, regardless of whether any other person shall have been elected or appointed to succeed him. Any officer of the Trust may resign at any time by written notice to the Trust. Any officer or agent of the Trust may be removed at any time by the Trustees or by the President acting under authority delegated by the Trustees pursuant to Section 2 of this Article V if in their or his judgment the best interest of the Trust would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights between the Trust and such officer or agent. SECTION 4. VACANCIES. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Trustees or by the President acting under authority delegated by the Trustees pursuant to Section 2 of this Article V. Each officer elected or appointed to fill a vacancy shall hold office for the balance of the term for which his predecessor was elected or appointed. SECTION 5. COMPENSATION. The compensation, if any, of all officers of the Trust shall be fixed by the Trustees or by the President acting under authority delegated by the Trustees pursuant to Section 2 of this Article V. SECTION 6. AUTHORITY AND DUTIES. All officers as between themselves and the Trust shall have such powers, perform such duties and be subject to such restrictions, if any, in the management of the Trust as may be provided in these By-Laws, or, to the extent not so provided, as may be prescribed by the Trustees or by the President acting under authority delegated by the Trustees pursuant to Section 2 of this Article V. SECTION 7. CHAIRMAN. When and if the Trustees deem such action to be necessary or appropriate, they may elect a Chairman from among the Trustees. The Chairman shall preside at meetings of the Shareholders and of the Trustees; and he shall have such other powers and duties as may be prescribed by the Trustees. The Chairman shall in the absence or disability of the President exercise the powers and perform the duties of the President. SECTION 8. PRESIDENT. The President shall be the chief executive officer of the Trust. He shall have responsibility for the general and active management of the business of the Trust, shall see to it that all orders, policies and resolutions of the Trustees are carried into effect, and, in connection therewith, shall be authorized to delegate to any Vice-President of the Trust such of his powers and duties as President and at such times and in such manner as he shall deem advisable. In the absence or disability of the Chairman, or if there is no Chairman, the President shall preside at all meetings of the Shareholders and of the Trustees and he shall have such other powers and perform such other duties as are incident to the office of a corporate president and as the Trustees may from time to time prescribe. SECTION 9. VICE-PRESIDENTS. The Vice-President, if any, or, if there is more than one, the Vice- Presidents, shall assist the President in the management of the business of the Trust and the implementation of orders, policies and resolutions of the Trustees at such times and in such manner as the President may deem to be advisable. If there is more than one Vice-President, the Trustees may designate one as the executive Vice-President, in which case he shall be first in order of seniority, and the Trustees may also grant to other Vice-Presidents such titles as shall be descriptive of their respective functions or indicative of their relative seniority. In the absence or disability of both the President and the Chairman, or in the absence or disability of the President if there is no Chairman, the Vice-President, or, if there is more than one, the Vice-Presidents in the order of their relative seniority, shall exercise the powers and perform the duties of those officers; and the Vice-President or Vice-Presidents shall have such other powers and perform such other duties as from time to time may be prescribed by the President or the Trustees. SECTION 10. ASSISTANT VICE-PRESIDENT. The Assistant Vice-President, if any, or if there is more than one, the Assistant Vice-Presidents, shall perform such duties as the Trustees or the President acting under authority delegated by the Trustees pursuant to Section 2 of this Article V may from time to time prescribe. SECTION 11. SECRETARY. The Secretary shall (a) keep the minutes of the meetings and proceedings and any written consents evidencing actions of the Shareholders, the Trustees and any committees of the Trustees in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these By-Laws or as required by law; (c) be custodian of the corporate records and the seal of the Trust, and, when authorized by the Trustees, cause the seal of the Trust to be affixed to any document requiring it, and when so affixed, attested by his signature as Secretary or by the signature of an Assistant Secretary; and (d) in general, perform such other duties as the President and Trustees may assign to him from time to time. SECTION 12. ASSISTANT SECRETARIES. The Assistant Secretary, if any, or, if there is more than one, the Assistant Secretaries in the order determined by the Trustees or by the President, shall in the absence or disability of the Secretary exercise the powers and perform the duties of the Secretary, and he or they shall perform such other duties as the Trustees, the President or the Secretary may from time to time prescribe. SECTION 13. TREASURER. The Treasurer shall be the chief financial officer of the Trust. The Treasurer shall keep full and accurate accounts of receipts and disbursements in books belonging to the Trust, shall deposit all moneys and other valuable effects in the name and to the credit of the Trust in such depositories as may be designated by the Trustees, and shall render to the Trustees and the President, at regular meetings of the Trustees or whenever they or the President may require it, an account of all his transactions as Treasurer and of the financial condition of the Trust. If required by the Trustees, the Treasurer shall give the Trust a bond in such sum and with such surety or sureties as shall be satisfactory to the Trustees for the faithful performance of the duties of his office and for the restoration to the Trust, in case of his death, resignation, retirement or removal from office, all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Trust. SECTION 14. ASSISTANT TREASURERS. The Assistant Treasurer, if any, or, if there is more than one, the Assistant Treasurers in the order determined by the Trustees or by the President, shall in the absence or disability of the Treasurer exercise the powers and perform the duties of the Treasurer, and he or they shall perform such other duties as the Trustees, the President or the Treasurer may from time to time prescribe. ARTICLE VI INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND OTHER AGENTS SECTION 1. AGENTS, PROCEEDINGS AND EXPENSES. For purposes of this Article VI, "agent" means any individual who is or was a Trustee, officer or employee of the Trust or is or was serving at the request of the Trust as a trustee, director, partner, officer or employee of another trust, partnership, corporation or association whose securities are or were owned by the Trust or of which the Trust is or was a creditor, and the heirs, executors, administrators, successors and assigns of any of the foregoing individuals; "proceeding" means any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative; and "expenses" includes without limitation attorney's fees and any expenses of establishing a right to indemnification under this Article VI. SECTION 2. ACTIONS OTHER THAN BY TRUST. The Trust shall indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the Trust) by reason of the fact that such person is or was an agent of the Trust, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceedings, if it is determined that such person acted in good faith and reasonably believed: (a) in the case of conduct in his official capacity as a Trustee of the Trust, that his conduct was in the Trust's best interests and (b) in all other cases, that his conduct was at least not opposed to the Trust's best interests and (c) in the case of a criminal proceeding, that he had no reasonable cause to believe the conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in the best interests of the Trust or that the person had reasonable cause to believe that the person's conduct was unlawful. SECTION 3. ACTIONS BY THE TRUST. The Trust shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action by or in the right of the Trust to procure a judgment in its favor by reason of the fact that such person is or was an agent of the Trust, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of that action if that person acted in good faith, in a manner that such person believed to be in the best interests of the Trust and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. SECTION 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to the contrary contained herein, there shall be no right to indemnification for any liability arising by reason of willful misfeasance, bad faith, gross negligence, or the reckless disregard of the duties involved in the conduct of the agent's office with the Trust. No indemnification shall be made under Sections 2 or 3 of this Article VI: (a) In respect of any claim, issue, or matter as to which that person shall have been adjudged to be liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in the person's official capacity; or (b) In respect of any claim, issue or matter as to which that person shall have been adjudged to be liable in the performance of that person's duty to the Trust, unless and only to the extent that the court in which that action was brought shall determine upon application that in view of all the circumstances of the case, that person was not liable by reason of the disabling conduct set forth in the preceding paragraph and is fairly and reasonably entitled to indemnity for the expenses which the court shall determine; or (c) Of amounts paid in settling or otherwise disposing of a threatened or pending action, with or without court approval, or of expenses incurred in defending a threatened or pending action which is settled or otherwise disposed of with or without court approval, unless the required approval set forth in Section 6 of this Article VI is obtained. SECTION 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of the Trust has been successful on the merits in defense of any proceeding referred to in Sections 2 or 3 of this Article VI or in defense of any claim, issue or matter therein, before the court or other body before whom the proceeding was brought, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith, provided that the Board of Trustees, including a majority who are disinterested, non-party Trustees, also determines that based upon a review of the facts, the agent was not liable by reason of the disabling conduct referred to in Section 4 of this Article VI. SECTION 6. REQUIRED APPROVAL. Except as provided in Section 5 of this Article VI, any indemnification under this Article VI shall be made by the Trust only if authorized in the specific case on a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in Sections 2 or 3 of this Article VI and is not prohibited from indemnification because of the disabling conduct set forth in Section 4 of this Article VI, by: (a) A majority vote of a quorum consisting of Trustees who are not parties to the proceeding and are not interested persons of the Trust (as defined in the 1940 Act); or (b) A written opinion by an independent legal counsel. SECTION 7. ADVANCE OF EXPENSES. Expenses incurred in defending any proceeding may be advanced by the Trust before the final disposition of the proceeding upon a written undertaking by or on behalf of the agent, to repay the amount of the advance if it is ultimately determined that he or she is not entitled to indemnification, together with at least one of the following as a condition to the advance: (i) security for the undertaking; or (ii) the existence of insurance protecting the Trust against losses arising by reason of any lawful advances; or (iii) a determination by a majority of a quorum of Trustees who are not parties to the proceeding and are not interested persons of the Trust (as defined in the 1940 Act), or by an independent legal counsel in a written opinion, based on a review of readily available facts that there is reason to believe that the agent ultimately will be found entitled to indemnification. Determinations and authorizations of payments under this Section must be made in the manner specified in Section 6 of this Article VI for determining that the indemnification is permissible. SECTION 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article VI shall affect any right to indemnification to which persons other than Trustees and officers of the Trust or any subsidiary hereof may be entitled by contract or otherwise. SECTION 9. LIMITATIONS. No indemnification or advance shall be made under this Article VI, except as provided in Sections 5 or 6 in any circumstances where it appears: (a) That it would be inconsistent with a provision of the Declaration, a resolution of the Shareholders, or an agreement in effect at the time of accrual or the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid which prohibits or otherwise limits indemnification; or (b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement. SECTION 10. INSURANCE. Upon the approval of the Board of Trustees, the Trust may purchase and maintain insurance protecting any agent of the Trust against any liability asserted against or incurred by the agent in such capacity or arising out of the agent's status as such, but the portion of the cost of such insurance protecting the agent against liabilities as to which the Trust would not have the power to indemnify the agent under the provisions of this Article VI and the Declaration shall not be borne by the Trust. SECTION 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article VI does not apply to any proceeding against any Trustee, Investment Manager or other fiduciary of an employee benefit plan in that person's capacity as such, even though that person may also be an agent of the Trust as defined in Section 1 of this Article VI. Nothing contained in this Article VI shall limit any right to indemnification to which such a Trustee, Investment Manager, or other fiduciary may be entitled by contract or otherwise which shall be enforceable to the extent permitted by applicable law other than this Article VI. ARTICLE VII RECORDS AND REPORTS SECTION 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. The Trust shall keep at its principal executive office or at the office of its transfer agent, a record of its Shareholders, giving the names and addresses of all Shareholders and the number and Series (and Class) of Shares held by each Shareholder. SECTION 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust shall keep at its principal executive office the original or a copy of these By-Laws as amended to date, which shall be open to inspection by the Shareholders at all reasonable times during office hours. SECTION 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The accounting books and records of the Trust and minutes of proceedings of the Shareholders and the Board of Trustees and any committee or committees of the Board of Trustees shall be kept at such place or places designated by the Board of Trustees or in the absence of such designation, at the principal executive office of the Trust. The minutes shall be kept in written form and the accounting books and records shall be kept either in written form or in any other form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection upon the written demand of any Shareholder at any reasonable time during usual business hours for a purpose reasonably related to the holder's interests as a Shareholder. The inspection may be made in person or by an agent or attorney and shall include the right to copy and make extracts. Inspection by any Shareholder of the Shareholder list and books and records of the Trust shall be at the discretion of the Trustees. SECTION 4. INSPECTION BY TRUSTEES. Every Trustee shall have the absolute right at any reasonable time to inspect all books, records and documents of every kind and the physical properties of the Trust. This inspection by a Trustee may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents. SECTION 5. FINANCIAL STATEMENTS. The Trustees shall submit to the Shareholders such written financial reports as are required by the 1940 Act. ARTICLE VIII CONTRACTS, CHECKS AND DRAFTS SECTION 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks, drafts, or other orders for payment of money, notes or other evidences of indebtedness issued in the name of or payable to the Trust shall be signed or endorsed in such manner and by such person or persons as shall be designated from time to time in accordance with the resolution of the Board of Trustees. SECTION 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of Trustees, except as otherwise provided in these By-Laws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Trust and this authority may be general or confined to specific instances; and unless so authorized or ratified by the Board of Trustees or within the agency power of an officer, no officer, agent, or employee shall have any power or authority to bind the Trust by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount. ARTICLE IX SHARES OF BENEFICIAL INTEREST SECTION 1. CERTIFICATES OF SHARES. The Trust shall not be obligated to issue certificates representing Shares of the Trust or any Series (or Class), except that the Trustees may determine to authorize the issuance of certificates for Shares of any Series (or Class), and in such case, certificates shall be issued in accordance with such procedures as the Trustees may establish. If certificates for Shares are issued, each such certificate shall be signed by the chairman, or co-chairmen, or, in the absence of a chairman or co-chairmen, by a vice-president and countersigned by the secretary or the treasurer. Certificates may be sealed with the seal of the Trust. The signatures and seal, if any, on a certificate may be either manual or facsimile. A certificate is valid and may be issued whether or not an officer who signed it is still an officer when it is issued. A full record of the issuance of each certificate and the identifying number assigned thereto shall be made on the books and records of the Trust usually kept for the purpose or required by statute. SECTION 2. TRANSFERS OF SHARES. Upon surrender to the Trust or its transfer agent of a certificate duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Trust shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Shares of the Trust or any Series (or Class) not represented by certificates shall be transferred by recording the transaction on the books of the Trust upon presentation of proper evidence of succession, assignment or authority to transfer. The Trust shall be entitled to treat the holder of record of any Share or Shares as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by applicable law. SECTION 3. LOST CERTIFICATE. The Trustees may by resolution establish procedures pursuant to which a new certificate or certificates may be issued in place of any certificate or certificates theretofore issued by the Trust which have been mutilated or which are alleged to have been lost, stolen or destroyed, upon presentation of each such mutilated certificate, or the making of an affidavit by the person claiming any such certificate to have been lost, stolen or destroyed as to the fact and circumstances of the loss, theft or destruction thereof. The Trustees, in their discretion and as a condition precedent to the issuance of any new certificate, may include among such procedures a requirement that the owner of any certificate alleged to have been lost, stolen or destroyed, or the owner's legal representative, furnish the Trust with a bond, in such sum and with such surety or sureties as the Trustees may direct, as indemnity against any claim that may be made against the Trust in respect of such lost, stolen or destroyed certificate. SECTION 4. FIXING OF RECORD DATE. For purposes of determining the Shareholders entitled to notice of, or to vote at, any meeting of Shareholders or at any adjournment thereof in respect of which a new record date is not fixed, or entitled to express written consent to or dissent from the taking of action by Shareholders without a meeting, or for the purpose of determining the Shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of Shares, or for the purpose of any other lawful action, the Trustees may fix, in advance, a date as the record date for any such determination of Shareholders. Such date shall not be more than ninety (90) days, and in case of a meeting of Shareholders not less than ten (10) days, before the date on which the meeting or particular action requiring such determination of Shareholders is to be held or taken. If no record date is fixed, (a) the record date for the determination of Shareholders entitled to notice of or to vote at a meeting of Shareholders shall be the later of: (i) the close of business on the day on which the notice of meeting is first mailed to any Shareholder; or (ii) the thirtieth (30th) day before the meeting; (b) the record date for determining the Shareholders entitled to express written consent to the taking of any action without a meeting, when no prior action by the Trustees is necessary, shall be the day on which the first written consent is expressed; and (c) the record date for the determination of Shareholders entitled to receive payment of a dividend or other distribution or an allotment of any other rights shall be at the close of business on the day on which the resolution of the Trustees, declaring the dividend, distribution or allotment of rights, is adopted. EX-99.C 4 CERTIFICATE OF TRUST CERTIFICATE OF TRUST OF HEWITT SERIES TRUST This Certificate of Trust of HEWITT SERIES TRUST, a business trust which proposes to register under the Investment Company Act of 1940, as amended (the "Business Trust"), filed in accordance with the provisions of the Delaware Business Trust Act (12 Del. Code (S)(S) 3801 et seq.), sets forth the following: -- --- FIRST: The name of the Business Trust is HEWITT SERIES TRUST. SECOND: As required by 12 Del. Code (S)(S) 3807(b) and 3810(a)(1)(b), the name and business address of the Business Trust's Registered Agent for Service of Process and the address of the Business Trust's Registered Office are: Address of Business Trust's Registered Office and Business Resident Agent Address of Registered Agent -------------- ------------------------------ National Corporate Research, Ltd. 9 East Loockerman Street Suite 214 Dover, DE 19901 The names and business addresses of the initial trustee of the Business Trust is as follows: Name Business Address ---- ---------------- E. Scott Peterson 100 Half Day Road Lincolnshire, IL 60069 THIRD: The nature of the business or purpose or purposes of the Business Trust as set forth in its governing instrument is to conduct, operate and carry on the business of a management investment company registered under the Investment Company Act of 1940, as amended, through one or more series of shares of beneficial interest, investing primarily in securities. FOURTH: Notice is given, pursuant to 12 Del. Code (S) 3804, that the governing instrument of the Trust provides for the creation of one or more series as provided in 12 Del. Code (S) 3806(b)(2), and separate and distinct records are maintained for such series and the assets associated with each such series are held and accounted for separately from the other assets of the Trust, or any other series thereof, and that the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets of such series only, and not against the assets of the Trust generally. FIFTH: The trustees of the business trust, as set forth in its governing instrument, reserve the right to amend, alter, change or repeal any provision contained in this Certificate of Trust, in any manner now or hereafter prescribed by statute. SIXTH: This Certificate of Trust shall become effective immediately upon its filing with the Office of the Secretary of State of the State of Delaware. IN WITNESS WHEREOF, the undersigned, being the initial trustee of HEWITT SERIES TRUST, has duly executed this Certificate of Trust as of this 6th day of July, 1998. /s/ E. Scott Peterson -------------------------------------- E. Scott Peterson, as Trustee and not individually -----END PRIVACY-ENHANCED MESSAGE-----